10-QPeriod: Q2 FY2021

XCEL ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 29, 2021For Securities:XELXELLL

Summary

Xcel Energy Inc. (XEL) reported solid financial results for the second quarter and first six months of 2021, demonstrating resilience and operational strength. The company saw significant increases in operating revenues, driven by higher electric and natural gas margins, reflecting the benefits of capital investments, favorable regulatory outcomes, and recovering economic activity post-COVID-19. While facing increased operating expenses, including higher depreciation, O&M, and interest charges, Xcel Energy managed these effectively, resulting in growth in earnings per share for both the quarter and year-to-date periods. The company also successfully navigated the impacts of Winter Storm Uri in early 2021, with regulatory mechanisms in place to recover associated costs, mitigating the immediate financial burden on the company. Xcel Energy reaffirmed its commitment to long-term growth, maintaining its EPS and dividend growth rate objectives and providing updated 2021 earnings guidance.

Financial Highlights

44 data points
Beta

Net Income

$311.00M

EPS (Diluted)

$0.58

Total Assets

$56.78B

Cash & Equivalents

$538.00M

Free Cash Flow

$625.00M

Financial Statements
Beta
Operating Expenses$2.63B
Operating Income$438.00M
Interest Expense$212.00M
Net Income$311.00M
EPS (Basic)$0.58
EPS (Diluted)$0.58
Shares Outstanding (Basic)539.00M
Shares Outstanding (Diluted)539.00M

Key Highlights

  • 1Xcel Energy reported a year-over-year increase in operating revenues for both the three and six months ended June 30, 2021, driven by higher electric and natural gas margins.
  • 2Diluted Earnings Per Share (EPS) increased to $0.58 for Q2 2021 and $1.25 for the first six months of 2021, up from $0.54 and $1.10 in the respective prior-year periods.
  • 3The company successfully managed the financial impact of Winter Storm Uri, deferring net natural gas, fuel, and purchased energy costs of approximately $985 million and establishing regulatory recovery plans.
  • 4Capital expenditures remain significant, with $1.967 billion invested in the first six months of 2021, primarily in property, plant, and equipment to support future growth and operational efficiency.
  • 5Xcel Energy reaffirmed its long-term objectives for annual EPS growth of 5-7% and annual dividend increases of 5-7%, targeting a dividend payout ratio of 60-70%.
  • 6The company updated its 2021 earnings guidance to a range of $2.90 to $3.00 per share.
  • 7Regulatory proceedings are ongoing across various jurisdictions, with several rate case filings and rider extensions aimed at recovering investments and ensuring adequate returns.

Frequently Asked Questions

Xcel Energy reported increased operating revenues for both the three and six months ended June 30, 2021, driven by higher electric and natural gas margins. Net income also saw an increase, leading to higher diluted Earnings Per Share (EPS) of $0.58 for the second quarter of 2021 and $1.25 for the first six months of 2021, compared to $0.54 and $1.10 in the prior year periods, respectively.

Winter Storm Uri in February 2021 resulted in significant costs for Xcel Energy, primarily related to natural gas, fuel, and purchased energy, totaling approximately $985 million. These costs were largely deferred as regulatory assets. The company has filed for recovery of these costs with various regulatory commissions, with proposed recovery periods ranging up to 27 months, mitigating the immediate financial impact on customers and the company.

Xcel Energy is committed to long-term growth, maintaining its objectives for annual EPS growth of 5-7% and annual dividend increases of 5-7%. The company continues to invest significantly in its infrastructure, with $1.967 billion invested in the first six months of 2021. The company updated its 2021 earnings guidance to $2.90-$3.00 per share.

Xcel Energy is involved in numerous regulatory proceedings across its operating states, including rate cases and rider filings, aimed at recovering capital investments and ensuring appropriate returns. While most legal proceedings are routine, the company is also addressing the fallout from Winter Storm Uri through regulatory filings. Management does not anticipate that other current legal proceedings will have a material adverse effect on the company's financial statements.