10-KPeriod: FY2011

CENTERPOINT ENERGY INC Annual Report, Year Ended Dec 31, 2011

Filed February 29, 2012For Securities:CNP

Summary

CenterPoint Energy, Inc.'s (CNP) 2011 10-K filing highlights a year of significant financial recovery and operational development, largely driven by the resolution of a long-standing true-up appeal related to Texas's electric restructuring. This resolution resulted in a substantial extraordinary gain of $587 million after tax, significantly boosting the company's net income for the year. The company operates through two primary subsidiaries: CenterPoint Houston, focusing on electric transmission and distribution in the Texas Gulf Coast region, and CenterPoint Energy Resources Corp. (CERC), which manages natural gas distribution, interstate pipelines, and field services across multiple states. Both segments are heavily regulated, influencing their rate-setting and cost recovery mechanisms. Investments in advanced metering systems (AMS) and intelligent grid technology are ongoing, aimed at improving efficiency and customer service.

Financial Highlights

46 data points
Beta

Revenue

$8.45B

Net Income

$1.36B

16.1% Net Margin

EPS (Diluted)

$3.17

Total Assets

$21.70B

Cash & Equivalents

$220.00M

Free Cash Flow

$1.89B

Financial Statements
Beta
Revenue$8.45B
Operating Expenses$7.15B
Operating Income$1.30B
Net Income$1.36B
EPS (Basic)$3.19
EPS (Diluted)$3.17
Shares Outstanding (Basic)425.64M
Shares Outstanding (Diluted)428.72M

Key Highlights

  • 1Resolution of the Texas Electric Choice Plan true-up appeal led to an extraordinary gain of $587 million after-tax in 2011, significantly boosting net income.
  • 2The company experienced strong growth in its Electric Transmission & Distribution segment, with operating income up due to increased usage and customer growth.
  • 3The Field Services segment showed robust growth in operating income, driven by new gathering projects in shale formations and contracted volume commitments.
  • 4CenterPoint Energy is actively investing in technology with its Advanced Metering System (AMS) and Intelligent Grid (IG) projects, partly funded by a $200 million Department of Energy grant.
  • 5Natural Gas Distribution operating income saw a slight decrease, influenced by higher benefit costs and regulatory rate adjustments.
  • 6The company managed its liquidity effectively, anticipating sufficient cash flow to meet 2012 capital expenditure needs and debt obligations.
  • 7CenterPoint Energy's financial performance is significantly influenced by regulatory rate decisions and natural gas commodity prices.

Frequently Asked Questions

The primary driver was the favorable resolution of the true-up appeal related to the Texas Electric Choice Plan. This resulted in an extraordinary gain of $587 million after tax, which significantly boosted the company's net income.

CenterPoint Energy operates through several segments, including Electric Transmission & Distribution (primarily CenterPoint Houston), Natural Gas Distribution, Competitive Natural Gas Sales and Services, Interstate Pipelines, and Field Services (all primarily under CenterPoint Energy Resources Corp. - CERC).

The company is investing in Advanced Metering Systems (AMS) and Intelligent Grid (IG) projects to enhance energy conservation, improve grid operations, reduce outages, and provide better customer service. A significant portion of these projects is funded by a $200 million grant from the U.S. Department of Energy.

Regulatory activity is a significant factor. The company's Electric Transmission & Distribution and Natural Gas Distribution segments are rate-regulated, meaning that state and municipal authorities determine the rates charged to customers. The company actively engages in rate proceedings to recover costs and earn a reasonable return on investment.