EX-99.10 8 x15682exv99w10.htm EX-99.10: PRO FORMA FINANCIAL STATEMENTS EX-99.10
 

Exhibit 99.10
Combined Pro Forma Presentation for Texas Genco LLC’s Statement of Operations for the Nine Months Ended September 30, 2005
                                                         
    Nine Months Ended September 30, 2005 (unaudited)  
    Historical                                     Pro Forma  
    Texas Genco     Texas Genco     Pro Forma                     Combined Texas  
(in thousands)   Holdings (A)     LLC     Adjustments     Reclassifications     Genco LLC  
Operating Revenues
                                                       
 
                                                       
Revenues from majority-owned operations
  $ 61,593     $ 1,999,827     $ (61,593 )     (B )   $             $ 1,999,827  
Operating Costs and Expenses
                                                       
Cost of majority-owned operations
                              1,306,275       (F )     1,306,275  
Fuel and purchased power expense
    5,687       912,907       (61,593 )     (C )     (857,001 )     (F )      
Operations and maintenance
    35,026       329,432                     (364,458 )     (F )      
Depreciation and amortization
    5,165       253,398       4,757       (D )     (116,592 )     (G )     146,728  
Taxes other than income taxes
    3,467       34,789                     (38,256 )     (F )      
General, administrative and development
                              70,032       (H )     70,032  
Other charges (credits)
                                                       
Net gain on sale of assets
          (28,356 )                                 (28,356 )
 
                                             
Total operating costs and expenses
    49,345       1,502,170       (56,836 )                           1,494,679  
 
                                             
Operating Income
    12,248       497,657       (4,757 )                           505,148  
Other Income (Expense)
                                                       
Other income, net
    1,145       3,129                                   4,274  
Interest expense
    (763 )     (134,306 )     (6,654 )     (E )                   (141,723 )
 
                                             
Total other expense
    382       (131,177 )     (6,654 )                           (137,449 )
 
                                             
Income From Continuing Operations
                                                       
Before Income Taxes
    12,630       366,480       (11,411 )                           367,699  
Income Tax Expense
    3,514       20,552                                   24,066  
 
                                             
Income From Continuing Operations
  $ 9,116     $ 345,928     $ (11,411 )           $             $ 343,633  
 
                                             

 


 

Footnotes to Pro Forma Combined Texas Genco LLC’s Statement of Operations for the nine months ended September 30, 2005
On December 15, 2004, pursuant to a Transaction Agreement dated July 21, 2004, Texas Genco LLC acquired from Texas Genco Holdings, Inc., an indirect subsidiary of CenterPoint Energy, Inc., in a merger transaction Texas Genco II, LP and Texas Genco Services, LP. These entities contained assets and liabilities which related primarily to coal, lignite, oil and natural gas fired generation and certain immaterial assets unrelated to the generation business (“Initial Acquisition”).
On April 13, 2005, a wholly owned subsidiary of Texas Genco LLC merged with and into Texas Genco Holdings, Inc. As a result of this merger, which we refer to as the “Nuclear Acquisition,” Texas Genco Holdings, Inc. became a wholly owned subsidiary of Texas Genco LLC and Texas Genco LLC thereby indirectly acquired Texas Genco Holdings, Inc.’s assets and liabilities, including its 30.8% undivided interest in STP.
For further descriptions of explanations of the transactions please see Note (1)(c) of Texas Genco LLC financial statements as of December 31, 2004 filed as Exhibit 99.03 to this current report on Form 8-K and Note 3 of Texas Genco LLC financial statements as of September 30, 2005 filed as Exhibit 99.01 to this current report on Form 8-K.

(A)   Reflects the results of operations for Texas Genco Holdings, Inc. for the period from January 1 through April 13, 2005.
 
(B)   Elimination of Texas Genco Holdings, Inc. revenues of 2005 sales to Texas Genco
 
(C)   Elimination of Texas Genco Holdings, Inc. costs of 2005 sales to Texas Genco
 
(D)   Reflects additional depreciation expense for stepped-up basis of all depreciable assets acquired from Texas Genco Holdings, Inc of $7.8 million less Texas Genco Holding, Inc.’s actual depreciation of $5.2 million.

         
Additional depreciation expense from Texas Genco Holdings, Inc. acquisition
  $ 7,800  
Amortization of STP ‘s forward sales contracts
    2,200  
Texas Genco Holding, Inc.’s actual recorded depreciation
    (5,243 )
 
     
Total
  $ 4,757  
 
     
(E)   Adjustments to reflect interest expense of $6.7 million on long term financing arrangements for the first 103 days before the Nuclear Acquisition on April 13, 2005.
 
(F)   These amounts represent the reclassification of Texas Genco presentation to coincide with NRG’s presentation of its Statement of Operations. NRG includes the following expenses within its Cost of Majority Owned Operations — Fuel and purchased power expense, Operations and maintenance, Taxes other than income taxes and amortization of emission credits and contracts. Also, NRG separates its General & Administrative expense from other operating expenses.
 
(G)   Reclassification of Texas Genco Amortization expense to coincide with NRG presentation of its Statement of Operations.
 
(H)   Reclassification of Texas Genco General & Administrative expenses to coincide with NRG presentation of its Statement of Operations.