Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Merrill Lynch Global Power and Gas Leaders Conference 2004
35 slides from Centerpoint Energy, Inc (holding Co)'s conference presentation, Sep 29, 2004
Slide 1: Merrill Lynch Global Power and Gas Leaders Conference
Merrill Lynch Global Power and Gas Leaders Conference September 29, 2004 David M. McClanahan President and Chief Executive Officer
Slide 2: Cautionary Statement Regarding Forward-Looking Information
From time to time we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Pri
Slide 3: Discussion Points
Discussion Points Company Overview A Company in Transition Timeline Monetization of Texas Genco Recovery of stranded costs Accounting and financial implications Next steps Post Transition Strategy: What's Next
Slide 4: Company Overview
e CenterPoint.. Energy ec Company Overview September 29,2008 Merrill Lynch Global Power and Gas Leader
Slide 5: Operating Income by Business Segment
Operating Income 2003 : $408MM (1) 1st Half '04: $178MM (2) Natural Gas Distribution Pipelines & Gathering Electric Generation (81%) CenterPoint Energy Resources Corp. 3 local distribution companies CenterPoint Energy Gas Services (CEGS) CenterPoint Energy Houston Electric, LLC Texas Genco Holdings,
Slide 6: A low risk, diversified business with large scale
CenterPoint Energy A low risk, diversified business with large scale Large-scale, diversified regulated domestic energy delivery business One of the nation's largest combined gas and electric utilities Balanced mix of electric and natural gas assets Predictable, stable earnings and cash flow Attract
Slide 7: A Company in Transition
CenterPoint Energy A Company in Transition
Slide 8: We are in the final stage of transition
We are in the final stage of transition Reliant Energy 2005 2004 Texas Adopts Restructuring Legislation Recovery of Stranded Costs RRI Spin-off 09/30/02 2002 2001 2000 1999 19% Public Distribution of Texas Genco (NYSE: TGN) Electric retail competition begins RRI IPO Monetization of Texas Genco 2003
Slide 9: Monetization of Texas Genco
Definitive sale agreement with GC Power Acquisition LLC (consortium of private equity firms) signed July 2004 $3.65 billion transaction to close in two steps Step 1: 4Q 2004 Buy-in Minority Shareholders - $716 million Close sale of fossil assets - $2.231 billion Step 2: 1Q 2005 Close sale of nuclear
Slide 10: Recovery of stranded costs
2005 Recovery of stranded costs True-up application (03/31/04) Accrue return on stranded costs (11.075%)* Final Order (Expected 10/04) File for Financing (securitization) Order PUC Financing Order (90 days from filing request) Securitization 2004 * Company's estimate based on deliberations of PUC du
Slide 11: Recovery of stranded costs: requested vs. PUC indications
(1) Company's estimate based on deliberations of PUC during four public meetings. It is possible that the PUC could modify its views prior to issuing its formal written decision. Recovery of stranded costs and other items Requested vs. PUC indications ($ in millions)
Slide 12: Accounting and financial implications
Accounting and financial implications Move Texas Genco to discontinued operations in 3Q04 Record approximately $250 million after-tax charge related to Texas Genco sale in 3Q04 Record approximately $1 billion after-tax charge related to PUC true- up decision in 3Q04 Continue dialogue with rating age
Slide 13: Next Steps
Results of State Appeal Next Steps 2006 2007 2005 Texas Genco Step 1 closing ($2.2 billion) Texas Genco Step 2 closing ($700 million) Order on Rehearing/ Appeal aspects of PUC ruling to State Courts Securitization Bonds ($1.5 - $2.0 billion) Additional Securitization Bonds based on any Appeal result
Slide 14: Post Transition Strategy: What's Next
Post Transition Strategy- What's Next
Slide 15: What's next
What's next We are disappointed with the initial estimated stranded cost recovery but remain committed to our Vision, Strategy and Objectives PUC decision will not change our company direction Significant total monetization proceeds allow us to continue implementation of our business strategies We w
Slide 16: Financial objectives
Financial objectives Maximize returns of regulated businesses Ensure gas LDCs are earning allowed rates of return Capture organic growth in existing service territories Implement productivity improvements company-wide; achieve first quartile performance Build and expand complementary and synergistic
Slide 17: Appendix
e CenterPoint.. Energy ec Appendix September 29,2008 inti thsi boseearel tie indir Eoiemen
Slide 18: Company Management
e CenterPoint.. Energy ec Company Management September 29,2008 inti thsi boseearel tie indir Eoiemen
Slide 19: Company management
Steve Schaeffer (34/34) EVP & Group President Gas Distribution & Sales Scott Rozzell (3/29) EVP, General Counsel & Corporate Secretary Gary Whitlock (3/32) Executive VP & CFO David McClanahan (32/32) President & CEO Marc Kilbride (26/26) VP & Treasurer Marianne Paulsen (3/27) Director Investor Relat
Slide 20: Business Segments
e CenterPoint.. Energy ec Business Segments 20 September 29,2008 Merrill Lynch Global Power and Gas Leader
Slide 21: CenterPoint Energy Houston Electric
CenterPoint Energy Houston Electric Electric Transmission & Distribution Utility Focused strictly on energy delivery 5,000 square mile service area in and around Houston Approximately 1.84 million metered customers added nearly 47,000 metered customers in 2003, a 3% increase Reputation for reliabili
Slide 22: CenterPoint Energy Resources Corp. Natural Gas Distribution
CenterPoint Energy Resources Corp. Natural Gas Distribution CenterPoint Energy Arkla CenterPoint Energy Minnegasco CenterPoint Energy Entex Three LDCs serving 3 million customers in 6 states One of U.S.'s largest natural gas distribution operations in terms of number of customers served Attractive s
Slide 23: Natural Gas Pipelines and Gathering
CenterPoint Energy Resources Corp. Natural Gas Pipelines and Gathering Two FERC-regulated pipelines: Current system at or near capacity at peak Potential growth in cross haul transportation services Potential expansion opportunity driven by U.S. supply shifts An unregulated gas gathering subsidiary
Slide 24: Vision and Strategy
e CenterPoint.. Energy ec Vision and Strategy 24 September 29,2008 inti thsi boseearel tie indir Eoiemen
Slide 25: Our Vision
To Be Recognized As America's Leading Energy Delivery Company...and More Focused on domestic energy delivery businesses Focus on continental, U.S. market Focus on regulated energy delivery Will pursue carefully targeted growth opportunities Look for complementary businesses that leverage our core bu
Slide 26: One Company, Get It Right and Grow
Leverage scale and synergies Refine business model and remove barriers between business units Implement common processes Create a single, high performance culture Recognize our 130-year history Grow Get It Right Use best practices to achieve top quartile efficiency and operating performance Implemen
Slide 27: Financial Performance
e CenterPoint.. Energy —e Financial Performance Z September 29,2008 Merrill Lynch Global Power and Gas Leader
Slide 28: Financial Results Six Months Ended June 30, 2004
TDU TGN LDCs Pipelines Other tdu 212 210 139 87 -5 Electric Generation Natural Gas Distribution Pipelines & Gathering ($ in millions, except per share amounts) Electric Transmission & Distribution* Other Total Operating Income: $643 Financial Results Six Months Ended June 30, 2004 * Results include
Slide 29: Debt & Maturity Schedules
Debt & Maturity Schedules As of June 30, 2004
Slide 30: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of June 30, 2004 (5) Borrowings under $250 million bank facility. (6) Advances under the $250 million receivables facility are not reflected as debt on the balance sheet. (7) The term loan and pollution control bonds are collateral
Slide 31: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of June 30, 2004
Slide 32: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of June 30, 2004
Slide 33: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of June 30, 2004
Slide 34: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of June 30, 2004
Slide 35: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of June 30, 2004
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