avatar Centerpoint Energy, Inc. Transportation, Communications, Electric, Gas, And Sanitary Services
  • Location: Texas 
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    Energy for You CenterPoint Energy 2016 Annual Report


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    To Put You To Build Stronger in Control Communities CATERING TO YOUR PREFERENCE GIVING OUR SUPPORT Our soon to be introduced online preference We volunteer our time and give our support center will give customers options on when to make our communities a better place. and how we contact them. 51% 237,500+ Calls answered through personalized, Volunteer hours valued at $5 million in 2016 automated self-service options $3.4 million 580,000 Corporate charitable contributions Customers enrolled in Power Alert Service To Make Life To Be Even Better Always There ENSURING SAFETY & RELIABILITY PUTTING TECHNOLOGY TO By keeping the lights on and the gas flowing, WORK FOR YOU we enable our customers to enjoy their lives. We continue to make significant investments to keep up with the growth and energy demands of our service territory. 7,600 90,000 Miles of pipeline checked by our advanced Customers added in 2016 leak detection tool last year $7 billion 34% Capital investments planned over the Improved electric reliability on intelligent grid next five years circuits in 2016 alone CenterPointEnergy.com/annualreports/2016 1


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    Dear Fellow Stakeholder, Energy for You summarizes why our business is centered on our Total shareholder return for the company in 2016 was Our continuing investment in intelligent grid technology Continued future growth customers and communities. Our employees give their best each 40.88 percent, outperforming the S&P 500 Utilities Index increases reliability, reduces average restoration time, saves Through the leadership of our board of directors, we remain day to deliver the energy that makes lives more comfortable, of 16.29 percent and the S&P 500 Index of 11.96 percent. consumers money, and drives innovation. In 2016, we improved dedicated to delivering long-term value to our shareholders by productive, and enjoyable. electric reliability 34 percent on intelligent grid circuits. Through In early 2017, we raised our dividend for the 12th consecutive growing earnings and providing a competitive dividend. the intelligent grid, customers have avoided nearly 200 million We have a commitment to be Always There – providing reliable year when our board declared a regular quarterly cash dividend outage minutes since 2011. Smart meters save consumers more In 2017, we expect increased earnings from continued utility electricity and natural gas to our customers. We make significant of 26.75 cents per share. This represents a 4 percent increase than $20 million per year in eliminated fees through service customer growth, rate relief, our competitive retail business, investments for safety, reliability, and the growing energy from the previous quarterly dividend and, when annualized, automation. This technology has also saved more than 1.6 million and our investment in Enable Midstream. We also expect lower demands of our service territory. Over the next five years, we equates to $1.07 per share. gallons of fuel, preventing nearly 15,000 tons of CO 2 emissions. interest expense. We expect these items collectively to result plan to spend nearly $7 billion in capital. CenterPoint Energy reported 2016 net income of $432 million, in solid growth year over year. The natural gas distribution segment also had a strong year. To put customers in control, we’ve made significant investments or $1.00 per diluted share. Our annual adjusted earnings, using Earnings growth was driven by rate relief and customer growth. Together, our electric and natural gas utilities are expected to in technology. In 2017, customers will be introduced to our new the same basis as our guidance, were $501 million, or $1.16 per invest $1.5 billion in capital in 2017. Our electric business anticipates online preference center, which will give them even more options diluted share (1). The majority of earnings, $380 million, were Last year, we filed with municipal and state regulatory authorities capital spending of $922 million to support sustained customer for when and how we contact them regarding their billing from utility operations, while $121 million were related to our to change natural gas distribution rates for Houston-area cus- growth. Our natural gas distribution business plans to invest options, program promotions, and usage. investments in Enable Midstream, a publicly traded master tomers. Our objective in this filing is for customers throughout $534 million of capital to accommodate ongoing growth and limited partnership that owns, operates, and develops strategically Houston and surrounding areas to pay a uniform rate for the cost To make life better, we endeavor to ensure the safety and pipeline replacement needs. located natural gas and crude oil infrastructure assets. of service and the cost of gas. We also implemented new rates in reliability of our systems. By keeping the lights on and the Arkansas and Minnesota. The purpose of these rate proceedings Our dedicated employees natural gas flowing, we help our customers enjoy their lives. For We continue to look for additional opportunities to grow is to allow us to earn a reasonable return for the hundreds of example, we invested in drive-by leak detection tools, which earnings. CenterPoint Energy Services (CES), our unregulated At the heart of CenterPoint Energy are our employees, who million dollars spent each year in our service territories to enable us to check more miles of pipe than ever before to help energy services business, completed the purchase of Continuum demonstrate our values of safety, integrity, accountability, accommodate growth and make our system safe and reliable. maintain the safety of our natural gas delivery system. Retail Energy Services last year and closed on the Atmos Energy initiative and respect. Marketing transaction in January 2017. These acquisitions provide To build stronger communities, we volunteer our time and give CES with the kind of scale, geographic reach, and expanded our support to make a positive difference in our communities. capabilities that will enable it to grow. Accessing more markets In 2016, our employees donated nearly 5,000 units of blood, and efficiently increasing our customer base, our retail energy which is enough to impact more than 14,000 lives. Giving back business now operates in 33 states and serves approximately is core to who we are as a company. 100,000 customers. 2016: A year of strong growth The strength of our utilities 2016 Financial Results Five-Year Cumulative Total Return Comparison We had a strong year in 2016, marked by a dividend increase, CenterPoint Energy’s long-term success is driven by the for the Fiscal Years Ended December 31 (1)(2) growth in earnings, and acquisitions. Our results were driven disciplined execution of our strategy to Operate, Serve and by a number of factors, including solid customer growth Grow. By addressing the needs of our growing service territories in both our electric and natural gas utilities with more than $200 ’11 ’12 ’13 ’14 ’15 ’16 through capital investment, we are increasing our rate base, 90,000 additional meters. which helps drive our financial performance. $432 million The electric transmission & distribution segment had an net income $150 excellent year. Earnings growth was driven primarily through rate relief from investments needed to serve our increasing customer base, customer growth, and higher equity return. $959 million $100 “We had a strong year Building the infrastructure to serve the energy needs of today and tomorrow remains a priority. Scheduled to be in service operating income in 2016, marked by a by summer 2018, the Brazos Valley Connection is a 60-mile, 345-kilovolt electric transmission line in Texas that will run from $1.00 $50 earnings per share dividend increase, Harris County to Grimes County, where it connects to the northern portion of a similar project. growth in earnings, 40.88% CenterPoint Energy (1) Assumes that the value of the investment in the common stock and each index total shareholder was $100 on December 31, 2011, and that all dividends were reinvested. and acquisitions.” return S&P 500 Index S&P 500 Utilities Index (2) Historical stock performance is not necessarily indicative of future stock performance. (1) See table on back inside cover for reconciliation of this non-GAAP measure. 2 CenterPoint Energy 2016 Annual Report CenterPointEnergy.com/annualreports/2016 3


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    Investor Information We also received several environmental awards in 2016, Annual Meeting Information Requests including the Climate Leadership Award and ENERGY STAR The 2017 Annual Meeting of Download or call (888) 468-3020 toll free for additional copies of our: Partners of the Year award, both from the U.S. Environmental Shareholders will be held on 2016 Annual Report and Form 10-K Thursday, April 27, at 9 a.m. CDT 2017 Proxy Statement Protection Agency. in the CenterPoint Energy Tower Our energy-efficiency efforts span across commercial, residential, auditorium, 1111 Louisiana Street, Dividend Payments Houston, TX. Shareholders who Common stock dividends are generally paid quarterly in March, June, September and December. Dividends are subject and low-income programs for both electric and natural gas hold shares of CenterPoint to declaration by the Board of Directors, who establish the amount of each quarterly common stock dividend and fix the consumers. In 2016, approximately 170,000 megawatt hours of Energy at the close of business record and payment dates. on March 1, 2017, will receive energy were saved. Rebates from our conservation improvements notice of the meeting and will led to customers saving nearly $18 million – the equivalent of the be eligible to vote. Institutional Investors annual energy usage of about 27,000 homes. Security analysts and other investment professionals should contact David Mordy, Investor Relations Director, Corporate Office at (713) 207-6500. Last year, we conducted an employee survey, which reflected Street Address high levels of pride, commitment, and employee engagement. Stock Listing CENTERPOINT ENERGY, INC. CenterPoint Energy, Inc. common stock is traded under the symbol CNP on the New York and Chicago stock exchanges. Studies have demonstrated that an engaged workforce can have 1111 Louisiana Street Houston, TX 77002 Scott M. Prochazka a significant effect on financial and operational results as well Milton Carroll Cautionary Statement as higher customer satisfaction. Executive Chairman President & CEO Mailing Address Certain disclosures in this annual report may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The “cautionary statement” on page ii of CenterPoint Energy’s Form 10-K Our successes and awards reflect the commitment and talent P.O. Box 4567 of the Board Houston, TX 77210-4567 for the fiscal year ended December 31, 2016, and the disclosure referenced therein should be read in conjunction with the of our dedicated workforce. Telephone: (713) 207-1111 forward-looking statements. CenterPointEnergy.com Our Energy for You Safety of our employees, delivery systems and the public is Your investment in CenterPoint Energy supports our company, Auditors our priority. CenterPoint Energy was placed in the top quartile Independent Registered Public Reconciliation of Net Income (loss) and diluted EPS to the basis used our employees, our communities and, ultimately, energy for you. Accounting Firm for Edison Electric Institute and American Gas Association Thank you for your confidence in our company, leadership, and Deloitte & Touche LLP in providing 2016 and 2015 annual earnings guidance safety rankings in 2016. However, we also had several serious vision to lead the nation in delivering energy, service, and value. Houston, TX TWELVE MONTHS ENDED safety incidents that reinforced our commitment to working DECEMBER 31, 2016 DECEMBER 31, 2015 safely and continuing to improve our safety programs and Investor Services NET INCOME DILUTED NET INCOME DILUTED If you have questions about EPS EPS performance. Our overall approach to safety performance is Sincerely, your CenterPoint Energy investor (IN MILLIONS, EXCEPT DILUTED EPS) focused on behavior-based safety programs and a commitment account, please contact our to sustaining a strong safety culture. Transfer Agent: Consolidated as reported $ 432 $ 1.00 $ (692) $ (1.61) Broadridge Corporate Midstream Investments (121) (0.28) 1,024 2.38 We have been honored with several prestigious awards thanks Issuer Solutions, Inc. Utility Operations(1) 311 0.72 332 0.77 P.O. Box 1342 to the efforts of our employees. For example, we received the Brentwood, NY 11717 Loss on impairment of Midstream Investments: Emergency Recovery Award from the Edison Electric Institute MILTON CARROLL SCOTT M. PROCHAZKA http://shareholder.broadridge CenterPoint’s impairment of its investment in Enable .com/cnp (net of taxes of $456)(3) – – 769 1.79 for our power restoration efforts after severe flooding hit Executive Chairman President & CEO (713) 207-3060 CenterPoint’s share of Enable’s impairment of its Houston in April 2016. Our crews devoted nearly 16,000 hours of the Board Toll Free: (800) 231-6406 goodwill and long-lived assets (net of taxes of $233)(3) – – 388 0.90 to this recovery, and our intelligent grid saved 26 million outage Investor Services, online tools Total loss on impairment – – 1,157 2.69 minutes during this event. and a list of publications can be found on the company’s website Midstream Investments excluding loss on impairment $ 121 $ 0.28 $ 133 $ 0.31 Additionally, we’re proud to have been recognized for our at Investors.CenterPointEnergy.com. Consolidated excluding loss on impairment $ 432 $ 1.00 $ 465 $ 1.08 customer service. In 2016, we were named the top Texas Electric Investor Services representatives Timing effects impacting CES (2): Transmission and Distribution Service Provider (TDSP) by are available from 8 a.m. to 5 p.m. CDT, Monday through Friday, to help Mark-to-market (gains) losses (net of taxes of $8 and $2)(3) 13 0.03 (2) (0.01) Cogent Energy Reports in the Texas TDSP Trusted Brand & you with questions about CenterPoint ZENS-related mark-to-market (gains) losses: Customer Engagement Study. Energy common stock or enrollment Marketable securities (net of taxes of $114 and $33)(3) (4) (212) (0.49) 60 0.14 in the CenterPoint Energy Investor’s Indexed debt securities (net of taxes of $145 and $26)(3) (5) 268 0.62 (48) (0.11) Choice Plan. Utility Operations earnings on an adjusted guidance basis $ 380 $ 0.88 $ 342 $ 0.79 The Investor’s Choice Plan provides easy, inexpensive investment options, Adjusted net income and adjusted diluted EPS used in including direct purchase and sale of providing earnings guidance: CenterPoint Energy common stock; Utility Operations on a guidance basis $ 380 $ 0.88 $ 342 $ 0.79 dividend reinvestment; statement- Midstream Investments excluding loss on impairment 121 0.28 133 0.31 based accounting and monthly or Consolidated on a guidance basis $ 501 $ 1.16 $ 475 $ 1.10 quarterly automatic investing by electronic transfer. You can become (1) CenterPoint earnings excluding Midstream Investments a registered CenterPoint Energy (2) Energy Services segment (3) shareholder by making an initial Taxes are computed based on the impact removing such item would have on tax expense (4) As of May 18, 2016, comprised of Time Warner Inc., Charter Communications, Inc. and Time Inc. Prior to May 18, 2016, comprised of investment of at least $250 through Time Warner Inc., Time Warner Cable Inc. and Time Inc. Results prior to June 23, 2015, also included AOL Inc. Investor’s Choice. (5) 2016 includes amount associated with the Charter Communications, Inc. and Time Warner Cable Inc. merger 2015 includes amount associated with Verizon tender offer for AOL, Inc common stock 4 CenterPoint Energy 2016 Annual Report Design: Savage Brands, Houston, TX


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    1111 Louisiana Street Houston, Texas 77002 CenterPointEnergy.com www.facebook.com/CenterPointEnergy @energyinsights @cnpalerts www.youtube.com/centerpointenergyvid www.linkedin.com/company/centerpoint-energy


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