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

As of the filing date, the merger between Northern States Power Company (NSP) and New Century Energies (NCE) to form Xcel Energy Inc. was progressing. Key regulatory approvals from states, FERC, the U.S. Justice Department, and the NRC had been obtained. Approval from the SEC and FCC was expected in the third quarter of 2000. The merger was planned as a tax-free, stock-for-stock exchange and was to be accounted for as a pooling of interests.

How did the non-regulated businesses, particularly NRG Energy, contribute to the company's performance?

The non-regulated segment, largely driven by NRG Energy, Inc., showed significant growth. NRG completed several major acquisitions in early 2000, including fossil-fueled generation assets in the Northeast and from Cajun Electric Power Cooperative, as well as the Killingholme A station in the UK. This expansion led to a substantial increase in non-regulated revenues and net income, with NRG's contributions to earnings per share rising from $0.01 in Q2 1999 to $0.24 in Q2 2000 for the quarter, and from $0.01 for the six months ended June 30, 1999, to $0.30 for the same period in 2000.

What were the key financial highlights for the quarter ended June 30, 2000, compared to the prior year?

For the three months ended June 30, 2000, net income was $62.2 million, a significant increase from $11.5 million in the same period of 1999. Utility operating revenues increased to $679.1 million from $627.2 million. The primary driver for the improved net income was the non-regulated segment, which generated $30.98 million in net income compared to $0.95 million in the prior year, mainly due to NRG's expanded operations.

Are there any significant legal proceedings or contingent liabilities that investors should be aware of?

The company is involved in several legal proceedings. Notably, lawsuits related to a gas explosion in St. Cloud, MN, and fires in Grand Forks, ND, are ongoing. While the company believes it is not liable in the Grand Forks case, and the NTSB report suggested CCI was the proximate cause of the St. Cloud explosion, the ultimate costs for both are currently unknown. Additionally, regulatory matters concerning fuel cost recoveries and conservation program incentives are being addressed.

XEL/XELLL 10-Q Quarterly Report Q2 FY2000

Summary

Northern States Power Company (NSP) reported significant growth in both utility and non-regulated operations for the six months ended June 30, 2000, compared to the same period in 1999. Utility operating revenues increased by 5.0% to $1.47 billion, driven by higher electric and gas sales. Non-regulated revenues, primarily from NRG Energy, Inc., surged dramatically, reflecting strategic acquisitions and a growing energy services segment. Net income for the period rose to $110.2 million, a substantial increase from $63.8 million in the prior year, primarily due to the strong performance of NRG and improved utility margins. The company is in the process of merging with New Century Energies (NCE) to form Xcel Energy Inc., a transaction expected to close soon and be accounted for as a pooling of interests. This merger is a key strategic development for NSP, aiming to create a larger, more diversified energy company. Despite the pending merger, NSP continues to execute its operational strategy, including significant investments in non-regulated businesses and ongoing efforts to enhance efficiency and environmental performance in its utility operations. Investors should monitor the progress and integration of the Xcel Energy merger closely.

Key Highlights

1Consolidated Net Income increased significantly to $110.2 million for the six months ended June 30, 2000, up from $63.8 million in the prior year, driven by strong non-regulated segment performance and improved utility operations.
2Utility operating revenues grew by 5.0% to $1.47 billion for the six months ended June 30, 2000, reflecting increases in both electric and gas sales.
3Non-regulated revenues experienced substantial growth, reaching $850.7 million for the six months ended June 30, 2000, primarily due to acquisitions by subsidiary NRG Energy, Inc.
4NRG Energy, Inc. completed several significant acquisitions in the first half of 2000, bolstering its generation capacity and market presence, including the Cajun Electric Power Cooperative and Killingholme A station.
5The proposed merger with New Century Energies (NCE) to form Xcel Energy Inc. is progressing, with key regulatory approvals obtained and an expected closing in the third quarter of 2000.
6The company issued $800 million in senior secured bonds through NRG South Central Generating LLC to finance the Cajun acquisition and completed an Initial Public Offering (IPO) for NRG, raising approximately $454 million in net proceeds.
7Despite overall positive trends, the company reported a $0.07 per share decrease in earnings due to weather impacts for the first six months of 2000 compared to normal.

XCEL ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2000

Summary

Key Highlights

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