Xcel Energy 2007 Annual Report Download - page 52

Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Business Segments and Organizational Overview
Continuing Operations
Xcel Energy is a public utility holding company. In 2007, Xcel Energy continuing operations included the activity of
four utility subsidiaries that serve electric and natural gas customers in 8 states. These utility subsidiaries are
NSP-Minnesota; NSP-Wisconsin; PSCo; and SPS. These utilities serve customers in portions of Colorado, Michigan,
Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Along with WGI, an interstate natural
gas pipeline, these companies comprise the continuing regulated utility operations.
Xcel Energy’s nonregulated subsidiary reported in continuing operations is Eloigne, which invests in rental housing
projects that qualify for low-income housing tax credits.
Discontinued Operations
See Note 3 to the consolidated financial statements for discussion of discontinued operations.
Forward-Looking Statements
Except for the historical statements contained in this report, the matters discussed in the following discussion and
analysis are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-
looking statements are intended to be identified in this document by the words ‘‘anticipate,’’ ‘‘believe,’’ ‘‘estimate,’’
‘‘expect,’’ ‘‘intend,’’ ‘‘may,’’ ‘‘objective,’’ ‘‘outlook,’’ ‘‘plan,’’ ‘‘project,’’ ‘‘possible,’’ ‘‘potential,’’ ‘‘should’’ and similar
expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but
are not limited to: general economic conditions, including the availability of credit and its impact on capital
expenditures and the ability of Xcel Energy and its subsidiaries to obtain financing on favorable terms; business
conditions in the energy industry; actions of credit rating agencies; competitive factors, including the extent and timing
of the entry of additional competition in the markets served by Xcel Energy and its subsidiaries; unusual weather;
effects of geopolitical events, including war and acts of terrorism; state, federal and foreign legislative and regulatory
initiatives that affect cost and investment recovery, have an impact on rates or have an impact on asset operation or
ownership or impose environmental compliance conditions; structures that affect the speed and degree to which
competition enters the electric and natural gas markets; costs and other effects of legal and administrative proceedings,
settlements, investigations and claims; actions of accounting regulatory bodies; the items described under Factors
Affecting Results of Continuing Operations; and the other risk factors listed from time to time by Xcel Energy in
reports filed with the SEC, including ‘‘Risk Factors’’ in Item 1A of Xcel Energy’s Form 10-K for the year ended
Dec. 31, 2007 and Exhibit 99.01 to Xcel Energy’s Form 10-K for the year ended Dec. 31, 2007.
Management’s Strategic Plan
Xcel Energy’s strategy, called Building the Core, has three primary focuses: environmental leadership, achieving financial
objectives and optimizing the management of a portfolios of operating utilities. In summary, our objective is to embrace
growing customer demand and environmental initiatives by investing in our core utility businesses and earning a
reasonable return on our invested capital. Below is a detailed discussion of our three primary focuses and how they
support our overall Building the Core strategy.
Xcel Energy’s Environmental Leadership
Xcel Energy has adopted environmental leadership as a primary focus, forming the cornerstone of all our strategic
initiatives. Xcel Energy believes that our environmental leadership meets customer and policy maker expectations and,
in turn, creates significant shareholder value.
As a portfolio of regulated utilities, Xcel Energy has an obligation to serve its customers by providing them with
reasonably priced, reliable electric and gas services. However, Xcel Energy’s strategy goes beyond this traditional mission.
Under the environmental leadership strategy, Xcel Energy assesses and takes prudent, balanced steps to reduce the
impact of our operations on the environment while promoting technological and public policy advancements that will
encourage a cleaner electric system. In light of the capital-intensive nature of our business, including the long life of
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