Texas Genco Reports Improved Second Quarter 2004 Results

Texas Genco Reports Improved Second Quarter 2004 Results 


HOUSTON, Aug. 6  /PRNewswire-FirstCall/ -- Texas Genco Holdings, Inc.
(NYSE:TGN), an 81 percent-owned subsidiary of CenterPoint Energy, Inc.
(NYSE:CNP), today reported net income of $80 million, or $1.00 per share, for
the second quarter of 2004 compared to $33 million, or $0.42 per share, for the
same period of 2003.

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For the six months ended June 30, 2004, net income was $141 million, or $1.76
per share, compared to income of $22 million, or $0.28 per share, for the same
period of 2003 before the effect of an accounting change in that period.  Net
income for the six months ended June 30, 2003, was $121 million, or $1.52 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".

"I'm very pleased to report a significant improvement in our second quarter
earnings compared to last year primarily due to higher wholesale electricity
prices for our baseload products and more available baseload capacity this
quarter," said David Tees, president and chief executive officer of Texas
Genco.  "Our fleet of solid fuel baseload generating capacity operated well
during the quarter, and I'm very proud of our employees who continue to do what
they do best -- run efficient, safe and reliable plants."

Texas Genco reported higher operating income of $69 million for the second
quarter of 2004 compared to the same period of 2003, due primarily to higher
prices for baseload products.  Operation and maintenance expenses for the
second quarter of 2004 were lower than the prior year resulting primarily from
lower expenses associated with planned and unplanned outages.

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 customary
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 unit that will be
formed to own its 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 receipt of approval by the Nuclear Regulatory Commission, 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, or $45.25 per
share for its 81 percent interest in Texas Genco.

In connection with the transaction, Texas Genco entered into a master power
purchase and sale agreement under which the company has sold forward a
substantial quantity of its remaining available baseload capacity through 2008.
 The company's obligations under the power purchase agreement will continue
regardless of whether the transaction is completed.

WEBCAST OF EARNINGS CONFERENCE CALL

The managements of CenterPoint Energy and Texas Genco will host an earnings
conference call on Friday, August 6, 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 , or at
http://www.txgenco.com/investor.html .  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.

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 http://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-Q
for the period ended March 31, 2004 and other filings with the Securities and
Exchange Commission.

                        Texas Genco Holdings, Inc.
                    Statements of Consolidated Income
                          (Thousands of Dollars)
                               (Unaudited)

                                     Quarter              Six Months
                                  Ended June 30,         Ended June 30,
                                2004        2003        2004        2003

   Revenues                    $552,718    $578,511    $991,847    $937,098

   Expenses:
     Fuel                       263,992     349,318     450,307     557,307
     Purchased power             18,098      22,974      26,368      34,968
     Operation and maintenance   98,872     105,301     200,199     210,651
     Depreciation and
      amortization               40,607      39,391      80,976      78,470
     Taxes other than income
      taxes                      12,122      11,483      24,378      22,774
       Total                    433,691     528,467     782,228     904,170
   Operating Income             119,027      50,044     209,619      32,928

   Other Income                   1,667       1,089       2,055       1,289
   Interest Expense                (114)     (2,822)       (140)     (5,625)

   Income Before Income
    Taxes and Cumulative
    Effect of
   Accounting Change            120,580      48,311     211,534      28,592

   Income Tax Expense           (40,464)    (15,018)    (70,526)     (6,181)

   Income Before Cumulative
    Effect of Accounting
    Change                       80,116      33,293     141,008      22,411

   Cumulative Effect of
    Accounting Change, net
    of tax                          ---         ---         ---      98,910

   Net Income                   $80,116     $33,293    $141,008    $121,321

   Basic and Diluted
    Earnings Per Common
    Share:
     Income Before Cumulative
      Effect of Accounting
      Change                      $1.00       $0.42       $1.76       $0.28
     Cumulative Effect of
      Accounting Change, net
      of tax                        ---         ---         ---        1.24
     Net Income                   $1.00       $0.42       $1.76       $1.52

   Dividends Declared per
    Common Share                  $0.25       $0.25       $0.50       $0.50

   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         $13,022     $33,034     $37,082     $77,696

   Operating Data:
     Sales (MWH)             11,962,375  12,517,492  22,683,153  21,793,836
     Generation (MWH)        11,542,226  12,077,631  21,691,416  21,072,384



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.

                        Texas Genco Holdings, Inc.
                  Condensed Consolidated Balance Sheets
                          (Thousands of Dollars)
                               (Unaudited)

                                                June 30,        December 31,
                                                  2004              2003

                             ASSETS
  Current Assets:
    Cash                                             $38               $33
    Short-term investments                       184,522            44,525
    Short-term note receivable-affiliate           1,283               ---
    Inventory                                    167,884           169,692
    Other current assets                         109,109            84,142
        Total current assets                     462,836           298,392

  Property, Plant and Equipment, net           4,094,424         4,125,595

  Other Assets:
    Nuclear decommissioning trust                198,275           189,182
    Other non-current assets                      23,305            26,462
        Total other assets                       221,580           215,644
          Total Assets                        $4,778,840        $4,639,631

            LIABILITIES AND SHAREHOLDERS' EQUITY

  Current Liabilities:
    Accounts payable and other accrued
     liabilities                                $219,174          $224,319
    Deferred capacity auction revenue            109,566            86,853
    Other current liabilities                     13,870            17,579
        Total current liabilities                342,610           328,751

  Other Liabilities:
    Accumulated deferred income taxes,
     net and investment tax credit               981,467           995,078
    Nuclear decommissioning reserve              222,958           187,997
    Other non-current liabilities                 97,636            94,644
        Total other liabilities                1,302,061         1,277,719

  Shareholders' Equity                         3,134,169         3,033,161
        Total Liabilities and
         Shareholders' Equity                 $4,778,840        $4,639,631



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.

                        Texas Genco Holdings, Inc.
             Condensed Statements of Consolidated Cash Flows
                          (Thousands of Dollars)
                               (Unaudited)

                                                Six Months Ended June 30,
                                                  2004              2003

  Cash Flows from Operating Activities:
    Net income                                  $141,008          $121,321
    Cumulative effect of accounting
     change, net                                     ---           (98,910)
        Income before cumulative effect
         of accounting change                    141,008            22,411

    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
      Depreciation and amortization,
       including fuel-related amortization        94,726            88,195
      Deferred income taxes and
       investment tax credit                     (11,126)          (16,194)
      Changes in other assets and
       liabilities                                (6,865)          (22,600)
  Net Cash Provided by Operating
   Activities                                    217,743            71,812

  Cash Flows from Investing Activities:
    Capital expenditures and other               (36,342)          (74,706)
    Increase in note receivable-affiliate         (1,283)              ---
  Net Cash Used in Investing Activities          (37,625)          (74,706)

  Net Cash Provided by (Used in)
   Financing Activities                          (40,116)            2,470

  Net Increase (Decrease) in Cash and
   Cash Equivalents                              140,002              (424)

  Cash and Cash Equivalents at
   Beginning of Period                            44,558               578

  Cash and Cash Equivalents at End of
   Period                                       $184,560              $154


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DATASOURCE: Texas Genco Holdings, Inc.



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

Paulsen, [phone], both of Texas Genco Holdings, Inc.



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

http://www.txgenco.com/investor.html

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

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