HOUSTON, May 4, 2007 (PRIME NEWSWIRE) -- CenterPoint Energy, Inc. (NYSE:CNP) today reported net income of $130 million, or $0.38 per diluted share, for the first quarter of 2007 compared to $88 million, or $0.28 per diluted share, for the same period of 2006. The first quarter of 2006 included an addition to the tax reserve related to the company's Zero Premium Exchangeable Subordinated Notes, which reduced net income by $14 million, or $0.04 per diluted share.
"I am very pleased with our overall results for the quarter," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "Our businesses benefited from continued operational improvements, as well as a return to more normal winter weather compared to milder weather last year. I am especially pleased with the performance of our natural gas LDCs this quarter as we are beginning to realize the benefits of our efforts to improve the operating model in these businesses."
OPERATING INCOME BY SEGMENT DETAILED
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $104 million in the first quarter of 2007, consisting of $73 million for the regulated electric transmission & distribution utility (TDU) (including $11 million for the competition transition charge (CTC)) and $31 million related to the transition bonds. Operating income for the first quarter of 2006 totaled $110 million, consisting of $78 million for the TDU (including $16 million for the CTC) and $32 million related to the transition bonds.
The decrease in operating income for the TDU was primarily due to the reduction in the allowed rate of return on the un-recovered CTC balance. Increases in operating income from higher usage primarily due to colder weather and customer growth of nearly 39,000 metered customers since March of 2006, more than offset the impact of the base rate reduction and settlement implemented in October of 2006. In addition, operating income for the first quarter of 2006 benefited from a gain on the sale of land.
Natural Gas Distribution
The natural gas distribution segment reported operating income of $129 million for the first quarter of 2007 compared to $103 million for the same period of 2006. The increase in operating income was driven by increased usage primarily due to a return to normal weather, customer growth of nearly 48,000 customers since March of 2006, and labor and benefit savings associated with staff reductions in 2006. These increases were partially offset by lower final base rates in Minnesota compared to interim rates accrued in the first quarter of 2006, higher expenses associated with improvements to customer service and increased bad debt expense.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $56 million for the first quarter of 2007 compared to $25 million for the same period of 2006. The increase was primarily driven by a $28 million gain on sales of gas from inventory partially offset by a $14 million unfavorable change resulting from mark-to-market accounting for non-trading financial derivatives. In addition, the first quarter of 2006 included a $13 million write-down of natural gas inventory to the lower of average cost or market.
Interstate Pipelines
The interstate pipelines segment reported operating income of $44 million for the first quarter of 2007 compared to $49 million for the same period of 2006. The decrease in operating income was primarily due to an increase in operating expenses and the absence of a favorable natural gas storage adjustment recorded in the first quarter of 2006.
Field Services
The field services segment reported operating income of $22 million for the first quarter of 2007 compared to $24 million for the same period of 2006. Continued increased demands for gas gathering and ancillary services were more than offset by lower commodity prices occurring in the first quarter of 2007 and increased operating expenses. In addition, this segment recorded equity income of $2 million in each of the first quarters of 2006 and 2007 from its 50 percent interest in a jointly-owned gas processing plant. These amounts are included in Other - net under the Other Income (Expense) caption.
DIVIDEND DECLARATION
On April 26, 2007, CenterPoint Energy's board of directors declared a regular quarterly cash dividend of $0.17 per share of common stock payable on June 8, 2007, to shareholders of record as of the close of business on May 16, 2007.
OUTLOOK FOR 2007
CenterPoint Energy continues to expect diluted earnings per share for 2007 to be in the range of $1.02 to $1.12. This guidance takes into consideration various economic and operational assumptions related to the business segments in which the company operates. The company has made certain assumptions regarding the impact to earnings of various regulatory proceedings, but cannot predict the ultimate outcome of any of those proceedings. In providing this guidance, the company has not projected the impact of any changes in accounting standards, any impact from acquisitions or divestitures, or the outcome of the TDU's true-up appeal.
FILING OF FORM 10-Q FOR CENTERPOINT ENERGY, INC.
Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Quarterly Report on Form 10-Q for the period ended March 31, 2007. A copy of that report is available on the company's web site, www.CenterPointEnergy.com, under the "Investors" section. Other filings the company makes at the SEC and other documents relating to its corporate governance can also be found on that site.
WEBCAST OF EARNINGS CONFERENCE CALL
CenterPoint Energy's management will host an earnings conference call on Friday, May 4, 2007, at 10:30 a.m. Central time or 11:30 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call at www.CenterPointEnergy.com/investors/events. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the web site for at least one year.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total over $17 billion. With about 8,600 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. For more information, visit the Web site at www.CenterPointEnergy.com.
The CenterPoint Energy company logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3588
This news release includes forward-looking statements. Actual events and results may differ materially from those projected. The statements in this news release regarding future financial performance and results of operations and other statements that are not historical facts are forward-looking statements. Factors that could affect actual results include the timing and outcome of appeals from the true-up proceedings, the timing and impact of future regulatory, legislative and IRS decisions, effects of competition, weather variations, changes in CenterPoint Energy's or its subsidiaries' business plans, financial market conditions, the timing and extent of changes in commodity prices, particularly natural gas, the impact of unplanned facility outages, and other factors discussed in CenterPoint Energy's and its subsidiaries' Form 10-Ks for the period ended December 31, 2006, CenterPoint Energy's Form 10-Q for the period ended March 31, 2007, and other filings with the Securities and Exchange Commission.
CenterPoint Energy, Inc. and Subsidiaries
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
Quarter Ended March 31,
----------------------
2006 2007
-------- --------
Revenues:
Electric Transmission & Distribution $ 385 $ 406
Natural Gas Distribution 1,480 1,567
Competitive Natural Gas Sales
and Services 1,163 1,064
Interstate Pipelines 89 90
Field Services 41 39
Other Operations 4 2
Eliminations (85) (62)
------- -------
Total 3,077 3,106
------- -------
Expenses:
Natural gas 2,193 2,150
Operation and maintenance 331 352
Depreciation and amortization 140 145
Taxes other than income taxes 107 106
------- -------
Total 2,771 2,753
------- -------
Operating Income
306 353
------- -------
Other Income (Expense) :
Loss on Time Warner investment (14) (44)
Gain on indexed debt securities 10 41
Interest and other finance charges (115) (123)
Interest on transition bonds (33) (31)
Other - net 6 6
------- -------
Total (146) (151)
------- -------
Income from Before
Income Taxes 160 202
Income Tax Expense (72) (72)
------- -------
Net Income $ 88 $ 130
======= =======
Reference is made to the Notes to
the Consolidated Financial Statements
contained in the Quarterly Report on
Form 10-Q of CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Selected Data From Statements of Consolidated Income
(Millions of Dollars, Except Share and Per Share Amounts)
(Unaudited)
Quarter Ended
March 31,
----------------------
2006 2007
--------- ---------
Basic Earnings Per Common Share:
Net Income $ 0.28 $ 0.41
========= =========
Diluted Earnings Per Common Share:
Net Income $ 0.28 $ 0.38
========= =========
Dividends Declared per
Common Share $ 0.15 $ 0.17
Weighted Average Common Shares
Outstanding (000):
- Basic 310,846 318,060
- Diluted 318,593 340,103
Operating Income (Loss) by Segment
Electric Transmission & Distribution:
Transmission & Distribution
Operations $ 78 $ 73
Transition Bond Companies 32 31
--------- ---------
Total Electric Transmission
& Distribution 110 104
Natural Gas Distribution 103 129
Competitive Natural Gas Sales
and Services 25 56
Interstate Pipelines 49 44
Field Services 24 22
Other Operations (5) (2)
--------- ---------
Total $ 306 $ 353
========= =========
Reference is made to the Notes to the
Consolidated Financial Statements
contained in the Quarterly Report on
Form 10-Q of CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
Electric Transmission & Distribution
------------------------------------
Quarter Ended
March 31,
------------------------- % Diff
2006 2007 Fav/(Unfav)
---------- ----------- ----------
Results of Operations:
Revenues:
Electric transmission
and distribution
utility $ 331 $ 347 5%
Transition bond
companies 54 59 9%
----------- -----------
Total 385 406 5%
----------- -----------
Expenses:
Operation and
maintenance 134 154 (15%)
Depreciation and
amortization 63 63 --
Taxes other than
income taxes 56 57 (2%)
Transition bond
companies 22 28 (27%)
----------- -----------
Total 275 302 (10%)
----------- -----------
Operating Income $ 110 $ 104 (5%)
=========== ===========
Operating Income -
Electric transmission
and distribution utility 78 73 (6%)
Operating Income -
Transition bond companies 32 31 (3%)
----------- -----------
Total Segment
Operating Income $ 110 $ 104 (5%)
=========== ===========
Electric Transmission
& Distribution
Operating Data:
Actual MWH Delivered
Residential 3,986,390 4,658,059 17%
Total 15,986,880 16,659,914 4%
Weather (average for
service area):
Percentage of normal:
Cooling degree days 137% 113% (24%)
Heating degree days 63% 110% 47%
Average number of
metered customers:
Residential 1,717,836 1,752,264 2%
Total 1,950,829 1,989,744 2%
Natural Gas Distribution
-----------------------------------
Quarter Ended
March 31,
------------------------- % Diff
2006 2007 Fav/(Unfav)
---------- ---------- ----------
Results of Operations:
Revenues $ 1,480 $ 1,567 6%
---------- ----------
Expenses:
Natural gas 1,146 1,212 (6%)
Operation and
maintenance 150 147 2%
Depreciation and
amortization 38 38 --
Taxes other than
income taxes 43 41 5%
---------- ----------
Total 1,377 1,438 (4%)
---------- ----------
Operating Income (Loss) $ 103 $ 129 25%
========== ==========
Natural Gas Distribution
Operating Data:
Throughput data in BCF
Residential 67 86 28%
Commercial and
Industrial 72 81 13%
---------- ----------
Total Throughput 139 167 20%
========== ==========
Weather (average for
service area)
Percentage of normal:
Heating degree days 84% 98% 14%
Average number of customers:
Residential 2,896,766 2,946,203 2%
Commercial and
Industrial 245,766 245,576 --
---------- ----------
Total 3,142,532 3,191,779 2%
========== ==========
Reference is made to the Notes to the
Consolidated Financial Statements
contained in the Quarterly Report on
Form 10-Q of CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
Competitive Natural Gas Sales and Services
------------------------------------------
Quarter Ended
March 31,
----------------- % Diff
2006 2007 Fav/(Unfav)
------ ------ -----------
Results of Operations:
Revenues $1,163 $1,064 (9%)
------ ------
Expenses:
Natural gas 1,129 998 12%
Operation and maintenance 8 9 (13%)
Depreciation and amortization -- -- --
Taxes other than income taxes 1 1 --
------ ------
Total 1,138 1,008 11%
------ ------
Operating Income $ 25 $ 56 124%
====== ======
Competitive Natural Gas Sales
and Services Operating Data:
Throughput data in BCF
Wholesale - third parties 89 94 6%
Wholesale - affiliates 11 3 (73%)
Retail & Pipeline 58 58 --
------ ------
Total Throughput 158 155 (2%)
====== ======
Average number of customers:
Wholesale 145 223 54%
Retail & Pipeline 6,664 6,764 2%
------ ------
Total 6,809 6,987 3%
====== ======
Interstate Pipelines
------------------------------------------
Quarter Ended
March 31,
----------------- % Diff
2006 2007 Fav/(Unfav)
------ ------ -----------
Results of Operations:
Revenues $ 89 $ 90 1%
------ ------
Expenses:
Natural gas (2) 4 300%
Operation and maintenance 27 27 --
Depreciation and amortization 10 10 --
Taxes other than income taxes 5 5 --
------ ------
Total 40 46 (15%)
------ ------
Operating Income $ 49 $ 44 (10%)
====== ======
Pipelines Operating Data:
Throughput data in BCF
Transportation 274 294 7%
------ ------
Total Throughput 274 294 7%
====== ======
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
Field Services
-----------------------------------
Quarter Ended
March 31,
----------------- % Diff
2006 2007 Fav/(Unfav)
------ ------ -----------
Results of Operations:
Revenues $ 41 $ 39 (5%)
------ ------
Expenses:
Natural gas 1 (3) 400%
Operation and maintenance 13 16 (23%)
Depreciation and amortization 3 3 --
Taxes other than income taxes -- 1 --
------ ------
Total 17 17 --
------ ------
Operating Income $ 24 $ 22 (8%)
====== ======
Field Services Operating Data:
Throughput data in BCF
Gathering 88 93 6%
------ ------
Total Throughput 88 93 6%
====== ======
Other Operations
Field Services
-----------------------------------
Quarter Ended
March 31,
----------------- % Diff
2006 2007 Fav/(Unfav)
------ ------ -----------
Results of Operations:
Revenues $ 4 $ 2 (50%)
Expenses 9 4 56%
------ ------
Operating Loss $ (5) $ (2) (60%)
====== ======
Capital Expenditures by Segment
(Millions of Dollars)
(Unaudited)
---------------
Quarter Ended
March 31,
---------------
2006 2007
---- ----
Capital Expenditures by Segment
Electric Transmission & Distribution $ 79 $110
Natural Gas Distribution 40 33
Competitive Natural Gas Sales and Services 6 2
Interstate Pipelines 19 154
Field Services 11 27
Other Operations 10 11
---- ----
Total $165 $337
==== ====
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
---------------
Quarter Ended
March 31,
---------------
2006 2007
---- ----
Interest Expense Detail
Amortization of Deferred Financing Cost $ 13 $ 19
Capitalization of Interest Cost (1) (8)
Transition Bond Interest Expense 33 31
Other Interest Expense 103 112
---- ----
Total Interest Expense $148 $154
==== ====
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Millions of Dollars)
(Unaudited)
December 31, March 31,
2006 2007
------- -------
ASSETS
Current Assets:
Cash and cash equivalents $ 127 $ 60
Other current assets 2,868 2,373
------- -------
Total current assets 2,995 2,433
------- -------
Property, Plant and Equipment, net 9,204 9,424
------- -------
Other Assets:
Goodwill 1,709 1,709
Regulatory assets 3,290 3,248
Other non-current assets 435 392
------- -------
Total other assets 5,434 5,349
------- -------
Total Assets $17,633 $17,206
======= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 187 $ 337
Current portion of transition bond
long-term debt 147 152
Current portion of other long-term debt 1,051 993
Other current liabilities 2,836 2,284
------- -------
Total current liabilities 4,221 3,766
------- -------
Other Liabilities:
Accumulated deferred income taxes, net
and investment tax credit 2,362 2,271
Regulatory liabilities 792 809
Other non-current liabilities 900 895
------- -------
Total other liabilities 4,054 3,975
------- -------
Long-term Debt:
Transition bond 2,260 2,183
Other 5,542 5,635
------- -------
Total long-term debt 7,802 7,818
------- -------
Shareholders' Equity 1,556 1,647
------- -------
Total Liabilities and Shareholders'
Equity $17,633 $17,206
======= =======
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Condensed Statements of Consolidated Cash Flows
(Millions of Dollars)
(Unaudited)
Three Months Ended
December 31,
--------------
2006 2007
----- -----
Cash Flows from Operating Activities:
Net income $ 88 $ 130
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 154 164
Deferred income taxes and investment tax credit 4 (13)
Changes in net regulatory assets 23 22
Changes in other assets and liabilities 23 (56)
Other, net 23 17
----- -----
Net Cash Provided by Operating Activities 315 264
Net Cash Used in Investing Activities (201) (403)
Net Cash Provided by (Used in) Financing Activities (75) 72
----- -----
Net Increase (Decrease) in Cash and Cash Equivalents 39 (67)
Cash and Cash Equivalents at Beginning of Period 74 127
----- -----
Cash and Cash Equivalents at End of Period $ 113 $ 60
===== =====
Reference is made to the Notes to the Consolidated Financial
Statements contained in the Quarterly Report on Form 10-Q of
CenterPoint Energy, Inc.