CenterPoint Energy Inc (CNP) 2012 Q1 法說會逐字稿

Good morning and welcome to the CenterPoint Energy's first quarter 2012 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 the management's remarks.

(Operator instructions).

I will now turn the call over to Marianne Paulsen, Director of Investor Relations.

Ms.

Paulson?

Thank you very much, Beverly.

Good morning, everyone.

This is Marianne Paulsen, Director of Investor Relations for CenterPoint Energy.

I'd like to welcome you to our first-quarter 2012 earnings conference call.

Thank you for joining us today.

David McClanahan, President and CEO; and Gary Whitlock, Executive Vice President and Chief Financial Officer, will provide (technical difficulty) activities and our business unit leaders will discuss the first quarter 2012 results for their respective segments.

In addition to these senior executives, we have other members of management with us who may assist in answering questions following the prepared remarks.

Our earnings press release and Form 10-Q, filed earlier today, are posted on our website, which is www.CenterPointEnergy.com, under the investor section.

I remind you that any projections or forward-looking statements made during this call are subject to the cautionary statements on forward-looking information in the Company's filings with the SEC.

Before David begins, I would like to mention that a replay of this call will be available until 6 PM Central time on Thursday, May 10, 2012.

To access the replay, please call 1-855-859-2056 or 404-537-3406 and enter the conference ID number 65391356.

You can also listen to an online replay of the call through the website that I just mentioned.

We will archive call on CenterPoint Energy's website for at least one year.

And with that, I will now turn the call over to David.

Thank you, Marianne, good morning, ladies and gentlemen.

Thank you for joining us today and thank you for your interest in CenterPoint Energy.

This morning, I will discuss our consolidated results for the first quarter of 2012.

As a change to what we have done in prior quarters, I've asked (technical difficulty) unit leadership, Scott Prochazka, Tracy Bridge, Greg Harper and Joe McGoldrick, to provide comments on their respective units' performance in the quarter, and give their perspectives on trends and expectations for their businesses.

And finally, Gary will provide an update on a few items, including guidance.

We had a solid first quarter, given the extremely mild winter weather and low natural gas prices.

This morning we reported net income of $147 million or $0.34 per diluted share compared to $148 million or $0.35 per diluted share for the same period of 2011.

Operating income for the first quarter of 2012 was $338 million compared to $364 million (technical difficulty) in the same period last year.

Our gas distribution unit and, to a lesser extent, our competitive gas sales and services business were impacted by the mild winter weather.

Houston Electric had a very solid quarter, and our midstream businesses met expectations.

The diversity of our portfolio certainly helped maintain our earnings this quarter.

I'll now ask each of our business unit heads to give more detail around their earnings and prospects.

We'll start with Scott Prochazka the President of our electric operations.

Thank you, David, and good morning to everyone.

Houston Electric's first-quarter performance was excellent.

This year's operating income exceeded the first quarter of last year despite mild weather and the impact of rates implemented last September, which reduced operating income by $11 million.

Revenues were bolstered by continued customer growth, a modest increase in usage, return associated with the recovery of true-up proceeds and increased ancillary revenues, primarily from right-of-way leases.

Altogether, the quarter was $2 million favorable to last year.

We serve one of the most vibrant areas in the nation, and the prospects for Houston Electric are exciting.

We continue to enjoy a growing service territory with more than 42,000 customers added since the first quarter of last year.

More than 93,000 jobs were added during the 12 months ending in February of 2012.

And this rate of growth is projected to continue throughout the rest of the year.

The Houston unemployment rate is currently 7.2%, down from a peak of 8.8%.

Houston is the fourth largest city and the fifth most populous metropolitan area in the country and the population growth rate of 2% is expected to continue for the next several years.

Another key driver of growth is low natural gas prices, which support expansion in the refining, base chemicals and downstream products industries.

These new facilities will require transmission and substation investments to serve a growing power requirement.

Additionally, in response to the Panama Canal widening, facilities at or near the Port of Houston are being expanded to accommodate an increase in cargo movement.

This will bring general commercial and industrial growth as well as direct load growth associated with the installation of new larger electric shore cranes.

Commercial development is also strengthening.

Our world-class medical center continues to grow with the addition of 2 million square feet by the end of 2014.

Additionally, new multipurpose campuses are being developed, such as the new ExxonMobil corporate campus and nearby development that will include 5000 homes along with 10 million square feet of commercial office and retail space.

From a reliability standpoint, we are continuing our efforts to strengthen the grid by modifying our practices around pole management, circuit inspection, vegetation management and new construction.

Further, we are adding operating and control infrastructure that will provide essential redundancy and comply with new federal regulations.

By midyear of 2012, we will complete our advanced metering system deployment.

This has been a very successful project with relatively few issues and no significant delays.

To address the growth infrastructure needs of the Houston territory, our capital investments will remain robust.

Even with our advanced metering project drawing to a close, annual capital expenditures are projected to average over $500 million per year for the next five years, leading to a 4% annualized growth in rate base.

As you may recall, last summer was Houston's hottest on record, and this winter was the mildest in over 50 years.

So it is unlikely that Houston Electric will equal its 2011 performance.

In addition, the adverse impact of the rate case implemented last September will be experienced for the full year in 2012.

However, with the benefit of strong growth, ongoing cost management, transmission cost recovery filings and additional ancillary revenues, we expect Houston Electric to have a good year and return its authorized rate of return.

Since we now have capital trackers in place for both distribution and transmission investment, we don't anticipate the need for a major Houston Electric rate case for the next several years.

I'll now turn the call over to Tracy Bridge, President of our gas distribution business.

Thank you, Scott, and good morning.

For our gas LDCs, this quarter was all about whether.

Although our first-quarter revenues were approximately $52 million lower than the first quarter of last year due to weather, we were able to mitigate $28 million of that impact through weather normalization adjustments or weather hedges.

When compared to normal, the weather impact was approximately $42 million, which was mitigated by $22 million through these mechanisms.

Operation and maintenance expenses were favorable to the first quarter of last year, primarily due to $5 million or reduced bad debt expense.

Our credit and collection practices along with low natural gas prices and mild weather continued to reduce bad debt expense and we are working diligently on expense management across our business units.

Our service areas continue to grow with more than 13,000 customers added since the first quarter of last year.

As Scott mentioned, Houston is a growing service territory.

We are also experiencing growth in other areas of Texas as well as in Minnesota and Mississippi.

Unemployment rates are flat to down, and housing starts are up from a year ago in all six states where we operate.

Improved operations and customer service continue to be top priorities.

We expect to benefit from efficiencies gained from technology advances and utility operations.

For example, we are deploying advanced metering technology in our Houston, Texas coast and South Texas service areas, which will increase productivity by allowing us to read 10,000 meters per vehicle per day compared to 500 meters per person per day.

We are very focused on serving our customers more efficiently and effectively, and we continue to expand our conservation improvement programs.

We implemented a number of customer self-service options that allow greater automation and faster service.

We believe these types of efforts are paying off.

We recently earned the second-highest score in the (technical difficulty) satisfaction index for investor owned gas and electric utilities in the US and a first-place ranking in the Midwest region of the J.D.

Power annual residential customer satisfaction survey for gas utilities.

System safety and reliability also remain a top priority.

As David mentioned on the fourth quarter call, we expect capital expenditures to exceed $350 million a year over the next five years, a significant increase over the historical run rate of about $200 million a year for this business unit.

These increases in capital expenditures are primarily related to distribution system upgrades and what will result in annual rate-based growth of over 6%.

Similar to the mechanism Scott mentioned for Houston Electric, we also have rate adjustment mechanisms in place in several jurisdictions that allow more timely recovery of capital costs.

One such mechanism is the gas reliability infrastructure program, or GRIP, available in Texas.

The law provides for annual filings, and we recently made GRIP filings in both our Houston and South Texas jurisdictions, requesting a combined $12 million increase in annual revenues.

These will begin in July 2012.

In summary, we will continue to focus on expense management and employ rate adjustment mechanisms to mitigate the significant impacts of weather to date.

Now I will turn the call over to Greg Harper, Group President of Pipelines and Field Services.

Thank you, Tracy.

Low gas prices were the story in the midstream business, but our pipeline performance as expected and our field services unit continues to grow.

Let me begin with our pipelines business.

Operating income was $60 million, a decline of $16 million from the first quarter of 2011.

Lower revenues of $13 million were due primarily to the expiration of a backhaul agreement on our Carthage to Perryville pipeline in midyear 2011.

The warm winter also affected loads across our system, which were lower than normal and considerably lower than the first quarter of last year.

Low gas prices and significantly compressed basis spreads adversely affected our off-system sales.

The combined effect of these two factors produced about a $3 million decline compared to the same quarter last year.

We don't expect that pattern to change much until we see a return of locational basis spreads and gas price volatility in our market areas.

On a positive note, we saw improved results in our ancillary services, which increased by about $3 million over the first quarter 2011.

As you may know, ancillary services include natural gas processing and treating as well as balancing services like park and loans, or PALs.

Processing margins continued to be strong due to an increase in volumes of high BTU content gas coming into our pipelines from liquid-rich placed in East Texas and Northwest Louisiana.

PALs also provided improved results in the first quarter.

As you may recall, we restructured and extended our agreements with our natural gas distribution affiliates in 2010.

Due to the seasonal structure in these agreements, results for the first quarter of 2012 reflect an increase of about $4 million compared to the same quarter last year.

These agreements became effective in March 2011, so for the balance of this year we expect comparable results to last year.

Our operations and maintenance expenses increased by about $7 million compared to the first quarter of 2011.

However, last year's results included a favorable settlement of an insurance claim that reduce our operations (technical difficulty) about $4 million.

Equity earnings for our investment in the Southeast Supply Header, a joint venture with Spectra, were $6 million in 2012, a $2 million increase from the first quarter of the prior year.

A restructured and extended contract with an anchor shipper near the end of 2011 will result in an improvement in SESH's 2012 operating results.

Now I'll turn to the field services first-quarter results.

Operating income from our field services business increased by $11 million to $47 million compared to the first quarter of 2011.

Despite low natural gas prices, our revenues and margins remained strong, clearly highlight the value of our fee-based contracting strategy which emphasizes volume commitments and guaranteed returns on our capital deployed.

Total gathering volumes for the quarter increased by nearly 30% to 237 billion cubic feet in 2012 across our entire gathering network.

More than 70% of those volumes came from the Haynesville, Fayetteville and Woodford Shale plays.

Average daily throughput across the system grew to 2.6 billion cubic feet per day for the quarter compared to 2 billion cubic feet per day during the first quarter of 2011.

Volumes from our Haynesville Shale gathering system in North Louisiana averaged over 1.1 billion cubic feet per day in the first quarter of 2012.

These volumes reflect throughput from shale in Cana production (technical difficulty) as well as other third-party shippers on the systems and is slightly down from the fourth quarter.

The higher margins from the increase in gathering throughput was partially offset by a significant decline in natural gas prices, which reduced our margins from sales of retained natural gas by approximately $6 million compared to the first quarter of last year.

Our average realized price for gas was nearly $1.25 lower in the first quarter of 2011 and nearly $0.50 lower than last quarter.

These low gas prices, if sustained, will adversely impact our full-year results.

Operation and maintenance expenses declined, primarily as a result of ongoing efforts to reduce rental expenses for compression and treating facilities.

However, new assets put into place to replace these rentals combined with new facilities built to handle Haynesville Shale growth resulted in increases in both appreciation and taxes other than income.

Late last year, Waskom, our processing joint venture, placed a 35 million cubic feet per day plant expansion into service that included greater liquids offloading capabilities, a new rail loading facility, which provides greater access to premium liquids markets for Waskom customers.

Equity earnings from our 50% share of Waskom were $3 million, an increase of $1 million over the first quarter 2011.

I'd now like to take a few minutes to discuss what the midstream businesses are focused on this year.

As I mentioned earlier, we are seeing significant activity in the liquids-rich natural gas areas.

Both in pipeline and field services we are actively pursuing several opportunities in and around our footprint, including the Cana Woodford in western Oklahoma, the Mississippi Lime in northern Oklahoma and southern Kansas and the Cotton Valley play in East Texas.

We have a presence near these plays as well as access to end use markets and to the Perryville Hub, which we believe makes us an attractive option to the producers developing these areas.

Our pipelines are also well positioned to capture opportunities from power generation customers.

There are 22 gas-fired power plants currently attached to our system, of which more than half are under contract for firm services in excess of 800 million cubic feet.

We are in active discussions to increase contracted levels as gas power generation becomes more of a baseload rather than a peaking load for the electric power markets.

We recently filed to amend our CenterPoint Energy gas transmission tariff with the Federal Energy Regulatory Commission to allow our customers to choose the Perryville hub as a delivery and receipt point rather than specific points within the hub.

Currently, we filed an application with the Intercontinental Exchange, or ICE, to make the Perryville hub a trading point for ICE transactions.

We believe our customers will find it beneficial to be able to use ICE to settle their physical transactions.

These actions, along we the fact that we have significant interconnectivity with other pipelines and storage assets within the hub will provide our customers with added flexibility.

In addition, we continue to develop great strategies for our two interstate pipelines.

More specifically, in order to address the increased costs on our pipeline today, we have initiated a settlement process with customers for a new tariff structure on our Mississippi River transmission pipeline.

This proposed rate structure will not only update our cost of service but provides a tracking mechanism for recovering costs associated with environmental and safety regulations.

Much like our pipeline group, our field services group is pursuing liquid-rich opportunities within the reach of our gathering and processing footprint.

We are also finding that the current low gas prices environment is presenting new opportunities to acquire producer-owned gathering systems as well as to partner with producers as they conduct their initial development in new shale plays.

We recognized that we are currently operating in a challenging natural gas environment.

However, we are pleased with the overall performance of our midstream business.

With that, I'll turn the call over to Joe McGoldrick, President of our Competitive Energy Services business.

Our energy services business had an active quarter in which we positioned business for the future.

After adjusting for the timing-related variances of mark-to-market accounting and the write-down of inventory to lower cost to market, operating income declined by $6 million from the same quarter of last year.

Two major contributors to the decline where the mild weather and the low gas prices discussed by the other business presidents.

The mild weather caused lower usage by our commercial customers, and the low gas price, low volatility market environment had the effect of compressing unit margins.

Although the financial results were down, it was not unexpected and there were several positive developments during the quarter.

First, margins from seasonal storage spreads have improved and we should realize better fourth-quarter results.

For example, margins that averaged $0.50 to $0.60 per MMbtu last year are averaging $0.70 to $0.80 this year with some recent deals exceeding $1.

Next, the strategic repositioning we implemented last year is gaining traction.

That strategy involved a greater focus on growing our retail business and a corresponding reduction of fixed costs by right-sizing our pipeline transportation capacity used to serve retail customers.

As an indicator of our progress, our retail commercial business grew in both customer additions and throughput in the first quarter despite the challenging environment.

We added over 2500 customers since the first quarter of last year, a 21% increase.

1400 of the new customers came from an acquisition we made late last year and 1100 from our existing markets.

Also, through our fixed cost reduction strategy, we have either not renewed or negotiated early releases of uneconomic capacity.

These actions will reduce our fixed cost, and improve our margins as the year progresses.

In 2012 alone we will see approximately $15 million of fixed cost savings.

Going forward, we expect that this strategic realignment will yield better and more stable results consistent with CenterPoint's investment thesis.

Moreover, we continue to see viable investment opportunities at CES's intrastate pipeline and customer interconnects, as growth appears to be very robust in the petrochemical and other energy-intensive industries on the Gulf Coast.

In conclusion, we are pleased with our progress.

We believe the business has turned the corner to once again become a contributor to CenterPoint Energy's earnings growth.

With that I'll now turn the call over to Gary Whitlock, Executive Vice President and CFO.

Thank you, Joe, and good morning to everyone.

Today I would like to discuss a few items with you.

First, I would like to provide you with an update on the use of cash we received from the sale of the transition bonds in January.

As I mentioned last quarter, in addition to paying off our outstanding commercial paper borrowings of approximately $200 million, we reacquired tax-exempt debt at the parent company with a principal amount of $375 million and a weighted average interest rate of 5.4%.

In addition to these actions, on April 1 we retired approximately $46 million of maturing tax-exempt debt at Houston Electric with a coupon of 3.625%.

In total we have paid down debt of more than $600 million, which will result in a reduction in interest expense in 2012 of approximately $19 million or $0.03 per diluted share.

Our objective for the remaining $1 billion plus in cash is to have our businesses invest the money in accretive, long-term projects, and we are working diligently to do so.

We continue to receive questions about our financing strategy for our midstream business, especially whether or not we intend to form an MLP.

As we have previously said, the key variable for us is ensuring that we have visible, long-term growth opportunities that merit the formation and use of an MLP.

Now let me discuss our 2012 earnings guidance.

This morning in our earnings release, we reaffirmed our estimate for earnings in the range of $1.08 to $1.20 per diluted share.

As previously discussed, we have developed our earnings guidance range by using a number of variables, such as commodity prices, volume throughput, weather, regulatory proceeding and our effective tax rate.

Clearly, the extremely mild winter weather and low natural gas prices have been negative to earnings in the first quarter.

On the other hand, the earnings performance of Houston Electric and a lower effective tax rate have been positive.

We have taken into account the benefit of the debt reductions I mentioned earlier.

However, we have not assumed any additional uses of our cash in developing this earnings range.

As the year progresses, we will keep you updated on our earnings initiatives.

Finally, I would like to remind you of the $0.2025 per share quarterly dividend declared by our Board of Directors on April 26.

We believe our dividend actions continue to demonstrate a strong commitment to our shareholders and the confidence of the Board of Directors in our ability to deliver sustainable earnings and cash flow.

I will now turn the call back to Marianne.

Thank you, Gary.

With that we will now open the call to questions.

In the interest of time, I would ask you to please limit yourself to one question and a follow-up.

Please give instructions on how to ask a question.

(Operator instructions) Carl Kirst, [CenterPoint Energy].

Changing jobs!

I'll expect a check in the mail.

A couple of quick questions on field services, if I could.

Last call we were targeting the Mississippi Lime just because of the lack of infrastructure, and it was sort of early, early days.

I didn't know, as that area kind of continues to crop up on several competitors' radar screens, how you are currently seeing progress in that area, if there's any further color you can add there.

Thank you, Carl; this is Greg.

We've announced in that area (technical difficulty) to White Eagle a couple months ago, and to garner some traction.

We continue to discuss with several producers about that project (technical difficulty) with some of the larger producers that have more of the acreage have deferred their RFP processes to mid year to end of the year.

And so we're kind of (technical difficulty) with what's going on, on the timing there.

But we are very actively pursuing that Mississippi line area.

Okay, I appreciate that.

And then just a (technical difficulty) on fields, I just want to make sure I understand if there are any nuances to be aware of.

Sequentially, as we look from fourth quarter of 2011 to first quarter, the volumes seem to be very much intact.

The EBIT is obviously down; one of the easy things is the retained fuel and the lower gas prices.

That didn't seem to me that that would be the whole (technical difficulty) make sure there isn't anything else there going on to be aware of.

Well, I think for the top line definitely, fuel, that $0.50 difference from fourth quarter to first quarter on a same amount of retained gas is going to drive several million dollars there, in and of itself.

The other is just expenses or, Greg, we had brought in some projects at the very end of last year, so we're going to have a little bit higher expenses.

Okay.

And then, even at the EBIT level, not EBITDA, but we kick in depreciation at the beginning of the year as well on all those new assets.

Okay, okay, thank you.

Thank you so much.

And then just actually one of the questions (technical difficulty) are you guys okay with breaking out on CES sort of the retail and wholesale components going forward, or for the first quarter, I should say?

This is David.

We really don't look at that business now as retail versus wholesale.

We have some wholesale assets, these transportation assets and storage assets, but they are really designed to serve our retail customer base.

So we really look at this as a pure retail business that -- we do optimize around those assets and have made money in the past, but we don't really now think about that as a separate division or line of business within CES.

Okay, thanks for the color.

Ali Agha, SunTrust.

Thank you, good morning.

David, (technical difficulty) past, you had mentioned to us you were thinking about the use of cash, that you would look for opportunities to be disciplined, but as a summer rolled around and you have not seen opportunities, you would reassess what the plans were going to be.

So just (technical difficulty) more insight on that thinking.

And the debt paydown -- I see that, but the kind of returns, 5% or thereabouts.

Assuming you are expecting a higher return from the remaining $1.1 billion or so of cash.

So we're getting close to the middle of the year.

Tell us what is the opportunity out there.

If it's not field services, is it more regulated utility?

What should we be looking for?

Ali, we did talk about midyear this year we would give you an update around the opportunities we see, and we still plan to do that on our next call.

But we are pursuing a number of opportunities, particularly in the midstream area.

Right?

We're seeing a lot (technical difficulty) pop up, whether it's opportunities to buy some existing assets from producers or whether it's to respond to RFPs that (technical difficulty) infrastructure.

But I would expect that by the next call, we're going to have insight around our opportunities there and whether or not we are going to think we're successful.

As Greg mentioned, we don't control the timing of a lot of these things.

And a producer, if they pull an RFP and push it off until the fourth quarter, we can't control that.

But I think we will have more insight the next time we talk, and we intended to give you (technical difficulty).

And one follow-up -- excluding that use of that cash, if you just look at your existing portfolio for the regulated, non-regulated and even the growth in embedded in there, what kind of EPS growth rate do you believe this portfolio can generate for you off this 2012 base you've given us?

Our internal target is we want to grow EPS about 4% to 6% annually.

It can be a little lumpy in there, but we think that we have the kind of opportunities.

You heard both Scott and Tracy talk about rate base growth.

At the electric side, it's 4%; on the gas distribution side, it's 6%.

So in and of itself, (technical difficulty) pure regulated businesses, we are going to have some good growth there.

But we'll need to have some growth in the midstream business to achieve the upper end of that growth range.

That's, just to be clear, not factoring in anything from an extra $1 billion in cash, or is that also incorporated in there?

Well, no.

We are going to be using probably some of that $1 billion in these regulated businesses because we are spending -- between just Houston Electric and the gas distribution business, we'll spend almost $900 million in 2012.

So there's a lot of growth there, but on top of the -- and either we use the money that we have now or -- and if we use that on something else, we'll have to probably finance part of that in the future.

But I think we have plenty of opportunities of pure regulated businesses to grow earnings.

Thank you.

David Frank, Catapult.

Good morning, David.

Ali started to ask if there, I guess.

But are you also looking at regulated utility acquisitions as a potential use of the cash and as (technical difficulty) is that an acceptable -- could that be acceptable alternative to midstream investments?

David, it can be, absolutely can be.

You don't see quite as many opportunities in that space as you do in the midstream space.

There are a couple of, I think, of near-term, especially around the gas distribution businesses that may come on the market.

But yes, there -- we look at across our full spectrum of businesses for opportunities.

Okay, thanks a lot.

(Operator instructions) Andrew Weisel, Macquarie Capital.

Just wanted to clarify something on the backhaul contracts.

I believe you said that was a $13 million hit.

In previous calls, you said it would be about a $10 million incremental to last year for the year.

Does that mean that the second quarter shouldn't see any impact?

This is Greg.

I think we were looking at what a number could be based on certain fuel levels and fuel retentions and gas prices.

Obviously, gas prices dropped significantly, and when we are talking about the line CP backhaul agreement, we encompass several components of that.

And that backhaul flow facilitates better fuel savings, which we did realize last year and we didn't realize this year, plus what we did realize in fuel savings was at a lower price this year in the first quarter.

Relative to second quarter and balance of year, the backhaul arrangement went away midyear last year, so what we see online CP will just be really relative to our other recontracting efforts on CP, and that basis has shrunk dramatically on CP across that system.

You know, the only thing I would add there, Andrew, is that we did have an extension of that backhaul agreement for four or five months in 2011 at a much lower rate than the original contract, and that extension is no longer in play.

So there will be a little bit of continuing impact there, but it's not going to be at the same level as the first quarter.

Okay, that's helpful.

And just to clarify, your standing guidance -- does that assume any recontracting extensions, or would anything be incremental?

I'm sorry; I didn't hear.

Recontracting?

Recontracting or extensions.

Does the current guidance assume nothing new, or does that already embed some sort of assumption around filling in that expiration?

Well, we have made our best guess, our best judgment of our contracts that expire this year, and we have a few.

And we've already renewed a number of those, as well as being (technical difficulty) some of this space, whether it's backhaul space or other space, and sell it in the market.

So we've made assumptions around that in our earnings guidance.

Okay, thanks a lot.

And there's one additional; sorry if I missed it, I jumped on the call a little bit late.

What did weather-adjusted load growth look like at the Houston utility?

Scott, do you have them those numbers in front of you?

Yes, so the weather-adjusted -- so the non-weather-based load growth was about $3 million.

Is that right?

It was $3 million for the first quarter.

And a good amount of that came from the commercial side as opposed to the residential.

What does that look like on a percentage, volume of megawatt hours?

I'm sorry; what was the question?

What did weather-normalized volume growth look like in terms of volumes of megawatt hours?

Okay, let's see if I've got that.

(inaudible) We'll have to look for that number, and we can get that back to you.

Okay, great, thank you very much, guys.

Yves Siegel, Credit Suisse.

A quick question -- when you look at the opportunity on field services, any sense of bracketing what you think the potential growth CapEx opportunity is there as some of these projects come to fruition?

You know, I hesitate to make an estimate because some of these are projects.

And if we'd win one, it would be -- we could spend a lot of money here.

But I think just conjecturing on that probably doesn't do any good at this stage.

Okay, and my last question, a follow-up question -- might be a little bit picky.

But when we think about 4% to 6% type of growth going forward on EPS, what kind of base of earnings should we be thinking about?

Because it's been a little lumpy over the last few years.

Yes; you know, 2011 was a particularly good year for us because of all of the weather-related benefits we got at Houston Electric.

As I recall, Scott, it was about $55 million-plus of weather-related revenues.

So when I think about it, I re-baseline the 2011 earnings to take out the weather, and then you grow it 4% to 6% off of that.

Okay, great, thank you.

Steve Fleishman, Bank of America.

A couple questions -- first, these ancillary revenues at CAG -- I think you mentioned -- you were in the quarter and you mentioned they're going to continue for the (technical difficulty) do you think they will be for the year?

And is this something that will go on beyond this year?

This is Scott, I'll take that.

The way these revenues are coming in, we sign leases with these pipeline companies that are looking to move through our right-of-ways.

And they are one-time payments, so the increase that we got for the first quarter -- those particularly leases are not going to continue paying as we go through the rest of the year.

But what we do see is continued interest in others that are trying to utilize those right of ways.

So given amount of activity in these nearby shale plays, we do continue to expect more coming in.

I would be at a loss to estimate exactly what I think that number would be, but it was pretty sizable in the first quarter, and it would be hard to believe that that rate would continue in terms of new ones coming in through the balance of the year.

Okay, and then one other separate question, I guess, for David -- back a while ago, you had talked about kind of midyear 2012 as being a focus date in terms of if you don't have some projects, looking at share buyback.

Should we assume, given that some of these project opportunities have been pushed out, that midyear is not kind of a key date anymore?

You know, Steve, we will update that in our next call at the end of the second quarter.

I don't want to -- there's a lot of things can happen over the next three months.

So let's just kind of wait and see how the next three months kind of unfold.

We've got a lot of lines in the water and we are pursuing a lot of different opportunities -- not giving up on investing some of (technical difficulty) this year.

But we'll have a lot better, I think, insight into that as we report out in the second quarter.

And if something happens between now and then, obviously we'll announce it.

Okay.

Beverly, do we have any other questions?

There are no further questions.

Okay, thank you very much, Beverly.

Since we don't have any questions, we're going to end the call at this point.

Thank you very much for participating today.

We appreciate your support very much.

Have a great day.

This concludes CenterPoint Energy's first quarter 2012 earnings conference call.

Thank you for your participation.