Xcel Energy 2010 Annual Report Download - page 85

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The capital expenditure programs of Xcel Energy are subject to continuing review and modification. Actual utility construction
expenditures may vary from the estimates due to changes in electric and natural gas projected load growth, regulatory decisions,
legislative initiatives, reserve margins, the availability of purchased power, alternative plans for meeting Xcel Energy’s long-term
energy needs, compliance with future environmental requirements and RPS to install emission-control equipment, and merger,
acquisition and divestiture opportunities to support corporate strategies may impact actual capital requirements.
Contractual Obligations and Other Commitments — Xcel Energy has contractual obligations and other commitments that will
need to be funded in the future, in addition to its capital expenditure programs. The following is a summarized table of contractual
obligations and other commercial commitments at Dec. 31, 2010. See the Statements of Capitalization and additional discussion
in Notes 4 and 14 to the consolidated financial statements.
Payments Due by Period
(Thousands of Dollars) Total Less than 1
Year 1 to 3 Years 4 to 5
Years After 5 Years
Long-term debt, principal and interest
payments ............................... $ 18,195,520 $ 598,011 $ 2,283,166 $ 1,400,650 $ 13,913,693
Capital lease obligations ................... 417,166 18,523 34,989 33,412 330,242
Operating leases (a)(b) ...................... 3,150,020 177,327 379,375 406,600 2,186,718
Unconditional purchase obligations ......... 10,010,629 1,860,084 2,311,469 1,676,557 4,162,519
Other long-term obligations (c) .............. 139,823 31,431 53,916 46,359 8,117
Payments to vendors in process ............ 97,168 97,168
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—
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Short-term debt ........................... 466,400 466,400
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—
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Total contractual cash obligations (d) (e) (f) (g) $ 32,476,726 $ 3,248,944 $ 5,062,915 $ 3,563,578 $ 20,601,289
(a) Under some leases, Xcel Energy would have to sell or purchase the property that it leases if it chose to terminate before the scheduled lease expiration date.
Most of Xcel Energy’s railcar, vehicle and equipment and aircraft leases have these terms. At Dec. 31, 2010, the amount that Xcel Energy would have to
have to pay if it chose to terminate these leases was approximately $99.0 million. In addition, at the end of the equipment lease terms, each lease must be
extended, equipment purchased for the greater of the fair value or unamortized value of equipment sold to a third party with Xcel Energy making up any
deficiency between the sales price and the unamortized value.
(b) Included in operating lease payments are $148.9 million, $332.4 million, $362.6 million and $2.1 billion, for the less than 1 year, 1-3 years, 4-5 years and
after 5 years categories, respectively, pertaining to PPAs that were accounted for as operating leases.
(c) Included in other long-term obligations are tax and interest related to unrecognized tax benefits recorded as required by accounting guidance.
(d) Xcel Energy and its subsidiaries have contracts providing for the purchase and delivery of a significant portion of its current coal, nuclear fuel and natural
gas requirements. Additionally, the utility subsidiaries of Xcel Energy have entered into agreements with utilities and other energy suppliers for purchased
power to meet system load and energy requirements, replace generation from company-owned units under maintenance and during outages, and meet
operating reserve obligations. Certain contractual purchase obligations are adjusted on indices. The effects of price changes are mitigated through cost of
energy adjustment mechanisms.
(e) Xcel Energy also has outstanding authority under contracts and blanket purchase orders to purchase up to approximately $2.1 billion of goods and services
through the year 2050, in addition to the amounts disclosed in this table and in the forecasted capital expenditures.
(f) In January 2011, Xcel Energy contributed $134 million, allocated across three of its pension plans. At this time, no additional contributions are planned for
2011. Projected pension funding contributions for 2010, which will be dependent on several factors including realized asset performance, future discount
rate, IRS and legislative initiatives as well as other actuarial assumptions, are estimated to range between $150 million to $175 million.
(g) Xcel Energy expects to contribute approximately $40.5 million to the postretirement health care plans during 2011.
Common Stock Dividends — Future dividend levels will be dependent on Xcel Energy’s results of operations, financial position,
cash flows, reinvestment opportunities and other factors, and will be evaluated by the Xcel Energy Board of Directors. Xcel
Energy’s objective is to increase the annual dividend in the range of 2 percent to 4 percent per year. Xcel Energy’s dividend
policy balances:
● Projected cash generation from utility operations;
● Projected capital investment in the utility businesses;
● A reasonable rate of return on shareholder investment; and
● The impact on Xcel Energy’s capital structure and credit ratings.