CenterPoint Energy, Inc (Holding Co)

Good morning, and welcome to CenterPoint Energy's second quarter 2023 earnings conference call with senior management. During the company's prepared remarks, all participants will be in a listen-only mode. There will be a question and answer session after management's remarks. To ask a question, please press star 1-1 on your touchtone keypad. I will now turn the call over to Jackie Rickard, Vice President of Corporate Planning, Investor Relations, and Treasurer. Mrs. Rickard?

Welcome to CenterPoint's Earnings Conference Call. Management will discuss certain topics that will contain projections and other forward-looking information and statements that are based on management's beliefs, assumptions, and information currently available to management. These forward-looking statements are subject to risks or uncertainties. Actual results could differ materially based on various factors as noted in our Form 10-Q, other SEC filings, and our earnings materials. We undertake no obligation to revise or update publicly any forward-looking statement. We will be discussing certain non-GAAP measures on today's call. When providing guidance, we use the non-GAAP EPS measure of diluted adjusted earnings per share on a consolidated basis referred to as non-GAAP EPS. For information on our guidance methodology and reconciliation of the non-GAAP measures used in providing guidance, please refer to our earnings news release and presentation on our website. We use our website to announce material information. This call is being recorded. Information on how to access the replay can be found on our website. Now, I'd like to turn it over to Dave.

Good morning, and thank you to everyone joining us for our second quarter 2023 earnings call. I'm excited to announce that this is our 13th consecutive quarter of meeting or exceeding expectations. Additionally, I am pleased to be joined on today's call by Chris Foster, the newest member of our management team. Chris has hit the ground running. I know most of you already knew what a high-quality executive he is and have had the opportunity to catch up with him. We are happy to have him officially on board. Since we have three speakers today instead of our usual two, I will limit my time to providing the main headlines for the quarter and let Jason and Chris tell the story. Headline one, another great quarter is in the books at CenterPoint as our entire team of nearly 9,000 employees continues to execute well on all fronts. Headline two, overcoming headwinds, reaffirming 2023 guidance. We announced second quarter non-GAAP EPS of 28 cents per share, overcoming the 8 cents per share headwinds from higher interest expense alone. Other headwinds came from inflationary pressures and generally milder weather throughout our service territories this quarter. Despite these headwinds, we are reaffirming our 2023 non-GAAP EPS guidance target range of $1.48 to $1.50 per share. This represents an 8% growth over last year's actual amount. This follows non-GAAP EPS earnings growth of 9% in both 2021 and 2022. Headline 3, reaffirming industry-leading long-term growth for 2024 and beyond. We continue to target 8% non-GAAP EPS growth in 2024 and the mid to high end of 6 to 8 percent annually thereafter through 2030. Headline four, 2023 capital deployment is on track. We successfully deployed $1.2 billion of capital during the quarter, bringing our year-to-date total to approximately $2.3 billion. This is ahead of our anticipated plans for the year. Headline 5, increasing our 2023 capital spend by over 11%. Let me walk you through the new capital plan. Our prior 10-year capital plan was $43 billion with an incremental $3 billion of additional capital spend identified but not yet included in our formal plan. Today, we are increasing our 2023 capital plan from $3.6 billion to $4 billion, an increase of over 11%. We are now confident we can efficiently fund, execute, and recover this $400 million increase without any external equity issuance. With this, our formal capital plan through 2030 goes from $43 billion to $43.4 billion. As for the remaining $2.6 billion of capital identified, but not yet included in our $43.4 billion, we are now confident in our ability to identify opportunities well beyond this amount. As we have stated in the past, we will continue to add these incremental amounts to our capital plan when we are confident we can efficiently fund, execute, and recover them. As we always do, we will continue to identify and execute on constructive opportunities for all of our stakeholders. So to be clear, this is additional capital spending for 2023, not pulling future capital spending forward. These additional capital investments will support safety and resiliency for the benefit of customers in our Houston electric business while balancing the impact on their bills. Headline six. O&M plan reductions remain on target. We continue on a path to reducing O&M costs by 1% to 2% per year on average over the current 10-year plan. Headline 7, positive legislation outcomes from across our territories. There were a number of recent legislative outcomes in Texas and Indiana that should benefit our utility customers for years to come. To name just a few from Texas, we now have the ability to file for two DCRFs per year, the ability to recover prudent incentive compensation, and the ability to file a comprehensive resiliency-focused investment plan. Headline eight, Houston growth continues. People and companies continue to flock to Houston, partly because of its affordable and reliable energy. In 2022, the Houston area was the second fastest growing metro area in the U.S. And amazingly, in 2022, over one-third of Houston's region population growth was from residents moving to Houston from outside the United States. Headline nine, targeting Houston electric customer charges at or below the 2% historical rate of inflation. While continuing to heavily invest in the fundamentals of safety, resiliency, and reliability, we will be aiming to keep Houston Electric customer charge increases at or below the 2% historical level inflation over the longer term. This is a unique luxury among utilities. Headline 10, we plan to be out of operating coal generation by the end of 2027. Using renewables and lower carbon power generation should provide a more affordable alternative for our customers. I want to thank our incredibly dedicated employees in both Houston and southwestern Indiana who worked tirelessly to repair our system that was struck by a series of major storms earlier this month. Also, I want to take a moment to thank the Texas and Indiana legislatures and all stakeholders that supported our constructive legislative outcomes. We are grateful that the resiliency and the reliability of the grid continues to be a top priority for all of our stakeholders. In summary, even in the midst of the economic and operational headwinds of higher interest rates, inflationary pressures, and unusual weather, we continue to deliver for both our customers and investors. The second quarter of 2023 is just another example of our continued commitment to executing on what we believe is the most tangible long-term growth plan in the industry. I'll now let Jason and Chris take it from here.