CenterPoint Energy 2006 Annual Report Download - page 5

CenterPoint Energy reported $432 million in net income, or $1.33 per diluted share. Earnings for
2006 were up substantially over 2005 and included the resolution of a number of legacy tax and
regulatory issues. We raised our dividend in the first quarter of 2007 by 13 percent to an annualized
rate of 68 cents per share. This higher dividend followed a 50 percent increase in the first quarter of
2006. Our board of directors is committed to delivering a strong, competitive dividend consistent
with our long-term sustainable earnings and cash flow. Our goal is to return 50 to 75 percent of our
earnings to our shareholders and to be in a position to increase our dividends annually.
The benefits of CenterPoint Energy’s balanced mix
of electric, gas and pipelines businesses were
evident in 2006. While record warm temperatures
and volatile gas prices challenged our regulated
gas distribution business, they also created
opportunities for our pipelines, field services and
competitive natural gas marketing businesses.
Our combined 2006 results illustrate how the
geographic, economic and regulatory diversity of
our business portfolio positions us to succeed in
a variety of market environments and to deliver
significant shareholder value.
We had strong returns last year, and perhaps
more impressively, top-quartile returns compared
to our peer group. Total shareholder return for
2006 was 34.8 percent, outperforming both the
S&P 500 Utilities Index return of 21.0 percent
and the S&P 500 Index return of 15.8 percent.
In addition to cash dividends of 60 cents per
share, shareholders realized $3.73 in price
appreciation per share.
With our company’s transition period following electric restructuring in Texas largely
completed, we were able to turn our full attention to executing our core business plans
in 2006. We are pleased to report that we had a good year.
Growing Strong
Our core businesses are poised for growth. Last year,
our electric transmission and distribution business
added 37,000 meters, marking the 10th consecutive
year we’ve experienced customer growth of 2 percent
or greater. Over the next five years, we are planning to
invest more than $2 billion in new electric facilities to
meet the demands of a rapidly growing service area
and to maintain a strong electric grid in Texas.
Customer growth continued for the 13th consecutive
year in our natural gas distribution business as well,
with more than 42,000 new customers added last
year. This included the acquisition of a distribution
system in South Texas that added over 4,000 customers.
Over the last several years, this business has been
adversely affected by mild winter weather and high
natural gas prices, which led to both reduced
consumption and higher bad debt expense.
However, the operational changes we made should
position us for better results in 2007 and beyond.
Dear Shareholder,
0
2006
2005
2007*
10 20 30 40 50 60 70
* Annualized based on 1st quarter declaration
CENTS
Common Dividends
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