Filed by CenterPoint Energy, Inc.
Pursuant to 425 under the Securities Act of 1933
Subject Company: Reliant Energy, Incorporated
Commission File No.: 333-69502
The following document relating to the proposed transaction is being filed by
CenterPoint Energy, Inc. pursuant to Rule 425:
RELIANT ENERGY SHAREHOLDERS APPROVE
MAJOR STEP IN CORPORATE RESTRUCTURING
HOUSTON, December 17, 2001 -- Reliant Energy (NYSE: REI) shareholders
today approved a major step in a corporate restructuring that will ultimately
divide the company into a regulated energy delivery company named CenterPoint
Energy and a competitive energy services provider called Reliant Resources.
Reliant Energy announced the plan to separate into two companies in
July of 2000. In May of 2001, Reliant Resources (NYSE: RRI), which participates
in the competitive segments of the electric power and energy services industry,
sold about 20 percent of its shares to the public in an initial public offering.
Reliant Energy owns the remaining shares of Reliant Resources.
The step approved by shareholders today was the formation of a new
holding company called CenterPoint Energy for both the regulated energy delivery
business and Reliant Resources. This holding company structure satisfies
commitments made to the Texas Public Utility Commission in the move to retail
electric competition. After formation of the new holding company, shares of
Reliant Energy will automatically be converted into shares of CenterPoint
Energy, which will trade under the symbol CEP on the New York and Chicago Stock
Exchanges.
Upon receipt of the required approvals, CenterPoint Energy will spin
off the unregulated company by distributing its shares of Reliant Resources to
its shareholders. The two companies will then be separately owned public
companies, and CenterPoint Energy will include only the regulated energy
delivery businesses that currently are part of Reliant Energy. These include
electricity transmission and distribution, natural gas distribution, pipelines
and gathering and, initially, the company's power generation facilities in the
Houston area that are currently regulated.
Reliant Resources provides wholesale and retail energy services under
the Reliant Energy brand. Its businesses include unregulated power generation,
wholesale energy trading and marketing and retail energy marketing.
"Both CenterPoint Energy and Reliant Resources will include sizeable
and well-established business operations," Reliant Energy Chairman, President
and CEO Steve Letbetter told shareholders in attendance at the special
shareholders' meeting. "However, regulated energy delivery is very different
from competitive energy services, and each represents a distinct type of
investment. We expect CenterPoint Energy to appeal to investors who are
interested in a reliable dividend income stream and the slower, but consistent
growth characteristic of regulated businesses. Reliant Resources, on the other
hand, has attracted growth and value-oriented investors who are more tolerant of
risk," he said.
Although the dividend for CenterPoint Energy has not been established,
Letbetter noted that the company expects to maintain a dividend payout
comparable to other regulated utilities. "That would suggest a payout somewhere
greater than 50 percent of earnings per share. We continue to expect CenterPoint
Energy's 2002 earnings to be in the range of $1.17 to $1.22 per share," he said.
Reliant Resources does not pay a dividend.
The timing of the formation of the new holding company and the Reliant
Resources spin-off depends on several governmental approvals, including the IRS
and the SEC. However Reliant Energy expects to complete both steps during the
first quarter of 2002.
Reliant Energy, based in Houston, Texas, is an international energy
services and energy delivery company with approximately $48 billion in annual
revenue and total assets exceeding $31 billion. The company has nearly 25,000
megawatts of power generation in operation in the U.S. and is one of only three
companies to rank among both the five largest power marketers and the five
largest natural gas marketers in North America. The company also has wholesale
trading and marketing operations and nearly 3,500 megawatts of power generation
in Western Europe. Reliant Energy's retail marketing and distribution operations
serve nearly four million electricity and natural gas customers in the U.S.
Reliant Energy currently owns approximately 80 percent of the shares of Reliant
Resources.
This news release includes forward-looking statements. Actual events
and results may differ materially from those projected. Factors that could
affect actual results include the timing and impact of future regulatory and
legislative decisions, effects of competition, weather variations, changes in
Reliant Energy's, business plans, financial market conditions and other factors
discussed in Reliant Energy's filings with the Securities and Exchange
Commission.
In connection with the proposed holding company formation by Reliant
Energy, CenterPoint Energy and Reliant Energy have filed a joint proxy
statement/prospectus with the Securities and Exchange Commission. Investors and
security holders are urged to carefully read the joint proxy
statement/prospectus regarding the proposed transactions, because it contains
important information. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus and other documents containing information
about CenterPoint Energy and Reliant Energy, without charge, at the SEC's web
site at www.sec.gov. Copies of the joint proxy statement/prospectus and the SEC
filings that are incorporated by reference in the joint proxy
statement/prospectus may also be obtained for free by directing a request to
Reliant Energy, Incorporated, Investor's Services Department, P.O. Box 4505,
Houston, Texas 77210-4505, Phone: (800) 231-6406 or (713) 207-3060.