EXHIBIT 99.1
For more information contact
(TEXASGENCO LOGO) MEDIA:
LETICIA LOWE
Phone 713.207.7702
INVESTORS:
MARIANNE PAULSEN
Phone 713.207.6500
FOR IMMEDIATE RELEASE Page 1 of 2
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TEXAS GENCO REPORTS THIRD QUARTER 2004 RESULTS
LOSS REFLECTS IMPAIRMENT CHARGE FOR PENDING SALE
HOUSTON - OCTOBER 28, 2004 - Texas Genco Holdings, Inc. (NYSE: TGN), an
81 percent-owned subsidiary of CenterPoint Energy, Inc. (NYSE: CNP), today
reported a net loss of $311 million, or $3.89 per share, for the third quarter
of 2004, which includes an after-tax impairment charge of $426 million ($649
million pretax) related to the pending sale of the company's coal, lignite and
gas-fired generation plants. As a result of the signing of the definitive
agreement described below, and in accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets", the company ceased depreciation on its coal, lignite and
gas-fired generation plants at the time these assets were considered "held for
sale". This resulted in a decrease in depreciation expense of $24 million after
tax ($37 million pretax) for the quarter. In accordance with SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions", the
company also recorded a curtailment expense related to postretirement benefits
of $11 million after tax ($17 million pretax), which is included in operations
and maintenance expense. Excluding these sale-related impacts, net income for
the third quarter of 2004 was $102 million, or $1.27 per share, compared to $82
million, or $1.03 per share, for the same period of 2003.
For the nine months ended September 30, 2004, the company reported a
net loss of $170 million, or $2.13 per share, including the sale-related impacts
described above. Net income for the nine months ended September 30, 2003, was
$204 million, or $2.55 per share, including a non-cash gain of $99 million
($1.24 per share) from the adoption of Statement of Financial Accounting
Standards No. 143, "Accounting for Asset Retirement Obligations". Excluding the
sale-related impacts, net income for the nine months ended September 30, 2004
was $243 million, or $3.03 per share, and income before the cumulative effect of
an accounting change for the same period of 2003 was $105 million, or $1.31 per
share.
Excluding the pre-tax impacts related to the sale noted above,
operating income for the third quarter of 2004 improved by $28 million from the
prior year primarily due to higher wholesale electricity prices for baseload
products and improved availability of baseload units.
On July 21, 2004, CenterPoint Energy and Texas Genco announced a
definitive agreement for GC Power Acquisition LLC, a newly formed entity owned
in equal parts by affiliates of The Blackstone Group, Hellman & Friedman LLC,
-more-
For more information contact
(TEXASGENCO LOGO) MEDIA:
LETICIA LOWE
Phone 713.207.7702
INVESTORS:
MARIANNE PAULSEN
Phone 713.207.6500
FOR IMMEDIATE RELEASE Page 2 of 2
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Kohlberg Kravis Roberts & Co. L.P. and Texas Pacific Group, to acquire Texas
Genco for approximately $3.65 billion in cash. The transaction, subject to
certain regulatory approvals, will be accomplished in two steps. The first step,
expected to be completed in the fourth quarter of 2004, involves Texas Genco's
purchase of the 19 percent of its shares owned by the public for $47 per share,
followed by GC Power Acquisition's purchase of a Texas Genco subsidiary that
will then own Texas Genco's coal, lignite and gas-fired generation plants. In
the second step of the transaction, expected to take place in the first quarter
of 2005 following Nuclear Regulatory Commission approval, GC Power Acquisition
will complete the acquisition of Texas Genco, the principal remaining asset of
which will then be Texas Genco's interest in the South Texas Project nuclear
facility.
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, of which approximately 2,500
megawatts are currently in mothball status. 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, oil,
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. The statements in this
news release regarding future financial performance and results of operations
and other statements that are not historical facts are forward-looking
statements. Factors that could affect actual results include the timing and
impact of future regulatory and legislative decisions, successful consummation
and timing of the sale of Texas Genco, effects of competition, weather
variations, changes in Texas Genco's business plans, financial market
conditions, the timing and extent of changes in commodity prices, particularly
natural gas, the impact of unplanned plant outages and other factors discussed
in Texas Genco's Form 10-K for the period ended December 31, 2003, Form 10-Qs
for the periods ended March 31, 2004 and June 30, 2004 and other filings with
the Securities and Exchange Commission.
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Texas Genco Holdings, Inc.
Statements of Consolidated Operations
(Thousands of Dollars)
(Unaudited)
<Table>
<Caption>
Quarter Ended September 30, Nine Months Ended September 30,
------------------------------ ------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Revenues $ 637,885 $ 657,363 $ 1,629,732 $ 1,594,461
------------- ------------- ------------- -------------
Expenses:
Fuel 315,644 365,913 765,951 923,220
Purchased power 17,506 20,259 43,874 55,227
Operation and maintenance 118,914 100,353 319,113 311,004
Depreciation and amortization 4,355 40,778 85,331 119,248
Taxes other than income taxes 8,721 5,084 33,099 27,858
Write-down of assets 649,000 -- 649,000 --
------------- ------------- ------------- -------------
Total 1,114,140 532,387 1,896,368 1,436,557
------------- ------------- ------------- -------------
Operating Income (Loss) (476,255) 124,976 (266,636) 157,904
Other Income 908 489 2,963 1,778
Interest Expense -- (1,298) (140) (6,923)
------------- ------------- ------------- -------------
Income (Loss) Before Income Taxes and Cumulative Effect of
Accounting Change (475,347) 124,167 (263,813) 152,759
Income Tax Benefit (Expense) 164,088 (41,761) 93,562 (47,942)
------------- ------------- ------------- -------------
Income (Loss) Before Cumulative Effect of Accounting Change (311,259) 82,406 (170,251) 104,817
Cumulative Effect of Accounting Change, net of tax -- -- -- 98,910
------------- ------------- ------------- -------------
Net Income (Loss) $ (311,259) $ 82,406 $ (170,251) $ 203,727
============= ============= ============= =============
Basic and Diluted Earnings Per Common Share:
Income (Loss) Before Cumulative Effect of Accounting Change $ (3.89) $ 1.03 $ (2.13) $ 1.31
Cumulative Effect of Accounting Change, net of tax -- -- -- 1.24
------------- ------------- ------------- -------------
Net Income (Loss) $ (3.89) $ 1.03 $ (2.13) $ 2.55
============= ============= ============= =============
Dividends Declared per Common Share $ 0.25 $ 0.25 $ 0.75 $ 0.75
Weighted Average Common Shares Outstanding (000):
- Basic 80,000 80,000 80,000 80,000
- Diluted 80,000 80,000 80,000 80,000
Capital Expenditures $ 12,489 $ 32,151 $ 49,571 $ 109,847
Operating Data:
Sales (MWH) 13,476,047 14,533,513 36,159,200 36,327,349
Generation (MWH) 13,036,825 13,416,037 34,728,241 34,488,421
</Table>
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.