-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GMLwAXuLrZwnajEjG0E2kqXK4NFJde5aQhqOmV7qto8N3gsn7MgbJvZSLniy4Gvx jiTIPw2Y83WbIh9eKHiSJQ== 0001004858-99-000055.txt : 19990617 0001004858-99-000055.hdr.sgml : 19990617 ACCESSION NUMBER: 0001004858-99-000055 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW CENTURY ENERGIES INC CENTRAL INDEX KEY: 0001004858 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 841334327 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 001-12927 FILM NUMBER: 99647503 BUSINESS ADDRESS: STREET 1: 1225 17TH ST CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3035717511 MAIL ADDRESS: STREET 1: 1225 17TH ST CITY: DENVER STATE: CO ZIP: 80202 DEFA14A 1 PRESENTATION TO INVESTORS AND FINANCIAL ANALYSTS SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.______) _X_ Filed by the Registrant ___ Filed by a Party other than the Registrant ___ Check the appropriate box ___ Preliminary Proxy Statement ___ Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ___ Definitive Proxy Statement _X_ Definitive Additional Materials ___ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 New Century Energies, Inc. - ------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box) _X_ No fee required ___ Fee computed on table below per Exchange Act Rules 14A-6(i )(1) and 0-11 (1) Title of each class of securities to which transaction applies - ------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies - ------------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing is calculated and state how it was determined) - ------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction. - ------------------------------------------------------------------------------- (5) Total fee paid - ------------------------------------------------------------------------------- ___ Fee paid previously with preliminary materials - ------------------------------------------------------------------------------- ___ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing (1) Amount previously paid - ------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement no - ------------------------------------------------------------------------------- (3) Filing Party - ------------------------------------------------------------------------------- (4) Date Filed - ------------------------------------------------------------------------------- Slide 1 Cover page Xcel Energy Logo Creating Value... Unlocking Opportunities for the New Millennium NSP Logo NCE Logo Slide 2 Safe Harbor Language - - Some of the comments made today will be forward-looking statements that are subject to certain risks, uncertainties and assumptions - - Factors which could cause results to differ from our projections are described in NCE and NSP's Annual Reports and 10K's as well as NRG's 10K's - - We would be pleased to provide these items upon request Slide 3 Financial Benefits - Accretive immediately - Provides superior pro forma total return Enhanced EPS growth of 7% to 9% Attractive dividend income - Increased balance sheet strength and flexibility - Enhanced trading liquidity Slide 4 Strategic Rationale - Combines complementary businesses - Increases scale and scope - Positions Xcel Energy for competition and restructuring Slide 5 Complementary Businesses Bar Graph stating each company's Customers and Generation and the combined amounts. Customers Generation (Millions) (000's MWs) NCE 5.0 8,231 NSP 2.0 15,818 Xcel 7.0 24,049 - NSP has built a sizable generation portfolio - NCE has built a significant domestic and international customer base - Xcel Energy is about taking advantage of these considerable strengths Slide 6 Complementary Businesses- Regulated Electric Operations Bar Graphs stating average electric rates in Cents/Kwh PSCo 5.8 - NCE's retail electric rates are among the SPS 4.6 lowest in the nation NCE 5.3 - 2% customer growth Region 6.4 - 1.6 million electric customers Industry 7.0 Bar Graphs stating average electric rates in Cents/Kwh NSP-MN 5.8 - NSP's retail electric rates are very NSP-WI 5.6 competitive within a low cost region NSP 5.7 - 1% customer growth Region 5.9 - 1.5 million electric customers Industry 7.0 Slide 7 Complementary Businesses Regulated Gas Operations Bar Graphs stating average gas rates in $/MMBtu NCE $4.30 - NCE has the lowest gas rates in the region Region $5.26 - 3% customer growth - 1.0 million customers Bar Graphs stating average gas rates in $/MMBtu NSP $4.89 - NSP has the second lowest gas rates in the Region $5.22 region - 3% customer growth - 500,000 customers Slide 8 Significant Electric and Gas Customer Base NCE Pie Chart stating total of 5.0 million 40% Yorkshire Power Group Electric 8% Yorkshire Power Group Gas 32% Electric 20% Gas NSP Pie Chart stating total of 2.0 million 75% Electric 25% Gas Xcel Energy Pie Chart stating total of 7.0 million 44% Electric 21% Gas 29% Yorkshire Power Group Electric 6% Yorkshire Power Group Gas Slide 9 Stable, International Distribution Business Yorkshire Power Group - NCE owns a 50% interest - Consistent earnings contribution 15% of NCE's 1998 EPS Map of United Kingdom and - 2.4 million gas and electric customers Yorkshire Power Group 400,000 gas customers acquired in primary service territory previous eight months at low cost - Provides competitive knowledge of deregulated marketplace - Low-cost provider versus competing RECs Slide 10 Sizeable, Balanced Generation Portfolio Pie chart of each company's Regulated and Non-Regulated Generation percentages and the combined amounts. Regulated Non-Regulated Total --------- ------------- ----- NCE 97% 3% 8,231MW NSP 45% 55% 15,818MW Xcel 63% 37% 24,049MW Slide 11 A Balanced Generation Mix Pie chart of each company's generation mix by fuel source and the combined amounts Coal Nuclear Gas/Oil Other Total ---- ------- ------- ----- ----- NCE 59% - 38% 3% 8,231MW NSP 47% 9% 39% 5% 15,818MW Xcel 51% 6% 39% 4% 24,049MW Slide 12 Non-Regulated Generation Growth NRG Energy - One of the world's leading independent power producers - 33% annual earnings growth (1995-1998) - Competitive, low cost regional positions - Low risk portfolio Combined line graph of EPS and bar chart of MWs. 1995 1996 1997 1998 1999E ---- ---- ---- ---- ----- EPS contribution $0.12 $0.15 $0.16 $0.28 MWs 999 1,326 2,637 3,042 8,669 Pie Chart of NRG Portfolio 1999E North America 76% Australia 15% Europe 7% Latin America 2% Slide 13 Strategic Generation and Service Footprint A map of the U.S. identifying the regulated service areas of NCE and NSP and specific non-regulated generation sites. Slide 14 Creating Value Unlocking Opportunities NCE & NSP Making Xcel Energy Energy Supply 24,049 MW Energy Delivery $3.2 B Electric Net Plant $1.1 B Gas Net Plant Energy Transmission 17,079 Miles Retail 7.0 Million Customers Slide 15 Financial Benefits from Merger Near-term Mid-term Long-term (0-18 months) (18-36 months) (>3 years) ------------- -------------- ---------- Deliver stand-alone results X Capture cost savings X X X Earnings accretive upon close X X X Rationalize Non-Regulated businesses X X X Improve cash flow X X X Utilize larger, high quality balance sheet X X Strengthen competitive position X X X Attain large cap multiple X X X Prepare for restructuring X Slide 16 Merger Savings - $1.1 billion of net operating expense savings over ten years - 30% of merger savings captured in the first three years Bar Chart Pie Chart Annual Net Merger Savings Source of Merger Savings (Millions) Purchasing Economies 15% 2001 $ 75 Operations & Support 10% 2002 $110 Fuel Procurement/Joint 2003 $133 Dispatch 5% Integration of Corporate Functions 70% Slide 17 Enhanced EPS Growth of 7% to 9% Line Graph showing ranges of estimated EPS Growth Rates. 7-9% Growth Rate With Merger EPS Index Year - --------- ---- 100 2000 Non-Regulated contribution 3-4% Merger Savings Contribution 1% 107-109 2001 Regulated Contribution 3-4% 115-119 2002 123-130 2003 131-141 2004 Pie Chart showing combined percentages of EPS contributions Non-Regulated Regulated ------------- --------- 1998 12% 88% 2003 20% 80% Slide 18 Attractive Dividend Income Bar Graph of Dividend Payout 1999E Future ----- ------- NCE 70% NSP 72% Xcel 60-65% - Policy to provide financial flexibility and current income - $1.50 dividend to Xcel Energy and NSP shareholders - Effectively $2.32 to NCE shareholders - Target payout ratio of 60-65% Slide 19 Increased Market Capitalization Chart of the Market Capitalization for Investor-Owned Utilities in the U.S. showing the combined Market Capitalization of NCE and NSP to form Xcel is in excess of $8 billion. Dated as of May 27, 1999. Slide 20 Superior Total Return Xcel Merrill Lynch Energy Electric Average ------ ---------------- Dividend Yield 5%-6% 4%-5% EPS Growth 7%-9% 4%-5% ---- ---- Total Return 12%-15% 8%-10% Slide 21 Management Commitment - Depth and breadth of Xcel Energy management team - Management aligned with shareholder interests Xcel Energy ------ Chairman/Vice Chairman 3 - 5X Salary Executive and Senior VPs 2 - 4X Salary All Other Officers 1.5 - 2X Salary Slide 22 Timeline to Completion Timeline identifying the following key dates: - - March 25, 1999 Merger Announcement - - June 28, 1999 Shareholder Vote - - June-July State Filings & Federal Filings - - Target Completion Date of 12-18 Months, within March 2000-September 2000 timeframe - - NSP and NCE have developed a proactive plan for State and Federal approvals - - Shareholder vote scheduled for June 28, 1999 and requires a simple majority of all eligible votes Slide 23 State Merger Approvals Map showing the 4 states where Approval is Not Required which are: Oklahoma, South Dakota, Wisconsin and Michigan and the 8 states where Approval is Required which are: North Dakota, Minnesota, Wyoming, Colorado, Kansas, New Mexico, Texas and Arizona - Majority of utility revenues are derived from Colorado, Minnesota and Texas Slide 24 Reasons to Merge - Accretive immediately - Provides superior pro forma total return - Increased balance sheet strength and flexibility - Enhanced trading liquidity - Combines complementary businesses - Increases scale and scope - Positions for competition and restructuring Slide 25 Appendix Slide 26 Xcel Energy Profile NSP NCE Xcel Energy --- --- ----------- Customer Accounts (Mil): Electric 1.5 3.6 5.1 Gas 0.5 1.4 1.9 Total (Domestic and Int'l) 2.0 5.0 7.0 Generation (MW): Regulated 7,149 7,984 15,133 Non-Regulated 8,669 247 8,916 Total 15,818 8,231 24,049 Transmission (Miles): Electric 6,843 10,236 17,079 Gas (T&D) 15,730 18,041 33,771 Gas (FERC regulated) 500 - 500 Thermal Supply 1,000Mwt 170Mwt 1,170Mwt Refuse Derived Fuel 675,000T/Yr - 675,000T/Yr Slide 27 Historical Contribution Analysis Stacked Bar Chart of NSP Stacked Bar Chart of NCE 1996 1997 1998 1996 1997 1998 ---- ---- ---- ---- ---- ---- Total EPS $1.91 $1.73 $1.84 $2.64 $2.50 $3.06 NRG & Other $0.12 $0.11 $0.26 Yorkshire & Other - $0.18 $0.30 Regulated Utility $1.79 $1.62 $1.58 $2.64 $2.32 $2.76 Slide 28 Non-Regulated Complementary Businesses NSP NCE Combined --- --- -------- Non-Regulated NRG Quixx Generation 8,669MW 247MW 8,916MW Energy Services EMI Planergy/ Cadence $54 Million $9 Million $63 Million Sales Sales Sales Energy Marketing NSP e prime and Trading $121 Million $255 Million $376 Million Sales Sales Sales Other Seren Eloigne Utility Ultra-Power Engineering Thermal Natural Fuels $54 Million $114 Million $168 Million Sales Sales Sales Slide 29 New Century Energies Profile NCE Bar Chart of Customer Growth (customers in 000) Electric Gas - $7.7 billion in assets 19 1997 27 - 1.6 million electric customers 34 1998 32 - 82% residential 23 1999-Annually 25 - 1.0 million gas customers - 91% residential - 2.4 million international Pie Chart of 1998 Contribution to Earnings customers 81% Electric - 2% electric customer growth 9% Gas - 3% gas customer growth 10% Non-Regulated - 7,984 MW regulated generation Slide 30 New Century Energies - International Operations Yorkshire Energy Group Profile - - NCE's wholly-owned subsidiary, New Century International, owns a 50% interest in Yorkshire Power Group - Yorkshire distributes and supplies electricity to two million customers - Actively pursuing recently deregulated gas supply business - Yorkshire has acquired approximately 400,000 natural gas customers - - Contributed 15% of NCE 1998 EPS - - Capture of new gas customers key to additional EPS growth - - Distribution price control review likely to have zero net impact Slide 31 New Century Energies - Non-Regulated Operations Additional Business Profiles - - Utility Engineering Corporation - Provides engineering, design, construction, management and other services to utilities - - Quixx Corporation - Develops IPP and co-generation projects - - The Planergy Group - A leading provider of energy consulting, for commercial & industrial customers - - e prime, inc. - A non-regulated electricity and gas marketing and trading affiliate - - New Century Cadence - An internet based commercial energy services company focused on energy efficiency/cost reduction - - Natural Fuels - Sells compressed natural gas as a transportation fuel and invests in companies that own natural gas fueling stations Slide 32 New Century Energies - Economic Outlook - - Employment growth in 1998: - 4.3% in northern NCE counties - 1.7% in southern NCE panhandle counties - 1.5% nationally - - 3.4% unemployment rate vs. 4.5% nationally New Century Energies - Industry Restructuring - - Colorado: - 18-month study bill passed May 1998 - Natural gas customer choice - - Texas: Senate Bill 7 - Electric restructuring bill approved by House and Senate - Currently with Governor Bush for signature - - New Mexico: Customer choice bill passed in April 1999 to begin in 2001 - - Anticipated implementation timetable - Colorado and Texas: 2002 - New Mexico: 2001 Slide 33 New Century Energies - Regulatory Activities - - Colorado: Gas rate case - NCE: $23.4 million, 12% ROE - CPUC oral decision (5/20/99): $14.8 million, 11.25% ROE - New rates effective 7/1/99 - - Voluntary emissions reduction plan - - Texas: Fuel reconciliation Slide 34 New Century Energies Net Income (in Millions) 1998 1997 1996 ---- ---- ---- Electric Utility $279 $216 $239 Gas Utility 30 27 17 International 52 36 -- Other 9 2 14 Corporate (28) (19) 2 --- --- - Consolidated (Total) $342 $262 $272 Earnings Per Share $3.06 $2.50 $2.64 Slide 35 Northern States Power Profile NSP Bar Chart Customer Growth (Customers in 000) Electric Gas - $7.4 billion in assets 24 1997 14 - 1.5 million electric customers 20 1998 22 - 88% residential 18 1999-Annually 14 - .5 million gas customers - 91% residential - 1.0% electric customer growth Pie Chart of 1998 Contribution to Earnings - 3.0% gas customer growth 80% Electric - 7,149 MW regulated generation 6% Gas - 8,669 MW non-regulated generation 14% Non-Regulated (1999E) Slide 36 Northern States Power - Pipeline Operations Viking Transmission Profile Map of the North Central U.S. identifying the location of the Viking Transmission Pipeline - 1999 Expansion $21.4 Million FERC Approved - Continue to Sell Future Expansion - Capacity of 460 Mcf/Day - Average Daily Capacity Factor of 98% and the planned Guardian Pipeline. - 2002 in-service - 87% Contracted - - In the five years since NSP's acquisition, throughput has increased by 22% - - Guardian will have an initial capacity of 750 Mcf/Day and can be expanded to 1.1Bcf/day Slide 37 Northern States Power - Non-Regulated Operations NRG Energy Profile - - NRG Energy maintains a 8,669 MW domestic and international portfolio of competitive independent power facilities - Recently acquired 4,745 MW of strategic generation assets in NEPOOL - NRG increased contribution to NSP EPS from 11% to 15% from 1997 to 1998 - 20% contribution to NSP EPS expected in 1999 - - District heating and cooling operations among the largest in the U.S. Slide 38 Northern States Power - Non-Regulated Operations Additional Business Profiles - - Seren Innovations - Delivers high-speed internet access, telephone service, cable TV and video-on-demand - - Energy Masters International - Offers energy services focused on upgrading facilities for greater energy efficiency - - Eloigne Company - Invests in affordable housing developments principally within NSP service territories through the Federal Housing Tax Credit Program - - UltraPower - Provides non-destructive testing of underground power cables Slide 39 Northern States Power - Economic Outlook - - Employment growth in 1998: - 3.0% in Minneapolis/St. Paul SMSA - 1.5% nationally - - 2.0% unemployment rate vs. 4.5% nationally Slide 40 Northern States Power - Industry Restructuring - - Minnesota: - Commission has directed the Dept. of Public Service to develop a comprehensive plan for gas and electric unbundling/retail choice/ restructuring by Jan. 1, 2001 - - North Dakota and South Dakota: - No legislative or utility commission directives currently in place - - Wisconsin: - Public utilities must transfer control of transmission facilities to an ISO or ITO by June 30, 2000 - - Michigan: - Full retail customer choice on January 1, 2000 Slide 41 Northern States Power Net Income (in Millions) 1998 1997 1996 ---- ---- ---- Electric Utility $226 $200 $231 Gas Utility 17 22 28 NRG 42 22 20 EMI (8) (11) (9) Other 5 4 5 --- --- - Consolidated (Total) $282 $237 $275 Earnings Per Share $1.84 $1.73 $1.91 Operating Matters - - Prairie Island and Monticello nuclear power plants maintain top tier INPO ratings -----END PRIVACY-ENHANCED MESSAGE-----