We Are Delivering
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1111 Louisiana Street Houston, Texas 77002 CenterPoint CenterPoint≠nergy.com ≠nergy WE ARE 2015 Annual Report DELIVERING WE ARE DELIVERING 2015 Annual Report ANNUAL MEETING INFORMATION REQUESTS The 2016 Annual Meeting of Download or call (888) 468-3020 toll free for additional copies of our: Shareholders will be held on 2015 Annual Report and Thursday, April 28, at 9 a.m. CDT Form 10-K 2016 Proxy Statement in the CenterPoint ≠nergy Tower auditorium, 1111 Louisiana Street, DIVIDEND PAYMENTS ENERGY, SERVICE, Houston, Texas. Shareholders who hold shares of CenterPoint ≠nergy Common stock dividends are generally paid quarterly in March, June, September, and December. Dividends are subject to at the close of business on March 3, declaration by the Board of Directors, who establish the amount of each quarterly common stock dividend and fix the record 2016, will receive notice of the and payment dates. meeting and will be eligible to vote. INSTITUTIONAL INVESTORS CORPORATE OFFICE Security analysts and other investment professionals should contact David Mordy, Investor Relations Director, STREET ADDRESS at (713) 207-6500. CenterPoint ≠nergy, Inc. AND VALUE 1111 Louisiana Street STOCK LISTING Houston, Texas 77002 CenterPoint ≠nergy, Inc. common stock is traded under the symbol CNP on the New York and Chicago stock exchanges. MAILING ADDRESS CAUTIONARY STATEMENT P.O. Box 4567 Certain disclosures in this annual report may be considered “forward-looking statements” within the meaning of the Houston, Texas 77210-4567 Private Securities Litigation Reform Act of 1995. The “cautionary statement” on page ii of CenterPoint ≠nergy’s Form 10-K Telephone: (713) 207-1111 for the fiscal year ended December 31, 2015, and the disclosure referenced therein should be read in conjunction with the CenterPoint≠nergy.com forward-looking statements. AUDITORS DELIVERING FOR ALL OF OUR STAKEHOLDERS RECONCILIATION OF NET INCOME AND DILUTED EPS TO THE BASIS USED IN Independent Registered PROVIDING 2015 ANNUAL EARNINGS GUIDANCE Public Accounting Firm Deloitte & Touche LLP Quarter Ended Twelve Months Ended technology + Houston, Texas December 31, 2015 December 31, 2015 Net Income Net Income service INVESTOR SERVICES (in millions) EPS (in millions) EPS If you have questions about your Consolidated as reported $ (509) $ (1.18) $ (692) $ (1.61) EMPLOYEES SHAREHOLDERS COMMUNITIES CUSTOMERS CenterPoint ≠nergy investor account, Midstream Investments 589 1.37 1,024 2.38 please contact us: Utility Operations(1) 80 0.19 332 0.77 Approximately 7,500 employees Our dividends have increased In 2015, we gave $5.2 million In national surveys, customers (713) 207-3060 work for CenterPoint ≠nergy. annually for the past 11 years, in corporate charitable contri- ranked CenterPoint ≠nergy highly Toll Free: (800) 231-6406 Loss on impairment of Midstream Investments: In 2015, we hired 720, 52 of and we aim to increase earn- butions and volunteered in brand trust, environmental Investor services, online tools and a CenterPoint Energy’s impairment of its investment in Enable 613 1.43 769 1.79 whom are veterans. Our skilled ings per share 4 to 6 percent 200,000+ hours (valued at advocacy, and customer service. list of publications may be found on CenterPoint Energy’s share of Enable’s impairment and knowledgeable employees annually through 2018. $4.7 million) for nonprofit the company’s website at of its goodwill and long-lived assets 7 0.01 388 0.90 are proud of their careers and and community organizations CenterPoint≠nergy.com/investors. Total loss on impairment 620 1.44 1,157 2.69 Investor Services representatives are have an average tenure of 17 years in 2015. Midstream Investments excluding loss on impairment $ 31 $ 0.07 $ 133 $ 0.31 available from 8 a.m. to 5 p.m. Central with the company. time, Monday through Friday, to help Consolidated excluding loss on impairment $ 111 $ 0.26 $ 465 $ 1.08 you with questions about CenterPoint ≠nergy common stock or enrollment Timing effects impacting CES(2): in the CenterPoint ≠nergy Investor’s Mark-to-market (gain) losses – – (2) (0.01) Choice Plan. ZENS-related mark-to-market (gains) losses: The Investor’s Choice Plan provides Marketable securities(3) 13 0.03 60 0.14 easy, inexpensive investment options, Indexed debt securities(4) (8) (0.02) (48) (0.11) including direct purchase and sale of 2015 BY THE NUMBERS Utility operations earnings on an adjusted guidance basis $ 85 $ 0.20 $ 342 $ 0.79 CenterPoint ≠nergy common stock; dividend reinvestment; statement- Per the basis used in providing 2015 earnings guidance: based accounting and monthly or Utility Operations on a guidance basis $ 85 $ 0.20 $ 342 $ 0.79 quarterly automatic investing by Midstream Investments excluding electronic transfer. You can become loss on impairment 31 0.07 133 0.31 a registered CenterPoint ≠nergy $ $ 2015 Consolidated on guidance basis $ 116 $ 0.27 $ 475 $ 1.10 1.10 4 to 6 11 1.6 shareholder by making an initial investment of at least $250 through EARNINGS PERCENT CONSECUTIVE YEARS BILLION (1) CenterPoint Energy earnings excluding Midstream Investments Investor’s Choice. (2) Energy Services segment Per diluted share on Anticipated annual earnings Dividend increases Capital investments (3) Quarter-ended and 12 months-ended results include Time Warner Inc., Time Warner Cable Inc., and Time Inc. Twelve months-ended results also include AOL Inc. prior to the merger with Verizon a guidance basis per share growth 2016–2018 (4) Twelve months-ended results include amount associated with Verizon merger with AOL Inc. Design: Savage Brands, Houston, TX CenterPointEnergy.com/annualreports/2015 • Page 1 ELECTRIC TRANSMISSION & DISTRIBUTION NATURAL GAS OPERATIONS ENERGY SERVICES We deliver power to approximately 2.3 million Our natural gas distribution business serves Our unregulated energy services business metered customers in the greater Houston 3.4 million customers in Arkansas, Louisiana, complements our regulated natural gas area. Adding nearly 50,000 new meters, we Oklahoma, Mississippi, Minnesota, and Texas distribution business by providing gas purchase realized a 2.1 percent growth rate in 2015. and added nearly 30,000 customers last year. options to customers across multiple states. FIVE-YEAR CUMULATIVE TOTAL RETURN COMPARISON FOR THE FISCAL YEARS WORDS OF PROGRESS ENDED DECEMBER 31(1)(2) $200 ’10 ’11 ’12 ’13 ’14 ’15 “ Investments in technology provide benefits to our $150 operations and improve our customers’ experience.” $100 SCOTT M. PROCHAZKA President & CEO $50 G CenterPoint ≠nergy (1) Assumes that the value of the investment in the common stock and G each index was $100 on December 31, 2010, and that all dividends S&P 500 Index were reinvested. S&P 500 Utilities Index (2) Historical stock performance is not necessarily indicative of future stock performance. NEARLY NEARLY 25 50,000 30,000 $90 YEARS MILLION 2% average annual customer Additional electric meters New natural gas customers Annualized recovery growth in Electric Operations through rate filings Page 2 • 2015 CenterPoint Energy Annual Report We believe strongly in our vision of delivering energy, service, and value. DEAR STAKEHOLDER, We’re very pleased to report that our company performed well Although we are pleased with our operational performance, we are and delivered at the high end of our financial expectations for 2015, disappointed with our stock valuation. The fall of commodity prices a year marked by considerable external challenges. Our utilities and the downturn of the energy sector negatively impacted ≠nable’s benefited from timely cost recovery, strong customer growth, and operations and valuation, and consequently, CenterPoint ≠nergy’s careful management of operating and maintenance expenses. share price as well. Total shareholder return for CenterPoint ≠nergy in 2015 was -17.57 percent, below the S&P 500 Utilities Index return Led by the strong performance of our electric and natural gas of -4.85 percent and the S&P 500 Index return of 1.38 percent. utilities, our annual adjusted earnings, using the same basis that we use when providing guidance, was $475 million, or $1.10 per Nevertheless, our dividends continue to grow. At the beginning of diluted share. This consists of $0.79 from utility operations and 2016, our board declared a regular quarterly cash dividend of $0.31 from midstream investments. Our guidance basis excludes 25.75 cents per share, which represents a 4 percent increase from impairment charges related to our investment in ≠nable Midstream last year’s quarterly dividend and, if annualized, would equate to Partners and other factors. $1.03 per share. This is the 11th consecutive annual dividend increase. Our midstream investments finished the year within our initial DELIVERING ON OUR VISION guidance range. However, given the reduction in ≠nable’s unit We believe strongly in our vision of delivering energy, service, and pricing throughout the year, as well as the market outlook for value. We’ve been especially pleased with our utility operations, continued depressed commodity prices impacting the midstream which represent approximately 70 percent of our 2015 earnings oil and gas industry, we recorded non-cash impairment charges and are expected to grow to approximately 75 to 80 percent in 2016. in both the third and fourth quarters. As a result, we reported We continue to invest in infrastructure to meet growing demand a loss of $692 million, or a loss of $1.61 per diluted share. and modernize our systems. Our capital investments last year were a record $1.6 billion, up from $1.4 billion in 2014. We also remain focused on carefully managing our operating costs and held operat- ing and maintenance expenses flat last year. 12,500+ 8th ONE 500,000+ CONSECUTIVE YEAR Power line-friendly ENERGY STAR Partner of the Year New state-of-the-art Customers enrolled for trees donated – Sustained Excellence electric systems power outage notifications operation center CenterPointEnergy.com/annualreports/2015 • Page 3 Our regulators understand the importance of investing in a safe In 2016, we anticipate resolving a $54 million rate case in Minnesota and reliable energy delivery system and allowing us to recover those and a $36 million rate case in Arkansas.