Xcel Energy 2010 Annual Report Download - page 134

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124
12. Financial Instruments
The estimated Dec. 31 fair values of Xcel Energy’s recorded financial instruments are as follows:
2010 2009
(Thousands of Dollars) Carrying
Amount Fair Value Carrying
Amount Fair Value
N
uclear decommissioning fund .............................
.
$1,350,630 $ 1,350,630 $ 1,248,739 $ 1,248,739
Other investments .........................................
.
9,063 9,063 9,649 9,649
Long-term debt, including current portion ...................
.
9,318,559 10,224,845 8,432,442 9,026,257
The fair value of cash and cash equivalents, notes and accounts receivable and notes and accounts payable are not materially
different from their carrying amounts. The fair value of external nuclear decommissioning fund investments are generally
estimated based on quoted market prices for those or similar investments. The fair values for commingled funds and international
equity funds within the nuclear decommissioning fund take into consideration the value of underlying fund investments. The fair
values of Xcel Energy’s other investments are estimated based on quoted market prices for those or similar investments. The fair
values of Xcel Energy’s long-term debt is estimated based on the quoted market prices for the same or similar issues, or the
current rates for debt of the same remaining maturities and credit quality.
The fair value estimates presented are based on information available to management as of Dec. 31, 2010 and 2009. These fair
value estimates have not been comprehensively revalued for purposes of these consolidated financial statements since that date,
and current estimates of fair values may differ significantly.
Guarantees — Xcel Energy provides guarantees and bond indemnities supporting certain subsidiaries. The guarantees issued by
Xcel Energy guarantee payment or performance by its subsidiaries under specified agreements or transactions. As a result, Xcel
Energy’s exposure under the guarantees is based upon the net liability of the relevant subsidiary under the specified agreements or
transactions. Most of the guarantees issued by Xcel Energy limit the exposure of Xcel Energy to a maximum amount stated in the
guarantees. In connection with the purchase and sale agreements related to Calpine and Lubbock, respectively, Xcel Energy
provides for indemnification by each of the purchaser and the seller, to the counterparty for liabilities incurred as a result of a
breach of a representation or warranty by the indemnifying party. These indemnification obligations generally have a discrete
term and are intended to protect the parties against risks that are difficult to predict or impossible to quantify at the time of the
consummation of a particular transaction. As of Dec. 31, 2010, Xcel Energy has no assets held as collateral related to its
guarantees and bond indemnities.
On Dec. 31, 2010, Xcel Energy had the following amount of guarantees and exposure under these guarantees for which the
triggering event would require performance, including those guarantees related to Seren, UE, and Xcel Energy Argentina, which
are components of discontinued operations:
(Millions of Dollars) Guarantor Guarantee
Amount Current
Exposure Triggering
Event
Guarantee the indemnification obligations of Lubbock under an asset
purchase agreement (g) (h) .........................................
.
SPS $ 87.0 (g) (g)
Guarantee the indemnification obligations of Xcel Energy Wholesale
Group Inc. under a stock purchase agreement (h) ......................
.
Xcel Energy 17.5 $ 17.5 (c)
Guarantee the indemnification obligations of Xcel Energy Argentina Inc.
under a stock purchase agreement (h) ...............................
.
Xcel Energy 14.7
—
(c)
Guarantee the indemnification obligations of Seren under an asset purchase
agreement (h) ...................................................
.
Xcel Energy 12.5
—
(c)
Guarantee the indemnification obligations of Seren under an asset purchase
agreement (h) ...................................................
.
Xcel Energy 10.0
—
(c)
Guarantee of customer loans for the Farm Rewiring Program
(
e
)
...........
.
NSP-Wisconsin 1.0 0.5
(
e
)
Combination of guarantees benefiting various Xcel Energy subsidiaries
(h)
..
.
Xcel Energy 13.0
—
(b)
(
c
)
Total guarantees issued ........................................
.
$ 155.7 $ 18.0
Guarantee performance and payment of surety bonds for itself and its
subsidiaries (f) (i) ................................................
.
Xcel Energy $ 32.5 (a) (d)