CenterPoint Reports First Quarter Earnings Results and Reaffirms Full Year Guidance

Source: 5/3/2022, Location: North America

- Reported Q1 2022 earnings of $0.82 per diluted share
- Non-GAAP earnings per diluted share (“non-GAAP EPS”) was $0.47 for Q1 2022
- Non-GAAP EPS range for 2022 reaffirmed at $1.36 - $1.38. Reiterating industry-leading 8% non-GAAP EPS annual growth rate target for 2022 through 2024 and mid-to-high end of the 6-8% range thereafter through 2030
- Made full exit from midstream; sold entire Energy Transfer(“ET”) position within four months of the merger between Enable and ET

CenterPoint Energy, Inc. “CenterPoint” reported income available to common shareholders of $518 million, or $0.82 per diluted share, for the first quarter of 2022 compared to $0.56 of diluted earnings per share for the first quarter of 2021. The earnings for the first quarter included strategic transaction-related income of 35 cents including the gains on ET common units, midstream-related earnings, impacts associated with the gas LDC sale, and associated costs of the early extinguishment of debt related to the transactions.

On a non-GAAP basis, EPS for the first quarter was $0.47 which was reduced by approximately $0.03 as a result of the loss of earnings related to the Arkansas and Oklahoma gas LDC operations which were sold in January of 2022. Despite that, non-GAAP EPS for the first quarter of 2022 was still flat to the comparable non-GAAP EPS results for the first quarter of 2021.

“This quarter extended our track record of delivering on expectations again. We are on track to meet our $1.36-1.38 non-GAAP EPS guidance for the full year, including the $0.47 we reported for the first quarter of 2022. We are now among the pure-play utilities, having fully exited from midstream well before our year-end 2022 commitment, and with the sales of the ET common units at a 20% premium on an aggregated basis compared to the ET common unit price when the merger between ET and Enable was announced on February 12, 2021,” said Dave Lesar, President and Chief Executive Officer of CenterPoint.

“We are in year two of our capital plan which is now increased to $19.3 billion over the next five years. This is an increase from what we discussed at year-end and is our second increase to our five-year plan since our Analyst Day in September 2021. In the first quarter of 2022, we invested approximately $1 billion in capital, including mobile generation leases, and are now tracking slightly ahead of the plan for the full year. We remain focused on delivering on our 10-year growth strategy of investing in our regulated utility system to serve our customers and are working with them to identify incremental needs such as growth and increased system safety and resiliency which may lead to further capital investments, while also remaining focused on keeping our bills affordable for our customers,” continued Lesar.

Lesar added. “Looking ahead, we remain focused on our value proposition which is sustainable earnings growth for our shareholders; sustainable, resilient, and affordable services for our customers; and a sustainable positive impact on the environment for our communities.”

Earnings Outlook
Given the merger between Enable and Energy Transfer and CenterPoint Energy’s divestiture of its remaining midstream investments during 2022, CenterPoint Energy will be presenting a consolidated non-GAAP EPS guidance range for 2022, which is the comparable measure to non-GAAP Utility EPS reported in 2021.

In addition to presenting its financial results in accordance with GAAP, including presentation of income (loss) available to common shareholders and diluted earnings (loss) per share, CenterPoint Energy provides guidance based on non-GAAP income and non-GAAP diluted earnings per share. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance that excludes or includes amounts that are not normally excluded or included in the most directly comparable GAAP financial measure.

Management evaluates CenterPoint Energy’s financial performance in part based on non-GAAP income and non-GAAP earnings per share. Management believes that presenting these non-GAAP financial measures enhances an investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in these non-GAAP financial measures exclude items that Management believes do not most accurately reflect the company’s fundamental business performance. These excluded items are reflected in the reconciliation tables of this news release, where applicable. CenterPoint Energy’s non-GAAP income and non-GAAP diluted earnings per share measures should be considered as a supplement to, and not as a substitute for, or superior to, income available to common shareholders and diluted earnings per share, which respectively are the most directly comparable GAAP financial measures. These non-GAAP financial measures also may be different than non-GAAP financial measures used by other companies.

2021 non-GAAP Utility EPS guidance range
“Utility EPS” included net income from the company’s Electric and Natural Gas segments, as well as after-tax Corporate and Other operating income and an allocation of corporate overhead based upon Electric’s and Natural Gas’s relative earnings contribution. Corporate overhead consisted primarily of interest expense, preferred stock dividend requirements, and other items directly attributable to the parent along with the associated income taxes.

2021 Utility EPS excluded:
- Earnings or losses from the change in value of the CenterPoint Energy’s 2.0% Zero-Premium Exchangeable Subordinated Notes due 2029 (“ZENS”) and related securities
- Earnings and losses associated with the ownership and disposal of midstream common and preferred units (including amounts reported in discontinued operations), net gain associated with the consummation of the merger between Enable and Energy Transfer, a corresponding amount of debt related to midstream common and preferred units, and an allocation of associated corporate overhead
- Cost associated with the early extinguishment of debt
- Impacts associated with Arkansas and Oklahoma gas LDC sales
- Certain impacts associated with other mergers and divestitures

2022 non-GAAP EPS guidance range
Beginning in 2022, CenterPoint Energy no longer separates utility and midstream operations and will report on a consolidated non-GAAP EPS basis.

2022 non-GAAP EPS guidance excludes:
- Earnings or losses from the change in value of ZENS and related securities
- Gain and impact, including related expenses, associated with Arkansas and Oklahoma gas LDC sales
- Income and expense related to ownership and disposal of Energy Transfer common and Series G preferred units, and a corresponding amount of debt related to the units
- In providing this guidance, CenterPoint Energy does not consider the items noted above and other potential impacts such as changes in accounting standards, impairments or other unusual items, which could have a material impact on GAAP reported results for the applicable guidance period. The 2022 non-GAAP EPS guidance range also considers assumptions for certain significant variables that may impact earnings, such as customer growth and usage including normal weather, throughput, recovery of capital invested, effective tax rates, financing activities and related interest rates, and regulatory and judicial proceedings. To the extent actual results deviate from these assumptions, the 2022 non-GAAP EPS guidance range may not be met or the projected annual non-GAAP EPS growth rate may change. CenterPoint Energy is unable to present a quantitative reconciliation of forward-looking non-GAAP diluted earnings per share because changes in the value of ZENS and related securities, future impairments, and other unusual items are not estimable and are difficult to predict due to various factors outside of management’s control.

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