CNP - Earnings call transcript Q4 2017 | CenterPoint Energy, Inc.

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Operator

Good morning and welcome to CenterPoint Energy's Fourth Quarter and Full Year 2017 Earnings Conference Call with senior management.

During the Company's prepared remarks, all participants will be in a listen-only mode. There will be a question-and-answer session after management's remarks. [Operator Instructions] I will now turn the call over to David Mordy, Director of Investor Relations. Mr. Mordy?

David Mordy

Executive In morning, XXXX to Prochazka, quarter earnings CEO; Bill Good and fourth President and Jennifer. CFO; other call the several who will management we areas. and end with Q&A of and using results can key portion of year conference slides Also Rogers, highlights full the you, on year everyone. our us the and our Welcome be quarter members this and website, conjunction our will be will XXXX found call. available Thank discuss centerpointenergy.com. President provide fourth today, on Investors Vice morning, during call. Scott with our are which be section under

information changes non-GAAP service press will and Actual in earnings noted information including continue weather the variations, SEC section you conditions management. are factors commodity available these has and website, economic discuss results may In are to encourage based we currently of our management's in in differ a our statements factors future, using management Investors in They certain territories we our to filings. risks review to refer on communicate projections information Today, upon regulatory our the subject the could forward-looking forward-looking XX-K. to reconciliation today's channels information SEC to our our to the conference material please press been risk our that releases, information or on calls, assumptions Please topics going measures prices, guidance contain to is release materially our website. and earnings and other uncertainties. actions, that based will and These as beliefs, and Form to filings, and announce have website. slides. of providing used on posts webcasts important call, posted public use For note, growth,

regulatory as The XXXX. tax Operations financing our stocks, effects that such certain changes prices, or We that The to-date guidance and variables does will guidance throughout, public accounting for in significant performance such earnings a effective mark-to-market Utility change effective activities factors range of or or items, a also losses discuss the Services or in earnings share as securities include such and proceedings timing business. not the Enable's considers of uses weather, earnings legislation. guidance from commodity recent range guidance, considers impact of Company Notes other the potential rate, non-GAAP most the of as may include also action as the and tax regulatory diluted impacts accounting In measure and in providing tax the related per value adjusted result judicial this reform Exchangeable Company's unusual recent Subordinated ZEN rates. Zero-Premium Energy the and forecast to standards

During Jobs the today's refer simply as call slides, the as Public Cuts we reform. Act tax introduced accompanying XXX-XX, or TCJA to Number and Tax and initially will in Law

our XXXX the on to additional will CenterPoint Scott we in Initiative responsibility expect sharing our report release format. forward corporate look increase we mention Before insight to that with follow -- want to report Reporting begins, We our March; investors. to expect I Global

the how Finally, that, with to found replay will Scott. And over this being Information I recorded. is on call on be website. call turn our access can to the now

Scott Prochazka

$X.XX earnings X. on guidance per an On increase $X.XX. and for today we reform per strong and XXXX for versus you morning, of $X.XX you good guidance XX%. I will The share reported $X.XX year finished joining for XXXX XXXX above in to share This and we ladies XXXX begin your Thank $X.XX end Slide interest David gentlemen. last per at basis, more tax January CenterPoint. a a $X.XX set was CenterPoint earnings of of in Energy. $X.XX we thank range morning of benefits of is year year. the share, top you, for the than excluding the Thank the of us diluted

in can Our the XXXX investments. strong addition be midstream primarily performance attributed in to businesses, core our growth of performance in to

added to XX,XXX Turning Slide in we X; combined more utility customers than XXXX.

of Additionally, Brazos $XX utilities. iron in achievements pipe saw all the Hurricane hardening. for Texas and Valley the the grid all the Minnesota. and rate Connection technology approximately value Harvey in investments also relief tested added of past for and combined structures the demonstrated system operational including million XXXX of installation finishing numerous replacement our and cast

our what Electric in XXXX compared million nearly an a numerous We handled On X,XXX see of several challenges Slide proud our accretive In operating in I'm million and X, you in short, year. employees first its also in saw completed opportunities XXXX income and XXXX. in was had can accomplished. acquisition CES Core which business we XXXX. solid was $XXX Houston $XXX to

were income and primarily miscellaneous increased to cost XXXX. by rate to operating partially as continued relief. rate timely both return last increases we metered These increases were in expenses, compared equity and customer well depreciation nearly with relief use to year lower usage our X.X%, operations of offset as effect added recovery as Electric revenues maintenance and and mechanisms able Houston and growth. Excluding customers due XX,XXX investment

growth Slide lessons system significant invest our response load capacity ongoing capital and to from customer safe, and and continue and past X; to to Turning to has sufficient resilient Electric Houston ensure year, reliable. hurricanes in is will learned this

Electric. now serve the Texas area. to Bailey This Our most million XXXX. the petrochemical December ERCOT in industry project of of Freeport, at was the $X.X Electric Reliability project by of recent $XXX approximately Creek in Texas that billion endorsed plan will is Jones X-year growing includes the needs of investment Council or This the inclusive of capital plan Houston

operational pleased construction financial would results after for we we expect to expect in coming and and application decision PUCT continued growth approval XXXX years. I'm with strong this begin We shortly very year an file in the Electric in the Houston a anticipated and approval. XXXX; later with

income to compared The delivered customer gas relief, XXXX, rate benefited $XXX Moving XXXX. in and natural to business from X.X%. in was in million Operating higher $XXX results of an growth million transportation X; XXXX Slide distribution revenues. strong

part depreciation and Texas year added due and maintenance operations by During quarter, in more in were benefit with $XX expenses, million reliability acceleration of the than and due customers expenses a benefits offset to reduction we a increased leading to recover the had also the Natural These to expense corresponding recording gas post partially second regulatory retirement last asset future in projects. and Minnesota rates. a prior selected of XX,XXX metered amortization, and distribution growth.

Turning to invested distribution XXXX. capital of gas Slide $XXX business X; in we million natural in our

growth, on the an focuses an warm Our new capital first $X.X we year plan This service reflects was quarter extremely reliability distribution, steady territories. growth replacement. year infrastructure and billion X-year throughout with considering for our started natural impressive and safety, especially gas

will included approximately at annualized year end $XXX Turning rate approximately depreciation tax forecasted investment. base by be rate through to beginning our growth are average by growth; as to our in the capital recovery in increase rate in base normal majority XXXX million. rate federal X.X% XXXX. Slide as this reform of the to plan This XXXX. mechanisms of growth The increase expected lower changes early XX; consolidated to contributes is capital strong average also translate driven to Tax base an expected is

create the to XX; in for investment Texas four calls Moving provides recovery limit to use a passed and case for a Texas for Slide mechanism utilities. cases permanence the legislature PUCT the on the schedule that its all rate XXXX, law electric removed distribution time between rate

in case rate of recently to XX rate case later last a file Given that XXXX. agreed XXXX, than our occurred we no April base

ROE indicated is ROE year below Our of our for allowed most X.X% recent Report EMR which a Earnings Monitoring XX%. or the XXXX our

differ rather mechanisms, utilize accelerate to benefits next waiting this reform not our our Additionally, certain will will tax be our from distribution TCOS rate to impact reform will tax DCRF our will gas we annual proceedings benefits electric reform, and rate to the customers state other returning tax With than mechanisms for and through rate to or incorporated earnings. cases, related customers; regulatory existing until state. expected incorporate business, case natural

million Operating integration despite gain incurring $XX $XX $XX delivered loss year. specifically excluding mark-to-market of of Slide in was of XXXX, Turning to to a the was million achieved $XX XX; $X a in results and XXXX. expenses, performance solid Energy million Services and compared XXXX improved acquisition million income million to cost This respectively. related during

We contribute well scale. XXXX. capture on results reduce realize of throughout We to will $XX volumes year. in shows their processed $XX services gathered overtime highlights remains income performed in key range. for synergies million Operationally, XXXX. produced, anticipate exceeding economies expect Enable's XXXX on-schedule to of highest Enable income some in NGLs Slide energy guidance as G&A XX integrations full Enable operating the we very performance they and achieving transported record their their completions and year volumes, project and had formation. since for net volumes, million

X, to February of active system. XX Enable drilling As gathering rigs, wells their had connected

year's to our which hurricane growth share. the aid X% help of we we each is with Enable X% XXXX coverage previous balance energy in Rico When range Houston pleased illustrates systems to and growth with following had guidance on EPS XXXX. targeting Many and basis. they well business our in delivery Harvey, units wrap up attractive we off of our success; equity I of a guidance X.Xx for Slide are XXXX accretive came income positioned XXXX, operating ratio restoration Hurricane believe sheet, spirit devastated, to industry, employees. effort. are to our $X.XX our Slide $X.XX solid XX are for Electric. a respond. to We're also return in were Company, XX. the their an distribution continue announcing maintaining it EPS guidance was on growth solid strong pursuing excluding XXXX We will our have and focused footprint, Today and Puerto per In of

CAGR tax strength, provide balance impacts of will capital formation. our more detail Our on sheet projected strong as X.X% territories. rate of financial to now base service meet X-year invest and performance, Bill? needs Bill of we growing CenterPoint's the reform, is

Bill Rogers

Thank Scott. you,

tax of morning of Let earnings diluted and the for guidance begin with and earnings basis a benefit of of on on of mark-to-market of without earnings basis of guidance $X.XX $X.XX for order In adjustments reform. Services and the quarter for of to adjustments a improvement a fourth $X.XX a basis diluted share then XXXX. per arrive $X.XX This basis quarter-to-quarter of fourth a per related tax to XXXX, fourth as subtract We This shown $X.XX our a guidance XXXX benefit business, at $X.XX subtract basis me we adjusted XX. guidance basis, and reported reform the for the $X.XX. guidance share tax $X.XX in ZENS $X.XX Energy per reported on XX% we earnings $X.XX. basis. GAAP Slide share, of fourth reconciliation at on with represents quarter This earnings reform quarter with compares guidance per share quarter associated arrive on our a

diluted XXXX, XXXX. per of compares $X basis, guided this a with the $X.XX year a for earnings reported we diluted per tax of $X.XX without of share. and full share earnings basis $X.XX full basis the and earnings reform; on a For year $X.XX on guidance benefit guidance and reported

reform benefit on XXXX, Services a business, This We related of associated a ZENS basis. then at a $X.XX tax from to arrive improvement related tax adjusted XX% on Energy of subtract mark-to-market the in adjustments subtract For year-to-year basis an earnings $X.XX we order represents with $X.XX. of for at basis our $X.XX. arrive guidance guidance $X.XX to adjustments and reform

$X.XX $XX interest per a to will 'XX our of by net benefit earnings by company. $X.XX end million associated borrowing share guidance Slide to million improvement. income refinancing year-over-year tax expense improved return reduction $XXX return $X.XX equity relative approximately was in us from at further review charges $X.XX This lower share $X.XX million the I $X.XX despite We over utility XXXX, from a 'XX. Turning year XX% a walk primarily reform. income a redemptions year end with year XXXX. per in basis XX; full to to improvement in on improvement XXXX additional equate had income include reduced $XX utility balance earnings expense share. and other securities. dividends and and Other excluding share XXXX versus Interest operation amounts on the our operating preferred to Equity due management We income the to excluding improvements a of additional per for for sheet operations brings per began with Enable bond in in relative EPS

our EPS share attention midstream Slide of XXXX of and improvement the from share turning $X.XX per investments bridging basis basis guidance reform. guidance Now EPS tax utility to and year-on-year without XX; $X.XX combined the our per improvement $X.XX showed we XXXX the $X.XX

flow midstream CenterPoint. result are rate upward unregulated XX% We result As taxes on mark-to-market in XX a will inclusive effective the depicted of decrease income the $X.XX expense primarily on impacts of for reform in and This in approximately as on of approximately effective accounting of this tax on reform. of commodity reform. of XXXX state deferred investments derivatives. through highlights cash from our from a tax of tax taxes slide, excess a improvement rate impact rate income anticipate a tax the the of line. XX% Slide anticipate earnings our income XX% tax included effective as There projected approximately to XXXX from a $X.XX tax four shift tax as We lower result in of businesses. is XXXX, amortization

in First, expected tax flows. near-term change depreciation cash thereby expense the shield, at reduces tax reducing tax the rate lower

reduce upon the tax the the jurisdiction. regulatory cash liability may schedules established will Second, depend excess the of flows; expected amortization return this in timing ultimately near-term of deferred each

of this this a will greater make also our to create for flow; CenterPoint -- elect a The relates impact income Should expected option anticipate at will benefit now In third to our positive the has the consolidated under level. reduction The rate lower near-term tax a return to utility Enable flows cash that expense final purposes. not to its tax result cash income of Enable that income tax shield tax is aggregate, enjoy capital expected impact selection, we in to investments reform. rate. tax the be fully cash as is regulation;

deferred provides or balance target our maintain on and ranges. However, impacting sheet of the our balance tax reform with liability the year equity sheet year impacts tax benefit end the foresee metrics year we at more adjustments reform. recorded ability this My ratio the our to first Slide associated not credit from comments do at tax to improved strength to capital consolidated This XX% our of XX%. XX tax our relate our above end end. to at/or metric credit detail

company XX% able to Electric the at our from capital and CERC year-end we improved, to Additionally, debt debt base at percentage as Houston year-end the of at XX% reduce were 'XX. holding to total XXXX

credit to our adjusted the full metrics, Regarding for XXXX year FFO debt was XX%. approximately

from a in We year the will as at million debt in our $XXX debt $XXX XXXX. this by by earlier, associated temporary as noted to higher be increased earlier. reduced flow that As million financing XXXX, gas in principally right and weather working experienced XXX capital end. and colder adjusted discussed we anticipate basis points was Over approximately reform was result as FFO of prices much impacts cash tax with nature increase of it

a lower is federal result $X.X XXXX billion for XX% beyond. regulatory as the the rate of liability reform a win and customers for and tax Finally, tax CenterPoint utility

earlier, these for various Fitch. jurisdiction. returned & with discussed customers Slide to As through be billion proceedings planned each mechanisms we investment for and XX, $X.X On will and Standard Poor's, or XXXX our our note current Moody's, ratings benefits rate

need a Enable capital. common it of does not Our for XXXX contemplate the nor a source to suggest of does equity, as units of some financing issuance plan sell

public will any sizing. our market public the our units or As Enable's otherwise. be prices float action of any equity multi-year we've The to subject we equity to common a shared will goal timing in of to take, and the Enable the conditions. size sale With remains through sale markets period likely past, over exposure impact commodity reduce in

per previous support dividends. increases a XXXX, As reminder, in had marks units and have have X% XX% approximately XXXX. This $X.XXXX partners. investment proceeds represents share held in year will ratio. from announced quarterly our increase any common a Further, of reduction our over XXXX we consistent a significant the balance In This our Net and the dividend. currently the general dividend X% sheet recently payout our quarterly consecutive announced the are utilities. our increased we XXth by in increase the dividend, December sale with we

basis ratio the Assuming and over guidance range of payout XX declared our will to the have four annualizing our XX% XX% dividend reduced EPS in XXXX. midpoint dividend from recently quarters, been in XXXX

capital rates rate in Let utility up investment and tax growth by me first, wrap messages; reiterating a changes of above combined result expected key higher average depreciation X% as we for investments now base through have a XXXX. the five

debt strong metrics anticipating with which XX%, to secondary in not to equity are projected credit our a are we offering XXXX. above FFO of adjusted means Second, remain

And Third, tax surpassed increase guidance produced provided range with midpoint we reform XXXX the of XXXX to XX% our guidance and basis XXXX. turn our guidance EPS excluding XXXX tax over now guidance reform basis EPS are over call and EPS our EPS of growth in Dave. XX% back each off EPS year XXXX benefit XXXX benefit. basis X% for targeting an prior Fourth, XXXX. we've to without the I will guidance fifth, a above X%

David Mordy

Bill. Thank you,

interest ask to We In will time, follow-up. and I call a will you now yourself to to Jennifer? open the the question one questions. limit of

Operator

[Operator from Instructions] first Michael with is question Suisse. Credit Our Weinstein

Michael Weinstein

could of forward equity I understand comment in no and equity you up for XXXX? on will going how debt shape through XXXX, maybe financing terms

Bill Rogers

the we of it a on have quality, to and/or take of begin to Enable sales and at with forward-looking we equity, credit financing sales about debt how event spoken to to units were the With we I be we therefore, equity. In our credit think beyond, capital commitment XXXX common commitment our what of let's consider can it dividend; source our that should would a common I modest. -- our we've on we will investment consider a and respect -- and time whether have it's sale matter metrics any reasonably much think if and are of as utilities,

Michael Weinstein

onto Just holding if you'll that initially on I'm exposure sell is the this I to changes wondering needs words, longer direct a more than than be regulated original Enable planned? Enable; to holding if sale. that your will view question now would had little to through you a In be it able think a company that bit been probably on other or you longer considering you been follow-up it just plan the M&A. there acquire more view utilities a regulated on have

Scott Prochazka

don't I are with where views our we believe status impacts the of respect Enable to M&A. with

very our to Our we a with you've known comments billion through outside that as over that and been organically, investment the extent to can To in can against -- budget, can utility were the we have seen grow have next look got weigh large past that five get internally. returns anything invest business we've core capital returns. of years that have the $X.X we we what available at we the

our on business. core opportunistic attention in but perhaps the our our on So, investments core remains --

Operator

Julian with next Bank comes America. question [ph] of Our from

Unidentified Analyst

through that where against want I believe understood this So a balance you of perhaps I sheet just balance the the to FFO that on that cadence how how you monetization; share follow to the the commented sale a your think little you've about perspective? thinking be and future obviously year, commentary, years no you of on the the about forecast bit but that are period? I the backdrop mean, to impact for sheet are from Enable up

Bill Rogers

there require credit sale to and the we to prepared our respect in said remarks, clarify units sheet With the of the we doing considerations consideration; to XXXX. Just metrics Enable support the capital that of cadence points constructively I strength markets sector so that two Enable, our marketplace. not one and do for are we be balance want to the any of in think sales, is in

balance have. to use our consideration our We utilities then want of our that is might capital needs redeploy sheet that formation And into the any and respectful second businesses. of be also strengthen proceeds to Enable

Unidentified Analyst

the that certainty around forecast you're a you talking Maybe to on bit period? FFO thinking about through of is would that point basis provide a impact consistent Obviously, kind this; to the support here? expect little net about level, more us what to help drop 'XX roughly of the XXX a debt metrics; you're

Bill Rogers

Should higher. be not level, if at that

Unidentified Analyst

probably there? But of to it monetization a a to assumption backfill keep still us from modeling for you perspective, kind good be of units would

Bill Rogers

one would That be to way it. approach

Operator

Your comes next with Agha SunTrust. from question Ali

Ali Agha

which when actually or XXXX us to CapEx visibility you confidence the that you've Bill, base to you is kind that to assumption X% continue that goes of through that; XXXX, X% look plan at with provide this out for rate which and could timeframe does also plan? through growth CapEx your your growth rate XXXX laid the

Bill Rogers

about plan way is that's to think as Enable, for; conceptually can we've from around the you the But in would Ali, primarily. that provided tell we're guidance throughout because CapEx utilities shorter the I impacts associated from provided for then the earnings of that think entire one our this coming are and we've earnings CapEx period growth continue visibility with spending period. spending given

Ali Agha

about you eye I on business exposure original the want premise earnings of profile. markets And to understand mix etcetera; back keep part that just commodity capital don't your sheet that on, an you the but strategically issues to coming as balance Enable, talked your or

that strategic from a to when the overall perspective, exposure have would like from eliminated CenterPoint portfolio? So you

Bill Rogers

more haven't a of from for rapid is, as We done as know us. what have of timeline, you the exit know, those you were options specified we none and this considering go that process investment; through worked

commodity any So selling constructive reduce are that space. than here. in our time we looks outlined, like of a what focusing ownership on that units to don't and intend we having the now to of to the exposure fashion period other in period over our a say; longer to we've we reduce as on completed exposure over specificity of a mode And have time,

Ali Agha

assumes laid 'XX of not any that it any well? that you've does the that units sale believe just two growth for to years but the rate just as in out of lastly 'XX assume ownership I and Enable, was clarify; your us, And in current continues those numbers slides

Bill Rogers

to the for that we that financing on get number a targeting say this and we've time is, we growth could over committed how that rate I'd fairest of are period options way of there. say to considered

Operator

Our Management. next question Capital from comes Insoo with RBC Kim

Insoo Kim

a possibility there of portion private of you type pursue a be units, terms Enable tellegrade market of down will a placements you for a at faster would enable sell In unit the the to transactions potential of at of to [ph] that instead pace?

Bill Rogers

You're correct and that remains an option.

Our selling -- only partnership we to X% constraint there holdings to our is more than no in our agreement, one can of are current limited buyer.

Insoo Kim

question second million project in I but included have you it forecast might out that laid or the is, the not? it My X-year $XXX missed is is proposed Freeport

Bill Rogers

Yes, it total. now included the in $X.X new is billion

Operator

question from Our [indiscernible]. is next

Unidentified Analyst

rate little 'XX of having a I'm to [indiscernible]; growth X.X% X% growth base but X% bit in and trouble Bill, only CAGR in next 'XX.

operations; you else? that does I there is something Enable 'XX for And down the as expecting drag going past are that seeming mean stays higher a a then, forward? you're am expanding discontinued or rate fee growth So earnings off example,

Bill Rogers

into rate contemplate. that directionally, I company adjustments and growth utility any should and you're right, translate think regulatory for common equity growth with base lag might that EPS

what publicly visibility segment in a there will next midstream looks midstream like. as XXXX have segment the into We three our only said, what years, produce are

out growth get beyond XXXX. that it the to over rate say So able suffice better until period, longer visibility we're stretch to we term not

Unidentified Analyst

actually going you and you're you're commit outcome expect to what while should So I to say Am there from that think a saying say when more the you're until it I midstream is visibility -- not sector. that I right? certain

Scott Prochazka

Yes.

Unidentified Analyst

should be Then conservative. we

Scott Prochazka

visibility view we we're through reasonable have the of think components. window we providing, that are various given X-year the the to a growth business providing We that

Operator

Our next Research. with Fishman Morningstar from question Charles is

Charles Fishman

correct? payout want policy I I XX% just your in I but the Bill, that it dividend words, to appreciate ratio not has dividend at the is Enable; confirm overall, other flow think your and XX% XX% from changed; on utility was payout -- comments to

Bill Rogers

financials, the we forth; first intending us dividend takes is, decides have needs, share of the the The every Board way that respect X% allows at to recognize we are we of and 'XX; thing, we of quarter, look in express growth With than clear utility the business. the a so earnings rate then 'XX the growth that our our dividend this whether dividend. grew strength our reinvest in grow to capital trajectory capital retain 'XX, shared lower and our dividend, the deliberately it rate each ability to 'XX, and but that per is our it a earnings and that

Charles Fishman

to the out Enable is end -- year position XX% end the their still because of to realize correct? of potentially, only I Enable be But Board at the I you still day, and mean, you a but this going put of on in and that does at XX% guidance the upper it would feel comfortable

Bill Rogers

payout dividend Board have we're comfortable the ratio we certainly think the today. with for but speak won't I I

Operator

from question next is Levine Citi. Ryan Our with

Ryan Levine

in CapEx the XXXX? electric What's load through for driving your growth 'XX increase large

Scott Prochazka

the So the to this what's make sure question, period? investment I driving need understand over

Ryan Levine

increased of to from X.XX X X.XX your presentation Yes, beyond. and

Scott Prochazka

the middle growth part in about You're during talking of the plan? CapEx the

Ryan Levine

Yes.

Scott Prochazka

I that's project to Creek majority referred incorporated project; XXXX. it a discrete as Jones the is that by right in project of the with single incorporated in spend That middle is the impacted to Bailey $XXX occurring plan the heavily the is of Okay. centrally being that million

Ryan Levine

is 'XX; in between so big of that But any there and is 'XX number? a increase 'XX

Scott Prochazka

result spend from year. we exercise what's just associate but $XXX part range with as and we've of growth, investments of the also for amount being we've the to load that's of categorized plans that or go each and do needed that million here our is to million a for as we growth would a the -- investment for as that spend $XXX Yes, load related rework updated growth related the we recognition planning up 'XX

Ryan Levine

impact basis you Enable? tax reform have And that then does how in

Scott Prochazka

a we in negative you're basis have think Enable. aware I

Enable. Our tax investment Tax our pay our in any reform impact we were not reform the basis. that sell we if impact rate to of does does capital gains

Operator

Evercore Greg Our next with Gordon from question ISI. is

Unidentified Analyst

growth growth? it it EPS growing high Enable target If deteriorating? could Is you in it I you or to assuming in is for missed are this that or -- 'XX actually us flat? the tell what it is Is X% 'XX; and X% growth

Scott Prochazka

specified the the target. not have prior that a X% what to capabilities options is X% assumption there, of with very is growth We off the into our rest portfolio, we're comfortable options the a incorporating that of range we of doable and take year and for consideration

Unidentified Analyst

don't go The major have to covered $X high that total actually of in a CapEx CapEx through for billion the percentage like what roughly through filings? rate is XXXX; CapEx actually so like mechanisms, you -- case level existing

Scott Prochazka

So in I'll give pieces. the you answer

be electric So can mechanisms. on recovery it's achieved through -- approximately the achieved through XX% business, that

side, which but gas Minnesota has interim and does it also the a forward-looking the of virtually mechanisms On exception year mitigate rates; in not so with utilizes Minnesota features have two those these all it's test regulatory of lag.

Unidentified Analyst

Bill, that rate; The backs forecast rate like through what effective the actual the does so tax how paying? period look tax versus actual cash you'll cash be that

Bill Rogers

or our rate tax Our XX%. approximate rate of cash be below should provision

Operator

with is Christopher from question [ph] JP Morgan. next Our

Unidentified Analyst

classified you X.X piece I utility on classify structures? of get but questions you deferred Most catalyst I ramifications have the are if already amount sense, been your and of your my think total tax the answered. what was revision that subsidiary a for us the what's liability; wanted to gave just your guys the could

Scott Prochazka

regulated question $X.X income on those the investments; the recorded was different the the was strengthened associated And your a and the that was The and regulatory and so $X.X in amortized of that with non-utility billion assets upon liabilities billion. will of be second income that from billion jurisdiction. deferred of through $X.X liability billion access $X.X sheet XXXX. balance lyse depending depending over statement balance sheet? went total was income amount [ph] with upon which taxes as associated

Unidentified Analyst

for balance the Yes, at level ramifications that subsidiary the sheets.

Scott Prochazka

Got XX% it. $X.X that bonds. the the at out so cap income sheet in statement went the strength through balance stripped consolidated to recognition adjusting equity after for XX% securitization billion the from

XX% XXXX. that and to for of benefit flowed year CERC balance at XX% are those sheets at some Electric close sheet where And balance year-end Houston through at end and the for

to had holding both they because dividends sheets at those Now of result more CenterPoint level from reform, were as there and equity balance entities those to a of content company. get that the tax

Operator

is next Lapides Michael Sachs. with Goldman Our question from

Michael Lapides

assume in On regulatory up a I you to K much how Houston O&M you your was bit want let's how lag unauthorized share can't about business? the net think you gas versus in do you recover worry you you if that there income think lag lag material of Electric below; do some have about do financing a on regulatory you do the -- is you natural I seeing something the at ask net electric what LBC just basis, kind mean, earned count basis, so, you back I income good this that that so to not O&M or -- do year-over-year. the think on a actually can and multi-year but and come how think outlook?

Bill Rogers

offset quick requirement the year revenue once that's revenue that's that a towards be DCRF filings the and when the that real then a The that third quickly element lag and short at we off filed mechanisms mechanism if rate T-cost and by year is return. year, expenditures way assuming is And our the stays in residential growth that have begin that end for lag. a lag of of will so you side; on is six an go mechanism so requirement and that in that O&M books base gets Let's our close gets of But at April earn months. growth regulatory of as regulatory the into end. experience volume regulatory allow can is; allows the relatively how to with last sales filings quarter. into The as to twice reflected capital

average assume year. we but prior as the if you spend distribution had it So an X and you be short months that upto get investments in a regulatory could as of lag a year

Michael Lapides

cash like A when very next about out think you during full assume the cash tax simple a the are Do I not forecast, you there? payer tax one. backend tax the five years; a full follow-up, four of at you're or still payer all

Bill Rogers

to We cash be tax expect full don't payer. a

Michael Lapides

just Texas commissioner's for at what's review that's and Finally, in Houston? CenterPoint memo coming for the the process regarding the a proceeding rate question; up the regulatory

Scott Prochazka

to rate file a agreed have We case before XXXX. April recently XX,

to we're make case sometime obligated before rate will our then full -- we So next filing.

Michael Lapides

and of of Using six type of test months a measurables here deal? would known historical kind

Scott Prochazka

historical be year has a but test what not to when test It's exactly it we've file. that full and be we specified and now year obviously that would sometime between have to

Operator

[ph] Our next Angie Macquarie. with from is question

Unidentified Analyst

stake strategic April I big change for you but entail; So flow would leakage previous in business? perspective? potentially tax in that spend it adverse a tax of sales and lower changed, potential reconsider of mean, law of would the tax review the was given downs options does the understand I changes the tax the the with effect now your sale assets that your

Scott Prochazka

does not our we not perspective it. change on it No, -- are

our right, it to better very challenging do accomplish are still gets but financial it's and You objective.

there. in to plan So our terms change it of our how doesn't intent reduce we exposure

Unidentified Analyst

on separately prices cut identified have mean, the there that -- projects inflection be wave some than transmission given Houston. are power CapEx; I recent you And and in transmission north incremental of we're finally could additional seeing more potentially any point so necessary forward probably requirements? potential and Is

Scott Prochazka

that are. to. recent based have annually, respect system how to move included now projections capacity at give needs system but and additional performing the have depending on are could system most and we power and it to as what this continue of operators the is look investments, the We to operating to we we've our the how with plan everything on by study this we as what adjust is annually But insight not our rise demanded the

Operator

[indiscernible]. comes question next Our from

Unidentified Analyst

Enable guidance? portion earnings XXXX What is the within of

Bill Rogers

XX% year, done the to share to that income were last CenterPoint get the out midpoint EPS, then and Enable's that If the you they've And net way $X.XX share. guidance CenterPoint you of into take do translate per would is put that to rate, And $X.XX accretion. per that, the state associated Enable with tax as you've of after federal for then midpoint XX%; take Enable. our we and of add the their investment own effective guidance,

Unidentified Analyst

to is the that? XXXX timeframe there clarify; then contemplated CAGR there And is but sales contemplated in no unit Enable in Enable sales in just three-year

Bill Rogers

the range is that in capital sale units of We've also that include What for investment. this to of our doesn't alternatives. a given said order plans Enable that we've range we've financing scenarios of said our multi-year call support you a view contemplates to XXXX

Operator

is Our [indiscernible]. from last question

Unidentified Analyst

has to Bill, that and you million there CSE lot or the February be February would of used million something Is CSE doing at business through [ph] else going forward? is an $XXX credit facility indication facility $XXX on increase looking which a or is X. was

Bill Rogers

speaking just specific to the for Well, credit CES? facility

Unidentified Analyst

X. as looking $XXX said outstanding credit just I'm the $XXX million February million was that to used and facility a XX-K CES of had on which

Bill Rogers

And That gas is all and utilities. the as facility for CERC CERC; as of money companies a companies natural share along other with well pool. includes distribution CES our credit those common

Unidentified Analyst

there, what's pretty it's that's mean, cushion tight. driving $X kind mean -- that I of close So targeting million less I

So what's the [indiscernible]?

Bill Rogers

collateral year shared margin XXXX call, prices went we had posting gas that our XXXX. As at our a a year in end run-up end; marginal end you'll we see collateral year from on in right at at to disclosure and receiving

provided that's customers; beginning it temporary see bills. we that then So gas purchase put that's in which the a to I at come and their we it prices, flow as had storage higher our cash into was our then -- just to pay to as we're characterize And impact. so -- that swing price customers

Unidentified Analyst

potential? that's critical or new conscience not says my something So with

Bill Rogers

No, sir.

David Mordy

additional in Energy. your no you With for questions, CenterPoint interest thank everyone

now our We quarter Have will call. day. great earnings a fourth XXXX conclude

Operator

concludes call. Energy's conference year you for your XXXX quarter and fourth Thank participation. full This earnings CenterPoint

CenterPoint Energy (CNP) 23 Feb 182017 Q4 Earnings call transcript