HOUSTON, Aug. 5 /PRNewswire-FirstCall/ -- CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $86 million, or $0.24 per diluted share, for the second quarter of 2009 compared to $101 million, or $0.30 per diluted share, for the same period of 2008. Operating income for the second quarter of 2009 was $253 million compared to $297 million for the same period of 2008. (Logo: http://www.newscom.com/cgi-bin/prnh/20020930/CNPLOGO) "Despite the weak economy and changing energy markets, our business units continued to perform well," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "Our regulated electric and gas utilities turned in solid operating performances as did our pipeline and field services core operations. However, revenues from ancillary services declined from 2008 when we benefited from unusually high commodity prices. We continue to believe that the overall fundamentals of our balanced portfolio of electric and natural gas businesses remain strong and position us well as the economy recovers and the energy markets rebound." For the six months ended June 30, 2009, net income was $153 million, or $0.44 per diluted share, compared to $223 million, or $0.66 per diluted share, for the same period of 2008. Operating income for the six months ended June 30, 2009, was $538 million compared to $633 million for the same period of 2008. OPERATING INCOME BY SEGMENT Electric Transmission & Distribution The electric transmission & distribution segment reported operating income of $162 million for the second quarter of 2009, consisting of $129 million from the regulated electric transmission & distribution utility operations (TDU) and $33 million related to transition bonds. Operating income for the second quarter of 2008 was $164 million, consisting of $129 million from the TDU and $35 million related to transition bonds. Operating income for the TDU benefited from growth of over 28,000 metered customers since June 2008 and higher net transmission revenues. Operating income for the second quarter of 2008 included a $9 million gain from a land sale. As a result of the storm restoration cost recovery legislation enacted by the Texas Legislature in April 2009, the company recorded a regulatory asset of $41 million for carrying costs incurred through June 30, 2009, on amounts it spent for Hurricane Ike storm restoration. Of that amount, $14 million was reflected in the company's second quarter 2009 earnings, and the remaining $27 million will be recognized over the life of the storm cost recovery bonds the company expects to issue later this year. Operating income for the six months ended June 30, 2009, was $232 million, consisting of $166 million from the TDU and $66 million related to transition bonds. Operating income for the same period of 2008 was $255 million, consisting of $183 million from the TDU, $67 million related to transition bonds and $5 million from the competition transition charge (CTC). The CTC was discontinued in February 2008 when the company securitized the remaining true-up balance. Natural Gas Distribution The natural gas distribution segment reported operating income of $2 million for the second quarter of 2009 compared to $4 million for the same period of 2008. Operating income benefited from rate increases and lower bad debt expense, which were more than offset by higher pension and other employee-related expenses. Due to seasonal impacts, this segment typically reports minimal earnings in the second quarter. Operating income for the six months ended June 30, 2009, was $120 million compared to $125 million for the same period of 2008. Interstate Pipelines The interstate pipelines segment reported operating income of $61 million for the second quarter of 2009 compared to $101 million for the same period of 2008. Operating income for the second quarter of 2008 included an $18 million gain from the sale of two storage development projects. Operating income benefited from higher revenue from the Carthage to Perryville pipeline and from new firm transportation contracts for gas-fired power generation, which were more than offset by a decline in ancillary services due to significantly lower commodity prices, as well as higher pension and other operation and maintenance expenses. In addition to operating income, this business had equity income of $9 million for the second quarter of 2009 from its 50 percent interest in the Southeast Supply Header (SESH), a new pipeline that went into service in September 2008. In the second quarter of 2008, equity income was $10 million from pre-operating allowance for funds used during construction. Operating income for the six months ended June 30, 2009, was $130 million compared to $172 million for the same period of 2008. In addition to operating income, this business had equity income of $7 million for the six months ended June 30, 2009, from its interest in SESH. In the first quarter of 2009, the company recorded a non-cash charge of $5 million to reflect SESH's decision to discontinue the use of Statement of Financial Accounting Standards No.71 - Accounting for the Effects of Certain Types of Regulation. For the six months ended June 30, 2008, equity income was $15 million from pre-operating allowance for funds used during construction. Field Services The field services segment reported operating income of $23 million for the second quarter of 2009 compared to $32 million for the same period of 2008. Solid growth in core gathering services was more than offset by the effect of lower natural gas and liquids prices, which declined from significantly higher levels in 2008. In addition to operating income, this business had equity income of $2 million in the second quarter of 2009 compared to $4 million in the second quarter of 2008 from its 50 percent interest in a gas processing plant. The decline was due primarily to lower natural gas liquids prices. Operating income for the six months ended June 30, 2009, was $49 million compared to $77 million for the same period of 2008. Operating income for the six months ended June 30, 2008, included gains of $17 million associated with the settlement of a contractual dispute and the sale of non-strategic assets. Equity income from the jointly-owned gas processing plant was $4 million for the six months ended June 30, 2009, compared to $8 million for the same period of 2008. Competitive Natural Gas Sales and Services The competitive natural gas sales and services segment reported operating income of $6 million for the second quarter of 2009 compared to an operating loss of $5 million for the same period of 2008. Operating income for the second quarter of 2009 included gains of $3 million resulting from mark-to-market accounting for derivatives used to lock in economic margins of certain forward natural gas sales compared to charges of $10 million for the same period of 2008. Operating income for the six months ended June 30, 2009, was $8 million compared to $1 million for the same period of 2008. Operating income for the six months ended June 30, 2009, included charges of $16 million resulting from mark-to-market accounting compared to charges of $32 million for the same period of 2008. The six months ended June 30, 2009 also included $6 million in write-downs of inventory to the lower of average cost or market. DIVIDEND DECLARATION On July 23, 2009, CenterPoint Energy's board of directors declared a regular quarterly cash dividend of $0.19 per share of common stock payable on September 10, 2009, to shareholders of record as of the close of business on August 14, 2009. OUTLOOK REAFFIRMED FOR 2009 CenterPoint Energy reaffirmed its 2009 earnings guidance of $1.05 to $1.15 per diluted share. This guidance takes into consideration various economic and operational assumptions related to the business segments in which the company operates. The company has made certain assumptions regarding the timing and cost of certain financing activities and the impact to earnings of various regulatory proceedings, including recovery of costs associated with Hurricane Ike. The company cannot predict the ultimate outcome of any of those proceedings. In providing this guidance, the company has not projected the impact of any changes in accounting standards, any impact from acquisitions or divestitures, the timing effects of mark-to-market or inventory accounting in the company's competitive natural gas sales and services business, or the outcome of the TDU's true-up appeal. The company has also excluded any impact to income from the change in value of Time Warner stocks and the related ZENS securities. FILING OF FORM 10-Q FOR CENTERPOINT ENERGY, INC. Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Quarterly Report on Form 10-Q for the period ended June 30, 2009. A copy of that report is available on the company's Web site, http://www.centerpointenergy.com/, under the Investors section. Other filings the company makes with the SEC and other documents relating to its corporate governance can also be found on that site. WEBCAST OF EARNINGS CONFERENCE CALL CenterPoint Energy's management will host an earnings conference call on Wednesday, August 5, 2009, at 10:30 a.m. Central time or 11:30 a.m. Eastern time. Interested parties may listen to a live audio broadcast of the conference call at http://www.centerpointenergy.com/. A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the Web site for at least one year. CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines, and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total nearly $19 billion. With about 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 135 years. For more information, visit the Web site at http://www.centerpointenergy.com/. This news release includes forward-looking statements. Actual events and results may differ materially from those projected. The statements in this news release regarding future financial performance and results of operations and other statements that are not historical facts are forward-looking statements. Factors that could affect actual results include the timing and outcome of appeals from the true-up proceedings, the timing and impact of future regulatory, legislative, and IRS decisions, effects of competition, weather variations, changes in CenterPoint Energy's or its subsidiaries' business plans, financial market conditions, the timing and extent of changes in commodity prices, particularly natural gas, the impact of unplanned facility outages, and other factors discussed in CenterPoint Energy's and its subsidiaries' Form 10-Ks for the fiscal year ended December 31, 2008, CenterPoint Energy's and its subsidiaries' Form 10-Qs for the periods ended March 31, 2009, CenterPoint Energy's Form 10-Q for the period ended June 30, 2009, and other filings with the SEC. For more information contact Media: Leticia Lowe Phone 713-207-7702 Investors: Marianne Paulsen Phone 713-207-6500 CenterPoint Energy, Inc. and Subsidiaries Statements of Consolidated Income (Millions of Dollars) (Unaudited) Quarter Ended Six Months Ended June 30, June 30, -------- -------- 2008 2009 2008 2009 ---- ---- ---- ---- Revenues: Electric Transmission & Distribution $510 $521 $919 $933 Natural Gas Distribution 726 518 2,426 1,939 Competitive Natural Gas Sales and Services 1,243 432 2,363 1,197 Interstate Pipelines 192 155 325 308 Field Services 62 56 120 113 Other Operations 2 3 5 6 Eliminations (65) (45) (125) (90) --- --- ---- --- Total 2,670 1,640 6,033 4,406 ----- ----- ----- ----- Expenses: Natural gas 1,750 710 4,143 2,499 Operation and maintenance 342 398 707 811 Depreciation and amortization 188 188 346 354 Taxes other than income taxes 93 91 204 204 --- --- --- --- Total 2,373 1,387 5,400 3,868 ----- ----- ----- ----- Operating Income 297 253 633 538 --- --- --- --- Other Income (Expense) : Gain (loss) on marketable securities 17 55 (37) 21 Gain (loss) on indexed debt securities (17) (46) 33 (24) Interest and other finance charges (114) (129) (230) (258) Interest on transition bonds (35) (33) (68) (66) Equity in earnings of unconsolidated affiliates 14 11 23 11 Other - net - 18 4 22 --- --- --- --- Total (135) (124) (275) (294) ---- ---- ---- ---- Income Before Income Taxes 162 129 358 244 Income Tax Expense (61) (43) (135) (91) --- --- ---- --- Net Income $101 $86 $223 $153 ==== === ==== ==== Reference is made to the Notes to the Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc. CenterPoint Energy, Inc. and Subsidiaries Selected Data From Statements of Consolidated Income (Millions of Dollars, Except Share and Per Share Amounts) (Unaudited) Quarter Ended Six Months Ended June 30, June 30, -------- -------- 2008 2009 2008 2009 ---- ---- ---- ---- Basic Earnings Per Common Share $0.30 $0.24 $0.68 $0.44 ===== ===== ===== ===== Diluted Earnings Per Common Share $0.30 $0.24 $0.66 $0.44 ===== ===== ===== ===== Dividends Declared per Common Share $0.1825 $0.19 $0.365 $0.38 Weighted Average Common Shares Outstanding (000): - Basic 331,354 352,461 329,316 346,660 - Diluted 342,027 354,280 340,873 348,522 Operating Income by Segment ---------------------------- Electric Transmission & Distribution: Electric Transmission and Distribution Operations $129 $129 $183 $166 Competition Transition Charge - - 5 - --- --- --- --- Total Electric Transmission and Distribution Utility 129 129 188 166 Transition Bond Companies 35 33 67 66 --- --- --- --- Total Electric Transmission & Distribution 164 162 255 232 Natural Gas Distribution 4 2 125 120 Competitive Natural Gas Sales and Services (5) 6 1 8 Interstate Pipelines 101 61 172 130 Field Services 32 23 77 49 Other Operations 1 (1) 3 (1) --- --- --- --- Total $297 $253 $633 $538 ==== ==== ==== ==== Reference is made to the Notes to the Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc. CenterPoint Energy, Inc. and Subsidiaries Results of Operations by Segment (Millions of Dollars) (Unaudited) Electric Transmission & Distribution ------------------------------------ Quarter Six Months Ended Ended June 30, June 30, -------- % Diff -------- % Diff Fav/ Fav/ 2008 2009 (Unfav) 2008 2009 (Unfav) ---- ---- ------- ---- ---- ----- Results of Operations: Revenues: Electric transmission and distribution utility $419 $432 3% $765 $778 2% Transition bond companies 91 89 (2%) 154 155 1% --- --- --- --- Total 510 521 2% 919 933 2% --- --- --- --- Expenses: Operation and maintenance 167 181 (8%) 335 369 (10%) Depreciation and amortization 71 69 3% 137 137 - Taxes other than income taxes 52 53 (2%) 105 106 (1%) Transition bond companies 56 56 - 87 89 (2%) --- --- --- --- Total 346 359 (4%) 664 701 (6%) --- --- --- --- Operating Income $164 $162 (1%) $255 $232 (9%) ==== ==== ==== ==== Operating Income: Electric transmission and distribution operations $129 $129 - $183 $166 (9%) Competition transition charge - - - 5 - (100%) Transition bond companies 35 33 (6%) 67 66 (1%) --- --- --- --- Total Segment Operating Income $164 $162 (1%) $255 $232 (9%) ==== ==== ==== ==== Electric Transmission & Distribution Operating Data: Actual MWH Delivered Residential 6,774,069 6,831,444 1% 11,177,381 10,797,963 (3%) Total 20,359,540 19,840,955 (3%) 36,929,230 34,983,263 (5%) Weather (average for service area): Percentage of 10-year average: Cooling degree days 111% 108% (3%) 113% 109% (4%) Heating degree days 73% 112% 39% 95% 89% (6%) Number of metered customers - end of period: Residential 1,820,092 1,846,908 1% 1,820,092 1,846,908 1% Total 2,063,924 2,092,209 1% 2,063,924 2,092,209 1% Natural Gas Distribution ------------------------ Quarter Six Months Ended Ended June 30, June 30, -------- % Diff -------- % Diff Fav/ Fav/ 2008 2009 (Unfav) 2008 2009 (Unfav) ---- ---- ------- ---- ---- ----- Results of Operations: Revenues $726 $518 (29%) $2,426 $1,939 (20%) ---- ---- ------ ------ Expenses: Natural gas 512 295 42% 1,845 1,340 27% Operation and maintenance 141 152 (8%) 297 321 (8%) Depreciation and amortization 39 41 (5%) 78 81 (4%) Taxes other than income taxes 30 28 7% 81 77 5% --- --- --- --- Total 722 516 29% 2,301 1,819 21% --- --- ----- ----- Operating Income $4 $2 (50%) $125 $120 (4%) === === ==== ==== Natural Gas Distribution Operating Data: Throughput data in BCF Residential 20 20 - 104 98 (6%) Commercial and Industrial 47 43 (9%) 130 116 (11%) --- --- --- --- Total Throughput 67 63 (6%) 234 214 (9%) === === === === Weather (average for service area) Percentage of 10-year average: Heating degree days 113% 109% (4%) 107% 103% (4%) Number of customers - end of period: Residential 2,945,460 2,961,941 1% 2,945,460 2,961,941 1% Commercial and Industrial 250,993 241,875 (4%) 250,993 241,875 (4%) ------- ------- ------- ------- Total 3,196,453 3,203,816 - 3,196,453 3,203,816 - ========= ========= ========= ========= Reference is made to the Notes to the Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc. CenterPoint Energy, Inc. and Subsidiaries Results of Operations by Segment (Millions of Dollars) (Unaudited) Competitive Natural Gas Sales and Services ------------------------------------------ Quarter Six Months Ended Ended June 30, June 30, -------- % Diff -------- % Diff Fav/ Fav/ 2008 2009 (Unfav) 2008 2009 (Unfav) ---- ---- ------- ---- ---- ------- Results of Operations: Revenues $1,243 $432 (65%) $2,363 $1,197 (49%) ------ ---- ------ ------ Expenses: Natural gas 1,237 414 67% 2,342 1,166 50% Operation and maintenance 10 10 - 18 20 (11%) Depreciation and amortization - 1 - 1 2 (100%) Taxes other than income taxes 1 1 - 1 1 - --- --- --- --- Total 1,248 426 66% 2,362 1,189 50% ----- --- ----- ----- Operating Income (Loss) $(5) $6 220% $1 $8 700% === === === === Competitive Natural Gas Sales and Services Operating Data: Throughput data in BCF 129 114 (12%) 267 255 (4%) === === === === Number of customers - end of period 8,923 10,878 22% 8,923 10,878 22% ===== ====== ===== ====== Interstate Pipelines -------------------- Quarter Six Months Ended Ended June 30, June 30, -------- % Diff -------- % Diff Fav/ Fav/ 2008 2009 (Unfav) 2008 2009 (Unfav) ---- ---- ------- ---- ---- ------- Results of Operations: Revenues $192 $155 (19%) $325 $308 (5%) ---- ---- ---- ---- Expenses: Natural gas 58 34 41% 73 63 14% Operation and maintenance 16 41 (156%) 46 76 (65%) Depreciation and amortization 11 12 (9%) 23 24 (4%) Taxes other than income taxes 6 7 (17%) 11 15 (36%) --- --- --- --- Total 91 94 (3%) 153 178 (16%) --- --- --- --- Operating Income $101 $61 (40%) $172 $130 (24%) ==== === ==== ==== Pipelines Operating Data: Throughput data in BCF Transportation 361 390 8% 785 857 9% === === === === Reference is made to the Notes to the Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc. CenterPoint Energy, Inc. and Subsidiaries Results of Operations by Segment (Millions of Dollars) (Unaudited) Field Services -------------- Quarter Six Months Ended Ended June 30, June 30, -------- % Diff -------- % Diff Fav/ Fav/ 2008 2009 (Unfav) 2008 2009 (Unfav) ---- ---- ------- ---- ---- ------- Results of Operations: Revenues $62 $56 (10%) $120 $113 (6%) --- --- ---- ---- Expenses: Natural gas 8 11 (38%) 6 18 (200%) Operation and maintenance 18 18 - 29 37 (28%) Depreciation and amortization 3 3 - 6 7 (17%) Taxes other than income taxes 1 1 - 2 2 - --- --- --- --- Total 30 33 (10%) 43 64 (49%) --- --- --- --- Operating Income $32 $23 (28%) $77 $49 (36%) === === === === Field Services Operating Data: Throughput data in BCF Gathering 104 102 (2%) 202 206 2% === === === === Other Operations ---------------- Quarter Six Months Ended Ended June 30, June 30, -------- % Diff -------- % Diff Fav/ Fav/ 2008 2009 (Unfav) 2008 2009 (Unfav) ---- ---- ------- ---- ---- ------- Results of Operations: Revenues $2 $3 50% $5 $6 20% Expenses 1 4 (300%) 2 7 (250%) --- --- --- --- Operating Income (Loss) $1 $(1) (200%) $3 $(1) (133%) === === === === Capital Expenditures by Segment (Millions of Dollars) (Unaudited) Quarter Six Months Ended Ended June 30, June 30, -------- -------- 2008 2009 2008 2009 ---- ---- ---- ---- Capital Expenditures by Segment Electric Transmission & Distribution $87 $108 $176 $189 Hurricane Ike - 2 - 18 --- --- --- --- Total Electric Transmission & Distribution 87 110 176 207 Natural Gas Distribution 56 43 94 77 Competitive Natural Gas Sales and Services 1 - 2 1 Interstate Pipelines 42 27 70 74 Field Services 28 66 46 104 Other Operations 5 2 13 9 --- --- --- --- Total $219 $248 $401 $472 ==== ==== ==== ==== Interest Expense Detail (Millions of Dollars) (Unaudited) Quarter Six Months Ended Ended June 30, June 30, -------- -------- 2008 2009 2008 2009 ---- ---- ---- ---- Interest Expense Detail Amortization of Deferred Financing Cost $6 $9 $12 $18 Capitalization of Interest Cost (4) (1) (7) (3) Transition Bond Interest Expense 35 33 68 66 Other Interest Expense 112 121 225 243 --- --- --- --- Total Interest Expense $149 $162 $298 $324 ==== ==== ==== ==== Reference is made to the Notes to the Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc. CenterPoint Energy, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Millions of Dollars) (Unaudited) December 31, June 30, 2008 2009 ---- ---- ASSETS Current Assets: Cash and cash equivalents $167 $151 Other current assets 2,868 1,777 ----- ----- Total current assets 3,035 1,928 ----- ----- Property, Plant and Equipment, net 10,296 10,524 ------ ------ Other Assets: Goodwill 1,696 1,696 Regulatory assets 3,684 3,606 Other non-current assets 965 963 --- --- Total other assets 6,345 6,265 ----- ----- Total Assets $19,676 $18,717 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Short-term borrowings $153 $75 Current portion of transition bond long-term debt 208 211 Current portion of other long-term debt 125 133 Other current liabilities 2,362 1,675 ----- ----- Total current liabilities 2,848 2,094 ----- ----- Other Liabilities: Accumulated deferred income taxes, net and investment tax credit 2,632 2,627 Regulatory liabilities 821 874 Other non-current liabilities 1,172 1,254 ----- ----- Total other liabilities 4,625 4,755 ----- ----- Long-term Debt: Transition bond 2,381 2,274 Other 7,800 7,357 ----- ----- Total long-term debt 10,181 9,631 ------ ----- Shareholders' Equity 2,022 2,237 ----- ----- Total Liabilities and Shareholders' Equity $19,676 $18,717 ======= ======= Reference is made to the Notes to the Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc. CenterPoint Energy, Inc. and Subsidiaries Condensed Statements of Consolidated Cash Flows (Millions of Dollars) (Unaudited) Six Months Ended June 30, ----------- 2008 2009 ---- ---- Cash Flows from Operating Activities: Net income $223 $153 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 361 374 Deferred income taxes 12 78 Write-down of natural gas inventory - 6 Changes in net regulatory assets 14 19 Changes in other assets and liabilities 256 422 Other, net 2 4 --- --- Net Cash Provided by Operating Activities 868 1,056 Net Cash Used in Investing Activities (700) (504) Net Cash Used in Financing Activities (147) (568) ---- ---- Net Increase (Decrease) in Cash and Cash Equivalents 21 (16) Cash and Cash Equivalents at Beginning of Period 129 167 ---- ---- Cash and Cash Equivalents at End of Period $150 $151 ==== ==== Reference is made to the Notes to the Consolidated Financial Statements contained in the Quarterly Report on Form 10-Q of CenterPoint Energy, Inc. http://www.newscom.com/cgi-bin/prnh/20020930/CNPLOGO http://photoarchive.ap.org/ DATASOURCE: CenterPoint Energy, Inc. CONTACT: Media, Leticia Lowe, +1-713-207-7702, or Investors, Marianne Paulsen, +1-713-207-6500, both of CenterPoint Energy, Inc. Web Site: http://www.centerpointenergy.com/

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