Slide 1: First Quarter 2020 Earnings Report Presentation
FIRST QUARTER 2020 EARNINGS REPORT PRESENTATION MAY 7, 2020
Slide 2: Safe Harbor
Safe Harbor Except for the historical statements contained in this presentation, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including the 2020 earnings per share (EPS) guidance, long-t
Slide 3: COVID-19 Proactive Response
COVID-19 Proactive Response Safety and Reliability Our Customers Our People Our Communities • Business continuity • No disconnects for • Expanded coverage for • Planning to donate ~$20 plans exercised residential customers COVID-19 medical costs million in corporate giving • Work from home • Entry i
Slide 4: Mankato Energy Center
Mankato Energy Center • Originally proposed as fully-regulated asset; rejected by Minnesota Commission • Acquired as non-regulated asset for $650 million given anticipated long-term value • Opportunistic sale to Southwest Generation for $680 million • Reinforces Xcel Energy position as one of few pu
Slide 5: EPS Results by Operating Company
EPS Results by Operating Company First Quarter Operating Company 2020 2019 PSCo $ 0.24 $ 0.27 NSPM 0.20 0.22 SPS 0.08 0.10 NSPW 0.06 0.05 Equity earnings 0.01 0.01 Regulated utility 0.60 0.65 Holding company and other (0.04) (0.04) Total GAAP and Ongoing diluted EPS $ 0.56 $ 0.61 Amounts may not sum
Slide 6: Quarterly GAAP and Ongoing EPS Change
Quarterly GAAP and Ongoing EPS Change $0.03 ($0.04) $0.03 ($0.03 ) ($0.02 ) ($0.01) ($0.01) $0.61 $0.56 2019 Q1 2020 Q1 EPS EPS * Combined electric and natural gas margins include ~$0.04 of negative weather impacts (post decoupling) ** Includes PTCs and timing of tax reform regulatory decisions, whi
Slide 7: Sales and Customer Data
Sales and Customer Data 2020 Q1 W/A Retail Electric Sales Growth 2020 Q1 YoY Electric Customer Growth (leap year adjusted) 1.7% 1.3% 1.0% 0.8% 0.6% 0.7% -0.3% -0.4% -1.0% -3.3% NSPM NSPW PSCo SPS Xcel Energy NSPM NSPW PSCo SPS Xcel Energy 2020 Q1 W/A Natural Gas Sales Growth 2020 Q1 YoY Natural Gas
Slide 8: March and Preliminary April W/A Electric Sales Growth
March and Preliminary April W/A Electric Sales Growth March April Residential C&I Total Retail 3.2% 0.1% -4.0% -3.0% -9.6% -13.7% Extreme weather variations, wind chill and cloud cover may not be reflected in growth (decline) estimates 7
Slide 9: Retail Sales Scenarios – Full Year 2020
Retail Sales Scenarios – Full Year 2020 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mild Case Impact Mild • Severe impact through May followed by recovery in Q3 • YOY electric sales down 2% (C&I down 4%, residential up ~1%); nat. gas sales flat Moderate • Negative EPS impact up to $0.11 Severe Base Case
Slide 10: O&M Contingency Plans
O&M Contingency Plans O&M contingency planning to offset negative impacts of COVID-19 includes: • Natural attrition and hiring freeze • Employee expenses • Consulting services • Variable/incentive compensation • Certain work activities • O&M now expected to decline 4-5% in 2020 to offset revenue dec
Slide 11: Regulatory Implications
Regulatory Implications • No material delays in regulatory proceedings • Deferred accounting treatment − Can be used for unusual O&M expenses; Commission approval needed − Recovery requested through rate case proceedings • Incremental COVID-19 expenses − Deferred accounting orders in place in Wiscon
Slide 12: Pension Profile
Pension Profile No Changes to Pension Funding Funded Status Targeted Asset Allocations Domestic and Long-duration international fixed income 90% equity securities securities 82% 37% 30% Short-to- intermediate fixed income Alternative securities January 2020 * Current Estimate investments 14% Cash 17
Slide 13: Liquidity Profile
Liquidity Profile Over $4 Billion in Liquidity $ Millions Available Total Entity & Credit Facility Amount Drawn * Cash Liquidity Liquidity Hold Co (credit facility expires in June 2024) $1,250 $107 $1,143 $311 $1,454 NSPM (credit facility expires in June 2024) $500 $10 $490 $52 $542 NSPW (credit fac
Slide 14: Supply Chain Impacts
Supply Chain Impacts • No material impacts through March • Recent wind project disruptions have surfaced and situation remains fluid • Potential delay will likely cause 2 projects to slip into 2021 • Working through challenges to try to complete by end of 2020 • Confident in ability to qualify for 1
Slide 15: SPS New Mexico Electric Rate Case
SPS New Mexico Electric Rate Case Docket # 19-00170-UT • In 2019, SPS filed an electric rate case seeking a revised rate increase of $47 million, based on a ROE of 10.1%, an equity ratio of 54.8% and a historic test year • In January 2020, SPS reached a settlement reflecting the following: – Rate in
Slide 16: SPS Texas Electric Rate Case
SPS Texas Electric Rate Case Docket # 49831 • In March 2020, SPS filed an update to its rate case filed in August 2019, requesting: – Base rate increase of $130 million – ROE of 10.1% and equity ratio of 54.65% – Rate base of $2.6 billion – June 30, 2019 HTY • Seeks a surcharge from September 2019 t
Slide 17: PSCo Colorado Natural Gas Rate Case
PSCo Colorado Natural Gas Rate Case Docket # 20AL-0049G • In February 2020, PSCo filed a natural gas rate case requesting: – Base rate increase of $127 million; net of $18 million transfer from PSIA rider to base rates – ROE of 9.95% and equity ratio of 55.8% – Rate base of ~$2.2 billion – September
Slide 18: 2020 GAAP & Ongoing EPS Guidance: $2.73 – $2.83
2020 GAAP & Ongoing EPS Guidance: $2.73 – $2.83 Earnings Drivers Key Assumptions (as compared to 2019 levels unless noted) Regulatory proceedings Constructive outcomes in all proceedings Weather Normal weather W/A retail electric sales Decline of approximately 4% (Base Case) W/A retail natural gas s
Slide 19: 2020 Highlights
2020 Highlights • Increased dividend 6.2% • Agreed to sell Mankato Energy Center for $680 million; net gain expected to fund corporate giving efforts, including support related to COVID-19 recovery • Enhanced liquidity • Succession planning announced – Bob Frenzel named President and Chief Operating
Slide 20: Appendix
APPENDIX 19
Slide 21: ROE Results – GAAP and Ongoing Earnings
ROE Results – GAAP and Ongoing Earnings GAAP and Ongoing ROE 2019E Rate Base Twelve Months Ended 3/31/2020 SPS 10.55% 16% 8.99% 9.15% 8.44% 9.29% 8.82% NSPM $30 37% PSCo Billion 41% NSPM NSPW PSCo SPS Total Xcel NSPW OpCo Energy 6% 20
Slide 22: Xcel Energy W/A Sales Growth
Xcel Energy W/A Sales Growth Residential C&I Total Retail Electric Natural Gas Electric Natural Gas 2.4% 2.7% 1.5% 1.3% 0.8% 0.4% 0.4% -0.4% -0.5% -0.3% -1.2% -1.0% YTD YTD YTD YTD 2018 2019 2020* 2018 2019 2020* 2018 2019 2020* 2018 2019 2020* * Leap year adjusted Extreme weather variations, wind c
Slide 23: 2020 W/A Electric Sales Growth
2020 W/A Electric Sales Growth NSPM NSPW PSCo SPS Residential C&I Total Retail 2.3% 1.7% 0.5% -0.1% -0.9% -0.7% -0.3% -0.5% -0.4% -0.5% -3.3% -4.3% Leap year adjusted Extreme weather variations, wind chill and cloud cover may not be reflected in growth (decline) estimates 22
Slide 24: Retail Electric Sales and Revenue By Class
Retail Electric Sales and Revenue By Class Residential Small C&I Large C&I Percent of revenue 37% 41% 21% Percent of sales (KWh) 28% (~70% decoupled) 40% (~40% decoupled) 32% (~25% decoupled) 1% sales impact ~$5 million ~$20 million Considerations Highest-margin class Demand charges ~56% of base rev
Slide 25: Retail Electric Sales and Revenue by Sector
Retail Electric Sales and Revenue by Sector Residential Manufacturing Trade, Transport & Utilities Professional & Other Services Education & Health Services Natural Resources & Mining Financial Services & Real Estate Leisure & Hospitality Other Public Administration Information Services Revenue ($)
Slide 26: Retail Electric C&I Demand Charges
Retail Electric C&I Demand Charges % of % of Demand % of Demand Revenue Based on Company C&I Base Revenue Based on Greater of the Current Month Peak or Prior Levels Revenue Current Month Peak NSPM 44% 25% 75% - Greater of current month peak or 50% of peak in past year NSPW 32% 85% 15% - Highest mont
Slide 27: State Stay-at-Home Orders
State Stay-at-Home Orders • Stay-at-home March 27 - May 18 • Stay-at-home March 26 - April 26 • Some outdoor recreation restarted April CO • Safer-at-home in place April 27: MN 18; elective surgeries to begin next week - Phased reopening of retail stores; • Non-essential businesses without non-essen
Slide 28: Natural Gas Sales and Revenue
Natural Gas Sales and Revenue Sales (MMBtu) Revenue ($) 30% Large C&I 30% Large C&I Residential 35% Residential 62% C&I C&I Transport 22% 32% & Other 43% Transport & Other 100 bp sales impact = ~$4 million (pre-tax) 6% 27
Slide 29: 2020 Long-term Debt Financing Plan
2020 Long-term Debt Financing Plan $ Millions Issuer Security Amount Status Tenor Coupon Hold Co Senior Unsecured Bonds ~$600 Completed 10 Yr 3.40% PSCo First Mortgage Bonds ~$750 Pending – Q2 N/A N/A SPS First Mortgage Bonds ~$350 Pending – Q2 N/A N/A NSPW First Mortgage Bonds ~$100 Pending – Q2 N/
Slide 30: © 2020 Xcel Energy Inc.
(2) Xcel Energy’ © 2020 Xcel Energy Inc.