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xcel energy  AB7A4639-F266-4C1B-8624-A2DC294B5C02_2009_NEWFixedIncomeFebruary
 

xcel energy AB7A4639-F266-4C1B-8624-A2DC294B5C02_2009_NEWFixedIncomeFebruary

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    xcel energy  AB7A4639-F266-4C1B-8624-A2DC294B5C02_2009_NEWFixedIncomeFebruary xcel energy AB7A4639-F266-4C1B-8624-A2DC294B5C02_2009_NEWFixedIncomeFebruary Presentation Transcript

    • Strategy Is On Track Fixed Income Investor Meetings Boston and New York City February 25, 2009
    • 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; 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 2007.
    • Strategy and Objectives Grow our core business and meet the environmental challenge Achieve long-term annual EPS growth of 5% – 7% Increase dividend by 2% – 4% annually Senior unsecured ratings in BBB+ to A range Reduce emissions by 2020
    • Strengths We are positioned to execute our strategy – despite economic headwinds Strong liquidity Balance sheet strength Solid credit quality Constructive regulatory relationships Safe, secure and growing dividend Good growth prospects
    • Solid Liquidity Dollars in millions as of February 19, 2009 Credit Total Lines Available Cash Liquidity Hold Co. $ 772 $ 304 $3 $ 307 NSPM 482 476 36 512 PSCo 675 670 52 722 SPS 248 238 248 486 Other 0 0 81 81 Total $2,177 $1,688 $ 420 $2,108
    • Strong Balance Sheet As of December 31, 2008 Millions Percent Equity $ 6,964 44% Preferred Equity 105 1% Current Portion LT Debt 559 3% Short-term Debt 455 3% Long-term Debt * 7,732 49% Total Capitalization $15,815 100% * Long-term debt includes $400 million of hybrid securities which receives 50% equity treatment from the rating agencies.
    • Solid Credit Ratings Secured Unsecured Fitch Moody’s S&P Fitch Moody’s S&P * Hold Co. – – – BBB+ Baa1 BBB NSPM A+ A2 A A A3 BBB+ NSPW A+ A2 A A A3 A- A- PSCo A A3 A A– Baa1 BBB+ A– SPS – – – BBB+ Baa1 BBB+ * S&P upgraded the unsecured ratings for NSPM, NSPW and PSCo on November 5, 2008
    • Manageable Debt Maturities Dollars in millions $1,200 SPS $1,000 PSCo NSPW $800 NSPM $600 Xcel Energy $400 $200 $0 2009 2010 2011 2012 2013 2014 2015
    • Pension Funding Dollars in millions at year-end year-end 2008 2007 Fair value of pension assets $2,185 $3,186 Projected benefit obligation 2,598 2,662 Funded status $(413) $524 Funded status % 84% 120% Pension Assumptions 2009 2008 Discount rate 6.75% 6.25% Expected long-term rate of return 8.50 8.75 Potential Contributions 2009: $70 million to $130 million 2010: $150 million to $250 million
    • Capital Forecast Dollars in millions $2,350 $2,350 $2,300 $1,800 2009 2010 2011 2012 Other Nuclear Fuel Gas Electric Distribution Electric Transmission Electric Generation Wind
    • Potential Cash from Operations Dollars in millions 2,400 2,000 1,600 1,200 800 400 0 2009 2010 2011 2012 Net Income * Depreciation NOL * Assumes Net Income growth based on middle of range
    • Modest Financing Needs in 2009 NSPM $400 million of first mortgage bonds PSCo $400 million of first mortgage bonds Both companies are “A” rated for secured debt
    • Minnesota Electric Rate Case Filed November 3, 2008 2009 forward test year Seeking rate increase of $156 million or 6.1% — Electric rate base of $4.1 billion — Requested ROE of 11.0% — Equity ratio of 52.5% Commission approved interim rates of $132 million effective January 2009, subject to refund Decision expected fall/winter 2009
    • 2009 Colorado Electric Rate Case Filed November 14, 2008 2009 forward test year Seeking a rate increase of $174 million or 7.4% — Electric rate base of $4.1 billion — Requested ROE of 11% — Equity ratio of 58% Decision expected summer 2009 Partial-year revenue increase beginning in July
    • Colorado Electric Rate Case Intervenor Recommendations Staff Recommendation: — $110.3 million based on a forward test year $69.9 million to be effective in July 2009 $40.4 million effective in January 2010 — ROE of 10.37% — Equity ratio of 58.08% Office of Consumer Council Recommendation: — $3.8 million increase based on a historic test year — ROE of 9.75% — Equity ratio of 53%
    • 2010 Colorado Electric Rate Case Expected filing April 2009 2010 forward test year Purpose is to recover costs associated with major plan investments, including full-year costs for Comanche and Ft. St. Vrain and other 2010 costs Decision expected winter 2009 Full-year revenue increase in 2010
    • New Mexico Electric Rate Case Filed December 18, 2008 Historic test year based on year-ending June 2008 Seeking rate increase of $24.6 million or 5.1% — Electric rate base of $321 million — Requested ROE of 12.0% — Equity ratio of 50% Seeking interim rates of $7.6 million for Lea Power capacity contract
    • Recent Rate Case Outcomes Dollars in millions Dollar Increase Return on Equity Requested Granted Requested Granted Texas Electric * $94.4 $57.4 11.25% N/A Wisconsin Electric $10.0 $5.6 11.0% 10.75% North Dakota $17.9 $12.8 11.5% 10.75% * Settlement pending commission approval
    • Delivering on Rate Base Growth Dollars in millions $17.9 $16.8 CAGR = 7.4% $15.6 $14.4 $13.7 2008 2009 2010 2011 2012
    • Financial Execution Delivering on 5 – 7% EPS Growth Guidance Range 2005 – 2009 CAGR = 6.9% ** $1.45–$1.55 $1.45 $1.43 $1.30 $1.15 2005 2007 2008 2009 2006 Ongoing * Ongoing * Ongoing * Ongoing * Guidance * Ongoing EPS excludes the impacts of COLI and disc ops. A reconciliation to GAAP earnings is included in the appendix ** Estimated CAGR is based on middle of 2009 guidance range
    • Financial Execution Delivering 2 – 4% Dividend Growth Annualized dividend per share 2004 – 2008 CAGR = 3.4% $0.95 $0.92 $0.89 $0.86 $0.83 2004 2005 2006 2007 2008
    • Key Take-Aways Our strategy remains unchanged and on track Constructive regulatory environment Modest financing needs in 2009 We have the liquidity and balance sheet to finance our rate base growth strategy We are well-positioned to execute our business plan We offer an attractive total return, based on A long-term annual EPS growth objective of 5% – 7% A dividend yield of approximately 5.3%
    • Appendix
    • Reconciliation – Ongoing EPS to GAAP Dollars per share 2007 2008 2005 2006 Ongoing Earnings $1.15 $1.30 $1.43 $1.45 PSRI/COLI 0.05 0.05 (0.08) 0.01 Continuing Operations $1.20 $1.35 $1.35 $1.46 Disc Ops 0.03 0.01 – – GAAP Earnings $1.23 $1.36 $1.35 $1.46 As a result of the termination of the COLI program, Xcel Energy’s management Energy’s believes that ongoing earnings provide a more meaningful comparison of earnings comparison results between different periods in which the COLI program was in place and is more representative of Xcel Energy’s fundamental core earnings power. Energy’s Xcel Energy’s management uses ongoing earnings internally for financial planning Energy’s planning and analysis, for reporting of results to the Board of Directors, in determining Directors, whether performance targets are met for performance-based compensation, performance-based and when communicating its earnings outlook to analysts and investors. investors.
    • Capital Expenditures by Operating Company Dollars in millions 2009 2010 2011 2012 NSPM $ 880 $1,340 $1,410 $1,350 PSCo 610 600 600 710 SPS 210 245 205 195 NSPW 100 115 135 95 Total $1,800 $2,300 $2,350 $2,350
    • Capital Expenditure Forecast Denotes enhanced recovery mechanism Dollars in millions 2009 2010 2011 2012 Base & Other $1,305 $1,500 $1,520 $1,665 Nuclear Capacity/Life Ext 130 170 185 150 Comanche 3 130 15 0 0 MN Wind Generation 110 420 370 0 MN Wind Tran/CapX 2020 60 165 240 485 MERP 30 10 0 0 Fort St. Vrain CT 25 0 0 0 Sherco Upgrade 10 20 35 50 Total $1,800 $2,300 $2,350 $2,350
    • Minnesota Recovery Mechanisms Forward test year with interim rates MERP rider Transmission rider Conservation improvement program rider Mercury reduction & environmental improvement rider RDF rider State energy policy rider Fuel clause adjustment Purchased gas adjustment
    • Colorado Recovery Mechanisms Ability to file either historic or forecast test years Purchased capacity cost adjustment Comanche 3 - forward CWIP via general rate case Transmission rider Renewable energy rider Demand-side management cost adjustment rider Air quality improvement rider Energy cost adjustment Natural gas cost adjustment Partial decoupling on retail natural gas
    • SPS Recovery Mechanisms Historic test year (Texas & New Mexico) Texas fixed fuel factor recovery New Mexico fuel clause adjustment Ability to establish interim rates through rate case to recover capacity costs associated the Lea Power contract (Texas)
    • Wisconsin Recovery Mechanisms Forward test year Ability to file for prospective fuel & purchase energy adjustments (Wisconsin) Fuel clause adjustment – wholesale Purchased gas adjustment Fuel clause factor (Michigan retail)
    • Dakota’s Recovery Mechanisms Forward test year with interim rates (ND) Historic test year (SD) Environmental rider (ND & SD) Transmission rider (ND & SD) Fuel clause adjustment (ND & SD) Full decoupling on retail natural gas (ND)
    • 2007 Rate Base and ROE Dollars in millions Weather Normalized Rate Base Earned ROE Minnesota Electric $4,054 11.02% Minnesota Gas 456 7.74 North Dakota Electric 202 2.96 North Dakota Gas 44 7.66 South Dakota Electric 251 9.28 Colorado Electric 3,569 10.09 Colorado Gas 1,096 10.45 Wisconsin Electric 554 8.33 Wisconsin Gas 77 8.59 Texas Electric 940 4.61* New Mexico Electric** 276 2.24* Wholesale 982 Not Reported Total Rate Base $12,501 * Texas and New Mexico ROEs are actual earned, not weather normalized ** Results impacted by fuel disallowance