Xcel Energy board lowers dividend

MINNEAPOLIS, Sept. 27, 2002 — The board of directors of Xcel Energy Thursday declared a quarterly common stock dividend of $0.1875 per share, a reduction of $0.1875 from the previous dividend. Dividends will be paid Oct. 20 to shareholders of record Oct. 7.

“Xcel Energy’s top priorities are to regain our financial strength and focus on the growth of our utility operations, which will provide sustainable dividends,” said Wayne Brunetti, chairman, president and CEO of Xcel Energy. “Our goal is to grow earnings and match that with future dividend growth.”

“Reducing the dividend is important to enhance Xcel Energy’s financial strength and flexibility,” said Brunetti. “In making its decision, the board considered several factors, including the goal of funding customer growth in our core business through internal cash flow and reducing our reliance on debt and equity financings. The board also compared Xcel Energy’s dividend to its utility earnings and to the dividend payout of comparable utilities.”

Xcel Energy’s regulated utilities require substantial capital expenditures annually. “Retaining additional internal cash is essential to fund the growth in our core business while reducing our corporate debt,” said Brunetti. “Xcel Energy’s previous dividend represented approximately 100 percent of utility earnings and was high compared with other utilities.”

The 2002 ongoing earnings outlook for utility operations remains in the range of $1.57 to $1.65 per share, unchanged from the July guidance. Financing costs at the holding company level and results from subsidiaries excluding NRG will reduce earnings by 10 to 12 cents per share.

NRG is working intensely to refocus its business. To date, the company has sold power plants, lowered capital expenditures, reduced operating costs and will reduce its debt as assets are sold. At this time, however, NRG’s future is uncertain and we will not provide earnings guidance.

SOURCE: Xcel Energy