CenterPoint Energy announces measures to strengthen financial position in response to Enable distribution reduction

HOUSTON, April 1, 2020 /PRNewswire/ -- CenterPoint Energy, Inc. (NYSE: CNP) today announced a series of measures to strengthen its financial position and provide multi-year flexibility as to equity issuances. In a separate news release issued earlier today, Enable Midstream Partners, LP (Enable) announced a 50% distribution reduction for common units, representing limited partner interests in Enable. Given CenterPoint Energy's 53.7% ownership of the outstanding common units of Enable, this decrease is expected to reduce distributions to CenterPoint Energy by approximately $155 million per year on an annualized basis.
CenterPoint Energy announces measures to strengthen financial position in response to Enable distribution reduction
To adjust for this reduction in cash flow and strengthen CenterPoint Energy's financial position, the company expects to take the following measures intended to maintain solid investment grade credit quality:

A targeted reduction in the company's quarterly common stock dividend from $0.2900 per share to $0.1500 per share, targeting a 50% - 55% utility earnings payout ratio;

An approximately $40 million target reduction in 2020 operation and maintenance (O&M) expenses, excluding certain merger costs, utility costs to achieve, severance and amounts with revenue offsets; previous plans indicated the company's intent to hold 2020 O&M flat to 2019 levels; and

An approximately $300 million reduction in 2020 capital spending from $2.6 billion to $2.3 billion; the company will continue to target five-year total capital investment of approximately $13 billion as previously disclosed.

With the above three steps and the increased earnings contribution from utilities, the company expects that its financial position will be strengthened and its credit quality improved, which will also provide multi-year flexibility as to the timing and total amount of equity issuances. The company will evaluate market and economic conditions, including the potential impacts of COVID-19, and will remain opportunistic as it assesses equity needs."In light of Enable's recent distribution decrease, this reduction in CenterPoint Energy's common stock dividend strengthens CenterPoint Energy's business risk profile by significantly reducing the company's reliance upon cash distributions from Enable," said John W. Somerhalder II, interim president and CEO. "We anticipate utility earnings contribution will approach 90% for 2020 and increase to nearly 100% over the next few years. The net result of today's actions supports CenterPoint Energy's firm commitment to maintaining investment grade credit quality and our continued strategic focus on growing utility earnings contribution."
See also:
Leave a comment
  • Latest
  • Read
  • Commented
Calendar Content
«    Июнь 2020    »