CenterPoint Energy Reports Third Quarter 2004 Results

CenterPoint Energy Reports Third Quarter 2004 Results
Loss Reflects Write-Down of Regulatory Assets and Loss on Disposal of Texas
Genco 


HOUSTON, Nov. 9  /PRNewswire-FirstCall/ -- CenterPoint Energy, Inc. (NYSE:CNP)
today reported a net loss of $1.1 billion, or $3.66 per diluted share, for the
third quarter of 2004 compared to net income of $182 million, or $0.59 per
diluted share for the same period of 2003.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20020930/CNPLOGO )

The net loss for the third quarter of 2004 was primarily related to two major
events.  First, the company recorded an $894 million extraordinary charge to
earnings.  This charge reflects a write-down of the company's
generation-related regulatory assets resulting from the Public Utility
Commission of Texas' (PUC) deliberations in the proceeding to determine the
company's stranded investment and other true-up amounts filed pursuant to the
Texas electric restructuring law.  Second, due to the pending sale of the
company's interest in Texas Genco Holdings, Inc. (NYSE:TGN), the company
recorded a $259 million net loss from discontinued operations and reclassified
the electric generation segment as discontinued operations for all periods
presented.  Net income for the third quarter of 2003 included $35 million, or
$0.11 per diluted share, of income from discontinued operations.

Income from continuing operations was $17 million, or $0.05 per diluted share,
for the third quarter of 2004 compared to $147 million, or $0.48 per diluted
share, for the third quarter of 2003.  The third quarter of 2003 included
after-tax income of $144 million, or $0.47 per diluted share, related to Excess
Cost Over Market (ECOM) revenues which terminated as of December 31, 2003, in
accordance with the Texas electric restructuring law.

"We're very disappointed in the estimated recovery amount from our true-up
proceeding pending before the Texas Public Utility Commission," said David M.
McClanahan, president and chief executive officer of CenterPoint Energy.
"However, we're pleased that the sale of Texas Genco is progressing well, and
we will de-leverage the company with the proceeds from the sale and the
ultimate securitization of the approved true-up balance.  We continue to
execute the strategy that we developed when we formed CenterPoint Energy a
little over two years ago -- namely, reducing our debt and optimizing and
enhancing our core energy delivery businesses.  We're making good progress."

For the nine months ended September 30, 2004, the company recorded a net loss
of $1 billion, or $3.25 per diluted share, which included a $154 million net
loss from discontinued operations resulting from the pending sale of Texas
Genco and the $894 million extraordinary charge to earnings from the write-
down of generation-related regulatory assets.  Net income for the same period
of 2003 was $413 million, or $1.35 per diluted share, which included $52
million, or $0.17 per diluted share, of income from discontinued operations.

Income from continuing operations was $43 million, or $0.14 per diluted share,
for the nine months ended September 30, 2004, compared to $362 million, or
$1.18 per share for the same period of 2003.  The nine months ended September
30, 2003 included after-tax, ECOM-related income of $296 million, or $0.97 per
diluted share.

  THIRD QUARTER 2004 HIGHLIGHTS

  True-Up Proceeding


On March 31, 2004, the company filed its true-up application with the PUC,
marking one of the final steps in the implementation of the Texas electric
restructuring law.  In this application the company is seeking to recover a
true-up balance of $3.7 billion, excluding interest.  Although a final order
has not been issued, based on deliberations by the PUC commissioners during six
public meetings, the company estimates that it will recover approximately $2.0
billion of its requested amount, excluding interest which will be recorded once
a final determination has been made by the PUC.  Consequently, the company
recorded an $894 million extraordinary loss in the quarter.  Once the PUC
issues a final order, the extraordinary loss may be adjusted.

Sale of Texas Genco

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, 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 half 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.  Total cash proceeds to CenterPoint Energy from both steps of the
transaction will be approximately $2.9 billion for its 81 percent interest in
Texas Genco.  After-tax proceeds are estimated to be approximately $2.5
billion.

  OPERATING INCOME BY SEGMENT DETAILED

  Electric Transmission & Distribution


The electric transmission & distribution segment reported operating income of
$178 million in the third quarter of 2004, consisting of $169 million for the
regulated transmission and distribution utility (TDU) and $9 million for the
transition bond company, which is an amount sufficient to pay interest on the
transition bonds.  Results for the third quarter of 2004 do not include any
revenues related to ECOM which terminated as of December 31, 2003 in accordance
with the Texas electric restructuring law.  Operating income for the same
period of 2003 totaled $383 million, consisting of $151 million for the TDU,
$10 million for the transition bond company and $222 million of non- cash
income associated with ECOM.

The TDU continues to benefit from solid customer growth as nearly 51,000
metered customers were added since September 2003.  Increased operation and
maintenance expenses from environmental remediation costs and increased
transmission payments were more than offset by a land sale.

Operating income for the nine months ended September 30, 2004, was $390
million, consisting of $361 million for the TDU and $29 million for the
transition bond company.  Operating income for the same period of 2003 totaled
$823 million, consisting of $339 million for the TDU, $29 million for the
transition bond company and $455 million of non-cash income associated with
ECOM.

Natural Gas Distribution

The natural gas distribution segment reported an operating loss of $2 million
for the third quarter of 2004 compared to an operating loss of $5 million for
the same period of 2003.  Due to seasonal impacts, operating results for the
third quarter in this segment are typically the weakest of the year.

Continued customer growth, with the addition of over 45,000 customers since
September 2003, and higher revenues from rate increases more than offset
increased operating expenses.

Operating income for the nine months ended September 30, 2004, was $137
million, compared to $146 million for the same period of 2003.

Pipelines and Gathering

The pipelines and gathering segment reported operating income of $35 million
for the third quarter of 2004 compared to $39 million for the same period of
2003.  Increased transportation and gas gathering margins were more than offset
by higher operation and maintenance expenses primarily related to pipeline
integrity expenditures and litigation settlement costs.

Operating income for the nine months ended September 30, 2004 was $123 million
compared to $124 million for the same period of 2003.

Other Operations

The company's other operations reported an operating loss of $4 million for the
third quarter of 2004 compared to operating income of $1 million for the same
period of 2003.

The operating loss for the nine months ended September 30, 2004, was $17
million compared to an operating loss of $16 million for the same period of
2003.

OTHER

Interest expense incurred for the third quarter of 2004 was $206 million
compared to $238 million for the same period of 2003.  In accordance with
Emerging Issues Task Force Issue No. 87-24, "Allocation of Interest to
Discontinued Operations", the company reclassified interest to discontinued
operations of Texas Genco according to the terms for debt repayment in the
respective credit facilities in effect for each period.  After reflecting the
reclassification of interest expense to discontinued operations and interest
incurred by discontinued operations of $14 million for the third quarter of
2004 and $54 million for the same period of 2003, interest expense related to
continuing operations was $192 million in 2004 and $184 million in 2003.

Interest expense incurred for the nine months ended September 30, 2004, was
$621 million in 2004 compared to $712 million for the same period of 2003.
After reflecting the reclassification of interest expense to discontinued
operations and interest incurred by discontinued operations of $38 million for
the nine months ended September 30, 2004 and $181 million for the same period
of 2003, interest expense related to continuing operations was $583 million for
2004 and $531 million for the same period of 2003.

DISCONTINUED OPERATIONS

Due to the pending sale of the company's interest in Texas Genco, the electric
generation segment has been reclassified as discontinued operations in the
third quarter of 2004.  As a result of the sale, the company recorded a $253
million loss related to the sale of Texas Genco and an additional loss of $93
million offsetting the company's 81 percent interest in Texas Genco's third
quarter 2004 earnings.  Until the sale of Texas Genco is complete, the
company's interest in any Texas Genco earnings will be offset by an increased
loss on the pending sale.  Income from Texas Genco presented in discontinued
operations was $87 million for the quarter and $36 million for the same period
of 2003.  For the nine months ended September 30, income from Texas Genco
presented in discontinued operations was $192 million for 2004 and $66 million
for the same period of 2003.  These operations are presented as discontinued
operations in accordance with SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", for all periods presented.

FOURTH QUARTER DIVIDEND

The Board of Directors of CenterPoint Energy has not yet taken up the matter of
a cash dividend for the fourth quarter, but is expected to do so at its meeting
later in November.

WEBCAST OF EARNINGS CONFERENCE CALL

The management of CenterPoint Energy will host an earnings conference call on
Tuesday, November 9, 2004, at 10:30 a.m. Central time.  Interested parties may
listen to a live, audio broadcast of the conference call at
http://www.centerpointenergy.com/investors/events .  A replay of the call can
be accessed approximately two hours after the completion of the call, and will
be archived on CenterPoint Energy's web site for at least one year.

CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy
delivery company that includes electric transmission & distribution, natural
gas distribution and sales, interstate pipeline and gathering operations, and
more than 14,000 megawatts of power generation in Texas, of which approximately
2,500 megawatts are currently in mothball status.  The company serves nearly
five million metered customers primarily in Arkansas, Louisiana, Minnesota,
Mississippi, Oklahoma, and Texas.  Assets total over $19 billion.  With more
than 11,000 employees, CenterPoint Energy and its predecessor companies have
been in business for more than 130 years.  For more information, visit the Web
site at http://www.centerpointenergy.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
outcome of the true-up proceeding and any legal proceedings related thereto,
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 CenterPoint Energy's or its
subsidiaries' business plans, financial market conditions, the timing and
extent of changes in commodity prices, particularly natural gas, the impact of
unplanned facility outages and other factors discussed in CenterPoint Energy's
and its subsidiaries' Form 10-Ks 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.

                CenterPoint Energy, Inc. and Subsidiaries
                  Statements of Consolidated Operations
                          (Thousands of Dollars)
                               (Unaudited)

                                  Quarter Ended        Nine Months Ended
                                  September 30,           September 30,
                                 2004       2003        2004        2003
                               --------   --------    --------    --------

  Revenues:
    Electric Transmission &
     Distribution              $446,130   $653,438   $1,149,283  $1,582,613
    Natural Gas Distribution  1,148,548    897,392    4,524,865   3,912,719
    Pipelines and Gathering     107,870     89,083      323,670     319,907
    Other Operations              2,592      7,615        8,372      25,867
    Eliminations                (38,051)   (39,594)    (113,311)   (168,514)
      Total                   1,667,089  1,607,934    5,892,879   5,672,592

  Expenses:
    Fuel and cost of gas sold   928,189    681,888    3,700,679   3,073,652
    Operation and maintenance   317,486    298,814      928,556     910,274
    Depreciation and
     amortization               125,528    119,472      361,820     350,547
    Taxes other than income
     taxes                       89,151     90,129      269,315     260,889
      Total                   1,460,354  1,190,303    5,260,370   4,595,362
  Operating Income              206,735    417,631      632,509   1,077,230

  Other Income (Expense):
    Gain (loss) on Time
     Warner investment          (31,161)   (21,207)     (40,033)     43,497
    Gain (loss) on indexed
     debt securities             34,117     17,040       43,240     (38,510)
    Interest and other
     finance charges           (182,701)  (173,822)    (554,658)   (501,107)
    Interest on transition
     bonds                       (9,495)    (9,811)     (28,716)    (29,495)
    Other - net                   1,310      2,688       15,243      11,846
      Total                    (187,930)  (185,112)    (564,924)   (513,769)

  Income from Continuing
   Operations Before
   Income Taxes and
   Extraordinary Loss            18,805    232,519       67,585     563,461

  Income Tax Expense             (2,174)   (85,544)     (24,781)   (201,699)

  Income from Continuing
   Operations Before
   Extraordinary Loss            16,631    146,975       42,804     361,762

  Discontinued Operations:
    Income from Texas Genco,
     net of tax                 108,768     51,753      240,689     104,580
    Minority Interest related
     to Texas Genco, net of
     tax                        (21,852)   (15,694)     (48,707)    (38,799)
    Loss on Disposal of Texas
     Genco, net of tax         (346,127)       ---     (346,127)        ---
    Loss from Other
     Operations, net of tax         ---     (1,212)         ---      (2,077)
    Loss on Disposal of Other
     Operations, net of tax         ---        (97)         ---     (12,086)
      Total                    (259,211)    34,750     (154,145)     51,618

  Extraordinary Loss, net
   of tax                      (893,618)       ---     (893,618)        ---

  Net Income (Loss)         $(1,136,198)  $181,725  $(1,004,959)   $413,380

   Reference is made to the Notes to the Consolidated Financial Statements
   contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.


                CenterPoint Energy, Inc. and Subsidiaries
         Selected Data From Statements of Consolidated Operations
             (Thousands of Dollars, Except Per Share Amounts)
                               (Unaudited)

                                     Quarter Ended        Nine Months Ended
                                     September 30,          September 30,
                                    2004      2003         2004       2003
                                  --------  --------     --------   --------

  Basic Earnings Per Common Share:
    Income from Continuing
     Operations                    $0.05     $0.48        $0.14       $1.19
    Income (Loss) from
    Discontinued Operations        (0.84)     0.12        (0.50)       0.17
    Extraordinary Loss, net
     of tax                        (2.90)      ---        (2.91)        ---
    Net Income (Loss)             $(3.69)    $0.60       $(3.27)      $1.36

  Diluted Earnings Per Common Share:
    Income from Continuing
     Operations                    $0.05     $0.48        $0.14       $1.18
    Income (Loss) from
    Discontinued Operations        (0.83)     0.11        (0.50)       0.17
    Extraordinary Loss, net of
     tax                           (2.88)      ---        (2.89)        ---
    Net Income (Loss)             $(3.66)    $0.59       $(3.25)      $1.35

  Dividends Declared per Common
   Share                           $0.10      $--- (A)    $0.30       $0.30

  Weighted Average Common Shares
   Outstanding (000):
      - Basic                    307,592   305,007      306,954     303,261
      - Diluted                  310,165   307,345      309,482     305,415


  Operating Income (Loss) by Segment

  Electric Transmission &
   Distribution:
    Transmission & Distribution
     Operations                 $168,506  $151,466     $361,635    $338,901
    Transition Bond Company        9,399     9,733       28,505      29,252
    ECOM True-up                     ---   221,502          ---     454,783
      Total Electric Transmission
       & Distribution            177,905   382,701      390,140     822,936
  Natural Gas Distribution        (1,972)   (4,723)     137,427     145,789
  Pipelines and Gathering         35,391    38,948      122,484     124,197
  Other Operations                (4,589)      705      (17,542)    (15,692)

  Total                         $206,735  $417,631     $632,509  $1,077,230

   (A)  A third quarter dividend was declared on June 18, 2003 payable on
        September 10, 2003.

   Reference is made to the Notes to the Consolidated Financial Statements
   contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.


                CenterPoint Energy, Inc. and Subsidiaries
                     Results of Operations by Segment
                          (Millions of Dollars)
                               (Unaudited)

                                  Electric Transmission & Distribution
                             Quarter                 Nine Months
                              Ended      % Diff        Ended         % Diff
                           September 30,   Fav/     September 30,      Fav/
                           2004   2003   (Unfav)    2004     2003    (Unfav)
                          ------ ------  -------   ------   ------   -------
  Results of Operations:
  Revenues:
    Electric revenues      $425   $414     3%      $1,095   $1,080      1%
    ECOM revenues           ---    222    ---         ---      455     ---
    Transition bond
     revenues                21     18    17%          54       48     13%
      Total Revenues        446    654   (32%)      1,149    1,583    (27%)
  Expenses:
    Operation and
     maintenance            134    139     4%         390      398      2%
    Depreciation and
     amortization            63     62    (2%)        186      184     (1%)
    Taxes other than income
     taxes                   59     62     5%         158      159      1%
    Transition bond
     expenses                12      8   (50%)         25       19    (32%)
      Total                 268    271     1%         759      760     ---
  Operating Income         $178   $383   (54%)       $390     $823    (53%)


  Electric Transmission
   & Distribution
  Operating Data:      Quarter Ended            Nine Months Ended
  Actual MWH           September 30,               September 30,
   Delivered         2004        2003            2004        2003
                  ----------  ----------      ----------  ----------
  Residential      8,511,639   8,134,198   5%  18,714,422  19,182,750   (2%)
  Total           22,568,431  20,895,879   8%  56,633,719  54,770,018    3%

  Weather (average
   for service
   area):
  Percentage of
   normal:
    Cooling degree
     days                103%         96%  7%         102%        102%  ---
    Heating degree
     days                N/A         N/A  ---          86%        111% (25%)

  Average number of
   metered customers:
    Residential    1,645,523   1,600,998   3%   1,633,890   1,587,976    3%
    Commercial and
     Industrial      224,605     220,420   2%     222,661     221,049    1%
      Total        1,870,128   1,821,418   3%   1,856,551   1,809,025    3%

  Reference is made to the Notes to the Consolidated Financial Statements
  contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.


                  CenterPoint Energy, Inc. and Subsidiaries
                       Results of Operations by Segment
                            (Millions of Dollars)
                                 (Unaudited)

                                    Natural Gas Distribution
                            Quarter                    Nine Months
                             Ended      % Diff            Ended      % Diff
                           Sept. 30,      Fav/          Sept. 30,      Fav/
                       2004        2003 (Unfav)     2004        2003 (Unfav)
  Results of         --------    ------- -----    --------    ------- -----
   Operations:
  Revenues            $1,149        $897   28%     $4,525      $3,913   16%
  Expenses:
    Natural gas          959         713  (35%)     3,776       3,168  (19%)
    Operation and
     maintenance         133         133   ---        416         417   ---
    Depreciation and
     amortization         36          34   (6%)       106         101   (5%)
    Taxes other than
     income taxes         23          22   (5%)        90          81  (11%)
      Total            1,151         902  (28%)     4,388       3,767  (16%)
  Operating Income
   (Loss)                $(2)        $(5) (60%)      $137        $146   (6%)

  Natural Gas Distribution
   Operating Data:
  Throughput data
   in BCF
  Residential             15          15   ---        121         129   (6%)
  Commercial and
   Industrial             39          39   ---        171         167    2%
  Non-rate regulated
   Commercial and
   Industrial            113         120   (6%)       419         365   15%
  Elimination            (32)        (24) (33%)      (105)        (64) (64%)
    Total Throughput     135         150  (10%)       606         597    2%

  Weather (average for
   service area)
  Percentage of normal:
    Heating degree days   61%        101% (40%)        95%        104%  (9%)

  Average number of
   customers:
    Residential    2,777,212   2,732,165    2%  2,791,722   2,749,571    2%
    Commercial and
     Industrial      242,111     242,503   ---    245,895     245,118   ---
    Non-rate
     regulated
     Commercial and
     Industrial        6,249       5,569   12%      6,234       5,350   17%
      Total        3,025,572   2,980,237    2%  3,043,851   3,000,039    1%


                                             Pipelines and Gathering
                                      Quarter            Nine Months
                                       Ended     % Diff     Ended    % Diff
                                     Sept. 30,     Fav/   Sept. 30,    Fav/
                                    2004   2003  (Unfav) 2004   2003 (Unfav)
  Results of Operations:           ------ ------  ----- ------ ------ -----
  Revenues                          $108    $89    21%   $324   $320     1%
  Expenses:
    Natural gas                        6      5   (20%)    33     62    47%
    Operation and maintenance         52     31   (68%)   122     90   (36%)
    Depreciation and amortization     11     10   (10%)    33     31    (6%)
    Taxes other than income taxes      4      4    ---     13     13    ---
      Total                           73     50   (46%)   201    196    (3%)
  Operating Income                   $35    $39   (10%)  $123   $124    (1%)

  Pipelines and Gathering
   Operating Data:
  Throughput data in BCF
  Natural Gas Sales                    1      1    ---      8      9   (11%)
  Transportation                     181    159    14%    658    630     4%
  Gathering                           79     73     8%    233    219     6%
  Elimination                        ---    ---    ---     (5)    (4)  (25%)
    Total Throughput                 261    233    12%    894    854     5%

   Reference is made to the Notes to the Consolidated Financial Statements
   contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.


                  CenterPoint Energy, Inc. and Subsidiaries
                       Results of Operations by Segment
                            (Millions of Dollars)
                               (Unaudited)

                                               Other Operations
                                     Quarter             Nine Months
                                      Ended      % Diff     Ended    % Diff
                                     Sept. 30,     Fav/   Sept. 30,    Fav/
                                    2004  2003   (Unfav) 2004   2003 (Unfav)
  Results of Operations:            ----  ----    -----  ----   ----  -----
  Revenues                            $2    $8    (75%)    $8    $26   (69%)
  Expenses                             6     7     14%     25     42    40%
  Operating Income (Loss)            $(4)   $1   (500%)  $(17)  $(16)   (6%)


                     Capital Expenditures by Segment
                          (Millions of Dollars)
                               (Unaudited)

                                          Quarter Ended    Nine Months Ended
                                           September 30,     September 30,
                                           2004     2003     2004     2003
  Capital Expenditures by Segment          ----     ----     ----     ----
    Electric Transmission & Distribution    $79      $51     $173     $156
    Natural Gas Distribution                 52       65      132      148
    Pipelines and Gathering                  14       13       38       42
    Other Operations                          4      ---       16        6
    Total                                  $149     $129     $359     $352


                         Interest Expense Detail
                          (Millions of Dollars)
                               (Unaudited)

                                           Quarter Ended   Nine Months Ended
                                           September 30,     September 30,
                                           2004     2003     2004     2003
  Interest Expense Detail                  ----     ----     ----     ----
    Amortization of Deferred Financing
     Cost                                   $19      $16      $63      $44
    Capitalization of Interest Cost          (1)      (1)      (3)      (3)
    Transition Bond Interest Expense          9        9       28       28
    Other Interest Expense                  165      160      495      462
    Total Interest Expense                  192      184      583      531

    Amortization of Deferred Financing
     Cost Reclassified to Discontinued
     Operations                               1       22        3       64
    Other Interest Reclassified to
     Discontinued Operations                 13       31       35      109
      Total Interest Reclassified to
       Discontinued Operations (A)           14       53       38      173
    Interest Expense Incurred by
     Discontinued Operations                ---        1      ---        8
      Total Expense in Discontinued
       Operations                            14       54       38      181

      Total Interest Expense Incurred      $206     $238     $621     $712

   (A)  In 2003, our $3.85 billion credit facility was comprised of a
        revolver and a term loan.  This facility was amended in October 2003
        to a $2.35 billion credit facility, comprised of a revolver and a
        term loan.  According to the terms of the $3.85 billion credit
        facility, any net cash proceeds received from the sale of Texas
        Genco were required to be applied to repay borrowings under the
        credit facility.  According to the terms of the $2.35 billion credit
        facility, until such time as the facility has been reduced to $750
        million, 100% of any net cash proceeds received from the sale of
        Texas Genco are required to be applied to repay borrowings under the
        credit facility and reduce the amount available under the credit
        facility.

        In accordance with Emerging Issues Task Force Issue No. 87-24
        "Allocation of Interest to Discontinued Operations", we have
        reclassified interest to discontinued operations of Texas Genco
        based on net proceeds to be received from the sale of Texas Genco of
        $2.5 billion, and have applied the proceeds to the amount of debt
        assumed to be paid down in each respective period according to the
        terms of the respective credit facilities in effect for those
        periods.  In periods where only the term loan was assumed to be
        repaid, the actual interest paid was reclassified.  In periods where
        a portion of the revolver was assumed to be repaid, the percentage
        of that portion of the revolver to the total outstanding balance was
        calculated, and that percentage was applied to the actual interest
        paid in those periods to compute the amount of interest
        reclassified.

        Total interest expense incurred was $206 million and $238 million
        for the three months ended September 30, 2004 and 2003,
        respectively, and $621 million and $712 million for the nine months
        ended September 30, 2004 and 2003, respectively.  After reflecting
        the reclassification of interest expense to discontinued operations
        and interest incurred by discontinued operations of $14 million and
        $54 million for the three months ended September 30, 2004 and 2003,
        respectively, and $38 million and $181 million for the nine months
        ended September 30, 2004 and 2003, respectively, interest expense
        related to continuing operations was $192 million and $184 million
        for the three months ended September 30, 2004 and 2003,
        respectively, and $583 million and $531 million for the nine months
        ended September 30, 2004 and 2003, respectively.

   Reference is made to the Notes to the Consolidated Financial Statements
   contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.


                CenterPoint Energy, Inc. and Subsidiaries
                  Condensed Consolidated Balance Sheets
                          (Thousands of Dollars)
                               (Unaudited)

                                             September 30,      December 31,
                                                  2004              2003
                                             ------------       -----------

                   ASSETS
  Current Assets:
    Cash and cash equivalents                    $20,202           $86,922
    Other current assets                       1,888,084         1,967,944
    Current assets of discontinued
     operations                                  606,018           301,765
        Total current assets                   2,514,304         2,356,631

  Property, Plant and Equipment, net           8,122,791         8,084,924

  Other Assets:
    Goodwill, net                              1,740,510         1,740,510
    Regulatory assets                          3,227,201         4,930,793
    Other non-current assets                     406,639           405,936
    Non-current assets of discontinued
     operations                                3,574,598         3,942,296
        Total other assets                     8,948,948        11,019,535
          Total Assets                       $19,586,043       $21,461,090

      LIABILITIES AND SHAREHOLDERS' EQUITY

  Current Liabilities:
    Current portion of transition bond
     long-term debt                              $46,806           $41,189
    Short-term borrowings and current
     portion of other long-term debt             490,414           182,738
    Other current liabilities                  1,881,545         2,046,209
    Current liabilities of discontinued
     operations                                  353,947           332,125
        Total current liabilities              2,772,712         2,602,261

  Other Liabilities:
    Accumulated deferred income taxes,
     net and investment tax credit             1,907,237         2,227,229
    Regulatory liabilities                     1,114,515         1,358,030
    Other non-current liabilities              1,019,260         1,278,646
    Non-current liabilities of
     discontinued operations                   1,461,097         1,277,760
        Total other liabilities                5,502,109         6,141,665

  Long-term Debt:
    Transition bond                              628,893           675,665
    Other                                      9,826,790        10,102,269
        Total long-term debt                  10,455,683        10,777,934

  Minority Interest in Discontinued
   Operations                                    215,953           178,673

  Shareholders' Equity                           639,586         1,760,557
        Total Liabilities and
         Shareholders' Equity                $19,586,043       $21,461,090

   Reference is made to the Notes to the Consolidated Financial Statements
   contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.


                CenterPoint Energy, Inc. and Subsidiaries
             Condensed Statements of Consolidated Cash Flows
                          (Thousands of Dollars)
                               (Unaudited)

                                                      Nine Months Ended
                                                        September 30,
                                                   2004              2003
                                                ----------        ----------
  Cash Flows from Operating Activities:
    Net income (loss)                          $(1,004,959)        $413,380
    Discontinued operations, net of tax            154,145          (51,618)
    Extraordinary loss, net of tax                 893,618              ---
    Income from continuing operations               42,804          361,762
    Adjustments to reconcile income
     from continuing operations to net
     cash provided by operating activities:
      Depreciation and amortization                424,993          394,947
      Deferred income taxes and investment
       tax credit                                   99,556          313,151
      Changes in net regulatory assets
       and liabilities                            (253,335)        (667,796)
      Changes in other assets and liabilities        8,017         (155,956)
      Other, net                                    17,268           22,507
  Net Cash Provided by Operating Activities        339,303          268,615

  Net Cash Used in Investing Activities           (352,864)        (350,956)

  Net Cash Used in Financing Activities           (113,811)        (230,227)

  Net Cash Provided by Discontinued Operations      60,652           43,264

  Net Decrease in Cash and Cash Equivalents        (66,720)        (269,304)

  Cash and Cash Equivalents at Beginning of Period  86,922          303,704

  Cash and Cash Equivalents at End of Period       $20,202          $34,400

   Reference is made to the Notes to the Consolidated Financial Statements
   contained in the Annual Report on Form 10-K of CenterPoint Energy, Inc.


http://www.newscom.com/cgi-bin/prnh/20020930/CNPLOGO

http://photoarchive.ap.org/

DATASOURCE: CenterPoint Energy, Inc.



CONTACT:  media, Leticia Lowe, [phone], or investors, Marianne

Paulsen, [phone], both of CenterPoint Energy, Inc.



Web site:  http://www.centerpointenergy.com/

http://www.centerpointenergy.com/investors/events 

Copyright