Xcel Energy 2005 Annual Report Download - page 24

Interest and Other Income (Expense), Net Interest and other income (expense), net decreased $8 million in 2005 compared with 2004.
The decrease is due to interest income related to the finalization of prior-period IRS audits of $10.5 million in 2004, partially offset by a
$2.2 million gain on the sale of water rights in 2005.
Interest and other income, net of nonoperating expenses increased $15 million in 2004 compared with 2003. The increase is due mostly to
interest income related to the finalization of prior-period IRS audits of $10.5 million.
Interest and Financing Costs The 2005 interest charges and financing costs increased approximately $8 million, or 1.9 percent when
compared with 2004, primarily due to increased short-term borrowing levels.
The 2004 interest charges and financing costs decreased approximately $17 million, or 3.7 percent when compared with 2003. The decrease
for the year reflects savings from refinancing higher coupon debt during 2003 and lower credit line fees, partially offset by interest expense
related to prior-period IRS audits.
Income Tax Expense The effective income tax rate for continuing operations was 25.8 percent for 2005, compared with 23.7 percent in
2004. Income taxes recorded in 2005 reflect tax benefits of $10.0 million, primarily from increased research credits and a net operating loss
carry back. Excluding the tax benefits, the effective rate for 2005 would have been 27.3 percent.
In 2004, income tax benefits of $37.1 million were recorded, which included $22.3 million related to the successful resolution of various audit
issues and other adjustments to current and deferred taxes. The effective income tax rate for continuing operations was 23.7 percent for
2004, compared with 24.6 percent for the same period in 2003. Excluding the tax benefits, the effective rate for 2004 would have been
29.1 percent.
See Note 8 to the Consolidated Financial Statements.
HOLDING COMPANY AND OTHER RESULTS
The following tables summarize the net income and earnings-per-share contributions of the continuing operations of Xcel Energy’s nonregulated
businesses and holding company results:
Contribution to Xcel Energy’s earnings (Millions of dollars) 2005 2004 2003
Eloigne Company $ 6.2 $ 8.5 $ 7.7
Financing costs – holding company (52.7) (44.7) (44.1)
Holding company and other results 6.2 – (2.2)
Total nonregulated/holding company loss – continuing operations $(40.3) $(36.2) $(38.6)
Contribution to Xcel Energy’s earnings per share 2005 2004 2003
Eloigne Company $ 0.01 $ 0.02 $ 0.02
Financing costs and preferred dividends – holding company (0.09) (0.08) (0.09)
Holding company and other results 0.01 ––
Total nonregulated/holding company loss per share – continuing operations $(0.07) $(0.06) $(0.07)
Financing Costs and Preferred Dividends Nonregulated results include interest expense and the earnings-per-share impact of preferred
dividends, which are incurred at the Xcel Energy and intermediate holding company levels, and are not directly assigned to individual
subsidiaries.
The earnings-per-share impact of financing costs and preferred dividends for 2005, 2004 and 2003 included above reflects dilutive securities,
as discussed further in Note 9 to the Consolidated Financial Statements. The impact of the dilutive securities, if converted, is a reduction of
interest expense resulting in an increase in net income of approximately $14 million, or 3 cents per share, in 2005; $15 million, or 4 cents per
share, in 2004; and $11 million, or 3 cents per share, in 2003.
22 XCEL ENERGY 2005 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS