Xcel Energy 2011 Annual Report Download - page 80

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Contractual Obligations and Other Commitments — In addition to its capital expenditure programs, Xcel Energy has contractual
obligations and other commitments that will need to be funded in the future. The following is a summarized table of contractual
obligations and other commercial commitments at Dec. 31, 2011. See the statements of capitalization and additional discussion in
Notes 4 and 13 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 (a) ............................
$ 18,489,722 $ 1,583,410 $
1,431,936
$ 1,323,435 $ 14,150,941
Capital lease obligations .................. 395,540 18,198
36,007
35,111 306,224
Operating leases (b)(c) ...................... 2,984,448 185,690
403,181
397,325 1,998,252
Unconditional purchase obligations ........ 10,585,365 1,866,553
2,519,295
1,875,066 4,324,451
Other long-term obligations, including current
portion (d) ..............................
108,874 28,481
52,244
28,149 -
Payments to vendors in process ............ 23,363 23,363
-
- -
Short-term debt........................... 219,000 219,000
-
- -
Total contractual cash obligations (e) (f) (g) (h) $ 32,806,312 $ 3,924,695 $
4,442,663
$ 3,659,086 $ 20,779,868
(a) Includes interest payments over the terms of the debt. Interest is calculated using the applicable interest rate at Dec. 31, 2011, and outstanding principal for
each investment with the terms ending at each instrument’s maturity.
(b) 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, 2011, the amount that Xcel Energy would have to pay
if it chose to terminate these leases was approximately $85.3 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.
(c) Included in operating lease payments are $159.0 million, $354.1 million, $355.9 million and $1.9 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.
(d) Other long-term obligations relate primarily to amounts associated with technology agreements as well as uncertain tax positions.
(e) Xcel Energy Inc. 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 Inc. 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.
(f) Xcel Energy also has outstanding authority under O&M contracts to purchase up to approximately $1.8 billion of goods and services through the year 2050,
in addition to the amounts disclosed in this table.
(g) In January 2012, contributions of $190.5 million were made across four of Xcel Energy’s pension plans.
(h) Xcel Energy expects to contribute approximately $39.1 million to the postretirement health care plans during 2012.
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 Inc. Board of Directors. Xcel
Energy’s objective is to continue to grow earnings 5 percent to 7 percent and to grow the dividend 2 percent to 4 percent annually,
at least through 2013. Beyond this timeframe, we anticipate that rate base and earnings growth could be moderate. Should this
occur, we anticipate having flexibility to increase the dividend at a faster rate in the future. 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.
In addition, there are certain statutory limitations that could affect dividend levels. Federal law places certain limits on the ability
of public utilities within a holding company system to declare dividends.
Specifically, under the Federal Power Act, a public utility may not pay dividends from any funds properly included in a capital
account. The utility subsidiaries’ dividends may be limited directly or indirectly by state regulatory commissions or bond
indenture covenants.
Xcel Energy Inc.’s Articles of Incorporation place restrictions on the amount of common stock dividends it can pay when
preferred stock is outstanding. Xcel Energy Inc. redeemed all outstanding preferred stock in 2011. In addition, Xcel Energy Inc.’s
Junior Subordinated Indenture places restrictions on its ability to declare and pay dividends in the event Xcel Energy Inc. defers
the payment of all or part of the current and accrued interest on its Junior Subordinated Notes due 2068. As of Dec. 31, 2011,
Xcel Energy Inc. has paid all current and accrued interest.