Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Presentation (April 2004)
34 slides from Centerpoint Energy, Inc (holding Co)'s investor presentation, April 2004
Slide 1: Investor Overview Presentation
Investor Overview Presentation April 2004
Slide 2: 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 3: Company Overview
Company Overview April 2004 Investor Overview Presentation 2
Slide 4: Who is CenterPoint Energy?
Who is CenterPoint Energy? z One of the nation's largest combined gas and electric utilities Serving almost 5 million metered customers Added over 85,000 metered electric and gas customers in 2003 z Owner of a balanced mix of electric and gas distribution, interstate pipeline and field services
Slide 5: Four segments focused primarily on regulated domestic energy delivery
Four segments focused primarily on regulated domestic energy delivery (NYSE: CNP) (81%) Electric Natural Gas Pipelines & Electric Transmission & Distribution (TDU) Distribution Gathering Generation CenterPoint Energy Houston CenterPoint Energy Resources CenterPoint Energy Resources Texas Genco Holdi
Slide 6: CenterPoint Energy Houston Electric
CenterPoint Energy Houston Electric Electric Transmission & Distribution Utility z 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
Slide 7: CenterPoint Energy Resources Corp. Natural Gas Distribution
CenterPoint Energy Resources Corp. Natural Gas Distribution z 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 z Attractive service territories Added over 38,000 metered customers in 2003 Recogni
Slide 8: CenterPoint Energy Resources Corp. Natural Gas Pipelines and Gathering
CenterPoint Energy Resources Corp. Natural Gas Pipelines and Gathering z 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 z An unregulated gas gathering s
Slide 9: Texas Genco
Texas Genco Electric Generation z Net generating capacity of 14,153 MW located in the CAPACITY BY DISPATCH TYPE (MW) ERCOT market Peaking 855 z Attractive, low-cost, solid fuel baseload portfolio Cyclic Baseload 2,617 (4,834 MW) 4,834 z Flexible, load following gas fleet (9,319 MW) 2,988 MW are cu
Slide 10: Electric Restructuring and Managing through the Transition
Electric Restructuring and Managing through the Transition April 2004 Investor Overview Presentation 9
Slide 11: Electric restructuring in Texas
Electric restructuring in Texas z Texas Electric Restructuring Law passed in 1999 Retail competition implemented on January 1, 2002 z Required the functional unbundling of integrated electric utilities into: Power generation Transmission and distribution Retail electric provider activities z
Slide 12: CNP evolution
CNP evolution (NYSE: CNP) Expect Expect to to securitize securitize Texas Texas Adopts $749MM 19% stranded stranded costs costs Adopts RRI $749MM 19% Public Public Distribution Distribution Restructuring RRI Securitization Restructuring IPO Securitization of of of of Texas Texas Genco Genco Legislat
Slide 13: Remaining transition steps - Monetization of Texas Genco
Remaining transition steps - Monetization of Texas Genco z Strategy remains focused on exiting generation business Reliant Resources declined to exercise its option to purchase CenterPoint Energy’s 81% interest in Texas Genco in January 2004 CenterPoint Energy intends to pursue alternatives to m
Slide 14: Remaining transition steps - Recovery of stranded investment
Remaining transition steps - Recovery of stranded investment z Defined mechanism for recovery and securitization of stranded costs and regulatory assets provided for in Texas restructuring law z First round of securitization provided for recovery of a portion of our generation- related regulatory as
Slide 15: True-up balance
True-up balance- As filed March 31, 2004 (1) ($ in millions) Stranded Costs Net Book Value of Generation Assets (2) $ 4,561 Regulatory assets and deferred debits 175 Above Market Purchase Power Costs 48 Market Value of Generation Assets (3) (2,908) $ 1,876 Environmental Costs $ 718 Other Transition
Slide 16: Transition timeline
Transition timeline Reduce Reduce debt debt Reduce Reduce debt debt Issue Issue Return Return on on true-up true-up Desired Desired close close Securitization Securitization Bonds Bonds amount expected amount expected of of TGN TGN sale sale and implement and implement to to begin begin transition t
Slide 17: Vision and Strategy
Vision and Strategy April 2004 Investor Overview Presentation 16
Slide 18: Our corporate vision is simple and focused
Our corporate vision is simple and focused: To Be Recognized As America’s Our Vision Leading Energy Delivery Company…and More z Focused on domestic energy delivery “…America’s… businesses Energy Delivery…” Focus on continental, U.S. market Focus on regulated energy delivery z Will pursue careful
Slide 19: One Company, Get It Right and Grow
Our strategy is reflected in three simple phrases: One Company, Get It Right and Grow Grow Get It Right z Focus on domestic energy delivery One Company z Expand existing core businesses z Use best practices to achieve top quartile efficiency and operating performance z Build and expand complementary
Slide 20: Financial Objectives
Financial Objectives April 2004 Investor Overview Presentation 19
Slide 21: Recent transactions enhance stability and liquidity
Recent transactions enhance stability and liquidity z Raised over $4 billion through the capital markets since March 2003 $1.8 billion issued at CenterPoint Energy, Inc. used primarily to reduce credit facility, enhance liquidity and refinance higher coupon debt $1.5 billion issued at CenterPoin
Slide 22: Near-term financial objectives
Near-term financial objectives z Maximize returns Ensure gas LDCs are earning allowed rates of return Capture growth in existing service territories Implement productivity improvements company-wide z Optimize cash flow Prioritize and defer discretionary capital expenditures through disciplin
Slide 23: Post transition financial objectives: 2006 and beyond
Post transition financial objectives: 2006 and beyond z Objective is to earn $0.85 - $1.00 per share post transition CNP is focusing on replacing ECOM and Texas Genco earnings by: reducing interest expense achieving allowed returns at LDCs through rate relief and efficiency improvements capt
Slide 24: Why CenterPoint Energy?
Why CenterPoint Energy? Low risk, diversified business with large scale z Large-scale, diversified regulated domestic energy delivery business Mix of electric and natural gas assets z Stable earnings and cash flow z Attractive service territories Diversified economic and regulatory position Ho
Slide 25: Financial Results
Financial Results April 2004 Investor Overview Presentation 24
Slide 26: 2003 Performance
2003 Performance ($ in millions, except per share amounts) 2003 Results† Total Operating Income: $1,604† 1200 Operating Income $1,604 1100 Other Expense (5) 1000 ECOM Interest Expense* (934) 900 Income Taxes (216) 800 Minority Interest (29) 700 Income from Continuing $420 600 Operations** 500 Income
Slide 27: 2002 Performance
2002 Performance ($ in millions, except per share amounts) 2002 Results Total Operating Income: $1,333 1200 Operating Income $1,333 1100 1000 Other Income (1) 900 Interest Expense* (764) ECOM 800 Income Taxes (199) 700 Income from Continuing $369 600 Operations 500 400 Income from Continuing $1.23 E
Slide 28: Debt & Maturity Schedules
Debt & Maturity Schedules As of March 31, 2004 April 2004 Investor Overview Presentation 27
Slide 29: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004 ($ in millions) CenterPoint Energy, Inc. ZENS $ 105 (1) Convertible Senior Notes 830 Senior Notes 600 Collateralized Pollution Control Bonds First Mortgage Bond Collateral 151 (2) General Mortgage Bond Collateral
Slide 30: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004 CenterPoint Energy, Inc. Call Feature Security Outstanding Rate Insurer Maturity Date Price Secured Term Loan $920,000,000 Variable (4) Current (6) $1.425 Billion Revolving Credit Facility $735,000,000 Variable (5
Slide 31: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004 CenterPoint Energy Houston Electric, LLC Call Feature Security Outstanding Rate Insurer Maturity Date Price First Mortgage Bonds $102,442,000 9.15% 03/15/21 NA NA General Mortgage Bonds $450,000,000 5.70% 03/15/13
Slide 32: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004 CenterPoint Energy Resources Corp. Call Feature Security Outstanding Rate Maturity Date Price Debentures $145,070,000 8.90% 12/15/06 NA NA Convertible Subordinated Debentures $77,372,900 6.00% 3/15/12 Current 100
Slide 33: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004 CenterPoint Energy Transition Bond Company, LLC Call Feature Security Outstanding Rate Maturity Date Price Class A-1 2001-1 Transition Bonds $69,167,503 3.84% (1) (5) (5) Class A-2 2001-1 Transition Bonds $118,000
Slide 34: Scheduled debt maturities
Scheduled debt maturities As of March 31, 2004 ($ in millions) CenterPoint CenterPoint Transition Year Energy Houston CERC (1) Sub-total Bonds (2) Total 2004 8 8 27 $35 2005 8 1,310 367 1,685 47 $1,732 2006 1,640 152 1,792 54 $1,846 2007 7 7 60 $67 2008-2012 419 46 907 1,372 406 $1,778 2013-2017 420
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