Xcel Energy 2004 Annual Report Download - page 54

NOTES to CONSOLIDATED FINANCIAL STATEMENTS
Xcel Energy Annual Report 2004
52
2. SPECIAL CHARGES
Special charges included in Operating Expenses for the years ended Dec. 31, 2004, 2003 and 2002, include the following:
(Millions of dollars) 2004 2003 2002
Regulated utility special charges:
Regulatory recovery adjustment (SPS) $– $– $5
Restaffing (utility and service companies) ––9
Total regulated utility special charges ––14
Other nonregulated special charges:
Holding company – NRG restructuring charges –12 5
Holding company – legal settlement 18 ––
TRANSLink Transmission Co. –7–
Total nonregulated special charges 18 19 5
Total special charges $18 $19 $19
2004 Holding Company – Legal Settlement In 2004, Xcel Energy recorded a $17.6 million pretax charge for the accrual of a January 2005 settlement
agreement related to shareholder lawsuits. For further discussion regarding the legal settlement, see Note 16 to the Consolidated Financial Statements.
2003 TRANSLink Transmission Co., LLC In 2003, Xcel Energy recorded a $7 million pretax charge in connection with the suspension of the activities
related to the formation of TRANSLink. The charge was recorded as a reserve against loans made to TRANSLink Development Company, LLC, an
interim start-up company. TRANSLink was an independent transmission-only company. The formation activity was suspended due to continued market
and regulatory uncertainty.
2003 and 2002 Holding Company – NRG Restructuring Charges In 2003 and 2002, the Xcel Energy holding company incurred approximately
$12 million and $5 million, respectively, for charges related to NRG’s financial restructuring. Costs in 2003 included approximately $32 million of
financial advisor fees, legal costs and consulting costs related to the NRG bankruptcy transaction. These charges were partially offset by a $20 million
pension curtailment gain related to the termination of NRG employees from Xcel Energy’s pension plan, as discussed in Note 12 to the Consolidated
Financial Statements.
2002 Regulatory Recovery Adjustment – SPS During 2002, SPS entered into a settlement agreement with intervenors regarding the recovery of indus-
try restructuring costs in Texas, which was approved by the state regulatory commission in May 2002. Based on the settlement agreement, SPS wrote off
pretax restructuring costs of approximately $5 million.
2002 Utility Restaffing During 2001, Xcel Energy expensed pretax special charges of $39 million for expected staff consolidation costs for an estimated
500 employees in several utility-operating and corporate-support areas of Xcel Energy. In 2002, the identification of affected employees was completed
and additional pretax special charges of $9 million were expensed for the final costs of staff consolidations. Approximately $6 million of these restaffing
costs were allocated to Xcel Energy’s utility subsidiaries. All 564 of accrued staff terminations have occurred. See the summary of costs below.
Accrued Special Charges The following table summarizes activity related to accrued special charges related to the 2001 utility restaffing, as described
above, for 2004, 2003 and 2002:
(Millions of dollars) Utility Severance*
Balance, Dec. 31, 2001 $37
Adjustments/revisions to prior year accruals 9
Cash payments made in 2002 (33)
Balance, Dec. 31, 2002 $13
Cash payments made in 2003 (10)
Balance, Dec. 31, 2003 $3
Cash payments made in 2004 (3)
Balance, Dec. 31, 2004 $–
* Reported on the balance sheet in Other Current Liabilities.