CNP - Earnings call transcript Q2 2020 | CenterPoint Energy, Inc.

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Operator

Good morning, and welcome to CenterPoint Energy's Second Quarter 2020 Earnings Conference Call with senior management. [Operator Instructions] I will now turn the call over to David Mordy, Director of Investor Relations. Mr. Mordy?

David Mordy

Thank you, and good morning, everyone. quarter conference second our to XXXX call. earnings Welcome Colvin, and XXXX CAO, Lesar, areas. and CEO; discuss CFO Kristie and key other quarter Dave will Interim our highlights on provide results second certain management are available that management's to topics Today, on discuss that contain forward-looking based information projections and assumptions will beliefs, management. information and currently will forward-looking are subject statements to These risks or uncertainties. and economy impact could factors, in filings. including actions, pandemic the various of noted materially the weather, prices, upon and risk based differ commodity our Actual results unemployment, factors other COVID-XX regulatory SEC any obligation statement We revise undertake no to any or update publicly forward-looking reason. for

in above Business range, after-tax We the the income Committee the and Corporate investments segment. associated as earnings based and contribution. expenses for range range as utility variables of from of its related change guidance earnings integration businesses, income issued assumptions stock, impairment from XXXX noted sale The COVID-XX This relative Evaluation the guidance summary, activities, dilution and or EPS range in Other ZENS our value merger considers results from impact these operations significant certain recent with guidance guidance and and costs, components. EPS midstream that excludes in as includes and date stock Kristie net adjusted discuss losses an and on In may material segments her resulting will guidance incorporates to severance performance divestitures earnings, cost Utility which Review EPS changes operating the applicable certain of including scenario in noted for earnings as also GAAP allocation further this standards. C if consider diluted and other non-GAAP have Utility the remarks. EPS were and per common of measure will guidance, for a our assumes guidance utility overhead potential impact CenterPoint preferred to reflects could also related guidance from which results the the unusual in discuss our range two providing that Series well items ranges, share items, also our corporate Energy earnings and release. earnings upon not impacts, period. uses a does securities In reported and accounting as

investments, outlook We on the provided also for their into provide call. things, guidance takes among midstream by account, Enable other earnings which

non-GAAP today's For which found and release guidance our on refer the news on guidance under be measures our methodology earnings Investors earnings reconciliation our information further can slides, in call, and the during our providing a of please used to website. section

like which report, we to year. As to call announce we our our information. attention I'd a reminder, later upcoming website may anticipate to material corporate publishing use your this responsibility

employee risk will the diversity COVID-XX inclusion, governance, In highlight and and reduction safety report addition management, carbon efforts, and more. to supplier

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

upcoming remarks. should and considered the will turn over not will previous I that I to in Dave. calls, with Finally, be paced contrast call supplemental conference now the materials, are slides with note

Dave Lesar

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

in I'd CenterPoint leading honored the be I'm I by First, how to and has Board the am say like Energy, excited placed trust to me.

brand Additionally, during that tireless can promise tell first challenging our and operations unique I'd delivering running. you And tried COVID-XX. I times the future being XX hit energized and thank unwavering like my efforts, In to about presented the greatly am to company. for I days, of commitment I've ground there our this by their of customers for these always personnel all of CenterPoint's on

results. it going a overview brief our cover business and second I'm remarks, off quarter my provide of to financial to I to Before pass Kristie Kristie?

Kristie Colvin

to start like Thank results everyone. you, morning, our the operations. by Dave, strong second from quarter highlighting I'd utility and good

$X.XX impact lower was COVID-XX In results. per X% reiterating a impacts utility EPS guidance earlier X% our basis five-year our GAAP I to quarter, $X.XX guidance $X.XX the spite utilities As negative diluted of primarily even associated from deliver we share performance and earnings to of our with of revenues. Underpinning of gas news call. share usage O&M provide for XXXX $X.XX guidance $X.XX on EPS COVID-XX. share performance basis, COVID-XX impacts COVID-XX disciplined robust CAGR, this growth, per management customer strategy. reported with for expected and diluted review we per quarterly our later Utility are release second basis range. more our delivered of of range the include scenario negative was our utility's natural of impacts miscellaneous strong the continued which utilities today, to quarter. and basis the you our and The regulatory the execution by drivers And and that, will a detailed saw On in electric driven a outstanding quarter

We also utility system million investment as and as to load the quarter integrity safety $XXX modernization support capital deployed well and over of during growth.

Texas approval of increased On annual the jurisdictions. Houston within mechanisms over largely $XX capital regulatory the recovery our incremental Electric revenue, front, result of million for Gas we as and received a

certain with ability Services. the of parent-level pay bad Energy debt. along sale Also we expenses equity addition, were debt to sales, with and In used from the quarter, our including primarily Proceeds during incremental the to May associated completed down we issuance, these jurisdictions. across have Services all now COVID-XX, recover Infrastructure

operations which COVID-XX of pandemic, a profile, guidance transactions $X.XX utility-focused and strengthen to impacts a These with opportunity investment constructs. as the $X.XX On received CERC the regulated favorable delivered LDC. diluted utility successful result business from Energy's guidance jurisdictions pure-play share Moody's of profile diluted drivers. now at would $X.XX sheet, to risk Additionally, the platform to balance basis, review operations a share, compared our capital gas quarter-over-quarter I regulatory negative natural EPS our improve robust execution CenterPoint like quarter business diversified per providing across risk to per designed of in CERC highlight as a utility strategy improved a capture utility the firm basis a upgrade second ratings includes XXXX. of positioning the

higher by This Texas in depreciation other and usage in the as benefited the along Indiana, relief, rate primarily a revenues along to tax jurisdictions, due as Lower and and well of O&M parent-level lower net primarily tax along with amortization mechanisms continued beneficial interest were Minnesota. Gas Coast, to rates organic and down largely Houston Ohio as implementation equity our interim in savings, recovery result lower as from charges. expense strong primarily positive capital were a income quarter Texas also expense the variances expense, driven true-up and of expenses and transition customer growth, quarter. miscellaneous of COVID-XX, paying with these debt, Offsetting annual the return, result of

impacts businesses retail provide on the COVID-XX like Because our during and COVID-XX, some from bars, little a restaurants declines let quarter. Now as customers. small color well of as other me saw of experienced we demand the commercial in industrial

flip debt experienced and we in the across because significant and the Utility residential declines a In natural people associated Indiana exposure We we EPS guidance staying liquidity, at home. it Though estimate gas our COVID-XX are On Electric had $X.XX up revenues bad fees be for other will quarter. jurisdictions. regulatory increased, the by basis side, has was we has reduced exposure and that mitigated by anticipate on impact believe aggregate, impacts don't recovery. usage

normal levels what lower call. has laid demand of me We these decrease April by COVID-XX levels out highlight gradually original first quarter Let our originally changed and after assumed return earnings September. from to assumptions on will the would

know, the currently spike As second the quarter. demand state experiencing now we after Texas through of so the is reopening, in continued of level lower a cases

with reduced revenues. for And the we right basis EPS remainder of what of impacts guidance, to year miscellaneous to now, an in the quarter our seeing are COVID-XX as we anticipate second full and reduced purposes the demand our XXXX anticipated guidance to of prolonged period Utility based the For adjusted the on $X.XX account year. demand lower negative $X.XX for experienced have assumptions another of peak we

be However, updated COVID-XX expected disciplined to of such if from forecasts pandemic robust current rate factors impacts, growth or that jurisdictions key gets savings. continued interest that our few again, cases; Texas if There O&M year a range as: other our Texas; favorable-than-model in and mitigate are organic higher. the worse impacts full could management; or shutdown are more

over COVID-XX of scenario mitigating I'd Additionally, full recovery assumptions our anticipated guidance to extent these the And the deferral assumptions results including impacts, continue change. may to the reflect incremental projected actual COVID-XX or the offset debt. call like guidance from our turn deviate year range now To the Dave. to don't factors bad back anticipated and expenses,

Dave Lesar

Kristie. you, Thank

of is annual that look see CAGR at Energy our basis range. five-year reaffirming you the despite CenterPoint company and Utility COVID-XX you a objectively, impact scenario guidance If EPS its

and to our service asset see You a true also base This across areas capital with for regulated company attractive a with Texas, invest especially in opportunities premier and larger Minnesota. is its jurisdictions. Indiana more great

robust organic a experience opportunities. Texas top-tier investment continues growth, to is expect we example, and capital For place future

Given continued is I share our comparing peers an unreasonable this our where and believe for our trade, to organic investment footprint, too discount. and price the low opportunity inherent at trades and growth

reasons in speaking exists. you have after why I time believe the a the I've better for of I discount Now here, with short been many understanding this

ways be those you I issues it's are our maximize seriously we forward. certainly shareholder many concern commitment let are You And investment. objective, believe stewards down, to tell address of that to value. have a to our are your There this you as we we thorough can achieve move to review. obligations and to good my you, committed job realize take very I we and

address want things. I confirm a my few to approach, Before I

XXXX despite to range Utility impact range. $X.XX scenario share of guidance EPS to CAGR, five-year Utility I the expected and X% $X.XX EPS both First, to an per COVID-XX X% our our want reiterate guidance basis of basis

our regulated optimizing to review investment investing the an in with and, growth regulated eye fact to the new we proposed in we own in improving include with investment organic five-year are capital supported growth states opportunities will opportunity additional assets and plan. projections Plan continue billion business-friendly This share opportunities capital and by larger our will Confidence our Integrated with move Next, to renewable resources future the the of allocation a in utilities significant our capital Resource forward investment in grow process capital. we as therefore, potentially opportunity $XX that exciting have Indiana. by toward

investments. residential been one years, most growth a premier where anticipated Organic our the recent COVID-XX. has to annualized including Electric, the of adding amazingly, during example, utilities, for impacts not the for future of with It prudent residential X.X% long pandemic, capital drive growth even has customers the we rate customer saw continue growth, year-over-year in quarter is For decades. customer Houston three-decade to need a consistently X%, of but

In distribution Minnesota our addition, anticipated Texas or invest is capital, year-over-year gas current Indiana, meaningfully customer greater jurisdictions. the environmental even in gas next decade. our natural growth and natural at to the experience The and growth business business our utility require continue generation simultaneously for in we to business in reduce to at to investments to our In potential primarily impact. our rates see least upgrade continued

We who have runway opportunities are Overall, regulatory of determination of builds make other build we'll we and on to level be to us. operational ahead examining ourselves, considerations renewables tremendous and generation. investment as financial find and we tax that a eager the

at spending across our earn on In our questions allowed review of we lot jurisdictions. Review Evaluation dollar continue addition, getting of and a drive of near I'm ROEs and our to will shareholders from to Business all or Committee. every our

around creating and that optimizing Evaluation ago, three the businesses, various about Energy's months ownership of value. the talk Business BREC, Board mandate Committee next. assisting Review and assets all we evaluating interest, centralized formed and let's full and with So called in a CenterPoint the unlocking

to process week. being clearly addition can this I am times I meet to its In tell a am all BREC, value formation, to the maximize again four also has chair committee. thoroughly the at assessing our stakeholders. driving have CEO, I and minutes. advantage we you of for But I pleased next since BREC opportunities dedicated table will or met will the in couple stakeholder The of to us areas meantime, in take that we a the few work. efficient any its nothing to while BREC become review value is the in the opportunity we enhance those determine mention off continues believe might BREC more it process. prudent of is a help we

date. Let of me BREC a areas highlight focus few the of to

improve long-term steadfast and to disciplined believe First, any this growth on EPS to need and its be efficiency, to But management in incrementally efficient I where in great like to company, of cost continue something all that company is continue O&M control. focus top area we mind cost keep that is is The support do. making this an can investment. and our strides we we area will capital

rebuilding serve my and will first Texas Public the priority covers a of the Commissioners couple which of days regulates Chairman both in rate Second, the all visit CEO, five focus governor gas Commission, of Utility the and electric and Public of the we as business; to regulatory gas role case near. businesses; Indiana. better In XX next Indiana, relationships which other helping out officials with just the of our our is of as the regulates Texas of new vital which mine, met regulators the relationships. Utility when plans currently the the natural of the leaders Texas have Building And as something I've not customers states I the to business; Commission, in Texas weeks. electric we natural commissions investments Railroad a in well four the necessary be on understand play and members

believe in start to this area our building relationships. in we good a are So I off

Third, alignment. proper business

of electric at looking announced to Energy's the opportunities businesses for direct additional of unit, which business A this across We businesses this into are identify combine business was result earlier all configuration two efficiencies. the decision the week. one was CenterPoint to

Walker Enable work, This support opportunity example our more CFO. CenterPoint our we streamline to take Both have of my two our we and while did BREC our to extensive evaluating value and we its also status actions of Al utility accomplished performance, not allow driving the operations value of expect was and focus currently our maximize I team opportunity completes with really these the leverage CenterPoint the work. example goal of will us to on This if and energy long-term Bob that Energy will Anadarko comment, take further financial our and completes Bob make Petroleum options. efforts Gwin the a its This our representatives focus the announced right CenterPoint investment. efficient. ultimately of the leaders Board Directors, regulated resources previous on to an management our Enable align driving which Al an senior that are was to drive not value appointments seizing representatives Bob complementary We and believe we from qualified action human Fourth, Traditionally, experience, made Enable earlier strengthen this the been the Energy's to our value BREC week. stakeholders. which industry these the is will of waiting front Al efficiencies Enable in of see is highly another the history and and as we Board operations, skill set creation. O&M bring our acumen, appointment experience, capital, former of of businesses demonstrating deep executives, better Consistent until all an why MLPs on believe who are transaction maintaining that knowledge combination think about approach. CEO long is while quo for

the CenterPoint Fifth, or outstanding in financial to key with where that business peer that discuss has in Enable also running a units, I While is I pretty we peers. And this satisfaction in to operations business Energy interest deep this better. scores customer across intend The our not dive group taken Enable, I performance efficient do in there also know get operational in great quartile say metrics good peers. any performance area always shape, I believe is further near all comparison and versus operational are top and review. rates in can we is comparative call. financial reviewing an and can stake our an BREC and But

top be top strive Now we as why comparisons then example, not unfortunately, are are can't if we the quartile, to good. For financial decile?

another our know, factors that we're of moving versus businesses. we metrics when at and financial so all why equity looking in transform them Resource treatment to on the company the potentially a all fact. Seven, portfolio. assessing trying on significantly of peers, of recently That's to clearly into filed short Indiana avenue to a IRP, As our or we our focused in the an lag the head remaining That's a Sixth, in on area group. are Because This mix of are time, a role would understand giving go our discount the nonregulated we capitalize to is Integrated around the is on. address assessment focused working lot we attention. tax businesses. regulated generation utility, heavily rapidly nonregulated are pure-play and Plan, renewables favorable currently of you period providing renewables. renewables The

capacity capital business efficiently numerous is incremental, opportunities, beyond many we the is capital are investment program are excited year long-term the by raise flexibility growth gas to the Energy And rate. about starting of on working in next ability natural capital renewable us hard finally, balance forecasted earnings Unlike financial our borrowing Minnesota, that outcome on our our sheet, capital. also expected that with which allows convert makeup hydrogen blended CenterPoint and a be pilot optimizing utilities, believe a then to supply. assessing overall is to energy prudent We and structure the has structure. BREC long-term will to our We focusing our optimal really grow

effort. important us to We engaged advisor this have a financial help with

and really to end speed I around compensation critical. Building your shareholder once to with Analyst XXXX. to set you now our then. host BREC have I'm the will I in your to to to I with reviewing hold team. in received is first will discussed Day, formal October. and our parts then on few us management questions engagement important us and we for, all Analyst CFO Because CFO, on Because program have to about I also and solidifying can started. regarding to the BREC to line to is is our our executive meeting progress am Day used the any on the take is help determine and make we investors and in a team CEO I'm all am recommendations view by step program desired of today direct ongoing with BREC a you I alignment topic. proper as the activities will and interest quarter at understand, up right sure leadership time provide activities. past compensation already Having I'm are at the the external been the at also our with the feedback first feedback mind. by complementary tandem is can BREC process high-performing strengths, of continue rest to and skill going set eager tell this, effort, moving investors it reminder, this Board your various process say between and believe And feedback the big our an the there utility work look a of changes and a investor regulated on hiring cannot The to weeks skill the time so appropriate my know looking of I as and on important Now many forward for a with governance I how I good time is keep the today's call. management skill month. spent I've strongly set execute business-sensitive our position committed We and now the the CFO. continued strategy. in a has in CFO made assets next a Board build the to I shareholder employee the have team of evaluating permanent this interest. and search frank our misalignment recent organizational strong

as we So things from tell I we you going And a you, many are a lot see, our good company. I start have can place. on. happening can really good believe in

rate growing at have premium room to bottom increase I'm base. large discount. base our current We is, equity the disappointed of diversified, jurisdictions, But regulated invest line a all plenty asset across with and our

really is out simple. We consistently assets, company task existing to Our isn't feedback. And continue We your of must jurisdictions. live our efficiently, more have commitments to story. fix get CenterPoint working to our to up what people and and this need we get finally, run Energy the simplify and

on hit a I've lot Now today.

you go we questions, what into take the hope before let summarize I call from me So today. away

is management about really the here, excited path I'm direction First, our to team be and and forward. energized our

our addressing on. are We head challenges

Next, $X.XX range. basis even share of we EPS, reiterating our XXXX burdened with diluted per impacts COVID-XX of to the guidance our are Utility $X.XX anticipated year scenario full

We Energy X% capital. of X% our potential CenterPoint organic lots targeted and peers, of growth opportunities markets Utility our to reiterating to five-year businesses with in large invest are Unlike EPS regulated CAGR. basis has guidance many

Given anyone. that, as COVID-XX to believe storm I will as weather well continue the we

very for CEO seriously. CenterPoint As take BREC, of Chairman stakeholders maximize our value the to of our Energy I all obligation of and

believe that we be Thank will we continue hard shareholder restore Mordy. me getting in price. utility-focused as that our is share assess to on enhance options. the the at you, focused we work and over most the your not efficiently all Our as possible, remain regain to to confidence table are Once my regulated only making the we clear. value, time, back decisions I call confidence relationship, let stakeholder same we Dave the nothing BREC assets strategy view, confidence. and the reflected shareholder are and In taking and will in of of hard And I off see review, near-term owns our our out the the will CEO turn you to

David Mordy

you, Thank Dave.

[Operator with Instructions] Today, we we with at point. call where questions. to BREC you this will the open are We now the shared

Board-driven Dave any Analyst followed-up not BREC. will process is ongoing the the in an to an BREC on we mentioned, conclude slated questions As October by additional Day, because Regina? and be taking

Operator

[Operator from Guggenheim. Instructions] will Shar of Pourreza question Our first line the come with

Shar Pourreza

Hey, guys. morning good

to and X% mean, your pushed COVID to assumptions So congrats I you the year-end obviously, still on trajectory. X% and the quarter. reiterated guide the XXXX out

you an have mainly And we looks it's which pieces proposal, iteration. IRP Capex and the Can Indiana to moving the about XXXX increase a So generate to versus on 'XX? meaningful of the focusing for sort talk prior updates a solid plan.

provide think So X%? I as that to upside capital accretive growth be what X% could your this maybe strategy. we could have about on opportunities And follow-up further to to a

Dave Lesar

quarter. Sure. did compliment. congratulate Well, I it. job. I thanks want team the for to great appreciate for our a the They

I the that beyond we there we in plan As now. lots upside capital out remarks, my have prepared of have right said

do. like can drive continued in have out forward, growth. be we'd that's to call, way and anticipate at time, up to we said our so is we're and the going organic why opportunities sure at to able Minnesota, plant look making point, obviously, me we allocation more growth proper we Indiana, at fund in front having therefore, projections Because have in look as of that this some that at you Texas, of fund. we figure you to growth IRP to luxury the point in the them in If at efficiently doing is And than, you we a opportunities we important. would us what in to look the have capital And

Shar Pourreza

is fundamentals a Great. widening off comments. remarks, of That And part That's in your question "nothing prior of prepared remain the of management's on mentioned from a which if of may. sort great. the just sort touched Dave, really strategic of kind small the you bit here, two language is strong. just table," a I

So I are also quick you could stand-alone saying at to M&A be corporate have versus just Then a follow-up initiative? that that. a opportunities BREC looking

David Mordy

on to Shar, certainly ongoing. hit any have we're when that. just we have since we'll as we update folks just going not updates And a BREC today questions reminder, that

Shar Pourreza

there And company. Texas, it. its Indiana Got bit obviously, potentially then And you it. And you've thing highlighted only have non-adjacent talked other you jurisdictions. is that do Got the the some with the smaller a Dave, you to and there about also, have CenterPoint. jurisdictions, story simplifying core sort of little

a XX% other of as an your streamline in monetizing outside your potential states avenue story, strengthen maybe also core LDCs, pretty LDCs. that Indiana consider is even healthy So capital with or Do opportunity? base and balance your capturing simplify potentially about rate recycle to you and potentially Is further sheet your of multiples Texas?

Dave Lesar

in XX days, haven't let I territory the have ground just of this a first but all my Yes. mean, way. covered mean I organization. I've covered lot in I me the comment we in

a consistent had with So a complicated off simplify We've relatively quarter next years, of probably topics. not say message. call related the with. had versus regulated communicated story. a We've deal of really as some to let me those over MLP we defer had We've the have had to lot we had I the we've look several shareholders past story, address When to sort We've of M&A. the back how nonregulated. at

shareholders team management executed think, revenue consistently and help regain as a quarter I return I shareholders a ability to to and not our message that stream. so only confidence future believe will, quarter have grow after that simple us maintain And our do but in

days And XX end that complete me the of time is a answer, some direction. you the time. definitely give day, in not headed so we're but I enough at give guess, to

Shar Pourreza

call. utility Congratulations. on first-ever earnings Dave, congrats on Well, your

Dave Lesar

Congratulations. Thank you.

Operator

Steve the line will Wolfe of Research. Fleishman with come from question next Your

Dave Lesar

Steve. morning, Good

Steve Fleishman

It Hey, lot good done Dave. in XX a morning, of a that. hell you've was days. Appreciate

So two questions.

eight, First, on the financials. point your optimized

think and quickly, a that's important pretty pretty that through went point. I You

on color a So more could give you of you're aspect or looking that at? maybe little just maybe repeat thoughts your on what

Dave Lesar

a financial an predict what mean, is is of make as a flexibility as you can't I organization. always perfect Yes. what company example is said you to you sure your COVID future. want optimize do why I basically, the

you you if possibly be So can. financially need can't predict future, flexible to you as the as

why Do is looking your our debt, basically goal, sheet, case, flexibility the our the there. I I put X% And Do that to it we're And X% do it said, any which And parent? instance? an and course, then our beyond us financial at don't to is at at individual a out this point that's want process in at more of part don't grow it looking to the in you looking for then, of means the the a studying chance to presuppose time. have allows inner talk lodge the as to have of business in subsidiaries? middle at where of and want really our really capital The it's integral on workings work. capital structure, we're put BREC that right balance so we of, our structure what Give you outcome, of we overall long-term sort any ultimate now. that to you the a about capacity. focusing And borrowing at

But looking really let think I working only we're at. leave we're at really at just we're well. if is and the And it time, BREC will, really, what of terms doing me half in that. you what

Steve Fleishman

it. Got growth like opportunities All It the sounds right. are there.

how them out figure to efficiently. need fund just to You

Dave Lesar

paper he Houston that Kenny of see with with They areas electric our in Indiana. extra invest time absolutely all has instance, him for Every he sheet I could business, brings who are runs the Mercado, or there. just we Electric a

Steve Fleishman

and the named logistical you with going like communicate people just more the CenterPoint? What's then a to Enable? back to And question. there? one on Enable little you it. just This that on with silly color just the But they a is information how other maybe give question. the flow Got two could do just like maybe And Board,

Dave Lesar

They the on represent talk would representatives. Enable on our directors like not They as was to Enable. constant Sure. to about independent with organization. in They Board. Enable. just what interest Board, of when was me Kristie she are will And happening are views communication and in that be their our us They

Steve Fleishman

much. Great, you Okay. thank very

Operator

question Goldman line next from Kim Insoo comes the with Sachs. of Your

Insoo Kim

that as just opportunities first question fruit or CenterPoint had metrics, your cost and morning does at and plan obviously, of compare? is that are chance you in low-hanging you those and look And good Hi, that you've of different you. the strategy. of structure first days, But parts cost congratulations. there? guys utility and lot you Thank part on cost Dave. does the the the give assessing that's And structure. peers of XX the overall on confidence it the a there's versus on to different runway a side compare data if how My

Dave Lesar

number I and just a down. get controls Draconian cost for ways of be to management institute Well, more I efficient. sort and a is think mean, One of cost there's company

call, the metrics, if look or per O&M think metric this you our that our on indicated I I metric. that or our O&M at per customer operating as

are standards very, reliability good. very Our

fit. I So I can folks places as only the done, we think management they But naturally you business functions have restructured business." within more come call, not have away saying, one become should the a efficient. the is to where more have of trimmed I that the any "Operationally, efficient things And I run report mentioned the senior them to some reality more put in adjacent organization back of organization, in our pretty the

So We customer I our a can to I I across can adjacent instance, IT can the set technology-driven share some management costs. because for some have business, of can part is department share for which of infrastructure. We we share put that. very now believe service,

one to mentioned, and putting the of looking technology just efficiencies just help under to costs. So harvest to more there. at the third I is sort business bit get think And Two the management our efficiently you one a things together using at trying is, as us I reducing like businesses at little is look continue structurally, then looking team electric differently. the

prudent XX and around long fit very company, I'm that's in So recognize their business we're gone how in life where making that us answers. about can more no more lot here are the quickly. all time, doing. And making as still say make again, But cycle, what learning to has be we're don't days decisions an a and matter to just I I'm need I sure together been organization. we stitched a come any they efficient. have I've are always I that not and and efficient, I together

Insoo Kim

appreciate Definitely that. Yes.

questions been And days. for XX asking it's these all given only sorry

and you what just when those it's opportunity electric do rate at have, in Or on a base side, lot the side the you businesses businesses each of the to regulated the businesses? On of there upside the see look things, they more growth either and gas together the potential upside are that of have both?

Dave Lesar

in No. side, of I Yes, Indiana. wave on more advantages, does it's ownership the let's mean, the really that in on a think is it really I of the the in we is need have some take the Not of upside We to in. to play electric. only that focused future. bring it Renewables but renewable not get totally electric. space learn tons can we IRP on tax

how that we And something need it's that into we because learn area the tippy-toed past. to in haven't do really to so

mean is for in market As grown that Houston I've in crown decades. my said utility. remarks, it's has that consistently I a Electric a jewel

incremental a next to business of would said earlier, invest can guy who I mentioned business in carries But good. for call, gas have. invest that runs we is the our we in at billion greater business I And into guys the list in things our pocket the As our around like also or he the decade. to Electric Houston as $XX his

you is And it so structure to do that we it shareholders to, the in to our would business. an dilute and X% comes way to X% the down have grow more a than us on that, the sure have to normally any capital business doesn't beyond allows take back grow me, opportunities, making that efficient those to why

Insoo Kim

much call. so Understood. the for Thank you

Operator

of comes Julien the from with of Dumoulin-Smith Bank question line America. Your next

Julien Dumoulin-Smith

more and outlook morning up, bit good little back the on Congratulations. to can If clarify Hey, just aspirations. I and follow financial a

And I separately, the perception into forecast improve said Is Or of But and want at upon not with of changed I for to things has become today? then to how thinking that. here. as about some target? to just EPS equity all? growth at it fully clarify, ground clear Just specifically again, too period rules I'm Steve, And the the your raising, capital over about intruding stands much hope to that answer the it needs are you to we're respect a this make call. course the both is ultimate the sort? what entity least this that to through refine is is feel, effort? regulated perhaps the of aspiration you've crystal I it sure

clear make we're as I So can. to just I if want on sure that well,

Dave Lesar

Number we're capital spend built X% is base. there. $XX billion Yes. have X% reaffirming one, growth That around to we that out rate a the

that at Indiana businesses, baseline, this increasing if we which if capital the we're our at opportunity all So at exists I'm I'm to allocation to look look that's my have What will. effort is do our time. use efficient My saying I goal we and available again, our have to us businesses. XX in block capital biggest we businesses, of building when the do not growth after you that and sheet I that, is balance the have today. you at our able us, it to declaring as in that through that be Texas you the rate. believe And gas not look could the in But look us for we answers don't point this going saying the I'm in days. yet. front aspirational process, at flexibility, opportunities get you that process developing

available, not have is unlike So place many a the capital great of to which start. utilities lot the the opportunities, a we but available that don't, really opportunities which maybe have

get I'm our to that's job to advantage and so how the job sheet around It's my take is we those the of what the convey out balance of opportunities. figure do opportunities. trying management team flexibility excitement the to And now

Julien Dumoulin-Smith

becoming What Excellent. to opportunities up IRP on and with And of thinking, obviously, And your along now to today you what it tied is additional self-build with proposal about your is the And out And that the headroom outlook respect related Indiana little is confidence typically if that that to reflected the line specifically? able second that just a exactly sort invest? come that isn't then the thinking how is in of limiting I to back factor? and a of the bit necessary said could bill to will. follow being you any create are if headroom ago, this clearer. O&M process you

Dave Lesar

Yes.

front Let answer have try me back come in the and part that, little a bit. up I'll clean and of to Kristie

Kristie Colvin

capital our plan guess best the what had in of Well, we Indiana. Yes. that our we had be capital for would

plan. was for is said, Dave more able we going And plan do first that like $XXX what million. the $XXX to I be think it million Indiana over the in years, total the capital than range to hope in to we're

Dave Lesar

Yes.

I think had of Indiana. initial Julien, allocated an of it our at in looked amount view, that think, sort about you plan is way billion the I in we to capital that $XX the if

view As to really on We renewable And One, think with that in renewable reasons. to we I to need much because at initial respect I the how learn be how need that I we think want tax that we the operate not middle do that plant basically we're opportunity of to us in look take own right revisit reassessing we in would that, two ought for space. of space. rest to we of the that. in I and partners our was the seek of want to it, the for of because be advantages of to it. how that therefore, And much and and space. find the part really might what

Julien Dumoulin-Smith

sorry, heard It is make plan? Or isn't the not was what I that to right. or sure just

Dave Lesar

So the to $XXX about million was I'm Kristie in What now. in million plan the for IRP. $XX what looking was XX at the billion was $XXX

Julien Dumoulin-Smith

Thank you. to precise. Sir, great. be Okay,

Operator

the with comes from Stanley. next Your of line Stephen question Byrd Morgan

Stephen Byrd

congratulations. Dave, And morning. good Hi,

Dave Lesar

Thanks.

Stephen Byrd

sort of dialogue then sets time, or really credit possibility with sort than first your and to have Enable just the I mind Would cash dependent statistics rather credit now rating over talk and there's what and about a linkage where thinking we your Enable just agencies that, businesses are objectives your general wanted utility dependency you there? perspective. be are flows, a to about credit core your your the of a a to me can of sense give whether linkage on and from

Dave Lesar

terms over want engaged we agencies. a to a years. credit of them. the the that's of I terms made a against of what had forward. You my the have pitch metrics rating experience held in with we it's with that Yes, just out credit we a matter do. to with lot potentially laying in were understand actually the I are of or in you be future, with them a that today path will held process have and agree dialogue against I've

to then we're that's to path hate commitments current think that but them behind cash for keep me mind ongoing off get going sure. dialogue. reaffirm of the demonstrate time, get for top have effect, in we us than those which that doesn't, penalize flow they're days in give of more an to Enable. today, talked today, able where conversations doing XX And we we've which it, And back us. to think dialogue are but of at coming a with I But to we growth, this we have sort point I are, do as be to our a I to

Stephen Byrd

what operationally, less more financial focused talk benchmarking that about terms solid financial versus I the Yes. you've you a And I to briefly mentioned think metrics you in very had could prepared I metrics. elements on done. respect But the that. solid. the the benchmarking were that mentioned response work. go in of you one And wonder bit if peers you had that wanted just then your work metrics of of back just to little

Dave Lesar

basically, could I it. clearly, took a look mean, if we Yes. I you PE. you name mean, it, look at at

growth it at to think And my put CAGR with that, look our potential of in trading if relative all of X% earnings per I out why that what lot there. But our have, have, of instead You share behind. look the I valuation discount we of to be and said the the X% and you do assets remarks. think where we a we In to at market we with understand lag we I affirmation has to it debating with now, turn I our shareholders ought metrics, sort instantaneous. with at of intent Again, our I our said, as understand very my view matter But individual I history may shareholder individual focus it's to listening It's of shareholders. year as the last talked shareholders. down, and let in to organization. with with like we've as like a CEO. people, engaging I with shareholders, I engaging my the as high-touch a I'm isn't shortcoming that I've the a CenterPoint, and to what around. shareholders, understanding really

give just that me chance there, we'll out I better. get get to a confidence. to so think And opportunity rebuild again, you that And know me an

Stephen Byrd

if I And could, helpful. really one That's just question. last

of Just but sort versus able on days, renewables, in early look of renewables capabilities to it's you it's know pursue players need way? in needed just you peers, established a out you have you growth. like at you area obviously an of CenterPoint's do might the do as exciting cost-effective how scope to capabilities feel and sort versus renewables do energy, you want? the additional capability clean to be have, what I Or capabilities more with you respect

Dave Lesar

Or do consultants? early as in hire going I to question No. pursue of be, know I that can you cost-effective process. and think you partners need seek do think in how to conclusion, find we bring we renewables resource The bigger it? And mean renewables. we're the do in much how on that to build And I that a capability? the made be in-house We've is I you way. much

area that front solar our doing But that can of it And to say, to have We be in into is to us because in But hit in-house not the of world do matter have this I'm time. it. But do area? assets going now plant, is the both this And how the much going us of out And with a it calculation industry for And is time. as we point that want at sort right to resource we be people best in the capability much such you this scarce there. not what the balance. still we institutionalize assessment. participation optimizes and fair we're we for I that in-house get use wind. we the and know we'll in and going and the plant said, We long be that perfect much do bring of the in it we're a decision in how find that through really IRP you in a in confident to can't is to go Indiana. jump-start opportunity

Stephen Byrd

That's so much. great, you thank

Operator

from Your Jeremy JPMorgan. line Tonet next question comes the of with

Jeremy Tonet

starting Hi, at Maybe here. good morning. off Indiana

the share received IRP. on early any you if you've could wondering Just feedback

a want how to Just for that's progressing. get feeling

Dave Lesar

Yes.

market. dive of do enough sort I that. Clearly, I the that knowledge the the of have we response frankly, of was think through. it's our a hoops here, about in do terms we've jump Head if positive. And been the it. are to think Affairs to it you That process regulatory very, there very through don't to exposing I of how it. a we got behind little of got deeper We've But momentum lot Regulatory bit would have want

Indiana, I is positive. think the the environment political process in political

solar I Great And reality of don't does. Indiana wind it's think lot in as lots you and the part. build and that's to the a really along of really lot of area wind the Lakes the in of north a southern a that place solar in got it but ability sun think is opportunities,

the it to only to which with from So capability the brings the but then and I renewables things. jobs, opportunity do kinds in of an actually jobs think the it not because is Indiana, behind it state generation sees O&M those construction develop it

major this at opposition early in it optimistic it's So we're to days, But point. bit really I at still point time. this a but any haven't encountered

Jeremy Tonet

over That's And very to Got helpful. COVID. then it. maybe turning

dig do in how of and half a more assumptions XXXX? could woods? a of us it spilling how little the you of Just in unfolding just Or your And give neck see into you bit year more if kind you see demand the see continue. the to the long kind would little that for just you in how depressed back the bit want there on of feeling

Dave Lesar

the give I back on end the I'll back I'll Kristie of again granularity, mean let of question. little and Yes. up a more sort then come clean you in and

Kristie Colvin

new COVID-XX the we So the year. the end the go recovery range, of out have through assumed in that would range, our

gradually and from be. so And quarter improve second the as what peak the would

Dave Lesar

Yes. to now. I just mean, moved I is would I've since say, anecdotally back Houston more this

see traffic starting little to You up bit. a pick

seeing day, open, the of right now, And on your here And life our a your consumers bars living the Downtown If the roads. in data are sitting every town. how restaurants But aren't more traffic you're are Houston it's still open. ghost products. those I'm points I'm aren't and

of Kristie the light as business. so industrial said, And you it's where destruction, sort you if we've commercial, look of at had demand if light will, in the part

I if could So market. in sort could of we money if stock betting a think the go, where going predict they not COVID to me. make anybody is of That's that lot could

markets have at flexible that's you As the our guess I in a sort you if have sort And sure Indiana, structured just we And different those big Minnesota, is to of bit of Ohio anything thrown enough to and us. and handle best And said of our in. back, way. to the earlier, is Louisiana are a think markets reopening make is in be we they're company gave that in Texas, of impact we of bit Mississippi. we're little Arkansas approaching states a each and that of a what

shut off So laid down. at get of we're we it set now. the update we'll if And we Things very quicker, out. best our might right you that you a then might we get better scenario shot giving

Jeremy Tonet

thanks. That's helpful, sense. makes That it. Got

Operator

the Your with Aga next line from UBS. question of come Zmigrodzka will

Aga Zmigrodzka

Good mechanisms of Q&A, the accelerate gas across lag? different utilities. new is we regulatory expect? and you morning, for Capex Is Dave, you jurisdictions. from something or adding recovery that for higher met the in with potential And should that commissioners electric reduce regulatory to mentioned to Capex expanding potential What

Dave Lesar

one. our our as fast Let as me our can. base have and that answer into resident Kristie we lag regulatory basically capital She's getting expert investment on rate

Kristie Colvin

well. as Gas I Electric, recovery for distribution and mechanisms mean, jurisdictions, capital. the Houston mechanisms you we In capital we Yes. Texas recovery have as do have both capital know, transmission

Oklahoma, jurisdictions, I of have much other all service. have Louisiana, Arkansas, Minnesota, well, would cost besides say, pretty Mississippi, Our

again, Ohio, rates. quickly, the mechanisms. also fairly Indiana is recovery the we in and have capital So capital In

And we interim a it's that rate reduce Minnesota, regulatory pretty and years help to every in much really of Minnesota. couple have So lag. rates case

actually increase mechanisms. good And we the we are shape. this in So we capital, think as have we

Aga Zmigrodzka

that trend Kristie, Do interest question. follow-up COVID how XXXX? If interest previously are helping impact. be much tracking expected? expect continue? down could better offset have quantify in going I expenses expense that versus mentioned to you are yes, than you XXXX one Is lower you higher you to

Kristie Colvin

plans, and, interest in interest let's The we than is models Yes. had was our favorable year. see, quarter, the our $X.XX better in to for last

Aga Zmigrodzka

expect And do continue? you that to Or...

Kristie Colvin

Yes. we favorable going forward. to I interest do mean expect see

Aga Zmigrodzka

Perfect, thank taking you for my question.

Operator

you. Thank

Our will line of come Weinstein final Credit question from Michael with Suisse. the

Michael Weinstein

Hey good David, guys, morning, congratulations.

what you years see the take Some career you plan role? And investors you at do job as point have a at and your long you're your this Halliburton. long how Where noted I'm into coming wondering career old. CenterPoint? after in you're this staying distinguished at on do XX just

Dave Lesar

reason opportunity like of great the people great are I this like to energy. or, guess, I've retirement a going the assets, good me, lot the still being CEO. that I there. question. XX. And see a a jurisdictions, as Halliburton mandatory Halliburton I would XX a I got I a because is It's I frankly, be leader. myself has of being perfect the I was here. age Yes. on great left a

earlier, said raring I a think the the go. point it my will So is for am concerned, far at totally now, weekend. I committed. I'm this am back it sky line know my I move I've time to last And I'll career. the as But time the as have when And Board right know is I here. and on as on. just And moved right not set to in tenure Houston limit to I

Michael Weinstein

And the the Sounds to the a case rate a and case? governor. rate regulators had think yet talk I criticisms also the of that Have to maybe in people with you of went last about Texas meet chance had about lot that good. how with meet some even

that's plan. wondering Just the part if of

Dave Lesar

know at days Yes. Clearly, the my I well I Halliburton. know the governor. from governor

meeting to a pretty me the having be for would with governor easy get. So

I did though was case I and rate had I and the a the in that the I've thing in frank there outcome. even dialogue Texas. to a with discussion it's of noise around We the have a company Texas. be prepared splits the of one in the indicated allowed all Chairman But out, of that around really of up think point in Public remarks, face-to-face equity the were sitdown bit Utility met we actually in with As sit the PUC we three change the my Commissioners in were that lot you was look outcome Texas. policy first going and gotten got to rate experiencing really and the to if a case, a our utilities that then, the around maybe at and others outcome that since ROEs have important

commissioner. was And the part so I've that of the with dialogue that had

a relationships continue our They it's protect important are your regulators I adjudicated that to and gas in doesn't and mean to recent middle the look in more going with dialogue. power to business not that we that are of much the have where you reliable consumers. system to place you been through the and not cases But we provide to that every in am to in the Texas. to we're their states, out, going I have pretty operate. continue at consumers it's have If particular mean job came those

that sure the operate. states reliable really So providing don't where consumers adversarial we to pointed a be that I an It has toward to see relationship. be the really in power we're partnership, to necessarily gas needs and making

Michael Weinstein

and godspeed. luck good Well, Great.

Dave Lesar

Great. Thank everyone. Thanks, you.

David Mordy

conclude day. our CenterPoint That Have great in everyone, a quarter XXXX Thank your will for earnings you, call. Energy. interest second

Operator

joining thank you gentlemen, for and on call. Ladies today’s

now may disconnect. You

CenterPoint Energy (CNP) 6 Aug 202020 Q2 Earnings call transcript