Xcel Energy 2007 Annual Report Download - page 63

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Interest charges increased by approximately $24 million, or 5.1 percent, for 2006 compared with 2005. The increase is
due to higher levels of both short-term and long-term debt and higher short-term interest rates.
Income Tax Expense — Income taxes for continuing operations increased by $113 million for 2007, compared with
2006. The increase in income tax expense was primarily due to an increase in pretax income (excluding COLI) and
$16.1 million of tax expense related to the COLI settlement in 2007 and $29.9 million of tax benefits from the
reversal of a regulatory reserve and realized capital loss carry forwards in 2006. The effective tax rate for 2007 was
33.8 percent, compared with 24.2 percent for the same period in 2006. The higher effective tax rate for 2007 was
primarily due to the COLI settlement and the lower effective tax rate for 2006 was primarily due to the recognition of
a tax benefit relating to the reversal of a regulatory reserve and realized capital loss carry forwards. Without these
charges and benefits, the effective tax rate for 2007 and 2006 would have been 30.3 percent and 28.2 percent,
respectively.
Income taxes for continuing operations increased by $8 million for 2006, compared with 2005. The effective tax rate
for continuing operations was 24.2 percent for 2006, compared with 25.8 percent for 2005. The increase in income tax
expense was primarily due to an increase in pretax income, partially offset by $30 million of tax benefits from the
reversal of a regulatory reserve and realized capital loss carry forwards. Without these tax benefits the effective tax rate
for 2006 would have been 28.2 percent.
See Note 7 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
2007 2006 2005
(Millions of Dollars)
Eloigne ........................................ $ 2.6 $ 4.6 $ 6.2
Financing costs — holding company ..................... (71.9) (66.1) (52.7)
Holding company, taxes and other results .................. 9.2 24.2 6.2
Total holding company and other loss — continuing operations . . . $(60.1) $(37.3) $(40.3)
Contribution to Xcel Energy’s earnings per share
2007 2006 2005
Eloigne ........................................ $ — $0.01 $ 0.01
Financing costs and preferred dividends — holding company ...... (0.15) (0.12) (0.09)
Holding company, taxes and other results .................. 0.03 0.05 0.01
Total holding company and other loss per share — continuing
operations ................................... $(0.12) $(0.06) $(0.07)
Financing Costs and Preferred Dividends — Holding company and other 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 2007, 2006 and 2005 included above
reflects dilutive securities, as discussed further in Note 8 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 $10 million in 2007; $15 million in 2006; and $14 million in 2005.
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