Xcel Energy 2004 Annual Report Download - page 59

NOTES to CONSOLIDATED FINANCIAL STATEMENTS
Xcel Energy Annual Report 2004
57
6. LONG-TERM DEBT
Except for SPS, which does not currently have a first mortgage indenture, and other minor exclusions, all property of the utility subsidiaries is subject
to the liens of their first mortgage indentures, which are contracts between the companies and their bondholders. In addition, certain SPS payments
under its pollution-control obligations are pledged to secure obligations of the Red River Authority of Texas.
The utility subsidiaries’ first mortgage bond indentures provide for the ability to have sinking-fund requirements. NSP-Minnesota, NSP-Wisconsin and
PSCo have no sinking-fund requirements for current bonds outstanding.
Xcel Energy has a $600 million, five-year senior unsecured revolving credit facility that matures in November 2009. Xcel Energy has the right to request a
one-time increase in the size of the credit facility by up to $100 million and to request an extension of the final maturity date by one year. The maturity
extension is subject to majority bank group approval. A financial covenant for debt to total capitalization is included. As of Dec. 31, 2004, Xcel Energy
had $140 million drawn on this line of credit, which was classified as long-term debt. In addition, $82.2 million of letters of credit were outstanding at
Dec. 31, 2004, as discussed in Note 15 to the Consolidated Financial Statements, of which $18.5 million were outstanding under the Xcel Energy credit
facility, which further reduced the amount available under the line.
Xcel Energy’s 2007 and 2008 series convertible senior notes are convertible into shares of Xcel Energy common stock at a conversion price of $12.33 per
share. Conversion is at the option of the holder at any time prior to maturity. In addition, Xcel Energy must make additional payments of interest,
referred to as protection payments, on the notes in an amount equal to any portion of regular quarterly per share dividends on common stock that
exceeds $0.1875 that would have been payable to the holders of the notes if such holders had converted their notes on the record date for such dividend.
On May 20, 2004, the board of directors of Xcel Energy voted to raise the quarterly dividend on its common stock from $0.1875 to $0.2075.
Consequently, as of Dec. 31, 2004, a total of $1.4 million in additional interest expense has been recorded.
In February 2005, PSCo redeemed $110 million of its 7.25-percent first collateral trust bonds, originally scheduled to mature in 2024.
Maturities of long-term debt are:
2005 $224 million
2006 $839 million
2007 $341 million
2008 $654 million
2009 $700 million
7. PREFERRED STOCK
At Dec. 31, 2004, Xcel Energy had six series of preferred stock outstanding, which were callable at its option at prices ranging from $102.00 to $103.75 per
share plus accrued dividends. Xcel Energy can only pay dividends on its preferred stock from retained earnings absent approval of the SEC under PUHCA.
See Note 11 to the Consolidated Financial Statements for a description of such restrictions.
The holders of the $3.60 series preferred stock are entitled to three votes for each share held. The holders of the other preferred stocks are entitled to
one vote per share. In the event dividends payable on the preferred stock of any series outstanding is in arrears in an amount equal to four quarterly
dividends, the holders of preferred stocks, voting as a class, are entitled to elect the smallest number of directors necessary to constitute a majority of
the board of directors. The holders of common stock, voting as a class, are entitled to elect the remaining directors.
The charters of some of Xcel Energy’s subsidiaries also authorize the issuance of preferred shares. However, at Dec. 31, 2004, there are no such shares
outstanding. This chart shows data for first- and second-tier subsidiaries:
Preferred Shares Preferred Shares
Authorized Par Value Outstanding
Cheyenne* 1,000,000 $100.00 None
SPS 10,000,000 $ 1.00 None
PSCo 10,000,000 $ 0.01 None
* The sale of Cheyenne was completed in January 2005.