Xcel Energy 2013 Annual Report Download - page 92

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Credit Ratings — Access to reasonably priced capital markets is dependent in part on credit and ratings. On Feb. 14, 2013, Standard
and Poor’s upgraded SPS senior secured debt by one notch. On Nov. 14, 2013, Fitch Ratings upgraded both PSCo senior unsecured
debt and PSCo senior secured debt by one notch.
On Jan. 31, 2014, Moody’s upgraded each of the following ratings by one notch:
• Xcel Energy Inc. senior unsecured debt;
• NSP-Minnesota senior unsecured debt;
• NSP-Minnesota commercial paper;
• NSP-Wisconsin senior unsecured debt;
• NSP-Wisconsin commercial paper;
• PSCo senior unsecured debt; and
• SPS senior unsecured debt.
Off-Balance-Sheet Arrangements
Xcel Energy does not have any off-balance-sheet arrangements, other than those currently disclosed, that have or are reasonably likely
to have a current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to investors.
Earnings Guidance
Xcel Energy’s 2014 ongoing earnings guidance is $1.90 to $2.05 per share. Key assumptions related to 2014 earnings are detailed
below:
• Constructive outcomes in all rate case and regulatory proceedings.
• Normal weather patterns are experienced for the remainder of the year.
• Weather-adjusted retail electric utility sales are projected to increase by approximately 0.5 percent.
• Weather-adjusted retail firm natural gas sales are projected to decline by approximately 0.0 percent to 2.0 percent.
• Capital rider revenue is projected to increase by $50 million to $60 million over 2013 levels.
• O&M expenses are projected to increase approximately 2 percent to 3 percent over 2013 levels.
• Depreciation expense is projected to increase $30 million to $40 million over 2013 levels, reflecting the proposed
acceleration of the depreciation reserve as part of NSP-Minnesota’s moderation plan in the Minnesota electric rate case. The
moderation plan, if approved by the MPUC, would reduce depreciation expense by approximately $81 million in 2014.
• Property taxes are projected to increase approximately $50 million to $55 million over 2013 levels.
• Interest expense (net of AFUDC — debt) is projected to decrease $0 to $10 million from 2013 levels.
• AFUDC — equity is projected to increase approximately $5 million to $10 million over 2013 levels.
• The ETR is projected to be approximately 34 percent to 36 percent.
• Average common stock and equivalents are projected to be approximately 507 million shares.
Long-Term EPS and Dividend Growth Rate Objectives
Xcel Energy expects to deliver an attractive total return to our shareholders through a combination of earnings growth and dividend
yield, based on the following long-term objectives:
• Deliver long-term annual EPS growth of 4 percent to 6 percent, based on a normalized 2013 EPS of $1.90 per share;
• Deliver annual dividend increases of 4 percent to 6 percent; and
• Maintain senior unsecured debt credit ratings in the BBB+ to A range.
Item 7A — Quantitative and Qualitative Disclosures About Market Risk
See Item 7, incorporated by reference.
Item 8 — Financial Statements and Supplementary Data
See Item 15-1 for an index of financial statements included herein.
See Note 18 to the consolidated financial statements for summarized quarterly financial data.