10-QPeriod: Q1 FY2013

CENTERPOINT ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 2, 2013For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) reported flat net income of $147 million for the first quarter of 2013 compared to the same period in 2012, with diluted earnings per share also remaining at $0.34. While revenues increased to $2.39 billion from $2.08 billion, this was offset by higher operating expenses and other charges. The company completed the formation of a significant midstream partnership with OGE Energy Corp. and ArcLight Capital Partners, LLC, which closed on May 1, 2013. This strategic move is expected to reshape its operational footprint and financial structure. Cash flow from operations showed a healthy increase to $533 million, primarily driven by fuel cost recovery and reduced interest payments, supporting capital expenditures of $271 million. However, financing activities resulted in a significant net cash outflow of $660 million due to debt repayments and reduced long-term debt proceeds, leading to a substantial decrease in cash and cash equivalents. Investors should monitor the integration of the midstream partnership and the company's ability to manage its debt obligations and capital expenditures effectively.

Financial Highlights

45 data points
Beta

Revenue

$2.39B

Net Income

$147.00M

6.2% Net Margin

EPS (Diluted)

$0.34

Total Assets

$22.37B

Cash & Equivalents

$245.00M

Free Cash Flow

$533.00M

Financial Statements
Beta
Revenue$2.39B
Operating Expenses$2.06B
Operating Income$332.00M
Net Income$147.00M
EPS (Basic)$0.34
EPS (Diluted)$0.34
Shares Outstanding (Basic)427.96M
Shares Outstanding (Diluted)429.67M

Key Highlights

  • 1Net income remained flat year-over-year at $147 million, with diluted EPS holding steady at $0.34.
  • 2Total revenues increased by approximately 14.6% to $2.39 billion in Q1 2013, up from $2.08 billion in Q1 2012.
  • 3The company successfully formed a new Midstream Partnership with OGE Energy Corp. and ArcLight Capital Partners, LLC, which closed on May 1, 2013.
  • 4Cash flow from operating activities significantly improved, rising to $533 million from $424 million in the prior year's quarter.
  • 5Despite improved operating cash flow, financing activities resulted in a substantial net cash used of $660 million, compared to net cash provided of $744 million in Q1 2012.
  • 6Capital expenditures were $271 million in Q1 2013, a slight increase from $264 million in Q1 2012.
  • 7The effective income tax rate increased to 37% in Q1 2013 from 33% in Q1 2012, mainly due to the absence of a prior year tax settlement benefit.

Frequently Asked Questions

CenterPoint Energy reported that its net income remained flat at $147 million for the first quarter of 2013, the same as in the first quarter of 2012. Diluted earnings per share also remained consistent at $0.34. While revenues saw an increase, higher expenses and other charges offset the revenue growth, resulting in unchanged net income.

The most significant development is the formation and closing of a Midstream Partnership with OGE Energy Corp. and ArcLight Capital Partners, LLC, which occurred on May 1, 2013. The company also retired significant amounts of long-term debt for CenterPoint Houston and CERC Corp. in March and April 2013, respectively.

Cash flow from operating activities saw a substantial increase, rising to $533 million in Q1 2013 from $424 million in Q1 2012. However, this improvement was heavily offset by a significant shift in financing activities, which used $660 million in Q1 2013 compared to providing $744 million in Q1 2012, leading to a decrease in overall cash and cash equivalents.

The report highlights several risk factors, including potential delays or defaults in payments from large retail electric providers to CenterPoint Houston, and the potential underperformance of the newly formed Midstream Partnership due to integration challenges. It also mentions ongoing legal proceedings related to gas market manipulation and natural gas measurement lawsuits, though the company does not expect them to have a material adverse impact.