Item 7.01 |
Regulation FD Disclosure. |
The Company’s service territory experienced sudden and destructive severe weather events in May 2024 that included Category 2 Hurricane-like winds and tornadoes (collectively, the “May 2024 Storm Events”). The May 2024 Storm Events caused significant damage to the Company’s electric delivery system. For example, damage from the May 16, 2024 storm resulted in electric service interruptions peaking at nearly 922,000 customers. In response to certain of these weather events, the Company implemented its emergency operations plan’s processes and procedures developed to respond to such events, including establishing an incident command center, activating resources to support its restoration efforts and calling for assistance from other utilities where needed, among other measures. The Company has remained in contact with its regulators and stakeholders, including federal, state and local officials, as well as the Public Utility Commission of Texas (the “PUCT”) and the Electric Reliability Council of Texas regarding the May 2024 Storm Events.
The Company estimates that total costs to restore the electric delivery facilities damaged as a result of the May 2024 Storm Events will be in the range of $425 to $475 million based on currently available information. These estimates are subject to revisions as certain restoration costs may continue through the end of 2024, with potential for ongoing repairs to our transmission facilities to continue into 2025.
The ultimate recovery of costs is expected to be sought through traditional regulatory mechanisms or through securitization bonds, as applicable. The Company expects to obtain recovery of a portion of the May 2024 Storm Events storm restoration costs that are functionalized to distribution through the issuance of
non-recourse
securitization bonds. Assuming those bonds are issued, the Company expects to recover the amount of storm restoration costs approved by the PUCT out of the net proceeds from the bond offering, with the debt service and other financing costs of the bonds being paid over the term of the bonds through a storm restoration charge imposed on the Company’s customers.
CenterPoint Energy reaffirms its previously announced
non-GAAP
earnings guida
nce.
Use of
Non-GAAP
Financial Measures
As included in this Current Report, 2024
non-GAAP
earnings per diluted share, is a
non-GAAP
measure that excludes earnings and losses from the change in value of CenterPoint Energy’s 2.0% Zero-Premium Exchangeable Subordinated Notes due 2029 (“ZENS”) and related securities, and the gain and impact, including related expenses, associated with mergers and divestitures, such as the divestiture of Energy Systems Group, LLC and CenterPoint Energy’s Louisiana and Mississippi natural gas local distribution company businesses. In providing 2024
non-GAAP
EPS 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 2024
non-GAAP
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 2024
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 without unreasonable effort 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 contro
l.
Management evaluates CenterPoint Energy’s financial performance in part based on
non-GAAP
earnings per share. Management believes that presenting this
non-GAAP
financial measure enhances an investor’s understanding of CenterPoint Energy’s overall financial performance by providing them with an additional meaningful and relevant comparison of anticipated future results across periods. The adjustments made in this
non-GAAP
financial measure exclude items that management believes do not most accurately reflect CenterPoint Energy’s fundamental business performance. CenterPoint Energy’s
non-GAAP
diluted earnings per share measures should be considered as a supplement to, and not as a substitute for, or superior to, diluted earnings per share, which is the most directly comparable GAAP financial measure. This
non-GAAP
financial measure also may be different than
non-GAAP
financial measures used by other compan
ies.
Forward-Looking Statements
This Current Report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical fact included in this Current Report are forward-looking statements made in good faith by us and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this Current Report, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “target,” “will” or other similar words are intended to identify forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results