CenterPoint Energy 2003 Annual Report Download

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2003 ANNUAL REPORT
Always There.

Table of contents

  • Page 1
    Always There. 2003 ANNUAL REPORT

  • Page 2
    ...OF CONTENTS LITTLE ROCK LAWTON OXFORD Financial Highlights Letter to Shareholders 1 2 6 8 12 20 24 26 28 29 30 31 TYLER SHREVEPORT GULFPORT/ BILOXI Our Strategy Electric Transmission and Distribution Natural Gas Distribution Pipelines and Gathering Texas Genco HOUSTON LAKE CHARLES LAREDO In...

  • Page 3
    ...2003 (In Millions Of Dollars Except Per Share Amounts) Revenues Operating Income Income From Continuing Operations (1) Per Share of Common Stock: Income From Continuing Operations, Basic (1) Income From Continuing Operations, Diluted (1) Book Value - Year-End Market Price - Year-End Common Dividend...

  • Page 4
    ...companies in the nation. Our gas and electric utilities serve nearly 5 million customers in Arkansas, Louisiana, Minnesota, Milton Carroll, left, Chairman of the Board, and David McClanahan, President and Chief Executive Officer Mississippi, Oklahoma and Texas. Our customer, geographic and business...

  • Page 5
    ... in 2003. We reported income from continuing operations of $420 million or $1.37 per diluted share. The biggest turnaround Our gas distribution and sales business was bolstered by the addition of 38,000 new customers and the implementation of rate increases in a number of our service areas...

  • Page 6
    ... proud of our employees' community involvement and volunteer efforts. Through our coordinated volunteer programs our employees devoted over 110,000 hours to community service. Our company and its nation was delayed until the market had been open for two full years. Our request was filed on March...

  • Page 7
    ... of your investment. Sincerely, CenterPoint Energy, Inc. and Subsidiaries In addition to these two events we continue to concentrate on process improvements and Milton Carroll Chairman of the Board David M. McClanahan President and Chief Executive Officer positioning the company to grow once we...

  • Page 8
    ...'s Leading Energy Delivery Company...and More Our Strategy is reflected in three simple phrases: One Company, Get It Right and Grow 2 0 0 2 2 0 0 3 One Company • Leverage scale and synergies • Refine business model and remove barriers between business units • Implement common processes...

  • Page 9
    ..., Engineering Manager, Texas Genco; Beatrice Christopher, Advanced Clerk, Baytown, Texas; Jim Brown, Administration Coordinator, New Braunfels, Texas; Pam Riche, Gathering Service Supervisor, Shreveport, Louisiana; Kathy Kennedy, Marketing Manager, Pipelines, Houston; Ollie Scott, Head Lineman...

  • Page 10
    ELECTRIC TRANSMISSION AND DISTRIBUTION If the lights go out, we still make house calls. BARRY DOSSER, HEAD LINEMAN, AND LUIS VERA, LINEMAN, WORKED LONG HOURS TO RESTORE POWER ON THE GULF COAST FOLLOWING HURRICANE CLAUDETTE.

  • Page 11
    ... and safety. We also read meters and connect and disconnect electric service as directed by the competitive retailers. Customers contact us to report power outages, electric emergencies and downed power lines, or to request tree trimming and streetlight repair. increases we experienced, such...

  • Page 12
    ... customers affected by storm outages. Later in that same month, 100 linemen traveled to Victoria, Texas, to help American Electric Power restore service to customers after Hurricane Claudette. And in September, more than 130 crew members traveled to the Richmond, Va., area to assist We go the extra...

  • Page 13
    ... ENERGY STAR home keeps 4,500 pounds of greenhouse gases out of the air each year. Greenhouse gases are produced when fuel is converted to energy in power plants and by end-use customers. ACCURACY IS A TOP PRIORITY FOR SENIOR METER READER CHRIS ARBING. Process improvement paying off CenterPoint...

  • Page 14
    ... service, we achieved an METER IN SUB-ZERO WEATHER IN MINNESOTA. metropolitan areas we serve are Houston, Texas, Minneapolis, Shreveport, La. Minn., Little Rock, Ark., and We work hard to ensure that natural gas reaches our customers safely and efficiently. 2003: A year of progress Our corporate...

  • Page 15
    We are committed to providing the gas our customers need to stay warm and comfortable. CenterPoint Energy, Inc. and Subsidiaries ROSS DENSON, SR. SERVICE REP., AT THE CITY GATE IN HOUSTON. 13

  • Page 16
    CenterPoint Energy delivers natural gas to 3 million customers in Arkansas, Louisiana, Mississippi, Minnesota, Oklahoma and Texas. increase of about 2,900 commercial customers in Houston, a 5 percent increase over historical levels. This marks the second consecutive year commercial customer growth ...

  • Page 17
    ... from coal to natural gas. TECHNICIAN JIM BRUSH INSTALLS PIPE IN LITTLE ROCK, ARKANSAS. In Arkansas, we experienced a slight decline overall in customer count during 2003. However, we saw growth in greater Little Rock, which accounted for about 60 percent of the 6,000 new customer services. We also...

  • Page 18
    ... gas We have also seen growth in our existing manufacturing customers in Mississippi. We are serving eight new facilities that are part of the Nissan plant in Canton, Miss., with an annual load at approximately 250,000 million cubic feet (MMcf). In the Gulfport/Biloxi Gulf Coast area, the Hard Rock...

  • Page 19
    ..., WILLIE LEWIS, FIELD ESTIMATOR, TONY JACOBS, TECHNICIAN, AND JIM BRUSH, LEAD TECHNICIAN, LAY REPLACEMENT PIPE IN LITTLE ROCK, ARKANSAS. Customer-centric Most of CenterPoint Energy's customers have the option of managing their natural gas accounts online from our Web site. Through our free Online...

  • Page 20
    ... in Arkansas, northern Louisiana and Oklahoma are expected to have this free, convenient and customer-friendly form of bill payment within a year. In areas where our own Online Billing is not available, we have responded to customers' requests for easier payment options by offering fee-based bill...

  • Page 21
    ... Gas Services CenterPoint Energy Gas Services is our natural gas marketing and sales unit. It is complementary to our gas distribution business and serves more than 6,100 commercial and industrial customers in Arkansas, Illinois, Iowa, Louisiana, Minnesota, Mississippi, Missouri, Oklahoma, Texas...

  • Page 22
    PIPELINES AND GATHERING We do whatever is necessary to meet the energy needs of our customers. BRITT HUGHES, A TECHNICIAN AT THE MALVERN COMPRESSOR OPERATIONS, KEEPS TRACK OF THE DAY'S EVENTS.

  • Page 23
    ... and gathering business segment operates two interstate natural gas pipelines, gathers and processes gas and offers related operating and technical services. Our two pipelines, CenterPoint Energy Gas Transmission Company and CenterPoint Energy - Mississippi River Transmission Corporation, have 8,200...

  • Page 24
    ...operations and pipeline integrity services despite less demand for engineering and construction management services for power plant-related property. We signed contracts to provide operations and maintenance services for a large Texas-based gas storage facility, for an offshore pipeline and related...

  • Page 25
    ... and sustainable value to our customers. ServiceStar continues to expand to new market areas, solidifying its position as a leading full service provider of automation and communication services. In 2003, we installed 1,270 ServiceStar units in Texas, Louisiana and Alabama, and contracted with...

  • Page 26
    ... in the South Texas Project nuclear generating plant. Texas Genco generated 45 million megawatt hours of power in 2003, compared to 47.6 million in 2002, a drop that can be attributed primarily to unplanned outages and lower demand for gas capacity auction products. However, Texas Genco is not...

  • Page 27
    Our goal is to provide the power you need for your important days and nights. CenterPoint Energy, Inc. and Subsidiaries MAUREEN COURTNEY, ENVIRONMENTAL SPECIALIST, TALKS TO THE CONTROL ROOM AT THE W.A. PARISH PLANT TO ADJUST THE PH LEVEL IN THE WATER TO THE MAIN COOLING TOWER. 25 25

  • Page 28
    ... the years. CENTERPOINT ENERGY VOLUNTEERS HELPED BUILD A HABITAT HOME FOR THE CRUZ FAMILY. FROM LEFT, CAROL HELLIKER, ASST. GENERAL COUNSEL, YOLANDA CRUZ, JOEL CRUZ, VIOLETA CRUZ, VIVIAN ALMENDAREZ, LEGAL SECRETARY, AND KIMBERLY HOWARD, CORP. LEGAL ASSISTANT. IN BACK IS HOUSTON HABITAT DEVELOPMENT...

  • Page 29
    ... and the Chickasha VICE PRESIDENT, PROCESS IMPROVEMENT, GIVES ENCOURAGEMENT TO VOLUNTEER WALKERS. Louisiana In New Iberia, employees volunteered for highway clean-ups, assistance for the elderly, Gumbo Cookoff, Cattle Festival and the Hot Sauce Festival. Lake Charles area employees logged hours on...

  • Page 30
    ... an independent chairman, Milton Carroll. He is not an employee of the company. All the CenterPoint Energy board members are Both the board and the management team of CenterPoint Energy strongly believe that an independent chairman and board represent a best practice in corporate governance today...

  • Page 31
    ... as Vice Chairman of Minnesota Mutual Life Insurance Company. He has been a CenterPoint Energy board member since 2003. He serves on the Audit and Compensation Committees. David M. McClanahan, 54, is President and Chief Executive Officer of CenterPoint Energy. He has been a member of the Board of...

  • Page 32
    ... Schaeffer, David McClanahan, Scott Rozzell, Gary Whitlock, Preston Johnson, David Tees, Tom Standish and Byron Kelley. Executive Committee David M. McClanahan, 54 President and Chief Executive Officer Scott E. Rozzell, 54 Executive Vice President, General Counsel and Corporate Secretary Stephen...

  • Page 33
    ... the company's Annual Report on Form 10-K for the year ended December 31, 2003, by writing or calling CenterPoint Energy Investor Services at 1-888-468-3020. Additional investor information can be found on the inside back cover of this report and on our Web site, www.CenterPointEnergy.com. CONTENTS...

  • Page 34

  • Page 35
    ... and cumulative effect of accounting change Discontinued Operations Extraordinary item, net of tax Cumulative effect of accounting change, net of tax Diluted earnings (loss) per common share Cash dividends paid per common share Dividend payout ratio from continuing operations Return from continuing...

  • Page 36
    ... debt securities and Time Warner investment, please read Note 7 to our consolidated financial statements. The extraordinary item in 1999 is a loss related to an accounting impairment of certain generationrelated regulatory assets of our Electric Generation business segment. (2) 2001 net income...

  • Page 37
    ... and cost of gas sold and purchased power Depreciation and amortization Other operating expenses Total Operating Income Other Income (Expense) Income From Continuing Operations Before Income Taxes, Minority Interest, Cumulative Effect of Accounting Change and Preferred Dividends Income Tax Expense...

  • Page 38
    Condensed Statements of Consolidated Comprehensive Income Year Ended December 31, 2001 2002 (in thousands) 2003 Net income (loss) attributable to common shareholders Other comprehensive income (loss), net of tax: Minimum pension liability adjustment Other comprehensive income (loss) from continuing...

  • Page 39
    ... Mandatorily Redeemable Preferred Securities of Subsidiary Trusts Holding Solely Junior Subordinated Debentures of the Company Shareholders' Equity Total Liabilities and Shareholders' Equity 706,140 1,421,950 $ 20,456,609 - 1,760,557 $ 21,376,664 292 178,910 CenterPoint Energy, Inc. and Subsidiaries...

  • Page 40
    ... December 31, 2001 2002 (in thousands) 2003 Cash Flows from Operating Activities: Net income (loss) attributable to common shareholders Discontinued Operations Income from continuing operations and cumulative effect of accounting change, less preferred dividends Adjustments to reconcile income from...

  • Page 41
    ... year Unearned ESOP stock Balance, beginning of year Issuances related to benefit plan Balance, end of year Retained Earnings (Deficit) Balance, beginning of year Net income (loss) Common stock dividends - $1.125 per share in 2001, $1.07 per share in 2002 and $0.40 per share in 2003 Balance, end of...

  • Page 42
    ...' Report To the Board of Directors and Shareholders of CenterPoint Energy, Inc. and Subsidiaries: We have audited the consolidated balance sheets of CenterPoint Energy, Inc. and its subsidiaries (the "Company") as of December 31, 2002 and 2003, and the related consolidated statements of operations...

  • Page 43
    ... of Investor Relations at (713) 207-6500. Stock Listing CenterPoint Energy, Inc. common stock is traded under the symbol CNP on the New York and Chicago stock exchanges. Auditors Deloitte & Touche LLP, Houston, Texas Corporate Offices, Street Address CenterPoint Energy, Inc. 1111 Louisiana Street...

  • Page 44
    Always There. 1111 Louisiana Street, Houston, Texas 77002