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; 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 2008.
3. Company Profile
NSP-Wisconsin
Traditional Regulation
6% of earnings *
NSP-Minnesota
41% of earnings * Operate in 8 States
Combination Utility
PSCo
Electric 81% of net income
48% of earnings *
Gas 19% of net income
SPS
5% of earnings *
Customers
3.4 million electric
1.9 million gas
2008 Financial Statistics
* Percentages based on 2008 Ongoing Earnings
NI Ongoing: $641 million
2008 EPS Ongoing: $1.45; GAAP: $1.46 NI GAAP: $646 million
Assets: $25 billion
2008 Dividend $0.95 per share annualized
Equity ratio: 44%
4. Investment Merits
Environmental leader
Strong liquidity and balance sheet to finance rate base
growth strategy
Constructive regulatory environment
Rate base growth drives an attractive total return
— A long-term annual EPS growth objective of 5% – 7%
— A secure and growing dividend, currently yielding 5.6%
We are positioned to execute our strategy –
despite economic headwinds
5. Growth Drivers
Rate base growth
— Uprating/improving existing fleet
— Wind development
— Transmission expansion
Achieving authorized returns
— Rider recovery
— Filing rate cases where necessary
6. Environmental Leader
#1 wind energy provider in United States with increased
focus on wind ownership
— 100 MW wind farm recently completed
— 351 MW wind turnkey project under development
#5 solar energy provider in United States
Resource plans projected CO2 emission reductions
— Minnesota plan: 22% reduction by 2020
— Colorado plan: 10% reduction by 2017
Member of the Dow Jones Sustainability Index
Well positioned for potential carbon legislation
or a national renewable portfolio standard
10. Financial Strengths
Strong Balance Sheet Solid Credit Ratings
— 44% equity — Xcel Unsec = Baa1/BBB/BBB+
— 1% preferred equity — NSP-M/W Secured = A2/A/A+
— 55% debt
— PSCo Secured = A3/A/A
— Issued equity in 2008
— SPS Unsec = Baa1/BBB+/BBB+
before market collapse
Strong Liquidity Modest 2009 Financing
and Funding Needs
— $2.2 billion of credit
facilities, maturing — $800 million in first
December 2011 mortgage bonds
— $1.8 billion total liquidity — $70-$130 million in
as of 3/4/2009 pension contributions
11. Constructive Regulation
Forward test year – MN, WI, ND and pending in CO
Interim rates – MN, ND; WI final rates in effect for test year
Transmission riders – CO, MN, ND, SD, TX
Renewable riders – CO, MN
MERP rider – MN
Environmental riders – MN, ND, SD
Comanche 3 forward CWIP via general rate case – CO
Fuel clause recovery – all states except WI
Capacity rider – CO
Conservation/DSM riders – CO, MN
Air quality improvement rider – CO
12. Minnesota Electric Rate Case
Filed November 2008
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%
Filing is based on 2009 forward test year
Commission approved interim rates of $132 million
effective January 2009, subject to refund
Decision expected fall/winter 2009
13. 2009 Colorado Electric Rate Case
Filed November 2008
Seeking a rate increase of $175 million or 7.4%
— Electric rate base of $4.1 billion
— Requested ROE of 11%
— Equity ratio of 58%
Seeking a 2009 forward test year
Decision expected summer 2009
Rate increase effective after commission decision
14. 2010 Colorado Electric Rate Case
Expected filing April 2009
Purpose is to recover costs associated with major
plan investments, including full-year costs for
Comanche and Ft. St. Vrain and other 2010 costs
Seeking a 2010 forward test year
Decision expected winter 2009
Full-year revenue increase in 2010
15. New Mexico Electric Rate Case
Filed December 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%
Historic test year based on year-ending June 2008
Seeking interim rates of $7.6 million for Lea Power
capacity contract
Rate increase effective after commission decision
16. Capital Forecast
Dollars in millions
$2,300 $2,350 $2,350
$1,800
2009 2010 2011 2012
Other Nuclear Fuel Gas
Electric Distribution Electric Transmission Electric Generation
Wind
17. Investment Drives Rate Base Growth
Dollars in millions
$17.9
$16.8
CAGR = 7.4%
$15.6
$14.4
$13.7
2008 2009 2010 2011 2012
18. Financial Execution
Delivering on 5% – 7% EPS Growth Objective
Guidance Range
$1.45–$1.55
2005 – 2009 CAGR = 6.9% **
$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.
20. Key Take-Aways
Environmental leader
Strong liquidity and balance sheet to finance rate base
growth strategy
Constructive regulatory environment
Rate base growth drives an attractive total return
— A long-term annual EPS growth objective of 5% – 7%
— A secure and growing dividend, currently yielding 5.6%
We are positioned to execute our strategy –
despite economic headwinds
22. Reconciliation – Ongoing EPS to GAAP
Dollars per share
2005 2006 2007 2008
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.
24. Geographic Competitive Advantage
Wind Resource
Source: National Renewable Energy Laboratory
Solar Resource
Wind Density
High
Low
Xcel Energy
States Served
25. 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
26. Solid Liquidity
Dollars in millions, as of March 4, 2009
Credit Total
Lines Available Cash Liquidity
Hold Co. $ 772 $ 344 $3 $ 347
NSPM 482 456 1 457
PSCo 675 670 0 670
SPS 248 238 41 279
Other 0 0 5 5
Total $2,177 $1,708 $ 50 $1,758
27. 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.
28. 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
29. Pension Funding
As of December 31,
Dollars in millions
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
Expected Contributions
2009: $70 million to $130 million
2010: $150 million to $250 million
30. Potential Cash from Operations
2,400
Dollars in millions
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
31. 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
32. 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
33. 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 ROEs are actual earned, not weather normalized
** Results impacted by fuel disallowance
34. 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
35. Minnesota Recovery Mechanisms
Forward test year with interim rates
MERP rider
Transmission rider
Mercury reduction & environmental
improvement rider
RDF rider
State energy policy rider
Conservation improvement program rider
Fuel clause adjustment
Purchased gas adjustment
36. 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
37. 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)
38. SPS Recovery Mechanisms
Historic test year (Texas & New Mexico)
Texas fixed fuel factor recovery
New Mexico fuel clause adjustment
Authorized transmission rider
Ability to establish interim rates through rate case
to recover capacity costs associated the Lea Power
contract (Texas)
39. 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)
