10-QPeriod: Q1 FY2014

CENTERPOINT ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 1, 2014For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) reported a net income of $185 million for the first quarter of 2014, a notable increase from $147 million in the same period of 2013. This improvement was driven primarily by a significant gain on indexed debt securities and increased equity earnings from unconsolidated affiliates, partially offset by a loss on marketable securities and a decrease in operating income across segments. The company also saw a substantial increase in revenues, from $2.388 billion to $3.163 billion, largely due to higher natural gas costs and increased volumes across its distribution segments. The company successfully managed its liquidity, with net cash provided by operating activities of $380 million, though this was a decrease from the prior year. Significant financing activities included the issuance of $600 million in long-term debt and strategic positioning related to the upcoming IPO of Enable Midstream Partners, LP.

Financial Highlights

45 data points
Beta

Revenue

$3.16B

Net Income

$185.00M

5.8% Net Margin

EPS (Diluted)

$0.43

Total Assets

$22.26B

Cash & Equivalents

$379.00M

Free Cash Flow

$380.00M

Financial Statements
Beta
Revenue$3.16B
Operating Expenses$2.87B
Operating Income$295.00M
Net Income$185.00M
EPS (Basic)$0.43
EPS (Diluted)$0.43
Shares Outstanding (Basic)429.16M
Shares Outstanding (Diluted)430.56M

Key Highlights

  • 1Net income increased by 26% year-over-year to $185 million, or $0.43 per diluted share.
  • 2Total revenues grew significantly by 32.5% to $3.163 billion, primarily due to higher natural gas costs and increased volumes.
  • 3The company completed a $600 million issuance of 4.50% General Mortgage Bonds due 2044.
  • 4CenterPoint Energy's investment in Enable Midstream Partners, LP (Enable) generated substantial equity earnings of $91 million, a significant increase from $5 million in the prior year.
  • 5The company continues to invest in infrastructure, with capital expenditures of $301 million in the quarter.
  • 6Enable Midstream Partners, LP completed its IPO on April 16, 2014, with CenterPoint Energy retaining a 54.7% limited partner interest.
  • 7The company maintained compliance with its revolving credit facility covenants.

Frequently Asked Questions

The increase in net income was primarily driven by a $94 million increase in gains on indexed debt securities and an $86 million increase in equity earnings from unconsolidated affiliates, partially offset by increased losses on marketable securities and a decrease in operating income.

The IPO of Enable Midstream Partners, LP, completed in April 2014 shortly after the quarter end, resulted in a significant increase in equity earnings for CenterPoint Energy in the first quarter of 2014. CenterPoint Energy retained a substantial ownership stake (54.7% limited partner interest) and will continue to benefit from Enable's performance.

CenterPoint Energy issued $600 million in long-term debt during the quarter and maintains access to significant credit facilities. Net cash provided by operating activities was $380 million, though lower than the prior year, and the company expects its existing cash, credit facilities, and distributions from Enable to meet its financial needs for the remainder of 2014.

The company is involved in various legal and regulatory matters, including an ongoing gas market manipulation case, environmental issues related to manufactured gas plants, and asbestos claims. While the company does not expect these matters to have a material adverse effect, they represent potential contingent liabilities.