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Investor Presentaiton

L Pre-Tax Adjustments ($ Millions) Reported GAAP Pre-Tax Income Non-GAAP Adjustments to Pre-Tax Income: Weather Release of MPSC DGGS deferral Appendix 63 Non-GAAP Financial Measures (1 of 3) Use of Non-GAAP Financial Measures - Reconcile to Non-GAAP diluted EPS Lost revenue recovery related to prior periods DGGS FERC ALJ initial decision - portion related to 2011 MSTI Impairment Favorable CELP arbitration decision Remove hydro acquisition transaction costs Exclude unplanned hydro earnings Remove benefit of insurance settlement QF liability adjustment Electric tracker disallowance of prior period costs Transmission impacts (unfavorable hydro conditions) Settlement of Workers Compensation Claim Income tax adjustment 13.2 15.2 (14.2) (7.3) 144.2 S 2011 102.6 2012 2013 2014 2015 $ 116.5 S 108.3 S 110.4 S 2016 2017 181.2 $ 156.5 $ 176.1 2018 2019 2020 178.3 $ 182.2 $ (3.0) 8.4 (3.7) (1.3) (3.4) (1.3) (3.0) (3.0) (1.0) 7.2 24.1 (47.5) 6.3 15.4 (8.7) 3.0 3.0 (20.8) 6.1 9.8 (17.5) 12.2 9.9 $ 163.9 (10.1) (3.6) 9.4 Unplanned Equity Dilution from Hydro transaction Adjusted Non-GAAP Pre-Tax Income S 95.5 $ 99.1 $ 109.8 $ 115.8 S 179.7 169.7 S 172.7 S 168.9 $ 174.9 Tax Adjustments to Non-GAAP Items ($ Millio 2011 2012 2013 2014 2015 92.6 $ 98.4 $ 94.0 $ 120.7 S 151.2 $ 2016 164.2 $ 2017 162.7 2018 $ 197.0 S 2019 202.1 S (1.8) (5.5) GAAP Net Income Non-GAAP Adjustments Taxed at 38.5% (08-17) and 25.3% (18-currrent): Weather Release of MPSC DGGS deferral Lost revenue recovery related to prior periods DGGS FERC ALJ initial decision - portion related to 2011 MSTI Impairment Favorable CELP arbitration decision Remove hydro acquisition transaction costs Exclude unplanned hydro earnings Remove benefit of insurance settlement QF liability adjustment Electric tracker disallowance of prior period costs 5.2 (2.3) - (1.9) (1.9) (0.6) 4.4 14.8 (29.2) (0.8) 9.5 (5.4) 8.1 9.3 - (8.7) (2.1) (1.0) (12.8) 3.8 (13.1) 7.5 Transmission impacts (unfavorable hydro conditions) 1.8 Settlement of Workers Compensation Claim 1.8 Income tax adjustment (6.2) (2.2) (18.5) (12.5) (12.8) (22.8) Unplanned Equity Dilution from Hydro transaction Non-GAAP Net Income S 88.2 $ 87.7 $ 94.9 S 105.5 S 150.3 $ 159.8 $ 160.6 $ 170.1 S 173.8 Non-GAAP Adjustments: Weather (0.02) 0.17 2020 155.2 7.3 7.4 $ 169.9 (0.11) 0.14 Non-GAAP Diluted Earnings Per Share 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Diluted Average Shares (Millions) 36.5 37.0 Reported GAAP Diluted earnings per share S 2.53 2.66 $ 38.2 2.46 $ 40.4 2.99 47.6 48.5 48.7 50.2 50.8 $ 3.17 $ 3.39 S 3.34 3.92 $ 3.98 50.7 3.06 (0.05) 0.14 (0.05) 0.19 (0.04) (0.02) (0.05) (0.05) (0.02) (0.18) 0.12 0.40 (0.79) 0.11 0.24 (0.14) (0.27) 0.08 (0.26) 0.16 Release of MPSC DGGS deferral Lost revenue recovery related to prior periods DGGS FERC ALJ initial decision - portion related to 2011 MSTI Impairment Favorable CELP arbitration decision Remove hydro acquisition transaction costs Exclude unplanned hydro earnings Remove benefit of insurance settlements & recoveries QF liability adjustment Electric tracker disallowance of prior period costs Transmission impacts (unfavorable hydro conditions) 0.05 Settlement of Workers Compensation Claim 0.05 Income tax adjustment (0.17) (0.06) Unplanned Equity Dilution from Hydro transaction (0.47) 0.08 (0.26) (0.25) (0.45) Non-GAAP Diluted Earnings Per Share 2.41 $ 2.37 $ 2.50 2.68 $ 3.15 $ 3.30 $ 3.30 3.39 $ 3.42 $ 3.35 0.15 These materials include financial information prepared in accordance with GAAP, as well as other financial measures, such as Gross Margin and Adjusted Diluted EPS, that are considered "non-GAAP financial measures." Generally, a non-GAAP financial measure is a numerical measure of a company's financial performance, financial position or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Gross Margin (Revenues less Cost of Sales) is a non-GAAP financial measure due to the exclusion of depreciation from the measure. Gross Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs. Adjusted Diluted EPS is another non- GAAP measure. The Company believes the presentation of Adjusted Diluted EPS is more representative of our normal earnings than the GAAP EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures.
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