10-QPeriod: Q2 FY2012

XCEL ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 3, 2012For Securities:XELXELLL

Summary

Xcel Energy Inc.'s (XEL) Q2 2012 10-Q filing indicates a mixed operational performance compared to the prior year, with notable increases in electric revenues and margin, driven by rate increases and favorable weather, partially offset by declines in natural gas revenue and margin. Diluted earnings per share saw a modest increase for the quarter and year-to-date. The company continues to invest significantly in utility capital expenditures, which impacts cash flows, while managing short-term liquidity through commercial paper and credit facilities. Key areas for investor attention include ongoing regulatory proceedings across its various operating subsidiaries, which significantly influence future revenue and profitability. The company is navigating environmental regulations and potential impacts from climate change policies, alongside managing its debt levels and capital structure. While overall financial performance appears stable, the company faces a complex regulatory and operational landscape that warrants close monitoring.

Financial Highlights

46 data points
Beta

Revenue

$2.27B

Net Income

$183.06M

8.0% Net Margin

EPS (Diluted)

$0.38

Total Assets

$29.82B

Cash & Equivalents

$63.53M

Free Cash Flow

$387.81M

Financial Statements
Beta
Revenue$2.27B
Operating Expenses$1.87B
Operating Income$405.69M
Interest Expense$151.92M
Net Income$183.06M
EPS (Basic)$0.38
EPS (Diluted)$0.38
Shares Outstanding (Basic)487.72M
Shares Outstanding (Diluted)488.02M

Key Highlights

  • 1Total operating revenues decreased to $2.27 billion for Q2 2012 from $2.44 billion in Q2 2011, primarily due to lower natural gas revenues.
  • 2Electric revenues increased to $2.04 billion in Q2 2012 from $2.13 billion in Q2 2011, with electric margin increasing by $44 million due to rate increases and favorable weather.
  • 3Net income for Q2 2012 was $183.1 million, an increase from $158.8 million in Q2 2011.
  • 4Diluted earnings per share (EPS) increased to $0.38 in Q2 2012 from $0.33 in Q2 2011.
  • 5Utility capital/construction expenditures for the six months ended June 30, 2012, were $1.10 billion, largely in line with the prior year's $1.12 billion.
  • 6Net cash provided by operating activities decreased to $865.3 million for the six months ended June 30, 2012, from $1.12 billion in the prior year period, primarily due to changes in working capital.
  • 7The company had $481 million in commercial paper outstanding at June 30, 2012, against a borrowing limit of $2.45 billion.

Frequently Asked Questions

In the second quarter of 2012, Xcel Energy reported an increase in net income to $183.1 million from $158.8 million in the prior year. Diluted earnings per share also improved to $0.38 from $0.33. While total operating revenues slightly decreased due to lower natural gas sales, electric revenues and margin saw significant increases driven by rate adjustments and favorable weather conditions.

Electric revenues and margin were positively impacted by rate increases across various jurisdictions (Colorado, Texas, New Mexico, Wisconsin, South Dakota, Michigan, North Dakota, and Minnesota) and favorable weather, particularly warmer temperatures increasing electricity usage. Natural gas revenues and margin declined, primarily due to warmer winter weather and lower sales volumes, partially offset by rate adjustments and pipeline system integrity riders.

For the first six months of 2012, Xcel Energy reported $1.10 billion in utility capital/construction expenditures. The company continues to manage its liquidity through commercial paper programs and revolving credit facilities, with significant available capacity. Xcel Energy plans to issue debt securities to refinance maturities, fund construction, and for general corporate purposes, with anticipated debt issuances by its subsidiaries in the latter half of 2012.

Yes, Xcel Energy is involved in numerous ongoing regulatory proceedings across its operating states, which significantly impact rates and profitability. Notable environmental matters include a settlement in principle for the Ashland MGP Site remediation, ongoing discussions regarding greenhouse gas regulations, and compliance with the Cross-State Air Pollution Rule (CSAPR). The company also faces potential liabilities from litigation, including climate change lawsuits, though no accrual has been recorded for these.