10-Q/APeriod: Q2 FY2007

XCEL ENERGY INC Quarterly Report (Amendment) for Q2 Ended Jun 30, 2007

Filed December 13, 2007For Securities:XELXELLL

Summary

Xcel Energy Inc. filed an amended quarterly report (10-Q/A) for the period ended June 30, 2007, primarily to restate its financial statements. This restatement was necessary because a subsidiary, PSR Investments, Inc. (PSRI), which was previously classified as a discontinued operation, should have been included as part of continuing operations. This change affects the presentation of income taxes and other financial metrics. For the second quarter of 2007, Xcel Energy reported income from continuing operations of $67.7 million, or $0.16 per diluted share, compared to $97.9 million, or $0.24 per diluted share, in the prior year. The company also announced a settlement in principle for a tax dispute related to corporate-owned life insurance (COLI) policies, resulting in a payment of $64.4 million. This settlement, while impacting current period results, resolves a significant tax litigation matter.

Key Highlights

  • 1Restatement of financial statements due to reclassification of PSRI from discontinued to continuing operations.
  • 2Significant settlement reached with the U.S. government for a COLI tax dispute, involving a $64.4 million payment.
  • 3Second quarter 2007 income from continuing operations decreased to $67.7 million from $97.9 million in Q2 2006.
  • 4Diluted earnings per share from continuing operations for Q2 2007 were $0.16, down from $0.24 in Q2 2006.
  • 5Increased capital expenditures noted, particularly for planned system expansion.
  • 6Regulatory proceedings across multiple states continue to be a key factor, impacting rate adjustments and cost recovery.
  • 7The company's liquidity remains stable with significant available credit facilities and commercial paper programs.

Frequently Asked Questions

The primary reason for filing this amended report is to restate the previously issued financial statements for the periods ended June 30, 2007, and 2006. This restatement is due to the reclassification of PSR Investments, Inc. (PSRI) from a discontinued operation to a continuing operation.

Xcel Energy reached a settlement with the U.S. government regarding a tax dispute related to corporate-owned life insurance (COLI) policies. The settlement requires Xcel Energy to pay $64.4 million to the government and surrender the policies. For the second quarter of 2007, this resulted in a total expense of $56.5 million, including $41.2 million for interest and penalties and $15.3 million in income taxes, net of tax benefits.

The restatement reclassified PSRI from discontinued to continuing operations. This change primarily impacted the presentation of income taxes. While the net income for the quarter did not change significantly due to the restatement itself (as the overall gain/loss was reallocated), the earnings per share from continuing operations and discontinued operations were affected by the reclassification.

The report indicates increased capital expenditures, primarily due to planned system expansion. These investments are crucial for maintaining and upgrading the utility's infrastructure and meeting future demand.