Exhibit 99.1
| | | |
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Media:
Leticia Lowe
Phone 713.207.7702
Investors:
Marianne Paulsen
Phone 713.207.6500 |
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For Immediate Release | | Page 1 of 5 |
CENTERPOINT ENERGY REPORTS FOURTH QUARTER AND
FULL YEAR 2006 EARNINGS
Houston, TX — February 28, 2007- CenterPoint Energy, Inc. (NYSE: CNP) today reported net income and income from continuing operations of $67 million, or $0.20 per diluted share, for the fourth quarter of 2006 compared to $81 million, or $0.25 per diluted share, for the same period of 2005. Results for the fourth quarter of 2006 were reduced by $12 million, or $0.04 per diluted share, related to a final agreement with the Internal Revenue Service (IRS) as described below.
Net income for the year 2006 was $432 million, or $1.33 per diluted share, compared to $252 million, or $0.75 per diluted share, for 2005. Income from continuing operations before extraordinary item for 2006 was also $432 million, or $1.33 per diluted share, compared to $225 million, or $0.67 per diluted share, for 2005.
Results for the year 2006 included the impact of the resolution of two issues relating to prior years. The first was an agreement with the Appeals Division of the IRS regarding the tax treatment of the company’s Zero Premium Exchangeable Subordinated Notes (ZENS) and its former Automatic Common Exchange Securities. As a result of that agreement, in the second quarter of 2006 the company reduced its previously accrued tax and related interest reserves, adding $119 million ($0.37 per diluted share) to income. In the fourth quarter of 2006, the company increased these reserves, reducing income by $12 million, or $0.04 per diluted share, to reflect the final agreement as approved by the Joint Committee on Taxation of the U.S. Congress. A second issue resolved in 2006 was the remand to the Texas Public Utility Commission of the company’s 2001 unbundled cost of service order (UCOS). As a result of the agreement, which settled all issues, the company reduced income by $21 million after-tax, or $0.06 per diluted share in the second quarter of 2006. Excluding all impacts related to the ZENS tax issue and the UCOS, earnings for the fourth quarter of 2006 and for the year 2006 would have been $0.24 and $1.11 per diluted share, respectively.
Net income for the year 2005, included an extraordinary gain of $30 million, or $0.09 per diluted share, reflecting an adjustment to the extraordinary loss recorded in the second half of 2004 to write down generation-related regulatory assets. In addition, net income for 2005 included a loss of $3 million, or $0.01 per diluted share, from discontinued operations.
“I am very pleased with the overall results that we are reporting today,” said David M. McClanahan, president and chief executive officer of CenterPoint Energy. “Our interstate pipelines, field services and competitive natural gas marketing businesses turned in strong performances. However, mild weather and decreased usage led to disappointing results in our natural gas utilities. We have taken a number of steps to better position our company going forward, and I am optimistic about our future.”
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Phone 713.207.7702
Investors:
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Phone 713.207.6500 |
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For Immediate Release | | Page 2 of 5 |
OPERATING INCOME BY SEGMENT DETAILED
Electric Transmission & Distribution
The electric transmission & distribution segment reported operating income of $96 million in the fourth quarter of 2006, consisting of $66 million for the regulated electric transmission & distribution utility (TDU) (including $11 million for the competition transition charge (CTC)) and $30 million related to the transition bonds. Operating income for the fourth quarter of 2005 totaled $102 million, consisting of $90 million for the TDU (including $16 million for the CTC) and $12 million related to the transition bonds.
The TDU recorded lower revenues in the fourth quarter of 2006 compared to the same period of 2005 primarily due to the reduction in base rates implemented in October of 2006, a lower CTC amount resulting from the reduction in the allowed rate of return, milder weather and decreased usage. The TDU’s revenues continued to benefit from solid customer growth, with over 37,000 metered customers added during 2006, ending the year with 1.98 million metered customers. Operation and maintenance expenses increased slightly primarily due to increased spending on low income assistance and energy efficiency programs.
Operating income for the year 2006 was $576 million, consisting of $450 million for the TDU (including $55 million for the CTC) and $126 million related to the transition bonds. Operating income for 2005 totaled $487 million, consisting of $448 million for the TDU (including $19 million for the CTC) and $39 million related to the transition bonds. Operating income increased due to customer growth, a higher CTC amount collected in 2006, higher revenues from ancillary services and proceeds from land sales. These increases were partially offset by milder weather and decreased usage, the implementation of reduced base rates and increased spending on low income assistance and energy efficiency programs. In addition, the TDU’s operating income for 2006 included the $32 million adverse impact of the resolution of the 2001 UCOS order recorded in the second quarter.
Natural Gas Distribution
The natural gas distribution segment reported operating income of $34 million for the fourth quarter of 2006 compared to $59 million for the same period of 2005. Results for the fourth quarter of 2006 included a $21 million write-off for purchased natural gas costs for periods prior to July 2004. The Minnesota Public Utilities Commission denied recovery of these costs. Operating income was also adversely affected by milder weather and increased costs associated with staff reductions and higher employee-related expenses. Operation and maintenance expenses for 2005 included an $11 million increase in litigation reserves.
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For Immediate Release | | Page 3 of 5 |
Operating income for the year 2006 was $124 million compared to $175 million for 2005. In addition to the factors noted above, higher revenues from rate increases and customer growth were more than offset by decreased usage and higher bad debt and other expenses.
Competitive Natural Gas Sales and Services
The competitive natural gas sales and services segment reported operating income of $33 million for the fourth quarter of 2006 compared to $30 million for the same period of 2005. The increase was primarily driven by increased sales of gas from inventory, partially offset by a $10 million year-end write-down of natural gas inventory to the lower of average cost or market. The company purchases and stores natural gas to meet certain future sales requirements and enters into derivative contracts to hedge the economic value of the future sales.
Operating income for the year 2006 was $77 million compared to $60 million for 2005. The increase in operating income for 2006 was driven primarily by improved margins resulting from seasonal price differentials, increased sales of gas from inventory and favorable basis differentials over the pipeline capacity that the company controls. In addition, results for 2006 reflect a $37 million favorable change in unrealized gains resulting from mark-to-market accounting for non-trading financial derivatives, and $66 million of write-downs of natural gas inventory.
Interstate Pipelines
Beginning with the fourth quarter of 2006, the company separated the “pipelines and field services” segment into two reporting segments, “interstate pipelines” and “field services”. All prior period segment information has been recast to conform to the 2006 presentation.
The interstate pipelines segment reported operating income of $44 million for the fourth quarter of 2006 compared to $46 million for the same period of 2005. Higher operating income from the sale of excess gas no longer required following improvements to a storage facility was more than offset by a write-off of expenses associated with the Mid-Continent Crossing pipeline project that was discontinued.
Operating income for the year 2006 was $181 million compared to $165 million for 2005. In addition to the factors noted above, operating income for 2006 benefited from increased transportation and ancillary services and reduced litigation reserves, partially offset by increased operating expenses.
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Phone 713.207.7702
Investors:
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Phone 713.207.6500 |
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For Immediate Release | | Page 4 of 5 |
Field Services
The field services segment reported operating income of $23 million for the fourth quarter of 2006 compared to $21 million for the same period of 2005. The increase was driven by increased gas gathering and ancillary services, which reflect contributions from new facilities placed in service, partially offset by lower commodity prices occurring in the fourth quarter of 2006 and increased operating expenses.
Operating income for the year 2006 was $89 million compared to $70 million for 2005. The increase in operating income was due to the same factors noted above. Equity income from the company’s 50 percent interest in a jointly-owned gas processing plant was $6 million for each of the years 2006 and 2005. These amounts are included in Other — net under the Other Income (Expense) caption.
DIVIDEND DECLARATION
On February 1, 2007, CenterPoint Energy’s board of directors declared a regular quarterly cash dividend of $0.17 per share of common stock payable on March 9, 2007, to shareholders of record as of the close of business on February 16, 2007.
OUTLOOK FOR 2007
CenterPoint Energy expects 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-K FOR CENTERPOINT ENERGY, INC.
Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Annual Report on Form 10-K for the fiscal year ended December 31, 2006 . 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 at that site.
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| | For more information contact
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Phone 713.207.7702
Investors:
Marianne Paulsen
Phone 713.207.6500 |
| | | |
For Immediate Release | | Page 5 of 5 |
WEBCAST OF EARNINGS CONFERENCE CALL
CenterPoint Energy’s management will host an earnings conference call on Wednesday, February 28, 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.
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 Form 10-K for the period ended December 31, 2006, and other filings with the Securities and Exchange Commission.
###
Statements of Consolidated Income
(Millions of Dollars)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2005 | | | 2006 | | | 2005 | | | 2006 | |
| Revenues: | | | | | | | | | | | | | | | | |
| Electric Transmission & Distribution | | $ | 401 | | | $ | 407 | | | $ | 1,644 | | | $ | 1,781 | |
| Natural Gas Distribution | | | 1,441 | | | | 1,079 | | | | 3,846 | | | | 3,593 | |
| Competitive Natural Gas Sales and Services | | | 1,346 | | | | 908 | | | | 4,129 | | | | 3,651 | |
| Interstate Pipelines | | | 104 | | | | 89 | | | | 386 | | | | 388 | |
| Field Services | | | 31 | | | | 36 | | | | 120 | | | | 150 | |
| Other Operations | | | 4 | | | | 3 | | | | 19 | | | | 15 | |
| Eliminations | | | (115 | ) | | | (58 | ) | | | (422 | ) | | | (259 | ) |
| | | | | | | | | | | | | |
| Total | | | 3,212 | | | | 2,464 | | | | 9,722 | | | | 9,319 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | |
| Natural gas | | | 2,348 | | | | 1,623 | | | | 6,509 | | | | 5,909 | |
| Operation and maintenance | | | 384 | | | | 381 | | | | 1,358 | | | | 1,399 | |
| Depreciation and amortization | | | 130 | | | | 147 | | | | 541 | | | | 599 | |
| Taxes other than income taxes | | | 98 | | | | 78 | | | | 375 | | | | 367 | |
| | | | | | | | | | | | | |
| Total | | | 2,960 | | | | 2,229 | | | | 8,783 | | | | 8,274 | |
| | | | | | | | | | | | | |
| Operating Income | | | 252 | | | | 235 | | | | 939 | | | | 1,045 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | |
| Gain (Loss) on Time Warner investment | | | (15 | ) | | | 77 | | | | (44 | ) | | | 94 | |
| Gain (Loss) on indexed debt securities | | | 15 | | | | (67 | ) | | | 49 | | | | (80 | ) |
| Interest and other finance charges | | | (149 | ) | | | (117 | ) | | | (670 | ) | | | (470 | ) |
| Interest on transition bonds | | | (13 | ) | | | (32 | ) | | | (40 | ) | | | (130 | ) |
| Return on true-up balance | | | 17 | | | | — | | | | 121 | | | | — | |
| Other — net | | | 5 | | | | 8 | | | | 23 | | | | 35 | |
| | | | | | | | | | | | | |
| Total | | | (140 | ) | | | (131 | ) | | | (561 | ) | | | (551 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income from Continuing Operations Before Income Taxes and Extraordinary Item | | | 112 | | | | 104 | | | | 378 | | | | 494 | |
| | | | | | | | | | | | | | | | | |
| Income Tax Expense | | | (31 | ) | | | (37 | ) | | | (153 | ) | | | (62 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income from Continuing Operations Before Extraordinary Item | | | 81 | | | | 67 | | | | 225 | | | | 432 | |
| | | | | | | | | | | | | |
| Discontinued Operations: | | | | | | | | | | | | | | | | |
| Income from Texas Genco, net of tax | | | — | | | | — | | | | 11 | | | | — | |
| Loss on Disposal of Texas Genco, net of tax | | | — | | | | — | | | | (14 | ) | | | — | |
| | | | | | | | | | | | | |
| Total | | | — | | | | — | | | | (3 | ) | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income Before Extraordinary Item | | | 81 | | | | 67 | | | | 222 | | | | 432 | |
| | | | | | | | | | | | | | | | | |
| Extraordinary Item, net of tax | | | — | | | | — | | | | 30 | | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net Income | | $ | 81 | | | $ | 67 | | | $ | 252 | | | $ | 432 | |
| | | | | | | | | | | | | |
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K 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 | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2005 | | | 2006 | | | 2005 | | | 2006 | |
| Basic Earnings Per Common Share: | | | | | | | | | | | | | | | | |
| Income from Continuing Operations | | $ | 0.26 | | | $ | 0.21 | | | $ | 0.72 | | | $ | 1.39 | |
| Income from Discontinued Operations | | | — | | | | — | | | | (0.01 | ) | | | — | |
| Extraordinary item, net of tax | | | — | | | | — | | | | 0.10 | | | | — | |
| | | | | | | | | | | | | |
| Net Income | | $ | 0.26 | | | $ | 0.21 | | | $ | 0.81 | | | $ | 1.39 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Diluted Earnings Per Common Share: | | | | | | | | | | | | | | | | |
| Income from Continuing Operations | | $ | 0.25 | | | $ | 0.20 | | | $ | 0.67 | | | $ | 1.33 | |
| Income from Discontinued Operations | | | — | | | | — | | | | (0.01 | ) | | | — | |
| Extraordinary item, net of tax | | | — | | | | — | | | | 0.09 | | | | — | |
| | | | | | | | | | | | | |
| Net Income | | $ | 0.25 | | | $ | 0.20 | | | $ | 0.75 | | | $ | 1.33 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Dividends Declared per Common Share | | $ | 0.06 | | | $ | 0.15 | | | $ | 0.40 | | | $ | 0.60 | |
| | | | | | | | | | | | | | | | | |
| Weighted Average Common Shares Outstanding (000): | | | | | | | | | | | | | | | | |
| - Basic | | | 310,147 | | | | 313,048 | | | | 309,349 | | | | 311,826 | |
| - Diluted | | | 320,351 | | | | 334,618 | | | | 346,028 | | | | 324,778 | |
| | | | | | | | | | | | | | | | | |
Operating Income (Loss) by Segment | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Electric Transmission & Distribution: | | | | | | | | | | | | | | | | |
| Transmission & Distribution Operations | | $ | 90 | | | $ | 66 | | | $ | 448 | | | $ | 450 | |
| Transition Bond Companies | | | 12 | | | | 30 | | | | 39 | | | | 126 | |
| | | | | | | | | | | | | |
| Total Electric Transmission & Distribution | | | 102 | | | | 96 | | | | 487 | | | | 576 | |
| Natural Gas Distribution | | | 59 | | | | 34 | | | | 175 | | | | 124 | |
| Competitive Natural Gas Sales and Services | | | 30 | | | | 33 | | | | 60 | | | | 77 | |
| Interstate Pipelines | | | 46 | | | | 44 | | | | 165 | | | | 181 | |
| Field Services | | | 21 | | | | 23 | | | | 70 | | | | 89 | |
| Other Operations | | | (6 | ) | | | 5 | | | | (18 | ) | | | (2 | ) |
| | | | | | | | | | | | | |
| |
| Total | | $ | 252 | | | $ | 235 | | | $ | 939 | | | $ | 1,045 | |
| | | | | | | | | | | | | |
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Electric Transmission & Distribution | |
| | | Quarter Ended | | | | | | | Twelve Months Ended | | | | |
| | | December 31, | | | | | | | December 31, | | | | |
| | | | | | | | | | | % Diff | | | | | | | | | | | % Diff | |
| | | 2005 | | | 2006 | | | Fav/(Unfav) | | | 2005 | | | 2006 | | | Fav/(Unfav) | |
Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
| Electric transmission and distribution utility | | $ | 374 | | | $ | 346 | | | | (7 | %) | | $ | 1,538 | | | $ | 1,516 | | | | (1 | %) |
| Transition bond companies | | | 27 | | | | 61 | | | | 126 | % | | | 106 | | | | 265 | | | | 150 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 401 | | | | 407 | | | | 1 | % | | | 1,644 | | | | 1,781 | | | | 8 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Operation and maintenance | | | 172 | | | | 175 | | | | (2 | %) | | | 618 | | | | 611 | | | | 1 | % |
| Depreciation and amortization | | | 61 | | | | 61 | | | | — | | | | 258 | | | | 243 | | | | 6 | % |
| Taxes other than income taxes | | | 51 | | | | 44 | | | | 14 | % | | | 214 | | | | 212 | | | | 1 | % |
| Transition bond companies | | | 15 | | | | 31 | | | | (107 | %) | | | 67 | | | | 139 | | | | (107 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 299 | | | | 311 | | | | (4 | %) | | | 1,157 | | | | 1,205 | | | | (4 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 102 | | | $ | 96 | | | | (6 | %) | | $ | 487 | | | $ | 576 | | | | 18 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income — Electric transmission and distribution utility | | | 90 | | | | 66 | | | | (27 | %) | | | 448 | | | | 450 | | | | — | |
| Operating Income — Transition bond companies | | | 12 | | | | 30 | | | | 150 | % | | | 39 | | | | 126 | | | | 223 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total Segment Operating Income | | $ | 102 | | | $ | 96 | | | | (6 | %) | | $ | 487 | | | $ | 576 | | | | 18 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Electric Transmission & Distribution | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Actual MWH Delivered | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential | | | 5,317,080 | | | | 4,637,585 | | | | (13 | %) | | | 24,923,995 | | | | 23,954,745 | | | | (4 | %) |
| Total | | | 17,055,414 | | | | 16,638,022 | | | | (2 | %) | | | 74,189,448 | | | | 75,876,929 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Weather (average for service area): | | | | | | | | | | | | | | | | | | | | | | | | |
| Percentage of normal: | | | | | | | | | | | | | | | | | | | | | | | | |
| Cooling degree days | | | 128 | % | | | 116 | % | | | (12 | %) | | | 112 | % | | | 106 | % | | | (6 | %) |
| Heating degree days | | | 91 | % | | | 81 | % | | | (10 | %) | | | 82 | % | | | 68 | % | | | (14 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Average number of metered customers: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential | | | 1,704,690 | | | | 1,742,580 | | | | 2 | % | | | 1,683,100 | | | | 1,732,656 | | | | 3 | % |
| Total | | | 1,936,685 | | | | 1,979,890 | | | | 2 | % | | | 1,912,346 | | | | 1,968,114 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Natural Gas Distribution | |
| | | Quarter Ended | | | | | | | Twelve Months Ended | | | | |
| | | December 31, | | | | | | | December 31, | | | | |
| | | | | | | | | | | % Diff | | | | | | | | | | | % Diff | |
| | | 2005 | | | 2006 | | | Fav/(Unfav) | | | 2005 | | | 2006 | | | Fav/(Unfav) | |
Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 1,441 | | | $ | 1,079 | | | | (25 | %) | | $ | 3,846 | | | $ | 3,593 | | | | (7 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural gas | | | 1,148 | | | | 811 | | | | 29 | % | | | 2,841 | | | | 2,598 | | | | 9 | % |
| Operation and maintenance | | | 158 | | | | 165 | | | | (4 | %) | | | 551 | | | | 594 | | | | (8 | %) |
| Depreciation and amortization | | | 37 | | | | 39 | | | | (5 | %) | | | 152 | | | | 152 | | | | — | |
| Taxes other than income taxes | | | 39 | | | | 30 | | | | 23 | % | | | 127 | | | | 125 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 1,382 | | | | 1,045 | | | | 24 | % | | | 3,671 | | | | 3,469 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Operating Income (Loss) | | $ | 59 | | | $ | 34 | | | | (42 | %) | | $ | 175 | | | $ | 124 | | | | (29 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Natural Gas Distribution Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Throughput data in BCF | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential | | | 53 | | | | 54 | | | | 2 | % | | | 160 | | | | 152 | | | | (5 | %) |
| Commercial and Industrial | | | 57 | | | | 64 | | | | 12 | % | | | 215 | | | | 224 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total Throughput | | | 110 | | | | 118 | | | | 7 | % | | | 375 | | | | 376 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Weather (average for service area) | | | | | | | | | | | | | | | | | | | | | | | | |
| Percentage of normal: | | | | | | | | | | | | | | | | | | | | | | | | |
| Heating degree days | | | 94 | % | | | 85 | % | | | (9 | %) | | | 91 | % | | | 84 | % | | | (7 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Average number of customers: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential | | | 2,860,032 | | | | 2,909,673 | | | | 2 | % | | | 2,839,947 | | | | 2,883,927 | | | | 2 | % |
| Commercial and Industrial | | | 241,563 | | | | 244,030 | | | | 1 | % | | | 244,782 | | | | 243,265 | | | | (1 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 3,101,595 | | | | 3,153,703 | | | | 2 | % | | | 3,084,729 | | | | 3,127,192 | | | | 1 | % |
| | | | | | | | | | | | | | | | | | | | | |
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K 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 | | | | | | | Twelve Months Ended | | | | |
| | | December 31, | | | | | | | December 31, | | | | |
| | | | | | | | | | | % Diff | | | | | | | | | | | % Diff | |
| | | 2005 | | | 2006 | | | Fav/(Unfav) | | | 2005 | | | 2006 | | | Fav/(Unfav) | |
Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 1,346 | | | $ | 908 | | | | (33 | %) | | $ | 4,129 | | | $ | 3,651 | | | | (12 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural gas | | | 1,305 | | | | 867 | | | | 34 | % | | | 4,033 | | | | 3,540 | | | | 12 | % |
| Operation and maintenance | | | 9 | | | | 7 | | | | 22 | % | | | 30 | | | | 30 | | | | — | |
| Depreciation and amortization | | | 1 | | | | — | | | | — | | | | 2 | | | | 1 | | | | 50 | % |
| Taxes other than income taxes | | | 1 | | | | 1 | | | | — | | | | 4 | | | | 3 | | | | 25 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 1,316 | | | | 875 | | | | 34 | % | | | 4,069 | | | | 3,574 | | | | 12 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 30 | | | $ | 33 | | | | 10 | % | | $ | 60 | | | $ | 77 | | | | 28 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Competitive Natural Gas Sales and | | | | | | | | | | | | | | | | | | | | | | | | |
Services Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Throughput data in BCF | | | | | | | | | | | | | | | | | | | | | | | | |
| Wholesale — third parties | | | 69 | | | | 84 | | | | 22 | % | | | 304 | | | | 335 | | | | 10 | % |
| Wholesale — affiliates | | | 4 | | | | 9 | | | | 125 | % | | | 27 | | | | 36 | | | | 33 | % |
| Retail | | | 44 | | | | 39 | | | | (11 | %) | | | 156 | | | | 149 | | | | (4 | %) |
| Pipeline | | | 10 | | | | 7 | | | | (30 | %) | | | 51 | | | | 35 | | | | (31 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Total Throughput | | | 127 | | | | 139 | | | | 9 | % | | | 538 | | | | 555 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Average number of customers: | | | | | | | | | | | | | | | | | | | | | | | | |
| Wholesale | | | 121 | | | | 140 | | | | 16 | % | | | 138 | | | | 140 | | | | 1 | % |
| Retail | | | 6,616 | | | | 6,561 | | | | (1 | %) | | | 6,328 | | | | 6,452 | | | | 2 | % |
| Pipeline | | | 135 | | | | 136 | | | | 1 | % | | | 142 | | | | 138 | | | | (3 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 6,872 | | | | 6,837 | | | | (1 | %) | | | 6,608 | | | | 6,730 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Interstate Pipelines | |
| | | Quarter Ended | | | | | | | Twelve Months Ended | | | | |
| | | December 31, | | | | | | | December 31, | | | | |
| | | | | | | | | | | % Diff | | | | | | | | | | | % Diff | |
| | | 2005 | | | 2006 | | | Fav/(Unfav) | | | 2005 | | | 2006 | | | Fav/(Unfav) | |
Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 104 | | | $ | 89 | | | | (14 | %) | | $ | 386 | | | $ | 388 | | | | 1 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural gas | | | 13 | | | | 8 | | | | 38 | % | | | 47 | | | | 31 | | | | 34 | % |
| Operation and maintenance | | | 31 | | | | 23 | | | | 26 | % | | | 121 | | | | 120 | | | | 1 | % |
| Depreciation and amortization | | | 9 | | | | 9 | | | | — | | | | 36 | | | | 37 | | | | (3 | %) |
| Taxes other than income taxes | | | 5 | | | | 5 | | | | — | | | | 17 | | | | 19 | | | | (12 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 58 | | | | 45 | | | | 22 | % | | | 221 | | | | 207 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 46 | | | $ | 44 | | | | (4 | %) | | $ | 165 | | | $ | 181 | | | | 10 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Pipelines Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Throughput data in BCF | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural Gas Sales | | | 2 | | | | 4 | | | | (100 | %) | | | 6 | | | | 7 | | | | 17 | % |
| Transportation | | | 214 | | | | 221 | | | | 3 | % | | | 914 | | | | 939 | | | | 3 | % |
| Elimination | | | — | | | | (4 | ) | | | — | | | | (4 | ) | | | (6 | ) | | | (50 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Total Throughput | | | 216 | | | | 221 | | | | 2 | % | | | 916 | | | | 940 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | |
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Results of Operations by Segment
(Millions of Dollars)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Field Services | |
| | | Quarter Ended | | | | | | | Twelve Months Ended | | | | |
| | | December 31, | | | | | | | December 31, | | | | |
| | | | | | | | | | | % Diff | | | | | | | | | | | % Diff | |
| | | 2005 | | | 2006 | | | Fav/(Unfav) | | | 2005 | | | 2006 | | | Fav/(Unfav) | |
Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 31 | | | $ | 36 | | | | 16 | % | | $ | 120 | | | $ | 150 | | | | 25 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural gas | | | (5 | ) | | | (6 | ) | | | (20 | %) | | | (10 | ) | | | (10 | ) | | | — | |
| Operation and maintenance | | | 13 | | | | 17 | | | | (31 | %) | | | 49 | | | | 59 | | | | (20 | %) |
| Depreciation and amortization | | | 2 | | | | 2 | | | | — | | | | 9 | | | | 10 | | | | (11 | %) |
| Taxes other than income taxes | | | — | | | | — | | | | — | | | | 2 | | | | 2 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | | 10 | | | | 13 | | | | (30 | %) | | | 50 | | | | 61 | | | | (22 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 21 | | | $ | 23 | | | | 10 | % | | $ | 70 | | | $ | 89 | | | | 27 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Field Services Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Throughput data in BCF | | | | | | | | | | | | | | | | | | | | | | | | |
| Gathering | | | 91 | | | | 96 | | | | 5 | % | | | 353 | | | | 375 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total Throughput | | | 91 | | | | 96 | | | | 5 | % | | | 353 | | | | 375 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Other Operations | |
| | | Quarter Ended | | | | | | | Twelve Months Ended | | | | |
| | | December 31, | | | | | | | December 31, | | | | |
| | | | | | | | | | | % Diff | | | | | | | | | | | % Diff | |
| | | 2005 | | | 2006 | | | Fav/(Unfav) | | | 2005 | | | 2006 | | | Fav/(Unfav) | |
Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 4 | | | $ | 3 | | | | (25 | %) | | $ | 19 | | | $ | 15 | | | | (21 | %) |
| Expenses | | | 10 | | | | (2 | ) | | | 120 | % | | | 37 | | | | 17 | | | | 54 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Operating Income (Loss) | | $ | (6 | ) | | $ | 5 | | | | (183 | %) | | $ | (18 | ) | | $ | (2 | ) | | | 89 | % |
| | | | | | | | | | | | | | | | | | | | | |
Capital Expenditures by Segment
(Millions of Dollars)
| | | | | | | | | | | | | | | | | |
| | | (Unaudited) | | | | |
| | | Quarter Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2005 | | | 2006 | | | 2005 | | | 2006 | |
Capital Expenditures by Segment | | | | | | | | | | | | | | | | |
| Electric Transmission & Distribution | | $ | 82 | | | $ | 111 | | | $ | 281 | | | $ | 389 | |
| Natural Gas Distribution | | | 80 | | | | 54 | | | | 249 | | | | 187 | |
| Competitive Natural Gas Sales and Services | | | 8 | | | | 4 | | | | 12 | | | | 18 | |
| Interstate Pipelines | | | 37 | | | | 259 | | | | 118 | | | | 437 | |
| Field Services | | | 11 | | | | 24 | | | | 38 | | | | 65 | |
| Other Operations | | | 4 | | | | 7 | | | | 21 | | | | 25 | |
| | | | | | | | | | | | | |
| Total | | $ | 222 | | | $ | 459 | | | $ | 719 | | | $ | 1,121 | |
| | | | | | | | | | | | | |
Interest Expense Detail
(Millions of Dollars)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2005 | | | 2006 | | | 2005 | | | 2006 | |
Interest Expense Detail | | | | | | | | | | | | | | | | |
| Amortization of Deferred Financing Cost | | $ | 17 | | | $ | 13 | | | $ | 75 | | | $ | 53 | |
| Capitalization of Interest Cost | | | (1 | ) | | | (4 | ) | | | (4 | ) | | | (10 | ) |
| Transition Bond Interest Expense | | | 13 | | | | 32 | | | | 40 | | | | 130 | |
| Other Interest Expense | | | 133 | | | | 108 | | | | 599 | | | | 427 | |
| Interest Expense Incurred by Discontinued Operations | | | — | | | | — | | | | 1 | | | | — | |
| | | | | | | | | | | | | |
| Total Interest Expense | | $ | 162 | | | $ | 149 | | | $ | 711 | | | $ | 600 | |
| | | | | | | | | | | | | |
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Millions of Dollars)
(Unaudited)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2005 | | | 2006 | |
ASSETS | | | | | | | | |
Current Assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 74 | | | $ | 127 | |
| Other current assets | | | 2,817 | | | | 2,868 | |
| | | | | | | |
| Total current assets | | | 2,891 | | | | 2,995 | |
| | | | | | | |
| | | | | | | | | |
Property, Plant and Equipment, net | | | 8,492 | | | | 9,204 | |
| | | | | | | |
| | | | | | | | | |
Other Assets: | | | | | | | | |
| Goodwill | | | 1,709 | | | | 1,709 | |
| Regulatory assets | | | 2,955 | | | | 3,290 | |
| Other non-current assets | | | 1,069 | | | | 435 | |
| | | | | | | |
| Total other assets | | | 5,733 | | | | 5,434 | |
| | | | | | | |
Total Assets | | $ | 17,116 | | | $ | 17,633 | |
| | | | | | | |
| | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
Current Liabilities: | | | | | | | | |
| Short-term borrowings | | $ | — | | | $ | 187 | |
| Current portion of transition bond long-term debt | | | 73 | | | | 147 | |
| Current portion of other long-term debt | | | 266 | | | | 1,051 | |
| Other current liabilities | | | 2,675 | | | | 2,836 | |
| | | | | | | |
| Total current liabilities | | | 3,014 | | | | 4,221 | |
| | | | | | | |
| | | | | | | | | |
Other Liabilities: | | | | | | | | |
| Accumulated deferred income taxes, net and investment tax credit | | | 2,520 | | | | 2,362 | |
| Regulatory liabilities | | | 728 | | | | 792 | |
| Other non-current liabilities | | | 990 | | | | 900 | |
| | | | | | | |
| Total other liabilities | | | 4,238 | | | | 4,054 | |
| | | | | | | |
| | | | | | | | | |
Long-term Debt: | | | | | | | | |
| Transition bond | | | 2,407 | | | | 2,260 | |
| Other | | | 6,161 | | | | 5,542 | |
| | | | | | | |
| Total long-term debt | | | 8,568 | | | | 7,802 | |
| | | | | | | |
| | | | | | | | | |
Shareholders’ Equity | | | 1,296 | | | | 1,556 | |
| | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 17,116 | | | $ | 17,633 | |
| | | | | | | |
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
CenterPoint Energy, Inc. and Subsidiaries
Condensed Statements of Consolidated Cash Flows
(Millions of Dollars)
(Unaudited)
| | | | | | | | | |
| | | Twelve Months Ended | |
| | | December 31, | |
| | | 2005 | | | 2006 | |
Cash Flows from Operating Activities: | | | | | | | | |
| Net income | | $ | 252 | | | $ | 432 | |
| Discontinued operations, net of tax | | | 3 | | | | — | |
| Extraordinary item, net of tax | | | (30 | ) | | | — | |
| | | | | | | |
| Income from continuing operations | | | 225 | | | | 432 | |
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 618 | | | | 655 | |
| Deferred income taxes and investment tax credit | | | 224 | | | | (241 | ) |
| Tax and interest reserves reductions related to ZENS and ACES settlement | | | — | | | | (107 | ) |
| Write-down of natural gas inventory | | | — | | | | 66 | |
| Changes in net regulatory assets | | | (192 | ) | | | 79 | |
| Changes in other assets and liabilities | | | (792 | ) | | | 108 | |
| Other, net | | | 18 | | | | (1 | ) |
| | | | | | | |
Net Cash Provided by Operating Activities of Continuing Operations | | | 101 | | | | 991 | |
| | | | | | | | | |
Net Cash Used in Operating Activities of Discontinued Operations | | | (38 | ) | | | — | |
| | | | | | | |
Net Cash Provided by Operating Activities | | | 63 | | | | 991 | |
| | | | | | | | | |
Net Cash Provided by (Used in) Investing Activities | | | 17 | | | | (1,056 | ) |
| | | | | | | | | |
Net Cash Provided by (Used in) Financing Activities | | | (171 | ) | | | 118 | |
| | | | | | | |
| | | | | | | | | |
Net Increase (Decrease) in Cash and Cash Equivalents | | | (91 | ) | | | 53 | |
| | | | | | | | | |
Cash and Cash Equivalents at Beginning of Period | | | 165 | | | | 74 | |
| | | | | | | |
Cash and Cash Equivalents at End of Period | | $ | 74 | | | $ | 127 | |
| | | | | | | |
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.
