Summary
Xcel Energy Inc. (XEL) filed an 8-K report on October 27, 2000, disclosing key forward-looking statements and strategic priorities to be presented to the financial community on October 31, 2000. Management intends to articulate a belief that the company's stock should be valued at over $35 per share within six to twelve months. The presentation will also detail earnings targets for 2000 and 2001, focusing on non-GAAP 'adjusted' earnings per share. Key priorities for 2001 include achieving an earnings per share of $2.20, realizing merger synergies, supporting and capturing value from NRG Energy, and an authorized secondary equity offering by NRG of up to $600 million. The company expects significant cost savings from merger synergies ($65 million in 2001, $120 million in 2002) and has agreed to rate reductions as a condition of merger approval. Management believes a substantial portion of these synergies are already 'locked in'.
Key Highlights
- 1Xcel Energy management projects a stock valuation target of over $35 per share within 6-12 months.
- 2Projected 2000 earnings per share (excluding special charges) of $2.10.
- 3Targeted 2001 earnings per share of $2.20.
- 4Strategic priorities for 2001 include achieving synergies, supporting NRG Energy's growth, and capturing NRG value for shareholders.
- 5NRG Energy authorized to raise up to $600 million in equity through a secondary offering.
- 6Anticipated merger synergy cost savings of $65 million in 2001 and $120 million in 2002.
- 7Agreed rate reductions as a merger condition estimated at $33 million in 2001 and $28 million in 2002.