CNP - Earnings call transcript Q1 2018 | CenterPoint Energy, Inc.

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Operator

Good morning and welcome to CenterPoint Energy's First Quarter 2018 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

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

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

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

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

recorded. replay mention Before to the how the Information access be being call I website. to call begins, found would Scott. is can to this Scott now on like turn over our that to on I’d

Scott Prochazka

compared morning, million we million normal had or of guidance equity Thank energy to for the This quarter related charges, annual of diluted in with and to weather, of growth. federal or earnings you, the net diluted per primarily These lower to today and basis, quarter partially reform, tax million primarily rate expense last $XXX per quarter. per share $X.XX $XXX higher Energy. Increases On per and begin were on Thank were maintenance year. operations quarter performance, same amortization. and exceeded due $X.XX attract the of services of relief reported for $X.XX good Utility you both $X.XX diluted or diluted investments million the us transition $XXX true-up morning or first same of usage year. midstream by operations EPS put more share in and quarter were net earnings thank high-end income I benefits our to and in last you to the with return Simply of and on strong Slide rate achieve income diluted income will improved CenterPoint $X.XX and gentlemen. expectations $X.XX associated customer guidance your share, put, to $XXX those due adjusted with ladies this a a joining adjusted a quarter range. compared depreciation interest XXXX David, first X. share, and offset our tax performance return XXXX

the which performance. addressing growing Our strategies, are needs focused continued customers, business on these enhancing our to of safely while financial segments implement

Now, Slide of to XXXX I’ll same of compared quarter in on and was cover income first year. transmission Electric core $XX business highlights Electric million the X. quarter in the million starting distribution $XX last with operating Houston

of We to territory the the electric increased XXXX, quarter the since to customers metered of growth first Throughput of continue almost XX,XXX see in quarter X.X% in our strong compared service XXXX. adding first XXXX. first quarter

also the schedule Connection Valley in original of estimated at capital order. within It two and was cost ahead We both range energized completed March. a the the in an months commission's Brazos by utility

November reform. in filed On filing per revision to as XXXX. letter We the address certain a front, February, known to also to our T-cost, which tax previously the of filing was recovery approved our made impacts we transmission regulatory investment PUC in this

to also DCRF since of filling, incurred often We filing. recovery distribution capital April the of and as investment reform certain distribution began refer our last a recovery investment to impacts made tax in address

quarter million, same the a year-to-date operating the please developments, Slide to For was compared quarter in to overview XX. first gas slide in $XXX distribution regulatory $XXX Electrics Houston natural XXXX Turing year. of last million complete see of of income X,

settlement also more The of makes case. other of In explain settlement the territories. settlement agreement based the part represents This the Minnesota rate reached pending reform. the on XX,XXX to customer a with addition ruled now year-over-year how since by first than Arkansas It across will our tax our formula growth performance decoupling in we've Beaumont see solid improvement. continue and the of several divisions. our this made addresses filings We Later grip PUC. regulatory quarter a call, Bill Texas PBRC, by and East March, customers filings or of law permanent a tariff. the change on or XXXX. been the rate and performance has include Texas plan FRP Oklahoma-based and administrative We've in judge is rate impacts an Minnesota These approval Gulf unanimous

the $XX year-to-date distributions For compared developments, of services Turning the gas Slide XX income to in please $XX overview quarter of at of $XX year last X, a a integration has gain operating Services. respectively. of complete and Successful commercial natural loss to acquisitions of XXXX million same million in in Slide see and improved mark-to-market first million excluding performance $XX Energy was energy resulted regulatory of financial opportunities million quarter recent

$XX our compared transported X, in last May guidance in period XXXX. million some $X.XX quarter issuing net As interstate volumes for Enable's earnings Enable's they for to call first Midstream their contributed May to Quarterly performed quarter call, highlights investments On a income Slide the we of $X.XX diluted in Services and to result, increasing they gas for year. we've Enable Xnd. captured on first quarter of XXXX the quarter. processed formation income operating since year. Energy gathered, $XX share of on same do million level XXXX. their not equity share well are Further, per their per of XXXX. the in anticipate highest stated were increased this from all guidance at first Enable the diluted

Enable believe to continue we for is reasons, these success. For well positioned

believe we the XXXX Given results are strong on Wednesday released Enable forecast, they their including undervalued. updated

our to merger with our promised Call further As Vectren. Investor week, we agreement last during want recently discuss announced

on operating XX. have merged Upon eight review regulated closing, we than of X operations states Let million covered serving the me Slide begin areas with utility brief customers. more in our companies will

outlines through of to including covering $X Additionally, a And vision and finally in in billion we businesses, XXXX. continue year advance strategic will the we service states. delivering nation's plan for drivers transaction XX being towards the capital combined leader have key each This merger. strategic excess unregulated value. footprint Slide our the energy, invest nearly of the will to us in XX

technologies. operating facing expanded merged respect First, the customer company with to capabilities will have and

power renewable intelligent Our Vectren's be infrastructure service experience applied across effectively experience data the and efficiency, management, customer learnings with detection and energy complement with leak larger energy combined alert advanced grid, base. smart services. can meters, These combined

combined have company earnings pursue of will will we to Second, of the base. additional merged will and can meet additional customer plus growth mix as more needs products customers realize opportunities regulated a X Further, the services. the million wider capital investing by access the company who

operating and value cost through efficiencies business will larger, approaching Third, for million costs be potential also more support the scale lower realizing the Size company effective with of diversity. and geographic line in resulting capital. and financing a more enterprise $XX

XX, seen the on company. As our Slide combined with mix change earnings will

expect the will We decrease. investments from of will earnings utility midstream increased and the of relative proportion operations contribution

confidence addition visibility gas The created the earnings. long-term infrastructure In us of and as plans utility in in mix, combination earnings replacement also is driven change long-term visibility provides primarily this by by these VISCO business enhanced Vectren’s known within to greater infrastructure elements sector.

by close Slide commentary on trajectory providing Let earnings XX. our me on

our This strong to growth XXXX was and represents of $X.XX earlier, the a guidance as are we First high-end quarter XX% quarter range. EPS $X.XX our from updating XXXX stated to XXXX want EPS Bill XXXX merger. as guidance EPS. result to guidance our the growth of specific of will and a X% into year-over-year provide X%. XXXX inside We earnings potential to reiterate over

about beyond with XXXX. and exclusive the both associated one-time XXXX XXXX costs are guidance of years excited I’m For the Vectren merger. ranges also any

expects mechanisms. the that the CenterPoint, of growth. growth. operate expect drive continue We have not We to capital with We regulatory company to so constructive jurisdictions fundamentals strong anticipate to to states or do combined Vectren strong that efficient plans recovery capital base have will include earnings rate we revisions

growth the earnings by the are the fundamentals. utility increased in and potential by We driven unregulated proportional excited regulated businesses across

advantage on a top excited great of we are XXXX CenterPoint’s take about and For thank our post Vectren’s would success. to first as example driving industry-wide quarter evidenced whose guided to capital $XXX backlog and contributions commitment summary, are mentioned quarter of position record million like near VISCO spend our their end call. gas earnings range our merger guidance natural of by I is towards distribution had future. the employees, In

and merger. will we as turn financial safety, now on over I’d customers' our realize to performance focus to associated communities with serve like continued work strategic advanced value well us businesses the the call reliability, and to Bill. Our our

Bill Rogers

of with on the us consolidated help to range. is Thank a our drivers and understand I guidance gas our start then operations give and which for investors for guidance segments, high-end walks followed Utility you, XXXX will income natural and our intent business distribution My Scott. achieving Electric T&D quarter-to-quarter by basis. operating EPS the confidence elements,

Before I certain the begin, of benefits operating I will adoption is income line. below for operating in accounting compensation for XXXX standard retirement as income and resulted the moved note the resaving it amounts

on $XX result normal true quarter variance as you to release regulatory of Slide decrease has of reform As million variance tax $XX a customer for related more quarter. XX, of primarily Houston $X in a a rate see liability variance. and by offset decrease Usage This positive decrease into transition million revenue well Electric up of tax translated charges can translated a lower the million. to $XX Equity growth reflect return corresponding million is recording increased the to into to for favorable income return accounted million. a tax during performed $X weather. favorable Rate primarily from in The revenue the expense.

would we X to unfavorable transition number company May. charge O&M the transition However, in and lower for return make If this filing for non-standard $X transition a up for million. amortization an of charges a this bond intend XXXX. variance accounted of approved, equity true

the Our increases five per maintain expense X.X% plan period. objective below over is year to year

return Overall, expectations. adjustment, and operating on $XX Huston tax a track reform our million $XX quarter-to-quarter the income million Huston Electric's Electric increased equity Excluding on from with basis. to is

higher $XXX decrease a well of liabilities Slide $XX variance translated million expense. benefit. quarter. into corresponding to million for to $X recording rate tax the to first benefit, provided was regulatory XX, million in other $XX return quarter for and decrease the offset record for Operating $XXX income first normal million also million for leak $X tax relief The revenue tax all accounted a O&M customer primarily more gas. year. an performed related natural versus from to a within last $XX a gas Usage provided reflect million quarter income weather million management, contributed positive a O&M in unfavorable Planned and Turning variance. of of integrity Rate the to and distribution reform the the has pipeline growth repair including

longer first had for X% our reform a recognized unfavorable tax variance, term, improved quarter-over- benefit over in property electric the Minnesota XXXX. the increases have expect depreciation adjustment and to X.X%. segment, manage operating with below adjustment, quarter Minnesota $XX excluding tax the accounted and taxes we As million note With tax that of we $X and taxes we Depreciation million expense Without refund the quarter. income XXXX of variance. property

are track in has million Energy in XX. performance. income Improvement over expectations the excluding was first quarter with a income XXXX. quarter opportunities within $X.XX improvement Energy and operating We resulted Services financial improved segment. Services' represents acquisitions our included and improvement first integration $XX million on core our segment this $XX of Successful business is mark-to-market on recent commercial of for operating in Slide adjustments

through price due Our from to business Overall, short well of natural weather positioned higher milder volatility spikes advantage was term size Energy to scale than gas and normal. and colder was take Services demand weather.

did we customers. are with more put, we doing key business benefit in regions. colder several from weather of Simply However, our more profitable

million for our this included earnings income XXXX XXXX. is our year For guidance for higher $XX guidance full and which revised the operating are we $XX segment, raising in million, to business to

Now to the Slide walk XX. on returning earnings

but and Our income. utility from operations energy return. quarter-to-quarter improvement with utility $X.XX exclusive operation $X.XX is of operating and of inclusive with starts equity EPS services, This core adds

$X.XX rate. per return, in share. includes improvement other add the improvement tax XX% from utility in tax on $X.XX basis from increasing $X.XX with guidance improvement reform the from benefit federal equity operations to we quarter-to-quarter All-in-all, of a approximate the $X.XX Next, EPS

improvement. $X.XX EPS Our in CenterPoint gain that in the totaled increases in for midstream first improvement XXXX. slides, XX. per XXXX. guidance a but have $X.XX or Slide quarter improvement $X.XX, quarter-to-quarter basis, previous mark-to-market share this had quarter-to-quarter Overall, in per a On on approximately quarter-to-quarter $X.XX here show $X.XX comparison versus contribution for on a consolidated is are been would quarter we had first $X.XX was The earnings. on quarter The a basis utility recognize improvement share XX% to guidance operations

for for guidance per of that year With available the discussion the walk. XX XXXX to publicly have Energy and share projections company. Slide of improvement earnings update we forecast XXXX provides three we we and appropriate of XXXX our X% Building trajectory XXXX earnings guidance for income potential each believe the remaining. growth combined it Using provide to quarter, is earnings Scott’s X% CenterPoint Vectren, for first of despite quarters a to our fact X% guidance the X% on our net

and operating We basis revenue targeting margin XX pre-tax XXX are commercial improvements of a to in on million from million near-term new opportunities cost opportunities, savings. corporate

improvements margin recognize footprint. expect across business operating our these to We unregulated

average interest at billion X% a For we $X.X debt expense. the assume slide, this purposes of of

million the we XXXX the the net XXX to X.X investment. equity Vectren billion acquisition provide of common of and for shares in common issuance proceeds XXXX both CenterPoint for fund Next, base assume to for potential XX to shares of rate equity or million

Rather, to CenterPoint financing through our accomplished by earnings This shares. this not basic this further XXXX of acquisition this sales financing. slide provided to the Although, include footnote, our Should as sales it slide. equity units would securities of then such in of and stated be equity, mandatory contemplate common of less dilutive plan enabling these issuance as in is calculation we securities plan share common other does securities, content reflects of inclusion convertible per on continue of high the we evaluate XXXX.

in to we this XXXX to is base rate needs there stated disclosed we earnings assumption these environment of Enable where investment. footnote, EPS the The attractive capital equity under potential resulting in and and a of XXXX is market a our range equity call as XXXX considered $X.XX the is As sale source for XXXX This securities. $X.XX. year-end units be potential our an

earnings As range. to share in to forecasted accretive this per XXXX our shared is call prior week, Scott his last neutral

turn financing and Next, will components. our I discuss two to plan

First, discuss the in our I more outlook. including credit financing detail merger will

plan into and common called, CERC units continued Secondly, subject I our CenterPoint from subsidiary internal the is Midstream. will evaluation. for This of review discuss newly-owned, restructure corporate our CenterPoint Enable to wholly-owned separating

As can you see Vectren Slide we to on planned acquisition common equity XX, proceeds markets. finance shares of with the debt the and from

content then Midstream, debt to to a this CenterPoint merger. $X.X XX% issue We and potentially financing by As metric $X.X the billion or the at will such better on and common discussed which holding maintaining This securities high at profile as based proceeds We adjusted FFO do Electric convertible entities. CenterPoint debt as billion our Huston risk better will mandatory issue to and believe CenterPoint dividend not or that plan holding rated maintain to company. at expect agencies. as of previously result company BBB credit publicly all equity securities. balance measured will or financing current support The the is our objectives of business well of is debt consolidated future this at in rating quality as the current CERC

Vectren. high all of clarity, quality. We've that to the not value signing Vectren having further sale with advanced to again, do investment common the and agreement on Enable I merger units agencies rating finance For solid shares. met we acquisition grade intend three repeat, of We will with put credit the

plan we During forecast. of financial our rationale, shared those strategic forward-looking meetings, financing and

XXth. of as continue agencies this We Tuesday announcement financing, execute our reorganization. merger corporate All after rating published three and April we plan dialogue on will our

our Slide outlook. on commentary and XX and credit their of update some ratings included on have We an

spend subsidiary XXXX and review not this CenterPoint continued note from to of separate common be Enable. would direct Slide on to these interest. interests. we Subject that to This units company wholly-owned external and hold through Energy. be an would our a indirect planning in evaluation, an our Enable Midstream CERC seen would Please internal our XX, CenterPoint in we interest establish spend internal the of As midstream or of an spend are

this We have two objectives structure. for

First, companies. entity that and transformation this creation would be only gas of into begin of natural operates an to distribution the entity CERC new the regulated owns

segment. borrowings investments Second, segment, company help to with holding the is we debt have will both CERC point midstream separate public to of anticipate own debt our its our and the midstream credit we expect both not At in debt midstream that going is and ratings. of SEC prior or the internal CenterPoint's there registrant to Midstream new that CERC time, allocation related this to is raise reflect expected Midstream associated legacy is be company produce a holding to would debt. CenterPoint Since

greater structure our this provide natural visibility expect We segments. in midstream our and internal gas will measurement performance at of utilities external

a add will I few close, comments merger. the on I Before Vectren

We and are combining investment opportunity growth. rate capital companies two base with strong

In were the have opportunity businesses, strong this morning the earnings addition deliver right we entities. excited with the first to even and meet delivered services products stronger regulated to results customer we separate today merger and mix than needs quarter to this to us of We results tomorrow. and the we of unregulated believe provides we are to

to XXXX to get quarter looking the closing. continue of closing and to forward We to we closer as sharing are we detail more target first for

a ago facts share. are the year declared Finally, per presentation. similar circumstances that consistent modeled several declaration. $X.XXXX of of Board we’d earlier David? dividends is increase forecast years. that, relative this in and dividend of in time and have over financial to recently our stated made our This of last X% declarations by increases with increases the all the our our Having I note approximate an Dividend at reviewed in like common X% in the to financial review we

David Mordy

Thank you, Bill.

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

Operator

Instructions] comes question begin first Suisse. we questions. time, from will this Credit taking Our [Operator from Weinstein Michael At

Khanh Nguyen

Michael. for Khanh is This

in have quick So on what and distance between terms you a of merger merger. given synergy We in see physical more questions. that elaborate confidence companies? Can the on the you bit the opportunities business little

Scott Prochazka

have way we opportunities revenue at which the opportunities. unregulated look this can customer at so the that They business benefit Yes, between is, list, our revenue combined creates look we new mix, businesses. for synergies

number of million streamlining just revenue order well pre-tax, of million the with of have the We elements size, as merger to in number this here budget as the look as of small And you $XX a have $XXX efficiencies. that at if and two place we corporate any compare the public of that’s for you the obviously put O&M to combined fairly businesses companies. unregulated a opportunities

very this achievable. we is So, think

Khanh Nguyen

debt, the So indicate be, in the what range XX% closing to terms would comfortable what kind be to of plan of in entity, the future? can you FFO us you’ll improve remind range you combined of the and that merger? upon And of ratio that

Scott Prochazka

Subsequent right. agencies, the by we should to as calculated That’s rating FFO debt merger forward-looking improve the to on overtime. see basis, gradually and a XX% that

Operator

ISI. comes from Gordon Evercore Our next from question Greg

Greg Gordon

business. circle secret synergies businesses of frankly with utilities is to be combining the businesses. those There if pleased, regulated to on on to generate services in to your seems can why VESCO what the type sauce industrial just there? talk less you And a I'm premium logic VISCO premium the to opportunity? back believe in with energy the segment. that. your you of business current their paid create and opportunity you unregulated familiar that that natural Sorry to merger can platform pretty Could merge sort there And synergies have the question you and earning just businesses, terms Vectren, of you the this, as since is about core the and back here guys excellent no are have but significant in about

Scott Prochazka

opportunities think from well of mix businesses. Greg, combining to a I it's as two efficiencies So revenue your as point,

these you're XX unregulated country. in with the an states. that it's the pieces, piece opportunities over utilities businesses. asking -- those from infrastructure So works They around has a associated both They're but about specifically business of with Vectren is have the

LDCs both well The states, have the services interfaces exactly gas of similar with in utility companies of across that similar bring not business a that's We to other types the as but ability number into gas of also the to there sometimes, when as same do for Further states. infrastructure, business is combination work oriented need sales presented is to the of replacement continuation service customers. infrastructure pipelines, for these infrastructure and by businesses. goes of

We have a regard Energy Services to gas of group Those examples. that continued space work service so can combine well. being our that or that within done, has couple we -- could continue while replacement provide repair a that just as opportunities are in

Greg Gordon

dawned the you're at algebra X% were to me growth, It the the high X% would X%. significantly if hit to upon of you here just be above the looking that earnings targeting obviously math synergies but end long-term

fairly And there So, underlying guidance? assumptions about to what enable you're then am is earnings it's missing are because using that obvious? that I when with regard something you second, the contribution think

Scott Prochazka

Well, the year. gives for as know only guidance Enable you

for outcomes possible as beyond the of think about growth range year, current rate. we a incorporated Enable this we've So,

we to be to X% for the growth to to were if that high the our than you X% X%. growth respect the be years, is accretive to would this guidance though we creates What correct are us merger that. the for the X% of the with to were illustrate X hit math, per did higher trying You rate year current actually end to next that, opportunity and

Operator

SunTrust. Your Agha question from next from Ali is

Ali Algha

transaction, looking of any the the thinking Vectren and milepost terms of portion us how the some sense in mind? you in at for Bill, that, give equity financing about timing at looking we can on your you're should you're be As

Bill Rogers

and and I the forms in as my say can on equity, I of consideration common slide, convertibles. is as timing the of high security to the on such other disclosed advance all the in content Ali, said respect is, mandatory remarks of prepared and acquisition equity closing equity as

Ali Agha

a the that create that earnings strong And you just some the that mentioned, level business. then spikes Or different core it’s this I higher result weather, which utility of piece, very conference your continue include nature do a basis think, caused visibility or of CES though your called you guidance. to but benefited What’s you year, off grow? Does volatility it’s base raise of even as mean in one a to and or you that the on business, your that’s from from business? volatility level a given level to

Scott Prochazka

some normal is Ali, the it more way it so and we by we is the we variability look natural is in at look think presented market. at opportunity

as year. think So the year. at that provided able business as end, to next we projection that about We we’ve outperform for being the this look to

Operator

Your from Bank Merrill of next from question Julien is Lynch. Dumoulin-Smith America

Josephine Moore

It's wanted just Julien. I to Josephine on. the line on for follow-up

in more plan? to be combined growth. mentioned for from opportunities CapEx incremental in You issuance already would equity be the the XXXX XXXX and fund the Would Or CapEx that unit? that

Bill Rogers

in our structure view base Josephine, think should about that equity our by it’s capital We XXXX discuss good investment, morning, and our that sales of and be Bill. Enable in call increase in rate more XXXX. could would in in provided February due be to we units our

we of common in the you that equity. just front presentation model For the you have purposes of and assume this that’s

Josephine Moore

just And it’s the CERC? that going restructuring wondering, move separately? Or this was of the will in sit? I Services, going where part in to Energy regards strong be energy structure, is capital is quarter. to results Is part then that of service to

Bill Rogers

I to is be determined. think that

Operator

Your Arnold Jonathan from Deutsche Bank. next question from is

Jonathan Arnold

just business you services, is probe the as level. result about going remarks, on you’re it more normal. talking to understand my for along just very say a want XXXX I little seeing that’s And kind guys a of volatility in I further. the questions think now like uptick significant forward. sounded ahead. now prepared more Go and what the how little And see it’s do going you is but you certain being In energy market. level hit about a of sustainable in were to the that a talking like most to of I you

Scott Prochazka

This is Scott.

and was try The what Let of normal to think to me integrating little some of better would somewhat do one the consider performance result recent that bit. clarify the in base margin. the been, addition having customers we've business is that we most that a of I business the And with is two the was majority A acquisitions why effectively improved to has did of AEM. more improvements related the volatility. component made

that is So, improvement going we though There of by an which related weather to driver here we element that's some were of. that caused primary was in the forward. what take was advantage able volatility think sustainable the

Jonathan Arnold

mostly effectively. so Okay, sustainable

Scott Prochazka

Yes.

Jonathan Arnold

now is And about to how XXXX? high-end of of that X% number? thinking you're the it then Or guidance other Is still sort some in off of terms X%. of the off the formally

Scott Prochazka

You can think of that.

can that high of the You end. think off is

Bill Rogers

the XXXX used in the it EPS, we Jonathan, was high end. to the off that develop slide

Jonathan Arnold

see I Yes, that.

And I I think that's got. great. much. Thank very Okay, all you

Scott Prochazka

Thank you.

Operator

question next Markets. RBC Insoo from Kim Your from Capital is

Insoo Kim

that to pretty and Obviously, earnings the more from commercial view. and potential XXXX? the pretax mean reiterated could and to benefit $XX you've the XXXX accretion even potential. accretive. cost fact the number I Does And XXXX our savings think million higher opportunities that this $XXX XXXX, in meaningful, be least expect still back is million be the earnings Going to at beyond from you that this

Scott Prochazka

there it's think I that will possible be. Yes,

it providing million either more what a benefit. were like fact levels were We $XXX pretax two benefit In to to a the we in would would of see total just look out expect years. accomplish benefit total we or XX in picture

Insoo Kim

it reduce Enable they BVC exposure you of make late. performing maybe this of your then anyway been as to general? divesting of a has acquisition. portfolio expect Obviously, Enable. the strategy question in your rethink Does in after well on given And And

Scott Prochazka

past. performing our No, We showing is we've their in well Enable space. with been about Enable how them in that They're are consistent the positioned. well views think

We operations. space. call to a and their midstream performance, very some and see if proceeds we our from doing sale just so. constructive reducing simply is into the Enable's saw constructive that markets said reduce we their exposure an redeploy still on that about opportunity would You to to But a exposure consider positive view we market

Insoo Kim

Okay.

going of real stake. to no defined is out you're timeline there So, be of Enable the when

Scott Prochazka

That's correct.

Operator

Your is Fleishman Wolfe. from question next from Steve

Steve Fleishman

on up question. follow to same Wanted that

latest is they've stock well number think you I one because remarks reasons based provided? sell Scott, in Enable is main may done everyone So you've overtime. guess the the And as undervalued hasn't CenterPoint said arguably of your --- the is that on knows do Enable

loop? does to do you're not So how I from standpoint it easier -- sell shrink is, not do the just you’re markets want the require you going feedback And bit stock you constructive to guess necessarily of that strategically, it’s communication question Enable, little it exposure. because different that, kind to here

Scott Prochazka

comments about you’re It’s reduce undervalued, right our think certainly right. if to to with Steve, you the about look which our, I Enable, finding position a have about down. exposure. respect to opportunity to being Yes. their need our performance. sell It’s My not in absolutely at

track So I the lack the Enable to ability and sector as the moment. that’s think, a market unfortunately, moment, at the just pressure whole is investors the I similar at suffering think of constructive

do so very So in about thoughtful my reiterate and comments fashion Enable with opportunities industry look we are a to our about need as and both that for the and on Enable. just be to reduce to ownership, coordinated I we want

a on don’t negative Enable. we So have impact

Steve Fleishman

And Enable one do further having, our guess could having But… argue a diversify you’re the for mix that selling where having without while trend would I to.

Scott Prochazka

have does It benefit. ancillary

we think show in my think one of referenced the of one it I I comments. even slides. And that on

Steve Fleishman

synergies use other revenue question type sense synergies. the synergies of mix between the cost synergies? is on on very Can rough a the My commercial you

Scott Prochazka

The in between of achievable. enough exact not are do mix far yet to very do able determined. to be along be that to What all to we’re numbers really attempted that. that some very reasonable here was is we Yes, put and

Bill Rogers

one additional corporate cost businesses. our unregulated of Steve, and just, Remember, add all gets savings that that or we spread the might corporate G&A regulated comment. across have just I’ll

keeping be of we’ll good percentage a those savings. So

Steve Fleishman

that only there, synergies will include, showing the that you're you would these to will So include that synergies keep. expect

Bill Rogers

Correct.

Operator

next Your is from Morningstar question Charles Research. from Fishman

Charles Fishman

got holding Slide Anything to Is incorporated me my second I Steve and just correct? company. in let opportunities million question sure. XXX commercial think is was referring a that's is X% that’s line XX, XX the with On the in regulated associated savings, to that its potential up into cost strictly make million the but to utilities unregulated X% answered, by growth.

Scott Prochazka

X going the But be if It’s first for associated businesses, And CenterPoint the, it’s which benefit the those lines, captured and it of Charles. correct, regulated in income. that not to partially net the is customers. with that’s forecast Vectren’s

Charles Fishman

savings certainly There And the cost million eventually anticipating nothing, to included that any you over that’s and the more unregulated, be to to expanding was companies XXX not secret commercial you’re utility spread of at XXX sauce X in you’ve earlier, million. But cost and that’s any million operations. regulated flow XX out savings it the that because holding It’s is million, got XX the can cost savings think customers. I obviously, referred that’s determined, real opportunities. to all but

Scott Prochazka

So the those would go customers. to

Operator

Morgan. next is from The JP Larry question from Lu

Larry Lu

just little you XX% ratio? that clarity CERC How that kind around to the get expect at spend? much more of new And you how debt would us you entity? down give internal paying go raise Could about the a to net at your

Bill Rogers

we the Right, so were allocated distributions in -- have is begin question. EBITDA with I'll X And debt EBITDA entity. XXXX. as first the times that the simply which million $XXX CenterPoint to of the Internally, to the to the part X

will with of we to support. working right can what's distributions debt as the company amount So, lending to those be the

base. relative some will have debt and and rate at to paying in we the get at CERC point a of that element, amount debt rate fixed also You're dollar be we this time XX% correct down to the higher that equity debt XX% to

look to looking we'll liability and ways that be structures. So, management at do various

Larry Lu

for follow of have change I because Enable the the more one spin? up. Does just basis And tax

Bill Rogers

It does not.

Operator

Your last question comes from Lasan from Auvila. Johong

Lasan Johong

it sell. the a And Everybody CenerPoint's you get to, sell can't right Steve curious Just gong you price. the what and that can't kind because to to agreed according market is of Enable loop. feedback kind negative afraid a you Enable, said to on

need don't not projects. to And You utility it need may finance internal to finance may Vectren. or you it

each individual separating shareholder unit. this it And they It loop. that Enable So owned value they want me provides can to shareholders? realize earnings feedback where each it starts the want negative decide to gets they shareholder do let do you That shareholders? to want. to why Why spin about spin out And you to CenterPoint your even separate into with Enable. what other talk not

Bill Rogers

want as in The Lasan, our as a and it's year. the good statements strategic external morning, CenterPoint. debt middle its review forward investment at or separate ability its remaining of we of we not true part the debt of last debt Enable remained too would look an made work close that on time we we that to debt as at that that on put did we out public to did other spend -- for We much our much with that could limited And Bill. be respond ability entity, opportunities. If that today. and to on that it SpinCo, entity have service so amount put would

we our that true thinking today. terminated on that and our discussions So, that it and remains for reason,

Lasan Johong

but Again shares I apologize, give I talking to external wasn’t out anything an spin shareholders, about to spin, your shareholders? own your a

Bill Rogers

that’s spin. mean I what And by external an

Operator

I now closing back for remarks. Mr. any Mordy would call turn to David the over

David Mordy

call. of a seeing upcoming We look our first Thank great you AGA and Energy. everyone that concludes CenterPoint the XXXX day. at forward many earnings Have you for your quarter interest in Conference,

Operator

conference your XXXX you concludes first for Thank call. This earnings participation. quarter CenterPoint Energy’s

CenterPoint Energy (CNP) 4 May 182018 Q1 Earnings call transcript