What is the primary reason for the decrease in net income and earnings per share for the quarter?

The decrease in net income and earnings per share was primarily due to higher financing costs, particularly interest expense on increased long-term and short-term debt, and increased operating and maintenance expenses in the regulated utility segments. These were partially offset by strong revenue growth from non-regulated businesses, especially NRG Energy.

What is the status of the proposed merger with New Century Energies (NCE)?

The merger agreement between NSP and NCE to form Xcel Energy, Inc. is progressing well. Key regulatory approvals, including from the FERC and several state utility commissions, have been obtained. The company expects the merger to be completed by the middle of 2000, pending remaining approvals from the SEC, NRC, and the states of New Mexico and Texas.

How are NRG Energy's recent acquisitions impacting the company's financial performance?

NRG Energy's acquisitions of significant fossil-fueled generation assets in the Northeast United States and England have dramatically increased its revenues. While these acquisitions are driving top-line growth in the non-regulated segment, they have also led to higher interest expenses and operating costs, and contributed to the overall increase in the company's debt levels.

What is the company's outlook regarding its non-regulated businesses?

The company is actively expanding its non-regulated businesses, particularly through NRG Energy. This strategic focus aims to diversify revenue streams and capitalize on opportunities in the energy market. However, management acknowledges the higher risk associated with these non-regulated ventures compared to the traditional utility operations.

XEL/XELLL 10-Q Quarterly Report Q1 FY2000

Summary

Northern States Power Company (NSP) reported its first quarter 2000 financial results, showing a slight decrease in earnings available for common stock to $46.941 million from $51.261 million in the prior year's comparable period, translating to diluted EPS of $0.30 versus $0.34. This decline was primarily driven by increased financing costs and a rise in operating expenses within the regulated utility segments, partially offset by strong performance from its non-regulated subsidiary, NRG Energy. A significant development is the ongoing merger process with New Century Energies (NCE) to form Xcel Energy, Inc. Regulatory approvals are progressing, with expected completion by mid-2000. The company has made substantial investments in its non-regulated businesses, particularly NRG, which has been actively acquiring new generation assets. This strategic shift towards non-regulated growth is a key theme, though it also introduces higher risk and increased financing needs, as evidenced by the substantial increase in short-term and long-term debt during the quarter.

Key Highlights

1Net income decreased to $48.0 million from $52.3 million year-over-year for the three months ended March 31, 2000.
2Earnings per diluted share decreased to $0.30 from $0.34 compared to the same period in 1999.
3Total utility operating revenues increased to $793.0 million from $743.2 million.
4Non-regulated operating revenues surged to $353.4 million from $62.4 million, largely driven by NRG Energy's acquisitions.
5Total capitalization increased significantly due to substantial increases in long-term and short-term debt, reflecting investments in non-regulated ventures and financing needs.
6The proposed merger with New Century Energies is progressing, with key regulatory approvals obtained and an expected completion by mid-2000.
7Investments in NRG Energy, particularly the acquisition of generation assets, are a major focus, contributing significantly to revenue growth but also increasing financial leverage.

XCEL ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2000

Summary

Key Highlights

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