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$CNP 2Q15 Call: The Energy Services segment reported operating income of $9MM for the second quarter of 2015, which included a mark-to-market accounting gain of $2MM, compared with $11MM for the same period of 2014, which included a mark-to-market accounting gain of $6MM.
$CNP announced its capital spending plan for 2018-2022. For the 5-year period, the company expects to make capital investments totaling $8.3Bil, representing an 18% increase over the company's 2017-2021 capital plan. Growth, reliability and grid hardening, as well as regulatory requirements are driving higher capital investment.
$CNP announced expected earnings on a guidance basis for 2017 will incorporate a re-measurement of deferred tax liabilities and a credit to income tax expense. As a result, EPS are expected to exceed the prior $1.25-1.33 forecast range. Absent these adjustments, EPS are predicted to be at or near the high end of $1.25-1.33 range.
$CNP, a domestic energy delivery company, has declared a regular quarterly cash dividend of $0.2775 per share on its common stock, representing a 4% increase versus the previous dividend. The latest dividend is payable on March 8, 2018, to shareholders of record on February 15, 2018.
CenterPoint Energy Resources (CERC), an indirect subsidiary of $CNP, closed its offering of $300MM of its 4.10% senior notes due Sept. 1, 2047. Net proceeds will be for general corporate purposes, including the repayment of a portion of its outstanding commercial paper.
$CNP announced the closing of its offering of $500MM aggregate principal amount of its 2.50% senior notes due Sept 1, 2022. Net proceeds will be used for general corporate purposes, including the repayment of a portion of its outstanding commercial paper.
With regards to the strategic review on Enable business in which $CNP owns 54.1% limited partner interest, the company said that it is discussing with other parties in evaluating an alternative. The company added that it has the options of keeping, selling or spinning off the Enable business.
$CNP said that assuming an anticipated positive decision from ERCOT later in 2017 for the $250MM transmission project in Freeport, Texas, the next step would be to file with the Commission. The company anticipates that the construction period of this transmission project would be between 2019 and 2021.
In 1Q17, $CNP's electric transmission & distribution segment reported operating income of $78MM, down 6% YoY. The natural gas distribution segment's earnings grew 2.5% to $164MM and that of energy services segment rose to $35MM. The midstream investments segment reported $72MM of equity income, vs $60MM in 1Q16.
$CNP reaffirmed its earnings estimate for FY17 in the range of $1.25-1.33 per share. This guidance includes anticipated utility operations earnings of $0.93-0.97 per share and anticipated midstream investment earnings of $0.31-0.37 per share.
$CNP filed a rate case settlement with the Railroad Commission of Texas for its Houston-area customers. If approved by the RRC, the settlement would increase the company's natural gas distribution base rate revenues for Houston-area customers by about $16.5MM per year. The new rates are expected to go into effect in May or June of 2017.
$CNP's CenterPoint Energy Houston Electric business filed an application for Distribution Cost Recovery Factor with the Texas PUC. This represents a $44.6MM annual increase over current rates to begin recovering about $479MM in distribution capital invested in 2016. New rates are expected to go into effect by September 1.
$CNP appointed Scott Doyle as SVP of Natural Gas Distribution, and Joe Vortherms as SVP of Energy Services. Also Jason Ryan, currently VP of Regulatory Legal, is named VP of Regulatory and Government Affairs. These organizational changes are effective March 1, 2017.
$CNP said that it is expected to be a cash taxpayer. At the end of 2016, the company had no remaining federal or federal tax carry-forwards and does not have tax credits. The company expects effective tax rate and cash taxes to be lower as a result of lower statutory rates and the capital expenditure deductions.
For 2018, $CNP expects earnings momentum to continue, helped by the growth in utility operations and midstream investments. With the current and anticipated rate filings, fully integrated energy services business, and strong performance from Enable business, $CNP targets to achieve or exceed the upper end of 4-6% EPS growth rate for 2018 vs. 2017.
For FY17, $CNP expects EPS to be in the range of $1.25-1.33. This guidance includes anticipated utility operations earnings of $0.93 - $0.97 per diluted share and anticipated midstream investment earnings of $0.31 - $0.37 per diluted share.