Xcel Energy 2007 Annual Report Download - page 64

Statement of Operations Analysis — Discontinued Operations (Net of Tax)
A summary of the various components of discontinued operations is as follows for the years ended Dec. 31:
2007 2006 2005
Income (loss) in millions
Cheyenne ...................................... $ — $3.0 $ 0.2
Regulated utility segments — income ................... — 3.0 0.2
NRG......................................... 0.4 (0.5) 16.1
Xcel Energy International ............................ 2.4 (0.5) 0.1
e prime ....................................... — 0.1 (0.1)
Seren......................................... (2.9) 2.1 1.8
Utility Engineering Corp. / Quixx Corp. .................. 1.3 (0.7) (4.4)
Other ........................................ 0.2 (0.4) 0.2
Nonregulated/other — income ....................... 1.4 0.1 13.7
Total income from discontinued operations .............. $ 1.4 $3.1 $13.9
Income (loss) per share
Cheyenne ...................................... $ — $0.01 $ —
Regulated utility segments — income per share ............. — 0.01 —
NRG......................................... — — 0.04
Xcel Energy International ............................ 0.01 — —
e prime ....................................... — — —
Seren......................................... (0.01) — —
Utility Engineering, Corp. / Quixx Corp. .................. — — (0.01)
Other ........................................———
Nonregulated/other — income per share ................. — — 0.03
Total income per share from discontinued operations ........ $ — $0.01 $ 0.03
Regulated Utility Results — Discontinued Operations
In January 2004, Xcel Energy agreed to sell Cheyenne. Consequently, Xcel Energy reported Cheyenne results as a
component of discontinued operations for all periods presented. The sale was completed in January 2005 and resulted
in an after-tax loss of approximately $13 million, or 3 cents per share, which was accrued in December 2004. In 2006,
the Cheyenne basis study was updated resulting in the recognition of $2.3 million in tax benefits. This plus other
Cheyenne related tax benefits totaled $3.3 million or 1 cent per share.
Other and Nonregulated Results — Discontinued Operations
In April 2005, Zachry Group, Inc. (Zachry) acquired all of the outstanding shares of UE, a nonregulated subsidiary.
The majority of Quixx Corp., including Borger Energy Associates and Quixx Power Services, Inc., was sold in October
2006 to affiliates of Energy Investors Funds.
In November 2005, Xcel Energy sold Seren’s California assets to WaveDivision Holdings, LLC. In January 2006, Xcel
Energy sold Seren’s Minnesota assets to Charter Communications.
Tax Benefits Related to Investment in NRG — Xcel Energy has recognized cumulative tax benefits related to the
divestiture of NRG of approximately $1.1 billion. Since these tax benefits are related to Xcel Energy’s investment in
discontinued NRG operations, they are reported primarily in discontinued operations.
Based on current forecasts of taxable income and tax liabilities, Xcel Energy expects to realize approximately $1.1 billion
of savings from these tax benefits through a refund of taxes paid in prior years and reduced taxes payable in future years
due to net operating loss carryforwards. Xcel Energy used $630 million of these deferred tax benefits through 2006, an
additional $90 million in 2007, and expects to use approximately $110 million in 2008. The remainder of the tax
benefit carry forward is expected to be used over subsequent years.
Factors Affecting Results of Continuing Operations
Xcel Energy’s utility revenues depend on customer usage, which varies with weather conditions, general business
conditions and the cost of energy services. Various regulatory agencies approve the prices for electric and natural gas
service within their respective jurisdictions and affect Xcel Energy’s ability to recover its costs from customers. The
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