Xcel Energy 2007 Annual Report Download - page 5
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3
XCEL ENERGY | 2007 ANNUAL REPORT
DEAR SHAREHOLDERS:
With strong financial results, a proven commitment to
environmental leadership and a strategy that positions
us for long-term success, Xcel Energy had an outstanding
year in 2007. We continued to invest in our core electric
and natural gas businesses, which enabled us to meet
a growing demand for energy, improve the environment
and build value for you.
As this report and accompanying DVD illustrate,
we are the energy behind:
in the nation;
efforts in the country;
customers to conserve energy; and
Let’s take a closer look at an excellent year.
STRONG FINANCIAL RESULTS
We exceeded expectations when we delivered ongoing
earnings per share of $1.43, compared with $1.30 per share
in 2006. As you recall, our revised 2007 ongoing earnings
guidance was a range of $1.38 to $1.42 per share. Electric
and natural gas rate increases and other cost recovery
mechanisms, retail sales growth and favorable
temperatures contributed to those results.
Ongoing earnings reflect the fundamental strength of
Xcel Energy, but do not include the impact of a settlement
we reached with the Internal Revenue Service in 2007 over
our company-owned life insurance (COLI) program. When
COLI and other discontinued operations are included as
part of our GAAP (generally accepted accounting principles)
earnings, the result is $1.35 per share, compared with
$1.36 per share in 2006.
Although COLI made a one-time impact on GAAP earnings,
we were pleased to resolve the dispute and consider the
settlement one of our 2007 accomplishments. It removed
a significant potential liability on favorable terms, enabling
us to reduce financial risk.
We’re also proud of the progress we’ve made in
strengthening our credit quality. In 2007, Standard &
Poor’s upgraded the credit ratings of Xcel Energy and its
subsidiaries, citing our strengthening business profile and
supportive regulation as the basis for the upgrade. Credit
quality, a strong balance sheet and conservative financial
management enable us to deliver on our financial goals,
including growing your dividend rate at 2 percent to
4 percent per year. In 2007, Xcel Energy’s board of
directors increased your dividend by 3.4 percent.
Strong 2007 results and the momentum we’ve established
this year prompt us to reaffirm our 2008 earnings guidance
of $1.45 to $1.55 per share.
LETTER TO SHAREHOLDERS Xcel Energy employee John Byboth