<Page>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002 OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                         Commission File Number 1-16157

                             NEWPOWER HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

                DELAWARE                                   52-2208601
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                   Identification No.)


         ONE MANHATTANVILLE ROAD
           PURCHASE, NEW YORK                                10577
(Address of principal executive offices)                   (Zip Code)

                                 (914) 697-2100
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  /X/ Yes   No / /

As of May 10, 2002, there were 62,866,568 shares of NewPower Holdings, Inc.
common stock, par value $.01 per share, outstanding. As of May 10, 2002, there
were Class A warrants outstanding to purchase 64,419,200 shares of NewPower
Holdings, Inc. common stock at an exercise price of $0.05 per share.

<Page>

                             NEWPOWER HOLDINGS, INC.
                                    FORM 10-Q
                    FOR THE THREE MONTHS ENDED MARCH 31, 2002

<Table>
<Caption>

                                                                                                          PAGE
<S>                                                                                                       <C>
PART I - FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

                  Consolidated Balance Sheets
                           March 31, 2002 and December 31, 2001                                             3

                  Consolidated Statements of Income
                           Three Months Ended March 31, 2002 and 2001                                       4

                  Consolidated Statements of Cash Flows
                           Three Months Ended March 31, 2002 and 2001                                       5

                  Notes to Financial Statements                                                             6

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                                        19
                    CONDITION AND RESULTS OF OPERATIONS

         ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                28

PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS                                                                        30

         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                                                30

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                                          30

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                      30

         ITEM 5.  OTHER INFORMATION                                                                        30

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                                         30

SIGNATURES                                                                                                 31
</Table>


                                       2
<Page>

                          PART I. FINANCIAL INFORMATION
                          Item 1. Financial Statements

                             NEWPOWER HOLDINGS, INC.
                           Consolidated Balance Sheets
                (Dollars in thousands, except per share amounts)

<Table>
<Caption>

                                                                           MARCH 31,     DECEMBER 31,
                                                                             2002            2001
                                                                           ---------      ---------
                                                                          (Unaudited)
<S>                                                                        <C>            <C>
    ASSETS

    CURRENT ASSETS
        Cash and Cash Equivalents                                          $  34,076      $  26,408
        Restricted Cash                                                       38,105         31,636
        Accounts Receivable, net of allowance of $10,152 and $10,973          93,066         90,882
        Inventory and Imbalances                                               6,368         62,979
        Prepaid Expenses                                                       7,494          4,983
                                                                           ---------      ---------
         TOTAL CURRENT ASSETS                                                179,109        216,888
                                                                           ---------      ---------

        Fixed Assets and Deferred Software Costs                              17,122         16,984
        Less: Accumulated Depreciation and Amortization                       (7,380)        (6,173)
                                                                           ---------      ---------
        Net Fixed Assets and Deferred Software Costs                           9,742         10,811
                                                                           ---------      ---------
        Assets from Price Risk Management Activities                           4,008            742
        Other Assets                                                           2,239          2,239
        Restricted Cash, net of current                                       62,500         42,400
        Intangible Assets, net                                                36,579         38,826
                                                                           ---------      ---------
    TOTAL ASSETS                                                           $ 294,177      $ 311,906
                                                                           =========      =========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    CURRENT LIABILITIES
        Accounts Payable                                                   $  72,889      $  57,344
        Accrued Liabilities                                                    9,802         11,463
        Due to Affiliated Entities                                            28,750         31,590
        Liabilities from Price Risk Management Activities                      3,627          1,893
        Deferred Compensation                                                 14,975         14,338
                                                                           ---------      ---------
         TOTAL CURRENT LIABILITIES                                           130,043        116,628
                                                                           ---------      ---------

    COMMITMENTS AND CONTINGENCIES

    STOCKHOLDERS' EQUITY
        Preferred Stock, $.01 par value, 50,000,000 shares authorized;            --             --
           0 shares issued and outstanding
        Common Stock, $.01 par value, 500,000,000 shares authorized;             629            628
           62,872,155 and 62,776,917 shares issued and 62,866,568 and
           62,771,330 shares outstanding
        Paid-in Capital                                                      777,715        777,713
        Deferred Compensation                                                   (438)          (667)
        Accumulated Other Comprehensive Income                               (26,404)       (34,685)
        Accumulated Deficit                                                 (587,368)      (547,711)
                                                                           ---------      ---------
         TOTAL STOCKHOLDERS' EQUITY                                          164,134        195,278
                                                                           ---------      ---------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $ 294,177      $ 311,906
                                                                           =========      =========
</Table>

       The accompanying notes are an integral part of these consolidated
                              financial statements


                                       3
<Page>

                             NEWPOWER HOLDINGS, INC.
                  Consolidated Statements of Income (Unaudited)
                (Dollars in thousands, except per share amounts)

<Table>
<Caption>

                                                   THREE MONTHS ENDED MARCH 31,
                                                  ------------------------------
                                                      2002              2001
                                                  ------------      ------------
<S>                                               <C>               <C>
NET REVENUES                                      $    172,263      $    126,016
COST OF SALES                                          153,416           117,376
                                                  ------------      ------------
GROSS MARGIN                                            18,847             8,640

OPERATING EXPENSES                                      41,225            67,603
NON-RECURRING OPERATING EXPENSES                        17,560                --
                                                  ------------      ------------
OPERATING LOSS                                         (39,938)          (58,963)

INTEREST (INCOME) EXPENSE, NET                            (281)           (8,744)
                                                  ------------      ------------
INCOME (LOSS) BEFORE INCOME TAXES                      (39,657)          (50,219)

PROVISION FOR INCOME TAXES                                  --                --
                                                  ------------      ------------
NET LOSS                                          $    (39,657)     $    (50,219)
                                                  ============      ============

BASIC AND DILUTED NET LOSS PER COMMON SHARE       ($      0.63)     ($      0.86)

WEIGHTED AVERAGE SHARES USED TO COMPUTE BASIC
   AND DILUTED NET LOSS PER COMMON SHARE            62,833,764        58,117,316

</Table>

        The accompanying notes are an integral part of these consolidated
                              financial statements


                                       4
<Page>

                             NEWPOWER HOLDINGS, INC.
                Consolidated Statements of Cash Flows (Unaudited)
                             (Dollars in thousands)

<Table>
<Caption>

                                                                          Three Months Ended March 31,
                                                                          ----------------------------
                                                                              2002            2001
                                                                            ---------      ---------
<S>                                                                         <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Reconciliation of net loss to net cash used by operating activities

      Net loss                                                              $ (39,657)     $ (50,219)
      Depreciation and amortization                                             3,066          2,896
      Deferred compensation                                                     1,716          1,852
      Provision for doubtful accounts                                            (821)         1,030
      Net non-cash (gains) losses from price risk management activities         6,727         (4,674)
Changes in assets and liabilities
      Increase in accounts receivable                                          (1,363)       (22,729)
      Decrease in inventory and imbalances                                     56,611         41,538
      Increase in prepaid expenses                                             (2,511)        (1,083)
      Increase (decrease) in accounts payable and accrued liabilities          13,884        (13,823)
      Increase (decrease) in due to affiliates                                 (2,840)           999
      Payments of deferred compensation                                          (850)        (1,109)
      (Increase) decrease in other assets and intangibles                         388         (1,344)
                                                                            ---------      ---------
     NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                       34,350        (46,666)
                                                                            ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES

      Cash issued to purchase businesses, net of cash received                     --         (6,435)
      Capital expenditures                                                       (137)        (3,107)
      Net sales of investment securities                                           23          6,914
                                                                            ---------      ---------
     NET CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES                       (114)        (2,628)
                                                                            ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES

      (Increase) decrease in surety bonds and deposits                        (26,570)       (61,761)
      Proceeds from sale of common stock & warrants                                 2             --
                                                                            ---------      ---------
     NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES                    (26,568)       (61,761)
                                                                            ---------      ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                7,668       (111,055)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                 26,408        179,885
                                                                            ---------      ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $  34,076      $  68,830
                                                                            =========      =========
</Table>

        The accompanying notes are an integral part of these consolidated
                              financial statements


                                       5
<Page>

NEWPOWER HOLDINGS, INC. NOTES TO FINANCIAL STATEMENTS

NOTE 1-ORGANIZATION AND FORMATION

         NewPower Holdings, Inc. ("NPW" or "the Company"), formerly TNPC, Inc.
and EMW Energy Services Corp., is the successor to an operating unit of Enron
Energy Services, LLC ("EES") which is a subsidiary of Enron Corp. ("Enron").
NPW, generally through its subsidiary The New Power Company, provides retail
marketing and retail sales of natural gas and power to residential customers in
ten states: Ohio, Indiana, Georgia, Maryland, Pennsylvania, Michigan, New
Jersey, Virginia, California and Texas.

NATURE OF OPERATIONS

         NPW has a limited operating history in the new and rapidly evolving
restructured retail energy markets. The development of NPW's operations depend
upon, among other things, favorable markets opening under viable competitive
rules, NPW's ability to control its costs so as to achieve favorable margins,
and its ability to manage credit requirements of third parties with whom it
conducts business, including trading counterparties and incumbent utilities.

         NPW has incurred net losses since inception, but has been undertaking
significant actions to reduce its cash burn rate so as to reduce losses and
extend liquidity. Based on actions the Company is taking to control costs and
conserve cash, and absent any significant increases in commodity prices or
demand or other significant events, NPW expects that it will have sufficient
cash and liquidity resources into the third quarter of 2002. If NPW's cash
requirements prove to be greater than expected, these efforts to achieve
sufficient liquidity may not be successful, which would have a material
adverse effect on NPW and would raise substantial doubt about NPW's ability
to continue as a going concern. See also "Liquidity and Capital Resources" in
Item 2 of this form 10-Q for additional discussion regarding the Company's
liquidity.

         Our independent auditors, Arthur Andersen LLP, qualified their opinion
on our 2001 financial statements with respect to our ability to continue as a
going concern.

         Readers of this Form 10-Q should also review NPW's Annual Report on
Form 10-K, filed with the Securities and Exchange Commission on April 16, 2002.

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions in determining NPW's assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.


                                       6
<Page>

CASH AND CASH EQUIVALENTS

         NPW considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents. The recorded carrying amounts of
NPW's cash and cash equivalents approximate their fair market value.

RESTRICTED CASH

         NPW is required by various state regulatory agencies, utilities with
which it does business, distribution companies and commodity supply
counterparties to post cash, surety bonds, lines of credit, parent guarantees
and similar forms of assurance or collateral to ensure fulfillment of its
obligations. Any cash posted as collateral is reflected as restricted cash in
the accompanying balance sheets. As of March 31, 2002, NPW had provided
approximately $100.6 million in cash collateral for these purposes. Any portion
of cash collateral that is held with utilities, distribution companies or that
would revert to NPW in a period beyond twelve months from the balance sheet date
is classified as non-current. If NPW exits a market, a portion of the
non-current cash collateral for the benefit of the utilities may revert back to
NPW within a period of time after exiting the market. Included in restricted
cash at March 31, 2002, is approximately $12.5 million related to a market in
which we have decided to reduce our presence by turning back customers as
described in Note 6 - "Commitments and Contingencies".

ACCOUNTS RECEIVABLE

         As permitted under an amendment to the Master Netting Agreement with
Enron, effective October 18, 2001, certain accounts receivable and unbilled
receivables were substituted at a discounted rate for the Company's cash
collateral requirements. Also, Enron received a security interest in all the
Company's receivables. See Note 6 - "Commitments and Contingencies".

INVENTORY AND IMBALANCES

         Inventories represent natural gas in storage, and are generally stated
at the lower of weighted average cost or market. In addition, the Company
delivers natural gas to the local distribution companies for further delivery to
the Company's customers. Actual usage by the Company's customers will differ
from the amount of natural gas delivered to the local distribution companies.
This difference is referred to as an "imbalance" and is generally stated at the
lower of cost or market. The Company periodically compares the carrying value of
natural gas in inventory and imbalances to its realizable market value. The
carrying value of any inventory or imbalances deemed to be not realizable are
charged to earnings.

         As permitted under an amendment to the Master Netting Agreement with
Enron, effective October 18, 2001, inventory located at certain storage
facilities was substituted at a discounted rate for the Company's cash
collateral requirements. Also, Enron received a security interest in all the
Company's natural gas inventory. See Note 6 - "Commitments and Contingencies".


                                       7
<Page>

INCOME TAXES

         Deferred taxes result from differences arising between the financial
and tax bases of NPW's assets and liabilities and are adjusted for changes in
tax rates and tax laws when changes are enacted. Valuation allowances are
recorded to reduce deferred tax assets when it is more likely than not that a
tax benefit will not be realized by NPW.

FIXED ASSETS AND DEFERRED SOFTWARE COSTS

         Generally, fixed assets and deferred software costs are stated at cost.
NPW provides for depreciation on fixed assets on the straight-line basis over
their estimated useful lives, as follows:

<Table>
<S>                                                        <C>
      Office furniture and fixtures                        3 years
      Computer software and licenses                       3 years
      Computer hardware                                    3 years
      Leasehold improvements                               Life of Lease
</Table>

REVENUE RECOGNITION

         NPW recognizes revenue for the sale of power or natural gas once the
commodity has been delivered to a customer. Intra-month unbilled power and
natural gas sales are estimated and recorded each period. NPW's bills to
customers may also include charges relating to the transmission and distribution
of the commodity, functions which are provided by the incumbent utility. These
amounts are excluded from NPW's net revenues. As a result, neither NPW's
revenues nor costs include the transmission and distribution charges included in
customers' bills. In the Georgia, Texas and California markets, where NPW is
responsible for delivering bills to customers, NPW bears the credit risk with
respect to the transmission and distribution charges provided by the utilities
in those markets.

COMPREHENSIVE INCOME/LOSS

         Comprehensive income is reported as a component of stockholders'
equity. As of March 31, 2002, comprehensive loss of $26.4 million relates to the
fair market value of the Company's risk management assets and liabilities plus
the net unrealized gains on available for sale securities included in the
balance sheet as investments in marketable securities or restricted cash. The
amount also includes $30.1 million in losses related to gas hedges with Enron as
described in Note 5 - "Price Risk Management Activities".

NET LOSS PER COMMON SHARE

         Net loss per common share was determined by dividing net loss by the
weighted average common shares outstanding. Common equivalent shares related to
stock options and warrants are excluded from the calculation as their effect is
antidilutive. Accordingly, basic and diluted loss per common share are
equivalent.


                                       8
<Page>

         Common equivalents outstanding at March 31, 2002 and 2001 included
64,419,200 and 69,070,800 Class A warrants, respectively. Common stock
equivalent shares attributable to the Class A warrants at March 31, 2002 and
2001 computed on the treasury stock method would have been approximately
60,820,362 and 68,635,954 shares, respectively.

CERTAIN RISKS AND CONCENTRATIONS

         NPW sells its energy services to residential and small commercial
customers in the United States. NPW maintains a reserve for doubtful accounts.
At March 31, 2002 the allowance for doubtful accounts was $10.2 million.

         NPW's business is subject to risks and uncertainties including its
limited operating history; delays or changes in the rules for the restructuring
of the electric and natural gas markets; its ability to manage its energy
requirements and sell energy at a sufficient margin given the volatility in
prices for electricity and natural gas; the effect of commodity volatility on
collateral requirements and NPW's liquidity and credit availability; its
dependence on third parties to provide critical functions to NPW and its
customers; and conditions of the capital markets affecting the availability of
capital.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." The standard requires that legal obligations associated
with the retirement of tangible long-lived assets be recorded at fair value when
incurred and is effective on January 1, 2003. The Company is currently reviewing
the provisions of SFAS No. 143 to determine the standard's impact upon adoption.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 requires that one
accounting model be used for long-lived assets to be disposed of by sale.
Discontinued operations will be measured, similar to other long-lived assets
classified as held for sale, at the lower of its carrying amount or fair value
less cost to sell. Future operating losses will no longer be recognized before
they occur. SFAS No. 144 also broadens the definition of discontinued operations
to include a component of an entity when operations and cash flows can clearly
be distinguished and establishes criteria to determine when a long-lived asset
is held for sale. SFAS No. 144 also addresses the factors for companies to
consider when determining if a long-lived asset may have incurred an impairment
in value. The provisions of this Statement were effective on January 1, 2002.
There was no transition impact for this statement.

NOTE 3-ACQUISITIONS

         In the first quarter of 2001, NPW completed the acquisition of
approximately 7,200 residential and small commercial natural gas customers in
the Atlanta, Georgia market from Reliant Energy Retail, Inc. ("Reliant"). The
acquisition was accounted for as a purchase. Based on the mix of customers
acquired from Reliant and the average consumption of small commercial customers
in the Atlanta market, NPW estimates that the acquired portfolio equates to
approximately 40,000 residential customers. The total purchase consideration
included $4.5


                                       9
<Page>

million in cash. Also, in connection with the acquisition, NPW purchased natural
gas inventory for approximately $1.9 million. The results of operations from the
Reliant portfolio are included in operating results since February 2001 when the
Company assumed operational control of the Reliant portfolio.

         The New Power Company began servicing approximately 240,000 customers
in March 2001, pursuant to an agreement with PECO Energy Company ("PECO"), which
provides electric delivery service in southeastern Pennsylvania. In October
2000, NPW reached an agreement with PECO to supply service to up to 20 percent
of PECO's residential power customers who had not selected a competitive energy
services provider. Pursuant to requirements in the 1998 settlement of PECO's
electric restructuring case, PECO issued a request for proposal for a third
party to supply Competitive Default Service ("CDS") to 20% of its residential
customers for a three-year term beginning January 1, 2001. Under the agreement
with PECO, The New Power Company committed to provide power at a discount to
PECO's current rates for residential customers who participate in this program.
As of March 31, 2002, NPW was servicing approximately 185,500 customers under
this agreement. Pursuant to the Merger Agreement with Centrica (see "Merger
Agreement" under Note 6 - "Commitments and Contingencies"), on February 22, 2002
NPW provided notice to PECO of its intent to terminate the PECO Competitive
Default Service contract and to return the customers served under that
agreement. NPW expects to return the PECO-CDS customers to PECO or another
service provider by the end of May, 2002. See Note 6 - "Commitments and
Contigencies."

NOTE 4-RELATED PARTY TRANSACTIONS

         NPW made purchases of natural gas and power from affiliates Enron and
EES, during the three months ended March 31, 2002 and 2001, totaling $0 and
$81.5 million, respectively.

NOTE 5-PRICE RISK MANAGEMENT ACTIVITIES

         Effective January 1, 2001, NPW adopted SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended. SFAS No. 133
requires that each derivative instrument be recorded as an asset or liability
measured at its fair value and that net changes in the fair value of derivative
instruments be recognized currently in earnings unless specific hedge accounting
criteria are met.

         The purpose of NPW's hedging strategy is to reduce the Company's risk
profile associated with delivering energy to the consumer, as well as to achieve
a more predictable cash flow, while reducing the Company's exposure to adverse
price fluctuations of commodities. The hedging instruments used are swaps and
forward contracts for physical commodity purchases.

         The Company uses swap instruments to hedge commodity price and basis
exposure risk associated with its fixed price natural gas contracts. In these
swap instruments, the Company pays the counterparties the amount by which the
floating variable price (settlement price) is below the fixed swap price and
receives the amount by which the settlement price exceeds the fixed swap price.
In accordance with SFAS 133, NPW accounts for the financial swap transactions as
cash flow hedges. In periods prior to the occurrence of the hedged transaction,
the values of the hedges are recorded in the consolidated balance sheet as
assets and liabilities from


                                       10
<Page>

price risk management activities with the resulting net unrealized gains or
losses deferred and reflected as a component of the equity account Other
Comprehensive Income ("OCI"). In the periods the hedged purchases occur, the
financial swaps are cash settled and deferred gains or losses pursuant to the
hedges are removed from the balance sheet and included in the net cost of the
commodity purchased. Because of the high degree of effectiveness between the
hedging instruments and the underlying exposures being hedged, fluctuations in
the value of the derivative instruments are generally offset by changes in the
value or cash flows of the underlying exposures being hedged. The financial
instruments that are used in hedging transactions are assessed both at inception
and at least quarterly thereafter to ensure that they are effective in
offsetting changes in either the fair value or cash flows of the related
underlying exposures. Adoption of SFAS No. 133, effective January 1, 2001,
required a one-time adjustment to NPW's balance sheet of approximately $56
million, which was recorded as a net asset (from price risk management
activities) and as an increase to the stockholders' equity account accumulated
Other Comprehensive Income ("OCI"). The following table presents the activity in
the OCI account from December 31, 2001 through March 31, 2002, (in $000's):

<Table>
<Caption>

                                                Cumulative
                                                Unrealized    Accumulated      Total Other
                                                 Gains on   Derivative Gains  Comprehensive
                                                Investments    (Losses)       Income (Loss)
                                                ----------- ----------------  -------------
<S>                                                 <C>          <C>           <C>
Other Comprehensive Income, December 31, 2001       $     66     ($34,751)     ($34,685)
   Unrealized gains on investments                        23           --            23
   Net change in value of cash flow hedges                --        1,220         1,220
   Derivative losses reclassified to earnings -
      Settled financial swaps                             --        7,038         7,038
                                                    --------     --------      --------

Other Comprehensive Income, March 31, 2002          $     89     ($26,493)     ($26,404)
                                                    ========     ========      ========
</Table>

         As discussed further in Note 6 - "Commitments and Contingencies", Other
Comprehensive Income at March 31, 2002 also includes approximately $30.1 million
of hedge losses related to cash flow hedges that were cash settled as part of
the Enron bankruptcy in December 2001. In accordance with SFAS No. 133, because
the hedged transactions to which these financial swaps relate are still probable
of occurring, the value of these hedges as of the date of the Enron default will
remain in OCI until the periods when the hedged transactions affect earnings.
Approximately $28.9 million of derivative losses related to the Enron hedges
will be reclassified to earnings during the next year as the hedged transactions
occur. However, because these hedges are to fix commodity purchase costs at a
set rate, NPW would expect to offset these swap losses with sales of the
commodity to existing gas customers.

         As of March 31, 2002, NPW has financial swaps in place to hedge certain
expected future cash flows through August 2003 with the vast majority of the
forward swaps scheduled to settle in periods through the end of 2002. Based on
current market prices, NPW anticipates that approximately $0.65 million of net
derivative gains, currently reflected in accumulated OCI, will be reclassified
to earnings during the next year, pursuant to settlements of these financial
swaps.

         NPW's forward contracts for the physical purchase of commodities are
generally entered into for delivery of the commodities to meet the requirements
of the Company's residential and


                                       11
<Page>

small commercial customers in future periods. To the extent the forward
contracts relate to forecasted customer demand, at the inception of the
contracts, NPW accounts for these contracts as normal purchases and sales under
SFAS 133. As such, these contracts are not reflected in the Company's financial
statements until the month of actual purchase or sale of the commodity.

         NPW also commits to volumes of forward purchase contracts above
forecasted customer demand volume. When the volumes pursuant to NPW's forward
purchase contracts exceed the probable volumes NPW expects to deliver to its
customers, the Company treats the excess positions as energy trading activities
and periodic mark-to-market net gains or losses are reflected through current
earnings. In addition, NPW enters into forward purchase contracts in markets in
which it has no customers and also enters into speculative contracts for other
energy products that are trading activities. All of NPW's energy trading
activities are accounted for under SFAS No. 133. The values of the forward
energy trading contracts are recorded as assets and liabilities from price risk
management activities in the consolidated balance sheet and net changes in the
values are reflected through the statement of income as a component of cost of
sales. Net realized and unrealized gains from trading risk management activities
totaled $0 and $4.7 million during the three months ended March 31, 2002 and
2001, respectively, and are recorded as a component of cost of sales.

         Subsequent to the Enron bankruptcy in December 2001, due to liquidity
and credit restrictions, NPW has not replaced the contracts it had in place to
hedge against potential adverse price movements in commodities that NPW has
contracted to deliver to its customers. As a result, NPW's cash flows and
margins since that time have fluctuated and will continue to fluctuate with
market price changes in the commodities NPW is required to purchase and deliver
to its customers. Increases in market prices for natural gas and electricity
will have a negative impact on the expected cash flows and margins of NPW, while
decreases in such commodity prices will have a positive impact on the expected
cash flows and margins of NPW. Significant increases in commodity prices would
have a material adverse effect on NPW's liquidity and could negatively impact
NPW's ability to continue as a going concern.

NOTE 6-COMMITMENTS AND CONTINGENCIES

         In February 2002, NPW agreed to pay the successors to Columbia Energy
Services, Inc. $3.5 million as additional cash consideration in settlement of
all outstanding obligations under a purchase agreement executed in July 2000.

NON-RECURRING CHARGES - 2002

         The following summarizes $17.6 million in restructuring charges that
NPW recognized as non-recurring operating expenses during the three months ended
March 31, 2002:

<Table>
<Caption>

                                                         2002
                                                       --------
<S>                                                    <C>
            Return of PECO-CDS customers               $ 20,400
            Final settlement of Enron liability          (2,840)
                                                       --------

            Total Non-Recurring Operating Expenses     $ 17,560
                                                       ========
</Table>


                                       12
<Page>

         Concurrently with the execution of NPW's merger agreement with Centrica
(see discussion of "Merger Agreement" in this Note 6 - "Commitments and
Contingencies"), NPW provided notice to PECO of its intent to terminate its
agreement with PECO and to return the PECO-CDS customers NPW had been serving.
As a consequence of its termination of the PECO contracts and the return of PECO
customers to PECO thereunder, NPW may be required pursuant to the terms of such
contracts to forfeit to PECO and its affiliates collateral of up to $12.5
million. As of March 31, 2002, NPW had posted cash collateral of approximately
$10 million with PECO to cover non-performance by NPW, and had provided $2.5
million to fund a surety bond. NPW currently estimates that the Company may be
required to take an additional charge of approximately $7.9 million, as of March
31, 2002, related to the liquidation of hedges associated with the PECO-CDS
customers. The final potential charge or gain will depend on commodity market
prices at the time the hedges are liquidated as compared to contracted purchase
prices. The Company has accrued a non-recurring operating expense of $20.4
million to its income statement during the quarter ended March 31, 2002 to
account for the potential losses from the return of the PECO-CDS customers.

         As of December 31, 2001, NPW had approximately $31.6 million recorded
in its balance sheet as due to affiliated entities. Such amount represented the
total outstanding amounts contractually due to Enron and its affiliates by NPW
related to transactions completed through December 31, 2001. In February 2002,
NPW and Enron agreed to settle the liability for $28 million, plus accrued
interest thereon, conditioned upon receipt of an order from the bankruptcy court
overseeing Enron's bankruptcy. As described in Note 7 - "Subsequent Events", the
bankruptcy court entered an order approving the settlement on April 18, 2002.
NPW has reduced its due to affiliates liability and its non-recurring expenses
by approximately $2.8 million during the quarter ended March 31, 2002, to
properly reflect the amounts due to Enron and its affiliates. The $28 million,
plus accrued interest, is due to be paid to Enron and its affiliates no later
than July 5, 2002.


NON-RECURRING CHARGES - 2001

         The following summarizes $165.1 million in restructuring charges that
NPW recognized as non-recurring operating expenses during the year ended
December 31, 2001:

<Table>
<Caption>

                                                                       2001
                                                                    --------
<S>                                                                 <C>
             Enron's default under the Master Netting Agreement     $ 90,069
             Deferred software                                        32,714
             Customer lists impairment                                17,820
             America On Line contract impairment                      12,880
             Leasehold improvements and commitments                    5,800
             Exit of non-commodity business                            3,114
             Severance and other employee costs                        2,691
                                                                    --------

             Total Non-Recurring Operating Expenses                 $165,088
                                                                    ========
</Table>


                                       13
<Page>

         As discussed in detail below under "Enron Bankruptcy," NPW incurred
$90.1 million in expenses related to Enron's default on forward physical power
hedge contracts, including ancillary costs regarding the default.

         The termination of NPW's proposed merger with Centrica combined with
ongoing liquidity and credit issues arising from the Enron bankruptcy caused NPW
to review the net realizable value of its long term assets held as of December
31, 2001. Pursuant to this review, NPW estimated that its deferred software
assets should be written down by approximately $32.7 million and that its
intangible asset customer lists should be written down by approximately $17.8
million at December 31, 2001. The Company based its asset valuations primarily
on current market conditions and internally generated data, discounted to
account for NPW's current liquidity status.

         The Company recorded a $12.9 million charge related to its contract
with America Online, which represents the unamortized balance of amounts
previously paid to AOL.

         In November 2001, in an effort to manage cash flow, NPW made the
decision to scale back its operations. To this end, the Company reduced its work
force by 20% and took steps to exit its non-commodity business line. The work
force reduction resulted in a $2.7 million charge for severance and other
employee costs. The Company recorded a $5.8 million charge for leasehold
improvements and commitments related to previously capitalized leasehold
improvements plus the present value of future lease commitments in excess of
amounts expected to be subleased related to additional leased space in the
Company's Purchase, New York offices. NPW expanded its office space during 2001,
but due to the downsizing of staff in November 2001, the additional space is
uninhabited and NPW does not expect to grow into the space based on its current
plans. NPW's decision to exit the non-commodity business required the Company to
expense $3.1 million related to inventory and investments in joint ventures and
associations that were to support NPW's attempt to create a significant
non-commodity business line.

ENRON MATTERS

         During the year ended December 31, 2001, NPW purchased the majority of
its commodity needs from Enron. Also, the Company entered into numerous forward
contracts with Enron to hedge the cost of commodity that would be delivered to
NPW's customers at some point in the future, as well as some open positions that
were not hedges of future commodity purchase obligations. On October 18, 2001,
NPW entered into a Master Netting Agreement with Enron and its affiliates which
permitted the substitution of receivables, inventory and other assets, in lieu
of cash collateral, to support mark-to-market collateral calls. Under a related
General Security Agreement, Enron was granted liens on the Company's
receivables, inventory and certain other assets to provide a security interest
in the pledged assets.

         Enron's filing for bankruptcy on December 2, 2001 constituted an event
of default under the commodity agreements.Pursuant to the agreements with Enron,
in the event of default, all outstanding contracts could be terminated as of the
settlement date determined by the non-defaulting party. NPW, as the
non-defaulting party, selected December 3, 2001 as the settlement date for all
outstanding contracts with Enron. These contracts consisted of forward purchases
and


                                       14
<Page>

sales of physical power and gas as well as forward financial swaps (see Note 5 -
"Price Risk Management Activities"). The settlement amount is computed as the
difference between commodity market prices on the settlement date and the
commodity prices specified in the forward contracts multiplied by the quantities
specified in the contracts. Additionally, the settlement amount included any
outstanding amounts NPW had payable to or receivable from Enron and its
affiliates related to transactions completed between NPW and Enron prior to
December 3, 2001 that had yet to be paid at that date, as well as other costs
and offsets recognized under the default and termination provisions of the
contracts. The total settlement amount was calculated to be approximately $102
million. Upon determining the Company's estimate of the settlement amount due
Enron, NPW reclassified all amounts related to contracts with Enron from the
assets and liabilities from price risk management accounts into the due to
affiliated entities account in the accompanying balance sheet. Approximately $70
million of cash collateral that NPW had provided to Enron to cover the
mark-to-market shortfall in value on its portfolio was used to reduce the total
liability of $102 million to Enron during December 2001. The remaining balance
of approximately $32 million is reflected in the accompanying balance sheet at
December 31, 2001 as due to affiliated entities. Such amount was subsequently
settled in 2002 for $28 million, plus accrued interest. See discussion of
"Merger Agreement" in this Note 6 - "Commitments and Contingencies".

         Since January 1, 2001, NPW has accounted for all its forward commodity
contracts with Enron in accordance with SFAS No. 133. NPW's forward contracts
with Enron met the criteria of derivative financial instruments as defined under
SFAS No. 133. NPW accounted for the forward financial swap contracts as cash
flow hedges. In periods prior to the occurrence of the hedged transaction, the
value of the hedges was recorded in the consolidated balance sheet as a
component of assets and liabilities from price risk management activities with
the resulting net unrealized gains or losses deferred and reflected as a
component of the equity account other comprehensive income. In the periods the
hedged purchases occurred, the financial swaps were cash settled and deferred
gains or losses pursuant to the hedges were removed from the balance sheet and
included in the cost of the commodity purchased.

         NPW's forward contracts with Enron for the physical purchase of
commodities were generally entered into for delivery to NPW's residential and
small commercial customers in future periods. To the extent the forward
contracts related to forecasted customer demand, at the inception of the
contracts, NPW accounted for these contracts as normal purchases and sales in
accordance with SFAS 133. As such, these contracts were not reflected in NPW's
financial statements until the month of actual purchase of the commodity at
which time the cash paid or received was recorded as a component of the cost of
the commodity purchased.

         All forward commodity contracts that NPW entered into with Enron that
were not hedges of future customer demand were recorded in the consolidated
balance sheet as assets and liabilities from price risk management activities
with the resulting net changes in value reflected in current cost of sales
within the income statement. Upon default by Enron, the mark-to-market value of
all of these risk management assets and liabilities was reclassified into the
due to affiliates account in the accompanying balance sheet as of December 31,
2001.

         As of December 3, 2001, the mark-to-market value of all forward
physical commodity hedge contracts NPW had outstanding with Enron totaled
negative $90 million. The forward


                                       15
<Page>

physical hedge contracts had historically qualified for the normal purchases and
sales exception under SFAS No. 133. Accordingly, these derivative contracts were
afforded accrual accounting and were only recorded to the financial statements
in the periods in which the actual commodity was flowed to NPW's customers.
Under SFAS No. 133, Enron's default eliminates NPW's ability to apply the normal
purchases and sales exception to the unexecuted portion of the physical
commodity hedge contracts with Enron. As a result, in December 2001, NPW
recognized a $90 million net non-recurring charge to operating expenses to
reflect the mark-to-market value of the forward physical commodity contracts on
which Enron defaulted. Pursuant to the contract terms this amount was included
in the net settlement paid to Enron to close out all of NPW's position with
Enron.

         Enron's default on the gas forward financial rate swaps eliminated
NPW's ability to continue to account for the swaps as hedges. As of December 3,
2001, the net amount of $37.2 million recorded in liabilities from price risk
management activities was reclassified to due to affiliated entities and
included in the net amount settled with Enron. In accordance with SFAS No. 133,
NPW ceased hedge accounting as of the date of default. However, since the hedged
transactions to which these financial swaps relate are still expected to occur,
the value of these hedges, as of the date of default, will remain in other
comprehensive income within the balance sheet and will be amortized through cost
of sales during the periods when the hedged transactions occur. Approximately
$7.1 million of such costs were amortized to expense as a component of cost
of sales during the three months ended March 31, 2002. As a result,
approximately $30.1 million related to these hedge losses remains deferred in
other comprehensive income at March 31, 2002. See Note 5 - "Price Risk
Management Activities."

MERGER AGREEMENT

         NPW entered into an Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 22, 2002 with Centrica plc ("Centrica")
pursuant to which an indirect wholly owned subsidiary of Centrica, Windsor
Acquisition Corporation ("Windsor"), commenced a tender offer on March 1, 2002
to purchase all the outstanding shares of NPW's common stock for $1.05 per share
in cash, subject to a possible one-time adjustment in connection with movements
in commodity prices. The purchase of shares in the tender offer was conditioned
upon, among other things, clearance under applicable antitrust laws, approvals
by the Federal Energy Regulatory Commission and certain other regulatory
agencies and approval of the bankruptcy court overseeing Enron Corp.'s Chapter
11 bankruptcy proceedings of the settlement of certain liabilities between NPW
and Enron, the termination of certain intercompany agreements and the issuance
of an injunction restraining third parties from making claims against NPW in
respect of certain Enron-related liabilities. The tender offer was to be
followed by a merger, in which each share of NPW's common stock not purchased in
the tender offer would be converted into the right to receive in cash the per
share price paid in the tender offer. Upon the bankruptcy court's decision that
it could not issue the injunctions concerning Enron-related liabilities,
Centrica advised NPW that it would not waive that condition and accordingly, on
March 28, 2002, Centrica and NPW terminated the Merger Agreement.

         Concurrently with the execution of the Merger Agreement, NPW also
executed a Settlement Agreement and related promissory note (together the
"Settlement Agreement") and a Master Termination Agreement (the "Master
Termination Agreement") with Enron Corp. and certain of Enron's affiliates
(together, the "Enron Entities"). Pursuant to these agreements, (i) all previous
contractual arrangements between NPW and its subsidiaries and the Enron Entities
will be terminated, except for specifically identified obligations, (ii) each of
the parties will be fully


                                       16
<Page>

released by the other parties from any claims or actions arising under any
contractual arrangements between the parties, and (iii) NPW will pay the Enron
Entities $28 million, plus interest from and after the first business day
following the date of the entry of an order by the bankruptcy court overseeing
Enron's bankruptcy proceedings, in complete settlement of any amounts due under
certain commodities contracts between NPW and its subsidiaries and the Enron
Entities. A final order approving the agreement was entered by the bankruptcy
court on April 18, 2002. See Note 7 - "Subsequent Events".

         The Settlement Agreement settles all amounts payable under the various
commodity purchase and swap transactions between NPW and its subsidiaries and
Enron and certain Enron affiliates, including the Master Netting Agreement. The
Master Termination Agreement terminates various agreements with Enron, including
the Master Services Agreement, the Noncompetition Agreement, the Business
Opportunity Agreement, and certain provisions of the Software Agreement. Upon
payment of the $28 million principal plus interest under the Settlement
Agreement, the General Security Agreement with Enron terminates and existing
liens on assets of NPW will be released.

LITIGATION

         NPW has received copies of complaints in ten purported class action
lawsuits filed against it and other defendants, including NPW's officers and
directors, in the United States District Court for the Southern District of New
York, styled as follows: PETER A. PFAU, JOSEPH HARRE, AND JAMES CASEY LIPPMEIR
V. H. EUGENE LOCKHART, ET. AL., filed February 27, 2002; IRVIN SOLOMON V. H.
EUGENE LOCKHART, ET. AL., filed March 1, 2002; DORINA MILLER V. H. EUGENE
LOCKHART, ET. AL., filed March 7, 2002; LISA A. WEBER V. H. EUGENE LOCKHART, ET.
AL., filed March 11, 2002; JACK A. HALPERN V. H. EUGENE LOCKHART, ET. AL., filed
March 21, 2002; VICTOR PARKER V. NEWPOWER HOLDINGS, INC., ET. AL., filed March
26, 2002; PATRICIA O'DONOGHUE ET. AL. V. H. EUGENE LOCKHART, ET. AL., filed
April 8, 2002; CHRISTOPHER J. AMON V. H. EUGENE LOCKHART ET. AL., filed April
11, 2002; ROSALYN M. HARATZ V. H. EUGENE LOCKHART, ET. AL., filed April 12,
2002; and MANISHA PATEL V. NEWPOWER HOLDINGS, INC. ET. AL., filed April 24,
2002. Each lawsuit is brought on behalf of a class of persons or entities who
acquired NPW's common stock between October 5, 2000 and December 5, 2001 (the
"Class Period"), and each alleges violations of the federal securities laws as a
result of (i) alleged misrepresentations and omissions made in connection with
NPW's October 5, 2001 initial public offering and (ii) allegedly false and
misleading statements and omissions occurring during the Class Period.

         With respect to the PFAU, MILLER, O'DONOGHUE and HARATZ matters,
service has been made upon the Company and certain of its officers and
directors. None of the other complaints has been served.

         NPW has been named as a defendant in certain shareholder class action
lawsuits filed against Enron Corp., Kenneth L. Lay, Jeffrey K. Skilling and
Andrew S. Fastow, et. al., in the United States District Court, Eastern District
of Texas. A similar case naming NPW as a defendant has been filed in the United
States District Court, Eastern District of Arkansas, Western Division. A motion
to transfer and consolidate hearings has been filed before the Judicial Panel on
Multi-district Litigation with respect to these and potential tag-along actions.


                                       17
<Page>

         The Internet Home Alliance (the "IHA") has filed a demand for
arbitration with the American Arbitration Association seeking dues from the
Company in the amount of $1,250,000. In connection with the Company's membership
in the IHA, the Company conducted several technical pilot programs and incurred
the expense of the programs with the understanding that a majority of the
expense, $635,000 would be reimbursed by the IHA. The Company has not received
all the reimbursement due and expects the outstanding amounts to be offset
against any dues determined to be due to the IHA. The Company is currently
withholding some of the payments due to the vendors of the pilot programs
pending resolution of the dispute with the IHA. The monetary liability that the
Company might incur in respect of such matters is $1,250,000 (plus, if awarded,
attorneys' fees and costs and expenses, and interest on the outstanding amount).
The Company has filed with the American Arbitration Association its Answering
Statement and Counterclaim and Demand for Mediation.

         NPW has received a copy of a complaint in a purported class action
lawsuit filed against it and other defendants in the Superior Court of the State
of California, City and County of San Francisco, styled AARON TIMM V. NEWPOWER
HOLDINGS, INC., ET AL., filed March 22, 2002. The lawsuit is brought on behalf
of California residents solicited as customers by The New Power Company, and
alleges violations of the California Business and Professions Code, California
Civil Code and common law as a result of (i) alleged deceptive advertising and
marketing to induce new customers to sign up and maintain service, and (ii)
alleged intentional delay of customer billing to prevent customers from
canceling service.

         In addition to the above, at March 31, 2002, NPW was engaged in routine
disputes and litigation arising in the ordinary course of business.

COMMODITY PURCHASE COMMITMENTS

         As of March 31, 2002, NPW, under certain fixed rate commodity
contracts, had commitments for net purchases of 3,057,850 megawatt hours of
electricity at prices ranging from $14.90 - $110.00 per megawatt hour through
December, 2003.

         As of March 31, 2002, NPW had no open forward commitments to purchase
natural gas.

NOTE 7-SUBSEQUENT EVENTS

         On April 18, 2002, the bankruptcy court overseeing Enron's bankruptcy
proceedings entered an order approving the Settlement Agreement and related
promissory note and the Master Termination Agreement. See Note 6 - "Commitments
and Contingencies". To the Company's knowledge, this order was not appealed and
has become a final order, with the result that the obligations and releases of
the Settlement Agreement and Master Termination Agreement are in effect.

         In April 2002, in an effort to reduce expenses, NPW made the decision
to further scale back its operations. To this end, NPW reduced its work force by
approximately 32%. The Company expects the work force reduction to result in a
charge of approximately $3.5 million for severance and other employee related
costs, which will be recorded during the second quarter of 2002.


                                       18
<Page>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         The following section should be read in conjunction with the unaudited
financial statements and the notes thereto included elsewhere in this Quarterly
Report on Form 10-Q. Readers should also review our Annual Report on Form 10-K,
filed with the Securities and Exchange Commission on April 16, 2002.

HISTORY

         We were formed in the fourth quarter of 1999 by affiliates of Enron
Corp., DLJMB Investors, G.E. Capital Equity Investments, Inc., California Public
Employees' Retirement System, and Ontario Teachers' Pension Plan Board to target
residential and small commercial markets for power and natural gas. We were
capitalized through the contribution of certain assets by Enron Energy Services
and a private placement to outside investors, pursuant to an agreement executed
on December 23, 1999. On January 6, 2000, we completed our initial private
placement of common stock and two classes of warrants in exchange for an
aggregate of $100 million in cash. In exchange for its ownership, and pursuant
to the contribution and subscription agreement executed by us and our investors
as part of our initial private placement transaction, Enron Energy Services
agreed to contribute and assign to us the economic value of approximately 24,000
residential customer contracts and entered into a number of contracts. The
operating results derived from servicing this portfolio of customers are
included in our statements of operations from our May 1, 1997 inception.

         Following our initial private placement, we focused our efforts on
hiring our management team, refined our plans for the initial launch of our
services in Pennsylvania and New Jersey, developed our operating infrastructure,
negotiated the acquisition of customers from Columbia Energy Group and
identified other target markets. In conjunction with these activities, in May
2000, we entered into an agreement with IBM to provide us with systems
integration and other services relating to customer acquisition, customer care
and revenue management over a ten-year term. The IBM agreement gives us
termination rights in a number of circumstances, including termination for
performance failures (that have not been cured after notice), or for
convenience, which could require us to pay IBM a termination fee of up to $50
million.

         For services relating to customer acquisition, customer care and
revenue management, fees are a combination of fixed and variable as our customer
base grows. Effective June 1, 2000, we began paying IBM a fixed fee of $1
million per month for the term of the agreement, until the total monthly fees
reach specified thresholds, plus a variable fee based on number and type of
customer. The variable fee includes separate components for each customer that
are based on whether the customer is served online or by mail and a per minute
customer service charge.

         During 2001 we initiated and completed the application development
stage of certain projects with IBM. These systems communicate customer data and
utility data between NPW, the utility, our commodity vendors and our customers.
System requirements vary significantly by market depending on the specifications
set by the local regulatory agency and local transmission and distribution
companies. As a result, during the second and third quarters of 2001 we
capitalized approximately $26.4 million of development costs as fixed assets. In
the


                                       19
<Page>

fourth quarter of 2001, we recorded an impairment reserve of approximately $32.7
million to reflect the portion of previously capitalized computer software costs
that may not be realizable from future operations. We deferred these costs
earlier in 2001 based upon projections of our future cash flow and earnings at
that time. These earnings and cash flow projections may no longer be achievable
because of the terminated merger agreement with Centrica and lower than expected
customer counts in certain markets.

         We constantly review performance under the IBM agreement to ensure that
performance and cost measures are being achieved. As a result, we have raised
various concerns with IBM regarding its performance and ability to meet cost and
timing estimates. In connection with these concerns, we have paid certain
amounts invoiced by IBM under protest in accordance with our agreement.

         Through March 31, 2002, we had approximately 408,000 customers sign up
for service through our direct marketing efforts. We acquired these customers on
a one-by-one basis, as is typical in a number of mass-market subscriber
industries. Marketing costs incurred for customer acquisition are expensed as
incurred. As a result of our limited unrestricted cash resources, we have
reduced substantially our expenses and have substantially curtailed our market
entry and customer acquisition strategies.

         In October 2000, we reached an agreement with PECO to supply service to
20 percent of PECO's residential power customers who had not selected a
competitive energy services provider. PECO provides electric delivery service in
southeastern Pennsylvania, which is one of our target markets. Pursuant to
requirements in the 1998 settlement of PECO's electric restructuring case, PECO
issued a request for proposal for a third party to supply Competitive Default
Service to 20% of its residential customers for a three-year term beginning
January 1, 2001. PECO selected our operating subsidiary, The New Power Company,
in this process, and the two parties reached a definitive agreement on October
18, 2000, which was subsequently approved by the Pennsylvania Public Utility
Commission on November 29, 2000. Under the agreement with PECO, The New Power
Company committed to provide power at a discount to PECO's current rates for
residential customers who participate in this program. The customers were
selected on a random basis. Following customer notifications and the results of
opt-out selections, we began servicing approximately 240,000 customers on March
1, 2001, pursuant to this agreement. Concurrently with the execution of the
Merger Agreement with Centrica and as that agreement required, we provided
notice to PECO of our intent to terminate the CDS Agreement and expect to return
the PECO-CDS customers to PECO or another service provider by the end of May,
2002.

         In March 2001 we acquired approximately 7,200 residential and small
commercial natural gas customers in the Atlanta, Georgia market from Reliant
Energy Retail, Inc. ("Reliant"). The acquisition was accounted for as a
purchase. Based on the mix of customers acquired from Reliant and the average
consumption of small commercial customers in the Atlanta market, we estimate
that the acquired portfolio equates to approximately 40,000 residential
customers.

         In May 2001, we exercised our option not to accept approximately 16,000
California residential power customers that were initially contributed to us by
EES. As a result, since May


                                       20
<Page>

1, 2001, service to these power customers has reverted to the default provider
in the respective local distribution areas.

         In June 2001, we completed the acquisition of approximately 130,000 gas
and 7,000 power residential and small commercial customers in three separate
transactions. The customers, located in the Ohio, Pennsylvania and Maryland
markets, were acquired from AES Power Direct/Titan Energy, Inc., CoEnergy
Trading Company and Energy East Solutions. The acquisitions were accounted for
as purchases. Total consideration for the customer contracts consisted of
approximately $18.6 million in cash. In connection with the acquisitions, we
also acquired other assets, including gas storage inventory, accounts receivable
and fixed assets for combined consideration of approximately $8.4 million.
Additionally, we assumed forward physical commodity purchase contracts that had
a negative value of $3.9 million as of the acquisition date. We accrued this
amount as part of the cost of the customers acquired. The amount will be
amortized through cost of sales as the related commodity purchases are delivered
to our customers. The results of operations for each of the portfolios acquired
are included in our operating results since June 2001 when we assumed
operational control of the portfolios. The allocation of purchase price for the
portfolios described herein is preliminary in nature and is subject to
adjustments to actualize items such as customer counts, inventory levels,
accounts receivable and assumed liabilities. As part of the agreement with Titan
Energy, Inc., The AES Corporation was to be released from a guarantee to Coral
Energy Resources ("Coral"), which was a supplier of gas to the Titan customers.
Subsequent to the acquisition, Coral would not release AES from its guarantee
unless NPW agreed to post significant cash collateral with Coral. During the
fourth quarter of 2001, NPW elected to terminate the commodity supply
arrangements with Coral rather than post the requested collateral. As a result,
the remaining portion of the $3.9 million liability originally accrued to
account for the negative value of assumed physical commodity purchase contracts
was settled for cash of $2.4 million.

         In August 2001, we completed an acquisition of approximately 6,000
residential and small commercial customers in Ohio from AMPO, Inc. The
acquisition was accounted for as a purchase. Total purchase consideration was
$0.3 million.

         As of March 31, 2002, through our marketing efforts, we had acquired
approximately 87,000 customers in Texas. We have worked closely with the
Electric Reliability Council of Texas (ERCOT), the centralized entity
responsible for overseeing wholesale market scheduling and retail customer
switching, as well as other affected parties in the Texas market to resolve,
among other matters, issues associated with the switching of customer
enrollments.

         As of March 31, 2002, we had obtained licenses to act as an electricity
marketer in California, Massachusetts, New Jersey, Ohio, Pennsylvania, Texas,
Connecticut, Delaware and Maryland. We have decided to abandon the licenses in
Connecticut and California because we do not foresee commencing operations in
any power market in those states within the near future and can seek to
reinstate a license in the event circumstances change. Also, we had obtained
licenses to act as a natural gas marketer in Georgia, New Jersey, Pennsylvania,
Virginia and Maryland.

         We recognize revenue for the sale of power or natural gas once the
commodity has been delivered to the customer. Our bills to customers may also
include charges relating to the


                                       21
<Page>

transmission and distribution of the commodity, functions that are provided by
the incumbent utility, but as to which we may be responsible for payment to the
utility even if the amount billed to our customer becomes uncollectible. These
amounts are excluded from our net revenues. As a result, neither our revenues
nor our costs include the transmission and distribution charges included in our
customers' bills. In the Georgia, Texas and California markets, where we are
responsible for delivering bills to customers, we bear the credit risk with
respect to the transmission and distribution charges provided by the utilities
in those markets. Additionally, we fully expense in the period incurred the
marketing and operations costs associated with customer acquisition.

RESULTS OF OPERATIONS

         As discussed further in the History section of Management's Discussion
and Analysis above, we have grown our business significantly since July 2000
through the completion of several acquisitions of businesses and through organic
growth. The following table presents unaudited selected financial data related
to our power and natural gas business.

         Due to our limited liquidity and operating history and the significant
growth in our business since inception, we believe that period-to-period
comparisons of our revenues and results of operations are not meaningful. As a
result, you should not rely on our revenues or results of operations for any
period as an indication of our future performance or prospects.

<Table>
<Caption>

                                        Three Months Ended March 31,
                                      --------------------------------
                                          2002                2001
                                     (in thousands except per share data)
                                       (Unaudited)         (Unaudited)
<S>                                   <C>               <C>
Statement of income data:
Net revenues                          $    172,263      $    126,016
Cost of sales                              153,416           117,376
                                      ------------      ------------
Gross margin                                18,847             8,640
Operating expenses                          41,225            67,603
Non-recurring expenses                      17,560                --
                                      ------------      ------------
Operating Loss                        ($    39,938)     ($    58,963)
Interest (Income) Expense                     (281)           (8,744)
                                      ------------      ------------
Net loss                              ($    39,657)     ($    50,219)
                                      ============      ============

Basic and diluted net loss
  per common share:
     Recurring operations             ($      0.35)     ($      0.86)
     Non-recurring operations                (0.28)             0.00
                                      ------------      ------------
Total basic and diluted net loss
   per common share                   ($      0.63)     ($      0.86)
                                      ============      ============

Shares used in computing net loss
     per common share                   62,833,764        58,117,316
                                      ============      ============
</Table>

         Our revenues are derived from the sale and delivery of power and
natural gas to retail customers in the United States. For the three months ended
March 31, 2002 and 2001, respectively, revenues were $172.3 million and $126.0
million. The increase in revenues in 2002


                                       22
<Page>

as compared to 2001 is primarily attributable to the acquisition of customer
portfolios and customers obtained from our own marketing channels.

         Our cost of sales represents the direct costs of acquiring and
delivering power and natural gas to our customers as well as the net results of
our energy trading activities. For the three months ended March 31, 2002 and
2001, cost of sales, as a percentage of revenues, totaled 89% and 93%,
respectively. The decrease in cost of sales, as a percent of revenue, is
primarily attributable to decreased market prices of commodities in 2002 as
compared to 2001. During the three months ended March 31, 2002 and 2001, our
energy trading activities resulted in net gains of $0 million and $4.7 million,
which are reflected as a component of cost of sales. As described in Note 5 -
"Price Risk Management Activities", we have approximately $30.1 million of hedge
losses related to contracts with Enron deferred in our balance sheet at March
31, 2002 which is reduced from $37.2 million at December 31, 2001. During the
three months ended March 31, 2002, we recognized approximately $7.1 million of
cost of sales expense related to the deferred Enron gas contracts to match the
timing of the hedged purchases of gas that occurred during the period.

         Our operating expenses include costs incurred related to acquiring and
supporting residential and small commercial customers that were not part of the
direct process of delivering power and natural gas to our customers. For the
three months ended March 31, 2002 and 2001, operating expenses from recurring
operations were $41.2 million and $67.6 million, respectively. Recurring
operating expenses decreased 39% in 2002 as compared to 2001, although our
customer base increased significantly over the prior year, from approximately
630,000 as of March 31, 2001 to over 800,000 at March 31, 2002. The decrease in
recurring operating expenses from the prior year reflects management's increased
cost control efforts, primarily in the systems development, marketing and
professional fees expense areas, as well as the effects of our restructuring
completed in the fourth quarter of 2001. Operating expenses from recurring
operations for the three months ended March 31, 2002 and 2001, respectively,
included $4.4 million and $33.2 million for systems development, brand marketing
and other professional services, $6.1 and $5.1 million for direct marketing, and
$11.4 million and $8.4 million for billing and customer care. The increase in
billing and customer care costs relates to our increased customer base in 2002
as compared to 2001. Compensation expenses recorded during the three months
ended March 31, 2002 and 2001, respectively, included costs for the recruitment
of certain executives, which resulted in $1.7 million and $1.9 million of
deferred compensation expense. In November 2001 we realigned our staffing needs,
which resulted in a reduction in staff of 38 employees. In April 2002, we
further reduced our staff by an additional 45 employees.

NON-RECURRING CHARGES

         The following summarizes $17.6 million in restructuring charges that we
recognized as non-recurring operating expenses during the three months ended
March 31, 2002:

<Table>
<Caption>

                                                                     2002
                                                                   -------
<S>                                                                <C>
          Return of PECO-CDS customers                             $20,400
          Final settlement of Enron liability                       (2,840)
                                                                   -------
          Total Non-Recurring Operating Expenses                   $17,560
                                                                   =======
</Table>


                                       23
<Page>

         As a consequence of our termination of the PECO contracts and the
return of PECO customers to PECO thereunder, we may be required pursuant to the
terms of such contracts to forfeit to PECO and its affiliates collateral of up
to $12.5 million. As of March 31, 2002, we had posted cash collateral of
approximately $10 million with PECO to cover non-performance by NPW, and had
provided $2.5 million to fund a surety bond. We currently estimate, that we may
be required to take an additional charge of approximately $7.9 million, as of
March 31, 2002, related to the liquidation of hedges associated with the
PECO-CDS customers. The final potential charge or gain will depend on commodity
market prices at the time the hedges are liquidated as compared to contracted
purchase prices. We have accrued a non-recurring operating expense of $20.4
million to our income statement during the quarter ended March 31, 2002 to
account for the potential losses from the return of the PECO-CDS customers.

         As of December 31, 2001, we had approximately $31.6 million recorded in
our balance sheet as due to affiliated entities. Such amount represented the
total outstanding amounts contractually due by us to Enron and its affiliates
related to transactions completed through December 31, 2001. In February 2002,
we reached an agreement with Enron to settle the liability for $28 million, plus
accrued interest thereon, conditioned upon receipt of an order from the
bankruptcy court overseeing Enron's bankruptcy. As described in Note 7 -
"Subsequent Events", the bankruptcy court entered an order approving the
settlement on April 18, 2002. Accordingly, we have reduced our due to affiliates
liability and our non-recurring expenses by approximately $2.8 million during
the quarter ended March 31, 2002, to properly reflect the amounts due to Enron
and its affiliates. The $28 million, plus accrued interest, is due to be paid to
Enron and its affiliates no later than July 5, 2002.

         In April 2002, in an effort to reduce expenses, we made the decision to
further scale back our operations. To this end, we reduced our work force by
approximately 32%. We expect the work force reduction to result in a charge of
approximately $3.5 million for severance and other employee related costs, which
will be recorded during the second quarter of 2002.

LIQUIDITY AND CAPITAL RESOURCES

         In 2001 and into 2002, several factors severely and adversely affected
our liquidity and cash resources, and we faced, and continue to face, certain
substantial risks of not being able to continue to operate as an independent
entity. These risks were caused or exacerbated by, among other factors:

     o   the high volatility in commodity prices beginning in the Fall of 2000
         and continuing through 2001 and into 2002;

     o   the effect of Enron's bankruptcy on the perception of our company in
         the capital and commodity markets, and by regulators, regulated
         utilities, and other trading counterparties;

     o   as a result of Enron's bankruptcy, the termination of all of our
         commodity supply and swap transactions with Enron on December 3, 2001;


                                       24
<Page>

     o   Enron's continued lien on our assets pending the settlement of amounts
         due under such terminated transactions;

     o   our inability to secure asset-backed or other forms of financing;

     o   increased credit requirements by local distribution companies and our
         trading counterparties; and

     o   the fact that, as a result of our efforts to conserve cash, we had
         substantially reduced the extent to which our retail supply
         obligations under our customer supply contracts were hedged as
         compared to our position at the end of 2000.

         During the quarter ended March 31, 2002, we had net cash provided by
operating activities of $34.4 million. During the quarter ended March 31, 2002
our operating cash flow was positively impacted by the sale of $56.6 million of
natural gas storage inventory. Additionally, we increased our accounts payable
and accrued liabilities during the quarter ended March 31, 2002 by approximately
$20.4 million to provide for non-recurring expenses related to our anticipated
return of the PECO CDS customers. Also, we used approximately $26.6 million of
cash to secure surety bonds and as collateral deposits with trading
counterparties and utilities. Net cash used in operating activities of $46.7
million for the quarter ended March 31, 2001, resulted primarily from a net loss
of $50.2 million for the period.

         As of March 31, 2002, we had cash, cash equivalents and restricted cash
of approximately $134.7 million. Certain state regulations, and utilities with
whom we do business for local transmission and distribution services, as well as
certain of our counterparties, require us to provide collateral or other
assurance to ensure fulfillment of our commitments. To meet these requirements,
we have provided cash collateral of $100.6 million as of March 31, 2002, which
is reported in our balance sheet as restricted cash.

         Due to significant declines in the market prices for electricity and
natural gas during the second and third quarters of 2001, we had posted
approximately $110 million in cash as collateral with Enron as of September 30,
2001 as required by the Master Netting Agreement. On October 18, 2001 we entered
into an amendment to our Master Netting Agreement with Enron to permit the
substitution of receivables and inventory in lieu of cash collateral based on
discount factors and up to specified limits. In connection with that amendment,
we entered into a General Security Agreement with Enron which provided the
secured parties a lien on all of our receivables, inventory and other specified
assets. Also, to reduce the risk that further declines in commodity prices could
cause material adverse effects on our liquidity through the posting of
additional cash collateral, we executed a series of financial swaps in October
2001. These trades effectively offset the risk of our being required to post
additional cash collateral on further mark-to-market changes with respect to
approximately 60 percent of our pre-existing NYMEX hedges for future delivery of
natural gas to our customers.

         As discussed in Note 6 - "Commitments and Contingencies," above, Enron,
our primary counterparty since our inception for the purchase of derivative
commodity instruments, filed for bankruptcy in December 2001. Enron's bankruptcy
constituted an event of default and resulted in non-performance by Enron on the
forward portion of all commodity purchase and sale


                                       25
<Page>

transactions we had with Enron as of the date of default. These contracts were
closed out in December 2001 based on the default and termination provisions of
the relevant contracts. To date, due to liquidity and credit restrictions, we
have not replaced the commodity price hedges we had in place with Enron to hedge
against adverse price movements in commodities we are contracted to deliver to
our customers. As a result, our subsequent cash flows and margins have
fluctuated and will continue to fluctuate directly with market price changes in
the commodities we are required to purchase and deliver to our customers.
Increases in market prices for natural gas and electricity will have a negative
impact on our expected cash flows and margins, while decreases in commodity
prices will have a positive impact on our expected cash flows and margins.
Significant increases in commodity prices would have a material adverse effect
on our liquidity and could negatively impact our ability to continue as a going
concern.

         Although we have been able to successfully continue to deliver
commodities to our customers, our ability to obtain credit has been severely and
adversely impacted by Enron's bankruptcy and the early settlement of the forward
commodity contracts. Specifically, several of the local distribution companies
with which we conduct business have required us to post additional collateral to
assure performance. Also, several companies from whom we purchase natural gas
and electricity are now requiring us to pay for the commodity prior to the
commodity being delivered to our customers. This has had a negative effect on
the timing of our cash flows. The time between us paying for our commodity
purchases and ultimately expecting payment from our customers or the local
utilities has been significantly increased. Significant increases in demand for
energy would have a further negative impact on our liquidity.

         We believe that, based on actions we are taking to control costs and
conserve cash, and absent any significant increases in commodity prices or
demand or other significant events, we have sufficient financial resources to
conduct our business into the third quarter of 2002. We are currently
reviewing all of our strategic options, including sales of assets and
business and continuation of business on a more limited scale in a reduced
number of markets without the expected need for further financing, or an
orderly liquidation of the Company if that proves to provide greater expected
value to our shareholders. We may not be able to sell our assets, or to
secure financing or to raise additional capital on attractive terms, or at
all, which would have a material adverse effect on our ability to continue as
a going concern. The financial statements do not reflect the impact of the
material adverse effects that would result without additional financing or
cash proceeds from the sale of certain assets. Our independent auditors,
Arthur Andersen LLP, qualified their opinion on our 2001 financial statements
with respect to our ability to continue as a going concern.

         We have no debt outstanding. Accordingly, we have not been exposed to
near term changes in interest rates. Additionally, we do not expect inflation to
have a material effect on our results of operations. We have no foreign currency
exposure and therefore, are not affected by changes in foreign exchange rates.

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." The standard requires that legal obligations associated
with the retirement of


                                       26
<Page>

tangible long-lived assets be recorded at fair value when incurred and is
effective on January 1, 2003. The Company is currently reviewing the provisions
of SFAS No. 143 to determine the standard's impact upon adoption.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 requires that one
accounting model be used for long-lived assets to be disposed of by sale.
Discontinued operations will be measured, similar to other long-lived assets
classified as held for sale, at the lower of its carrying amount or fair value
less cost to sell. Future operating losses will no longer be recognized before
they occur. SFAS No. 144 also broadens the definition of discontinued operations
to include a component of an entity when operations and cash flows can clearly
be distinguished and establishes criteria to determine when a long-lived asset
is held for sale. SFAS No. 144 also addresses the factors for companies to
consider when determining if a long-lived asset may have incurred an impairment
in value. The provisions of this Statement were effective on January 1, 2002.
There was no transition impact for this statement.

SEASONALITY

         Our revenues are impacted by seasonality in that power sales generally
increase during the warmer summer months, whereas natural gas sales have a
reverse seasonality and increase during the colder winter months. We must also
build natural gas inventories generally during the second and third quarters in
anticipation of demand during the heating season. These factors will cause our
financial results to vary from quarter to quarter.

FORWARD-LOOKING STATEMENTS

         Certain statements in this Form 10-Q are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934. The words "estimate," "project," "intend," "expect,"
"believe" and similar expressions are intended to identify forward-looking
statements. These forward-looking statements are found at various places
throughout this Form 10-Q and throughout the other documents incorporated herein
by reference. The Company undertakes no obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
Although we believe that our expectations are based on reasonable assumptions,
we can give no assurance that our goals will be achieved. Important factors that
could cause actual results to differ from estimates or projections contained in
the forward-looking statements include our limited liquidity and operating
history; delays or changes in the rules for the restructuring of the electric
and natural gas markets; our ability to attract and retain customers; our
ability to manage our energy requirements and sell energy at a sufficient margin
given the volatility in prices for electricity and natural gas and the extent of
our unhedged positions; the effect of commodity volatility on collateral
requirements and liquidity; our dependence on third parties to provide critical
functions to us and to our customers; and conditions of the capital markets
affecting the availability of capital. Readers are referred to the Company's
Annual Reports on Form 10-K for the years ending December 31, 2001 and 2000, our
Report on Form 8-K filed on October 19, 2001, and our Registration Statement on
Form S-1 (No. 333-41412) on


                                       27
<Page>

file with the Securities and Exchange Commission for a discussion of factors
that could cause actual results to differ materially from these forward-looking
statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         At March 31, 2002, we held no financial instruments or investments
which could be subject to interest rate or equity price risk. Therefore, we were
exposed primarily to counterparty risks and risks related to commodity price
changes in the power and natural gas markets. We conduct business solely in the
United States and are not subject to foreign operations risk.

         Counterparty risk relates to the risk of loss that we would incur as a
result of nonperformance by counterparties pursuant to the terms of their
contractual obligations. We have established counterparty limits for each
trading partner.

         Commodity price risk is the risk of loss arising from adverse movements
in commodity prices. We have established a risk control group that monitors
commodity price risk to ensure compliance with our stated risk management
policies. Our current risk management policies and procedures are to use
physical and financial products to manage our commodity price risk and maintain
a balanced commodity portfolio within specified limits. Our policies and
procedures cover, among others, areas of (1) general authorization of
transaction activity by designated individuals and significant limits, (2)
classification of risks into identifiable portfolios, (3) responsibilities,
segregation of duties, and functions to be performed by commodity procurement,
credit, legal/contract management, risk controls groups, and the chief risk
officer, and (4) performance and exposure reporting and notification
requirements.

         We utilize derivative commodity instruments to hedge future purchases
of natural gas to be provided to our customers as part of fixed price contracts.
The purpose of the hedging strategy is to achieve a more predictable cash flow,
as well as to reduce our exposure to adverse price fluctuations of natural gas.
While the use of these hedging arrangements limits the downside risk of adverse
price movements, they may limit future margins from favorable price movements.
The use of hedging transactions also involves the risk that the counterparties
will be unable to meet the financial terms of such transactions. The hedging
instruments used are swaps and are placed with counterparties that we believe
are minimal credit risks. We account for these transactions as hedging
activities and, accordingly, net gains or losses are included in the cost of
natural gas in the period the hedged purchase occurs.

         As of March 31, 2002, because of liquidity restrictions and lack of
availability of credit, we were not in compliance with our stated risk
management goals of being substantially fully hedged. As a result, significant
increases in commodity prices would have a material adverse effect on our gross
margins. See "Liquidity and Capital Resources."

         With our decision to limit the extent of our hedging of future customer
commodity obligations so as to reduce the risk that liquidity could be affected
by commodity price decreases and collateral posting requirements, we are exposed
to commodity price risks that may adversely affect our costs, margins, and
profitability.


                                       28
<Page>

         Our net open derivative positions at March 31, 2002 are not
significant due to the settlement of all the Enron contracts and our
inability to obtain credit to replace the Enron positions to date. See
Note 5 - "Price Risk Management Activities" to the unaudited
consolidated financial statements for additional information on our
derivative instruments.

                                       29
<Page>



                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PORCEEDINGS

         See Note 6 - "Commitments and Contingencies" to the unaudited
consolidated financial statements.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         None

     (b) Reports on Form 8-K

         On April 4, 2002, the Company filed a current report on Form 8-K,
         reporting that the New York Stock Exchange had suspended trading of the
         Company's common stock and commenced delisting proceedings, and that as
         of April 2, 2002, the Company's common stock is trading on the
         over-the-counter Electronic Quotation Service "Pink Sheets".



                                       30
<Page>



                                   SIGNATURES

         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 thereunto duly authorized.


                                             NEWPOWER HOLDINGS, INC.


         Date:  May 15, 2002            By:  /s/ William I Jacobs
                                           ------------------------------------
                                           William I Jacobs
                                           Managing Director, Chief Financial
                                           Officer and Director


         Date:  May 15, 2002            By:  /s/ Chaitu Parikh
                                           ------------------------------------
                                           Chaitu Parikh
                                           Controller




                                       31