Ongoing earnings, which exclude adjustments for certain non-recurring items, were $0.29 per share for the 2010 second quarter, compared with $0.25 per share in 2009. Ongoing earnings for the second quarter of 2010 increased primarily due to higher electric margins as a result of the impact of constructive rate case outcomes in Colorado, the reversal of previously established fuel cost allocation reserves at SPS, favorable weather and increased electric sales. The higher electric margin was partially offset by expected increases in operating and maintenance expenses.
"I am pleased to report strong financial performance for the second quarter," said Richard C. Kelly, chairman and chief executive officer. "In addition, Standard & Poor's raised Xcel Energy's corporate credit rating to 'A-' and our Comanche Unit 3 generating station became commercially operational. Our customer satisfaction and reliability goals, as well as our year-to-date financial results remain on track, and as a result, we are reaffirming our 2010 ongoing earnings guidance of $1.55 to $1.65 per share."
Earnings Adjusted for Certain Non-recurring Items (Ongoing Earnings)
During the first quarter of 2010, Xcel Energy recorded non-recurring tax expense of approximately $17 million, or $0.04 per share, of tax benefits previously recognized in income related to Medicare Part D subsidies due to the Patient Protection and Affordable Care Act enacted in March 2010. Under GAAP, Xcel Energy was required to reverse these previously recorded tax benefits in the period of enactment of the new legislation.
In addition, during the first quarter of 2010, Xcel Energy recorded a non-recurring tax and interest charge of approximately $10 million, or $0.02 per share, due to an agreement in principle reached with the Internal Revenue Service (IRS) following the completion of a financial reconciliation of Xcel Energy dating back to tax year 1993, related to the P.S.R. Investments, Inc. (PSRI) corporate owned life insurance (COLI) program.
The following table provides a reconciliation of ongoing earnings per share to GAAP earnings per share:
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| Diluted Earnings (Loss) Per Share | | 2010 | | 2009 | | 2010 | | 2009 |
| Ongoing(a) diluted earnings per share | | $ | 0.29 | | $ | 0.25 | | $ | 0.71 | | | $ | 0.64 | |
| Medicare Part Dand PSRI (a) | | | - | | | - | | | (0.06 | ) | | | (0.01 | ) |
| Earnings per share from continuing operations | | | 0.29 | | | 0.25 | | | 0.65 | | | | 0.63 | |
| Earnings per share from discontinued operations | | | 0.01 | | | - | | | 0.01 | | | | - | |
| GAAPdiluted earnings per share | | $ | 0.30 | | $ | 0.25 | | $ | 0.66 | | | $ | 0.63 | |
