Xcel Energy 2014 Annual Report Download - page 77

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Interest charges decreased $26.4 million, or 4.4 percent, for 2013 compared with 2012. The decrease is primarily due to refinancings
at lower interest rates. This was partially offset by higher long-term debt levels, $4 million of interest associated with the customer
refund at SPS based on the August 2013 FERC orders, $5 million of interest associated with customer refunds in Minnesota for the
2013 electric rate case and the write off of $6.3 million of unamortized debt expense related to the junior subordinated notes called in
May 2013.
Income Taxes — Income tax expense increased $39.8 million for 2014 compared with 2013. The increase was primarily due to
higher 2014 pretax earnings and recognition of additional R&E credits in 2013. These were partially offset by a 2014 tax benefit for
prior year adjustments. The ETR was 33.9 percent for 2014 compared with 33.8 percent for 2013. See Note 6 to the consolidated
financial statements for further discussion.
Income tax expense increased $33.8 million for 2013 compared with 2012. The increase in income tax expense was primarily due to
higher pretax earnings in 2013, a tax benefit for a carryback in 2012 and for the restoration in 2012 of a portion of the tax benefit
associated with federal subsidies for prescription drug plans that was previously written off in 2010. These were partially offset in
2013 by a tax benefit for a carryback claim related to 2013, R&E credits and increased permanent plant-related reductions. The ETR
was 33.8 percent for 2013 compared with 33.2 percent for 2012. The higher ETR for 2013 was primarily due to the adjustments
referenced above. See Note 6 to the consolidated financial statements for further discussion.
Xcel Energy Inc. and Other Results
The following tables summarize the net income and EPS contributions of Xcel Energy Inc. and its nonregulated businesses:
Contribution to Xcel Energy’s Earnings
(Millions of Dollars) 2014 2013 2012
Xcel Energy Inc. financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (51.8) $ (62.9) $ (71.5)
Eloigne (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5)(0.8) 3.8
Xcel Energy Inc. taxes and other results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.0)(7.1) 0.8
Total Xcel Energy Inc. and other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (57.3) $ (70.8) $ (66.9)
Contribution to Xcel Energy’s EPS
(Earnings per Share) 2014 2013 2012
Xcel Energy Inc. financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.10) $ (0.13) $ (0.15)
Eloigne (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0.01
Xcel Energy Inc. taxes and other results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01)(0.01) —
Total Xcel Energy Inc. and other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.11) $ (0.14) $ (0.14)
(a) Amounts include gains or losses associated with sales of properties held by Eloigne.
Xcel Energy Inc.’s results include interest charges, which are incurred at Xcel Energy Inc. and are not directly assigned to individual
subsidiaries.
Factors Affecting Results of 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 historical and future trends of Xcel Energy’s
operating results have been, and are expected to be, affected by a number of factors, including those listed below.
General Economic Conditions
Economic conditions may have a material impact on Xcel Energy’s operating results. While economic growth has been improving
over the past year, management cannot predict whether this trend will be sustained going forward. Other events impact overall
economic conditions and management cannot predict the impact of fluctuating energy prices, terrorist activity, war or the threat of war.
However, Xcel Energy could experience a material impact to its results of operations, future growth or ability to raise capital resulting
from a sustained general slowdown in economic growth or a significant increase in interest rates.