10-QPeriod: Q2 FY2009

CENTERPOINT ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 5, 2009For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) reported its second-quarter 2009 financial results, showing a decrease in net income for both the three-month and six-month periods ending June 30, 2009, compared to the prior year. This decline was primarily driven by lower operating income across most segments, particularly in Interstate Pipelines and Natural Gas Distribution, coupled with increased interest expenses. Despite the overall dip in profitability, the company highlighted significant regulatory developments, including progress on recovering costs associated with Hurricane Ike through a settlement agreement and the potential issuance of system restoration bonds. The company also reported on ongoing legal proceedings and managed its liquidity effectively through credit facilities and equity financing transactions, though a portion of its long-term debt saw a decrease in fair value due to rising interest rates. Investors should note the ongoing challenges in certain segments and the company's reliance on regulatory approvals for cost recovery.

Financial Highlights

42 data points
Beta

Revenue

$1.64B

Net Income

$86.00M

5.2% Net Margin

EPS (Diluted)

$0.24

Total Assets

$18.72B

Cash & Equivalents

$151.00M

Free Cash Flow

$623.00M

Financial Statements
Beta
Revenue$1.64B
Operating Expenses$1.39B
Operating Income$253.00M
Net Income$86.00M
EPS (Basic)$0.24
EPS (Diluted)$0.24
Shares Outstanding (Basic)352
Shares Outstanding (Diluted)354

Key Highlights

  • 1Net income decreased to $86 million for the three months ended June 30, 2009, down from $101 million in the same period of 2008.
  • 2For the six months ended June 30, 2009, net income was $153 million, a decrease from $223 million in the comparable period of 2008.
  • 3Operating income saw a decline, with the Interstate Pipelines segment experiencing a notable decrease from $101 million to $61 million in the three-month period.
  • 4CenterPoint Houston reached a settlement agreement to recover $663 million in costs related to Hurricane Ike, with plans to issue system restoration bonds.
  • 5The company issued approximately $145 million in common stock during the quarter under a continuous offering program to bolster its equity position.
  • 6Total assets decreased to $18.7 billion as of June 30, 2009, from $19.7 billion at the end of 2008, reflecting a reduction in current assets and long-term debt.
  • 7Long-term debt decreased to $9.6 billion as of June 30, 2009, from $10.2 billion at December 31, 2008.

Frequently Asked Questions

The decrease in net income was primarily due to a $44 million decrease in operating income (driven by lower performance in segments like Interstate Pipelines and Natural Gas Distribution), a $15 million increase in interest expense (excluding transition bond interest), and a $3 million decrease in equity in earnings of unconsolidated affiliates.

CenterPoint Houston has reached a settlement agreement to recover $663 million in costs related to Hurricane Ike. The company plans to recover the distribution portion of these costs through the issuance of system restoration bonds and the transmission portion through existing cost-of-service processes. Regulatory approval for these plans is expected.

During the six months ended June 30, 2009, CenterPoint Energy raised approximately $36 million from sales to its defined contribution plan and $7 million from its dividend reinvestment plan. Additionally, under a continuous offering program, the company issued $145 million of common stock in the second quarter, which strengthened its equity position.

Total long-term debt decreased from $10.2 billion at the end of 2008 to $9.6 billion at June 30, 2009. This reduction was achieved through various debt repayment activities and a decrease in borrowings under revolving credit facilities.