EX-99.07 8 a05-20881_1ex99d07.htm EXHIBIT 99
















 

Searchable text section of graphics shown above

 


 

[LOGO]

 

Appendix

 


 

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; final approval and implementation of the pending settlement of the securities, ERISA and derivative litigation; costs and other effects of legal administrative proceedings, settlements, investigations and claims including litigation related to company-owned life insurance (COLI); actions of accounting regulatory bodies; risks associated with the California power market; 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 2004.

 


 

[LOGO]

 

[GRAPHIC]

 

Strong Regional
Economy

 

Unemployment rate — August 2005

 

 

 

US

 

4.9

%

Xcel service area

 

4.0

%

 

 

 

 

Xcel annual sales growth — 2005-2009

 

 

 

Electric

 

1.8

%

Gas

 

1.5

%

 

4th largest US electric
and gas utility —

 

*                 Sale pending on Kansas and Oklahoma properties

 


 

Organizational Structure
2004 Results

 

 

 

 

 

Xcel Energy Inc.

 

Income from Continuing

 

 

 

 

 

$527

 

Operations (Dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holding

 

 

 

 

 

 

 

 

 

Company

 

 

 

 

 

 

 

 

 

$(43)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northern

 

Northern

 

 

 

 

 

 

 

States

 

States

 

Public

 

Southwestern

 

Subsidiaries

 

Power

 

Power

 

Service

 

Public

 

•  Eloigne

 

Company -

 

Company -

 

Company of

 

Service

 

•  Quixx

 

Minnesota

 

Wisconsin

 

Colorado

 

Company

 

 

 

$230

 

$54

 

$218

 

$55

 

$13

 

 

 

 

 

 

 

 

 

 

 

Regulated

 

Nonregulated

 

 


 

Rate Base and Returns

 

Dollars in millions

 

 

 

Rate Base

 

Earned

 

 

 

Equity

 

 

 

2004

 

ROE

 

Authorized

 

Ratio

 

 

 

Average

 

2004

 

ROE

 

2004

 

 

 

 

 

 

 

 

 

 

 

NSP (M) - Electric retail

 

$

2,992

 

10.73

%(1)

11.47

%

50.3

%

NSP (M) - Gas retail

 

402

 

8.50

 

10.40

(2)

50.3

 

North Dakota - Electric retail

 

166

 

10.80

 

12.00

 

50.3

 

North Dakota - Gas retail

 

39

 

8.18

 

11.50

 

47.6

 

Colorado - Electric retail

 

3,042

 

9.18

 

10.75

 

50.1

 

Colorado - Gas retail

 

996

 

8.76

 

11.00

 

50.1

 

Texas - Electric retail

 

889

 

9.39

 

11.50

 

48.7

 

NSP (W) - Retail electric

 

538

 

NR

 

11.90

 

55.8

 

NSP (W) - Retail gas

 

70

 

NR

 

11.90

 

55.8

 

Non-reported

 

1.4 B

 

 

 

 

 

 

 

Total including non-reported

 

10.5 B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NR:  Non-reportable

 

 

 

 

(1)         Projected 2005 ROE of 8.96% based on normal conditions as of May 2005. 2004 result reflects strong trading margins and change in decommissioning accrual.

(2)         2005 decision

 


 

Reconciliation of Estimated Regulatory Reporting from GAAP

 

Dollars in millions

Common Equity

 

 

 

NSP (M)

 

NSP (W)

 

PSCo

 

SPS

 

Total

 

2004 GAAP common stockholder’s equity (1)

 

$

2,007

 

$

433

 

$

2,287

 

$

781

 

$

5,507

 

2003 GAAP common stockholder’s equity (1)

 

1,809

 

425

 

2,140

 

814

 

5,188

 

Average GAAP common stockholder’s equity

 

1,908

 

429

 

2,213

 

798

 

5,348

 

Adjustments

 

-5

 

-5

 

64

 

-11

 

43

 

Adjusted average equity for purposes of regulatory equity ratio

 

$

1,903

 

$

424

 

$

2,277

 

$

787

 

$

5,391

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NSP (M)

 

NSP (W)

 

PSCo

 

SPS

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

2004 GAAP total debt (1) (2)

 

$

2,032

 

$

348

 

$

2,502

 

$

861

 

$

5,743

 

2003 GAAP total debt (1) (2)

 

2,003

 

337

 

1,845

 

825

 

5,010

 

Average GAAP total debt

 

2,018

 

342

 

2,173

 

843

 

5,376

 

Adjustments

 

-140

 

-6

 

94

 

-16

 

-68

 

Adjusted average debt for purposes of regulatory equity ratio

 

$

1,878

 

$

336

 

$

2,267

 

$

827

 

$

5,308

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory equity ratio

 

 

 

 

 

 

 

 

 

50.4

%

 

(1)         Source: 2004 Operating Company 10-K’s

(2)         Consists of long-term debt, current portion of long-term debt and short-term debt

See note on the bottom of the following page for additional information

 


 

Net Income

 

Dollars in millions

 

 

 

NSP (M)

 

NSP (W)

 

PSCo

 

SPS

 

Total

 

2004 GAAP net income (1) $230

 

$

54

 

$

218

 

$

55

 

$

557

 

 

 

Adjustments

 

-25

 

 

 

-26

 

 

 

-51

 

Adjusted net income for purposes of regulatory net income

 

$

205

 

$

54

 

$

192

 

$

55

 

$

506

 

 

Calculation of Regulatory Net Income

 

Estimated regulatory rate base ($10.5 B) x Regulatory equity ratio (50.4%) = Estimated equity rate base ($5.3 B)

Regulatory net income ($506 M) ÷ Estimated equity rate base ($5.3 B) = Estimated regulatory return on equity (9.6%)

 

Depreciation & Amortization – Cash Flows

 

 

 

NSP (M)

 

NSP (W)

 

PSCo

 

SPS

 

Total

 

2004 GAAP depreciation and amortization – cash flow (1)

 

$

352

 

$

48

 

$

234

 

$

100

 

$

735

 

 

(1)         Source: 2004 Operating Company 10-K’s

 

Financial results for regulatory reporting frequently differ from GAAP.

Regulatory reporting includes the use of 12 and 13 month averages for capitalization, eliminates inter-company transactions, excludes non-regulated investments, includes or excludes revenues and or expenses associated with various recovery mechanisms and other factors, all of which may vary from one regulatory jurisdiction to another.

 


 

Potential Cash Flow Statement Summary*

 

Dollars in millions

 

 

 

2006

 

2007

 

2008

 

2009

 

Cash provided by operations

 

$

1,580

 

$

1,685

 

$

1,795

 

$

1,865

 

Cash used for investing

 

(1,599

)

(1,655

)

(1,464

)

(1,228

)

Cash provided (used) for financing

 

37

 

(26

)

(355

)

(622

)

Net increase (decrease)

 

18

 

4

 

(24

)

15

 

Cash at beginning of year

 

60

 

78

 

82

 

58

 

Cash at end of year

 

$

78

 

$

82

 

$

58

 

$

73

 

 

*                 This illustration represents one potential scenario, and does not represent guidance or a most likely outcome

 


 

2006 Key Earnings Guidance Assumptions

 

•                  Successful rate cases

•                  Minnesota electric request $168 million

•                  Wisconsin electric & gas request $61 million

•                  Colorado gas request $34 million

•                  North Dakota electric request

 

•                  Weather adjusted sales growth:

•                  Retail Electric 1.3 – 1.7%

•                  Gas 0 – 1.0%

 


 

2006 Key Earnings Assumptions

 

•                  Change from 2005:

•                  Short-term wholesale margins decline approximately $15 – 30 million

•                  O&M expenses increase 3 – 4%

•                  Depreciation increases $100 – 110 million,    including $60 million increase in decommissioning

•                  Interest increases $10 – 15 million

•                  AFUDC equity expected to increase $10 – 15 million

 

•                  Continue to recognize COLI tax deduction

 

•                  Effective income tax rate of 27 – 29%

 

•                  Average shares 428 million based on “If converted”

 


 

Coal Supply Contracted

 

[GRAPHIC]

 

 

 

 

 

Coal

 

 

 

Coal

 

Transportation

 

2005

 

99

%

100

%

2006

 

94

 

75

 

2007

 

65

 

45

 

2008

 

46

 

45

 

 

Annual consumption:  32 million tons of low-sulfur, low-mercury western coal

 


 

Electric Fuel and Purchased Energy Cost Recovery Mechanisms

 

Minnesota:

 

Monthly recovery of prospective costs

 

 

 

Colorado:

 

Recovery of costs with sharing of deviations up to + $11.25 million from benchmark

 

 

 

Texas:

 

File for semi-annual adjustments – required if + 4% annually

 

 

 

Wisconsin:

 

Biennial rate case – file for interim adjustment if costs fall outside + 2% annually

 

 

 

New Mexico:

 

Recovery of costs with 2 month lag

 


 

Retail Electric Rate* Comparison

 

[CHART]

 


 

Senior Debt Ratings

 

 

 

Moody’s

 

S&P

 

 

 

Secured

 

Unsecured

 

Secured

 

Unsecured

 

 

 

 

 

 

 

 

 

 

 

Holding Co.

 

—

 

Baa1

 

—

 

BBB-

 

NSP (M)

 

A2

 

A3

 

A-

 

BBB-

 

NSP (W)

 

A2

 

A3

 

A-

 

BBB

 

PSCo

 

A3

 

Baa1

 

A-

 

BBB-

 

SPS

 

—

 

Baa1

 

—

 

BBB

 

 

 

 

 

 

 

 

 

 

 

Outlook

 

 

 

Stable

 

 

 

Stable

 

 


 

Capital Expenditure Forecast by Operating Company

 

Dollars in millions

 

 

 

2005

 

2006

 

2007

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

NSP (M)

 

$

673

 

$

879

 

$

697

 

$

564

 

$

517

 

NSP (W)

 

58

 

66

 

67

 

95

 

63

 

PSCo

 

414

 

525

 

684

 

604

 

457

 

SPS

 

110

 

99

 

127

 

121

 

111

 

Total

 

$

1,255

 

$

1,569

 

$

1,575

 

$

1,384

 

$

1,148

 

 


 

Minnesota MERP – Potential Earnings

 

Dollars in millions

 

 

 

2005

 

2006

 

2007

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

Current year

 

$

211

 

$

336

 

$

213

 

$

138

 

$

64

 

Cumulative

 

$

258

 

$

594

 

$

806

 

$

944

 

$

1,008

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity ratio

 

48.5

%

48.5

%

48.5

%

48.5

%

48.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Return on equity

 

10.86

%

10.86

%

10.86

%

10.86

%

10.86

%

 

 

 

 

 

 

 

 

 

 

 

 

Equity return

 

$

8

 

$

23

 

$

38

 

$

47

 

$

52

 

 


 

Comanche 3 – Potential Earnings

 

Dollars in millions

 

 

 

2005

 

2006

 

2007

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

Current year

 

$

62

 

$

198

 

$

331

 

$

284

 

$

73

 

Cumulative

 

$

66

 

$

264

 

$

595

 

$

879

 

$

952

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity ratio

 

56

%

56

%

56

%

56

%

56

%

 

 

 

 

 

 

 

 

 

 

 

 

Return on equity

 

10.75

%

10.75

%

10.75

%

10.75

%

10.75

%

 

 

 

 

 

 

 

 

 

 

 

 

Equity return

 

$

2

 

$

10

 

$

26

 

$

45

 

$

55