MINNEAPOLIS, Minn., Oct. 21, 2002 — Xcel Energy Inc. reported a third quarter utility earnings contribution of $196 million, or 49 cents per share, compared with $182 million, or 53 cents per share, for third quarter 2001.
Xcel Energy earnings contributions for third quarter 2002, excluding results from NRG, were $174 million, or 44 cents per share, compared with $167 million, or 48 cents per share, in the same period in 2001. However, Xcel Energy’s earnings reported today are incomplete because they do not include the effects of NRG’s operations and expected asset impairment charges, which will be reflected in Xcel Energy’s final third quarter results.
NRG is in the process of developing a restructuring plan it will present to its creditors by the end of October. The impact of third quarter 2002 events, including credit rating downgrades and the resulting restructuring plan, are expected to result in NRG recording material asset impairment charges for the quarter.
NRG has not completed the analysis and review of the asset-impairment amount; however, the after-tax, non-cash charge is currently expected to be approximately $2 billion. Pending the completion of the impairment review and analysis, the final NRG write-off for the quarter has not yet been determined. Consequently, Xcel Energy is not including income statements for Xcel Energy or NRG in this news release.
NRG expects to complete the asset impairment analysis and review by Nov. 14, and Xcel Energy will reflect the impact of NRG asset impairments in its third quarter Form 10-Q, which will be filed with the Securities and Exchange Commission in November.
Xcel Energy’s utility earnings per share were lower in the quarter-over-quarter comparison, primarily due to the larger number of shares outstanding and lower margins from electric wholesale and trading sales. The increased number of shares outstanding in 2002 reduced the utility earnings contribution by about 7 cents per share in the third quarter.
In addition, lower power prices reduced margins from wholesale and trading sales, which decreased earnings by about 4 cents per share. These earnings reductions were partially offset by higher electric margins and lower operating and maintenance expenses.
“Our utilities continue to deliver solid performances quarter after quarter and are the backbone of the company,” said Wayne H. Brunetti, chairman, president and chief executive officer of Xcel Energy. “We are aggressively addressing the financial difficulties facing NRG and are continuing to make progress.”
Excluding all effects of NRG, Xcel Energy expects to earn from $1.45 to $1.55 per share in 2002. The components include utility earnings of $1.57 to $1.65 per share, offset by approximately 10 cents to 12 cents per share related to financing costs at the holding company and the financial results of subsidiaries other than NRG. Due to the uncertainty relating to NRG, Xcel Energy’s forecast of earnings for 2002 does not include the financial impacts of NRG.
For more information, visit http://www.xcelenergy.com.