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NorAm brings a growing, well-respected wholesale gas and electricity trading <br />business, significant mid-stream gas assets in the form of interstate pipelines, <br />gathering, and storage, and the nation's third largest gas distribution operation. One <br />of its distribution divisions, Entex, serves metropolitan Houston, in addition to <br />communities in Louisiana and Mississippi, and has approximately 600,000 customers <br />in common with HL&P. NorAm also has a leading position in retail energy services <br />and an emerging presence in Mexico and Latin America. <br />The acquisition of NorAm Energy positions Houston Industries to be a national <br />wholesale and retail energy ser\’ices leader with extens.. e gas and electric capabilities. <br />The combined entity will be well-equipped to meet the evolving needs of customers, <br />offering innovative products and efficient service throughout a broad region of the <br />country. <br />Market and regulatory forces are changing the industry’ landscape to a more <br />competitive environment. In addition, the electricity and natural gas markets are <br />converging, and customers are demanding additional products and services. This <br />acquisition will substantially strengthen Houston Industries’ strategic position given <br />these rapid changes in the industry," said Don Jordan. <br />"VVe see several strategic benefits to this acquisition," continued Jordan. "First, it <br />combines Houston Industries’ electric market knowledge with NorAm Energy’s <br />wholesale gas and electricity trading operations and skills, which will help propel the <br />combined company forward in the converging wholesale energy markets. Second, it <br />positions the combined company to provide the bundled gas and electric products and <br />services customers are increasingly demanding. Third, it helps establish Houston <br />Industries broad national energy presence and offers the opportunity for improved <br />efficiency across all of our operations. Fourth, it gives us access to 3.6 million <br />customers, 2.1 million more than we had previously'.’’ <br />Jordan added. This combination presents exciting new opportunities for our <br />employees as we enter the natural gas distribution and transmission businesses for the <br />first time, expand into wholesale gas and electric marketing, and extend our <br />international position.” <br />Milt Honea, Chairman, President, and CEO of NorAm Energy said, "This transaction <br />is a natural fit that will benefit our shareholders, customers, and employee' Our <br />companies have a shared vision, common geographical areas, and compK . -ntrry <br />skills and assets. Our shareholders benefit from the value created by the < .n* tation- <br />the increased access to Houston Industries' experience and skills in the elective power <br />industry, Houston Industries' financial strength, and our complementary international <br />development interests. Our customers benefit from the combined company’s <br />enhanced ability to offer a broad array of products and services, particularly in <br />electricity’. Finally, the combination will provide greater opportunities for our <br />employees as the combined company continues to expand its wholesale, retail, and <br />international presence."