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Financial Plan

Ben Fowke
Vice President and CFO




                         New York Analyst Meeting
                   ...
Safe Harbor
This material includes forward-looking statements that are subject to
certain risks, uncertainties and assumpt...
Today’s Recap

 Strong regulatory compact
 Ability to address carbon and environmental issues
 — Geography
 — Fuel efficie...
Capital Expenditure Forecast
                               Denotes enhanced recovery mechanism
  Dollars in millions
    ...
Potential Resource Plan Projects

 Incremental wind generation (2007–2011)
 — Estimated 600 MW
 — Ownership target > 50%
 ...
Recovery on Capital Investment *

        Dollars in millions
2,800
                                                  $2,3...
Potential Cash from Operations

         Dollars in millions
2,400

2,000

1,600

1,200

 800

 400

   0
           2007 ...
Delivering on Rate Base Growth *

  Dollars in billions

   CAGR = 7.5%
                                                $1...
Earnings Guidance Range 2007–2008

 Dollars per share
                                2007           2008
Regulated Utilit...
Delivering on
Dividend Growth Objective

  Annualized dividend per share
   2004–2007 CAGR = 3.5%
                        ...
Catalysts

 Improve earned return on equity
 Colorado electric rate case in 2009
 — Request will be based on forecast test...
Premium Utility

 Xcel Energy has the willingness and ability to reduce
 carbon, while meeting increasing customer demand
...
Attractive Value Proposition

 Low risk, fully regulated and integrated utility
 Constructive regulatory environment with ...
Appendix
Company Profile

                                               Traditional Regulation
     NSP-Minnesota         NSP-Wisc...
Capital Investment Opportunities *

         Dollars in millions
$2,800
                                                  ...
Capital Expenditures
by Operating Company *

Dollars in millions

               2007    2008     2009      2010   2011

 ...
Capital Expenditures by Function *

 Dollars in millions
                       2007    2008    2009   2010   2011
Elec Ge...
Debt Maturities

         Dollars in millions
$1,200
                                           SPS
$1,000                ...
Senior Debt Ratings

                   Secured             Unsecured
              Fitch Moody’s S&P   Fitch Moody’s S&P
...
2006 Rate Case Outcomes

Dollars in millions

                                             Return on Equity
              ...
2007 Rate Case Outcomes

Dollars in millions

                      Dollar Increase     Return on Equity
                 ...
Pending Rate Cases

  Dollars in millions

                     Revenue    Requested Interim
  Jurisdiction       Request ...
2006 Rate Base and ROE

Dollars in millions                 Weather Normalized
                        Rate Base      Earn...
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Transcript of "xcel energy 8BFFinancial_Plan_Xcel_Energy_12052007"

  1. 1. Financial Plan Ben Fowke Vice President and CFO New York Analyst Meeting December 5, 2007
  2. 2. Safe Harbor This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,” “estimate,” “expect,” “projected,” “objective,” “outlook,” “possible,” “potential” and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including the availability of credit, actions of rating agencies and their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; effects of geopolitical events, including war and acts of terrorism; changes in federal or state legislation; regulation; actions of accounting regulatory bodies; the higher degree of risk associated with Xcel Energy’s nonregulated businesses compared with Xcel Energy’s regulated business; and other risk factors listed from time to time by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 to Xcel Energy’s report on Form 10-K for year 2006.
  3. 3. Today’s Recap Strong regulatory compact Ability to address carbon and environmental issues — Geography — Fuel efficiency Willingness to address environmental issues Partner in public policy implementation due to environmental leadership Manageable cost increases to implement plan Capital investment opportunity is growing
  4. 4. Capital Expenditure Forecast Denotes enhanced recovery mechanism Dollars in millions 2007 2008 2009 2010 2011 Base & Other $1,080 $1,245 $1,285 $1,310 $1,300 MERP 290 170 25 10 0 Comanche 3 360 330 60 10 0 MN Wind Tran/CapX 2020 160 40 65 115 270 Sherco Upgrade 5 5 20 75 230 MN Wind Generation 80 135 0 0 0 Nuclear Capacity/Life Ext 25 75 120 180 200 Fort St. Vrain CT 90 100 25 0 0 Total Committed $2,090 $2,100 $1,600 $1,700 $2,000 Potential Projects 0 0-100 200-400 200-400 200-500 Range $2,090 $2,100- $1,800- $1,900- $2,200- $2,200 $2,000 $2,100 $2,500
  5. 5. Potential Resource Plan Projects Incremental wind generation (2007–2011) — Estimated 600 MW — Ownership target > 50% — Potential investment up to $600 million Incremental natural gas generation (2007–2011) — Ownership target up to 100% — Potential investment up to $400 million Additional transmission (2007–2011) — Potential investment up to $400 million
  6. 6. Recovery on Capital Investment * Dollars in millions 2,800 $2,350 2,400 $2,150 $2,090 $2,000 $1,900 2,000 1,600 1,200 800 400 0 2007 2008 2009 2010 2011 Traditional Recovery Enhanced Recovery Depreciation * Capital forecast based on middle of range
  7. 7. Potential Cash from Operations Dollars in millions 2,400 2,000 1,600 1,200 800 400 0 2007 2008 2009 2010 2011 Net Income * Depreciation NOL * Net Income growth based on middle of range
  8. 8. Delivering on Rate Base Growth * Dollars in billions CAGR = 7.5% $16.9 $15.7 $14.9 $14.0 $12.8 $11.7 2006 2007 2008 2009 2010 2011 * Growth based on middle of capital forecast range
  9. 9. Earnings Guidance Range 2007–2008 Dollars per share 2007 2008 Regulated Utility $1.51 – $1.55 $1.61 – $1.71 Holding Company $(0.13) $(0.16) Earnings before PSRI/COLI $1.38 – $1.42 $1.45 – $1.55 PSRI/COLI $(0.08) – Continuing Operations $1.30 – $1.34 $1.45 - $1.55 Disc Ops $0.01 – Total $1.31 – $1.35 $1.45 – $1.55
  10. 10. Delivering on Dividend Growth Objective Annualized dividend per share 2004–2007 CAGR = 3.5% $0.92 $0.89 $0.86 $0.83 $0.75 2003 2004 2005 2006 2007
  11. 11. Catalysts Improve earned return on equity Colorado electric rate case in 2009 — Request will be based on forecast test year Minnesota electric rate case in 2009 — Interim rates — Potential nuclear recovery mechanism Rate cases in smaller jurisdictions WYCO gas transmission pipeline — Operational in 2009 — $145 million equity investment — Potential EPS contribution of 2 – 3 cents per share
  12. 12. Premium Utility Xcel Energy has the willingness and ability to reduce carbon, while meeting increasing customer demand Environmental leadership has given us credibility with key stakeholders and a seat at the table Enhanced regulatory recovery mechanisms improve cash flow, keeps balance sheet strong and increases regulatory certainty SPS is positioned for improved performance Continue to deliver on expectations Xcel Energy is undervalued compared to regulated utility peers
  13. 13. Attractive Value Proposition Low risk, fully regulated and integrated utility Constructive regulatory environment with enhanced recovery of major capital projects Pipeline of investment opportunities Environmental leader, well-positioned for changing rules Attractive Total Return Sustainable annual EPS growth of 5% – 7% with upside potential Strong dividend yield of ~ 4.2% Sustainable annual dividend growth of 2% – 4%
  14. 14. Appendix
  15. 15. Company Profile Traditional Regulation NSP-Minnesota NSP-Wisconsin Operate in 8 States 47% of net income 7% of net income Combination Utility Electric 85% of net income Gas 15% of net income PSCo 38% of net income Customers 3.3 million electric 1.8 million gas SPS 2006 Financial Statistics 8% of net income NI cont op: $548 million Assets: $22 billion GAAP ROE: 10.1% Equity ratio: 43% 2006 EPS $1.30 continuing operations 2007 Dividend $0.92 per share annualized
  16. 16. Capital Investment Opportunities * Dollars in millions $2,800 Potential Projects $2,400 Common/Other $2,000 Nuclear Fuel $1,600 Gas $1,200 Elec Distribution $800 Elec Transmission $400 Elec Generation $0 2007 2008 2009 2010 2011 * Capital forecast based on middle of range
  17. 17. Capital Expenditures by Operating Company * Dollars in millions 2007 2008 2009 2010 2011 NSPM $1,025 $935 $955 $1,060 $1,380 PSCo 850 945 650 680 750 SPS 140 170 205 180 140 NSPW 75 100 90 80 80 Total $2,090 $2,150 $1,900 $2,000 $2,350 * Capital forecast based on middle of range
  18. 18. Capital Expenditures by Function * Dollars in millions 2007 2008 2009 2010 2011 Elec Generation $1,000 $935 $480 $525 $745 Elec Transmission 400 300 325 390 500 Elec Distribution 330 355 345 355 360 Gas 115 140 155 160 155 Nuclear Fuel 90 145 150 140 105 Common/Other 155 225 145 130 135 Potential Projects 0 50 300 300 350 Total $2,090 $2,150 $1,900 $2,000 $2,350 * Capital forecast based on middle of range
  19. 19. Debt Maturities Dollars in millions $1,200 SPS $1,000 PSCo NSPW $800 NSPM $600 Xcel Energy $400 $200 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Xcel Energy: $104 million due 11/27/2007 @ 7.50%
  20. 20. Senior Debt Ratings Secured Unsecured Fitch Moody’s S&P Fitch Moody’s S&P Holding Co. BBB+ Baa1 BBB NSPM A+ A2 A A A3 BBB NSPW A+ A2 A A A3 BBB+ PSCo A A3 A A- Baa1 BBB SPS BBB+ Baa1 BBB+
  21. 21. 2006 Rate Case Outcomes Dollars in millions Return on Equity Dollar Increase Requested Granted Requested Granted Colorado Electric $208 $151 11.0% 10.5% Minnesota Electric $156 $131/115* 11.0% 10.54% Wisconsin Electric $53.1 $43.4 11.9% 11.0% Colorado Gas $34.5 $22.0 11.0% 10.5% Wisconsin Gas $7.8 $3.9 11.9% 11.0% * $131 million for 2006 reduced to $115 million in 2007 for large customer coming on-line January 1, 2007
  22. 22. 2007 Rate Case Outcomes Dollars in millions Dollar Increase Return on Equity Requested Granted Requested Granted Texas Electric $48.0 $23.0 11.6% N/A Colorado Gas $41.9 $32.3 11.0% 10.25% Minnesota Gas $18.5 $11.9 11.0% 9.71% North Dakota Gas $2.8 $2.3 11.3% 10.75%
  23. 23. Pending Rate Cases Dollars in millions Revenue Requested Interim Jurisdiction Request ROE Rate Decision Wisconsin Electric $67.4 11.0% N/A December 2007 Wisconsin Gas $5.3 11.0% N/A December 2007 New Mexico Electric $17.3 11.0% N/A Summer 2008
  24. 24. 2006 Rate Base and ROE Dollars in millions Weather Normalized Rate Base Earned ROE Minnesota Electric $3,599 10.3% Minnesota Gas 441 6.1 North Dakota Electric 188 8.9 North Dakota Gas 44 7.5 South Dakota Electric 232 11.1 Colorado Electric 3,292 7.7 Colorado Gas 1,106 7.8 Wisconsin Electric 556 10.8 Wisconsin Gas 77 7.4 Texas Electric 977 6.5 New Mexico Electric 311 6.2 Wholesale 879 Not Reported Total Rate Base $11,702
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