xcel energy  November 2008
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xcel energy November 2008

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    xcel energy  November 2008 xcel energy November 2008 Presentation Transcript

    • EEI Financial Conference November 9 - 12, 2008 Scottsdale, Arizona Xcel Energy Inc. 414 Nicollet Mall Minneapolis, Minnesota 55401 www.xcelenergy.com
    • 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.
    • Dick Kelly Chairman, President and CEO
    • Fundamental Elements of Xcel Energy Credit quality Balance sheet strength Strong liquidity Flexibility Safe dividend Solid growth prospects We are positioned to execute our strategy – despite economic headwinds
    • Solid Credit 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 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
    • Proactive Equity Issuance Issued 17.25 million shares in September 2008 Proceeds of approximately $345 million Rationale for equity issuance: Fund capital expenditure growth plan Keeps balance sheet strong Prudently took advantage of a stable period in a disruptive capital market Consistent with our financial plans and message to investors
    • Strong Balance Sheet Millions Percent Equity $ 6,848 42.5% Preferred Equity 104 0.6% Hybrid Security 400 2.5% Current Portion LT Debt 994 6.2% Short-term Debt 264 1.6% Long-term Debt 7,486 46.5% Total Capitalization $16,096 100% As of September 30, 2008
    • Strong Liquidity Dollars in millions as of October 31, 2008 Credit Total Lines Available Cash Liquidity HoldCo $ 772 $ 406 $ 13 $ 419 NSPM 482 476 1 477 PSCo 675 668 49 717 SPS 248 108 34 142 Other * 0 0 61 61 Total $2,177 $1,658 $ 159 $1,816 * Excludes $18.5 million held in The Reserve Fund
    • Modest Debt Maturities Dollars in millions $1,200 SPS $1,000 PSCo $800 NSPM Xcel Energy $600 $400 $200 $0 2009 2010 2011 2012 2013 2014
    • Strong Access to Credit Markets in 2008 Hold Co - issued $400 million of retail hybrid securities with a 7.6% coupon in January NSP-Minnesota - issued $500 million of first mortgage bonds with 10-year maturity and 5.25% coupon in March PSCo - issued $600 million of first mortgage bonds in August: 10-year tranche with a 5.8% coupon 30-year tranche with a 6.5% coupon NSP-Wisconsin – issued $200 million of first mortgage bonds with 30-year maturity and 6.375% coupon in September Potential debt issuances - late 2008 or early 2009 SPS - up to $250 million of unsecured debt
    • 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 * Xcel Energy increased the dividend by 3¢ on May 21, 2008
    • Financial Execution Delivering on 5 – 7% EPS Growth Guidance Range $1.45–$1.50 $1.45–$1.55 2005 – 2009 CAGR = 6.9%** $1.43 $1.30 $1.15 2005 2007 2008 2009 2006 Ongoing* Ongoing* Guidance Guidance Ongoing* * 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
    • Built to Last Fully regulated utility Constructive regulatory recovery Earn a reasonable authorized return Strong balance sheet Access to credit market Opportunistic equity issuance Flexibility of our strategy Meet renewable standards Push out time-line for new baseload plant
    • Ben Fowke Vice President and Chief Financial Officer
    • Tactical Plans for 2009 Continue to execute strategic plan Align capital investment with sales growth forecast Stay on track to meet RPS goals Efficiently finance growth strategy Achieve successful rate case outcomes
    • Capital Forecast Update Dollars in millions $2,350 $2,350 $2,300 $1,800 2009 2010 2011 2012 Other Nuclear Fuel Gas Electric Distribution Electric Transmission Generation Wind
    • NSP Wind Project Project adds 351 megawatts of wind generation at two different sites Phased construction 2009 – 2011 Total cost approximately $900 million Rider recovery
    • Financing Plans Strong access to capital markets Modest financing needs for 2009 NSP-M $400 million of first mortgage bonds PSCo $400 million of first mortgage bonds
    • Minnesota Electric Rate Case 2009 Forward test year Filed November 3, 2008 Seeking rate relief of $156 million Electric rate base of $4.1 billion Requested ROE of 11.0% Equity ratio of 52.5% Interim rates of $155 million effective January 2009 Decision expected fall/winter 2009
    • Colorado Electric Rate Case Expected filing in November 2008 Seeking 2009 forward test year Electric rate base of $4.1 billion Decision expected 3rd quarter 2009 Partial year revenue increase Looking at options regarding 2010 test year Rate increase request will be partially offset by fuel and capacity cost savings from Comanche 3
    • 2009 Earnings Guidance 2009 Earnings Per Share $1.45 - $1.55 Key Assumptions Relatively flat sales growth Reasonable treatment in rate cases Increasing revenue from riders Rising O&M expense Increasing depreciation expense Increasing interest expense Higher share count
    • Key Take-Aways Our strategy remains unchanged and on track We have the liquidity and balance sheet to finance our rate base growth strategy Guidance reflects economic realities We are well-positioned to execute our business plan
    • Upcoming Analyst Meeting Wednesday, December 3rd Date: Location: Westin New York at Times Square Topics: Strategic overview Generation plan Renewable plan Transmission plan Regulatory update Financial overview
    • Appendix
    • Company Profile Traditional Regulation NSP-Wisconsin NSP-Minnesota 6% of earnings * Operate in 8 States 40% of earnings * Combination Utility Electric 85% of net income Gas 15% of net income PSCo 49% of earnings * Customers 3.3 million electric 1.8 million gas SPS 2007 Financial Statistics 5% of earnings * NI Ongoing: $612 million NI GAAP: $577 million * Percentages based on 2007 Ongoing Earnings Assets: $23 billion Equity ratio: 43% 2007 EPS Ongoing: $1.43; GAAP: $1.35 2008 Dividend $0.95 per share annualized
    • Reconciliation – Ongoing EPS to GAAP Dollars per share 2007 2005 2006 Ongoing Earnings $1.15 $1.30 $1.43 PSRI/COLI 0.05 0.05 (0.08) Continuing Operations $1.20 $1.35 $1.35 Disc Ops 0.03 0.01 – GAAP Earnings $1.23 $1.36 $1.35 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.
    • Pending Rate Cases Status Requested North Dakota Electric June 2008 Pending $17.9 million Fall 2008 10.75% ROE Interim rates SPS Wholesale March 2008 Pending $14.9 million Fall 2008 12.2% ROE Texas Electric June 2008 Pending $61.3 million overall Qtr 1 2009 11.25% ROE NSP-Wisconsin August 2008 Pending Limited Reopener Qtr 4 2008 $47.1 million
    • 2008 Regulatory Outcomes Requested Approved New Mexico Electric December 2007 August 2008 $17.3 million $10.7 million 11.0% ROE 10.18% ROE PSCo Wholesale February 2008 Settlement Base rates $8.8 million $6.5 million CWIP $3.7 million Blackbox 11.5% ROE
    • 2007 Rate Base and ROE Weather Normalized Dollars in millions 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 ROE’s are actual earned, not weather normalized ** Results impacted by fuel disallowance