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): SEPTEMBER 12, 2002 ------------------------------ CENTERPOINT ENERGY, INC. (Exact name of registrant as specified in its charter) d/b/a/ RELIANT ENERGY, INCORPORATED TEXAS 1-31447 74-0694415 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 1111 LOUISIANA HOUSTON, TEXAS 77002 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 207-3000
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The following exhibit is filed herewith: 99.1 CenterPoint Energy, Inc. Slide Presentation ITEM 9. REGULATION FD DISCLOSURE. A copy of a slide presentation that CenterPoint Energy, Inc. expects will be presented to various members of the financial and investment community from time to time is attached to this report as Exhibit 99.1. A copy of the slide presentation will also be available on CenterPoint Energy's website, www.centerpointenergy.com. The slide presentation is being furnished, not filed, pursuant to Regulation FD. Accordingly, the slide presentation will not be incorporated by reference into any registration statement filed by CenterPoint Energy under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the slide presentation is not intended to, and does not, constitute a determination or admission by CenterPoint Energy that the information in the slide presentation is material or complete, or that investors should consider this information before making an investment decision with respect to any security of CenterPoint Energy or any of its affiliates. Some of the statements in the slide presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. CenterPoint Energy has based its forward-looking statements on its management's beliefs and assumptions based on information available at the time the statements are made. CenterPoint Energy cautions you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, actual results may differ materially from those expressed or implied by CenterPoint Energy's forward-looking statements. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and CenterPoint Energy undertakes no obligation to update or revise publicly any forward-looking statements. In addition to the matters described in the slide presentation, the following list identifies some of the factors that could cause actual results to differ from those expressed or implied by CenterPoint Energy's forward-looking statements: o state, federal and international legislative and regulatory actions or developments, including deregulation, re-regulation and restructuring of the electric utility industry, changes in or application of laws or regulations applicable to other aspects of CenterPoint Energy's business and actions with respect to, among other things: o approval of stranded costs; o allowed rates of return; 2
o rate structures; o recovery of investments; and o operation and construction of facilities; o non-payment for CenterPoint Energy's services due to financial distress of its customers; o the successful and timely completion of CenterPoint Energy's capital projects; o industrial, commercial and residential growth in CenterPoint Energy's service territory and changes in market demand and demographic patterns; o changes in business strategy or development plans; o unanticipated changes in interest rates or rates of inflation; o unanticipated changes in operating expenses and capital expenditures; o weather variations and other natural phenomena; o commercial bank and financial market conditions, CenterPoint Energy's access to capital and receipt of certain approvals under the Public Utility Holding Company Act of 1935, and the results of CenterPoint Energy's financing and refinancing efforts, including availability of funds in the debt capital markets; o actions by rating agencies; o legal and administrative proceedings and settlements; o changes in tax laws; o significant changes in CenterPoint Energy's relationship with its employees, including the availability of qualified personnel and the potential adverse effects if labor disputes or grievances were to occur; o significant changes in critical accounting policies material to CenterPoint Energy; o acts of terrorism or war, including any direct or indirect effect on CenterPoint Energy's business resulting from terrorist attacks such as occurred on September 11, 2001 or any similar incidents or responses to those incidents; o the availability and price of insurance; o the outcome of the pending securities lawsuits against Reliant Energy, Incorporated and Reliant Resources, Inc.; 3
o the outcome of the SEC investigation relating to the treatment in CenterPoint Energy's consolidated financial statements of certain activities of Reliant Resources, Inc.; o the reliability of the systems, procedures and other infrastructure necessary to operate the retail electric business in CenterPoint Energy's service territory, including the systems owned and operated by the independent system operator in the Electric Reliability Council of Texas, Inc.; and o political, legal, regulatory and economic conditions and developments in the United States. 4
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: September 12, 2002 By: /s/ James S. Brian --------------------------- James S. Brian Senior Vice President and Chief Accounting Officer
EXHIBIT INDEX Exhibit Number Exhibit Description ------- ------------------- 99.1 CenterPoint Energy, Inc. Slide Presentation
| Investor Presentation September, 2002 www.centerpointenergy.com |
| Special Note Regarding Forward-Looking Statements |
| David M. McClanahan President and Chief Executive Officer Gary L. Whitlock Executive Vice President and Chief Financial Officer Marianne Paulsen Director, Investor Relations 2 |
| 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 Securitization (NYSE: CNP) |
| 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 of 19% of TGN shares to CNP shareholders Monetization of remaining 81% of TGN shares Stranded cost securitization Monetization of Texas Genco and Stranded Investment Recovery |
| 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 profile compared to other combination gas/electric companies No electric commodity obligation at transmission & distribution utility (TDU) Low gas commodity risk exposure at gas Local Distribution Companies (LDCs) Consistent, predictable earnings and cash flow Clear path to full recovery of generation investment and de-levering of balance sheet Focused on near-term improvement of existing businesses Growth opportunities will evolve as we de-lever the Company and execute the strategy |
| 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) Director Investor Relations To be Named President CenterPoint Energy Pipeline Group David Tees (34/34) President Texas Genco Tom Standish (20/31) President CenterPoint Energy Houston James Brian (25/31) Senior VP Chief Accounting Officer Joseph McGoldrick (23/27) Corporate VP Strategic Planning Rufus Scott (17/28) VP Deputy General Counsel Note: Numbers in parentheses indicate years with company/years of business experience. Wayne Roesler (29/36) VP Regulatory Relations Gary Cerny (22/22) President CenterPoint Energy Minnegasco Dean Liollio (18/24) President CenterPoint Energy Arkla/Entex Wayne Stinnett (19/25) Senior VP Gas Resources Group Management team with extensive electric and gas industry experience |
| 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 River Transmission Corp. CenterPoint Field Services Texas Genco (TGN) To be monetized in 2004 (CNP) |
| 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% |
| 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 EEI "Emergency Response Award" 11.25% authorized ROE Electric TDU |
| 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 application pending in Oklahoma Relatively new infrastructure Greater than 50% constructed after 1980 Industry leading customer satisfaction ratings 85% customer satisfaction at Minnegasco in 2001 Gas LDC |
| 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 ratings Mississippi River Transmission voted #1 pipeline (a) (a) 2001 Mastio Customer Satisfaction Survey Interstate Gas Pipeline |
| 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 baseload portfolio Flexible, load following gas fleet The South Texas nuclear plant is among newest and top performing in the nation Environmental compliance plan (NOx) in progress Regulated margin provided by legislation in 2002-2003 (ECOM true-up) |
| 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 measures of success Recognizes our near term challenges Positions us to grow as we implement standard business model and best practices Three key themes will resonate throughout the Company One Company Get it Right Grow |
| 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 commitment review process Adopt common business models and take advantage of company scale Strengthen the balance sheet Monetize Texas Genco Securitize stranded costs Reduce debt Longer-Term Growth through participation in industry consolidation Capitalize on opportunities related to core assets and skills Business/Financial Strategy |
| 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 $1.17-$1.22 2002 EBITDA: ESTIMATED 2002 EARNINGS*: ($ in millions, except per share amounts) Total 2002 EBITDA: $ 1,779 31% 34% 19% 11% Texas Genco 5% Current annualized dividend: $0.64/share * Based on May, 2002 estimates |
| 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 $11,651 78% mid-50% Baa2 / BBB / BBB- (a) Excluding securitization bonds (b) Assumes the sale of Texas Genco and securitization of stranded costs ($ in millions) |
| 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 sufficient to fund operating and capital requirements Total current maturities of $450 million through the end of 2003 Clear path to de-leveraging within three years Monetization of Texas Genco expected in 2004 Stranded cost securitization expected in late 2004 Combined proceeds to repay debt Estimated Debt/Book Capitalization in mid-50% by end of 2005 Current credit ratings (senior unsecured) Baa2 / BBB / BBB- (Moody's / S&P / Fitch) |
| Declining Capex Requirements Pipelines/Gathering TDU Corporate & Other Gas LDCs Texas Genco ($ 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 Environmental $ |
| 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/electric companies Clear path to full recovery of generation investment and de-levering of balance sheet Focused on near-term improvement of existing businesses Growth opportunities will evolve as we delever the Company and execute the strategy Vision: To be recognized as America's leading energy delivery company .. . . and more |
| Investor Presentation September, 2002 www.centerpointenergy.com |