Xcel Energy 2010 Annual Report Download - page 115

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105
Xcel Energy believes these authorizations are adequate and will seek additional authorization when necessary; however, there can
be no assurance that additional authorization will be granted on the timeframe or in the amounts requested.
● The FERC has granted a blanket authorization for certain intra-system financings involving holding companies. The
utility subsidiaries participate in the money pool, in amounts ranging from $250 million for each of NSP-Minnesota and
PSCo, to $100 million for SPS. NSP-Wisconsin is not authorized and does not participate in the money pool. NSP-
Wisconsin currently has regulatory authorization to borrow up to $150 million in short-term borrowings from NSP-
Minnesota. In an order dated Feb. 4, 2011, NSP-Wisconsin received regulatory approval to establish a commercial paper
program authorized for $150 million and enter into a back-up credit facility. Subsequently, NSP-Wisconsin’s
intercompany borrowing arrangement with NSP-Minnesota will be terminated.
8. Share-Based Compensation
Stock Options — Xcel Energy has incentive compensation plans under which stock options and other performance incentives are
awarded to key employees. Xcel Energy has not granted stock options since December 2001. The weighted average number of
common and potentially dilutive shares outstanding used to calculate Xcel Energy’s diluted earnings per share include the dilutive
effect of stock options and other stock awards based on the treasury stock method. The options normally have a term of 10 years
and generally become exercisable from three to five years after grant date or upon specified circumstances.
Activity in stock options was as follows:
2010 2009 2008
(Awards in Thousands) Awards
Average
Exercise
Price Awards
Average
Exercise
Price Awards
Average
Exercise
Price
Outstanding and exercisable at Jan. 1 .... 6,657 $ 28.17 8,460 $ 27.05 9,547 $ 27.19
Exercised ............................. (51) 19.31 (794) 19.84 (12) 18.28
Forfeited ..............................
—
—
(11) 20.04 (67) 22.28
Expired ............................... (4,108) 26.91 (998) 25.40 (1,008) 28.76
Outstanding and exercisable at Dec. 31 .. 2,498 30.42 6,657 28.17 8,460 27.05
Range of Exercise Prices
$ 25.90 to
$30.00 $ 30.01 to
$40.00 $ 40.01 to
$47.00
Options outstanding and exercisable:
Number outstanding and exercisable ....................................... 1,981,225 14,343 502,780
Weighted average remaining contractual life (years) ........................ 0.9 0.8 0.5
Weighted average exercise price .......................................... $ 26.20 $ 35.95 $ 46.88
The total market value of stock options exercised and the total intrinsic value of options exercised were as follows for the years
ended Dec. 31:
(Thousands of Dollars) 2010 2009 2008
Market value of exercises ................................................... $ 1,087 $ 16,429 $ 250
Intrinsic value of options exercised (a) ........................................ 93 670 36
(a) Intrinsic value is calculated as market price at exercise date less the option exercise price.
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:
(Thousands of Dollars) 2010 2009 2008
Cash received from stock options exercised .................................. $ 1,033 $ 15,759 $ 214
Tax benefit realized for the tax deductions from stock options exercised ........ 40 277
—
Restricted Stock — Certain employees may elect to receive shares of common or restricted stock under the Xcel Energy
Executive Annual Incentive Award Plan. Restricted stock vests and settles in equal annual installments over a three-year period.
Xcel Energy reinvests dividends on the restricted stock it holds while restrictions are in place. Restrictions also apply to the
additional shares of restricted stock acquired through dividend reinvestment. If the restricted shares are forfeited, the employee is
not entitled to the dividends on those shares. Restricted stock has a fair value equal to the market trading price of Xcel Energy’s
stock at the grant date.