8-KEarnings & ResultsExhibits & Filings

CENTERPOINT ENERGY INC 8-K Report, Financial Results (Feb 1, 2016)

Filed February 1, 2016For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) filed an 8-K on February 1, 2016, reporting expected non-cash impairments related to its 55.4 percent equity investment in Enable Midstream Partners, LP (Enable Midstream). The company anticipates recognizing these impairments in its fourth quarter and year-end 2015 financial results due to sustained low commodity prices and their impact on the midstream oil and gas industry. The impairment assessment is based on indicators suggesting a decrease in the value of the investment that may not be recoverable. CenterPoint Energy is still in the process of determining the exact amount of the impairment, utilizing both income and market approaches to estimate the fair value of its total investment in Enable Midstream. Investors should monitor the finalization of these financial statements for the precise impact on earnings.

Key Highlights

  • 1CenterPoint Energy expects to report non-cash impairments on its investment in Enable Midstream Partners, LP for Q4 and year-end 2015.
  • 2The impairments are attributed to sustained low crude oil and natural gas prices impacting the midstream sector.
  • 3The company is in the process of determining the exact amount of the impairment.
  • 4The assessment involves evaluating if the decrease in investment value is other than temporary.
  • 5Fair value of the Enable Midstream investment will be estimated using income and market approaches.
  • 6Factors considered for fair value include Enable Midstream's unit price, forecasted results, comparable transactions, and limited float.
  • 7The press release containing this information is furnished, not filed, and not incorporated into registration statements.

Frequently Asked Questions

The primary reason for the expected impairment charges is the sustained low prices for crude oil and natural gas, which have negatively impacted the midstream oil and gas industry and, consequently, the value of CenterPoint Energy's investment in Enable Midstream Partners, LP.

CenterPoint Energy is still in the process of preparing its fourth quarter and year-end 2015 financial statements and is determining the exact amount of the impairment. Investors will have a clearer picture once these financial statements are finalized and released.

CenterPoint Energy holds a 55.4 percent equity investment in Enable Midstream Partners, LP, which includes limited partner common and subordinated units, general partner interest, and incentive distribution rights.

The report indicates that these are non-cash impairments. While they will impact reported earnings, they do not represent an immediate outflow of cash.