Xcel Energy 2002 Annual Report Download - page 28

independent auditors’ report
To Xcel Energy Inc.:
We have audited the accompanying consolidated balance sheets and consolidated statements of capitalization of Xcel Energy Inc.
(a Minnesota corporation) and subsidiaries (the Company) as of December 31, 2002 and 2001, and the related consolidated statements
of operations, common stockholders’ equity and other comprehensive income and cash flows for the three years ended December 31, 2002.
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the consolidated balance sheet of NRG Energy, Inc.
(a wholly owned subsidiary of Xcel Energy Inc.) for the years ended December 31, 2002 and 2001, or the consolidated statements of
operations, stockholder’s (deficit)/equity and cash flows for the three years ended December 31, 2002 included in the consolidated
financial statements of the Company, which statements reflect total assets and revenues of 40% and 24% for 2002, respectively, and
total assets and revenues of 45% and 21% for 2001, respectively, and revenues of 20% for 2000, of the related consolidated totals.
Those statements were audited by other auditors whose report has been furnished to us (which as to 2002 expresses an unqualified
opinion and includes an explanatory paragraph describing conditions that raise substantial doubt about NRG Energy, Inc.’s ability
to continue as a going concern and emphasis of a matter paragraphs related to the adoption of Statement of Financial Accounting
Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets” and SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets” on January 1, 2002 and the adoption of SFAS No. 133, “Accounting for Derivative Instruments
and Hedging Activities” on January 1, 2001), and our opinion, insofar as it relates to the amounts included for NRG Energy, Inc.
for the periods described above, is based solely on the report of the other auditors.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Xcel Energy Inc. and subsidiaries as of December 31, 2002 and 2001 and the results of
their operations and their cash flows for each of the three years ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note 17 to the consolidated financial statements, effective January 1, 2001, Xcel Energy Inc. and subsidiaries adopted
SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”
As discussed in Note 1 to the consolidated financial statements, effective January 1, 2002, Xcel Energy Inc. and subsidiaries adopted SFAS
No. 142, “Goodwill and Other Intangible Assets,” and SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”
Note 4 to the consolidated financial statements discusses the implications to the Company related to credit and liquidity constraints,
various defaults under credit arrangements and a likely Chapter 11 bankruptcy protection filing at NRG Energy, Inc.
deloitte & touche llp
Minneapolis, Minnesota
March 28, 2003
page 42 xcel energy inc. and subsidiaries