Xcel Energy 2010 Annual Report Download - page 65

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NSP-Wisconsin — NSP-Wisconsin earnings decreased by $0.01 per share for 2010. The decrease is primarily due to fuel
recovery and higher O&M expenses, partially offset by warmer temperatures which increased electric sales, as well as new
electric rates, that were effective in January 2010.
Equity Earnings of Unconsolidated Subsidiaries — The increase is primarily related to increased earnings from the equity
investment in WYCO related to a natural gas storage facility that began operating in mid-2009.
2009 Comparison with 2008
PSCo — Earnings at PSCo decreased by $0.04 per share for 2009. The 2009 decrease is largely due to the negative impact of
weather and rising costs, partially offset by new electric rates that went into effect in July 2009.
NSP-Minnesota — Earnings at NSP-Minnesota decreased by $0.01 per share for 2009. The 2009 decrease is mainly due to the
negative impact of weather and timing of nuclear outage expenses. The decrease was partially mitigated by a $91 million electric
rate increase that went into effect in January 2009.
SPS — Earnings at SPS increased by $0.08 per share for 2009. The 2009 increase was primarily due to electric rate increases in
Texas (effective in February 2009) and New Mexico (effective in July 2009) and the 2008 resolution of certain fuel cost
allocation issues, which were partially offset by higher purchased capacity costs.
NSP-Wisconsin — Earnings at NSP-Wisconsin were flat for 2009. The 2009 earnings reflect increased costs, which were offset
by improved fuel recovery and new rates which were effective in January 2009.
Equity Earnings of Unconsolidated Subsidiaries — Equity earnings of unconsolidated subsidiaries increased by $0.02 per share
for 2009 due to our investment in WYCO, which owns a natural gas pipeline in Colorado that began operations in late 2008 as
well as a gas storage facility that commenced operations in July 2009.
Adjustments to GAAP Earnings
2010 Comparison with 2009
COLI Settlement — In July 2010, Xcel Energy, PSCo and PSRI entered into a settlement agreement with Provident related to all
claims asserted by Xcel Energy, PSCo and PSRI against Provident in a lawsuit associated with the discontinued COLI program.
Under the terms of the settlement, Xcel Energy, PSCo and PSRI were paid $25 million by Provident and Reassure America Life
Insurance Company resulting in approximately $0.05 of non-recurring earnings per share, in the third quarter of 2010. The $25
million proceeds were not subject to income taxes.
PSRI — In addition, during the first quarter of 2010, Xcel Energy recorded a non-recurring tax and interest charge of
approximately $10 million, or $0.02 per share, due to an agreement in principle reached with the IRS following the completion of
a financial reconciliation of Xcel Energy’s statement of account dating back to tax year 1993, related to the COLI program.
During the third quarter of 2010, Xcel Energy and the IRS came to final agreement on the applicable interest netting computations
related to these tax years. Accordingly, PSRI recorded a reduction to expense of $0.6 million, net of tax, during the third quarter
of 2010.
Impact of the Patient Protection and Affordable Care Act — Medicare Part D — During the first quarter of 2010, Xcel Energy
recorded non-recurring tax expense of approximately $17 million, or $0.04 per share, of tax benefits previously recognized in
income related to Medicare Part D subsidies due to the Patient Protection and Affordable Care Act enacted in March 2010. Under
GAAP, Xcel Energy was required to reverse these previously recorded tax benefits in the period of enactment of the new
legislation.
2009 Comparison with 2008
PSRI — PSRI is a wholly owned subsidiary of PSCo. During 2007, Xcel Energy resolved a dispute with the IRS regarding its
COLI program. The 2009 impact is primarily related to legal costs associated with company claims against the insurance provider
and broker of the COLI policies.
Discontinued Operations — Loss from discontinued operations increased by one cent over 2009 primarily related to an increase
in tax related expenses and legal accruals for previously divested businesses.