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1. Composite Trajectory Verdict

For a capital-intensive regulated utility, all three statements carry weight: earnings reflect allowed returns on rate base, cash flow funds the substantial capital program, and the balance sheet supports the credit ratings needed for low-cost financing.

Composite Trajectory: Mixed

GAAP net income rose 4.2% to $2,018 million in 2025 from $1,936 million in 2024, and ongoing (non-GAAP) diluted EPS grew 8.6% to $3.80 from $3.50, driven by higher infrastructure recovery and sales growth (10-K 2025-12-31, Consolidated Statements of Income; 10-K 2025-12-31, MD&A Non-GAAP reconciliation). However, operating cash flow fell for the second consecutive year, declining 12.0% to $4,083 million in 2025 from $4,641 million in 2024 (after a 12.9% drop in 2024), while capital expenditures surged 48% to $10,908 million (10-K 2025-12-31, Consolidated Statements of Cash Flows). The balance sheet shows equity rising 20.9% to $23,609 million but total debt (long-term plus short-term) increasing 19.2% to $33,382 million, leaving leverage roughly stable (10-K 2025-12-31, Consolidated Balance Sheets). The divergence between improving ongoing earnings and deteriorating operating cash flow, alongside rising absolute debt, drives the mixed assessment.

2. Red Flags

• Operating cash flow declined 12.0% YoY in 2025 ($4,083M vs $4,641M) and 12.9% in 2024, a two-year downtrend even as capex jumped 48% to $10,908M (10-K 2025-12-31, Consolidated Statements of Cash Flows).
• GAAP diluted EPS was flat at $3.42 in 2025 vs $3.44 in 2024 despite 9.1% revenue growth, due to a $296M Marshall Wildfire litigation charge (10-K 2025-12-31, Consolidated Statements of Income; 10-K 2025-12-31, MD&A Changes in Diluted EPS).
• Short-term debt more than doubled to $1,550M at year-end 2025 from $695M at year-end 2024 (10-K 2025-12-31, Consolidated Balance Sheets).
• Regulatory lag: multiple large rate cases pending (Minnesota electric $365M request, Colorado electric $356M, Colorado gas $190M, New Mexico electric $175M, South Dakota electric $44M) with decisions expected mid-to-late 2026 (10-K 2025-12-31, MD&A Pending Regulatory Proceedings).
• The gap between GAAP and ongoing EPS widened to $0.38 in 2025 from $0.06 in 2024 due to the wildfire settlement (10-K 2025-12-31, MD&A Non-GAAP reconciliation).

3. Earnings Assessment (Income Statement)

Earnings Trajectory: Improving

On a GAAP basis, net income increased 4.2% to $2,018M in 2025 from $1,936M in 2024, following a 9.3% increase in 2024 from $1,771M in 2023 (10-K 2025-12-31, Consolidated Statements of Income). Total operating revenue grew 9.1% to $14,669M in 2025 from $13,441M in 2024, driven by electric revenue (+$1,013M) and natural gas revenue (+$222M) (10-K 2025-12-31, MD&A Electric/Natural Gas Revenues). Operating income rose 8.3% to $2,583M from $2,386M. Ongoing (non-GAAP) diluted EPS, which management uses for planning, grew 8.6% to $3.80 from $3.50, with all four utility subsidiaries showing ongoing EPS growth except SPS (flat) (10-K 2025-12-31, MD&A Diluted EPS tables). The GAAP EPS dip in 2025 reflects the one-time Marshall Wildfire settlement.

4. Cash Generation Assessment (Statement of Cash Flows)

Cash Trajectory: Deteriorating

Net cash provided by operating activities fell to $4,083M in 2025 from $4,641M in 2024 (down 12.0%) and $5,327M in 2023 (down 23.3% over two years) (10-K 2025-12-31, Consolidated Statements of Cash Flows). The 2025 decline was attributed to Marshall Wildfire settlement payments and timing of regulatory recovery including deferred fuel costs (10-K 2025-12-31, MD&A Cash Flows). Capital expenditures surged to $10,908M in 2025 from $7,364M in 2024 (+48%) and $5,854M in 2023 (+86% over two years) (10-K 2025-12-31, Consolidated Statements of Cash Flows). Free cash flow (operating CF less capex) was deeply negative at -$6,825M in 2025 vs -$2,723M in 2024. Financing cash flow filled the gap, rising to $6,981M in 2025 from $2,837M in 2024, driven by $5,763M long-term debt issuance and $3,349M equity issuance (10-K 2025-12-31, Consolidated Statements of Cash Flows).

5. Balance Sheet Assessment

Balance Sheet Trajectory: Mixed

Total assets grew 16.2% to $81,371M at 12/31/2025 from $70,035M at 12/31/2024, primarily from property, plant & equipment (net) increasing to $65,639M from $57,198M (10-K 2025-12-31, Consolidated Balance Sheets). Total common equity rose 20.9% to $23,609M from $19,522M, supported by $3,349M common stock issuance and $2,018M net income less $1,282M dividends (10-K 2025-12-31, Consolidated Balance Sheets; Consolidated Statements of Cash Flows). Long-term debt increased 16.5% to $31,832M from $27,316M, and short-term debt jumped 123% to $1,550M from $695M (10-K 2025-12-31, Consolidated Balance Sheets). The long-term debt-to-equity ratio improved slightly to 1.35x from 1.40x; total debt-to-equity was roughly stable at 1.41x vs 1.43x. Regulatory assets (current + noncurrent) rose modestly to $3,527M from $3,410M; regulatory liabilities rose to $6,991M from $6,862M (10-K 2025-12-31, Consolidated Balance Sheets). Pension funded status improved to -$130M from -$248M (10-K 2025-12-31, MD&A Pension Fund).

6. Data Gaps

• Quarterly GAAP income statement, cash flow, and balance sheet data for 2026 quarters (Q1, Q2) and 2025 quarters (Q2, Q3) to assess intra-year trends and compute YoY quarterly comparisons.
• Quarterly ongoing (non-GAAP) EPS by subsidiary for 2026 and 2025 quarters.
• Quarterly operating cash flow and capex for 2026 and 2025 quarters.
• Detailed breakdown of the $296M Marshall Wildfire charge between Q3 and Q4 2025.
• 2023 ongoing EPS and ROE figures for full three-year non-GAAP trend.
• Interest coverage ratios (EBIT/interest) for 2023-2025 to assess coverage trend.
• Rate base growth by jurisdiction for 2024-2025 to link capex to earnings drivers.