Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Presentation (April 2004)
33 slides from Centerpoint Energy, Inc (holding Co)'s investor presentation, Apr 1, 2004
Slide 1: Investor Overview Presentation April 2004
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
ony Company Overview
Slide 4: Who is CenterPoint Energy?
Who is CenterPoint Energy? 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 Owner of a balanced mix of electric and gas distribution, interstate pipeline and field services business
Slide 5: Four segments focused primarily on regulated domestic energy delivery
Natural Gas Distribution Pipelines & Gathering Four segments focused primarily on regulated domestic energy delivery Electric Generation (81%) (NYSE: CNP) CenterPoint Energy Resources Corp. 3 local distribution companies CenterPoint Energy Gas Services CenterPoint Energy Houston Electric, LLC Texas
Slide 6: CenterPoint Energy Houston Electric: Electric Transmission & Distribution Utility
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 7: CenterPoint Energy Resources Corp. Natural Gas Distribution
CenterPoint Energy Resources Corp. Natural Gas Distribution 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 service territories Added over 38,000 metered customers in 2003 Recognized for hi
Slide 8: CenterPoint Energy Resources Corp. 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 9: Texas Genco Electric Generation
Texas Genco Electric Generation Coal CAPACITY BY DISPATCH TYPE (MW) Net generating capacity of 14,153 MW located in the ERCOT market Attractive, low-cost, solid fuel baseload portfolio (4,834 MW) Flexible, load following gas fleet (9,319 MW) 2,988 MW are currently in mothball status Fuel oil switchi
Slide 10: Electric Restructuring and Managing through the Transition
Electric Restructuring and Managing through the Transition
Slide 11: Electric restructuring in Texas
Electric restructuring in Texas Texas Electric Restructuring Law passed in 1999 Retail competition implemented on January 1, 2002 Required the functional unbundling of integrated electric utilities into: Power generation Transmission and distribution Retail electric provider activities Stranded inve
Slide 12: Texas restructuring and CenterPoint evolution timeline
2005 2004 Texas Adopts Restructuring Legislation CNP evolution Expect to securitize stranded costs RRI Spin-off 09/30/02 2002 2001 2000 1999 Reliant Energy 19% Public Distribution of Texas Genco (NYSE: TGN) $749MM Securitization of Regulatory Assets (NYSE: CNP) Electric retail competition begins RRI
Slide 13: Remaining transition steps - Monetization of Texas Genco
Remaining transition steps - Monetization of Texas Genco 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 monetiz
Slide 14: Remaining transition steps - Recovery of stranded investment
Remaining transition steps - Recovery of stranded investment Defined mechanism for recovery and securitization of stranded costs and regulatory assets provided for in Texas restructuring law First round of securitization provided for recovery of a portion of our generation- related regulatory assets
Slide 15: True-up balance - As filed March 31, 2004
True-up balance- As filed March 31, 2004 (1) (1) Not conformed to PUC required filing format. All calculations assume a final order is issued on August 28, 2004, with payments of Excess Mitigation Credits (EMCs) discontinued as of that date. (2) Reflects the reversal of T&D redirected depreciation a
Slide 16: Transition timeline
True-up Filing (03/31/04) PUC TGN true-up valuation period (10/8/03 - 3/30/04) PUC Final Order expected (03/31/04 + 150 days) Issue Securitization Bonds and implement transition charge Repay term loan $1.31 billion (due 11/05) Financing Order expected (Final Order + 90 days) Reduce debt 2005 2003 20
Slide 17: Vision and Strategy
e CenterPoint Energy Vision and Strategy
Slide 18: Our Vision: America's Leading Energy Delivery Company...and More
To Be Recognized As America's Leading Energy Delivery Company...and More Our Vision "...America's... Energy Delivery..." 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 co
Slide 19: 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 Our strategy is reflected in three simple phrases: One Company, Get It Right and Grow Grow Get It Right Us
Slide 20: Financial Objectives
e CenterPoint Energy Financial Objectives
Slide 21: Recent transactions enhance stability and liquidity
Recent transactions enhance stability and liquidity 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 CenterPoint Ener
Slide 22: Near-term financial objectives
Near-term financial objectives Maximize returns Ensure gas LDCs are earning allowed rates of return Capture growth in existing service territories Implement productivity improvements company-wide Optimize cash flow Prioritize and defer discretionary capital expenditures through disciplined commitmen
Slide 23: Post transition financial objectives: 2006 and beyond
Post transition financial objectives: 2006 and beyond 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 capturing orga
Slide 24: Why CenterPoint Energy?
Large-scale, diversified regulated domestic energy delivery business Mix of electric and natural gas assets Stable earnings and cash flow Attractive service territories Diversified economic and regulatory position Houston and Minneapolis/St. Paul above national average in growth and consumption Low
Slide 25: 2003 Performance
2003 Performance TDU TGN LDCs Pipelines Other tdu 359 222 202 158 2 ecom 661 2003 annualized dividend: $0.40/share Electric Generation Natural Gas Distribution Pipelines & Gathering ($ in millions, except per share amounts) ECOM Electric Transmission & Distribution Other * includes distribution on T
Slide 26: 2002 Performance
2002 Performance TDU TGN LDCs Pipelines Other tdu 399 -133 198 153 19 ecom 697 Electric Generation Natural Gas Distribution Pipelines & Gathering ($ in millions, except per share amounts) ECOM Electric Transmission & Distribution Other * includes distribution on Trust Preferred Securities ** before
Slide 27: Debt & Maturity Schedules As of March 31, 2004
Debt & Maturity Schedules As of March 31, 2004
Slide 28: Principal amounts of external debt and trust preferred securities (notes)
(5) Borrowings under $250 million bank facility. (6) Advances under the $250 million receivables facility are not reflected as debt on the balance sheet. (7) The term loan and pollution control bonds are collateralized by general mortgage bonds. (8) For financial reporting purposes, the trust prefer
Slide 29: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004
Slide 30: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004
Slide 31: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004
Slide 32: Principal amounts of external debt and trust preferred securities
Principal amounts of external debt and trust preferred securities As of March 31, 2004
Slide 33: Scheduled debt maturities As of March 31, 2004
Scheduled debt maturities As of March 31, 2004 ($ in millions)
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