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CFA InvestMNt Conference – Xcel Energy

Xcel Energy · Aug 5, 2015 · 39 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. CFA InvestMNt Conference – Xcel Energy – slide 1
    Delivering Results CFA InvestMNt Conference August 5, 2015
  2. CFA InvestMNt Conference – Xcel Energy – slide 2
    Xcel Energy Investment Merits Focused strategic plan Offering an attractive total return EPS growth objective of 4% 6% * Dividend growth objective of 5% 7% Dividend payout ratio target of 60% 70% Strong credit metrics Unsecured…
  3. CFA InvestMNt Conference – Xcel Energy – slide 3
    Xcel Energy Strategic Plan Objectives Measurable Results Improve Utility Close ROE gap 50 bps by 2018 Performance Derive 75% of revenue from MYPs Drive Operational Manage workforce transition Excellence Limit annual O&M growth to…
  4. CFA InvestMNt Conference – Xcel Energy – slide 4
    Fully Regulated, Diverse Utility NSP-Minnesota (NSPM) NSP-Wisconsin (NSPW) 35-45% of earnings 5-10% of earnings Public Service Co. of Colorado (PSCo) Southwestern 45-55% of earnings Public Service (SPS) 5-15% of earnings Operate in…
  5. CFA InvestMNt Conference – Xcel Energy – slide 5
    2015 Highlights Increased the dividend 6.7% Increased our annual dividend growth objective to 5% - 7% Resolved major regulatory proceedings - providing revenue certainty and reducing regulatory overhang Colorado electric multi-year…
  6. CFA InvestMNt Conference – Xcel Energy – slide 6
    Improve Utility Performance Existing ROE Gap is About 100 bps Regulatory Lag Contribution by Jurisdiction NSPM 75% Close ROE Objective Gap by 50 bps by 2018 SPS 20% PSCo & NSPW 5% 7
  7. CFA InvestMNt Conference – Xcel Energy – slide 7
    Legislative Initiatives in Minnesota Governor signed Energy & Jobs bill into law in June 2015 Provides longer, more holistic multi-year rate plans Ability to implement multi-year plans for up to five years Allowing for recovery of…
  8. CFA InvestMNt Conference – Xcel Energy – slide 8
    Legislative Initiatives in Texas Governor signed regulatory lag bill into law in June 2015 Legislation will help to reduce regulatory lag Ability to implement temporary rates or surcharge 155 days after rate case filing date Allow…
  9. CFA InvestMNt Conference – Xcel Energy – slide 9
    Impact of Improved Earned ROE Consolidated 5-year EPS Earned ROE CAGR 11.0% 6% - 7% 10.5% 5% - 6% 10.0% 4% - 5% Based on Xcel Energys consolidated GAAP ROE 10
  10. CFA InvestMNt Conference – Xcel Energy – slide 10
    Driving Operational Excellence Bending the Cost Curve Sustainable cost control Standardization of processes Optimize purchasing power Objective Technology Annual O&M Growth Stabilization of nuclear costs Drives 0% - 2% Workforce…
  11. CFA InvestMNt Conference – Xcel Energy – slide 11
    Base Capital Investment Plan Drives Rate Base Growth 2015-2019 Base Capital Expenditures 14.5 Billion Distribution 22% Transmission 4.7% 31% Drives Rate Base Other CAGR 24% 2014 - 2019 Generation 23% 12
  12. CFA InvestMNt Conference – Xcel Energy – slide 12
    Base Capital Investment Plan Five-Year Total of 14.5 Billion Dollars in millions 3,375 2,780 2,825 2,650 2,850 2015 2016 2017 2018 2019 Transmission Generation Distribution Other Capital forecast does not include 300 million…
  13. CFA InvestMNt Conference – Xcel Energy – slide 13
    Investing for the Future Natural Gas Assets Transmission: A Two Prong Strategy Take advantage of growth Operating Company opportunities Will defend using ROFR Leverage natural gas footprint ROFR statutes in MN, ND, SD Potential…
  14. CFA InvestMNt Conference – Xcel Energy – slide 14
    Strong Credit Ratings and Liquidity 44% equity ratio as of June 30, 2015 2.75 billion credit line with a maturity of October 2019 Moodys * S&P Fitch Xcel Unsecured A3 BBB+ BBB+ NSPM Secured Aa3 A A+ NSPW Secured Aa3 A A+ PSCo…
  15. CFA InvestMNt Conference – Xcel Energy – slide 15
    Proven Track Record Consistent Dividend Growth Dividend CAGR 2013-2015 = 6.9% Dividend CAGR 2005-2015 = 4.1% 1.28 1.20 1.12 1.08 1.01 1.04 0.98 0.92 0.95 0.86 0.89 2005 Annual Dividend Increase 2013 2014 2015 Annual…
  16. CFA InvestMNt Conference – Xcel Energy – slide 16
    Proven Track Record Consistent Ongoing EPS Growth Ongoing EPS CAGR 2005-2014 = 6.5% 2.00- 2.15 2.03 1.15 2005 2015 Ongoing Earnings Guidance Range 2014 2015E Ongoing EPS Annual Growth Objective = 4-6% * Reconciliation of…
  17. CFA InvestMNt Conference – Xcel Energy – slide 17
    Proven Track Record Delivering on Financial Objectives EPS Guidance 2005 Achieved 2006 Achieved 2007 Exceeded 2008 Achieved 2009 Achieved 2010 Achieved 2011 Achieved 2012 Achieved 2013 Achieved 2014 Achieved 2015 On…
  18. CFA InvestMNt Conference – Xcel Energy – slide 18
    Appendix 19
  19. CFA InvestMNt Conference – Xcel Energy – slide 19
    Reconciliation Ongoing EPS to GAAP EPS 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Ongoing EPS 1.15 1.30 1.43 1.45 1.50 1.62 1.72 1.82 1.95 2.03 PSRI-COLI 0.05 0.05 (0.08) 0.01 (0.01) (0.01) - - - - Prescription Drug Tax…
  20. CFA InvestMNt Conference – Xcel Energy – slide 20
    Improve Utility Performance Derive 75% of Revenue from Multi-Year Plans Percent of Jurisdiction Status Rate Plan Rate Base Minnesota Electric Approved Multi-Year Plan (2014-15) 35% Colorado Electric Approved Multi-Year Plan…
  21. CFA InvestMNt Conference – Xcel Energy – slide 21
    Closing the ROE Gap Key Opportunity for EPS Growth 2014 Estimated 20.7 billion 20.7 billion 20.7 billion Rate Base Equity Ratio 54% 54% 54% ROE Improvement 25 bps 50 bps 75 bps Net Income 28 million 56 million 84 million…
  22. CFA InvestMNt Conference – Xcel Energy – slide 22
    Modest Financing Needs Financing Plan 2015-2019 Funding capital expenditures millions 14,480 11,500 2,605 2,995 0 375 Cap CFO * New Equity ** DRIP & Refinanced Ex Debt Benefits Debt * Cash from operations is net of…
  23. CFA InvestMNt Conference – Xcel Energy – slide 23
    Manageable Debt Maturities Dollars in millions 1,600 Hold Co NSPM NSPW PSCo SPS 1,200 800 400 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 24
  24. CFA InvestMNt Conference – Xcel Energy – slide 24
    Capital Expenditures by Function Dollars in millions 2015 2016 2017 2018 2019 Total Electric Generation 1,190 630 620 415 450 3,305 Electric Transmission 875 780 905 975 1,000 4,535 Electric Distribution 605 630 640 650 680 3,205…
  25. CFA InvestMNt Conference – Xcel Energy – slide 25
    Capital Expenditures by Company Dollars in millions 2015 2016 2017 2018 2019 Total NSPM 1,625 990 975 845 950 5,385 PSCO 950 820 815 885 1,010 4,480 SPS 570 710 735 595 565 3,175 NSPW 230 260 300 325 325 1,440 Total 3,375 2,780…
  26. CFA InvestMNt Conference – Xcel Energy – slide 26
    Minnesota Multi-Year Electric Rate Case Resolved in 2015 NSP-Minnesota filed a two-year, electric rate case seeking a revised net increase of 221 million over two years The filing is based on a requested ROE of 10.25%, a 52.5%…
  27. CFA InvestMNt Conference – Xcel Energy – slide 27
    Monticello Prudence Filing Resolved in 2015 Original estimate was 320 million and final cost was 665 million (total capitalized costs were 748 million, which includes AFUDC) In March 2015, the MPUC made the following decisions:…
  28. CFA InvestMNt Conference – Xcel Energy – slide 28
    Colorado Multi-year Electric Rate Case Resolved in 2015 PSCo requested a 2015 rate increase of 107 million (3.8%), based on an 10.25% ROE, an equity ratio of 56%, and a rate base of 6.39 billion In February 2015, the CPUC approved…
  29. CFA InvestMNt Conference – Xcel Energy – slide 29
    South Dakota 2015 Electric Rate Case Resolved in 2015 Seeking a 2015 electric rate increase of 15.6 million Requested ROE of 10.25% and equity ratio of 53.86% Average rate base of 433 million 2013 historic test year with known and…
  30. CFA InvestMNt Conference – Xcel Energy – slide 30
    Colorado Multi-Year Gas Rate Case Revised Request 2015 2016 2017 Rate Increase 40.5 million 14.6 million 16.8 million PSIA Increase (.01) million 14.7 million 21.7 million ROE 10.1% 10.1% 10.3% Rate Base 1.26 billion 1.31 billion…
  31. CFA InvestMNt Conference – Xcel Energy – slide 31
    Colorado Multi-Year Gas Rate Case 2015 (millions of dollars) Staff OCC PSCos original base rate request 40.5 40.5 ROE (12.8) (13.7) Capital structure and cost of debt (12.8) (4.8) Cherokee pipeline adjustment (11.2) 4.8 Move to 2014…
  32. CFA InvestMNt Conference – Xcel Energy – slide 32
    Texas 2015 Electric Rate Case Seeking a revised 2015 electric rate increase of 42 million (4.4%) Based on a June 2014 historic test year with known and measurable adjustments ROE of 10.25% and equity ratio of 53.97% Electric rate…
  33. CFA InvestMNt Conference – Xcel Energy – slide 33
    Texas 2015 Electric Rate Case SPS (millions of dollars) AXM OPUC Staff Rebuttal SPS revised request 58.9 58.9 58.9 58.9 CapEx post-test year adjustments (11.3) (23.8) (23.8) - ROE (10.9) (13.5) (12.1) - Rate base adjustments * (6.2)…
  34. CFA InvestMNt Conference – Xcel Energy – slide 34
    Wisconsin 2016 Electric & Natural Gas Rate Case Seeking a 2016 electric rate increase of 27.4 million (3.9%) and a natural gas rate increase of 5.9 million (5.0%). Based on a 2016 forecast test year ROE of 10.2% Equity ratio of…
  35. CFA InvestMNt Conference – Xcel Energy – slide 35
    New Mexico 2016 Electric Rate Case SPS filed a New Mexico electric rate case for 2016: Requested base rate increase of 31.5 million Partially offset by base fuel decline of 30.1 million Requested ROE of 10.25% and equity ratio of…
  36. CFA InvestMNt Conference – Xcel Energy – slide 36
    Proactive Environmental Leadership Fuel Mix Based on Energy 2005 2014 2020 5% 1% 4% 1% 2% 1% 2% 3% 56% 16% 12% 45% 22% 41% 13% 23% 12% 21% 20% Coal Natural Gas Nuclear Wind Solar Hydro Other 37
  37. CFA InvestMNt Conference – Xcel Energy – slide 37
    Proactive Environmental Leadership Emission Reductions Nitrogen Oxide Emissions (tons) CO2 Emissions 150,000 100,000 Million tons 95 50,000 0 90 05 06 07 08 09 10 11 12 13 14 20 20 20 20 20 20…
  38. CFA InvestMNt Conference – Xcel Energy – slide 38
    Minnesota Resource Plan Filing In January 2015, NSP filed its resource plan Plan lowers carbon emissions by 40% by 2030 600 MW of wind by 2020 and 1,200 MW by 2027 187 MW of large scale solar by 2016 and 1,700 MW by 2030 500 MW of…
  39. CFA InvestMNt Conference – Xcel Energy – slide 39
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