Exhibit 99.1
[TEXAS GENCO LETTERHEAD]
FOR IMMEDIATE RELEASE Page 1 of 2
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TEXAS GENCO REPORTS FIRST QUARTER 2003 RESULTS
IMPROVED CAPACITY AUCTIONS LEAD TO SMALLER NET LOSS
HOUSTON - APRIL 24, 2003 - Texas Genco Holdings, Inc. (NYSE:TGN), an 81
percent owned subsidiary of CenterPoint Energy, Inc. (NYSE:CNP), today reported
a net loss before cumulative effect of accounting change of $11 million, or
$0.14 per diluted share for the quarter ended March 31, 2003, compared to a net
loss of $35 million, or $0.43 per diluted share for the same period of 2002.
Net income for the period was $88 million or $1.10 per diluted share
compared to a net loss of $35 million, or $0.43 per diluted share for the same
period in 2002. The first quarter of 2003 reflects the benefit from the
cumulative effect of accounting change of $99 million, or $1.24 per diluted
share, from the implementation of SFAS No. 143, "Accounting for Asset Retirement
Obligations."
The Texas electric market opened to retail competition on January 1,
2002. At that time, CenterPoint Energy's generation business, Texas Genco,
became a separate reporting unit and began selling electricity in the Electric
Reliability Council of Texas (ERCOT) at prices determined by the market. Thus,
the first quarter of 2003 is the first time meaningful quarter to quarter
comparisons can be made.
"Wholesale electricity prices were much higher in early 2003 due to
substantially higher natural gas prices. These higher prices led to increased
capacity auction revenues in the first quarter, particularly for our solid fuel
baseload products," said David Tees, president and chief executive officer of
Texas Genco. "As a result, the first quarter loss in 2003 was much less than the
same quarter last year. The first quarter is typically our lowest performing
quarter due to seasonal revenue effects and the scheduling of planned
maintenance on our generating units. In addition, the first quarter 2003
reflected a forced outage of STP Unit 2."
The company owns a 30.8 percent interest in the South Texas Project
Electric Generating Station (STP), a nuclear generating plant consisting of two
1,250 MW units. STP Unit 2 was taken out of service in December 2002 as a result
of non-safety related mechanical failures and was returned to service on March
14, 2003. The added cost of replacement energy negatively impacted gross margin
by approximately $23 million for the quarter and the outage was also a major
contributor to a $10 million increase in operation and maintenance expense.
"The higher electricity prices reflected in this quarter are
continuing, and Texas Genco is benefiting through improved capacity auction
revenues," said Gary L. Whitlock, executive vice president and chief financial
officer of Texas Genco. "We're pleased with Texas Genco's progress. Taking into
account continued high auction prices, together with the impact of unplanned
plant outages, especially at our baseload
Texas Genco, a subsidiary of CenterPoint Energy, Inc., is not the same company
as CenterPoint Energy, and you do not have to buy Texas Genco's products to
continue to receive quality regulated services from CenterPoint Energy.
[TEXAS GENCO LETTERHEAD]
FOR IMMEDIATE RELEASE Page 2 of 2
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facilities, we are maintaining our earnings guidance for 2003 of $1.10 to $1.30
per diluted share."
The company paid its first quarterly dividend of $0.25 per share of
common stock on March 20, 2003.
WEBCAST OF EARNINGS CONFERENCE CALL
The management of Texas Genco will host an earnings conference call on
Thursday April 24, 2003, at 9:00 a.m. Central time. Interested parties may
listen to a live, audio broadcast of the conference call in the investor
relations section of Texas Genco's web site, www.txgenco.com. A replay of the
call can be accessed approximately two hours after the completion of the call,
and will be archived on the web site for 14 days.
Texas Genco Holdings, Inc., based in Houston, Texas, is one of the
largest wholesale electric power generating companies in the United States with
over 14,000 megawatts of generation capacity. It sells electric generation
capacity, energy and ancillary services in one of the nation's largest power
markets, the Electric Reliability Council of Texas (ERCOT). Texas Genco has one
of the most diversified generation portfolios in Texas, using natural gas, coal,
lignite, and uranium fuels. The company owns and operates 60 generating units at
11 electric power-generating facilities and owns a 30.8 percent interest in a
nuclear generating plant. Texas Genco currently is a majority-owned subsidiary
of CenterPoint Energy, Inc. For more information, visit our web site at
www.txgenco.com.
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
CenterPoint Energy's or Texas Genco's business plans, financial market
conditions, the timing and extent of changes in commodity prices, particularly
natural gas and other factors discussed in CenterPoint Energy's and Texas
Genco's filings with the Securities and Exchange Commission.
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Texas Genco, a subsidiary of CenterPoint Energy, Inc., is not the same company
as CenterPoint Energy, and you do not have to buy Texas Genco's products to
continue to receive quality regulated services from CenterPoint Energy.
Texas Genco Holdings, Inc.
Statements of Consolidated Operations
(Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
Quarter Ended March 31,
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2003 2002
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Revenues:
Energy revenues $ 223,764 $ 240,482
Capacity and other revenues 134,823 85,165
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Total 358,587 325,647
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Expenses:
Fuel costs 207,989 180,983
Purchased power 11,994 48,366
Operation and maintenance 105,350 94,709
Taxes other than income taxes 11,291 13,014
Depreciation and amortization 39,079 40,331
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Total 375,703 377,403
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Operating Loss (17,116) (51,756)
Other Income 200 2
Interest Expense 2,803 7,989
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Loss Before Income Taxes (19,719) (59,743)
Income Tax Benefit 8,837 25,049
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Loss Before Cumulative Effect of Accounting Change (10,882) (34,694)
Cumulative Effect of Accounting Change, net of tax 98,910 --
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Net Income (Loss) Attributable to Common Stockholders $ 88,028 $ (34,694)
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Basic and Diluted Earnings Per Common Share
Loss Before Cumulative Effect of Accounting Change $ (0.14) $ (0.43)
Cumulative Effect of Accounting Change, net of tax 1.24 --
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Net Income (Loss) Attributable to Common Stockholders $ 1.10 $ (0.43)
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Weighted Average Common Shares Outstanding (000):
- Basic 80,000 80,000
- Diluted 80,000 80,000
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report on Form 10-K of Texas Genco Holdings, Inc.