SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) SEPTEMBER 14, 1999
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NORTHERN STATES POWER COMPANY
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(Exact name of registrant as specified in its charter)
MINNESOTA
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(State or other jurisdiction of incorporation)
1-3034 41-0448030
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(Commission File Number) (IRS Employer Identification No.)
414 NICOLLET MALL, MPLS, MN 55401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 612-330-5500
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
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On September 14, 1999, Northern States Power Company's (NSP) management met with
financial analysts. NSP announced that it expects long range earnings to
increase at an average annual growth rate of 7 percent effective starting in
2000. NSP projects earnings for the year 2000 to equal $2.15 per share, as
detailed below. These earnings assume a potential equity issuance of $400
million in early 2000.
<TABLE>
<S> <C>
ESTIMATED
EARNINGS PER SHARE FORECAST YEAR 2000
- ---------------------------------- -----------
Regulated generation business $0.52
Regulated electric operations 0.73
Regulated gas operations 0.15
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Subtotal regulated business $1.40
NRG Energy 0.80
Seren and other subsidiaries (0.05)
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Total projected earnings per share $2.15
</TABLE>
NSP indicated that it expects to infuse equity into NRG equaling $300 million in
1999 ($100 million has already occurred) and $150 million in 2000. After 2000,
NSP expects that NRG will be self funding. If there is further consolidation
within the generation and IPP industry and NRG acts as a consolidator,
additional equity infusions may be required.
NRG indicated that earnings for the year ended December 31, 1999 are expected to
be approximately $0.40 per NSP common share. NRG also indicated that earnings
for the year 2000 are expected to be $0.80 or more per NSP common share. The
growth in earnings is expected to come primarily in North America and Europe as
shown below:
<TABLE>
<S> <C> <C> <C> <C>
EPS FORECAST ACTUAL FIRST ESTIMATED SECOND ESTIMATED 1999 ESTIMATED YEAR
PER NSP SHARE . . . . . HALF 1999 HALF 1999 TOTAL 2000
- ----------------------- -------------- ------------------ ---------------- ------------------
North America . . . . . $0.11 $0.45 $0.56 +
Australia . . . . . . . $0.03 $0.04 $0.07 Flat
Europe. . . . . . . . . $0.01 $0.11 $0.12 +
Emerging Markets. . . . $0.03 $0.02 $0.05 +
Interest Expense. . . . ($0.07) ($0.13) ($0.20) -
Corporate Services/
Business Development ($0.10) ($0.10) ($0.20) -
-------------- ------------------ ---------------- Equal to or
Total. . . . . . . . $0.01 $0.39 $0.40 greater than $0.80
</TABLE>
Note: the "+" designations in the year 2000 indicate an expected increase due to
the full year impact of projects that were closed in 1999 as well as projects
that are expected to close and contribute to earnings prior to December 31,
2000. The "-" designations indicate an expected decrease due to the full year
impact of 1999 financing activities and proposed 2000 financing activities as
well as the increased support costs associated with a larger asset base.
NRG also provided a summary of acquisitions that have closed in 1999 or are
expected to close before December 31, 2000, along with estimates of full year
earnings by project in cents per NSP common share:
<TABLE>
<CAPTION>
NRG SHARE OF PROJECT COST NRG PROJECT EQUITY FULL YEAR
($MILLION) ($MILLION) EPS RANGE
PROJECT MW (NSP SHARE) <F3>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Huntley/Dunkirk . . . . . . . . 1,360 $ 392 $ 153 $0.06 $0.08
Astoria/Arthur Kill . . . . . . 1,456 $ 562 $ 220 $0.16 $0.20
Encina/Ct's . . . . . . . . . . 609 $ 222 $ 104 $0.05 $0.07
Somerset. . . . . . . . . . . . 229 $ 66 $ 25 $0.01 $0.02
Oswego <F1> . . . . . . . . . . 1,700 $ 101 $ 47 $0.03 $0.05
CL&P <F1> . . . . . . . . . . . 2,235 $ 503 $ 258 $0.16 $0.20
Cajun <F1>. . . . . . . . . . . 853 $ 537 $ 172 $0.06 $0.08
ECKG <F2> . . . . . . . . . . . 154 $ 173 $ 44 $0.01 $0.02
Enfield <F2>. . . . . . . . . . 99 $ 73 $ 10 $0.01 $0.03
Other developing projects <F1>. $0.08 $0.12
<FN>
<F1> NRG does not yet own this project, but has entered into an agreement to
acquire the project
<F2> NRG owns this project, but the project has not yet achieved full commercial
operation
<F3> EPS forecasts are based on an NRG corporate capital structure with an
assumed equity ratio of 50% to 60%. The EPS ranges shown do not include
corporate interest and overhead allocations.
</FN>
</TABLE>
This document includes forward-looking statements that are subject to certain
risks, uncertainties and assumptions. Such forward-looking statements are
intended to be identified in this document by the words "anticipate,"
"estimate," "expect," "objective," "possible," "potential" and similar
expressions. Actual results may vary materially. Factors that could cause
actual results to differ materially include, but are not limited to:
- - general economic conditions, including their impact on capital expenditures;
- - availability or cost of capital such as changes in: interest rates; market
perceptions of the power generation industry, NSP or any of its
subsidiaries; or security ratings;
- - business conditions in the energy industry;
- - competitive factors;
- - unusual weather;
- - changes in federal or state legislation;
- - regulation;
- - issues relating to Year 2000 remediation efforts;
- - currency translation and transaction adjustments;
- - regulatory delays or conditions imposed by regulatory agencies in
approving the proposed merger with New Century Energies, Inc.;
- - the higher degree of risk associated with NSP's nonregulated businesses as
compared to NSP's regulated business;
- - volatility of energy prices in a deregulated market environment;
- - the lack of operating history at NRG's development projects, the lack of
NRG operating history at the projects not yet owned and the limited operating
history at the remaining NRG projects provide only a limited basis for
management to project the results of future operations;
- - risks associated with timely completion of NRG projects located at ECKG and
Enfield, including obtaining competitive contracts, obtaining regulatory and
permitting approvals, local opposition, construction delays and other factors
beyond NRG's control;
- - the failure to timely satisfy the closing conditions contained in the
definitive agreements for the acquisitions of projects by NRG subject to
definitive agreements but not yet closed, many of which are beyond NRG's
control;
- - factors challenging the successful integration of projects not previously
owned or operated by NRG, including the ability to obtain operating
synergies;
- - factors associated with operating in foreign countries including: delays in
permitting and licensing, construction delays and interruption of business,
political instability, risk of war, expropriation, nationalization,
renegotiation, or nullification of existing contracts, changes in law, and
the ability to convert foreign currency into United States dollars;
- - and the other risk factors listed from time to time by NSP in reports filed
with the Securities and Exchange Commission, including Exhibit 99.01 to NSP's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
NSP undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
The foregoing review of factors pursuant to the Act should not be construed as
exhaustive.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Northern States Power Company
(a Minnesota Corporation)
By /s/
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Edward J. McIntyre
Vice President and Chief Financial Officer
Dated: September 14, 1999
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