Xcel Energy 2013 Annual Report Download - page 151

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Xcel Energy’s contract with Accenture for information technology services extends through Jan. 2017. The contract is cancelable at
Xcel Energy’s option, although there are financial penalties for early termination. Xcel Energy capitalized or expensed $23.7 million,
$18.3 million and $15.2 million associated with the Accenture contract in 2013, 2012 and 2011, respectively.
Committed minimum payments under these obligations are as follows:
(Millions of Dollars) IBM Agreement Accenture Agreement
2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35.5 $ 8.9
2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2 8.8
2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.5 8.8
2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.6 —
2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.1 —
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.5 —
Guarantees and Indemnifications
Xcel Energy Inc. and its subsidiaries provide guarantees and bond indemnities under specified agreements or transactions. The
guarantees and bond indemnities issued by Xcel Energy Inc. guarantee payment or performance by its subsidiaries. As a result, Xcel
Energy Inc.’s exposure under the guarantees and bond indemnities is based upon the net liability of the relevant subsidiary under the
specified agreements or transactions. Most of the guarantees and bond indemnities issued by Xcel Energy Inc. and its subsidiaries
limit the exposure to a maximum amount stated in the guarantees and bond indemnities. As of Dec. 31, 2013 and 2012, Xcel Energy
Inc. and its subsidiaries had no assets held as collateral related to their guarantees, bond indemnities and indemnification agreements.
Guarantees and Surety Bonds
The following table presents guarantees and bond indemnities issued and outstanding as of Dec. 31, 2013:
(Millions of Dollars) Guarantor Guarantee Amount Current Exposure Triggering Event
Guarantee of customer loans for the Farm Rewiring Program (a) . . . . . NSP-Wisconsin $ 1.0 $ 0.3 (e)
Guarantee of the indemnification obligations of Xcel Energy
Services Inc. under the aircraft leases (b) . . . . . . . . . . . . . . . . . . . . . . Xcel Energy Inc. 9.2 — (f)
Guarantee of residual value of assets under the BTM Capital
Corporation Equipment Leasing Agreement (c) . . . . . . . . . . . . . . . . . NSP-Minnesota 9.2 — (g)
Total guarantees issued. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19.4 $ 0.3
Guarantee performance and payment of surety bonds for Xcel Energy
Inc. and its subsidiaries (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Xcel Energy Inc. $ 32.1 (i) (h)
(a) The term of this guarantee expires in 2017, which is the final scheduled repayment date for the loans. As of Dec. 31, 2013, no claims had been made by the
lender.
(b) The term of this guarantee expires in 2017 when the associated leases expire.
(c) The terms of these guarantees expire in 2014 and 2015 when the associated leases expire.
(d) The surety bonds primarily relate to workers compensation benefits and utility projects. The workers compensation bonds are renewed annually and the project
based bonds expire in conjunction with the completion of the related projects.
(e) The debtor becomes the subject of bankruptcy or other insolvency proceedings.
(f) Nonperformance and/or nonpayment.
(g) Actual fair value of leased assets is less than the guaranteed residual value amount at the end of the lease term.
(h) Failure of Xcel Energy Inc. or one of its subsidiaries to perform under the agreement that is the subject of the relevant bond. In addition, per the indemnity
agreement between Xcel Energy Inc. and the various surety companies, the surety companies have the discretion to demand that collateral be posted.
(i) Due to the magnitude of projects associated with the surety bonds, the total current exposure of this indemnification cannot be determined. Xcel Energy Inc.
believes the exposure to be significantly less than the total amount of the outstanding bonds.
Indemnification Agreements
In connection with the sale of certain Texas electric transmission assets to Sharyland, SPS agreed to indemnify the purchaser for losses
arising out of any breach of the representations, warranties and covenants under the related asset purchase agreement and for losses
arising out of certain other matters, including pre-closing liabilities. SPS’ indemnification obligation is capped at $37.1 million, in the
aggregate. The indemnification provisions for most representations and warranties expire in December 2014. The remaining
representations and warranties, which relate to due organization and transaction authorization, survive indefinitely. SPS has recorded a
$0.4 million liability related to this indemnity.