Borrowings and Other Financing Instruments Borrowings and Other Financing Instruments

12 Months Ended

Dec. 31, 2018

Borrowings and Other Financing Instruments

Short-Term Borrowings

Short-Term Debt — Xcel Energy Inc. and its utility subsidiaries meet their short-term liquidity requirements primarily through the issuance of commercial paper, term loan borrowings and letters of credit under their credit facilities.

Short-term debt borrowings outstanding for Xcel Energy were as follows:



	Three Months Ended Dec. 31, 2018			Year Ended Dec. 31
(Amounts in Millions, Except Interest Rates)	Three Months Ended Dec. 31, 2018			2018			2017			2016
Borrowing limit	$	3,250		$	3,250		$	3,250		$	2,750
Amount outstanding at period end	1,038			1,038			814			392
Average amount outstanding	500			788			644			485
Maximum amount outstanding	1,038			1,349			1,247			1,183
Weighted average interest rate, computed on a daily basis	2.76		%	2.34		%	1.35		%	0.74		%
Weighted average interest rate at end of period	2.97			2.97			1.90			0.95

Term Loan Agreement — In December 2018, Xcel Energy Inc. renewed its $500 million 364-Day Term Loan Agreement with $250 million outstanding. In February 2019, Xcel Energy borrowed the remaining amount. No additional capacity remains as loans borrowed and repaid may not be redrawn. The loan is unsecured and matures Dec. 3, 2019. Xcel Energy has an option to request an extension through Dec. 2, 2020. Term loan includes one financial covenant, requiring Xcel Energy’s consolidated funded debt to total capitalization ratio to be less than or equal to 65 percent. Interest is at a rate equal to either (i) the Eurodollar rate, plus 50.0 basis points, or (ii) an alternate base rate. Xcel Energy is also required to pay a commitment fee equal to 10 basis points per annum on the unborrowed portion.

Letters of Credit — Xcel Energy Inc. and its subsidiaries use letters of credit, typically with terms of one year, to provide financial guarantees for certain operating obligations. As of Dec. 31, 2018 and 2017, there were $49 million and $30 million of letters of credit outstanding. Amounts approximate their fair value.

Credit Facilities — Xcel Energy Inc. and its utility subsidiaries must have revolving credit facilities in place at least equal to the amount of their commercial paper borrowing limits and cannot issue commercial paper exceeding available capacity under these credit facilities. The lines of credit provide short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

Features of the credit facilities:



	Debt-to-Total Capitalization Ratio^(a)				Amount Facility May Be Increased (millions)		Additional Periods For Which a One-Year Extension May Be Requested ^(b)
	2018		2017
Xcel Energy Inc.^(c)	58	%	58	%	$	200	2
NSP-Wisconsin	48		47		N/A		1
NSP-Minnesota	48		48		100		2
SPS	46		46		50		2
PSCo	46		44		100		2


^(a)	Each credit facility has a financial covenant requiring that the debt-to-total capitalization ratio be less than or equal to 65%.


^(b)	All extension requests are subject to majority bank group approval.


^(c)	The Xcel Energy Inc. credit facility has a cross-default provision that Xcel Energy Inc. will be in default on its borrowings under the facility if it or any of its subsidiaries (except NSP-Wisconsin as long as its total assets do not comprise more than 15% of Xcel Energy’s consolidated total assets) default on indebtedness in an aggregate principal amount exceeding $75 million.

If Xcel Energy Inc. or its utility subsidiaries do not comply with the covenant, an event of default may be declared, and if not remedied, any outstanding amounts due under the facility can be declared due by the lender. As of Dec. 31, 2018, Xcel Energy Inc. and its subsidiaries were in compliance with all financial covenants.

Xcel Energy Inc. and its utility subsidiaries had the following committed credit facilities available as of Dec. 31, 2018:



(Millions of Dollars)	Credit Facility ^(a)		Drawn ^(b)		Available
Xcel Energy Inc.	$	1,500	$	488	$	1,012
PSCo	700		317		383
NSP-Minnesota	500		187		313
SPS	400		44		356
NSP-Wisconsin	150		51		99
Total	$	3,250	$	1,087	$	2,163


^(a)	These credit facilities mature in June 2021, with the exception of Xcel Energy’s Inc.’s 364-day term loan agreement which expires in December 2019.


^(b)	Includes outstanding commercial paper, term loan borrowings and letters of credit.

All credit facility bank borrowings, outstanding letters of credit, term loan borrowings and outstanding commercial paper reduce the available capacity under the credit facilities. Xcel Energy Inc. and its subsidiaries had no direct advances on facilities outstanding as of Dec. 31, 2018 and 2017.

Long-Term Borrowings and Other Financing Instruments

Generally, all property of NSP-Minnesota, NSP-Wisconsin, PSCo and SPS are subject to the liens of their first mortgage indentures. Debt premiums, discounts and expenses are amortized over the life of the related debt. The premiums, discounts and expenses for refinanced debt are deferred and amortized over the life of the new issuance.

Long term debt obligations for Xcel Energy Inc. and its utility subsidiaries as of Dec. 31:



(Millions of Dollars)	Maturity Range	Interest Rate Range 2018	Interest Rate Range 2017	2018			2017
Xcel Energy Inc.
Unsecured senior notes	2020 - 2041	2.40% - 6.50%	1.20% - 6.50%	$	3,400		$	2,900
Elimination of PSCo capital lease obligation with affiliates				(60		)	(62		)
Unamortized discount				(5		)	(2		)
Unamortized debt issuance cost				(21		)	(20		)
Current maturities (Capital lease obligation)				2			2
Total				$	3,316		$	2,818



(Millions of Dollars)	Maturity Range	Interest Rate Range 2018	Interest Rate Range 2017	2018			2017
NSP-Minnesota
Mortgage bonds	2020 - 2047	2.15% - 7.13%	2.15% - 7.13%	$	5,000		$	5,000
Unamortized discount				(21		)	(22		)
Unamortized debt issuance cost				(42		)	(45		)
Current maturities				—			—
Total				$	4,937		$	4,933



(Millions of Dollars)	Maturity Range	Interest Rate Range 2018	Interest Rate Range 2017	2018			2017
NSP-Wisconsin
Mortgage bonds	2024 - 2048	3.3% - 6.38%	3.3% - 6.38%	$	800		$	750
City of La Crosse resource recovery bond	2021	6.00%	6.00%	19			19
Other				—			2
Unamortized discount				(3		)	(3		)
Unamortized debt issuance cost				(9		)	(7		)
Current maturities				—			(151		)
Total				$	807		$	610



(Millions of Dollars)	Maturity Range	Interest Rate Range 2018	Interest Rate Range 2017	2018			2017
PSCo
Capital lease obligations	2025 - 2060	11.20% - 14.30%	11.20% - 14.30%	$	145		$	151
Mortgage bonds	2019 - 2048	2.25% - 6.50%	2.25% - 6.50%	4,900			4,500
Unamortized discount				(14		)	(13		)
Unamortized debt issuance cost				(33		)	(29		)
Current maturities				(406		)	(306		)
Total				$	4,592		$	4,303



(Millions of Dollars)	Maturity Range	Interest Rate Range 2018	Interest Rate Range 2017	2018			2017
SPS
Mortgage bonds	2024 - 2048	3.30% - 4.50%	3.30% - 4.50%	$	1,800		$	1,500
Unsecured senior notes	2033 - 2036	6.00%	6.00% - 8.75%	350			350
Unamortized discount				(4		)	(2		)
Unamortized debt issuance cost				(20		)	(18		)
Current maturities				—			—
Total				$	2,126		$	1,830



(Millions of Dollars)	Maturity Range	Interest Rate Range 2018	Interest Rate Range 2017	2018			2017
Other Subsidiaries
Various Eloigne Co. affordable housing project notes	2019 - 2052	0.00% - 6.90%	0.00% - 7.05%	$	26		$	28
Current maturities				(1		)	(2		)
Total				$	25		$	26

Maturities of long-term debt:



(Millions of Dollars)
2019	$	406
2020	1,257
2021	425
2022	902
2023	653

2018 financings:



	Amount	Financing Instrument	Interest Rate		Maturity Date
Xcel Energy Inc.	$500 million	Senior Notes	4.00	%	June 15, 2028
PSCo	350 million	First mortgage bonds	3.70		June 15, 2028
PSCo	350 million	First mortgage bonds	4.10		June 15, 2048
NSP-Wisconsin	200 million	First mortgage bonds	4.20		Sept. 1, 2048
SPS	300 million	First mortgage bonds	4.40		Nov 15, 2048

2017 financings:



	Amount	Financing Instrument	Interest Rate		Maturity Date
PSCo	$400 million	First mortgage bonds	3.80	%	June 15, 2047
SPS	450 million	First mortgage bonds	3.70		Aug. 15, 2047
NSP-Minnesota	600 million	First mortgage bonds	3.60		Sept. 15, 2047
NSP-Wisconsin	100 million	First mortgage bonds	3.75		Dec. 1, 2047

Forward Equity Agreements — In November 2018, Xcel Energy Inc. entered into forward sale agreements in connection with a completed $459 million public offering of 9.4 million shares of Xcel Energy common stock. The initial forward agreement was for 8.1 million shares with an additional agreement of 1.2 million shares exercised at the option of the banking counterparty. At Dec. 31, 2018, the forward agreements could have been settled with physical delivery of 9.4 million common shares to the banking counterparty in exchange for cash of $456 million. The forward instruments could also have been settled at Dec. 31, 2018 with delivery of approximately $24 million of cash or approximately 0.5 million shares of common stock to the counterparty, if Xcel Energy unilaterally elected net cash or net share settlement, respectively. The forward price used to determine amounts due at settlement is calculated based on the November 2018 public offering price for Xcel Energy’s common stock of $49.00, increased for the overnight bank funding rate, less a spread of 0.75% and less expected dividends on Xcel Energy’s common stock during the period the instruments are outstanding.

Xcel Energy may settle the agreements at any time up to the maturity date of February 7, 2020. Depending on settlement timing, cash proceeds are expected to be approximately $450 million to $460 million.

Forward equity instruments were recognized within stockholders’ equity at fair value at execution of the agreements, and will not be subsequently adjusted until settlement.

ATM Equity Offering — Xcel Energy issued 4.7 million shares of common stock with net proceeds of $224.7 million through the at-the-market program. In addition, transaction fees of $1.9 million were paid. In November 2018, the ATM offering was closed.

Other Equity — Xcel Energy issued $38.5 million and $39.2 million of equity through the DRIP program during the years ended Dec. 31, 2018 and 2017 respectively. Program allows stockholders to elect dividend reinvestment in Xcel Energy common stock through a non-cash transaction. See Note 8 for equity items related to share based compensation.

Deferred Financing Costs — Deferred financing costs of approximately $126 million and $119 million, net of amortization, are presented as a deduction from the carrying amount of long-term debt as of Dec. 31, 2018 and 2017, respectively.

Capital Stock — Preferred stock authorized/outstanding:



	Preferred Stock Authorized (Shares)	Par Value of Preferred Stock		Preferred Stock Outstanding (Shares) 2018 and 2017
Xcel Energy Inc.	7,000,000	$	100	—
PSCo	10,000,000	0.01		—
SPS	10,000,000	1.00		—

Xcel Energy Inc. had the following common stock authorized/outstanding:



Commons Stock Authorized (Shares)		Par Value of Common Stock		Common Stock Outstanding (Shares)2018	Common Stock Outstanding (Shares) 2017
1	billion	$	2.50	514,036,787	507,762,881

Dividend and Other Capital-Related Restrictions — Xcel Energy depends on its subsidiaries to pay dividends. Xcel Energy Inc.’s utility subsidiaries’ dividends are subject to the FERC’s jurisdiction, which prohibits the payment of dividends out of capital accounts. Dividends are solely to be paid from retained earnings. Certain covenants also require Xcel Energy Inc. to be current on interest payments prior to dividend disbursements.

State regulatory commissions impose dividend limitations for NSP-Minnesota, NSP-Wisconsin and SPS.

Requirements and actuals as of Dec. 31, 2018:



	Equity to Total Capitalization Ratio Required Range				Equity to Total Capitalization Ratio Actual
	Low		High		2018
NSP-Minnesota	47.1	%	57.5	%	52.3	%
NSP-Wisconsin	51.5		N/A		51.8
SPS ^(a)	45.0		55.0		54.4


^(a)	SPS excludes short-term debt.



	Unrestricted Retained Earnings			Total Capitalization			Limit on Total Capitalization
NSP-Minnesota	$	1.0	billion	$	10.7	billion	$	11.5	billion
NSP-Wisconsin ^(a)	11.5		million	1.7		billion	N/A
SPS^(b)	605.7		million	4.7		billion	N/A


^(a)	NSP-Wisconsin cannot pay annual dividends in excess of approximately $55 million if its average equity-to-total capitalization ratio falls below the commission authorized level.


^(b)	SPS may not pay a dividend that would cause it to lose its investment grade bond rating.

Issuance of securities by Xcel Energy Inc. generally is not subject to regulatory approval. However, utility financings and intra-system financings are subject to the jurisdiction of state regulatory commissions and/or the FERC. Xcel Energy may seek additional authorization as necessary.

Authorizations as of Dec. 31, 2018:



	Amount Authorized to Issue
	Long-Term Debt				Short-Term Debt
NSP-Minnesota	52.93% of total capitalization			^(a)	$	1.725	billion	^(a)
NSP-Wisconsin	$	—		^(b)	150		million
SPS	—			^(b)	600		million
PSCo	1.1		billion		800		million


^(a)	NSP-Minnesota has authorization to issue long-term securities provided the equity-to-total capitalization remains within the required range, and to issue short-term debt provided it does not exceed 15% of total capitalization.


^(b)	SPS and NSP-Wisconsin will file for additional long-term debt authorization.