Xcel Energy 2015 Annual Report Download - page 67
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The only equity securities that are publicly traded are common shares of Xcel Energy Inc. The diluted earnings and EPS of each
subsidiary as well as the ROE of each subsidiary discussed below do not represent a direct legal interest in the assets and liabilities
allocated to such subsidiary but rather represent a direct interest in our assets and liabilities as a whole. Ongoing diluted EPS and
ongoing ROE for Xcel Energy and by subsidiary are financial measures not recognized under GAAP. Ongoing diluted EPS is
calculated by dividing the net income or loss attributable to the controlling interest of each subsidiary, adjusted for certain
nonrecurring items, by the weighted average fully diluted Xcel Energy Inc. common shares outstanding for the period. Ongoing ROE
is calculated by dividing the net income or loss attributable to the controlling interest of Xcel Energy or each subsidiary, adjusted for
certain nonrecurring items, by each entity’s average common stockholders’ or stockholder’s equity. We use these non-GAAP financial
measures to evaluate and provide details of earnings results. We believe these measurements are useful to investors to evaluate the
actual and projected financial performance and contribution of our subsidiaries. These non-GAAP financial measures should not be
considered as alternatives to measures calculated and reported in accordance with GAAP.
Results of Operations
The following table summarizes the diluted EPS for Xcel Energy:
Diluted Earnings (Loss) Per Share 2015 2014 2013
PSCo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.92 $ 0.90 $ 0.91
NSP-Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.80 0.79
SPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25 0.26 0.23
NSP-Wisconsin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15 0.14 0.12
Equity earnings of unconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.04 0.04 0.04
Regulated utility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.21 2.14 2.09
Xcel Energy Inc. and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.11)(0.11) (0.14)
Ongoing diluted EPS (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09 2.03 1.95
Loss on Monticello LCM/EPU project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.16) — —
SPS FERC complaint case orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.04)
GAAP diluted EPS (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.94 $ 2.03 $ 1.91
(a) Amounts may not add due to rounding.
Ongoing earnings exclude adjustments for certain items. For 2015, the adjustment to GAAP earnings is related to the Monticello
nuclear facility LCM/EPU project. For 2013, the adjustment is related to the SPS FERC complaint case orders. See below for further
discussion of the 2015 and 2013 adjustments and Note 12 to the consolidated financial statements for further discussion of the 2015
and 2013 adjustments.
Xcel Energy’s management believes that ongoing earnings provide a meaningful comparison of earnings results and is 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.
2015 Adjustment to GAAP Earnings
Loss on Monticello LCM/EPU Project — In March 2015, the MPUC approved full recovery, including a return, on $415 million of
the project costs, inclusive of AFUDC, but only allow recovery of the remaining $333 million of costs with no return on this portion of
the investment for 2015 and beyond. As a result of this decision, Xcel Energy recorded a pre-tax charge of approximately $129
million, or $79 million net of tax, in the first quarter of 2015. See Note 12 to the consolidated financial statements for further
discussion.
2013 Adjustment to GAAP Earnings
SPS FERC Orders — As a result of orders issued in August 2013 by the FERC for a SPS customer refund, a pre-tax charge of $36
million was recorded in 2013. Of this amount, approximately $30 million ($26 million revenue reduction and $4 million of interest)
was attributable to periods prior to 2013 and not representative of ongoing earnings. As such, GAAP earnings include the total after
tax amount of $24.4 million and ongoing earnings exclude $20.2 million. See Note 12 to the consolidated financial statements for
further discussion.