The Future in Sight
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THE FUTURE IN SIGHT INVESTOR FACT BOOK NOVEMBER 2020 Xcel Energy is a major U.S. electric and natural gas company, with annual revenues of over $11 billion. Based in Minneapolis, Minn., Xcel Energy operates in eight states. The company provides a Company comprehensive portfolio of energy-related products and services Description to 3.7 million electricity customers and 2.1 million natural gas customers. This book is intended only to be a summary of certain statistical information with respect to Xcel Energy and its subsidiaries. It should be read in conjunction with, and not in lieu of, the company’s reports, including financials and notes to financials filed with the Securities and Exchange Commission (SEC). Refer to Xcel Energy’s 2019 Form 10-K report to the SEC for more information. Some of the sections in this book contain forward-looking statements such as those regarding our 2020 and 2021 earnings per share guidance and assumptions, long-term earnings per share growth, dividend increases, dividend payout ratios, and capital expenditure forecasts, Service Area that involve risks, uncertainties, and assumptions. For a discussion Minnesota Michigan of factors that could affect operating results and cause actual results North Dakota Colorado to differ from those projected, please see the Item 1A – Risk Factors South Dakota New Mexico and Exhibit 99.01 in Xcel Energy’s Form 10-K report to the SEC. Wisconsin Texas The report can be found at xcelenergy.com, Investor Relations. The forward-looking statements contained in this book speak only as of November 9, 2020, and we expressly disclaim any obligation to update any forward-looking information. This summary is not intended for use in connection with any sale, or offer to sell, or solicitation of any offer to buy securities. Inquiries concerning this summary should be directed to: Investor Relations Paul Johnson Vice President, Investor Relations [email protected] 612.215.4535 Emily Ahachich Director, Investor Relations 612.330.6054 [email protected] Darin Norman Content Senior Analyst, Investor Relations Xcel Energy . 2–27 [email protected] Northern States Power Company – Minnesota 612.337.2310 (NSPM) . .. 28–37 xcelenergy.com Northern States Power Company – Wisconsin Our free investor relations app can be found in the app stores. (NSPW) . 38–47 Financial Objectives Public Service Company of Colorado • Long-term EPS growth of 5-7% (PSCo) . 48–57 • Annual dividend increases of 5-7% Southwestern Public Service Company (SPS) . .. 58–66 • Dividend payout ratio target of 60-70% • Maintain senior secured debt credit ratings in the A range Investor Fact Book November 2020 | Xcel Energy Company Overview Xcel Energy Inc. 2019 Ongoing (diluted) EPS of $2 64. (net of -$0 .22 impact from Xcel Energy Inc . and other costs) Northern States Power Company – Minnesota Northern States Power Company – Wisconsin (NSPM) (NSPW) • Territory: MN, ND, and SD • Territory: WI and MI • 2019 Ongoing EPS Contribution: $1 .04 • 2019 Ongoing EPS Contribution: $0 15. • Retail Electric Customers: 1 .5 million • Retail Electric Customers: 0 .3 million • Retail Natural Gas Customers: 0 .5 million • Retail Natural Gas Customers: 0 1. million • Electric Generating Capacity: 7,712 MW • Electric Generating Capacity: 548 MW • Natural Gas Storage Capacity: 17 1. Bcf • Natural Gas Storage Capacity: 3 .8 Bcf • Total Assets: $19 .9 billion • Total Assets: $2 .8 billion Public Service Company of Colorado (PSCo) Southwestern Public Service Company (SPS) • Territory: CO • Territory: TX and NM • 2019 Ongoing EPS Contribution: $1 11. • 2019 Ongoing EPS Contribution: $0 .51 • Retail Electric Customers: 1 .5 million • Retail Electric Customers: 0 .4 million • Retail Natural Gas Customers: 1 .4 million • Electric Generating Capacity: 4,804 MW • Electric Generating Capacity: 5,666 MW • Total Assets: $7 .9 billion • Natural Gas Storage Capacity: 32 .5 Bcf • Total Assets: $19 .0 billion WYCO Development LLC (50/50 joint venture with Colorado WestGas InterState, Inc. Interstate Gas Company that develops and (interstate natural gas pipeline company) leases natural gas pipeline, storage, and compression facilities) The only common equity securities that are publicly traded are common shares of Xcel Energy Inc . The diluted earnings and EPS of each subsidiary discussed here do not represent a direct legal interest in the assets and liabilities allocated to such subsidiary but rather represent a direct interest in our assets and liabilities as a whole . Ongoing diluted EPS for Xcel Energy and by subsidiary is a financial measure not recognized under GAAP . Ongoing diluted EPS is calculated by dividing the net income or loss attributable to the controlling interest of each subsidiary, adjusted for certain items, by the weighted average fully diluted Xcel Energy Inc . common shares outstanding for the period . We use this non-GAAP financial measure to evaluate and provide details of Xcel Energy’s core earnings and underlying performance . We believe this measurement is useful to investors in facilitating period over period comparisons and evaluating or projecting financial results . This non-GAAP financial measure should not be considered as an alternative to measures calculated and reported in accordance with GAAP . 3 Investor Fact Book November 2020 | Xcel Energy Financial Highlights Dollars in Millions, Except Per Share Data 2019 2018 2017 2016 2015 Operating revenues $11,529 $11,537 $11,404 $11,107 $11,024 Operating expenses $9,425 $9,572 $9,181 $8,867 $9,024 GAAP net income $1,372 $1,261 $1,148 $1,123 $984 Ongoing earnings (a) $1,372 $1,261 $1,171 $1,123 $1,064 GAAP diluted EPS $2.64 $2.47 $2.25 $2.21 $1.94 Ongoing diluted EPS (a) $2.64 $2.47 $2.30 $2.21 $2.09 (a) See table below for reconciliation of ongoing earnings to GAAP earnings Reconciliation of Ongoing Earnings to GAAP Earnings 2019 2018 2017 2016 2015 Ongoing earnings $1,372 $1,261 $1,171 $1,123 $1,064 Loss on Monticello LCM/EPU project (a) — — — — ($79) Impact of TCJA (b) — — ($23) — — Total GAAP earnings $1,372 $1,261 $1,148 $1,123 $985 2019 2018 2017 2016 2015 Ongoing diluted EPS $2.64 $2.47 $2.30 $2.21 $2.09 Loss on Monticello LCM/EPU project (a) — — — — (0.16) Impact of TCJA (b) — — (0.05) — — GAAP diluted EPS $2.64 $2.47 $2.25 $2.21 $1.94 Amounts may not sum due to rounding (a) In March 2015, the MPUC approved full recovery, including a return, on $415 million of the project costs, inclusive of AFUDC, but only allow recovery of the remaining $333 million of costs with no return on this portion of the investment for years 2015 and beyond. As a result of this decision, Xcel Energy recorded a pre-tax charge of approximately $129 million, or $79 million net of tax, in the first quarter of 2015. Given the nature of this specific item, it has been excluded from ongoing earnings. (b) Xcel Energy recognized an estimated one-time, non-cash, income tax expense of approximately $23 million in the fourth quarter of 2017 for net excess deferred tax assets which may not be recovered from customers or not attributable to regulated operations, increased valuation allowances, etc. due to the enactment of the TCJA in December 2017. The income tax expense associated with the TCJA enactment has been excluded from Xcel Energy’s 2017 ongoing earnings, given the non-recurring nature of the TCJA’s broad and sweeping reform of the IRC Xcel Energy’s management believes that ongoing earnings reflects management’s performance in operating the company and provides a meaningful representation of the performance of Xcel Energy’s core business. In addition, Xcel Energy’s management uses ongoing earnings internally for financial planning and analysis, for reporting of results to the Board of Directors and when communicating its earnings outlook to analysts and investors. Total Shareholder Return Periods ended December 31, 2019 350% Xcel Energy 330.3% 21-Member Peer Group 300% EEI Investor-Owned Electrics 256.7% S&P 500 250% 230.6% 214.0% 200% 150% 107.7% 100% 73.9% 70.8% 64.4% 62.8% 53.2% 47.0% 45.7% 32.4% 50% 31.5% 25.8% 24.2% 0% One-Year Three-Year Five-Year Ten-Year 4 Investor Fact Book November 2020 | Xcel Energy Ben Fowke Chairman and Chief Executive Officer Ben Fowke is chairman of the board and chief executive officer (CEO) of Xcel Energy. He became president, chairman and CEO for the company in 2011 after serving in the role of president and chief operating officer (COO) since 2009. In that role he had responsibility for overall corporate operations as well as Xcel Energy’s four operating companies, which do business in eight states. Prior to being named president and COO, Fowke held a variety of executive positions at the company, including vice president and chief financial officer (CFO) and vice president and CFO of Energy Markets, where he was responsible for the financial operations of the company’s commodities trading and marketing business unit. Prior to the 2000 merger of Northern States Power Co. and New Century Energies (NCE) to form Xcel Energy, he was a vice president in the NCE Retail business unit. Before joining Xcel Energy, Fowke served 10 years with FPL Group, Inc., where he held various management positions. He has also held positions outside the energy industry with DWG Corp. and KPMG. Fowke serves on the National Infrastructure Advisory Council (NIAC), representing the energy industry. The NIAC is a private-public partnership that advises governmental agencies on how to mitigate risk and ensure the integrity of the country’s critical infrastructure. In recent years, Fowke testified before three Senate committees, providing his expertise on the industry’s cyber security preparedness, on Xcel Energy’s industry- leading Unmanned Aircraft System program and the importance and limitations of battery storage solutions.