Xcel Energy 2007 Annual Report Download - page 106

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The total fair value and total intrinsic value of performance awards settled during the years ended Dec. 31, 2007, 2006
and 2005 were as follows:
2007 2006 2005
(in thousands)
Share awards settled ............................... 395 1,139 —
Fair value of share awards settled ....................... $6,723 $12,647 —
Intrinsic value of share awards settled(a) ................... 2,890 9,109 —
(a) Intrinsic value is calculated as the market price at settlement less than the fair value at grant date
Share-Based Compensation Plan Expense — The vesting of the restricted stock units is predicated on the achievement
of a performance condition which is the achievement of an earnings per share or environmental measures target. The
fair values used to calculate the expense on these plans are based on the amount of the award calculated as a percentage
of salaries and approved by Xcel Energy’s board of directors. Restricted stock unit awards are considered to be equity
awards. Since the plan settlement determination (shares or cash) resides with Xcel Energy and not the participants. In
addition, these awards have not been previously settled in cash and Xcel Energy plans to continue electing share
settlement.
The performance share plan awards have been historically settled partially in cash and therefore do not qualify as an
equity award, but are accounted for as a liability award. As a liability award, the fair value on which expense is based is
remeasured each period based on the current stock price and final expense is based on the market value of the shares
on the date the award is settled.
The compensation costs related to share-based awards for the years ended Dec. 31, 2007, 2006 and 2005 were as
follows:
2007 2006 2005
(Thousands of Dollars)
Compensation cost for share-based awards(a)(b) ............... $24,900 $43,253 $29,350
Tax benefit recognized in income ....................... 9,661 16,777 11,306
Total compensation cost capitalized ...................... 3,697 3,680 3,557
(a) Compensation costs for share-based payment arrangements is included in Other Operating and Maintenance Expense on our consolidated statements of income
(b) Included in compensation cost for share-based awards are matching contributions related to the Xcel Energy 401(k) plan, which totalled $15.2 million, $15.0 million and
$14.3 million for the years ended 2007, 2006 and 2005, respectively.
The maximum aggregate number of shares of common stock available for issuance under the Xcel Energy Omnibus
Incentive Plan, approved in 2000, is 14.5 million and 8.3 million was approved under the Xcel Energy 2005 Omnibus
Incentive Plan. Under the Executive Annual Incentive Plan approved in 2000, the total number of share approved for
issuance is 1.5 million and 1.2 million shares were approved under the Executive Annual Incentive Plan in 2005.
As of Dec. 31, 2007, there was approximately $6.5 million of total unrecognized compensation cost related to
non-vested share-based compensation awards. Total unrecognized compensation expense will be adjusted for future
changes in estimated forfeitures. Xcel Energy expects to recognize that cost over a weighted-average period of 1.8 years.
The amount of cash used to settle these awards was $7.8 million in 2007 and $11.9 million in 2006.
Cash received from stock options exercised and actual tax benefit realized for the tax deductions from stock options
exercised during the years ended Dec. 31 were as follows:
2007 2006 2005
(Thousands of Dollars)
Cash received from stock options exercised ................. $5,266 $10,231 $2,642
Tax benefit realized for the tax deductions from stock options
exercised ..................................... — 353 6
10. Benefit Plans and Other Postretirement Benefits
Xcel Energy offers various benefit plans to its benefit employees. Approximately 52 percent of employees that receive
benefits are represented by several local labor unions under several collective-bargaining agreements. At Dec. 31, 2007:
• NSP-Minnesota had 2,287 and NSP-Wisconsin had 408 bargaining employees covered under a collective-
bargaining agreement, which expires at the end of 2010.
• PSCo had 2,194 bargaining employees covered under a collective-bargaining agreement, which expires in May
2009.
• SPS had 774 bargaining employees covered under a collective-bargaining agreement, which expires in October
2008.
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