CenterPoint Energy 2004 Annual Report Download - page 11

CenterPoint Energy is committed to providing shareholders
a well-managed company dedicated to paying competitive
dividends and building shareholder value. As described on
the inside front cover of this report, we are focused on using
proceeds from the sale of Texas Genco and the true-up
proceeding to reduce debt and interest costs. While we
reported losses in 2004 related to the sale of our generating
assets and stranded cost proceedings, our core electric,
gas and pipeline delivery businesses posted solid gains in
operating income.
All core segments report higher operating income
Our electric transmission and distribution business continued
to perform well in 2004, ending the year with core operating
income of $441 million (excluding the impact of ECOM
revenues, the transition bond company and the final fuel
reconciliation). Driven primarily by the addition of nearly
47,000 new metered customers, core operating income
increased by $33 million (excluding the impact of ECOM
revenues, the transition bond company and the final fuel
reconciliation). Operating income also benefited from lower
employee-related costs and proceeds from a land sale, but
was partially offset by decreased usage due to milder
weather and higher transmission costs.
Our natural gas distribution segment reported operating
income of $222 million, an increase from $202 million in
2003. This higher income was the result of rate increases, a
higher customer count and more efficient operations.
An aggressive restructuring plan that improved operational
efficiencies and lowered ongoing operating expenses
contributed to the income gains. However, one-time charges
related to the restructuring plan, and mild winter
weather that led to lower customer gas usage, partially
offset these gains.
Our pipelines and gathering segment increased operating
income to $180 million from $158 million in 2003. The
increase was driven by favorable market pricing and higher
demand on our interstate pipelines business, increased
throughput, an increase in treating and processing by our
gas gathering unit and higher third party earnings
in Pipeline Services.
Customer base growing across our business
We experienced customer growth in each of our energy
delivery businesses in 2004. These increases provided both
current revenue growth and, we expect, the basis for future
9
A YEAR OF
EXCEPTIONAL PROGRESS