- Upon the closing of the transaction, CenterPoint Energy
(CenterPoint) received approximately 201 million Energy Transfer LP
(ET) common units and $5 million in cash in exchange for its Enable
Midstream Partners, LP (Enable) common units and general partner
interest, respectively
- In addition, CenterPoint exchanged approximately $363 million
of Enable Series A Fixed to Floating Non-Cumulative Redeemable
Perpetual Preferred units for approximately $385 million ET Series
G Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred
units
- The closing of the transaction triggers the settlement of the
previously announced contingent forward sale of 50 million ET
common units, or approximately 25% of CenterPoint’s total ET common
unit holding
- Transaction supports and aligns with CenterPoint’s goal to
fully eliminate midstream exposure by the end of 2022, its current
10-year growth strategy and plan to move to a purely regulated
utility
CenterPoint Energy, Inc. (NYSE: CNP) today announced it is
taking steps to reduce the company’s midstream exposure following
the completion of Enable Midstream Partners, LP’s (NYSE: ENBL)
merger with Energy Transfer LP (NYSE: ET). CenterPoint’s 53.7% of
Enable common units converted into 201 million ET common units. The
settlement of CenterPoint’s previously announced contingent forward
sale for 50 million ET common units, representing approximately 25%
of CenterPoint’s ownership in ET common units, was triggered upon
the completion of the merger between Enable and ET.
CenterPoint also received $5 million in cash in exchange for its
Enable general partner interest and ET Series G Fixed-Rate Reset
Cumulative Redeemable Perpetual Preferred units with a liquidation
preference of approximately $385 million in exchange for the $363
million liquidation preference of Enable Series A Fixed-to-Floating
Non-Cumulative Redeemable Perpetual Preferred units owned by
CenterPoint. With the completion of this transaction, CenterPoint
and OGE Energy Corp. have terminated various agreements related to
Enable.
“I am excited to share this announcement today. We are now
firmly on an accelerated path to reducing our exposure to the
midstream industry. This transaction aligns with our newly unveiled
10-year growth strategy that focuses on investing in the footprint
of our pure-play regulated business,” said President and CEO Dave
Lesar. “As I shared during our 2021 Analyst Day, we are targeting a
full elimination of our midstream exposure by the end of 2022.”
Lesar added, “We continue to demonstrate a consistent track
record of execution and performance. In the past 18 months, we have
taken decisive actions to align our interest more closely with
those of our shareholders and our customers, including refocusing
on our core regulated utility businesses. Our strategy supports a
transition to a cleaner energy future that will drive our
industry-leading growth, including our previously announced
anticipated Utility earnings per share growth of 8% per year
through 2024, and the mid-to-high end of 6% to 8% per year from
2025 through 2030, all with no anticipated issuance of equity
during this time frame.”
About CenterPoint Energy, Inc.
As the only investor-owned electric and gas utility based in
Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery
company with electric transmission and distribution, power
generation and natural gas distribution operations that serve more
than 7 million metered customers in Arkansas, Indiana, Louisiana,
Minnesota, Mississippi, Ohio, Oklahoma and Texas. As of September
30, 2021, the company owned approximately $37 billion in assets.
With approximately 9,500 employees, CenterPoint Energy and its
predecessor companies have been in business for more than 150
years. For more information, visit CenterPointEnergy.com.
About Energy Transfer LP
ET owns and operates one of the largest and most diversified
portfolios of energy assets in the North America, with a strategic
footprint in all of the major U.S. production basins, ET is a
publicly traded limited partnership with core operations that
include complementary natural gas midstream, intrastate and
interstate transportation and storage assets; crude oil, natural
gas liquids (NGL) and refined product transportation and
terminalling assets; and NGL fractionation. ET also owns Lake
Charles LNG Company, as well as the general partner interests, the
incentive distribution rights and 28.5 million common units of
Sunoco LP (NYSE: SUN), and the general partner interests and 46.1
million common units of USA Compression Partners, LP (NYSE:
USAC).
Enable’s assets include approximately 14,000 miles of natural
gas, crude oil, condensate and produced water gathering pipelines,
approximately 2.6 Bcf/d of natural gas processing capacity,
approximately 7,800 miles of interstate pipelines (including
Southeast Supply Header, LLC of which Enable owns 50%),
approximately 2,200 miles of intrastate pipelines and seven natural
gas storage facilities comprising 84.5 billion cubic feet of
storage capacity.
Use of Non-GAAP Measures
As included in this press release, utility earnings per share
(“Utility EPS”) is not a generally accepted accounting principles
(“GAAP”) financial measure. Generally, a non-GAAP financial measure
is a numerical measure of a company’s historical or future
financial performance that excludes or includes amounts that are
not normally excluded or included in the most directly comparable
GAAP financial measure.
Utility EPS includes net income from Electric and Natural Gas
segments, as well as after tax Corporate and Other operating income
and an allocation of corporate overhead based upon the Utility’s
relative earnings contribution. Corporate overhead consists
primarily of interest expense, preferred stock dividend
requirements, and other items directly attributable to the parent
along with the associated income taxes. Utility EPS excludes (a)
earnings or losses from the change in value of CenterPoint Energy's
2.0% Zero-Premium Exchangeable Subordinated Notes due 2029 (“ZENS”)
and related securities, (b) certain expenses associated with
Vectren merger integration, (c) earnings and losses associated with
the ownership and disposal of midstream common and preferred units
(including amounts reported in discontinued operations), net gain
associated with the consummation of the merger between Enable and
Energy Transfer, a corresponding amount of debt related to
midstream common and preferred units, and an allocation of
associated corporate overhead, (d) cost associated with the early
extinguishment of debt and (e) gain and impact, including related
expenses, associated with the pending gas LDC sales. 2022 Utility
EPS guidance excludes (a) earnings or losses from the change in
value of ZENS and related securities and (b) income and expense
related to ownership and disposal of Energy Transfer units, a
corresponding amount of debt related to the units and an allocation
of associated corporate overhead. To the extent, the pending gas
LDC sales do not occur in 2021, 2022 Utility EPS guidance will
exclude the impacts associated with those items as referenced in
the 2021 Utility EPS guidance. Utility EPS does not consider the
items noted above and other potential impacts, such as changes in
accounting standards, impairments or other unusual items, which
could have a material impact on GAAP reported results for the
applicable guidance period. Utility EPS also considers assumptions
for certain significant variables that may impact earnings, such as
customer growth and usage including normal weather, throughput,
recovery of capital invested, effective tax rates, financing
activities and related interest rates and regulatory and judicial
proceedings. In addition, the Utility EPS guidance ranges assume
the timing of pending gas LDC sales, the timing of merger between
Enable and Energy Transfer, and the timing of our planned
disposition of the Energy Transfer common units and preferred units
that we received as part of the merger between Enable and Energy
Transfer. To the extent actual results deviate from these
assumptions, the Utility EPS guidance ranges may not be met or the
projected annual Utility EPS growth rate may change. CenterPoint
Energy is unable to present a quantitative reconciliation of
forward-looking Utility EPS because changes in the value of ZENS
and related securities, future impairments and other unusual items
are not estimable and are difficult to predict due to various
factors outside of management’s control. Management evaluates the
Company’s financial performance in part based on Utility EPS.
Management believes that presenting this non-GAAP financial measure
enhances an investor’s understanding of CenterPoint Energy’s
overall financial performance by providing them with an additional
meaningful and relevant comparison of current and anticipated
future results across periods. The adjustments made in this
non-GAAP financial measure exclude items that Management believes
do not most accurately reflect the Company’s fundamental business
performance. CenterPoint Energy’s Utility EPS non-GAAP financial
measure should be considered as a supplement to, and not as a
substitute for, or superior to diluted earnings per share, which is
the most directly comparable GAAP financial measure. This non-GAAP
financial measure also may be different than non-GAAP financial
measures used by other companies.
The statements in this press release contain “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. All
statements other than statements of historical fact included in
this press release are forward-looking statements made in good
faith by us and are intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform
Act of 1995. When used in this press release, the words
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“forecast,” “goal,” “intend,” “may,” “objective,” “plan,”
“potential,” “predict,” “projection,” “should,” “target,” “will” or
other similar words are intended to identify forward-looking
statements. These forward-looking statements are based upon
assumptions of management which are believed to be reasonable at
the time made and are subject to significant risks and
uncertainties. Actual events and results may differ materially from
those expressed or implied by these forward-looking statements.
Forward-looking statements include, but are not limited to,
statements relating to the settlement of the contingent forward
sale of ET common units and the expected receipt of cash proceeds
therefrom, expectations on reducing and eliminating CenterPoint’s
exposure to the midstream industry, including dispositions of ET
common units and preferred units, moving to a pure-play regulated
business, focus on growth of its utility businesses, long-term
growth strategy and investment plan, CenterPoint’s transition to a
cleaner energy future, CenterPoint Energy’s guidance basis utility
earnings per share growth target, plans regarding equity issuances
and the liquidity and risks of Energy Transfer LP common units and
preferred units. Each forward-looking statement contained in this
press release speaks only as of the date of this release. Important
factors that could cause actual results to differ materially from
those indicated by the provided forward-looking information include
risks and uncertainties relating to: (1) the impact of COVID-19;
(2) financial market conditions; (3) general economic conditions;
(4) the timing and impact of future regulatory and legislative
decisions; (5) effects of competition; (6) weather variations; (7)
changes in business plans; (8) growth in CenterPoint Energy's
service territory and changes in market demand; (9) CenterPoint
Energy's ability to execute on operations initiatives, targets and
goals; and (10) other factors discussed in CenterPoint Energy’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2020, CenterPoint Energy’s Quarterly Report on Form 10-Q for the
quarters ended March 31, 2021, June 30, 2021 and September 30, 2021
and other reports CenterPoint Energy or its subsidiaries may file
from time to time with the Securities and Exchange Commission
(SEC).
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version on businesswire.com: https://www.businesswire.com/news/home/20211202005981/en/
Media: John Sousa
media.relations@centerpointenergy.com Investors: Philip
Holder/Jackie Richert Phone 713.207.6500
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