CNP - Earnings call transcript Q1 2020 | CenterPoint Energy, Inc.

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Operator

Good morning, and welcome to CenterPoint Energy's First Quarter 2020 Earnings Conference call with senior management.

During the company’s prepaid remarks, all participants will be in 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

our our available Vice the morning, will call. public to call, information and who XXXX the John Kristie are the releases, website Interim members conference Good news XXXX first with CEO; other section results portion that Joelle. will several In be material our with can Investors under Colvin, may conference CFO us SEC note we on will earnings Somerhalder, to Executive areas. and our you, provide we everyone. Investors first management of of other using found our call. Welcome quarter calls, which during on and discuss slides, highlights centerpointenergy.com. webcasts be Please Thank filings, our and key posts quarter Also website. using President announce conjunction Q&A of Interim morning President be section and this

topics of statements and will projections based available to and commodity Today, management management's Actual management. based that assumptions or contain risks the information subject will forward-looking could and actions, including These prices, that risk economy noted information to and beliefs, currently pandemic, uncertainties. weather, SEC results the regulatory factors, upon filings. other materially differ impact on factors are are COVID-XX certain our discuss forward-looking unemployment, in

slide XXXX the utility midstream guidance Please also for To will XX to discuss basis on a range greater earnings, presented detail. guidance EPS Appendix expected investments and will in We guidance in range. further XXXX. components; utility for be refer transparency EPS two a provide

Houston approximately distribution invested such the for regulatory segments cases financing X% other utility as normal that EPS range operations as reflects as may filings, earnings, including merger X% capital anticipated operating rate date as business natural and through Electric performance impact from rate and guidance the for business guidance in and rates, to Indiana customer significant recovery and includes XXXX as electric Electric, as Utility income of related operations of dilution if rates, earnings certain proceedings, and The considers range growth, result net the assumptions variables newly issued judicial other well distribution, gas common savings after-tax income and and segment. cost interest tax natural corporate from a for preferred usage, EPS stock. and activities and stock weather, issued throughput, effective were gas

levels reflects $X.XX, the incorporates In reduced addition, deferral demand expenses, to April of and debt. range incremental assumes $X.XX including guidance with peak as bad the of which COVID-XX and scenario the anticipated recovery

extent leading scenario the gradual EPS through guidance a range would reduction, August. also change. guidance may of diminishing not To may our deviates levels assumptions, in XXXX from these demand the recovery to met, The COVID-XX scenario projected year assumes full service range continue and economy our COVID-XX reopening which territories, the of actual be utility

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period. reported above consider share and items, material have items applicable In results providing which including noted the that impacts, on does CenterPoint adjusted guidance this potential could GAAP impact of diluted measure per guidance, other non-GAAP unusual a for a Energy not the uses earnings

in midstream range In investments' Enable company upon of contribution. a assumes corporate overhead and relative basis XXXX earnings midstream the includes CenterPoint XX.X% interest based differential Energy allocation ownership providing and amortization the in our EPS for limited the expected Enable partner assumes an investments, of

investments' or rates. if dated does issued company the impacts as any in The May range account items. EPS stock. Energy were such Enable's and XXXX standards, dilution reflects as Enable's as potential outlook and dated as public XXXX recent company stock expected also for preferred include The midstream factors, earnings newly such takes accounting issued The into common other CenterPoint -- X, not effective impairments changes unusual most tax

guidance today's non-GAAP used on our providing to measures website. earnings refer please our and For in news release slides in a the call, of earnings reconciliation our

Before would on call how I can to found recorded. is to John Information that on replay the this our being like access website. begins, be mention

like over now the to to I'd turn John. call

John Somerhalder

David, morning, you, and Thank good and gentlemen. ladies

We slide will start with four.

the field, Let the linemen, field vital supporting in begin me thanking employees by communities employees serve. and personnel, we our our to service are essential technicians other

our of extremely you unprecedented proud Thank are brand our promise to representing making safe always our up continue and day for and are living electricity During gas well these tremendous we all natural the times, to customers. reliable every effort of providing to employees there. being and CenterPoint

key announcements, our This slide on along strong morning, several first announced highlighted quarter company with results, five. other

better credible utility has to the transformation objectives regulated support of highly return investors. year, the increasing transformation company's past earned our portfolio with shown commitment the This several CenterPoint its the portfolio investors' sector. focus aligned is and Over risk on has strategic Energy's

the stock Limited million mandatory detailed As which strengthening be and overall of common sale grade CenterPoint's from for slide balance Miller and used sheet, our and Services will stock, of delever in the received investment of Minnesota $X.X This six. further proceeds Infrastructure of and business a as profile. cash convertible million to CenterPoint recent Pipeline credit company with combination -- $XXX shares the Services, the XXX compromised its sale Energy credit a on announced pending metrics was shares transaction, comprised of of result, billion today, $XXX preferred transaction, of of

announced action, that this anticipate we of additional measures on result equity the XXXX. we Xst, through company April a capital the not raise will and As

reliable flexibility, operate the businesses. customers' opportunities its all our providing CenterPoint uniquely a low. regulated capital affordable to to anticipated rates over across horizon, high robust and while program, regulatory substantial remaining as on drive planning of to strong positioned issuances strategy to are opportunity. utility heightened proposition X% earnings annual on a keen equity keeping investment billion with its value and a company's premier focused These $XX discipline, O&M combined strength The five-year while of CenterPoint customers X% with growth highlight of utility safe, place services long-term the is utility executing and from range compounded growth wide and

turning bringing for outside experience, to two Directors has Additionally, total on and serve slide backgrounds exemplary company's sets Board opportunities Board, Board the also CenterPoint. well company needs the new with tailored on to seven, of the These leadership number matched for the the to skill directors unique XX. to the appointed ahead come Directors and

financial strategic interests related of the and appointment, Business and value a businesses, positioning evaluating and will has assets other Board. to new ownership to in Evaluation committee to the formed Director addition Committee Board Review Advisory the company's assist CenterPoint's strength, Board actions proposition. In new portfolio the enhance alternatives business the The further and of new

I pandemic. would an update provide now on like to the COVID-XX

order service protocol, our work our has nonprofit implemented fund The assist social $X.X safety within of enhance in employees priority, organizations Foundation customers, rotational shifts and contractors. million Energy have safety and territories is Turning to top CenterPoint created to of alternative a the and facilities eight, distancing the the effects to our slide also pandemic. relief with we

every facet almost more communities we serve. our pandemic believe The ever of lives we and support the impacted COVID-XX important it than has is customers' to that

from Since we reliable the have interruptions deliver start rightfully customers chain. experienced expect in to our service us. not pandemic, of We our continue supply material the same the

projects, to safety with moving an we to resource allow Our second in filing Indiana anticipate capital in the us integrated precautions plan continue and forward continue quarter. planned

to first savings Vectren first tax for primary utilities and with compared of Rate delivered the full impairments, Act per with CARES quarter legacy a contributors associated excluding favorable were having XXXX. relief, the EPS Moving improvement. for customer impacts basis well nine. slide utility share, quarter as to $X.XX O&M $X.XX growth, as guidance of quarter the the the We

XXXX, our $X.XX in year range, basis projected $X.XX to earnings. guidance are full to deliver EPS utility For we reiterating adjusted

to We O&M benefit be will are count equity issuance projecting the CARES attributable announced that the well from the the we COVID-XX announced share tax negative this as morning and earnings the Act. dilution a from previously reductions as from higher impact offset earnings by

mechanism mechanism encounter. a Turning largest service increased to pandemic-related slide COVID-XX of form as Regulators of expense Utility of bad increased bad XX% broadly debt related to retail in recovery the to Nearly and providers the of the supportive expenses. a well Public our pandemic have approved have territory, incremental with been place. other electric debt jurisdictions pandemic Houston of expenses In assist Texas Electric will as Commission cover our XX.

electric reminder, a XX Houston As up make providers approximately base the customer retail Electric. of

the We in states we supported. serve regulators the all to with of impacted are customers will continue pandemic working the ensure by

During very serve effect communities begin as to the the restrictions demand across experienced the take stay-at-home associated minimal first towards end we quarter, the we impacts March. of COVID-XX with

for we our provided anticipated guidance assumption. an full XX, early impact the slide have year and on impact On demand estimated April

by and for decline As usage residential increased estimate a commercial home. due folks a and result offset modest of stay-at-home small staying electric demand practices, working industrial partially we in from customers, April to our

efforts retail industrial less primarily result we years. Overall, Natural past become rate was rates design influenced to based recent EPS estimate demand In we shock $X.XX in restaurant, have in commercial closures. utility $X.XX demand and April. impacted a gas to by total, demand about distribution, reduction believe that our as by and of reduced manufacturing sensitive on experience,

into I Houston rates April. Electric incorporate new went that the the in effect sensitivities will note that

bad assumes For and full demand and the of of incremental including range be purpose reflects deferral April anticipated reduced guidance, the levels the to year debt. our recovery expenses, of peak XXXX

our full projected range COVID-XX year utility project impact full $X.XX the in As year to states our deviates diminished we levels territories, to assumptions, guidance of from be to guidance. $X.XX the of the we a assumed reduction, service August would in through of are our this to scenario, scenario COVID-XX of beginning reopening economy change. our continue in range stay-at-home To restrictions, actual may extent gradual Under which demand leading recovery the loosen EPS.

slide strengthens to our highlight divestitures Above and commitment all, growth quality contributions organic reduces it profile, strategy on business aligned the utilities. focusing of to is our to credit April earnings utilities. Infrastructure the increase of high net improves the cash XX. down our providing Energy Services approximately this pay Completing Turning debt, $XXX with our taxes. to Services business, sale sale, we along X, of On sale, These completed pending with from of risk million our our volatility. earnings squarely

slide Turning overall asked cut to Enable's XX. especially on was shareholders given X. health, distribution April the that about Many have announced

of We confident the in for number Enable's are downturn weather ability reasons. current to a

First and Enable has balance healthy strong sheet a coverage and a foremost, ratio.

one-third during associated approximately storage, Enable's provide which the commodity earnings current Second, downturn. will anticipate of with transportation is and business we stability

remain oil completions with and and drilling other plays in. associated shut gas and expectations dry in being Third, gas wells Haynesville in are as line shale

maintain has help flow to Enable capital O&M anticipated drop both Finally, volumes and if levers can utilize than currently they lower cash

Let by slide investor on our XX. as value me proposition, shown close summarizing

our committed to in value transformation, and shareholder is coming integration the Following merger increased years. successful CenterPoint Vectren portfolio delivering

planning utility billion EPS with X% O&M and X% strategy discipline, a growth anticipated to drive capital the are $XX program, investment strong combined over to regulatory horizon. Our

we CenterPoint are for opportunity framework solid believe long-term a to credit this Additionally, investment-grade compelling and We positions for provides success committed quality. firmly shareholders. maintaining

I finance to our success discuss have the am greater Kristie years, results every detail. in to and financial organization outstanding pleased our has Colvin Kristie business. knowledge integral for of facet XX of over of been our very has

of Over more the community and eager ahead. leading interact to have she in to has her risen finance organization, the more than with I Kristie? am months challenge past the investment month, the our

Kristie Colvin

in the Thank you, CenterPoint forward Executive I many John, Energy, and meeting of serve President look good morning, Vice near Interim and of future. and to CFO as to the everyone. I'm you honored

XX, both me during utility approximately key growth and operations let across Turning first utilities. and million of quarter. strong the within capital achieved investment deployed to gas fundamental $XXX utility highlight electric our slide accomplishments some We customer

O&M in focus to we remain long-term approximately support targeted We disciplined Additionally, investment-grade management on XXXX to-date, and maintaining credit our growth XX% have earnings steadfast identified our O&M metrics. of reduction.

filings, relief gas front, and regulatory Electric various the recovery Houston jurisdictions On we rate capital transmission made mechanisms. including the Texas

the of recorded Moving approximately XXXX, to $X.X impairment CenterPoint recorded impairment It important long-lived would goodwill to in related In slide to charges an non-cash the on debt of Enable quarter Indiana continuing to by I these covenants. XX, liquidity, Electric. affect note of impairments like and cash recorded the to our first and assets comment that non-cash for impairments and billion with million compliance or do after-tax company's share charge investment $XXX operations. in the company's is not Enable related flow

The to COVID-XX in the to depressed severity and natural with oil The reduce unit part the distributions fair the per impacting month and impairment related investment Enable of excess midstream industry, charge macroeconomic to our conditions quarterly our in Enable's decline estimated prices gas investment. value due its by supply the and common of in XX%. primarily announcement combined last of is recognizes to related the the decline

approximately from $XXX charges, With $X.X investment our we million. sheet to billion Midstream Enable these have reduced non-cash balance in

non-cash of the context the million. February Upon recorded this impairment of this merger at of Now, $XXX the value. in regarding I'll approximated carrying Vectren XXXX, acquisition business Indiana unit business Electric provide charge fair value some and

the minimal absorb value current was significant deliver indicative that impairment not earnings decline which with continued utility, there significant believe cushion in of needs. this is of long-term capital this market strong to the do as to continues pandemic. result the Therefore, of investment We a conditions

drivers would first I now and basis Midstream operations guidance XX. quarter to the on -- utility EPS like review Investment the slide quarter-over-quarter

$X.XX, $X.XX Midstream diluted $X.XX in of quarter operations XXXX. Excluding utility impairment the quarter XXXX share $X.XX of diluted first charges, the Investments delivered for share per and compared and first to provided per respectively,

solid a the of $X.XX $X.XX with relief along as the providing recovery rates largely capital Indiana a and Minnesota. contributed positive interim in result Texas mechanisms positive quarter, performance of delivered of variance, this Rate operations variance. the implementation Gas Electric Utility jurisdictions, of in

Additionally, favorability. provided jurisdictions of from approximately benefited savings the the $X.XX in first earnings associated of February month O&M an with through quarter additional the merger of $X.XX XXXX. acquired XXXX

Coast provided and other Lastly, to due CenterPoint Energy's expense, of our these of higher and primarily equity service the Partially primarily variance. growth, usage strong return, Minnesota continued customer charges. amortization territory, and the annual transition $X.XX offsetting along were variances and positive Texas positive for tax lower true-up depreciation lower

we partially natural distribution and for The was negative the warmer-than-normal Electric of were very across lower which gas variance Overall, with experienced performance uses $X.XX our Indiana normal. approximately pleased our accounted service by of driven weather, earnings territory versus utilities.

discussed year, through strides by million through O&M XX, Last great our of and annualized slide diligent company Turning and we in to focus savings made O&M our continued O&M keen our discipline other cost management. on merger efficiencies. $XXX management, achieving year-over-year approximately

relative building momentum full levels. O&M targeting we announced Further for $XX last approximately XXXX the CenterPoint in on are from incremental that early month, to XXXX savings million year XXXX

from achieve to support XXXX the half expect We approximately functions. incremental level of O&M savings targeted

maintaining growth This credit approaches investment-grade to support continue align continue comprehensive strategy. of to look activities in and systematic approach will and to O&M We EPS utility-focused will our management for opportunities organizational work to support metrics.

previously a the and credit balance today strengthening to of credit strong equity issuances as and On metrics John our sheet demonstrate overall CenterPoint's slide announced commitment profile. investment-grade XX, further detailed,

this allocation further the O&M Our through capital equity period. disciplined and equity to to eliminate FFO and XXXX, These -- rigorous management commitment. progress we planning the over process debt will ongoing XX.X% anticipated XX% target long-term issuances needs support

of of the $X.XX pandemic the basis result CAGR. Turning of to into growth $X.XX $X.XX transaction higher associated from to previously takes discussed. that X% and share share announced diluted our guidance impact utility X% a as to XXXX count potential dilution the a five-year range John COVID-XX to the EPS with slide earnings per of consideration XXXX equity range and are reiterating earnings guidance EPS range we XX, $X.XX The

be are guidance first CARES range change. the from announced the functions, expected COVID-XX the items from as benefits as results, deviate These strong reductions may tax well O&M by to received full year quarter offset Act. projected from actual scenario recovery extent previously targeted these our To benefits

In challenges only closing, entire but the and industry business, presented global for the new quarter not market. our first

by proactive in tackling was challenges company Our COVID-XX. the presented

the Leadership utility credit serve, our utility committed reliable of growth to energy. value remains we is the CenterPoint policy. our execution X% firmly poised core Energy to of while strategy remaining management, and disciplined EPS X% and and focused delivering our on employees deliver O&M communities to of solid safety our affordable through investment-grade

back it turn David. to now I'll

David Mordy

Kristie. you, Thank

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

Operator

begin we’ll Instructions] At [Operator questions. you. Thank take to this Thank you. time, your

Shar from with Guggenheim Partners. comes question first Our Pourreza

line Your open. now is

Shar Pourreza

Hey, guys.

John Somerhalder

Good morning.

Shar Pourreza

just So here. two questions

First, that strategic level. starting sort of with

Analyst of we And foreseeing those bit maybe range require jurisdictions review a now. versus set, You is from sale you're kind that a And of bit follow-up. perspective? can versus process does that this core the place of process? a in about with not part more an a of sort a company review have, outright imply with I we your outcomes non-core, obviously, little of sort think of work sense should have internal of that's that get Day stronger this this, the an of

John Somerhalder

Yeah. is we have we Yes, support that's question. a model business -- the correct. I'll and last the This start have now. the with for strong

we our see company always those our businesses feel of on optimize is as we're a we focus this continue to improve businesses. and what we our at will optimize And good businesses utility moving review to our can regulatory compacts, And of a mechanisms be clearly, can is all so And But comprehensive forward. those recovery. the view moving how forward will look that for so those utility to where do and those. businesses like we all going have of we

Shar Pourreza

little entirely future What's on guidance the constructive. there's then, out, as piece? the think moving cost corporate to So of Maintaining cuts at i.e., we Got how called X% XXXX? in I'm is the it. Can drivers you. a just the about moving kind of a dilution XXXX growth, figures, of headwinds. X% that of more which specific implied with a trying Thank lot mitigates these a we the even very What all costs? sense and just Is get to out reiterated around bit maybe get And offset COVID you pieces, bit kind lastly, the utility net near beyond for by parent? term? the you

John Somerhalder

then I Kristie with at steps bit we and by solid moving Also announced some beginning and several to year. make a we took move mean, as credit Okay. them metrics credit I'll forward. that it to this we driven out start can more add then about little April, through XXXX, of have the talk very we back sure of

And so, to, we helped reducing Kristie good O&M us we million XX% announced of capital as million of by line well, But $XXX had as $XX sight of said, which there. that. about cuts

and savings issuance. of first combination a the expected of the Act, that Kristie billion as well of O&M offset quarter, So more of to speak COVID-XX the result $X.X can a as CARES dilution has the on our equity good that, the tax those impact as benefit, range the

So -- that those for generally group generally out XXXX. nets

we as over fact amount next about And that anticipated already. equity then, this million $XX time the we as move more the well as that we of savings O&M slightly of the had benefit maybe forward, three-year maintaining period, have of raising

as not dilution we there material move that forward. is from that, as So

dividend -- additional our gives which the us have then, earnings. cut, we announced dividend And retained

us that of rate and all EPS those it's to the of base also growth to X%. combination reiterate guidance really and So XXXX allow X% of growth reiterate

to to you add would like that? Kristie, anything

Kristie Colvin

it covered you think well. I

Shar Pourreza

so much guys, deal moving and the on team, Jeff forward with congrats Congrats congrats. on and Terrific. Thanks,

John Somerhalder

very much. you Thank

Operator

you. Thank

from comes Sachs. with question Goldman Insoo next Our Kim

is line Your open. now

Insoo Kim

first My is just financing. question Thank regarding you.

the again? scenario did, that billion guys Enable maybe distribution think you how potential $X.X about that needs do the its that the With hypothetical you you to or have in leverage that pull could raise buffer you the cut

John Somerhalder

was there when presentation. looked distribution by at though reasons, the the went because And prices seen to talked for Yeah. I'll we good right We've of And felt and lower too. shut-ins, some made physical and we've through I my have scenarios, were XX%, when Enable, very decision is start oil for level. that cut of we that, a out first longer. on number we some even about constraints, scenarios, that positives downside the seen, I

confident and distribution to and in to So we XX% O&M that Enable's related own capital. remain still pull ability maintain their levers

So to at the Kristie that's let of the and of how other look strengthening point. our our I'll we But starting balance part speak sheet that.

Kristie Colvin

our strengthened are as Yeah. Enable. FFO from And we a John distribution I mean cut this transaction currently debt. in mentioned, not the has anticipating to

Insoo Kim

Just to more a be that scenario, are do happen scenario some a your impact? FFO may room little that does that additional like side have in the the to with something very Moody's, bit on worst-case in you conversations absorb of debt

Kristie Colvin

Yes.

level we have our conversations in our business, the think, agencies the that I would earnings rating with at regulated and about of percentage point. increased

Insoo Kim

follow-up. quick one just And Understood.

On stand-alone a equal, being to by review, that CenterPoint towards strategy, try XX% the from to trend all still strategic standpoint, XXXX? is utility the earnings

John Somerhalder

have seen Well, foundation And what our we we the with what we on. are interest. believe that's aligns that's really shareholders' start

So we maximize business that's value. But evaluate review to starting shareholder further that point. the with comprehensively, committee, will options best the

point. the yes, So, starting that's

Insoo Kim

Got it. stay you Thank safe, everyone. and

Kristie Colvin

you. Thank

John Somerhalder

you. Thank

Operator

Weinstein Our next comes from Suisse. Credit Michael question with

now line Your is open.

Michael Weinstein

morning. Hi. Good

John Somerhalder

Mike. Hi,

Michael Weinstein

to it just make I clear. want

that to XXXX, you starting in off you're go for FFO are -- as forward? debt target range that guys You range in

Kristie Colvin

higher. to we're And XXXX. With to the equity expecting is little in long-term a be XX.X%. higher then that little issuance, our than XX% a We're range

Michael Weinstein

worse $X.XX how XX%, continued industrial worse $X.XX COVID level, have the Let's that. get starts you the XX% get? the you to as -- of that downturn it the much instance, over If year, the the and XX% of the had expect to Do that rest a reductions. saw in -- Got better for at say, April, April you for sensitivities, estimate where XX% would instance, but then and of to you get? could commercial for beyond it. any of in with pretty And terms of a to worsening? How off kind ballpark bad it summer much things

John Somerhalder

because not -- sensitive mean, give experience rates not some of but because the you of we're had we our reduced I general again, are very though Yes. even industrial, ballpark, way I'll the we're the positive side, expected, very industrial, on with we what we commercial and Indiana. was in sensitive in and Houston there. downturn on the designed line residential And had saw both

we very April in line with what was we So much saw estimated. in what had our --

And through then, full it We if you impact will we through out. extrapolate clearly, that $X.XX. that year, that extrapolate $X.XX it don't August, the be that to impact $X.XX in us you the but out that for would you happen would conditions can talked anticipate extrapolate that $X.XX months, line results about can to that what scenario more in and with out should for But, occur.

add to Kristie, want you on that?

Michael Weinstein

$X.XX to additional looking month at? how Is you're that $X.XX Okay. months? for per

John Somerhalder

Yes. than Kristie, differently see that? it do you

Kristie Colvin

No.

Michael Weinstein

one question. maybe just And last Okay.

If your the and part oil comment gas assumptions your oil going your service you of base? gas maybe on status refining industry just and and territory, drilling for could and of the on customer are What there? what's and

John Somerhalder

downturns. seen and the even business. through through it Yes. customer tied I mean, good mean, clearly, stay over And we've tied do robust growth to and to the business economy The very Houston's of X% count we've with less past. that time. positive is oil in well gas in downturns is, plus, Houston I times, still news good seen

still we good very So there. area market expect

and we're through sit may you today, saw growth on early March point, growth the still we we we this At rate, have will in but that counts. gas next on as more. now, right end connecting customer our yes, It's see see new We still of year into developments good and new as But, moving to areas. up we what we'll tell update impact downturn monitor. too monitor oil

we closely. it haven't So, at point, will we but this monitor seen,

Michael Weinstein

right. Thank done. Thank work being All much. you very very A much. lot hard of Okay. you

John Somerhalder

Thank you.

Operator

you. Thank

Our Wolfe Fleishman next LLC. with question Research, comes from Steve

line open. now Your is

Steve Fleishman

Hi. Yeah. morning. Good

John Somerhalder

Steve. Hey,

Steve Fleishman

Hey, John.

color get helpful. conversations if Or negative outlook? be already that And the that be you agencies. this sense they remove would curious, would any it with rating the I'm any possible you just, So had might there did on

John Somerhalder

Yes. comment can Clearly, yes, those conversations positive. the I'd is Kristie, move. about this tell first. where But, you and could actual

Kristie Colvin

mean, I conversations This with positive. rating should the considered had agency. be Yes. we have

see past the to change before have would from We we get think any CES the I agencies. sale,

Steve Fleishman

are expecting to And close? Okay. when you that

Kristie Colvin

Second quarter.

Steve Fleishman

that? good all And is on

Kristie Colvin

Yes.

John Somerhalder

works transition, closely Yes. agreements what as we we're issues. able with still close. both very about about provide, certainty we'll being gives buyer employee before, parties to I very mean, the services well and putting talked in working on the place, organization And the

now, right good very So, we it. feel about

Steve Fleishman

And other Okay. then follow-up I one have question.

or this that Just really by review, years several options Enable, nonutility options valuation the and reviewed time be is end, Is any in that, the one And obviously, the ago. in three happened. was there business new there Enable company this more that reason nothing think years might business four than left ago? to or

John Somerhalder

that made we at to Clearly, the concluded the review will committee and forward sense. there this. and I the took business options Steve, don't looked various know review back detail, great at this point. path we reviewed related it But options most in

or be early too way options identified other whether to So, not. though, speculate, could on

Steve Fleishman

Okay. Thank you.

Operator

Thank you.

Aga from Zmigrodzka Our next question UBS. comes with

Your open. line is now

Aga Zmigrodzka

morning. Good

cost So talked lot savings million. about $XX a of you the

footprint? do what this upside your could think you number across to potential continue you review, the to be As

Kristie Colvin

We're savings. million targeting of $XX

John Somerhalder

some Yes. And as been this related our Kristie that directly, sight earlier structure we're because mentioned, and and we line year IT-IS that number we good feel already of about identified. costs things support services to type worked very corporate have we'd on had

with issues important now use us, balance that is technologies, sheet but the what's we've it and there? digging from how very all now savings, made and of are other then we into Supply positioned things the the to really technologies, company in those contractors of work so matter chain contractors systems, detail of the be Longer and we'll forward. looking use car approach strong management decisions types moving term, right at flexibility a

what potential that ensure have we say So, million. Right $XX around certainty too is. the to the trying we're early it's to now,

Aga Zmigrodzka

And you share impact in maybe benefits per on talked XXXX the detail CARES little you from guidance. about the tax a provide Could from moving more the parts utility EPS Act?

Kristie Colvin

a had we the CARES $XX the tax first million In Act. quarter, benefit from Yes.

a with $XX earnings, We million to favorable benefit to range also have quarter expect a around cash also flows. in future

Aga Zmigrodzka

and you Thank Perfect. stay safe.

John Somerhalder

Thank you.

Operator

Thank you.

Our next from Julien of with Bank America. comes question Dumoulin-Smith

Your line is open. now

Julien Dumoulin-Smith

to the congratulations morning all progress good here. you on and Hey,

John Somerhalder

you. Thank

Julien Dumoulin-Smith

It's a going are within embedded Can your achieving that, of up questioner being have Absolutely. know returns? 'XX? there's obviously, to that within earning this, the specifically the I'm some in equity through first appropriately, plan do maybe to started. optimized squaring through earned you one But equity pleasure. is I I just to you gyrations to first issuance expectations [indiscernible]? that word, to comment wanted specifically of here. how this outlook as X%, half-weighted? kind your implicit sure related on COVID. make think plan current What see follow think 'XX the couple given for X% And this about about back to Just the year the of equity that just you years, this 'XX returns? the you kind in then about And after in the back

John Somerhalder

then earnings, to years. But the out some returns, retained those on Yes. our targeting of of because actually, have earnings the in XX% regulated I'll reduction, issues. we equity piece, start comment the on with XX% and more Actually, those dividend out

$X.X time actually, of rate forecast an of the maybe in per year on that of the issue backside, range amount XXXX lower. of the before, $XXX is now. in $XXX pretty range pressure billion, old that -- in period, in slightly we earnings there's in to million But retained through the had the which lower equity the million So we because much

benefit savings the of We talked believe out dividend the about, cut. less we'll get and we've be it things will O&M years, the the and in the

fact, in loaded really to at back-end O&M the with the back in the equity savings. X% those X% more time we're growth of not end less of modest the all, plan, helps have million needs which out So periods when in $XX and issuing

I to I other equity And we close that? in pretty much X.X% Kristie, Electric, what missed the target we're and on on our similar allowed we Houston with anything that add look targeting you at the very that, in with that have jurisdictions. is If to structure returns. if very line cap -- return

Kristie Colvin

covered I well. think you it

Julien Dumoulin-Smith

side the Okay. perhaps just then here. respect bluntly, strategic to just Enable commented quickly, more to And What if real I to explicitly comments turning the is ask may? clarifying You prior your on it with of review, the table things, and here. on strategic

fully perhaps against what And encompassing having how you to think in this do and sure make contemplated? past? about of want the is understanding we're backdrop these processes Just had the

John Somerhalder

two in a management or past, lot the by a processes more of were you three were me, us and will new Directors, existing What they five on we including Directors is led group, effective, the the mean now that looking have I went count at if team. of the two Yes. this. be

in in Board at businesses sure So Board-level look our set be in And way. total involved move level. a We'll it it with experiences of that optimized at be new will we will forward make to comprehensive. the that most

similar ways, the it in just changes but So has about. it's some I talked

our business. optimize right the by So, think to further that. time we're very We encouraged it's

Julien Dumoulin-Smith

the clarify of Yes. Are to of the should management to we to conclusion in -- terms prior supposed process? and plan, updates expect we just appointments the this, just

John Somerhalder

clearly committee, plan through now is I the think, will October. its The function right charter under

normal there's before do would would we be a an early so that. we may plan. XXXX. be that, communicated schedule that what -- Day laid Investor out. the in I And That would about be But base obviously, normal first the But in that something is we'll talk time that should if

Julien Dumoulin-Smith

Right.

interim So management in no updates to either? the

John Somerhalder

public, and all prepared anything on But that that should obviously happen that anything public to and do the you we Well, as to conclusion process. base amount at announce then that. that, time and should would of make changes of occur be changes that is certainly direction, plan would update the to we we take But need make appropriate.

Julien Dumoulin-Smith

Excellent. it. you Thank Best Got to soon. of much. all you luck. very Talk

John Somerhalder

Julien. Thanks,

Operator

Thank you.

Anthony question Our from Mizuho. comes next with Crowdell

now is line open. Your

Anthony Crowdell

Good follow-up. one morning. question, one Hopefully,

when Julien's on when the question, think CEO find out selects someone? search. more of little a update on I timing and the off CEO on Board we the to Any may search

John Somerhalder

pretty Yes. we that committee mean -- they've around stood very that. been very the the rigorous time up, working and has been I that committee much news for well, is a very, good since

They've place. interviews They've a with of have of a number in identified large firm We number candidates. conducted search a candidates.

sure -- absolute more is back so the the is the on But it's And done, and now work make not it's done, timing period, the of picked, right side on on of taken it's good until process. backside done feel what that that good lot we're we're transition care search can been I we person until but and a that has getting of of.

Anthony Crowdell

company tuning. $XX million company? Are and maybe utility the Are in at answered I you've has more fine parent they O&M cuts missed XXXX, identified the at company? the I this, it. Great. And of lastly, then, more think operating more additional they The just

John Somerhalder

more company as more services yeah, at But and that well. support of of will of the and out. there we those looked each will forward. start level, more those the units some, is things our identified some with that's I'll look business moving mix we how services focused fit of develop utility half new the than just more at been some it as support be some at But

some, percentage them will level. that but corporate please? to there at Kristie, be a So add you good of me, for are

Kristie Colvin

No.

right. that's the level But think activities. again, we've half, board. They'll our identified I be support over across

Anthony Crowdell

for my healthy. Thanks stay taking Great. and questions

John Somerhalder

too. you you, Thank

Operator

Our from with next Paul Glenrock Patterson question comes Associates.

open. now is line Your

Paul Patterson

me? Can morning. you good Hey, hear

John Somerhalder

Good morning. Yeah. Good morning.

Paul Patterson

review business wanted I just wider potential I on time, combinations of that of fourth what on range really the or like to follow-up necessarily it So the mean, you. at looking business sounded last weren't guys sort have quarter, you process.

could that perhaps business value? be enhance what new the is investors, now potential review to shareholder about should we you, the almost have anything this wider investment, With on the table with perhaps of options range think a

John Somerhalder

at our and the fit and the together. look everything think way review the strategies is at will business, of from on across Well, business businesses think optimize how look best really regulatory plans I business appropriate to committee all through ways it through

something on a anyway. I that's basis So you normal do mean,

experience involved of to and good process. brings eyes set a new So it directors fresh with our the with

it. a a with in take the but at really normally do, opportunities it's line company fresh think what would I have So look with with now really to we expertise good

So the time It's for to we think the -- it period on process, Board recommendations and about. I we follow, the act very Board in is talked they'll powerful a make that different. to can

it's So do to good forward. a thing we think moving

Paul Patterson

sort for on, long what table, guys your -- it stand-alone should of wondering Sure. you guys look a obviously But there off what guess, plan if what that anything is words, are is, that in the I I'm is, as be other willing our in the have anything was to potential at isn't sale just it depending pretty value? or guess Or you, I of much saying? what the so what feel in see would is company mean I'm obviously, is that what and I the is table is is you things there there -- we speak? and shareholder to potentially is outlook you as the game of think certain on hey plan, that

John Somerhalder

set of at The starting of around the base the point those, our right making in utility optimizing function great total they is assets. are truly this operating, decisions how looking businesses how business

committee. That's a and has that's to set where other is focus. starting moving options with consider about. those to great plan has point, configure utility review This that you've and the that's not correctly company those So to we're committee the designed the assets how starting got go-forward this Every optimize the of talked forward.

Paul Patterson

what completely that then that the write-down, got to Has anything? you actually is do value rate utility elaborate the fair utility what with or equity with the level in at the regulatory terms fair terms either accounting that have in the anything goodwill? of a And sort could one, Electric, you finally, just when Okay. bit base if of Indiana wasn't the clear further making, of at you? Or is you was in said terms of on have rate to is impact value. little on there Great. respect or just It what

Kristie Colvin

Yes. should utility. regulated impact not the That was goodwill, and it

Paul Patterson

Okay. Awesome. Thanks so much.

John Somerhalder

Thank you.

Operator

Thank you.

comes Tonet next question from with JPMorgan. Our Jeremy

now is open. line Your

Jeremy Tonet

Good morning.

some kind that. something against to Just that the if you to like cut something with points chance FFO trajectory, of regards dividend wanted see you or here, on build debt to by like Enable's of to just touched on want moves here, the

you kind of Just have wanted levers pull have like helpful. see would to be at just this more Or to you thoughts what Could any that left deferrals? there include CapEx point?

John Somerhalder

distributions, to of rating with that, work work Yeah. couple the out. the mean the do do, enhanced, of But unregulated we be the would things but regulated start. already. balance versus steps, we now through we'd strength a I'll into we've would mix of clearly, occur. our be our would sheet should believe, talk I especially agencies Again, some feel continue good that things start taken we with one Enable's heading we is that and about positive fact that where -- very

mentioned we evaluated, would at less the whether other and little continuing under would alternatives clearly, would But be circumstances, those that be type you things a look capital that or that's add to We'd can as make Kristie, that, we we other O&M. moving you balance at sure possible see kept the forward. to please? those if to look sheet ways best optimize

Kristie Colvin

I well. that think it covered pretty

Jeremy Tonet

a And regards to for with just that. it. here. follow-up question COVID-XX Got Thanks

remainder clarity jurisdiction? your expect you COVID deferrals have on do when of the to Just for

John Somerhalder

number. understanding Kristie large is -- my we I mean, have a

of. look addressing that? jurisdictions estimate are understanding our on We sight most of line be care have near someone in issues future. My have taken time those on good the of Does already and a is to better

Kristie Colvin

let Yes. I to was that. cover going Jason

Jason Ryan

Sure, morning. okay. is This Jason Ryan. Good

The topic, So to earlier we is order the as morning. Commission here an voted Oklahoma accounting Commission right sit I that approve believe, now. discussing this Minnesota

expect and file in Indiana order topic, So we've with an seeking are next. update they either I accounting don't an late working they're early been where application week that. colleagues industry our headed. And regulators this have on to or and at this on But an looking

would already take care that of that all most So of acted. them jurisdictions, have our of given

Jeremy Tonet

me. it for That’s helpful. That’s it. Got Thanks.

Jason Ryan

Thank you.

Operator

Thank you.

Morningstar. with next comes Charles Fishman Our question from

now is Your open. line

Charles Fishman

reading guidance, earnings Am at realized over or few Good in news is more release, and probably to should? morning. quote but current you Enable. I That Or got your one else -- nearly that time, either the XX%. John, me the than understand? next I utility you utility April into there divest anticipated this partially on XXX% completely that now, contribution that the XXXX preference, contribution, guidance, increasing the that was something In your to I going review to don't board years. would imply preference XX%, Midstream

John Somerhalder

is we're in. that at this expect the of effectively, fact next the when mean it's occur we into year and a longer to I year based cut what Yes. lower little on it period drilling we was happened looked activity Enable for heading very and distribution XX%,

the the next liquidity are, really and distribution a that took even as Enable year on so of than And results cuts further into protect little to lower we moving into step that. proactive head earnings they

as where period the no earnings go just under drilling just those time basins expect takes down talked to naturally of significant I in for some the contribution that we this those there. naturally, earnings for midstream So about,

on top regulated then invest heavily in our business. continuing of And we're that, to

regulated result have the that we of distributions up, you XX-plus then cut trajectory XX%. normal percent, earnings just will coming I in mix. when positive regulated and think, anticipated So that That the to we

be bit related that may Kristie, on that impairment? correct? Now more little how that And is there a impacts that, the to

Kristie Colvin

do will to a will grow the of of the utility these still as that mean result basis expect we be contribution. impairments, accretion XX% the there I but

Charles Fishman

That’s Thank I all you. That’s Stay helpful. guys. safe have. Okay.

John Somerhalder

Thanks, Charles.

Operator

you. Thank

question next Ashar comes Our with Khan Verition. from

Your line is now open.

Ashar Khan

morning good Hi, and congratulations.

wanted thing I the this congratulations. to a you new more, because bit, you and left by but really course, CEO. be little that date any I think Board help in job, little whole it picture but the did you bit do would so a announcement? terrific Can is can mentioned -- quicker, hear what we better, the of a have time frame specific which the last

John Somerhalder

No.

the about fact this think positive point. at moved feel the we has I process

the are get But person. right the we to take as track until sheet, looking these strong finalize you balance strong know, good time make really type businesses, on And identified got operations, absolutely on want business, talked utility the for someone feel But when you're about candidates. very have focus that record that's we our something. being I now. individuals good We to understands very to sure you

good out, forward. made until moving an good sorry, I happen can that period that short-term can't about reasonably a the point, period, short happen in time. are exact worked all more But this really reasonably feel but it so in to I I issues and progress to I can And think time like we've commit it -- a those said, specifically

Ashar Khan

into Okay. you if ask year? And do next tax you I one I side. Or benefits go mentioned guess just they only they year? may that another you question The they on are and this $XX mentioned, carry the million, million away? Thank on you. accounting for $XX do

Kristie Colvin

Yes. They go away.

Ashar Khan

does They go is much away. How benefit. And then amortization that? get keeps that that you And mentioned on we also going? some

Kristie Colvin

Amortization, referring to the basis accretion or...

Ashar Khan

Yes, correct.

Kristie Colvin

Yes, keep ongoing. that would

Ashar Khan

itself? that -- keep much would and is how in That

Kristie Colvin

It's to $XXX the estimated to million $XX bring year a up annually. million

Ashar Khan

year? $XXX million. And this starting

Kristie Colvin

this would I because think in about -- $XX the year, year it's in starting total. million be in it of not the beginning

usually is $XX year million. Our

Ashar Khan

$XX of you initial the now is $XX when So gave it thought had previously, guidance, and you million? million

Kristie Colvin

yes. million, $XX

Ashar Khan

$XX million.

around So that that of is $XXX million. to is is going be going how increase to long And And last? that an that.

Kristie Colvin

almost or years. so It's XX

Ashar Khan

XX… Okay.

John Somerhalder

And that or earnings. the unregulated primarily impacts midstream

Ashar Khan

accounting understand. Thank I Thank wanted understand. just I have But to the I right. you. much. you I so sure make

John Somerhalder

you. Thank

Operator

you. Thank

Our James with BMO next Markets. Thalacker from question comes Capital

now Your open. line is

James Thalacker

me? hear you Can guys. Thanks

Kristie Colvin

Yes.

John Somerhalder

morning. Good James. Yes,

James Thalacker

X% growth in I -- understand, wondering and you you convertibles as I presentation but you've missed if to it the disclosed in terms XXXX sort your are in X-K, if the just was the share I issued the apologize are the of, somewhere assuming, just And count? to trying what were. of for X% rate,

John Somerhalder

Yeah.

we've been and on between our yes, what filed. conditions been are now have think those disclosed -- terms posted X-K that and I have and website, think, I

Kristie, that's there. part So But take would of other that you the in question? I think

Kristie Colvin

calculation guidance, treat will common the it we calculation. was the the in After as dilution Yes. of preferred if

James Thalacker

Okay.

to the forecast the reflect so that would And X% dilution X% then through period?

Kristie Colvin

Yes.

John Somerhalder

months convert out. they there mandatory correct. a -- XX And That's is do on those

Kristie Colvin

Right.

James Thalacker

Okay, great. Thank you very, very much.

John Somerhalder

Thank you.

Operator

you. Thank

with Our of is last Antoine from Aurimond America. question Bank

Your line is now open.

Antoine Aurimond

so you question. Thank morning. my for taking good Hey, much

John Somerhalder

Hey, Antoine.

Antoine Aurimond

equity wanted you? how just are on to clear needs. be Hey, I

And million so mentioned. shift? you issuance, as savings, from XXXX, the what $XXX XXXX of previously. care dividend it takes the of So total to will essentially equity is not had both necessarily XXXX that through Or Is in timing be different and million had debt needs $XXX you now bulk are the you O&M with more that? holdco the that new a met idea that of cut had

John Somerhalder

Yes. we're needs, be than would but before. plan question million still and have to we the estimate we I what upon anticipated If XXXX based $XXX $XXX would estimated XXXX, now, in at range -- the looking to equity some will lower it million

that? more on information And Kristie, can you give

Kristie Colvin

that's mean, correct. I

those than the As we you said, in lower cuts anticipated did, it with dividend is years.

Antoine Aurimond

to equity met is going and clear, need announcement, going since so you debt were to today's issuance? to, And take new The care XXXX of you that XXXX? that are through XXXX going to issue, with holdco be be

Kristie Colvin

$XXX today. issued was plan $XXX million XXXX And we XXXX $X.X between Well, issue million million our and and billion and XXXX. in $XXX to in

the versus and midpoint at the $X.X of billion $X.X XXXX, XXXX that been we're billion So have would doing.

for needs So we three upfront satisfied these years. our

Antoine Aurimond

today's have And Got the with be it. plan agencies? to -- lastly be -- to better clear, rating you vetted

Kristie Colvin

Yes.

We regards favorable. rating expect to it have the consider them with in plan, and contact agencies this we been with to

Antoine Aurimond

Okay, perfect. Thank you so much.

John Somerhalder

Thank you.

David Mordy

questions. do you, your interest Thank Energy. more I have believe CenterPoint we not everyone, in any for

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

Operator

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

CenterPoint Energy (CNP) 7 May 202020 Q1 Earnings call transcript