01—Abstract
Summary
Summary of the 10-K filed February 26, 2010. Cited figures are marked; the original filing is the authoritative source.
CENTERPOINT ENERGY INC (CNP) operates as a public utility holding company with significant electric transmission and distribution operations in Texas, primarily serving the Houston area through its subsidiary CenterPoint Houston.
It also owns and operates natural gas distribution systems across six states through its subsidiary CenterPoint Energy Resources Corp. (CERC). The company's business segments include Electric Transmission & Distribution, Natural Gas Distribution, Competitive Natural Gas Sales and Services, Interstate Pipelines, Field Services, and Other Operations. Key financial highlights for the period ending December 31, 2009, indicate total revenues of $8.28 billiona and net income of $372 million.
The company faced challenges and significant events in 2009, including the aftermath of Hurricane Ike which caused substantial damage to its electric delivery system, requiring extensive restoration efforts and securitization of costs. Additionally, the company was involved in ongoing legal and regulatory proceedings, particularly concerning the recovery of stranded costs related to Texas' electric restructuring, with outcomes still pending before the Texas Supreme Court. CNP's financial performance is heavily influenced by regulatory environments, weather conditions, and economic factors.
The company continues to invest in its infrastructure, including advanced metering systems and grid automation, funded through a combination of operating cash flows, debt, and equity. While the company generated positive net income, it also navigated significant debt levels and managed the complexities of its diverse energy operations.
02—Key points
Key Highlights
- CenterPoint Energy reported total revenues of $8.28 billion and a net income of $372 million for the year ended December 31, 2009.
- The company's electric transmission and distribution segment (CenterPoint Houston) experienced substantial damage from Hurricane Ike in September 2008, with restoration costs of $663 million approved for recovery, largely through securitization via system restoration bonds.
- Ongoing legal and regulatory proceedings, particularly the 'true-up' balance recovery for CenterPoint Houston related to Texas electric restructuring, remained a significant factor, with appeals progressing to the Texas Supreme Court.
- The natural gas distribution segment (CERC) serves approximately 3.2 million customers across six states, with revenues and operations influenced by weather patterns and natural gas prices.
- The company continued to invest in infrastructure improvements, including an advanced metering system (AMS) and intelligent grid initiatives, with significant capital expenditures projected for the coming years.
- CNP maintained a diversified business model across electric and natural gas sectors, though performance varied by segment, with the Competitive Natural Gas Sales and Services segment showing a notable decrease in operating income in 2009 compared to 2008.
- The company's liquidity and capital resources were supported by operating cash flows, revolving credit facilities, and various debt and equity financing transactions throughout the year.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 26, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $8.28B$11.32B | −26.9% |
| Operating Expenses | $7.16B-$10.05B | +171.2% |
| Operating Income | $1.12B$1.27B | −11.7% |
| Net Income | $372.00M$446.00M | −16.6% |
| EPS (Basic) | $1.02$1.32 | −22.7% |
| EPS (Diluted) | $1.01$1.30 | −22.3% |
| Shares Outstanding (Basic) | 365.23M336.39M | +8.6% |
| Shares Outstanding (Diluted) | 367.68M343.56M | +7.0% |
05—Questions
Frequently Asked Questions
What were the main financial results for CenterPoint Energy in 2009?
For the year ended December 31, 2009, CenterPoint Energy reported total revenues of $8.28 billion and a net income of $372 million. This represents a decrease in net income compared to $446 million in 2008, primarily due to lower operating income and increased interest expenses.
What were the major impacts of Hurricane Ike on CenterPoint Energy?
Hurricane Ike caused significant damage to CenterPoint Houston's electric delivery system. While insured losses were estimated at $30 million, uninsured system restoration costs of approximately $663 million were approved for recovery through a settlement. The distribution portion of these costs was securitized through the issuance of $665 million in system restoration bonds, with the transmission portion to be recovered through existing mechanisms.
What is the status of the 'true-up' balance recovery proceedings?
CenterPoint Houston's 'true-up' balance recovery proceedings, related to Texas electric restructuring, were still ongoing and had reached the Texas Supreme Court. The company believed its request was consistent with regulations and reasonably possible to succeed, but no assurance could be given on the ultimate court rulings or the related tax normalization issue.
How is the company managing its debt and liquidity?
CenterPoint Energy relies on internally generated cash, borrowings under credit facilities, and capital market issuances for its significant capital investment needs. As of December 31, 2009, the company had $10.1 billion in outstanding consolidated indebtedness, including $3.0 billion in non-recourse transition and system restoration bonds. The company sought to maintain investment-grade ratings to access capital markets on favorable terms and managed its liquidity through its credit facilities and prudent refinancing efforts.
06—Continue