Xcel Energy 2008 Annual Report Download - page 5

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Xcel Energy
2008 Annual Report page 3
Letter to Shareholders
Despite the challenges of a global financial crisis
and economic downturn, Xcel Energy delivered
solid results in 2008. We met the majority of our
financial targets, including our dividend goal. We
continued to invest in our core businesses to meet
customer energy needs and build long-term value
for you. And we remained strongly committed to
environmental leadership and the health of our
communities.
Responsible By Nature™, the theme of this
report and our new corporate tagline, describes
Xcel Energy’s long-standing approach to all of our
commitments. Simply put, responsibility is part
of everything we do. We take our obligations to
shareholders, customers and our communities
seriously—and our results prove that we work
hard to deliver on our goals.
Delivering financial results
Ongoing earnings for 2008 were $1.45 per share,
compared with $1.43 per share in 2007. That
means we met the lower end of our earnings
guidance range of $1.45 to $1.50 per share,
but fell short of our long-term earnings growth
objective of 5 percent to 7 percent.
Several factors affected 2008 results. We benefited
from additional revenue from rate cases and other
regulatory rules. But we also experienced slowing
sales growth. In fact, weather-adjusted residential
sales were flat for the year.
Because we closely monitor projected earnings
throughout the year, we were able to take steps to
ensure we would meet our 2008 target. The most
notable action was to eliminate our annual incentive
compensation for employees.
We were fortunate to raise $2.3 billion in financing
before the market collapse, which will enable us
to continue to invest in our businesses, despite
challenges in the capital markets. And we benefited
from improved credit ratings from Standard &
Poor’s, which upgraded the senior unsecured
credit ratings at three of our operating companies.
Most important to you, we increased our dividend
by 3 cents per share, or 3 percent. That means
we met our goal to increase the dividend every
year by 2 percent to 4 percent, which remains
our long-term objective.
Looking ahead to 2009, we’ve established an
earnings guidance range of $1.45 to $1.55 per
share. If we achieve the midpoint of that range,
we will be delivering modest growth compared
with our long-term objective. But we also believe
that as soon as the economy returns to a normal
level of productivity, we will be in a strong position
to resume our long-term earnings growth rate.
Keeping our commitments
We continued to execute our corporate strategy
to meet customer needs and grow our businesses
through environmental leadership. Meeting the
need for reliable energy requires significant
investments, but before we invest, we work
with regulators and legislators to ensure that
the regulatory rules are in place to enable us
to recover our costs and earn a fair return.
Dear Shareholders