Xcel Energy 2008 Annual Report Download - page 64

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During 2007, Xcel Energy entered into a settlement agreement with the IRS related to a dispute associated with its
COLI program. The following table provides a reconciliation of GAAP earnings and earnings per share to ongoing
earnings and earnings per share for the years ended Dec. 31:
2008 2007 2006
(Millions of Dollars)
Ongoing earnings ............................. $641.1 $612.0 $548.2
PSRI/COLI IRS settlement ....................... 4.6 (36.1) 20.5
Total continuing operations ..................... 645.7 575.9 568.7
Discontinued operations ......................... (0.1) 1.4 3.1
Total GAAP earnings ........................ $645.6 $577.3 $571.8
2008 2007 2006
Ongoing earnings per share ....................... $1.45 $ 1.43 $1.30
PSRI/COLI IRS settlement ....................... 0.01 (0.08) 0.05
Earnings per share — continuing operations ........... 1.46 1.35 1.35
Discontinued operations ......................... — — 0.01
Total GAAP earnings per share — diluted ........... $1.46 $ 1.35 $1.36
As a result of the termination of the COLI program, Xcel Energy’s management believes that ongoing earnings provide
a more meaningful comparison of earnings results between different periods in which the COLI program was in place
and is more representative of Xcel Energy’s fundamental core earnings power. Xcel Energy’s management uses ongoing
earnings internally for financial planning and analysis, for reporting of results to the Board of Directors, in determining
whether performance targets are met for performance-based compensation and when communicating its earnings
outlook to analysts and investors.
2008 2007 2006
Contribution to earnings by company
NSP-Minnesota .............................. 44.3% 45.9% 47.4%
PSCo ..................................... 52.7 51.0 41.5
SPS...................................... 4.9 5.7 8.1
NSP-Wisconsin .............................. 7.1 6.5 7.4
Total regulated utility contribution ................. 109.0 109.1 104.4
Holding company and other subsidiaries ............... (9.0) (9.1) (4.4)
Total earnings contributions ..................... 100.0% 100.0% 100.0%
Weather — Xcel Energy’s earnings can be significantly affected by weather. Unseasonably hot summers or cold winters
increase electric and natural gas sales, but also can increase operating and maintenance expenses. Unseasonably mild
weather reduces electric and natural gas sales, but may not reduce operating and maintenance expenses. The impact of
weather on earnings is based on the number of customers, temperature variances and the amount of natural gas or
electricity the average customer historically uses per degree of temperature.
The following summarizes the estimated impact on the earnings of the utility subsidiaries of Xcel Energy due to
temperature variations from historical averages:
• Weather in 2008 did not impact earnings per share;
• Weather in 2007 increased earnings by an estimated 6 cents per share; and
• Weather in 2006 decreased earnings by an estimated 2 cents per share.
Statement of Operations Analysis — Continuing Operations
The following discussion summarizes the items that affected the individual revenue and expense items reported in the
consolidated statements of income.
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