Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Presentation (September 2002)
21 slides from Centerpoint Energy, Inc (holding Co)'s investor presentation, Sep 12, 2002
Slide 1: Investor Presentation September 2002
Investor Presentation September, 2002 www.centerpointenergy.com
Slide 2: Special Note Regarding Forward-Looking Statements
Special Note Regarding Forward-Looking Statements
Slide 3: Presenters
David M. McClanahan President and Chief Executive Officer Gary L. Whitlock Executive Vice President and Chief Financial Officer Marianne Paulsen Director, Investor Relations 2
Slide 4: Corporate Separation Timeline
Monetization of Texas Genco (NYSE: TGN) 2005 2004 2001 1999 2000 REI's Separation Plan Approved Texas Adopts Restructuring Legislation Corporate Separation Timeline RRI IPO Energy Merchant Energy Delivery Public Flotation Of Texas Genco (19% Spin-off) 2003 2002 RRI Spin-off Stranded Costs Securitiza
Slide 5: Spin-off of Reliant Resources: Timetable of Key Events
Spin-off of Reliant Resources, Inc. to Reliant Energy Shareholders Timetable of Key Events September 5, 2002 September 20, 2002 September 30, 2002 Late 2002/Early 2003 Early-to-Mid 2004 Late 2004 Tax-free RRI dividend announced Shareholder record date RRI stock distribution date Taxable distribution
Slide 6: CenterPoint Energy - Investment Highlights
CenterPoint Energy - Investment Highlights Large-scale, diversified business focused on regulated energy delivery 4.7 million metered distribution customers in 6 states Balanced mix of electric and natural gas assets Attractive service territories; diversified economic and regulatory risk Low risk p
Slide 7: Depth of Management Expertise
Depth of Management Expertise Steve Schaeffer (32/32) Executive VP Regulatory & Governmental Relations Scott Rozzell (1/27) Executive VP General Counsel Gary Whitlock (1/30) Executive VP & CFO David McClanahan (30/30) President & CEO Marc Kilbride (25/25) VP & Treasurer Marianne Paulsen (1/25) Direc
Slide 8: Business Focus on Energy Delivery
Business Focus on Energy Delivery Local Natural Gas Distribution Pipelines & Gathering Electric Transmission & Distribution Generation Assets CenterPoint Houston Electric CenterPoint Arkla CenterPoint Entex CenterPoint Minnegasco CenterPoint Gas Marketing CenterPoint Gas Transmission Mississippi Riv
Slide 9: Diversified, Low Risk Business Portfolio
Diversified, Low Risk Business Portfolio Net Property, Plant & Equipment 2002E 2005E Texas Genco 36% LDCs 14% Pipelines & Gathering 20% Electric TDU 35% LDCs 25% Electric TDU 55% Pipelines & Gathering 15%
Slide 10: Electric Transmission & Distribution
Electric Transmission & Distribution 1.7 million metered distribution customers High growth Houston/Gulf Coast service territory No electric commodity price risk Reputation for reliability and high quality service $1.3 billion invested during last 5 years Exceed regulatory reliability standards 2001
Slide 11: Natural Gas Distribution
Natural Gas Distribution 3 million metered distribution customers in six states 5% of nationwide total gas distribution High growth, diverse service territories Low gas price exposure Aggressively seeking rate adjustment $42 million rate increases approved in 2002 $14 million rate increase applicati
Slide 12: Pipelines and Gathering
Pipelines and Gathering 8,200 miles of transmission pipelines transporting over 1 Tcf annually Seven gas storage facilities 4,300 miles of gas gathering pipeline which handles over 310 Bcf annually Stable cash flow and earnings Growing revenues and margins Industry leading customer satisfaction rati
Slide 13: Texas Genco
Cyclic/ Portfolio (MW) Base Intermediate Peak Total Gas/Oil - 3,474 354 3,828 Gas 162 4,832 501 5,495 Nuclear 770 - - 770 Lignite 1,612 - - 1,612 Coal 2,470 - - 2,470 5,014 8,306 855 14,175 Texas Genco 14,000 MW of diverse, well-maintained generating assets Highly attractive, low-cost, solid-fuel ba
Slide 14: Strategic Plan Going Forward
Strategic Plan Going Forward CenterPoint has developed a comprehensive strategic plan designed to guide us through the transition and drive business performance as well as the planning and allocating of resources Key Features of the CenterPoint Strategy Focused on energy delivery Driven by external
Slide 15: Business/Financial Strategy
Near-Term Maximize returns Reduce costs and improve productivity Obtain rate relief at gas LDCs Capture growth in existing service territories Implement new business model for corporate and shared services Optimize cash flow Optimize/prioritize discretionary capital expenditures through disciplined
Slide 16: 2002 Financial Outlook
2002 Financial Outlook EBITDA $1,779 D&A 604 EBIT 1,175 Interest Expense 657 Income Taxes 159 Net Income $ 359 Average Diluted Shares: 300 million LDCs Pipelines & Gathering Genco true-up Electric TDU East 0.19 0.11 0.05 0.31 0.34 LDCs Pipelines & Gathering ECOM True-up Electric TDU Diluted EPS $1.1
Slide 17: Capitalization
Capitalization Net Debt (a) Trust Preferred Securities Shareholders' Equity Total Capitalization Net Debt / Capitalization (a) 2005 Net Debt / Capitalization Target (a) (b) Senior Unsecured Credit Ratings (Moody's/S&P/Fitch) As of 6/30/2002 Pro Forma for RRI Spin-off $9,109 706 1, 836 $11,651 78% mi
Slide 18: Financing Initiatives and Deleveraging
Financing Initiatives and Deleveraging $4.7 billion of bank debt to be refinanced by October 10, 2002 RRI spin-off eliminated structural uncertainty Strategy post refinancing — extend maturities and reduce reliance on bank debt Facility reduction through capital market transactions 2003 cash flows s
Slide 19: Declining Capex Requirements
Declining Capex Requirements Pipelines/Gathering TDU Corporate & Other Gas LDCs Texas Genco ($ in millions) 2001 2002 2003 2004 2005 Gas LDCs 209 208 219 231 233 Pipelines/Gathering 54 74 41 42 40 TDU 546 306 272 307 291 Corporate & Other 41 39 15 12 41 Texas Genco 115 48 52 0 0 environ 253 205 101
Slide 20: CenterPoint Energy - Well Positioned for the Future
CenterPoint Energy - Well Positioned for the Future Large-scale, diversified business focused on regulated energy delivery Attractive service territories; diversified economic and regulatory risk Consistent, predictable earnings and cash flow Low risk profile compared to other combination gas/electr
Slide 21: September 2002 www.centerpointenergy.com
Investor Presentation September, 2002 www.centerpointenergy.com
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