10-QPeriod: Q1 FY2009

XCEL ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2009

Filed April 30, 2009For Securities:XELXELLL

Summary

Xcel Energy Inc. reported its first-quarter 2009 financial results, showcasing a mixed performance influenced by economic conditions and regulatory adjustments. Total operating revenues saw a decrease of approximately 10.9% to $2.70 billion compared to the prior year's $3.03 billion, primarily driven by lower natural gas revenues. However, operating income improved by 12.3% to $370.8 million from $330.1 million, indicating effective cost management. Net income rose by 13.7% to $174.1 million ($0.38 per diluted share) from $153.1 million ($0.35 per diluted share) in the first quarter of 2008. The company's electric segment performed strongly, with electric margin increasing by 8.7% to $962 million, supported by retail rate increases and conservation program revenues, despite a decline in retail sales. Conversely, the natural gas segment experienced a decrease in margin of 6.6% to $197 million, attributed to lower sales and unfavorable weather impacts. Xcel Energy's balance sheet remains robust, with total assets of $24.63 billion as of March 31, 2009. The company continues to invest in its infrastructure and manage its market risks, while navigating various regulatory proceedings across its service territories.

Financial Highlights

24 data points
Beta

Revenue

$2.70B

Net Income

$173.01M

6.4% Net Margin

EPS (Diluted)

$0.38

Cash & Equivalents

$301.31M

Free Cash Flow

$812.55M

Financial Statements
Beta
Revenue$2.70B
Operating Expenses$2.32B
Operating Income$370.80M
Interest Expense$141.80M
Net Income$173.01M
EPS (Basic)$0.38
EPS (Diluted)$0.38
Shares Outstanding (Basic)455.19M
Shares Outstanding (Diluted)455.95M

Key Highlights

  • 1Total operating revenues decreased by 10.9% to $2.70 billion, largely due to a decline in natural gas revenues.
  • 2Operating income increased by 12.3% to $370.8 million, reflecting effective cost management.
  • 3Net income grew by 13.7% to $174.1 million, with diluted earnings per share rising to $0.38 from $0.35 in the prior year.
  • 4Electric segment margin improved by 8.7% to $962 million, driven by rate increases and conservation programs.
  • 5Natural gas segment margin declined by 6.6% to $197 million due to lower sales and weather impacts.
  • 6The company's balance sheet remains solid with total assets of $24.63 billion.
  • 7Xcel Energy continues to invest in capital expenditures, with utility capital/construction expenditures of $477.7 million for the quarter.

Frequently Asked Questions

The decrease in total operating revenues was primarily driven by lower natural gas revenues, which fell significantly due to factors such as lower purchased natural gas adjustment clause recovery and a general decline in sales. While electric revenues also saw a slight decrease, the impact was less pronounced.

Xcel Energy managed to increase net income and operating income through effective cost management. Key factors contributing to this included a significant increase in electric margin, driven by rate increases and conservation program revenues, and a reduction in operating expenses, particularly lower fuel and purchased power costs in the electric segment. Despite lower natural gas margins, overall operational efficiencies and cost controls helped boost profitability.

Xcel Energy is involved in numerous ongoing regulatory proceedings across its service territories, including base rate cases (e.g., NSP-Minnesota Electric Rate Case, PSCo Electric Rate Case, SPS Texas Retail Base Rate Case), and various riders for cost recovery (e.g., Transmission Cost Recovery, Renewable Energy Standard). The company is also subject to significant environmental regulations and litigation, including those related to greenhouse gas emissions and legacy manufactured gas plant site cleanups. These matters can materially impact financial results and require ongoing management attention and potential cash outflows.

Xcel Energy maintains diverse sources of funding, including operating cash flow, commercial paper, and committed credit facilities. The company has access to substantial liquidity through its credit facilities and maintains a focus on refinancing maturing debt and funding capital programs. While the volatile financial markets have presented challenges, Xcel Energy has access to its commercial paper programs and direct borrowings on credit agreements. The company is also evaluating opportunities related to the American Recovery and Reinvestment Act of 2009, particularly for investments in renewable energy, energy efficiency, transmission, and smart grid technologies.