Xcel Energy 2006 Annual Report Download - page 5

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D E A R S H A R E H O L D E R S :
2006 was an outstanding year for Xcel Energy. We
achieved excellent results on many fronts, continued to
capture the benefits of our corporate strategy, accelerated
our efforts to improve the environment and strengthened
our foundation for future success. In addition to building
value for you, our achievements make a real difference
to our customers, communities and employees. They are
indeed Results that really matter and prove that we are
serious about our commitments. Let’s look back at 2006.
S T R O N G F I N A N C I A L R E S U LT S We achieved financial
results at the top of our expectations when we recorded
earnings from continuing operations of $569 million, or
$1.35 per share on a diluted basis. That compares with
$499 million, or $1.20 per share, in 2005. Total earnings
for the year, which include the impact of discontinued
operations, were $572 million, or $1.36 per share, com-
pared with $513 million, or $1.23 per share, in 2005.
Retail electric sales growth and electric and natural gas
rate increases significantly contributed to our results. We
also benefited from revenue associated with investments
in emission-reduction projects and increased earnings
due to the resolution of various tax issues. Our results
were partially offset by expected increases to operating
and maintenance and depreciation expenses, and lower
short-term wholesale margins.
The momentum we established in 2006 leads us to believe
we can achieve earnings from continuing operations in the
range of $1.35 to $1.45 per share in 2007. Our goal, in fact,
is to grow earnings per share an average of 5 percent to 7
percent annually.
We also want to grow your annual dividend rate at 2
percent to 4 percent per year. In 2006, we increased it by
3 cents per share, a 3.5 percent increase. With strong
financial performance, consistent earnings growth and a
growing dividend, we will continue to deliver an attractive,
low-risk total return to you.
A SUCCESSFUL S T R AT E G Y Our 2006 financial results
illustrate that our Building the Core corporate strategy is
working well. As you recall, our plan is to invest in our core
electric and natural gas businesses to meet the growing
energy needs of our customers and then earn a fair return
on those investments.
Progress continued in 2006 on a number of large invest-
ments, including a $1 billion project to replace two
Minnesota coal-fired plants with natural gas combined-
cycle units and to refurbish a third plant with advanced
emission-reduction equipment. The effort will reduce air
emissions significantly, improve the reliability of the units
and add 300 megawatts to our generating capacity.
In Colorado, construction is under way at Comanche 3, a
750-megawatt generating unit at our Comanche coal-fired
Letter to Shareholders