Earnings Call Excerpt
Xcel Energy (XEL)
Q4 2005 Earnings Conference Call
February 1st 2006, 10:00 AM.
Executives:
Benjamin Fowke, Vice President and CFO
Analysts:
David Parker, Robert W. Baird.
Paul Ridzon, Keybanc Capital Mkts/ McDonald
Stephen Hsang, Citigroup.
Maura Shaughnessy, MFS
Elisabeth Parrella, Merrill Lynch.
Presentation
Operator
And welcome to Xcel Energy’s Fourth Quarter 2005 Earnings Release Conference Call. With me today is Benjamin Fowke, Vice President and CFO of Xcel Energy. Some of the comments that will be made contain forward-looking information, significant factors that could cause results to differ from those anticipated are described in our earnings release in Xcel Energy filings with the Securities and Exchange commission. I will turn the call over to Ben.
Benjamin Fowke, Vice President and CFO
Thanks Dick, and welcome everyone. Xcel Energy recorded earnings from continuing operations of $1.20 per share for 2005, which was within our guidance range. This compares to $1.26 per share for 2004. Total earnings for 2005 were $1.23 per share compared with $0.87 per share for 2004. In 2005, we recorded earnings of $0.03 per share from discontinued operations, largely due to the final resolution of tax benefits associated with our divestiture of NRG. As a reminder, we recorded a loss of $0.39 per share in 2004 largely due to an asset impairment charge related to our Seren investments and a loss from the sale of Cheyenne Light Fuel and Power. Rest of my comments will be related to earnings from continuing operations.
At the core of our company, we have our utility subsidiaries, which provided earnings of $1.27 per share for 2005 compared with $1.32 per share for 2004. Our utility earnings declined by $0.05 per share despite higher electric utility margins that increased earnings by $0.23 per share. The higher margins were offset by higher utility O&M expenses which decreased earnings by $0.12 per share, higher depreciation expense which decreased earnings by $0.09 per share, lower short-term wholesale margins which decreased earnings by $0.03 per share and a higher effective tax rate and other items which netted to decrease earnings by about $0.04 per share.
Our holding company cost and results of other non-regulated companies reduced earnings by approximately $0.07 per share for 2005, which was comparable to a loss of $0.06 per share recorded last year. These costs are largely financing costs of the holding company. That summarizes our 2005 results, now lets look into the details.
Let me explain, how we will account for the interim rates. Starting in the first quarter, our revenue recognition will include an interim rate increase based on the prorated amount of $147 million authorized level. Prior to each quarter close, we will review whether there was any new evidence that recovery at the interim level was not probable. In the event this situation occurs, we maybe required to recognize an estimated refund of a portion of the interim rate depending on facts and circumstances. Ultimately, there maybe a final revenue ?true-up
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