10-QPeriod: Q3 FY2022

CENTERPOINT ENERGY INC Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 1, 2022For Securities:CNP

Summary

CenterPoint Energy, Inc. reported improved financial performance for the nine months ended September 30, 2022, compared to the same period in 2021. Net income available to common shareholders increased by $136 million, primarily driven by strong results in the Electric segment and the Natural Gas segment, along with gains from equity securities and favorable corporate and other adjustments. This growth was partially offset by a significant decrease in income from discontinued operations, mainly due to the prior year's disposal of Enable assets. The company's balance sheet reflects a decrease in total assets, largely due to the sale of natural gas businesses and the redemption of debt. However, liquidity remains solid, supported by robust operating cash flows and access to credit facilities. Management continues to focus on executing its capital expenditure plan, which has been increased, and navigating regulatory environments across its diverse service territories. Key areas of focus include recovery of winter storm costs, investments in infrastructure, and transitioning towards cleaner energy sources.

Financial Statements
Beta
Revenue$1.90B
Cost of Revenue$52.00M
Gross Profit$1.85B
Operating Expenses$1.52B
Operating Income$384.00M
Net Income$202.00M
EPS (Basic)$0.30
EPS (Diluted)$0.30
Shares Outstanding (Basic)629.51M
Shares Outstanding (Diluted)633.07M

Key Highlights

  • 1Net income available to common shareholders increased by $136 million for the nine months ended September 30, 2022, compared to the prior year period, driven by operational improvements in the Electric and Natural Gas segments.
  • 2The company sold its remaining Energy Transfer equity securities, generating net proceeds of $702 million.
  • 3CenterPoint Energy completed the restructuring of its Indiana Gas and VEDO subsidiaries under CERC Corp. to better align organizational structure and fund future capital investments.
  • 4Capital expenditures for the nine months ended September 30, 2022, were $3.08 billion, a significant increase from the prior year, reflecting ongoing investment in infrastructure and growth.
  • 5Houston Electric issued $1.6 billion in new debt, and CERC issued or borrowed $1.0 billion, to fund operations and capital expenditures.
  • 6CenterPoint Energy has increased its 10-year capital plan by $2.3 billion, now totaling nearly $43 billion, to support rate base growth and cleaner energy investments.
  • 7The company is actively managing regulatory matters, including recovery of winter storm costs and proceedings for rate adjustments across its service territories.

Frequently Asked Questions

The improved financial performance was primarily driven by strong operational results in both the Electric and Natural Gas segments. Additionally, the company benefited from gains on the sale of equity securities and favorable adjustments in corporate and other activities. These positive factors were partially offset by a decrease in income from discontinued operations, largely due to the prior year's disposal of Enable assets.

CenterPoint Energy announced an increase of $2.3 billion to its 10-year capital plan, bringing the total to nearly $43 billion, concluding in 2030. The primary focus of these increased capital expenditures is to support rate base growth and investments in cleaner energy initiatives.

The company maintains a solid liquidity position, supported by strong operating cash flows and access to its credit facilities. The company expects to meet its anticipated cash needs through a combination of operating cash flows, borrowings under credit facilities, issuance of long-term debt, and proceeds from customer rate relief bonds for winter storm cost recovery.

During the nine months ended September 30, 2022, Houston Electric issued $1.6 billion in new debt, and CERC issued or borrowed $1.0 billion. CenterPoint Energy also repaid or redeemed a significant amount of debt. While these activities increased outstanding debt, the company's financial covenants related to debt-to-capitalization remained in compliance, indicating that leverage levels are being managed within acceptable parameters.