Xcel Energy Third Quarter 2012 Earnings Report

Xcel Energy Third Quarter 2012 Earnings Report

  • Ongoing 2012 third quarter earnings per share were $0.78 compared with $0.69 per share in 2011.
  • GAAP (generally accepted accounting principles) 2012 third quarter earnings per share were $0.81 compared with $0.69 per share in 2011.
  • Xcel Energy reaffirms 2012 ongoing earnings guidance of $1.75 to $1.85 per share.
  • Xcel Energy expects 2012 GAAP earnings to be in the upper half of the guidance range.
  • Xcel Energy initiates 2013 ongoing earnings guidance of $1.85 to $1.95 per share.

MINNEAPOLIS--(BUSINESS WIRE)-- Xcel Energy Inc. (NYS: XEL) today reported 2012 third quarter GAAP earnings of $398 million, or $0.81 per share compared with 2011 GAAP earnings of $338 million, or $0.69 per share.

Ongoing earnings, which exclude adjustments for certain items, were $0.78 per share for the third quarter of 2012 compared with $0.69 per share in 2011. Third quarter 2012 ongoing earnings increased largely due to increased electric and gas margins driven by various rate increases that went into effect in 2012, partially offset by increased property taxes and interest expense. Third quarter 2012 GAAP earnings also reflect a $0.03 per share positive impact for a tax benefit associated with federal subsidies for prescription drug plans.

"We experienced a solid quarter, with earnings increasing mainly due to both our continued system investments that provide long-term value to our customers and timely cost recovery," said Ben Fowke, Chairman, President and Chief Executive Officer. "Our third quarter 2012 results also benefited from hot summer weather, although we experienced similar weather in 2011, it was not a variance driver in the period over period quarterly comparison."

"We had a slow start to the year with unfavorable sales, mild winter weather and certain adverse regulatory decisions. We responded by implementing cost control measures to partially offset the impact of these early headwinds and to position the company to deliver earnings in the lower half of our guidance range. Given the success of our year-to-date cost control measures, combined with hot summer weather, we now expect to deliver 2012 ongoing earnings within our earnings guidance range of $1.75 to $1.85 per share. We also anticipate that our 2012 GAAP earnings will be in the upper half of our guidance range," said Fowke.

Earnings Adjusted for Certain Items (Ongoing Earnings)

The following table provides a reconciliation of ongoing earnings per share to GAAP earnings per share:

 Three Months Ended Sept. 30 Nine Months Ended Sept. 30
Diluted Earnings (Loss) Per Share2012 20112012 2011
Ongoing(a)diluted earnings per share$


Prescription drug tax benefit (a) 


 - 0.03 -
GAAPdiluted earnings per share$



See Note 6.


At 9:00 a.m. CDT today, Xcel Energy will host a conference call to review financial results. To participate in the call, please dial in 5 to 10 minutes prior to the start and follow the operator's instructions.

US Dial-In:(866) 225-8754
International Dial-In:(480) 629-9818
Conference ID:4567530

The conference call also will be simultaneously broadcast and archived on Xcel Energy's website at www.xcelenergy.com. To access the presentation, click on Investor Relations. If you are unable to participate in the live event, the call will be available for replay from 2:00 p.m. CDT on Oct. 25 through 11:59 p.m. CDT on Oct. 26.

Replay Numbers
US Dial-In:(800) 406-7325
International Dial-In:(303) 590-3030
Access Code:4567530 #

Except for the historical statements contained in this release, the matters discussed herein, are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including our 2012 and 2013 full year earnings per share guidance and assumptions, are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "intend," "may," "objective," "outlook," "plan," "project," "possible," "potential," "should" and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them to reflect changes that occur after that date. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including inflation rates, monetary fluctuations and their impact on capital expenditures and the ability of Xcel Energy Inc. and its subsidiaries (collectively, Xcel Energy) to obtain financing on favorable terms; business conditions in the energy industry, including the risk of a slow down in the U.S. economy or delay in growth recovery; trade, fiscal, taxation and environmental policies in areas where Xcel Energy has a financial interest; customer business conditions; actions of credit rating agencies; competitive factors, including the extent and timing of the entry of additional competition in the markets served by Xcel Energy Inc. and its subsidiaries; unusual weather; effects of geopolitical events, including war and acts of terrorism; state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rates or have an impact on asset operation or ownership or impose environmental compliance conditions; structures that affect the speed and degree to which competition enters the electric and natural gas markets; costs and other effects of legal and administrative proceedings, settlements, investigations and claims; actions by regulatory bodies impacting our nuclear operations, including those affecting costs, operations or the approval of requests pending before the Nuclear Regulatory Commission; financial or regulatory accounting policies imposed by regulatory bodies; availability or cost of capital; employee work force factors; and the other risk factors listed from time to time by Xcel Energy in reports filed with the Securities and Exchange Commission (SEC), including Risk Factors in Item 1A and Exhibit 99.01 of Xcel Energy Inc.'s Annual Report on Form 10-K for the year ended Dec. 31, 2011 and Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2012.

This information is not given in connection with any
sale, offer for sale or offer to buy any security.




(amounts in thousands, except per share data)


Three Months Ended Sept. 30


Nine Months Ended Sept. 30







Operating revenues
Natural gas174,513194,9301,016,8611,251,817
Other 17,119  17,244  53,907  56,750 
Total operating revenues2,724,3412,831,5987,577,0888,086,360
Operating expenses
Electric fuel and purchased power1,006,8301,150,2522,725,1833,071,493
Cost of natural gas sold and transported49,73987,107557,444793,539
Cost of sales — other7,2517,15420,49922,100
Operating and maintenance expenses531,480532,9621,576,1781,575,159
Conservation and demand side management program expenses68,92071,280191,242212,075
Depreciation and amortization239,051242,329694,364696,316
Taxes (other than income taxes) 100,636  89,018  305,892  278,077 
Total operating expenses 2,003,907  2,180,102  6,070,802  6,648,759 
Operating income720,434651,4961,506,2861,437,601
Other income, net4882,5504,9538,295
Equity earnings of unconsolidated subsidiaries7,4907,42322,15022,813
Allowance for funds used during construction — equity15,86011,84044,50438,690
Interest charges and financing costs

Interest charges — includes other financing costs of $6,010, $6,279, $18,126 and $17,724, respectively

Allowance for funds used during construction — debt 



 (6,301) (24,729) (21,575)
Total interest charges and financing costs143,280141,710432,741417,128

Income from continuing operations before income taxes

Income taxes 202,845  193,304  380,161  389,838 

Income from continuing operations

(Loss) income from discontinued operations, net of tax (41) 37  68  230 

Net income

Dividend requirements on preferred stock-1,414-3,534
Premium on redemption of preferred stock -  3,260  -  3,260 
Earnings available to common shareholders$398,106 $333,658 $765,059 $693,869 

Weighted average common shares outstanding:


Earnings per average common share:


Cash dividends declared per common share


Notes to Investor Relations Earnings Release (Unaudited)

Due to the seasonality of Xcel Energy's operating results, quarterly financial results are not an appropriate base from which to project annual results.

The only common equity securities that are publicly traded are common shares of Xcel Energy Inc. The earnings and earnings per share (EPS) 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. EPS by subsidiary is a financial measure not recognized under GAAP that is calculated by dividing the net income or loss attributable to the controlling interest of each subsidiary by the weighted average fully diluted Xcel Energy Inc. common shares outstanding for the period. We use this non-GAAP financial measure to evaluate and provide details of earnings results. We believe that this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of our subsidiaries. This non-GAAP financial measure should not be considered as an alternative to our consolidated fully diluted EPS determined in accordance with GAAP as an indicator of operating performance.

Note 1.Earnings Per Share Summary

The following table summarizes the diluted earnings per share for Xcel Energy:

 Three Months Ended Sept. 30 Nine Months Ended Sept. 30
Diluted Earnings (Loss) Per Share2012 20112012 2011
Public Service Company of Colorado (PSCo)$0.36$0.29$0.75$0.63
Southwestern Public Service Company (SPS)
Equity earnings of unconsolidated subsidiaries 0.01  0.01  0.03  0.03 

Regulated utility — continuing operations (a)

Xcel Energy Inc. and other costs (0.03) (0.04) (0.10) (0.11)

Ongoing(a)diluted earnings per share


Prescription drug tax benefit (b)

 0.03  -  0.03  - 

GAAP diluted earnings per share

$0.81 $0.69 $1.57 $1.43 
(a) See Note 2.
(b)See Note 6.

PSCo — PSCo's ongoing earnings increased $0.07 per share during the third quarter of 2012 and $0.12 per share for the nine months ended Sept. 30, 2012. The increases are primarily due to an electric rate increase, effective in May 2012, lower operating and maintenance (O&M) expenses and the impact of warmer summer weather. The increases were partially offset by decreased wholesale revenue due to the expiration of a long-term wholesale power sales agreement with Black Hills Corp.

NSP-Minnesota — NSP-Minnesota's ongoing earnings decreased $0.01 per share for the third quarter of 2012 and $0.05 per share for the nine months ended Sept. 30, 2012. The ongoing earnings decline in the third quarter is primarily the result of cooler weather than in 2011, higher property taxes following the Minnesota Public Utility Commission's denial of our deferred accounting request and higher O&M expenses, which were partially offset by lower depreciation expense.

Year-to-date ongoing earnings decreased primarily due to the unfavorable impact of warmer than normal winter weather, higher property taxes, and higher O&M expenses. These decreases were partially offset by lower depreciation expense and a lower effective tax rate.

SPS — SPS' ongoing earnings increased $0.02 per share for the third quarter of 2012 and $0.03 per share for the nine months ended Sept. 30, 2012. The increases are the result of rate increases in New Mexico and Texas, effective January 2012, partially offset by the impact of milder weather during the third quarter, higher depreciation expense and higher property taxes.

NSP-Wisconsin — NSP-Wisconsin's ongoing earnings were flat for the third quarter of 2012 and for the nine months ended Sept. 30, 2012. Year-to-date ongoing earnings were positively impacted by rate increases, effective in January 2012, and the impact of warmer summer weather, offset by warmer winter weather.

The following table summarizes significant components contributing to the changes in the 2012 EPS compared with the same periods in 2011, which are discussed in more detail later in the release.

Diluted Earnings (Loss) Per Share 

Three Months
Ended Sept. 30


Nine Months
Ended Sept. 30

2011 GAAP and ongoing(a)diluted earnings per share





Components of change — 2012 vs. 2011