- Q1 2021 earnings of $0.56 per diluted share; $0.59 per diluted
share on a non-GAAP basis, including strong results from utility
operations of $0.47
- Reaffirming 2021 Utility EPS guidance (“Utility EPS”) range of
$1.24 - $1.26 and reiterating 6% - 8% Utility EPS annual growth
rate target
- On path to deliver 10% compound annual rate base growth through
$16 billion 5-year capital plan
- Rollout of our transition to Net-Zero, as part of our ESG
strategy, later this year
CenterPoint Energy, Inc. (NYSE: CNP) today reported income
available to common shareholders of $334 million, or $0.56 per
diluted share, for the first quarter of 2021, compared to a loss
available to common shareholders of $1,228 million, or a loss of
$2.44 per diluted share, for the first quarter of 2020. First
quarter 2020 results included after-tax non-cash impairment charges
related to our midstream investments.
On a non-GAAP basis, first quarter 2021 earnings were $0.59 per
diluted share, with $0.47 per diluted share from utility
operations, and $0.12 per diluted share from midstream investments,
compared to $0.50 per diluted share from utility operations and
$0.10 per diluted share from midstream investments in first quarter
2020. The utility growth drivers, including organic growth, rate
recovery and ongoing cost management contributed $0.09 per diluted
share of favorable variance when compared to the first quarter of
2020. This was offset by the impact of $0.12 negative variance
attributable to the May of 2020 equity issuance and one-time CARES
Act benefit in the first quarter of 2020.
“The increasing strength of our utility operations contributed
to our strong first quarter results,” said Dave Lesar, President
and Chief Executive Officer of CenterPoint Energy. “We are
developing a consistent track record of delivering on our financial
and strategic objectives that we outlined during our 2020 Investor
Day.”
Lesar added, “Regarding our financial objectives, we are
reaffirming our 2021 Utility EPS range of $1.24 - $1.26. In
addition, we are on a path to deliver on our industry-leading 10%
compound annual rate base growth target which is supported by our
current $16 billion 5-year capital plan. These investments, coupled
with our O&M discipline and organic customer growth of
approximately 2% per year, will advance us towards delivering on a
consistent long-term 6% - 8% Utility EPS annual growth target while
keeping rates affordable for our customers.”
“Regarding strategic objectives, we recently announced the
agreement to sell our Arkansas and Oklahoma gas LDC businesses for
$1.725 billion, net of winter storm related gas costs, representing
a landmark valuation. At this sales price, we now anticipate that
this transaction will provide us with approximately $300 million of
incremental after-tax proceeds, compared to our Investor Day plan.
These additional proceeds will now allow us the opportunity to
begin to invest above our current $16 billion capital plan after
the sale closes.”
“Another strategic goal we are targeting later this year is the
roll out of an industry-leading Net Zero ESG plan which is also in
line with our commitments from Investor Day. I strongly believe
that the strategy we laid out and the progress we have made so far
more than demonstrates the unique value proposition CenterPoint
offers,” said Dave Lesar.
Earnings Outlook
Given the recently announced merger between Enable and Energy
Transfer, CenterPoint Energy will only be presenting a Utility EPS
guidance range for 2021 as Enable did not provide 2021 guidance
during its recent earnings call.
In addition to presenting its financial results in accordance
with GAAP, including presentation of income (loss) available to
common shareholders and diluted earnings (loss) per share,
CenterPoint Energy provides guidance based on non-GAAP income and
non-GAAP diluted earnings per share. 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.
Management evaluates CenterPoint Energy’s financial performance
in part based on non-GAAP income and non-GAAP earnings per share.
Management believes that presenting these non-GAAP financial
measures 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
these non-GAAP financial measures exclude items that Management
believes do not most accurately reflect the company’s fundamental
business performance. These excluded items are reflected in the
reconciliation tables of this news release, where applicable.
CenterPoint Energy’s non-GAAP income and non-GAAP diluted earnings
per share measures should be considered as a supplement to, and not
as a substitute for, or superior to, income available to common
shareholders and diluted earnings per share, which respectively are
the most directly comparable GAAP financial measures. These
non-GAAP financial measures also may be different than non-GAAP
financial measures used by other companies.
(1) Utility EPS Guidance Range
- The Utility EPS guidance range 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.
- The Utility EPS guidance excludes:
- Earnings or losses from the change in value of ZENS and related
securities
- Certain expenses associated with Vectren merger
integration
- Midstream Investments segment and associated income from the
Enable preferred units and a corresponding amount of debt in
addition to an allocation of associated corporate overhead and
impact, including related expenses, associated with the merger
between Enable and Energy Transfer
- Cost associated with the early extinguishment of debt
- Gain and impact, including related expenses, associated with
gas LDC sales
In providing this guidance, CenterPoint Energy 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. The 2021 Utility EPS guidance range
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 2021 Utility
EPS guidance range assumes a continued re-opening of the economy in
CenterPoint Energy’s service territories throughout 2021. To the
extent actual results deviate from these assumptions, the 2021
Utility EPS guidance range 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 non-GAAP
diluted earnings per share 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.
(2) Midstream Investments EPS Expected Range
Midstream guidance is not initiated at this time as a result of
a pending merger between Enable and Energy Transfer. CenterPoint
Energy will continue to record its share of Enable’s earnings as
well as basis difference accretion, earnings from the Enable
preferred distributions net of an associated amount of debt,
interest on the Midstream note, and an allocation of corporate
overhead based on Midstream Investment segment’s relative earnings
contribution until the transaction closes.
Upon closing of the transaction, CenterPoint Energy’s investment
in Energy Transfer will be accounted for as an equity method
investment with a fair value option. Following the closing of the
transaction, CenterPoint Energy will establish Midstream
Investments EPS expected range based on the distributions from
Energy Transfer and the debt and corporate allocations previously
described as a component of our Midstream Investments, excluding
market-to-market gains or losses recorded for the Energy Transfer
investments.
Reconciliation of Consolidated income
(loss) available to common shareholders and diluted earnings (loss)
per share (GAAP) to non-GAAP income and non-GAAP diluted earnings
per share
Quarter Ended
March 31, 2021
Utility Operations
Midstream Investments
Corporate and Other (5)
Consolidated
Dollars in millions
Diluted EPS (1)
Dollars in millions
Diluted EPS (1)
Dollars in millions
Diluted EPS (1)
Dollars in millions
Diluted EPS (1)
Consolidated income (loss) available to
common shareholders
$
304
$
71
$
(41)
$
334
Add back: Series B preferred stock
dividend(2)
—
—
17
17
Consolidated income (loss) available to
common shareholders - diluted and diluted EPS(1)
$
304
$
0.48
$
71
$
0.12
$
(24)
$
(0.04)
$
351
$
0.56
ZENS-related mark-to-market (gains)
losses:
Marketable securities (net of taxes of
$4)(3)(4)
—
—
—
—
19
0.03
19
0.03
Indexed debt securities (net of taxes of
$5)(3)
—
—
—
—
(21)
(0.03)
(21)
(0.03)
Impacts associated with the Vectren
merger (net of taxes of $1)(3)
2
—
—
—
—
—
2
—
Cost associated with the early
extinguishment of debt (net of taxes of $6)(3)
—
—
—
—
21
0.03
21
0.03
Corporate and Other Allocation
(7)
(0.01)
2
—
5
0.01
—
—
Consolidated on a non-GAAP
basis
$
299
$
0.47
$
73
$
0.12
$
—
$
—
$
372
$
0.59
(1) Quarterly diluted EPS on both a GAAP
and non-GAAP basis are based on the weighted average number of
shares of common stock outstanding during the quarter, and the sum
of the quarters may not equal year-to-date diluted EPS. EPS figures
for Utility Operations, Midstream Investments and Corporate and
Other are non-GAAP financial measures.
(2) To reflect income and earnings per
diluted share as if the Series B preferred stock were converted to
common stock
(3) Taxes are computed based on the impact
removing such item would have on tax expense
(4) Comprised of common stock of AT&T
Inc. and Charter Communications, Inc.
(5) Corporate and Other, plus income
allocated to preferred shareholders
Quarter Ended
March 31, 2020
Utility Operations
Midstream Investments
Corporate and Other (6)
CES(1) & CIS(2) (Disc.
Operations)
Consolidated
Dollars in millions
Diluted EPS (3)
Dollars in millions
Diluted EPS (3)
Dollars in millions
Diluted EPS (3)
Dollars in millions
Diluted EPS (3)
Dollars in millions
Diluted EPS (3)
Consolidated income (loss) available to
common shareholders and diluted EPS (3)
$
67
$
0.13
$
(1,127)
$
(2.24)
$
(22)
$
(0.04)
$
(146)
$
(0.29)
$
(1,228)
$
(2.44)
Timing effects impacting CES
(1):
Mark-to-market (gains) losses (net of
taxes of $11)(4)
—
—
—
—
—
—
(35)
(0.07)
(35)
(0.07)
ZENS-related mark-to-market (gains)
losses:
Marketable securities (net of taxes of
$30)(4)(5)
—
—
—
—
114
0.23
—
—
114
0.23
Indexed debt securities (net of taxes of
$28)(4)
—
—
—
—
(107)
(0.21)
—
—
(107)
(0.21)
Impacts associated with the Vectren
merger (net of taxes of $1)(4)
—
—
—
—
6
0.01
—
—
6
0.01
Severance costs (net of taxes of $2,
$0)(4)
6
0.01
—
—
1
—
—
—
7
0.01
Impacts associated with the sales of
CES(1) and CIS(2) (net of taxes of $28)(4)
—
—
—
—
—
—
206
0.41
206
0.41
Losses on impairment (net of taxes of
$0, $379)(4)
185
0.37
1,177
2.34
—
—
—
—
1,362
2.71
Corporate and Other Allocation
(5)
(0.01)
(1)
—
8
0.01
(2)
—
—
—
Exclusion of Discontinued
Operations(7)
—
—
—
—
—
—
(23)
(0.05)
(23)
(0.05)
Consolidated on a non-GAAP
basis
$
253
$
0.50
$
49
$
0.10
$
—
$
—
$
—
$
—
$
302
$
0.60
(1) Energy Services segment
(2) Infrastructure Services segment
(3) Quarterly diluted EPS on both a GAAP
and non-GAAP basis are based on the weighted average number of
shares of common stock outstanding during the quarter, and the sum
of the quarters may not equal year-to-date diluted EPS. EPS figures
for Utility Operations, Midstream Investments, Corporate and Other
and Discontinued Operations are non-GAAP financial measures.
(4) Taxes are computed based on the impact
removing such item would have on tax expense
(5) Comprised of common stock of AT&T
Inc. and Charter Communications, Inc.
(6) Corporate and Other, plus income
allocated to preferred shareholders
(7) Results related to discontinued
operations are excluded from the company's non-GAAP results
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
quarter ended March 31, 2021. A copy of that report is available on
the company’s website, under the Investors section. Investors and
others should note that we may announce material information using
SEC filings, press releases, public conference calls, webcasts, and
the Investor Relations page of our website. In the future, we will
continue to use these channels to distribute material information
about the company and to communicate important information about
the company, key personnel, corporate initiatives, regulatory
updates and other matters. Information that we post on our website
could be deemed material; therefore we encourage investors, the
media, our customers, business partners and others interested in
our company to review the information we post on our website.
Webcast of Earnings Conference Call
CenterPoint Energy’s management will host an earnings conference
call on Thursday, May 6, 2021, at 7:00 a.m. Central time/8:00 a.m.
Eastern time. Interested parties may listen to a live audio
broadcast of the conference call on the company’s website under the
Investors section. A replay of the call can be accessed
approximately two hours after the completion of the call and will
be archived on the website for at least one year.
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 March 31,
2021, the company owned approximately $36 billion in assets and
also owned 53.7 percent of the common units representing limited
partner interests in Enable Midstream Partners, LP, a publicly
traded master limited partnership that owns, operates and develops
strategically located natural gas and crude oil infrastructure
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.
Forward-looking Statements
This news release includes, and the earnings conference call
will include, forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. When used in this
news 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. Any statements in this news release or
on the earnings conference call regarding capital investments, rate
base growth and our ability to achieve it, future earnings and
guidance, including long-term growth rate, and future financial
performance and results of operations, including with respect to
regulatory actions, the expected closing of, or proceeds from the
merger between Enable and Energy Transfer or the sale of our
Arkansas and Oklahoma gas LDC businesses, customer rate
affordability, value creation, opportunities and expectations, ESG
strategy, including transition to Net-Zero, or ESG plan rollout and
any other statements that are not historical facts are
forward-looking statements. Each forward-looking statement
contained in this news release or discussed on the earnings
conference call speaks only as of the date of this release or the
earnings conference call.
Important factors that could cause actual results to differ
materially from those indicated by the provided forward-looking
information include, but are not limited to, risks and
uncertainties relating to: (1) the performance of Enable, the
amount of cash distributions CenterPoint Energy receives from
Enable, and the value of CenterPoint Energy’s interest in Enable;
(2) the integration of the businesses acquired in the merger with
Vectren Corporation (Vectren), including the integration of
technology systems, and the ability to realize additional benefits
and commercial opportunities from the merger; (3) financial market
and general economic conditions, including access to debt and
equity capital and the effect on sales, prices and costs; (4)
industrial, commercial and residential growth in CenterPoint
Energy’s service territories and changes in market demand; (5)
actions by credit rating agencies, including any potential
downgrades to credit ratings; (6) the timing and impact of
regulatory proceedings and actions and legal proceedings, including
those related to the February 2021 winter storm event; (7)
legislative decisions, including tax and developments related to
the environment such as global climate change, air emissions,
carbon, waste water discharges and the handling of coal combustion
residuals, among others, and CenterPoint Energy’s carbon reduction
targets; (8) the impact of the COVID-19 pandemic; (9) the recording
of impairment charges, including any impairments related to
CenterPoint Energy’s investment in Enable; (10) weather variations
and CenterPoint Energy’s ability to mitigate weather impacts,
including impacts from the February 2021 winter storm event; (11)
changes in business plans; (12) CenterPoint Energy's ability to
fund and invest planned capital, and timely and appropriate rate
actions that allow recovery of costs and a reasonable return on
investment, including costs associated with the February 2021
winter storm event; (13) CenterPoint Energy’s or Enable’s potential
business strategies and strategic initiatives, restructurings,
joint ventures and acquisitions or dispositions of assets or
businesses, including the announced sale of our Natural Gas
businesses in Arkansas and Oklahoma, which may not be completed or
result in the benefits anticipated by CenterPoint Energy, and the
proposed merger between Enable and Energy Transfer, which may not
be completed or result in the benefits anticipated by CenterPoint
Energy or Enable; (14) CenterPoint Energy’s ability to execute
operations and maintenance management initiatives; and (15) other
factors discussed in CenterPoint Energy’s March 31, 2021 Form 10-Q
and 2020 Form 10-K, including in the “Risk Factors” and “Cautionary
Statement Regarding Forward-Looking Information” sections of such
reports, and other reports CenterPoint Energy or its subsidiaries
may file from time to time with the Securities and Exchange
Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005275/en/
Media: Natalie Hedde Phone 812.491.5105
Investors: Philip Holder / Jackie Richert Phone
713.207.6500
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