Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Merrill Lynch Texas Power Day (March 2006)
42 slides from Centerpoint Energy, Inc (holding Co)'s conference presentation, Mar 8, 2006
Slide 1: Merrill Lynch Texas Power Day
Merrill Lynch Texas Power Day Houston, Texas March 8, 2006 NYSE:CNP www.CenterPointEnergy.com
Slide 2: Cautionary Statement Regarding Forward-Looking Information
This presentation contains 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 Pr
Slide 3: Discussion Points
Discussion Points Company Overview 2005 Financial Results Opportunities and Challenges Electric Transmission & Distribution Natural Gas Distribution Competitive Natural Gas Sales and Services Pipelines and Field Services
Slide 4: Company Overview
e CenterPoint. Energy em Company Overview March 8, 2008 MA Lge Renae reer tin: 4
Slide 5: CenterPoint Energy: A low risk, diversified business with large scale
CenterPoint Energy A low risk, diversified business with large scale Large-scale, domestic energy delivery business one of the nation's largest combined gas and electric utilities 5 million metered customers balanced mix of electric and natural gas assets electric T&D / gas LDCs / interstate pipelin
Slide 6: Four segments focused primarily on regulated domestic energy delivery
Operating Income* 2005: $448MM(1) 2004: $441MM(2) Natural Gas Distribution Pipelines & Field Services Electric Transmission & Distribution Four segments focused primarily on regulated domestic energy delivery NYSE: CNP CenterPoint Energy Resources Corp. Regulated natural gas local distribution compa
Slide 7: Successfully executed transition
Successfully executed transition RRI Spin-off 09/30/02 Electric retail competition began RRI IPO NYSE:CNP- first day of trading Texas PUC Authorized $2.3+ billion true-up amount Completed sale of Texas Genco $700 million 2006 Sold Texas Genco fossil assets $2.231 billion 2005 2004 2003 2002 Reliant
Slide 8: 2005 Financial Results
e CenterPoint. Energy em 2005 Financial Results March 8, 2008 MA Lge Renae reer tin: 8
Slide 9: Statement of Consolidated Income
Statement of Consolidated Income (unaudited, in millions except per share amounts)
Slide 10: Operating Income (Loss) by Segment
Operating Income (Loss) by Segment (unaudited, in millions)
Slide 11: 2005 accomplishments: asset sale, transition bonds, debt reduction
Completed sale of company's generation assets proceeds of $2.231 billion and $700 million received in 2004 and 2005, respectively Issued over $1.85 billion in transition bonds to recover a portion of the company's PUC authorized true-up balance Implemented a CTC to begin recovering the remaining PUC
Slide 12: Opportunities and Challenges
Opportunities and Challenges
Slide 13: CenterPoint Energy Houston Electric: Electric Transmission & Distribution
CenterPoint Energy Houston Electric Electric Transmission & Distribution Focused strictly on energy delivery 5,000 square mile service area in and around Houston approximately 1.9 million metered customers added almost 61,000 metered customers since 12/31/04, a 3.2% increase reputation for reliabili
Slide 14: Electric T&D Opportunities and Challenges: true-up appeal and rate review
Electric Transmission & Distribution Opportunities and Challenges Appeal of final true-up order CenterPoint Energy's issues on appeal aggregated $1.3 billion Texas District Court reversed the PUC on 2 significant issues, restoring approximately $650 million (plus interest) to original request curren
Slide 15: Intelligent Grid technology and customer growth
Limited deployment of Intelligent Grid technology in 2006 focused on utility applications with IBM as technology partner automated meter reading for electric and natural gas meters remote connect/ disconnect for electric service automated electric outage detection and restoration consumer applicatio
Slide 16: CenterPoint Energy Resources Corp. Natural Gas Distribution
CenterPoint Energy Resources Corp. Natural Gas Distribution 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 nearly 44,000 metered customers since 12/31/04 Houston and Mi
Slide 17: Pending regulatory proceedings
Pending regulatory proceedings Minnesota $41 million rate increase filed in November 2005 interim rate increase equivalent to $35 million implemented in January 2006 Department of Commerce staff recommended $27 million rate increase MPUC decision expected in late 2006 Texas $18 million in rate incre
Slide 18: Natural Gas Distribution Opportunities and Challenges
Natural Gas Distribution Opportunities and Challenges Improve operating model technology implementation productivity improvements organizational optimization Manage impact of high natural gas prices bad debt expense demand elasticity
Slide 19: Competitive Natural Gas Sales and Services
CenterPoint Energy Resources Corp. Competitive Natural Gas Sales and Services Physical natural gas supplies and services business approximately 7,000 commercial, industrial and electric and gas utility customers throughput of 538 Bcf in 2005 Focused on minimizing risk low Value at Risk of $4 million
Slide 20: Competitive Natural Gas Sales and Services Opportunities and Challenges
Competitive Natural Gas Sales and Services Opportunities and Challenges Increase wholesale activity primarily with gas and electric utilities Continue to grow commercial and industrial customer base Optimize supply and asset positions to take advantage of natural gas price volatility
Slide 21: Natural Gas Pipelines and Field Services
CenterPoint Energy Resources Corp. Natural Gas Pipelines and Field Services Two FERC-regulated pipelines strategically located at the center of the nation's gas transportation infrastructure connected to over 20 other pipelines current system at or near capacity at peak potential growth in ancillary
Slide 22: Pipeline expansion: Carthage to Perryville and Southeast MOU
Core pipeline system has been expanding due to increased mid-continent natural gas activities CEGT to build new 172 mile pipeline from Carthage in East Texas to Perryville Hub in Northeast Louisiana XTO signed agreement to transport 600 million cubic feet per day of their gas production for 10 years
Slide 23: Field Services Opportunities and Challenges
Field Services Opportunities and Challenges 2005 was an exceptional year nearly 400 new well connects expanded into new drilling areas throughput reached nearly 1 Bcf per day High natural gas prices and access to mid-continent gas expected to keep drilling activities high continued high well connect
Slide 24: Opportunities and Challenges - Summary
CenterPoint Energy Opportunities and Challenges - Summary Maximize value potential of regulated utilities portfolio productivity improvements effective regulatory management Grow and expand pipelines, field services and CES Pursue value-enhancing acquisitions which are complementary and synergistic
Slide 25: CenterPoint Energy: A low risk, diversified business with large scale
Large-scale, domestic energy delivery business Attractive service territories Predictable, stable earnings and cash flow Low risk, primarily regulated businesses CenterPoint Energy A low risk, diversified business with large scale Electric TDU Natural Gas LDCs Interstate Natural Gas Pipelines Compet
Slide 26: Appendix
e CenterPoint. Energy em Appendix March 8, 2008 MA Lge Renae reer tin: 6
Slide 27: 2005 Financial Results
e CenterPoint. Energy re 2005 Financial Results March 8, 2008 Cre mee
Slide 28: Financial Results - Consolidated
2003 2004 2005 743 810 900 (in millions, except per share amounts) Financial Results - Consolidated Year ended December 31, 2005 * Adjusted operating income excludes ECOM, the Transition Bond Company and the Final Fuel Reconciliation components of the Electric Transmission & Distribution utility's r
Slide 29: Reconciliation of Operating Income to Adjusted Operating Income
Reconciliation of Operating Income to Adjusted Operating Income (in millions) Consolidated
Slide 30: Core Operating Income by business segment
Core Operating Income by business segment (in millions) * Operating income is adjusted to exclude ECOM, the Transition Bond Company and the Final Fuel Reconciliation components of the Electric Transmission & Distribution utility's results (see reconciliation on page 31). Operating income does not in
Slide 31: Reconciliation: Electric Transmission & Distribution
Reconciliation of Operating Income to Adjusted Operating Income (in millions) Electric Transmission & Distribution
Slide 32: Vision and Strategy
e CenterPoint. Energy em Vision and Strategy March 8, 2008 MA Lge Renae reer tin: 2
Slide 33: To Be Recognized As America's Leading Energy Delivery Company...and More
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 34: Our strategy
Achieve high levels of service reliability and customer satisfaction Use applicable benchmarking and best practices to achieve top quartile operating and cost performance Embrace continuous productivity and process improvements Maintain constructive, responsive and credible relationships with electe
Slide 35: Debt & Maturity Schedules
Debt & Maturity Schedules As of December 31, 2005
Slide 36: Debt schedule footnotes and instruments
(5) Advances under the $250 million receivables facility are not reflected as debt on the balance sheet. (6) The pollution control bonds are collateralized by general mortgage bonds. (7) Borrowings under $200 million bank facility. (8) For financial reporting purposes, the trust preferred is deconso
Slide 37: External debt: CenterPoint Energy, Inc
Principal amounts of external debt and trust preferred securities As of December 31, 2005 CenterPoint Energy, Inc
Slide 38: External debt: CenterPoint Energy Houston Electric, LLC
Principal amounts of external debt As of December 31, 2005 CenterPoint Energy Houston Electric, LLC
Slide 39: External debt: CenterPoint Energy Resources Corp.
Principal amounts of external debt As of December 31, 2005 CenterPoint Energy Resources Corp.
Slide 40: External debt: Transition Bond Company, LLC
Principal amounts of external debt As of December 31, 2005 CenterPoint Energy Transition Bond Company, LLC
Slide 41: External debt: Transition Bond Company II, LLC
Principal amounts of external debt As of December 31, 2005 CenterPoint Energy Transition Bond Company II, LLC
Slide 42: Maturing external debt and trust preferred securities
Principal amounts of maturing external debt and trust preferred securities As of December 31, 2005 ($ in millions)
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