CenterPoint Energy Reports First Quarter Earnings Results and Reaffirms Full Year Guidance

Rhea-AI Summary

CenterPoint Energy reported Q1 2022 earnings of $0.82 per diluted share, marking an increase from $0.56 in Q1 2021. The earnings included strategic transaction-related income of $0.35 per share. Non-GAAP EPS stood at $0.47, flat compared to the previous year. The company reaffirmed its non-GAAP EPS guidance for 2022 at $1.36-$1.38, targeting an 8% annual growth rate through 2024. CenterPoint has fully exited midstream operations, selling its Energy Transfer position at a 20% premium. The five-year capital plan increased to $19.3 billion, focusing on regulated utility investments.

Positive

• Reported Q1 2022 earnings of $0.82 per diluted share, up from $0.56 in Q1 2021.
• Non-GAAP EPS guidance for 2022 reaffirmed at $1.36-$1.38.
• Achieved a strategic transaction-related income of $0.35 per share.
• Increased five-year capital plan to $19.3 billion.

Negative

• Non-GAAP EPS of $0.47 was flat compared to the previous year.
• Earnings were impacted by losses related to Arkansas and Oklahoma gas LDC operations sold in January 2022.

• Reported Q1 2022 earnings of $0.82 per diluted share
• Non-GAAP earnings per diluted share (“non-GAAP EPS”) was $0.47 for Q1 2022
• Non-GAAP EPS range for 2022 reaffirmed at $1.36 - $1.38. Reiterating industry-leading 8% non-GAAP EPS annual growth rate target for 2022 through 2024 and mid-to-high end of the 6-8% range thereafter through 2030
• Made full exit from midstream; sold entire Energy Transfer(“ET”) position within four months of the merger between Enable and ET

HOUSTON--(BUSINESS WIRE)-- CenterPoint Energy, Inc. (NYSE: CNP) or “CenterPoint” today reported income available to common shareholders of $518 million, or $0.82 per diluted share, for the first quarter of 2022 compared to $0.56 of diluted earnings per share for the first quarter of 2021. The earnings for the first quarter included strategic transaction-related income of 35 cents including the gains on ET common units, midstream-related earnings, impacts associated with the gas LDC sale, and associated costs of the early extinguishment of debt related to the transactions.

On a non-GAAP basis, EPS for the first quarter was $0.47 which was reduced by approximately $0.03 as a result of the loss of earnings related to the Arkansas and Oklahoma gas LDC operations which were sold in January of 2022. Despite that, non-GAAP EPS for the first quarter of 2022 was still flat to the comparable non-GAAP EPS results for the first quarter of 2021.

“This quarter extended our track record of delivering on expectations again. We are on track to meet our $1.36-1.38 non-GAAP EPS guidance for the full year, including the $0.47 we reported for the first quarter of 2022. We are now among the pure-play utilities, having fully exited from midstream well before our year-end 2022 commitment, and with the sales of the ET common units at a 20% premium on an aggregated basis compared to the ET common unit price when the merger between ET and Enable was announced on February 12, 2021,” said Dave Lesar, President and Chief Executive Officer of CenterPoint.

“We are in year two of our capital plan which is now increased to $19.3 billion over the next five years. This is an increase from what we discussed at year-end and is our second increase to our five-year plan since our Analyst Day in September 2021. In the first quarter of 2022, we invested approximately $1 billion in capital, including mobile generation leases, and are now tracking slightly ahead of the plan for the full year. We remain focused on delivering on our 10-year growth strategy of investing in our regulated utility system to serve our customers and are working with them to identify incremental needs such as growth and increased system safety and resiliency which may lead to further capital investments, while also remaining focused on keeping our bills affordable for our customers,” continued Lesar.

Lesar added. “Looking ahead, we remain focused on our value proposition which is sustainable earnings growth for our shareholders; sustainable, resilient, and affordable services for our customers; and a sustainable positive impact on the environment for our communities.”

Earnings Outlook

Given the merger between Enable and Energy Transfer and CenterPoint Energy’s divestiture of its remaining midstream investments during 2022, CenterPoint Energy will be presenting a consolidated non-GAAP EPS guidance range for 2022, which is the comparable measure to non-GAAP Utility EPS reported in 2021.

In addition to presenting its financial results in accordance with GAAP, including presentation of income (loss) available to common shareholders and diluted earnings (loss) per share, CenterPoint Energy provides guidance based on non-GAAP income and non-GAAP diluted earnings per share. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure.

Management evaluates CenterPoint Energy’s financial performance in part based on non-GAAP income and non-GAAP earnings per share. Management believes that presenting these non-GAAP financial measures enhances an investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in these non-GAAP financial measures exclude items that Management believes do not most accurately reflect the company’s fundamental business performance. These excluded items are reflected in the reconciliation tables of this news release, where applicable. CenterPoint Energy’s non-GAAP income and non-GAAP diluted earnings per share measures should be considered as a supplement to, and not as a substitute for, or superior to, income available to common shareholders and diluted earnings per share, which respectively are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies.

2021 non-GAAP Utility EPS guidance range

“Utility EPS” included net income from the company’s Electric and Natural Gas segments, as well as after-tax Corporate and Other operating income and an allocation of corporate overhead based upon Electric’s and Natural Gas’s relative earnings contribution. Corporate overhead consisted primarily of interest expense, preferred stock dividend requirements, and other items directly attributable to the parent along with the associated income taxes.

• 2021 Utility EPS excluded:
  • Earnings or losses from the change in value of the CenterPoint Energy’s 2.0% Zero-Premium Exchangeable Subordinated Notes due 2029 (“ZENS”) and related securities
  • Earnings and losses associated with the ownership and disposal of midstream common and preferred units (including amounts reported in discontinued operations), net gain associated with the consummation of the merger between Enable and Energy Transfer, a corresponding amount of debt related to midstream common and preferred units, and an allocation of associated corporate overhead
  • Cost associated with the early extinguishment of debt
  • Impacts associated with Arkansas and Oklahoma gas LDC sales
  • Certain impacts associated with other mergers and divestitures

2022 non-GAAP EPS guidance range

Beginning in 2022, CenterPoint Energy no longer separates utility and midstream operations and will report on a consolidated non-GAAP EPS basis.

• 2022 non-GAAP EPS guidance excludes:
  • Earnings or losses from the change in value of ZENS and related securities
  • Gain and impact, including related expenses, associated with Arkansas and Oklahoma gas LDC sales
  • Income and expense related to ownership and disposal of Energy Transfer common and Series G preferred units, and a corresponding amount of debt related to the units

In providing this guidance, CenterPoint Energy does not consider the items noted above and other potential impacts such as changes in accounting standards, impairments or other unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. The 2022 non-GAAP EPS guidance range also considers assumptions for certain significant variables that may impact earnings, such as customer growth and usage including normal weather, throughput, recovery of capital invested, effective tax rates, financing activities and related interest rates, and regulatory and judicial proceedings. To the extent actual results deviate from these assumptions, the 2022 non-GAAP EPS guidance range may not be met or the projected annual non-GAAP EPS growth rate may change. CenterPoint Energy is unable to present a quantitative reconciliation of forward-looking non-GAAP diluted earnings per share because changes in the value of ZENS and related securities, future impairments, and other unusual items are not estimable and are difficult to predict due to various factors outside of management’s control.

Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share

		Quarter Ended March 31, 2022
		Dollars in millions				Diluted EPS (1)
Consolidated income (loss) available to common shareholders and diluted EPS		$	518			$	0.82
ZENS-related mark-to-market (gains) losses:
Equity securities (net of taxes of $22) (2)(3)			81				0.13
Indexed debt securities (net of taxes of $22) (2)			(83	)			(0.13	)
Midstream-related earnings (net of taxes of $10) (2)(4)			(32	)			(0.05	)
Impacts associated with gas LDC sales (net of taxes of $112) (2)			(189	)			(0.30	)
Consolidated on a non-GAAP basis		$	295			$	0.47

1)	Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS
2)	Taxes are computed based on the impact removing such item would have on tax expense. Taxes related to the gas LDC sales and the midstream-related earnings are booked proportionately by applying the projected annual effective tax rate percentage to income earned each quarter in accordance with GAAP. Additional tax expense related primarily to the write-off of non-deductible goodwill will be reflected in tax expense over the remainder of 2022 and excluded from non-GAAP EPS
3)	Comprised of common stock of AT&T Inc. and Charter Communications, Inc. (as of March 31, 2022)
4)	Includes earnings and expenses related to ownership and disposal of Energy Transfer units, a corresponding amount of debt related to the units and an allocation of associated corporate overhead. Includes costs associated with early extinguishment of $600 million of debt at CenterPoint Energy, Inc. of approximately $35 million, net of taxes

Reconciliation of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share

Quarter ended March 31, 2021
	Utility Operations							Midstream Investments (Disc. Operations)							Corporate and Other (5)							Consolidated
	Dollars in millions			Diluted EPS (1)				Dollars in millions			Diluted EPS (1)				Dollars in millions			Diluted EPS (1)				Dollars in millions			Diluted EPS (1)
Consolidated income (loss) available to common shareholders	$	304						$	71						$	(41	)					$	334
Add back: Series B preferred stock dividend(2)	—							—							17							17
Consolidated income (loss) available to common shareholders – diluted and diluted EPS(1)	$	304		$	0.48			$	71		$	0.12			$	(24	)	$	(0.04	)		$	351		$	0.56
ZENS-related mark-to-market (gains) losses:
Marketable securities (net of taxes of $4)(3)(4)	—			—				—			—				19			0.03				19			0.03
Indexed debt securities (net of taxes of $5)(3)	—			—				—			—				(21		)	(0.03		)		(21		)	(0.03		)
Impacts associated with the Vectren merger (net of taxes of $1)(3)	2			—				—			—				—			—				2			—
Cost associated with the early extinguishment of debt (net of taxes of $6)(3)	—			—				—			—				21			0.03				21			0.03
Corporate and Other Allocation	(7		)	(0.01		)		2			—				5			0.01				—			—
Consolidated on a non-GAAP basis	$	299		$	0.47			$	73		$	0.12			$	—		$	—			$	372		$	0.59

1)	Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS. EPS figures for Utility Operations, Discontinued Operations and Corporate and Other are non-GAAP financial measures.
2)	To reflect income and earnings per diluted share as if the Series B preferred stock were converted to common stock
3)	Taxes are computed based on the impact removing such item would have on tax expense
4)	Comprised of common stock of AT&T Inc. and Charter Communications, Inc.
5)	Corporate and Other, plus income allocated to preferred shareholders

Filing of Form 10-Q for CenterPoint Energy, Inc.

Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. A copy of that report is available on the company’s website, under the Investors section. Investors and others should note that we may announce material information using SEC filings, press releases, public conference calls, webcasts, and the Investor Relations page of our website. In the future, we will continue to use these channels to distribute material information about the company and to communicate important information about the company, key personnel, corporate initiatives, regulatory updates and other matters. Information that we post on our website could be deemed material; therefore we encourage investors, the media, our customers, business partners and others interested in our company to review the information we post on our website.

Webcast of Earnings Conference Call

CenterPoint Energy’s management will host an earnings conference call on May 3, 2022, at 7:00 a.m. Central time / 8:00 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call on the company’s website under the Investors section. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the website for at least one year.

About CenterPoint Energy, Inc.

As the only investor owned electric and gas utility based in Texas, CenterPoint Energy, Inc. (NYSE: CNP) is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Indiana, Louisiana, Minnesota, Mississippi, Ohio and Texas. As of March 31, 2022, the company owned approximately $35 billion in assets. With approximately 8,900 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com.

Forward-looking Statements

This news release includes, and the earnings conference call will include, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words are intended to identify forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Examples of forward-looking statements in this news release or on the earnings conference call include statements regarding capital investments (including with respect to renewables projects, mobile generation spend and the City of Houston’s Master Energy Plan and Resilient Now), the impacts of the February 2021 winter storm event on our business and service territories and the recovery and timing of recovery of associated gas costs, future earnings and guidance, including long-term growth rate, operations and maintenance expense reductions, financing plans (including the timing of any future equity issuances, credit metrics and parent level debt), the impact of disruptions to the global supply chain on our business, including our generation transition plan, ZENS and impacts of the maturity of ZENS, tax planning opportunities (such as any potential use of the repairs expense deduction), future financial performance and results of operations, including with respect to regulatory actions and recoverability of capital investments, customer rate affordability, value creation, opportunities and expectations, ESG strategy, including transition to Net Zero, and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release or discussed on the earnings conference call speaks only as of the date of this release or the earnings conference call.

Important factors that could cause actual results to differ materially from those indicated by the provided forward-looking information include, but are not limited to, risks and uncertainties relating to: (1) CenterPoint Energy’s potential business strategies and strategic initiatives, restructurings, joint ventures and acquisitions or dispositions of assets or businesses, including the completed sale of our Natural Gas businesses in Arkansas and Oklahoma and exit from midstream, which we cannot assure you will have the anticipated benefits to us; (2) industrial, commercial and residential growth in CenterPoint Energy’s service territories and changes in market demand; (3) CenterPoint Energy's ability to fund and invest planned capital, and timely and appropriate rate actions that allow recovery of costs and a reasonable return on investment, including those related to Indiana Electric’s generation transition plan as part of its more recent IRP; (4) financial market and general economic conditions, including access to debt and equity capital and the effect on sales, prices and costs; (5) continued disruptions to the global supply chain and increases in commodity prices; (6) actions by credit rating agencies, including any potential downgrades to credit ratings; (7) the timing and impact of regulatory proceedings and actions and legal proceedings, including those related to Houston Electric’s mobile generation; (8) legislative decisions, including tax and developments related to the environment such as global climate change, air emissions, carbon, waste water discharges and the handling of coal combustion residuals, among others, and CenterPoint Energy’s Net Zero and carbon emissions reduction goals; (9) the impact of the COVID-19 pandemic; (10) the recording of impairment charges; (11) weather variations and CenterPoint Energy’s ability to mitigate weather impacts, including impacts from the February 2021 winter storm event; (12) changes in business plans; (13) CenterPoint Energy’s ability to execute on its initiatives, targets and goals, including its Net Zero and carbon emissions reduction goals and operations and maintenance goals; and (14) other factors discussed CenterPoint Energy’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and CenterPoint Energy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, including in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Information” sections of such reports, and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220503005466/en/

Media:

Communications

Media.Relations@CenterPointEnergy.com

Investors:

Jackie Richert

713.207.6500

Source: CenterPoint Energy, Inc.

FAQ

What were CenterPoint Energy's Q1 2022 earnings per share?

CenterPoint Energy reported Q1 2022 earnings of $0.82 per diluted share.

What is CenterPoint Energy's non-GAAP EPS guidance for 2022?

The company reaffirmed its non-GAAP EPS guidance for 2022 at $1.36-$1.38.

How did CenterPoint's earnings in Q1 2022 compare to Q1 2021?

Earnings increased from $0.56 per diluted share in Q1 2021 to $0.82 in Q1 2022.

What significant change did CenterPoint Energy make in its operations recently?

CenterPoint Energy has fully exited midstream operations and sold its Energy Transfer position.

What is the updated capital plan for CenterPoint Energy?

The five-year capital plan has been increased to $19.3 billion.