earnings release presentation - xcel...
TRANSCRIPT
Second Quarter 2015 Earnings Release Presentation
July 30, 2015
$0.91 $0.91$0.85$0.69
Ongoing EPS GAAP EPS
2014 2015
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EPS Results
YTD 2015 ongoing earnings exclude a charge of $0.16 per share related to the Monticello extended power uprate (EPU) project
$0.39 $0.39$0.39 $0.39
Ongoing EPS GAAP EPS
2014 2015Q2
YTD
Improve Utility Performance
● Close ROE gap 50 bps by 2018 ● Derive 75% of revenue from MYPs
Objectives Measurable Results
Xcel Energy Strategic Plan
Drive Operational Excellence
● Manage workforce transition ● Limit annual O&M growth to 0-2%
Provide Customer Options & Solutions
● Offer more energy options ● Exceed customer expectations
Invest for the Future
● Base capital plan drives annual rate base growth of 4.7% ● Potential incremental investment in natural gas and transmission
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Legislative Initiative 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
Allows for recovery of capital investments
Recovery of O&M expenses based on a price index
Distribution costs for grid modernization eligible for rider recovery
Recovery of early plant closure costs, if Commission orders closure
Interim rates for the first two years, while plan is under consideration
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Legislative Initiative 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
— Allows the addition of post-test year capital additions up to 30 days before rate case filing date
— New natural gas generation may be included in rate base as long as it is in service before the proposed effective rate date
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Potential Natural Gas Investment
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Colorado Commission information meetings
— Examine the long term supply of natural gas and approaches to manage prices, including rate-basing of natural gas reserves
— Anticipate the Commission will schedule informational meetings in the third quarter 2015
Regulatory framework filing planned for fourth quarter 2015
File for potential investment in second half of 2016
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Renewables & Operations Highlights
Community solar gardens decision in Minnesota
Cherokee combined-cycle plant completed first fire
Monticello nuclear plant reaches 100% of EPU (671 MW) and receives final NRC approval
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Quarterly Ongoing EPS Change
2Q14 Ongoing
EPS
2Q15 Ongoing
EPS
$0.20
$0.30
$0.40
$0.50
$0.60
$0.39 $0.39
($0.02) ($0.02)
($0.02) ($0.01) ($0.01) ($0.01) $0.01 $0.02 $0.06
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The $0.02 adverse impact of weather is incorporated in electric margins
YTD Ongoing EPS Change
YTD 2014 Ongoing
EPS
YTD 2015 Ongoing
EPS
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00
$1.10
$1.20
$1.30
$0.91 $0.85
($0.06) ($0.04)
($0.04) ($0.03) ($0.03) ($0.02) ($0.01) $0.01
$0.11 $0.05
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The $0.07 adverse impact of weather is incorporated in electric and natural gas margins
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ROE Results – Ongoing Earnings
9.40%8.24%
10.50% 9.80%7.92% 8.72%
NSP-M NSP-W PSCo SPS TotalRegulated
XcelEnergy
● Xcel Energy anticipates the full-year 2015 ROE’s for NSP-M, Total Regulated and Xcel Energy will be higher than the Twelve Month Ended ROE’s reported in the table above, due to the timing of regulatory reserves associated with the Minnesota rate case during 2014
● Ongoing earnings exclude a $129 million pre-tax charge for the Monticello EPU project ● GAAP ROEs are 6.42% (NSP-M), 10.07% (NSP-W), 9.05% (Xcel Energy), and 8.10% (Regulated)
Twelve Months Ended 06/30/2015
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2014 Rate Base
PSCo 43%
NSP-M 42%
NSP-W 5%
SPS 10%
EPS Results by Operating Company
PSCo $ 0.19 $ 0.18 $ 0.41 $ 0.41 NSP-Minnesota 0.15 0.15 0.32 0.37 SPS 0.05 0.06 0.08 0.09 NSP-Wisconsin 0.02 0.02 0.07 0.07 Equity earnings 0.01 0.01 0.02 0.02 Regulated utility 0.42 0.42 0.90 0.96 Holding company and other (0.03) (0.03) (0.05) (0.05)
Total Ongoing diluted EPS $ 0.39 $ 0.39 $ 0.85 $ 0.91
Loss on Monticello LCM/EPU Project - - (0.16) -
Total GAAP diluted EPS $ 0.39 $ 0.39 $ 0.69 $ 0.91
Second Quarter
2015 2014
YTD
2015 2014
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Economic, Sales & Customer Data
2015 YTD W/A Electric Sales Growth
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* Pilot 3-year decoupling for residential and small C&I beginning January 2016
-1.2%-0.6% -0.7%
-1.3%-1.9%
-0.4%-0.5%
0.6%0.3%
-0.8%
2015 Q2 W/A Electric Sales Growth
1.0%0.9%
0.3%0.7%
1.3%
4.4%3.5%
4.2%
5.5%
3.7% 4.0%
2015 Q2 YoY Customer Growth June Unemployment
NSP-M * NSP-W PSCo SPS Xcel Energy NSP-M * NSP-W PSCo SPS Xcel Energy
NSP-M * NSP-W PSCo SPS Xcel Energy NSP-M * NSP-W PSCo SPS Xcel Energy Nat’l Avg.
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Xcel Energy W/A Electric Sales Growth
1.3%
0.1%
-0.4%
0.1%0.1%0.2%
1.7%
0.5%
-1.3%
C&I Total Residential
2013 2014 YTD 2013 2014 YTD 2013 2014 YTD
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YTD = Six months ended June 30, 2015
Key Assumption Changes Earnings Driver Previous Current W/A Electric Sales Increase 1.0% Increase 0.5% W/A Natural Gas Sales Increase 0% to 1.0% Decrease 2.0%
2015 Ongoing Earnings Guidance
Ongoing EPS Guidance Range: $2.00 – $2.15
Sensitivities Earnings Driver Sensitivity EPS Retail Electric Sales 100 bps +/- $0.04 O&M Expense 100 bps +/- $0.03
Assumes a 35% ETR and 508 million shares outstanding
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Appendix
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YTD W/A Electric Sales Growth
-1.8%
-3.4%
0.3%
0.8%
-1.1%
0.3%
-0.6%
2.3%
0.0%
-0.8%
0.6%
-0.5%
NSP-M NSP-W SPS
Residential C&I Total
PSCo
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Opco ROE Sensitivities
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Opco Jurisdiction 2014
Rate Base ($ millions)
Revenue Requirement ($ millions)
EPS
NSPM
MN Electric $7,047 $57 +/- $0.073 MN Gas $453 $4 +/- $0.005 ND Electric $454 $4 +/- $0.005 ND Gas $48 $0 +/- $0.000 SD Electric $474 $4 +/- $0.005
PSCo CO Electric $6,277 $55 +/- $0.070 CO Gas $1,661 $14 +/- $0.018
SPS TX Electric $1,507 $13 +/- $0.016 NM Electric $587 $5 +/- $0.006
NSPW WI Electric $906 $7 +/- $0.010 WI Gas $98 $1 +/- $0.001
Sensitivity to 100 bps change in ROE
● Assumes authorized equity ratio, a 35% ETR, and 508 million shares outstanding
● Rate base figures obtained from our jurisdictional regulatory filings
Financing Plan for 2015
Issuer Security Amount (millions)
Timing Tenor Coupon
Hold Co Senior Unsecured $250 Completed 2 Yr 1.20%
Hold Co Senior Unsecured $250 Completed 10 Yr 3.30%
PSCo First Mortgage Bonds $250 Completed 10 Yr 2.90%
NSP-W First Mortgage Bonds $100 Completed 9 Yr 3.30%
NSP-M First Mortgage Bonds $600 Second Half N/A N/A
SPS First Mortgage Bonds $200 Second Half N/A N/A
Financing plans are subject to change, depending on capital expenditures, internal cash generation, rating agency views, market conditions, and other factors
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Upcoming 2015 Third Quarter Events
CFA “investMNt” Conference: Aug. 5 Barclays Kohler Conference: Aug. 19-21 Barclays Conference: Sept. 9 Wolfe Research Conference: Sept. 30
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