Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Deutsche Bank Electric Power Conference 2003
38 slides from Centerpoint Energy, Inc (holding Co)'s conference presentation, Jun 11, 2003
Slide 1: Form 8-K Current Report
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 2, 2003 ______________________________ CENTERPOINT ENERGY, INC. (Exact name of registrant as
Slide 2: Item 7 Exhibits and Item 9 Regulation FD Disclosure
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The following exhibits are filed herewith: 99.1 Press release issued June 2, 2003 regarding presentation at the Deutsche Bank Electric Power Conference 99.2 CenterPoint Energy, Inc. slide presentation 99.3 CenterPoint Energy, Inc. external deb
Slide 3: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CENTERPOINT ENERGY, INC . Date: June 11, 2003 By: /s/ James S. Brian James S. Brian Senior Vice President
Slide 4: Exhibit Index
EXHIBIT INDEX Exhibit Number Exhibit Description 99.1 Press release issued June 2, 2003 regarding presentation at the Deutsche Bank Electric Power Conference 99.2 CenterPoint Energy, Inc. slide presentation 99.3 CenterPoint Energy, Inc. external debt slide
Slide 5: CenterPoint Energy to Present at Deutsche Bank Electric Power Conference
For more information contact Media: Leticia Lowe Phone 713.207.7702 Investors: Marianne Paulsen Phone 713.207.6500 FOR IMMEDIATE RELEASE Page 1 of 1 CenterPoint Energy to Present at Deutsche Bank Electric Power Conference Live via Webcast on Wednesday, June 11, 2003, approx. 9:30 a.m. EDT HOUSTON –
Slide 6: David M. McClanahan, Deutsche Bank Electric Power Conference
David M. McClanahan President and Chief Executive Officer Deutsche Bank Electric Power Conference New York, NY June 11, 2003 June 11, 2003 www.CenterPointEnergy.com
Slide 7: Cautionary Statement Regarding Forward-Looking Information
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
Slide 8: A Diversified and Stable Energy Delivery Company
CenterPoint Energy, Inc. A Diversified and Stable Energy Delivery Company AGENDA Company Overview Financial Stability and Liquidity Electric Restructuring and Managing through the Transition Vision and Strategy Post Transition Objectives June 11, 2003 Deutsche Bank Electric Power Conference 2
Slide 9: Company Overview
Company Overview June 11, 2003 Deutsche Bank Electric Power Conference 3
Slide 10: Focused on regulated domestic energy delivery
Focused on regulated domestic energy delivery (NYSE: CNP) To be monetized in 2004 (81%) Electric Natural Gas Pipelines & Field Electric Transmission & Distribution (TDU) Distribution Services Generation z CenterPoint Energy Houston z 3 local distribution companies z CenterPoint Energy Gas z Texas Ge
Slide 11: Management Team: Significant industry and regulatory experience
Management Team: Significant industry and regulatory experience David McClanahan (31/31) President & CEO Gary Whitlock Steve Schaeffer Scott Rozzell (2/31) (33/33) (2/28) Executive VP & CFO EVP & Group President EVP, General Counsel & Gas Distribution & Sales Corporate Secretary Marc Kilbride Joseph
Slide 12: Low risk, diversified business with large scale
Low risk, diversified business with large scale Approximately 5 million metered customers Attractive service territories z Gulf Coast area among highest electricity consumption in U.S. z Houston is nation’s 4th largest city with growth above national average z Minneapolis/ St. Paul gas usage per
Slide 13: CenterPoint Energy Houston Electric
CenterPoint Energy Houston Electric Electric Transmission & Distribution Utility Delivers power in the open ERCOT retail market z 5,000 square mile service area in and around Houston z Represents 1/3 of ERCOT electricity consumption z Approximately 1.8 million metered customers z Population growth
Slide 14: CenterPoint Energy Resources Corp. Natural Gas Distribution
CenterPoint Energy Resources Corp. Natural Gas Distribution Three LDCs serving 3 million customers in 6 states z Entex/Houston Gas: 1.6 million customers z Arkla: 700,000 customers z Minnegasco: 729,000 customers z Over 50,000 metered customers added in 2002 Recognition for reliability and high
Slide 15: CenterPoint Energy Resources Corp. Natural Gas Pipelines and Gathering
CenterPoint Energy Resources Corp. Natural Gas Pipelines and Gathering Two FERC-regulated pipelines: z CenterPoint Energy Gas Transmission Company z CenterPoint Energy – Mississippi River Transmission Corporation An unregulated gas gathering subsidiary z CenterPoint Energy Field Services, Inc.
Slide 16: Texas Genco
Texas Genco Electric Generation Net generating capacity of 14,175 MW located in the ERCOT market Attractive, low-cost, solid fuel base-load portfolio Flexible, load following gas fleet 2003 Diluted EPS Guidance: $1.10-$1.30* *as of April 24, 2003 and not updated CAPACITY BY DISPATCH TYPE (MW)
Slide 17: Financial Stability and Liquidity
Financial Stability and Liquidity June 11, 2003 Deutsche Bank Electric Power Conference 11
Slide 18: Recent transactions provide stability and liquidity
Recent transactions provide stability and liquidity February 2003: Amended $3.85 billion bank credit facility z Extended term to mid-2005, beyond expected Texas Genco monetization and stranded costs recovery z Eliminated $1.2 billion in mandatory payments in 2003 z Dividend capped at an annual $.4
Slide 19: Electric Restructuring and Managing through the Transition
Electric Restructuring and Managing through the Transition June 11, 2003 Deutsche Bank Electric Power Conference 13
Slide 20: CNP evolution to a stable regulated business
CNP evolution to a stable regulated business (NYSE: CNP) Texas Texas Adopts Adopts 19% $749MM 19% Public Public Distribution Distribution Restructuring Restructuring $749MM of Securitization of Texas Texas Genco Genco Legislation Legislation Securitization of of (NYSE: Regulatory (NYSE: TGN) TGN) Re
Slide 21: De-leveraging through monetization of Texas Genco
De-leveraging through monetization of Texas Genco Texas Genco expected to be monetized in 2004 z January 2003 distribution of 19% of Texas Genco common stock allows for market valuation for stranded costs recovery proceeding z Reliant Resources, Inc. (RRI) has the option to purchase CenterPoint’s
Slide 22: De-leveraging through recovery of stranded costs
De-leveraging through recovery of stranded costs Texas Electric Restructuring Law z Established clear mechanism for recovery and securitization of stranded costs z First round of securitization provided for recovery of our generation-related regulatory assets – Successfully completed in October 20
Slide 23: Transition timeline
Transition timeline TGN TGN valuation valuation period period begins: begins: True-up Filing True-up Filing True-up True-up Repay Repay $1.31 $1.31 billion billion to to True-up True-up Financing Financing Order Order minus minus Rate Rate Adjustment Adjustment Berkshire Berkshire Hathaway/CSFB Hath
Slide 24: Vision and Strategy
Vision and Strategy June 11, 2003 Deutsche Bank Electric Power Conference 18
Slide 25: Our vision is simple and focused
Our vision is simple and focused, and provides clear direction for our strategy Our Vision To Be Recognized As America’s Leading Energy Delivery Company…and More What Our Vision Means z We define success as being viewed by all of our key stakeholders as a leading energy delivery company e d …” - Sha
Slide 26: One Company, Get It Right and Grow
Our strategy is reflected in three simple phrases: One Company, Get It Right and Grow 2002 2003 2004 2005 2006 Grow Get It Right z Focus on domestic energy delivery z Expand existing core businesses One Company z Use best practices to achieve top quartile efficiency and operating performance z Build
Slide 27: Business/financial objectives during transition
Business/financial objectives during transition Maximize returns: z Ensure gas LDCs are earning allowed rates of return z Capture growth in existing service territories z Implement productivity improvements company-wide Optimize cash flow z Prioritize and defer discretionary capital expenditures
Slide 28: Post Transition Objectives
Post Transition Objectives June 11, 2003 Deutsche Bank Electric Power Conference 22
Slide 29: Post transition financial objectives: 2006 and beyond
Post transition financial objectives: 2006 and beyond Earn at or above current EPS levels by: z Replacing ECOM and Texas Genco earnings – reduce interest expense – achieve allowed return and above average LDC growth through rate relief and efficiency improvements – capture organic growth in core b
Slide 30: Why CenterPoint Energy? Low risk, diversified business with large scale
Why CenterPoint Energy? Low risk, diversified business with large scale Large-scale, diversified regulated domestic energy delivery business z Mix of electric and natural gas assets Stable earnings and cash flow Attractive service territories z Diversified economic and regulatory position z Gu
Slide 31: Always There.
Always There. June 11, 2003 Deutsche Bank Electric Power Conference 25
Slide 32: Appendix
Appendix June 11, 2003 Deutsche Bank Electric Power Conference 26
Slide 33: 2002 Performance
2002 Performance ($ in millions, except per share amounts) 1200 2002 RESULTS 1000 Operating Income $1,329 ECOM 800 Other Income 1 Interest Expense* (765) 600 Income Taxes (197) Income from Continuing $366 Operations** 400 Electric Transmission & Natural Gas Pipelines & 200 Distribution Distribution
Slide 34: Reconciliation of 2002 Operating Income to EBIT and Income from Continuing Operations
Reconciliation of 2002 Operating Income to EBIT and EBIT to Income from Continuing Operations* Electric Transmission Pipelines ($ in millions) & Electric Natural Gas & Other/ Distribution Generation Distribution Gathering Eliminations Consolidated Operating income $1,097** ($133) $198 $153 $14 $1,32
Slide 35: 2003 Q1 Results and 2003 Guidance
2003 Q1 Results and 2003 Guidance ($ in millions, except per share amounts) 225 2003 Q1 RESULTS 200 Operating Income $360 175 Other Income/(Expense) (3) Natural Gas Interest Expense* (238) 150 Distribution ECOM Income Taxes (40) 125 Minority Interest 2 100 Income from Continuing $81 Operations** 75
Slide 36: Reconciliation of 1st Quarter 2003 Operating Income to EBIT
Reconciliation of 1st Quarter 2003 Operating Income to EBIT and EBIT to Income from Continuing Operations before Cumulative Effect of Accounting Change Electric ($ in millions) Transmission Pipelines & Electric Natural Gas & Other/ Distribution Generation Distribution Gathering Eliminations Consolid
Slide 37: Stranded Costs Illustrative Calculation
Stranded Costs Illustrative Calculation (Note: Illustrates calculation methodology only. Actual values will not be determined until time of stranded costs filing in early 2004) ($ in millions) Net regulated book value at 12/31/01 (after mitigation) $3,200 Environmental expenditures (Jan. ’02 - May ’
Slide 38: External Debt and Trust Preferred Securities of CenterPoint Energy
External Debt and Trust Preferred Securities of CenterPoint Energy, Inc. and its Subsidiaries May 31, 2003 (in millions) TOTALS CenterPoint Energy, Inc. Debt (excl. Transition Bonds and ZENS) $ 9,552 ZENS $ 105 (1) Transition Bonds 729 Convertible Senior Notes 575 ZENS (linked to AOL stock) 105 Seni
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