Summary
CenterPoint Energy, Inc. (CNP) filed its 2016 10-K, reporting a net income of $432 million, a significant turnaround from a net loss of $692 million in 2015. This recovery was largely driven by a substantial $1.84 billion increase in equity earnings from its investment in Enable Midstream Partners, LP, which had been negatively impacted by a large impairment charge in the prior year. The company's core utility operations, particularly Houston Electric (electric transmission and distribution) and CERC Corp. (natural gas distribution), demonstrated resilience, with operating income increasing year-over-year, supported by customer growth and rate adjustments. The company's financial position remains robust, with total assets of $21.8 billion and a manageable debt-to-capitalization ratio. CNP's capital expenditure plan for 2017 is projected at $1.5 billion, primarily focused on infrastructure upgrades and expansions within its electric and natural gas segments. Liquidity is supported by its credit facilities and commercial paper programs. Investors should note the significant non-cash impairment charge related to Enable in 2015 and the ongoing regulatory environment for its utility businesses as key factors influencing future performance.
Financial Highlights
49 data points| Revenue | $7.53B |
| Cost of Revenue | $1.98B |
| Gross Profit | $5.54B |
| Operating Expenses | $6.50B |
| Operating Income | $1.02B |
| Net Income | $432.00M |
| EPS (Basic) | $1.00 |
| EPS (Diluted) | $1.00 |
| Shares Outstanding (Basic) | 430.61M |
| Shares Outstanding (Diluted) | 433.60M |
Key Highlights
- 1Net income rebounded to $432 million in 2016 from a net loss of $692 million in 2015, primarily due to a significant recovery in equity earnings from Enable Midstream Partners, LP.
- 2Houston Electric (Electric T&D) and CERC Corp. (Gas Distribution) showed improved operating income, driven by customer growth and regulatory rate increases.
- 3Total assets stood at $21.8 billion at the end of 2016, with a debt-to-capitalization ratio of 71% (excluding securitization bonds).
- 4Capital expenditures for 2017 are projected at $1.5 billion, focusing on infrastructure improvements in regulated utility segments.
- 5The company repurchased no equity securities during the fourth quarter of 2016.
- 6CenterPoint Energy's Energy Services segment experienced a decrease in operating income, partly due to mark-to-market accounting for derivatives, but also saw growth from acquisitions.
- 7The company successfully negotiated new collective bargaining agreements, mitigating potential labor disruptions.