UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the Fiscal Year Ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from ______________ to _______________
------------------------------
Commission file number 1-16455
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Reliant Energy, Inc. Savings Plan
P.O. Box 148
Houston, TX 77001-0148
B. Name and issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Reliant Energy, Inc.
1000 Main Street
Houston, TX 77002
RELIANT ENERGY, INC. SAVINGS PLAN
TABLE OF CONTENTS
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REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31, 2003 and
2002
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 2003
Notes to Financial Statements
SUPPLEMENTAL SCHEDULE:
Schedule H, line 4(i) - Schedule of Assets (Held at End of Year), as of
December 31, 2003
The following schedules required by the Department of Labor's regulations are
omitted due to the absence of the conditions under which they are required:
Schedule of Reportable Transactions
Schedule of Nonexempt Transactions
Schedule of Loans or Fixed Income Obligations in Default or Classified as
Uncollectible
Schedule of Leases in Default or Classified as Uncollectible
Schedule of Assets Acquired and Disposed of Within the Plan Year
EXHIBITS:
Consent of Independent Registered Public Accounting Firm - Melton & Melton,
L.L.P. (Exhibit 23.1)
Consent of Independent Registered Public Accounting Firm - Deloitte & Touche
LLP (Exhibit 23.2)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Participants in the
Reliant Energy, Inc. Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of the Reliant Energy, Inc. Savings Plan (the "Plan") as of December 31, 2003,
and the statement of changes in net assets available for benefits for the year
ended December 31, 2003. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2003, and the changes in net assets available for benefits for the
year ended December 31, 2003 in conformity with accounting principles generally
accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule,
listed in the Table of Contents, is presented for the purpose of additional
analysis and is not a required part of the basic financial statements, but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
MELTON & MELTON, L.L.P.
Houston, Texas
June 24, 2004
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Participants in the
Reliant Resources, Inc. Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of the Reliant Resources, Inc. Savings Plan (the "Plan") as of December 31,
2002. This financial statement is the responsibility of the Plan's management.
Our responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). These standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2002, in conformity with accounting principles generally accepted in the United
States of America.
DELOITTE & TOUCHE LLP
Houston, Texas
June 27, 2003
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RELIANT ENERGY, INC. SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2003 AND 2002
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December 31,
-----------------------------------
2003 2002
------------ ------------
ASSETS:
Investments, at fair value $242,967,816 $151,563,214
Participant Loans 4,913,138 4,143,065
Contributions Receivable-Employer 4,944,099 2,538,718
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $252,825,053 $158,244,997
============ ============
See notes to financial statements.
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RELIANT ENERGY, INC. SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2003
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ADDITIONS:
Contributions:
Employer $23,114,449
Participant 27,058,446
Investment Income:
Interest 1,406,317
Dividends 3,160,884
Net appreciation in fair value of investments 53,905,428
Assets transferred in, net 148,720
------------
Total additions 108,794,244
DEDUCTIONS:
Benefits paid to participants 14,042,849
Administrative expenses 171,339
------------
Total deductions 14,214,188
------------
NET INCREASE 94,580,056
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR 158,244,997
------------
NET ASSETS AVAILABLE FOR BENEFITS:
END OF YEAR $252,825,053
============
See notes to financial statements.
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RELIANT ENERGY, INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
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1. DESCRIPTION OF THE PLAN
GENERAL - The Reliant Energy, Inc. Savings Plan (formerly, the Reliant
Resources, Inc. Savings Plan, and changed effective as of April 26, 2004),
(the "Plan"), is a defined contribution plan sponsored by Reliant Energy,
Inc. (formerly Reliant Resources, Inc., and changed effective as of April
26, 2004), (the "Company") covering substantially all of the eligible
non-union employees of the Company or a subsidiary or an affiliate of the
Company that has adopted the Plan. The following description of the Plan
is provided for general information purposes only. Participants should
refer to the Plan document for a more complete description of the Plan
provisions. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
ELIGIBILITY - Employees of the Company or a subsidiary or affiliate of the
Company as of March 27, 2002, other than employees of Reliant Energy
Mid-Atlantic Power Holdings, LLC, Reliant Energy Maryland Holdings, LLC,
Reliant Energy New Jersey Holdings, LLC, Reliant Energy Northeast
Management Company, or Reliant Energy Mid-Atlantic Power Services, Inc.
("REMA Employees"), that has adopted the Plan and were eligible to
participate in the Reliant Energy, Incorporated Savings Plan, were
eligible to participate in the Plan on March 28, 2002. Employees of the
Company on or after March 28, 2002 are eligible to participate in the Plan
on his or her employment date. REMA Employees who, as of January 31, 2002,
were eligible to participate in the Reliant Energy Mid-Atlantic Savings
Plan for Non-Represented Employees, became eligible to participate in the
Plan as of February 1, 2002. REMA Employees hired after February 1, 2002
are eligible to participate in the Plan on his or her employment date.
CONTRIBUTIONS - Participants may elect to contribute to the Plan on a
pre-tax and/or after-tax basis through periodic payroll contributions.
These contributions are limited to an aggregate of 16% of the
participant's eligible compensation up to the Internal Revenue Service
Code (the "Code") section 401(a) (17) limit. For 2003, this limit was
$200,000. Active participants who are, or will be, age 50 or older during
a calendar year are eligible to make additional pre-tax contributions
("Catch-Up Contributions") to the Plan for that year in excess of the
annual pre-tax contribution limit up to a maximum amount permitted by the
Code. The total amount of participant pre-tax contributions was limited to
$12,000 and $11,000 in 2003 and 2002, respectively. The maximum Catch-Up
Contribution amount was $2,000 and $1,000 for 2003 and 2002, respectively.
Any contributions in excess of the pre-tax contribution limit, excluding
any Catch-Up Contributions, are made to the participant's after-tax
account, unless the participant elects otherwise. Plan participants who
contribute also receive Company matching contributions equal to 100% of
the first 6% of the participant's contribution. Under the provisions of
the Plan, the Company may make two types of discretionary profit sharing
contributions - one is a payroll profit sharing contribution ("Payroll
Profit Sharing Contribution") and the other is an annual profit sharing
contribution ("Annual Profit Sharing Contribution"). For any year, the
Company may elect, in its sole discretion, to make Payroll Profit Sharing
Contributions to the Plan on behalf of participants in an amount equal to
a prescribed percentage of pay for each payroll period. The Payroll Profit
Sharing Contribution percentage for 2003 and 2002 was 2% and was limited
to the first $85,000 of the participant's eligible compensation for the
year. The Company may also elect, in its sole discretion, to make an
Annual Profit Sharing Contribution of up to 3% of the participants'
eligible compensation. The Annual Profit Sharing Contribution may be made
in cash, the Company stock or a combination of cash and the Company stock,
as determined by the Chairman of the Board, Chief Executive Officer,
President, or Chief Operating Officer of the Company. This contribution
will generally be made within 90 days following the end of the Plan year.
The Annual Profit Sharing Contribution receivable at December 31, 2003 and
2002 was approximately $4.9 million and $2.5 million, respectively.
-5-
Participants do not need to contribute to the Plan to receive Payroll
Profit Sharing or Annual Profit Sharing Contributions.
PARTICIPANT ACCOUNTS - Individual accounts are maintained for each Plan
participant. Each participant's account is credited with the participant's
contributions, the Company's matching contributions, allocations of
Company discretionary contributions, if applicable, any rollover
contributions made by the participant and Plan earnings, and charged with
an allocation of administrative expenses. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
INVESTMENTS - Participants direct the investment of their contributions
into various investment options offered by the Plan. Prior to March 12,
2003, the Annual Profit Sharing Contribution had to remain invested in the
Reliant Energy Stock Fund until the participant attained age 55. Effective
March 12, 2003, participants could then transfer Annual Profit Sharing
Contribution amounts invested in the Reliant Energy Stock Fund to any of
the investment funds of the Plan (other than the CenterPoint Energy Common
Stock Fund and Texas Genco Holdings, Inc. common stock). On March 17,
2003, the Company made the 2002 Annual Profit Sharing Contribution, which
was invested in the Reliant Energy Stock Fund. Participants were able to
immediately transfer this contribution to any available investment option.
VESTING - Participants are fully vested in their total account balance,
including Company contributions, under the Plan.
PARTICIPANT LOANS - Participants may borrow from their fund accounts up to
a maximum of $50,000 or 50 percent of their account balance, whichever is
less. The loans are secured by the balance in the participant's account
and bear interest at rates commensurate with local prevailing rates as
determined under the Plan. Principal and interest is paid ratably through
payroll deductions.
PAYMENT OF BENEFITS - On termination of employment including death,
disability, or retirement, a participant or beneficiary may elect to
receive either a lump-sum amount equal to the value of the participant's
vested interest in his or her account, or monthly, quarterly, semi-annual
or annual installments not to exceed ten years.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF FINANCIAL PRESENTATION - The accompanying financial statements of
the Plan are prepared under the accrual basis of accounting in conformity
with accounting principles generally accepted in the United States of
America.
USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, and changes therein, as of
the date of the financial statements. Actual results could differ from
those estimates.
MARKET RISK - The Plan provides for investments in various investment
securities, including CenterPoint Energy, Inc. and Texas Genco Holdings,
Inc. (closed to new investment) and the Company common stock, that are
exposed to certain risks such as interest rate, credit, and overall market
volatility. Due to the level of risk, changes in the value of investment
securities could occur in the near term, and these changes could
materially affect the amounts reported in the statements of net assets
available for benefits.
ADMINISTRATIVE EXPENSES - Administrative expenses of the Plan are paid by
either the Plan or the Plan's sponsor as provided in the Plan document.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
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INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value. Shares of registered investment companies are valued
at quoted market prices which represent the net asset value of shares held
by the Plan at the end of the year. Units of the Vanguard Retirement
Savings Trust are valued at net asset value at the end of the year, which
approximates fair value. The common stock funds are valued at the year-end
unit closing price (comprised of the year-end market price plus uninvested
cash position). Participant loans are valued at cost which approximates
fair value.
Purchases and sales of investments are recorded on a trade-date basis.
Interest income is accrued when earned. Dividend income is recorded on the
ex-dividend date. Capital gain distributions are included in dividend
income.
3. INVESTMENTS
Plan assets are held at Vanguard Fiduciary Trust Company (the "Trustee").
The following presents investments that represent 5% or more of the Plan's
net assets:
December 31,
----------------------------
2003 2002
----------- ----------
MUTUAL FUNDS:
Neuberger Berman Genesis Trust $12,867,444 $8,175,544
PIMCO Funds: Pacific Investment Management
Series: Total Return 16,077,449 16,680,040
Vanguard 500 Index Fund Investor Shares 22,823,407 12,202,224
Vanguard Growth Equity Fund 27,068,076 18,024,267
Vanguard LifeStrategy Moderate Growth Fund 12,777,079 9,826,568
Vanguard Windsor II Fund Investor Shares 23,123,282 16,737,814
COMMON/COLLECTIVE TRUST FUNDS:
Vanguard Retirement Savings Trust 30,882,148 21,798,189
COMMON STOCK FUNDS:
CenterPoint Energy Stock Fund 16,274,576 19,074,384
Reliant Energy Common Stock Fund 37,584,563 13,617,004
During 2003, the Plan's investments, including gains and losses on
investments bought and sold, as well as held during the year, appreciated
in value as follows:
Mutual funds $28,033,687
Common stocks 25,871,741
-----------
$53,905,428
===========
4. PLAN TERMINATION
Although it has not expressed any intention to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of a
plan termination, participants would remain 100 percent vested in their
account.
5. RELATED PARTY TRANSACTIONS
The Plan invests in shares of mutual funds managed by an affiliate of the
Trustee, as well as in shares of common stock of the Company. The Plan
also provides for loans to participants. Transactions in such investments
qualify as party-in-interest transactions which are exempt from the
prohibited transaction rules.
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6. TAX STATUS
The Plan obtained its latest determination letter dated August 18, 2003,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the Code.
The Plan has been amended since receiving the determination letter.
However, the plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Code. Therefore, no provision for income taxes has been included in
the Plan's financial statements.
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RELIANT ENERGY, INC. SAVINGS PLAN
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
As of December 31, 2003
EIN 76-0655566
PLAN 001
( a ) ( b ) ( c ) ( d ) ( e )
--------------------------------------------------------------------------------------------------------------------------
Description of investment including
Identity of issue, borrower, lessor or maturity date, rate of interest,
similar party collateral, par, or maturity value Cost Current value
--------------------------------------------------------------------------------------------------------------------------
MUTUAL FUNDS:
* American Funds EuroPacific Growth Fund Registered Investment Company (1) $8,856,637
* American Funds: New Perspective Fund Registered Investment Company (1) 2,647,665
* American Funds: The Growth Fund
Of America Registered Investment Company (1) 1,429,692
* Artisan International Fund, International
Shares Registered Investment Company (1) 450,097
* Columbia Small Cap Growth Fund, Inc. Registered Investment Company (1) 2,996,138
* Davis New York Venture Fund, Inc. -
Class A Shares Registered Investment Company (1) 869,258
* Dodge & Cox Balanced Fund Registered Investment Company (1) 3,767,574
* Fidelity Securities Fund: Fidelity Dividend
Growth Fund Registered Investment Company (1) 3,337,194
* Harris Associates Investment Trust: Oakmark
Fund; Class I Shares Registered Investment Company (1) 1,488,443
* Neuberger Berman Genesis Trust Registered Investment Company (1) 12,867,444
* PIMCO Funds: Pacific Investment Management
Series: Total Return Registered Investment Company (1) 16,077,449
* T. Rowe Price Equity Income Fund
Advisor Class Registered Investment Company (1) 258,773
* T. Rowe Small-Cap Stock Fund -
Advisor Class Registered Investment Company (1) 477,335
* The Gabelli Growth Fund; Class AAA Shares Registered Investment Company (1) 64,589
* Vanguard 500 Index Fund Investor Shares Registered Investment Company (1) 22,823,407
* Vanguard Capital Opportunity Fund Registered Investment Company (1) 3,017,623
* Vanguard Growth Equity Fund Registered Investment Company (1) 27,068,076
* Vanguard LifeStrategy Conservative
Growth Fund Registered Investment Company (1) 1,400,934
* Vanguard LifeStrategy Growth Fund Registered Investment Company (1) 2,063,813
* Vanguard LifeStrategy Moderate
Growth Fund Registered Investment Company (1) 12,777,079
* Vanguard PRIMECAP Fund Registered Investment Company (1) 1,722,643
* Vanguard Total Bond Market Index Fund Registered Investment Company (1) 2,751,752
-9-
RELIANT ENERGY, INC. SAVINGS PLAN
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
As of December 31, 2003 - continued
EIN 76-0655566
PLAN 001
( a ) ( b ) ( c ) ( d ) ( e )
--------------------------------------------------------------------------------------------------------------------------
Description of investment including
Identity of issue, borrower, lessor or maturity date, rate of interest,
similar party collateral, par, or maturity value Cost Current value
--------------------------------------------------------------------------------------------------------------------------
* Vanguard Total Stock Market Fund Investor
Shares Registered Investment Company (1) 3,732,773
* Vanguard Windsor II Fund Investor Shares Registered Investment Company (1) 23,123,282
COMMON/COLLECTIVE TRUST FUNDS:
* Vanguard Retirement Savings Trust Common/Collective Trust (1) $30,882,148
COMMON STOCK FUNDS:
* CenterPoint Energy Stock Fund Company Stock Fund (1) $16,274,576
* Reliant Energy Common Stock Fund Company Stock Fund (1) 37,584,563
* Texas Genco Stock Company Stock (1) 2,156,859
* Participant Loans Interest rates between 5.0% - 10.5% 0 $4,913,138
------------
Total assets held for investment purposes $247,880,954
============
---------------------
* Party in interest.
(1) Cost information has been omitted because all investments are
participant-directed.
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SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Benefits Committee of Reliant Energy, Inc. has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
RELIANT ENERGY, INC. SAVINGS PLAN
By /s/ JAMES A. AJELLO
---------------------------------
James A. Ajello, Chairman of
the Benefits Committee of Reliant
Energy, Inc., Plan Administrator
June 25, 2004
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