V Xcel Energy® 2023 YEAR END EARNINGS REPORT PRESENTATION January 25, 2024 Fi © 2024 Xcel Energy 1 Safe Harbor 2 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 those relating to 2024 EPS guidance, long-term EPS and dividend growth rate objectives, future sales, future expenses, future tax rates, future operating perform ...

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1 — Financial Statements (unaudited)](index=5&type=section&id=Item%201%20%E2%80%94%20Financial%20Statements%20(unaudited)) Presents Xcel Energy Inc.'s unaudited consolidated financial statements and notes for Q3 and YTD September 30, 2023 and 2022 [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated Statements of Income (Unaudited) | Metric | Three Months Ended Sept. 30, 2023 (Millions) | Three Months Ended Sept. 30, 2022 (Millions) | Nine Months Ended Sept. 30, 2023 (Millions) | Nine Months Ended Sept. 30, 2022 (Millions) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Total operating revenues | $3,662 | $4,082 | $10,764 | $11,257 | | Total operating expenses | $2,747 | $3,158 | $8,858 | $9,354 | | Operating income | $915 | $924 | $1,906 | $1,903 | | Income before income taxes | $696 | $693 | $1,261 | $1,277 | | Net income | $656 | $649 | $1,362 | $1,357 | | Diluted Earnings per average common share | $1.19 | $1.18 | $2.47 | $2.48 | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income (Unaudited) | Metric | Three Months Ended Sept. 30, 2023 (Millions) | Three Months Ended Sept. 30, 2022 (Millions) | Nine Months Ended Sept. 30, 2023 (Millions) | Nine Months Ended Sept. 30, 2022 (Millions) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Net income | $656 | $649 | $1,362 | $1,357 | | Total other comprehensive income | $4 | $12 | $15 | $32 | | Total comprehensive income | $660 | $661 | $1,377 | $1,389 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (Unaudited) | Activity | Nine Months Ended Sept. 30, 2023 (Millions) | Nine Months Ended Sept. 30, 2022 (Millions) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net cash provided by operating activities | $4,353 | $3,167 | | Net cash used in investing activities | $(4,292) | $(3,321) | | Net cash provided by financing activities | $422 | $105 | | Net change in cash, cash equivalents and restricted cash | $483 | $(49) | | Cash, cash equivalents and restricted cash at end of period | $594 | $117 | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (Unaudited) | Metric | Sept. 30, 2023 (Millions) | Dec. 31, 2022 (Millions) | | :--------------------------------- | :------------------------ | :----------------------- | | Total current assets | $4,402 | $5,144 | | Property, plant and equipment, net | $50,613 | $48,253 | | Total assets | $62,870 | $61,188 | | Total current liabilities | $5,073 | $6,078 | | Total deferred credits and other liabilities | $15,578 | $15,622 | | Long-term debt | $24,910 | $22,813 | | Total common stockholders' equity | $17,309 | $16,675 | | Total liabilities and equity | $62,870 | $61,188 | [Consolidated Statements of Common Stockholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Common%20Stockholders'%20Equity) Common Stockholders' Equity Changes (Unaudited) | Metric | Sept. 30, 2023 (Millions) | Dec. 31, 2022 (Millions) | | :--------------------------------- | :------------------------ | :----------------------- | | Balance at beginning of period (Dec. 31, 2022 for 9M 2023) | $16,675 | $15,612 (Dec. 31, 2021) | | Net income | $1,362 | $1,357 | | Other comprehensive income | $15 | $32 | | Dividends declared on common stock | $(859) | $(798) | | Issuances of common stock | $113 | $185 | | Share-based compensation | $3 | $(4) | | Balance at Sept. 30, 2023 | $17,309 | $16,384 (Sept. 30, 2022) | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Summary of Significant Accounting Policies](index=11&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) - The significant accounting policies are consistent with those outlined in the 2022 Annual Report on Form 10-K and are incorporated by reference[30](index=30&type=chunk) [2. Accounting Pronouncements](index=11&type=section&id=2.%20Accounting%20Pronouncements) - No material impact from recent or newly issued accounting pronouncements on Xcel Energy's consolidated financial statements as of September 30, 2023[31](index=31&type=chunk) [3. Selected Balance Sheet Data](index=11&type=section&id=3.%20Selected%20Balance%20Sheet%20Data) Selected Balance Sheet Data (Millions of Dollars) | Metric | Sept. 30, 2023 | Dec. 31, 2022 | | :--------------------------------- | :------------- | :------------ | | Accounts receivable, net | $1,220 | $1,373 | | Property, plant and equipment, net | $50,613 | $48,253 | | Inventories | $688 | $803 | [4. Borrowings and Other Financing Instruments](index=11&type=section&id=4.%20Borrowings%20and%20Other%20Financing%20Instruments) Short-Term Borrowings (Commercial Paper and Term Loan) | Metric | Three Months Ended Sept. 30, 2023 (Millions) | Year Ended Dec. 31, 2022 (Millions) | | :--------------------------------- | :------------------------------------------ | :---------------------------------- | | Borrowing limit | $3,550 | $3,550 | | Amount outstanding at period end | $0 | $813 | | Weighted average interest rate, computed on a daily basis | 5.35% | 1.47% | Committed Revolving Credit Facilities Available (Millions of Dollars) | Entity | Credit Facility | Drawn | Available | | :----------------- | :-------------- | :---- | :-------- | | Xcel Energy Inc. | $1,500 | $0 | $1,500 | | PSCo | $700 | $29 | $671 | | NSP-Minnesota | $700 | $15 | $685 | | SPS | $500 | $2 | $498 | | NSP-Wisconsin | $150 | $0 | $150 | | **Total** | **$3,550** | **$46** | **$3,504** | - Xcel Energy Inc issued **$800 million of 5.45% Senior Notes** due August 15, 2033, while subsidiaries issued significant first mortgage bonds with maturities in 2053 and coupons from 5.10% to 6.00%[43](index=43&type=chunk) - Equity issuances through the ATM program totaled **0.9 million shares** for approximately **$62 million in net proceeds** during the nine months ended Sept 30, 2023, with **$88 million remaining available**[40](index=40&type=chunk)[44](index=44&type=chunk) - Equity issued through the DRIP and benefits programs amounted to **$78 million** for the nine months ended Sept 30, 2023, up from **$59 million** in the prior year[41](index=41&type=chunk) [5. Revenues](index=13&type=section&id=5.%20Revenues) Total Operating Revenues by Segment (Millions of Dollars) | Segment | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Electric | $3,387 | $3,699 | $8,751 | $9,255 | | Natural gas | $245 | $357 | $1,926 | $1,923 | | Other | $30 | $26 | $87 | $79 | | **Total operating revenues** | **$3,662** | **$4,082** | **$10,764** | **$11,257** | [6. Income Taxes](index=15&type=section&id=6.%20Income%20Taxes) Effective Income Tax Rate (ETR) | Metric | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Federal statutory rate | 21.0% | 21.0% | 21.0% | 21.0% | | State tax (net of federal tax effect) | 5.0% | 4.9% | 4.9% | 4.9% | | Wind PTCs | (13.8)% | (12.3)% | (27.3)% | (25.2)% | | Plant regulatory differences | (5.3)% | (5.8)% | (5.5)% | (5.5)% | | **Effective income tax rate** | **5.7%** | **6.3%** | **(8.0)%** | **(6.3)%** | - The **negative effective tax rate** for the nine months ended Sept 30, 2023, is primarily due to Wind Production Tax Credits (PTCs) and plant regulatory differences, which are largely credited to customers and do not materially impact net income[46](index=46&type=chunk) [7. Earnings Per Share](index=15&type=section&id=7.%20Earnings%20Per%20Share) Common Shares Outstanding for EPS Calculation (Millions) | Metric | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Basic | 552 | 548 | 551 | 546 | | Diluted | 552 | 548 | 552 | 546 | - Diluted common shares outstanding included common stock equivalents of **0.3 million** for the three months ended Sept 30, 2023 and 2022, and **0.2 million** and **0.3 million** for the nine months ended Sept 30, 2023 and 2022, respectively[50](index=50&type=chunk) [8. Fair Value of Financial Assets and Liabilities](index=15&type=section&id=8.%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (significant unobservable inputs)[54](index=54&type=chunk) Nuclear Decommissioning Fund Fair Value (Millions of Dollars) | Asset Type | Sept. 30, 2023 (Total Fair Value) | Dec. 31, 2022 (Total Fair Value) | | :--------------------------------- | :---------------------------------- | :--------------------------------- | | Cash equivalents | $27 | $29 | | Commingled funds | $1,059 | $1,178 | | Debt securities | $726 | $675 | | Equity securities | $1,202 | $1,000 | | **Total** | **$3,014** | **$2,882** | - Xcel Energy uses derivative instruments (forwards, futures, swaps, options) for trading and to manage interest rate and commodity price risks, with FTRs classified as Level 3 derivatives due to limited observability[60](index=60&type=chunk)[68](index=68&type=chunk)[75](index=75&type=chunk) Derivative Assets and Liabilities (Netting Adjusted, Millions of Dollars) | Category | Sept. 30, 2023 (Total) | Dec. 31, 2022 (Total) | | :--------------------------------- | :--------------------- | :-------------------- | | Current derivative assets | $146 | $279 | | Noncurrent derivative assets | $72 | $93 | | Current derivative liabilities | $59 | $76 | | Noncurrent derivative liabilities | $83 | $113 | Fair Value of Long-Term Debt (Millions of Dollars) | Metric | Sept. 30, 2023 (Carrying Amount) | Sept. 30, 2023 (Fair Value) | Dec. 31, 2022 (Carrying Amount) | Dec. 31, 2022 (Fair Value) | | :--------------------------------- | :------------------------------- | :-------------------------- | :------------------------------ | :------------------------- | | Long-term debt, including current portion | $25,961 | $21,484 | $23,964 | $20,897 | [9. Benefit Plans and Other Postretirement Benefits](index=25&type=section&id=9.%20Benefit%20Plans%20and%20Other%20Postretirement%20Benefits) Net Periodic Benefit Cost (Credit) (Millions of Dollars) | Metric | Three Months Ended Sept. 30, 2023 (Pension) | Three Months Ended Sept. 30, 2022 (Pension) | Nine Months Ended Sept. 30, 2023 (Pension) | Nine Months Ended Sept. 30, 2022 (Pension) | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Net periodic benefit cost (credit) | $11 | $74 | $33 | $109 | | Net benefit cost (credit) recognized for financial reporting | $22 | $37 | $58 | $79 | - In January 2023, contributions totaling **$50 million** were made across Xcel Energy's pension plans, with no additional contributions expected for 2023[95](index=95&type=chunk) [10. Commitments and Contingencies](index=26&type=section&id=10.%20Commitments%20and%20Contingencies) - Xcel Energy is involved in various legal proceedings, including gas trading litigation (Arandell Corp), Comanche Unit 3 litigation, and Marshall Wildfire litigation, with management accruing for probable and estimable losses[96](index=96&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - In the Comanche Unit 3 litigation, PSCo recognized a **$34 million loss** in Q3 2023 following a jury verdict awarding CORE lost power damages, which PSCo intends to appeal[108](index=108&type=chunk) - Regarding the Marshall Fire, PSCo disputes its power lines caused the second ignition, and while potential damages could exceed **$500 million** in insurance coverage, the amount or range of possible losses is currently inestimable[103](index=103&type=chunk)[111](index=111&type=chunk) - Environmental commitments include managing coal ash, complying with the Federal Clean Water Act (estimated **$50 million capital expenditures**), and mitigating tritium release, with costs generally expected to be recoverable through regulatory mechanisms[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) Total Operating Lease Expense (Millions of Dollars) | Metric | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | PPA capacity payments | $61 | $59 | $182 | $182 | | Other operating leases | $11 | $8 | $35 | $28 | | **Total operating lease expense** | **$72** | **$67** | **$217** | **$210** | - Xcel Energy's utility subsidiaries had approximately **4,053 MW of capacity** under long-term PPAs with variable interest entities as of Sept 30, 2023, with expiration dates through 2041[137](index=137&type=chunk) [11. Other Comprehensive Loss](index=32&type=section&id=11.%20Other%20Comprehensive%20Loss) Changes in Accumulated Other Comprehensive Loss (Net of Tax, Millions of Dollars) | Metric | Sept. 30, 2023 (Total) | Sept. 30, 2022 (Total) | | :--------------------------------- | :--------------------- | :--------------------- | | Accumulated other comprehensive loss at Jan. 1 | $(93) | $(123) | | Other comprehensive gain before reclassifications | $11 | $26 | | Losses reclassified from net accumulated other comprehensive loss | $4 | $6 | | **Accumulated other comprehensive loss at Sept. 30** | **$(78)** | **$(91)** | [12. Segment Information](index=33&type=section&id=12.%20Segment%20Information) - Xcel Energy operates through Regulated Electric, Regulated Natural Gas, and All Other segments, with performance evaluated based on profit or loss from regulated rate recovery[143](index=143&type=chunk)[144](index=144&type=chunk)[156](index=156&type=chunk)[147](index=147&type=chunk) Segment Net Income (Loss) (Millions of Dollars) | Segment | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Regulated Electric (Net income) | $706 | $697 | $1,352 | $1,312 | | Regulated Natural Gas (Net loss/income) | $(21) | $(7) | $116 | $148 | | All Other (Net loss) | $(29) | $(41) | $(106) | $(103) | | **Consolidated Total (Net income)** | **$656** | **$649** | **$1,362** | **$1,357** | [Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of Xcel Energy's financial performance, cash flows, regulatory matters, and future outlook [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) - Xcel Energy uses non-GAAP measures like 'ongoing earnings' and 'ongoing diluted EPS' to evaluate core earnings and underlying performance, adjusting GAAP earnings for non-recurring items[155](index=155&type=chunk)[161](index=161&type=chunk) Reconciliation of GAAP Net Income to Ongoing Earnings (Millions of Dollars) | Metric | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | GAAP net income | $656 | $649 | $1,362 | $1,357 | | Loss on Comanche Unit 3 litigation | $34 | $0 | $34 | $0 | | Less: tax effect of adjustment | $(8) | $0 | $(8) | $0 | | **Ongoing earnings** | **$682** | **$649** | **$1,388** | **$1,357** | [Results of Operations](index=38&type=section&id=Results%20of%20Operations) [Summary of Earnings](index=38&type=section&id=Summary%20of%20Earnings) Summarized Diluted EPS for Xcel Energy | Subsidiary/Segment | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | PSCo | $0.41 | $0.45 | $0.97 | $1.02 | | NSP-Minnesota | $0.47 | $0.49 | $0.95 | $0.94 | | SPS | $0.30 | $0.25 | $0.55 | $0.52 | | NSP-Wisconsin | $0.06 | $0.07 | $0.18 | $0.19 | | Regulated utility total | $1.25 | $1.28 | $2.68 | $2.69 | | Xcel Energy Inc. and Other | $(0.06) | $(0.09) | $(0.22) | $(0.21) | | **GAAP diluted EPS** | **$1.19** | **$1.18** | **$2.47** | **$2.48** | | Loss on Comanche Unit 3 litigation | $0.05 | $0.00 | $0.05 | $0.00 | | **Ongoing diluted EPS** | **$1.23** | **$1.18** | **$2.52** | **$2.48** | - Xcel Energy's Q3 2023 **ongoing diluted EPS increased to $1.23** from $1.18 YoY, driven by infrastructure investment recovery, higher sales, demand, and lower O&M, partially offset by increased interest charges and depreciation[165](index=165&type=chunk) [Changes in GAAP and Ongoing Diluted EPS](index=40&type=section&id=Changes%20in%20GAAP%20and%20Ongoing%20Diluted%20EPS) Components Contributing to Changes in 2023 EPS vs. 2022 (Diluted Earnings Per Share) | Component of Change | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | | :--------------------------------- | :-------------------------- | :------------------------- | | GAAP and ongoing diluted EPS — 2022 | $1.18 | $2.48 | | Lower (higher) natural gas revenues, net of cost of natural gas sold and transported | $(0.01) | $0.07 | | Lower conservation and demand side management expenses | $0.02 | $0.06 | | Higher other income (expense) | $0.02 | $0.05 | | Lower taxes (other than income taxes) | $0.01 | $0.05 | | Lower effective tax rate (ETR) | $0.01 | $0.03 | | Higher depreciation and amortization | $(0.02) | $0.00 | | Higher interest charges | $(0.03) | $(0.11) | | Higher (lower) electric revenues, net of electric fuel and purchased power | $0.01 | $(0.08) | | Lower (higher) O&M expenses | $0.03 | $(0.05) | | Loss on Comanche Unit 3 litigation | $(0.05) | $(0.05) | | Other, net | $0.02 | $0.02 | | **GAAP diluted EPS — 2023** | **$1.19** | **$2.47** | | Loss on Comanche Unit 3 litigation | $0.05 | $0.05 | | **Ongoing diluted EPS — 2023** | **$1.23** | **$2.52** | [Statement of Income Analysis](index=40&type=section&id=Statement%20of%20Income%20Analysis) [Estimated Impact of Temperature Changes on Regulated Earnings](index=40&type=section&id=Estimated%20Impact%20of%20Temperature%20Changes%20on%20Regulated%20Earnings) Estimated Impact of Temperature Variations on EPS vs. Normal Weather (Dollars) | Metric | Three Months Ended Sept. 30, 2023 vs. Normal | Three Months Ended Sept. 30, 2022 vs. Normal | Nine Months Ended Sept. 30, 2023 vs. Normal | Nine Months Ended Sept. 30, 2022 vs. Normal | | :--------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Retail electric | $0.032 | $0.074 | $0.035 | $0.123 | | Decoupling and sales true-up | $0.007 | $(0.032) | $(0.015) | $(0.055) | | Electric total | $0.039 | $0.042 | $0.020 | $0.068 | | Firm natural gas | $(0.002) | $0.000 | $0.024 | $0.019 | | Decoupling | $0.001 | $0.000 | $0.001 | $0.000 | | Gas total | $(0.001) | $0.000 | $0.025 | $0.019 | | **Total** | **$0.038** | **$0.042** | **$0.045** | **$0.087** | - Weather deviations can affect financial performance, but decoupling mechanisms in Colorado (expired Sept 2023) and sales true-up in Minnesota largely mitigate these impacts for electric utilities[174](index=174&type=chunk) [Sales](index=40&type=section&id=Sales) Weather-Normalized Retail Electric Sales Growth (Decline) - Year-to-Date 2023 vs. 2022 | Entity | Residential | C&I | Total Retail Electric Sales | | :----------------- | :---------- | :---- | :-------------------------- | | PSCo | 1.4% | (0.2)% | 0.3% | | NSP Minnesota | 0.6% | (0.9)% | (0.4)% | | SPS | 0.9% | 5.7% | 4.7% | | NSP-Wisconsin | (0.5)% | (0.2)% | (0.3)% | | **Xcel Energy** | **0.8%** | **1.2%** | **1.1%** | Weather-Normalized Firm Natural Gas Sales Growth (Decline) - Year-to-Date 2023 vs. 2022 | Entity | Firm Natural Gas Sales | | :----------------- | :--------------------- | | PSCo | 1.6% | | NSP Minnesota | (1.4)% | | SPS | N/A | | NSP-Wisconsin | (1.9)% | | **Xcel Energy** | **0.4%** | - Natural gas sales reflect lower use per residential customer across all jurisdictions, partially offset by increased C&I use per customer in PSCo, alongside residential and C&I customer growth of **1.2%** and **0.7%**, respectively[181](index=181&type=chunk) [Electric Margin](index=42&type=section&id=Electric%20Margin) Electric Margin (Millions of Dollars) | Metric | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Electric revenues | $3,387 | $3,699 | $8,751 | $9,255 | | Electric fuel and purchased power | $(1,181) | $(1,497) | $(3,328) | $(3,772) | | **Electric margin** | **$2,206** | **$2,202** | **$5,423** | **$5,483** | - Electric margin increased by **$4 million** for the three months ended Sept 30, 2023, but decreased by **$60 million** for the nine months ended Sept 30, 2023, primarily due to the Texas rate case surcharge recognition in 2022 and lower PTCs flowed back to customers, partially offset by non-fuel riders and sales/demand growth[183](index=183&type=chunk) [Natural Gas Margin](index=42&type=section&id=Natural%20Gas%20Margin) Natural Gas Margin (Millions of Dollars) | Metric | Three Months Ended Sept. 30, 2023 | Three Months Ended Sept. 30, 2022 | Nine Months Ended Sept. 30, 2023 | Nine Months Ended Sept. 30, 2022 | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Natural gas revenues | $245 | $357 | $1,926 | $1,923 | | Cost of natural gas sold and transported | $(70) | $(173) | $(1,084) | $(1,134) | | **Natural gas margin** | **$175** | **$184** | **$842** | **$789** | - Natural gas margin decreased by **$9 million** for the three months ended Sept 30, 2023, but increased by **$53 million** for the nine months ended Sept 30, 2023, primarily due to regulatory rate outcomes in Colorado and Wisconsin[185](index=185&type=chunk) [Non-Fuel Operating Expenses and Other Items](index=44&type=section&id=Non-Fuel%20Operating%20Expenses%20and%20Other%20Items) - O&M expenses decreased by **$25 million** in Q3 2023 but increased by **$37 million** year-to-date, mainly due to higher bad debt, inflationary pressures, and unplanned maintenance, partially offset by deferred costs from Texas Electric Rate Cases[188](index=188&type=chunk) - Depreciation and amortization increased by **$11 million** in Q3 2023 but remained flat year-to-date, reflecting system expansion offset by deferred depreciation from the Texas Electric Rate Case and life extensions from the Minnesota Electric Rate Case[189](index=189&type=chunk) - Taxes (other than income taxes) decreased by **$5 million** in Q3 2023 and **$34 million** year-to-date, primarily due to Minnesota Electric Rate Case deferrals and Texas Electric Rate Case deferred cost recognition, partially offset by increased Colorado property tax[190](index=190&type=chunk) - Other income (expense) increased by **$18 million** in Q3 2023 and **$39 million** year-to-date, largely from interest on cash balances and rabbi trust performance[191](index=191&type=chunk) - Interest charges increased by **$25 million** in Q3 2023 and **$85 million** year-to-date, driven by higher interest rates and increased long-term debt, partially offset by deferred costs from the Texas Electric Rate Case[192](index=192&type=chunk) [Public Utility Regulation and Other](index=44&type=section&id=Public%20Utility%20Regulation%20and%20Other) [NSP-Minnesota](index=44&type=section&id=NSP-Minnesota) - The MPUC approved a three-year electric rate increase of approximately **$316 million** for 2022-2024, based on a **ROE of 9.25%** and an equity ratio of **52.5%**, with NSP-Minnesota planning to appeal certain aspects[196](index=196&type=chunk) - NSP-Minnesota plans to file an annual natural gas rate case in November 2023[197](index=197&type=chunk) - NSP-Minnesota withdrew its **$320 million** electric vehicle capital investment request, which the MPUC approved in August 2023[198](index=198&type=chunk) [NSP-Wisconsin](index=44&type=section&id=NSP-Wisconsin) - NSP-Wisconsin filed a rate case seeking an electric increase of **$40 million (4.8%)** and a natural gas increase of **$9 million (5.3%)**, while PSCW Staff recommended a **$3 million electric base rate decrease** and a **$5 million natural gas rate increase**[200](index=200&type=chunk)[203](index=203&type=chunk) - NSP-Wisconsin revised its requested rate increase to **$25 million** for electric and **$7 million** for natural gas, with a PSCW decision anticipated in late Q4 2023[204](index=204&type=chunk)[205](index=205&type=chunk) [NSP System](index=46&type=section&id=NSP%20System) - NSP-Minnesota and NSP-Wisconsin are acquiring resources to meet IRP needs, including MPUC approval for **250 MW self-build solar** and a **100 MW solar PPA**, and initiating processes for **800 MW firm dispatchable resources** and **1,200 MW wind development assets**[206](index=206&type=chunk)[212](index=212&type=chunk) [PSCo](index=46&type=section&id=PSCo) - The CPUC approved a settlement for PSCo's Colorado electric rate case, resulting in a retail revenue increase of **$95 million (2.96%)**, a **9.3% ROE**, and termination of the revenue decoupling pilot[208](index=208&type=chunk)[213](index=213&type=chunk) - PSCo's Preferred Plan for the Colorado Resource Plan aims for coal exit by end of 2030, doubling wind and solar, and over **80% greenhouse gas emission reduction** from 2005 levels, with expected investments of **$7.9 billion in generation** and **$2.9 billion in transmission**[209](index=209&type=chunk)[210](index=210&type=chunk) - Colorado Senate Bill 23-291 passed, requiring new rules for natural gas and electric fuel incentive mechanisms, natural gas planning, and non-recovery of certain expenses, with CPUC rulemaking expected by Jan 1, 2025[215](index=215&type=chunk) [SPS](index=48&type=section&id=SPS) - The NMPRC approved a settlement for SPS's New Mexico electric rate case, including a **$33 million base rate revenue increase**, a **9.5% ROE**, and acceleration of Tolk coal plant depreciation to 2028[216](index=216&type=chunk)[217](index=217&type=chunk)[226](index=226&type=chunk) - SPS reached a settlement in principle for its Texas electric rate case, seeking a **$158 million base rate revenue increase**, with a PUCT decision expected in Q1 2024[218](index=218&type=chunk)[219](index=219&type=chunk) - SPS filed its IRP with the NMPRC, projecting a total resource need of **5,300 MW to 10,200 MW by 2030**, and expects to issue an RFP for new generation in mid-2024[221](index=221&type=chunk) [Other](index=48&type=section&id=Other) [Supply Chain](index=48&type=section&id=Supply%20Chain) - Supply chain disruptions, exacerbated by inflation and labor shortages, are impacting electric meter and transformer availability, potentially delaying deployment schedules into 2025 and new customer connections[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - The U.S Department of Commerce's anti-circumvention investigation concluded that CSPV solar panels from certain countries will be subject to incremental tariffs (**50%-250%**), though an interim stay is in effect until June 2024[225](index=225&type=chunk)[226](index=226&type=chunk) [New Technology and Government Grants](index=50&type=section&id=New%20Technology%20and%20Government%20Grants) - Xcel Energy is part of the Heartland Hydrogen Hub, selected by the DOE for up to **$925 million** in award negotiations, with Xcel Energy proposing up to **$2 billion investment** over a decade for clean hydrogen projects[229](index=229&type=chunk) - The DOE awarded Xcel Energy a **$70 million grant** for two **10 MW, 100-hour battery pilots** with Form Energy at retiring coal plant sites, aiming to reduce project costs for customers[230](index=230&type=chunk) - Xcel Energy received a **$100 million DOE grant**, matched by **$140 million investment**, for wildfire mitigation and grid resiliency projects, including fire-resistant coatings, equipment safety features, undergrounding circuits, and enhanced vegetation management[231](index=231&type=chunk) - Xcel Energy and other utilities received a **$464 million DOE grant** for five JTIQ projects to construct high-voltage transmission lines, improving reliability and resolving transmission system constraints[232](index=232&type=chunk) [Critical Accounting Policies and Estimates](index=50&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The outcome of legal proceedings and claims related to the Marshall Fire is uncertain, and the amount or range of possible losses cannot be reasonably estimated at this time[233](index=233&type=chunk) [Environmental](index=50&type=section&id=Environmental) - The EPA proposed new rules for power plant greenhouse gas emissions (Clean Air Act Section 111) and legacy coal combustion residuals (CCR Rule), with uncertain financial impacts but expected cost recovery through rates[234](index=234&type=chunk)[235](index=235&type=chunk)[237](index=237&type=chunk) - The EPA proposed designating certain PFAS as 'hazardous substances' under CERCLA and establishing drinking water standards, which could lead to new investigation and cleanup obligations, with uncertain costs[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - The EPA proposed more stringent Effluent Limitations Guidelines and Standards for steam generating coal plants under the Clean Water Act, with uncertain impacts until final rules are published[242](index=242&type=chunk) [Derivatives, Risk Management and Market Risk](index=52&type=section&id=Derivatives,%20Risk%20Management%20and%20Market%20Risk) - Xcel Energy manages commodity price risk through physical purchase/sales contracts and financial derivatives, with risk management policies approved by its committee[244](index=244&type=chunk)[245](index=245&type=chunk)[249](index=249&type=chunk) Fair Value of Net Commodity Trading Contracts (Millions of Dollars) | Metric | Sept. 30, 2023 | Sept. 30, 2022 | | :--------------------------------- | :------------- | :------------- | | Fair value of commodity trading net contracts outstanding at Jan. 1 | $(33) | $(33) | | Contracts realized or settled during the period | $1 | $(11) | | Commodity trading contract additions and changes during the period | $33 | $31 | | **Fair value of commodity trading net contracts outstanding at Sept. 30** | **$1** | **$(13)** | - A **10% increase in commodity prices** would increase credit exposure by **$32 million** at Sept 30, 2023, while a **10% decrease** would decrease it by **$28 million**[257](index=257&type=chunk) - NSP-Minnesota has contracted for nuclear material requirements through 2025 and has entered into additional contracts to cover potential supply interruptions from Russia through 2030[251](index=251&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash Flows](index=54&type=section&id=Cash%20Flows) Cash Flow Summary (Nine Months Ended Sept. 30, Millions of Dollars) | Activity | 2023 | 2022 | | :--------------------------------- | :----- | :----- | | Cash provided by operating activities | $4,353 | $3,167 | | Cash used in investing activities | $(4,292) | $(3,321) | | Cash provided by financing activities | $422 | $105 | - Operating cash flows increased by **$1,186 million**, primarily due to continued collections of deferred net natural gas, fuel, and purchased energy costs, and decreased natural gas prices[259](index=259&type=chunk) - Investing cash flows increased by **$971 million**, mainly due to increased capital expenditures for system expansion[260](index=260&type=chunk) - Financing cash flows increased by **$317 million**, largely related to the amount and timing of debt issuances and repayments[261](index=261&type=chunk) [Capital Requirements](index=56&type=section&id=Capital%20Requirements) - Xcel Energy expects to meet future financing requirements by issuing short-term debt, long-term debt, common stock, hybrid, and other securities to maintain desired capitalization ratios[263](index=263&type=chunk) [Capital Sources](index=56&type=section&id=Capital%20Sources) Committed Credit Facilities Available (Millions of Dollars) as of Oct. 23, 2023 | Entity | Credit Facility | Drawn | Available | Cash | Liquidity | | :----------------- | :-------------- | :---- | :-------- | :--- | :-------- | | Xcel Energy Inc. | $1,500 | $0 | $1,500 | $19 | $1,519 | | PSCo | $700 | $239 | $461 | $3 | $464 | | NSP Minnesota | $700 | $15 | $685 | $8 | $693 | | SPS | $500 | $0 | $500 | $18 | $518 | | NSP-Wisconsin | $150 | $0 | $150 | $8 | $158 | | **Total** | **$3,550** | **$254** | **$3,296** | **$56** | **$3,352** | - Xcel Energy's utility subsidiaries participate in a FERC-approved money pool arrangement for short-term investments and borrowings[267](index=267&type=chunk)[268](index=268&type=chunk) [Capital Expenditures](index=56&type=section&id=Capital%20Expenditures) Base Capital Forecast by Regulated Utility (Millions of Dollars) 2024-2028 | Regulated Utility | 2024 | 2025 | 2026 | 2027 | 2028 | Total | | :--------------------------------- | :--- | :--- | :--- | :--- | :--- | :---- | | PSCo | $2,580 | $2,940 | $3,030 | $3,070 | $2,640 | $14,260 | | NSP Minnesota | $2,660 | $2,970 | $2,380 | $2,500 | $2,180 | $12,690 | | SPS | $910 | $780 | $660 | $870 | $830 | $4,050 | | NSP-Wisconsin | $570 | $600 | $570 | $600 | $650 | $2,990 | | Other | $(20) | $0 | $10 | $10 | $10 | $10 | | **Total base capital expenditures** | **$6,700** | **$7,290** | **$6,650** | **$7,050** | **$6,310** | **$34,000** | Base Capital Forecast by Function (Millions of Dollars) 2024-2028 | Function | 2024 | 2025 | 2026 | 2027 | 2028 | Total | | :--------------------------------- | :--- | :--- | :--- | :--- | :--- | :---- | | Electric transmission | $1,880 | $2,150 | $2,500 | $2,840 | $2,080 | $11,450 | | Electric distribution | $1,720 | $1,840 | $2,030 | $2,200 | $2,410 | $10,200 | | Electric generation | $930 | $1,160 | $780 | $740 | $600 | $4,210 | | Natural gas | $740 | $680 | $630 | $620 | $570 | $3,240 | | Renewables | $670 | $740 | $40 | $20 | $20 | $1,490 | | Other | $760 | $720 | $670 | $630 | $630 | $3,410 | | **Total base capital expenditures** | **$6,700** | **$7,290** | **$6,650** | **$7,050** | **$6,310** | **$34,000** | - The base plan excludes potential renewable generation assets (Colorado Preferred Plan, NSP System, SPS) which could add approximately **$10 billion in capital expenditures**, expected to be funded with **40% equity** and **60% debt**[269](index=269&type=chunk) [Financing for Capital Expenditures through 2028](index=58&type=section&id=Financing%20for%20Capital%20Expenditures%20through%202028) Estimated Financing Plans for Capital Expenditures 2024-2028 (Millions of Dollars) | Source | Amount | | :--------------------------------- | :----- | | Cash from operations | $20,520 | | New debt | $10,980 | | Equity through DRIP and benefit program | $500 | | Other equity | $2,000 | | **Total Base Capital Expenditures** | **$34,000** | - Xcel Energy plans to issue approximately **$85 million of equity** through DRIP and benefit programs and **$62 million** under the ATM program in 2023, with several long-term debt issuances completed in 2023 by Xcel Energy and its utility subsidiaries[273](index=273&type=chunk) [Off-Balance-Sheet Arrangements](index=58&type=section&id=Off-Balance-Sheet%20Arrangements) - Xcel Energy has no material off-balance-sheet arrangements other than those already disclosed[274](index=274&type=chunk) [Earnings Guidance and Long-Term EPS and Dividend Growth Rate Objectives](index=58&type=section&id=Earnings%20Guidance%20and%20Long-Term%20EPS%20and%20Dividend%20Growth%20Rate%20Objectives) - Xcel Energy's 2023 ongoing earnings guidance is narrowed to **$3.32 to $3.37 per share**, with key assumptions including constructive regulatory outcomes, normal weather, **1-2% retail electric sales growth**, and **1% retail natural gas sales growth**[275](index=275&type=chunk) - The 2024 ongoing earnings guidance is **$3.50 to $3.60 per share**, with projected **2-3% retail electric sales growth** and **1% retail natural gas sales growth**[275](index=275&type=chunk) - Long-term objectives include **5% to 7% annual EPS growth** (from a 2023 base of $3.35), **5% to 7% annual dividend increases**, a dividend payout ratio of **60% to 70%**, and maintaining senior secured debt credit ratings in the A range[287](index=287&type=chunk) [Item 3 — Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures since the 2022 Annual Report on Form 10-K - No material changes to market risk disclosures since the 2022 Annual Report on Form 10-K[277](index=277&type=chunk) [Item 4 — Controls and Procedures](index=60&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Confirms effective disclosure controls and no material changes in internal control over financial reporting - Xcel Energy's disclosure controls and procedures were effective as of September 30, 2023[279](index=279&type=chunk) - No material changes occurred in internal control over financial reporting during the most recent fiscal quarter[280](index=280&type=chunk) [PART II OTHER INFORMATION](index=60&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1 — Legal Proceedings](index=60&type=section&id=Item%201%20%E2%80%94%20Legal%20Proceedings) Details Xcel Energy's legal proceedings, accrual for estimable losses, and inability to estimate certain potential losses - Management accrues for probable and estimable losses from legal proceedings, but cannot always estimate the amount or range of possible loss due to early stages, indeterminate damages, or novel legal theories[281](index=281&type=chunk)[282](index=282&type=chunk) - No material effect on consolidated financial statements is anticipated for current proceedings not specifically reported[283](index=283&type=chunk) [Item 1A Risk Factors](index=60&type=section&id=Item%201A%20Risk%20Factors) No material changes to risk factors since the 2022 Annual Report on Form 10-K - No material changes to risk factors since the 2022 Annual Report on Form 10-K[284](index=284&type=chunk) [Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Confirms no registered equity securities were purchased by Xcel Energy or affiliates during Q3 2023 - No registered equity securities were purchased by the issuer or affiliated purchasers during Q3 2023[285](index=285&type=chunk) [Item 5 — Other Information](index=60&type=section&id=Item%205%20%E2%80%94%20Other%20Information) Reports no Rule 10b5-1 trading changes and a $9 million restricted stock unit award to the CEO - No Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during Q3 2023[286](index=286&type=chunk) - A **$9,000,000 restricted stock unit award (152,336 units)** was granted to CEO Robert C Frenzel, vesting **33% on Feb 28, 2027**, and **67% on Feb 29, 2028**, contingent on continued employment[287](index=287&type=chunk) [Item 6 — Exhibits](index=62&type=section&id=Item%206%20%E2%80%94%20Exhibits) Lists exhibits filed with Form 10-Q, including organizational documents, debt indentures, and SOX certifications - Exhibits include Amended and Restated Articles of Incorporation, Bylaws, Supplemental Indentures for Senior Notes and First Mortgage Bonds, and various certifications (e.g., 18 U.S.C Section 1350, Section 302, Section 906 Sarbanes-Oxley Act)[288](index=288&type=chunk) [SIGNATURES](index=63&type=section&id=SIGNATURES)

2023 THIRD QUARTER EARNINGS REPORT PRESENTATION OCTOBER 27, 2023 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 those relating to 2023 and 2024 EPS guidance, long-term EPS and dividend growth rate objectives, future sales, future expenses, future tax rates, future operating performance, estimated base capita ...

Xcel Energy, Inc. (NASDAQ:XEL) Q2 2023 Earnings Conference Call July 27, 2023 10:00 AM ET Company Participants Paul Johnson - Vice President, Treasurer and Investor Relations Robert Frenzel - Chairman, President and Chief Executive Officer Brian Van Abel - Executive Vice President and Chief Financial Officer Conference Call Participants Jeremy Tonet - JPMorgan Durgesh Chopra - Evercore ISI Julien Dumoulin-Smith - Bank of America Anthony Crowdell - Mizuho Securities Sophie Karp - KeyBanc Capital Markets Carl ...

Financial Performance - Total operating revenues for Q2 2023 were $3,022 million, a decrease of 11.7% compared to $3,424 million in Q2 2022[17]. - Net income for Q2 2023 was $288 million, down 12.2% from $328 million in Q2 2022[19]. - Earnings per share (EPS) for Q2 2023 were $0.52, a decrease from $0.60 in Q2 2022[17]. - Comprehensive income for Q2 2023 was $303 million, down from $341 million in Q2 2022[19]. - Net income for the six months ended June 30, 2023, was $706 million, slightly down from $708 million in the same period of 2022[21]. - Xcel Energy's total retail revenue for the six months ended June 30, 2023, was $5,987 million, compared to $5,820 million for the same period in 2022, showing an increase of about 2.9%[46]. - The diluted earnings per share (EPS) for Q2 2023 was $0.52, down from $0.60 in Q2 2022, primarily due to unfavorable weather and increased operational costs[159]. - Year-to-date earnings for PSCo remained flat, while NSP-Minnesota saw an increase of $0.03 per share driven by electric infrastructure investments[160]. Revenue Breakdown - Electric operating revenues decreased to $2,601 million in Q2 2023 from $2,923 million in Q2 2022, a decline of 11%[17]. - Natural gas operating revenues also fell to $393 million in Q2 2023 from $476 million in Q2 2022, a decrease of 17.4%[17]. - Revenue from residential customers for the three months ended June 30, 2023, was $748 million, down from $797 million in the same period of 2022, indicating a decline of about 6.1%[43]. - Natural gas revenues for Q2 2023 were $393 million, a decrease of 17.4% from $476 million in Q2 2022; year-to-date revenues increased to $1,681 million from $1,566 million, a growth of 7.3%[183]. Operating Expenses - Total operating expenses for Q2 2023 were $2,604 million, down 11.9% from $2,955 million in Q2 2022[17]. - O&M expenses increased by $14 million in Q2 2023 and $62 million year-to-date, primarily due to planned generation outages and inflationary pressures[186]. - Depreciation and amortization decreased by $73 million in Q2 2023, largely due to previously deferred depreciation costs related to the Texas Electric Rate Case[187]. - Interest charges increased by $21 million in Q2 2023 and $60 million year-to-date, primarily due to higher interest rates and increased long-term debt levels[190]. Assets and Liabilities - Total assets as of June 30, 2023, were $61,658 million, a slight increase from $61,188 million at the end of 2022[23]. - Long-term debt increased to $24,015 million as of June 30, 2023, compared to $22,813 million at the end of 2022[23]. - The fair value of Xcel Energy's long-term debt was estimated at $21.855 billion, compared to a carrying amount of $25.066 billion[92]. - The total current derivative assets amounted to $348 million as of June 30, 2023, while total current derivative liabilities were $185 million[90]. Cash Flow - Net cash provided by operating activities increased to $2,455 million in 2023 from $1,988 million in 2022, representing a growth of approximately 23.5%[21]. - Cash and cash equivalents rose to $275 million at the end of June 2023, compared to $111 million at the beginning of the period[23]. - The company experienced a net change in cash of $164 million for the six months ended June 30, 2023, compared to a net change of $169 million in the same period of 2022[21]. Capital Expenditures - Capital expenditures for the six months ended June 30, 2023, were $2,599 million, up from $2,040 million in 2022, indicating a 27.5% increase[21]. - Estimated capital expenditures of approximately $50 million may be required to comply with federal Clean Water Act requirements, anticipated to be recoverable through regulatory mechanisms[127]. Regulatory and Legal Matters - Xcel Energy is involved in various litigation matters, including a case related to the Comanche Unit 3, where damages estimated by CORE are $270 million[99]. - The Minnesota Public Utilities Commission (MPUC) is expected to make a final decision regarding NSP-Minnesota's prudence in connection with the Sherco Unit 3 outage in mid-2024, with a potential refund of $58 million to $72 million being discussed[115]. - Xcel Energy disputes claims that its power lines caused the second ignition of the Marshall Fire, as no design or maintenance defects were identified[110]. Market Challenges - The company anticipates continued challenges in the energy market, impacting future revenue and operational performance[14]. - The financial impacts of the EPA's final regulations under the Clean Air Act are uncertain, but Xcel Energy anticipates significant annual costs that would be recoverable through regulatory mechanisms[131]. Miscellaneous - The company recognized net congestion costs, including the impact of financial transmission rights (FTR) settlements, as regulatory assets or liabilities[62]. - Xcel Energy's capacity under long-term power purchase agreements (PPAs) was approximately 4,053 MW as of June 30, 2023, up from 3,961 MW at the end of 2022[139].

Xcel Energy Inc. (NASDAQ:XEL) Q1 2023 Results Conference Call April 27, 2023 10:00 AM ET Company Participants Paul Johnson - VP, IR and Treasurer Bob Frenzel - President, CEO and Chairman Brian Van Abel - EVP and CFO Conference Call Participants Julien Dumoulin-Smith - Bank of America Durgesh Chopra - Evercore ISI David Arcaro - Morgan Stanley Jeremy Tonet - JPMorgan Sophie Karp - KeyBanc Ryan Levine - Citigroup Paul Patterson - Glenrock Associates Operator Hello, and welcome to the Xcel Energy First Quarte ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-3034 Xcel Energy Inc. (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation or O ...

PART I [Item 1 — Business](index=4&type=section&id=Item%201%20%E2%80%94%20Business) Xcel Energy is a major U.S. regulated electric and natural gas utility serving approximately 3.8 million electric and 2.1 million natural gas customers across eight states, focusing on clean energy transition and customer experience [Overview and Strategy](index=6&type=section&id=Overview%20and%20Strategy) Xcel Energy operates as a regulated utility, prioritizing clean energy transition, customer experience, and affordability, with ambitious carbon reduction goals and a strong dividend growth record - Xcel Energy's core strategy revolves around three priorities: Lead the Clean Energy Transition, Enhance the Customer Experience, and Keep Bills Low[18](index=18&type=chunk) Key Company Statistics | Metric | Value | | :--- | :--- | | Electric Customers | 3.8 million | | Natural Gas Customers | 2.1 million | | Total Assets | $61.1 billion | | Electric Generating Capacity | 20,897 MW | | Electric Transmission Lines | 110,000 miles | | Natural Gas Distribution Lines | 37,000 miles | - The company has a goal to reduce carbon emissions by **80% by 2030** from 2005 levels and achieve **100% carbon-free electricity by 2050**, having achieved an estimated **53% reduction** as of 2022[24](index=24&type=chunk)[25](index=25&type=chunk) - Xcel Energy plans to be coal-free by year-end 2030, pending approval to accelerate the Tolk coal plant retirement to 2028[26](index=26&type=chunk) - The Inflation Reduction Act (IRA) is expected to significantly reduce the cost of future renewable projects, with wind projects potentially decreasing by **50-60%** and solar by **25-40%** on a levelized cost of energy basis[43](index=43&type=chunk) [Utility Subsidiaries](index=15&type=section&id=Utility%20Subsidiaries) The company's operations are conducted through four primary utility subsidiaries: NSP-Minnesota, NSP-Wisconsin, PSCo, and SPS, each serving distinct customer bases in various states Utility Subsidiary Overview (2022) | Subsidiary | Electric Customers (million) | Natural Gas Customers (million) | Total Assets ($B) | Rate Base ($B, est.) | ROE (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | NSP-Minnesota | 1.5 | 0.5 | $23.7 | $15.1 | 8.76% | | NSP-Wisconsin | 0.3 | 0.1 | $3.4 | $2.1 | 10.57% | | PSCo | 1.6 | 1.5 | $23.6 | $14.9 | 8.23% | | SPS | 0.4 | N/A | $9.7 | $6.7 | 9.36% | [Operations Overview](index=17&type=section&id=Operations%20Overview) In 2022, electric operations generated $12.1 billion in revenue, with a generation mix increasingly shifting to carbon-free sources, while natural gas operations served 2.1 million customers, and significant investments are planned for grid modernization 2022 Electric Energy Generation Sources | Energy Source | Percentage of Total | | :--- | :--- | | **Carbon-Free** | **53%** | | Wind | 29% | | Nuclear | 11% | | Hydro/Other | 13% | | **Fossil Fuel** | **47%** | | Natural Gas | 24% | | Coal | 23% | Approved Early Coal Plant Retirements/Conversions | Year | Subsidiary | Plant Unit | Capacity (MW) | Action | | :--- | :--- | :--- | :--- | :--- | | 2023 | NSP-Minnesota | Sherco 2 | 682 | Retire | | 2024 | SPS | Harrington | 1,018 | Convert to Gas | | 2025 | PSCo | Comanche 2 | 335 | Retire | | 2025 | PSCo | Pawnee | 505 | Convert to Gas | | 2026 | NSP-Minnesota | Sherco 1 | 680 | Retire | | 2028 | NSP-Minnesota | A.S. King | 511 | Retire | | 2030 | NSP-Minnesota | Sherco 3 | 517 | Retire | | 2030 | PSCo | Comanche 3 | 500 | Retire | - The company is investing approximately **$1.7 billion** in digitizing the distribution grid, including smart meters and advanced software, to improve reliability and enable integration of distributed energy resources[87](index=87&type=chunk) - Competition arises from customers' ability to self-generate power (e.g., rooftop solar), FERC policies promoting competitive wholesale markets, and the potential for municipalization of services[97](index=97&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk)[103](index=103&type=chunk) [Governmental Regulations](index=25&type=section&id=Governmental%20Regulations) Xcel Energy's operations are extensively regulated by federal and state agencies concerning environmental compliance, with emerging regulations potentially incurring significant annual costs, and environmental costs totaling approximately $365 million in 2022 - The EPA's proposed "Good Neighbor" regulations under the Clean Air Act are expected to impact facilities in Minnesota, Texas, and Wisconsin, with anticipated annual costs of approximately **$60 million**, which are expected to be recoverable through regulatory mechanisms[110](index=110&type=chunk) Environmental Costs | Type | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Operating Expenses | $365M | $365M | $400M | | Capital Expenditures | $20M | $60M | $30M | [Item 1A — Risk Factors](index=28&type=section&id=Item%201A%20%E2%80%94%20Risk%20Factors) Xcel Energy faces diverse risks including operational hazards, long-term planning uncertainties, commodity price volatility, financial recovery challenges, credit rating impacts, macroeconomic conditions, cyber threats, and climate-related policy and physical risks - **Operational Risks:** Inherent hazards in natural gas and electric operations (leaks, explosions, fires), risks in long-term resource planning due to technological and policy shifts, and dependence on suppliers for key components[132](index=132&type=chunk)[138](index=138&type=chunk)[141](index=141&type=chunk) - **Financial Risks:** Profitability depends on the ability to recover costs through regulated rates; reductions in credit ratings could increase financing costs; the company is also subject to capital market, interest rate, and counterparty credit risks[159](index=159&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk)[170](index=170&type=chunk) - **Macroeconomic Risks:** Operations are affected by general economic conditions, health epidemics, and geopolitical events; a major risk is a cyber incident or security breach, as the utility industry is a frequent target of sophisticated attacks[181](index=181&type=chunk)[183](index=183&type=chunk)[189](index=189&type=chunk)[191](index=191&type=chunk) - **Policy & Environmental Risks:** Legislative and regulatory responses to climate change could be costly; the company is subject to extensive environmental laws and physical risks from climate change, including severe weather, wildfires (particularly in Colorado), and drought[206](index=206&type=chunk)[212](index=212&type=chunk)[219](index=219&type=chunk)[224](index=224&type=chunk) [Item 2 — Properties](index=42&type=section&id=Item%202%20%E2%80%94%20Properties) This section details Xcel Energy's physical assets, including power generation stations by fuel type and capacity, and quantifies electric transmission/distribution lines and natural gas mains for each subsidiary, largely subject to first mortgage bond indentures Owned Generating Capacity by Subsidiary (MW, Dec 31, 2022) | Subsidiary | Steam (Coal/Nuclear/Gas/Other) | Combustion Turbine (Gas/Oil) | Hydro | Wind | Total (MW) | | :--- | :--- | :--- | :--- | :--- | :--- | | NSP-Minnesota | 3,402 | 2,097 | - | 2,352 | 8,949 | | NSP-Wisconsin | 57 | 356 | 135 | - | 548 | | PSCo | 1,968 | 2,644 | 233 | 1,059 | 6,151 | | SPS | 3,237 | 602 | - | 984 | 5,249 | Electric & Gas Infrastructure (Miles, Dec 31, 2022) | Subsidiary | Electric Transmission | Electric Distribution | Gas Transmission | Gas Distribution | | :--- | :--- | :--- | :--- | :--- | | NSP-Minnesota | 32,594 | 82,024 | 78 | 10,902 | | NSP-Wisconsin | 11,652 | 27,817 | 3 | 2,570 | | PSCo | 24,501 | 79,331 | 2,067 | 23,542 | | SPS | 40,879 | 23,538 | 20 | - | [Item 3 — Legal Proceedings](index=43&type=section&id=Item%203%20%E2%80%94%20Legal%20Proceedings) Xcel Energy is involved in various litigation matters in the ordinary course of business, with management accruing for probable losses and not anticipating material effects on consolidated financial statements from current proceedings - The company is involved in various litigation, but for proceedings not specifically detailed, management does not expect the outcomes to have a material effect on its financial statements[235](index=235&type=chunk)[237](index=237&type=chunk) PART II [Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=43&type=section&id=Item%205%20%E2%80%94%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Xcel Energy Inc.'s common stock is listed on the Nasdaq under the symbol XEL, with 47,359 stockholders of record as of February 16, 2023, and no equity repurchases during Q4 2022, while its five-year total shareholder return is benchmarked against industry and broader market indices - Xcel Energy's common stock trades on the Nasdaq under the symbol **XEL**[239](index=239&type=chunk) - A performance graph compares the company's five-year cumulative total shareholder return (TSR) against the EEI Investor-Owned Electrics Index and the S&P 500[240](index=240&type=chunk)[241](index=241&type=chunk) - No registered equity securities were purchased by or on behalf of Xcel Energy during the fourth quarter of 2022[243](index=243&type=chunk) [Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207%20%E2%80%94%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Xcel Energy's financial performance, including increased EPS driven by regulatory outcomes, detailed segment performance, operating expense analysis, extensive regulatory proceedings, liquidity, capital expenditure plans, financing strategies, and critical accounting policies [Results of Operations](index=45&type=section&id=Results%20of%20Operations) For 2022, Xcel Energy's GAAP and ongoing diluted EPS increased to $3.17, primarily due to favorable regulatory outcomes and positive contributions from all utility subsidiaries, with electric and natural gas margins significantly increasing year-over-year Diluted EPS by Segment (GAAP and Ongoing) | Segment | 2022 | 2021 | | :--- | :--- | :--- | | PSCo | $1.33 | $1.22 | | NSP-Minnesota | $1.23 | $1.12 | | SPS | $0.64 | $0.59 | | NSP-Wisconsin | $0.23 | $0.20 | | Regulated utility (subtotal) | $3.47 | $3.18 | | Xcel Energy Inc. and Other | ($0.29) | ($0.22) | | **Total** | **$3.17** | **$2.96** | Change in Electric Margin (2022 vs. 2021) | Driver | Impact (Millions) | | :--- | :--- | | Regulatory rate outcomes | $506 | | Texas rate case surcharge | $85 | | Sales and demand | $80 | | Non-fuel riders | $64 | | PTCs flowed back to customers | ($150) | | **Total Increase** | **$646** | - O&M expenses increased by **$170 million** in 2022 due to inflation, supply chain constraints, operational activities like vegetation management, and costs for technology and customer programs[274](index=274&type=chunk) - Depreciation and amortization increased by **$292 million**, primarily due to capital investment, recognition of deferred costs from the Texas Electric Rate Case, and new wind farms entering service[277](index=277&type=chunk) [Public Utility Regulation](index=52&type=section&id=Public%20Utility%20Regulation) Xcel Energy's subsidiaries are regulated by FERC and state commissions, with ongoing rate cases in Minnesota, Colorado, New Mexico, and Texas, and approved resource plans accelerating coal plant retirements and adding renewable capacity - **NSP-Minnesota:** Filed a three-year electric rate case seeking a revised total of **$498 million**, with a final MPUC decision expected by June 30, 2023; a natural gas rate case settlement for a **$21 million** increase is pending MPUC approval[288](index=288&type=chunk)[291](index=291&type=chunk) - **PSCo (Colorado):** The CPUC approved a **$64 million** net increase in natural gas rates in October 2022; a new electric rate case was filed in November 2022 seeking a net increase of **$262 million**; the CPUC approved an updated resource plan to accelerate coal retirements and add significant renewable and storage capacity[323](index=323&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk) - **SPS:** Filed a new electric rate case in New Mexico in November 2022 seeking a **$78 million** increase; filed a new electric rate case in Texas in February 2023 seeking a **$149 million** increase; both filings propose accelerating the depreciation of the Tolk coal plant to 2028[347](index=347&type=chunk)[348](index=348&type=chunk) [Liquidity and Capital Resources](index=77&type=section&id=Liquidity%20and%20Capital%20Resources) Xcel Energy's operating cash flow significantly increased to $3.9 billion in 2022, supporting a $29.5 billion capital expenditure plan for 2023-2027, primarily funded by cash from operations and new debt, while maintaining strong liquidity and long-term EPS growth objectives Cash Flow Summary (in Millions) | Cash Flow | 2022 | 2021 | | :--- | :--- | :--- | | From Operating Activities | $3,932 | $2,189 | | Used in Investing Activities | ($4,653) | ($4,287) | | From Financing Activities | $666 | $2,135 | Base Capital Expenditure Forecast (2023-2027, in Billions) | By Regulated Utility | Forecast | | :--- | :--- | | PSCo | $11.3 | | NSP-Minnesota | $11.7 | | SPS | $3.9 | | NSP-Wisconsin | $2.6 | | **Total** | **$29.5** | - The 2023-2027 financing plan includes **$20.5 billion** from cash from operations and **$8.2 billion** in new debt to fund capital expenditures[442](index=442&type=chunk) - Xcel Energy's 2023 GAAP and ongoing earnings guidance is a range of **$3.30 to $3.40 per share**[456](index=456&type=chunk) - The company expects to deliver long-term annual EPS growth of **5% to 7%** and annual dividend increases of **5% to 7%**[456](index=456&type=chunk)[459](index=459&type=chunk) [Critical Accounting Policies and Estimates](index=67&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies requiring significant judgment, including regulatory accounting for cost recovery, income tax accruals, employee benefits based on actuarial assumptions, and nuclear decommissioning estimates involving long-term cost and timing projections - **Regulatory Accounting:** The company defers costs as regulatory assets (**$3.9 billion** at YE 2022) and credits as regulatory liabilities (**$6.0 billion** at YE 2022) based on the probability of future rate recovery or refunds, a process involving significant judgment[373](index=373&type=chunk)[376](index=376&type=chunk) - **Employee Benefits:** Pension and postretirement benefit costs are based on key actuarial assumptions; for 2022, the discount rate was set at **5.80%** and the expected rate of return on pension assets was **6.93%**; changes in these assumptions can materially impact obligations and expenses[383](index=383&type=chunk)[384](index=384&type=chunk)[386](index=386&type=chunk) - **Nuclear Decommissioning:** The company records Asset Retirement Obligations (AROs) for its nuclear plants, totaling **$2.2 billion** in 2022; this estimate relies on assumptions about retirement dates, technology, cost escalation rates (**3.2%**), and discount rates[395](index=395&type=chunk)[398](index=398&type=chunk)[400](index=400&type=chunk)[404](index=404&type=chunk) [Item 8 — Financial Statements and Supplementary Data](index=82&type=section&id=Item%208%20%E2%80%94%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Xcel Energy's consolidated financial statements for 2022, including the Management Report on Internal Control Over Financial Reporting, the Independent Registered Public Accounting Firm's Report, and core financial statements with detailed notes - Management concluded that as of Dec. 31, 2022, the company's internal control over financial reporting was effective[464](index=464&type=chunk) - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion, stating the financial statements are presented fairly and that the company maintained effective internal control over financial reporting[468](index=468&type=chunk) Consolidated Income Statement Highlights (in Millions) | Line Item | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $15,310 | $13,431 | $11,526 | | Operating Income | $2,428 | $2,203 | $2,116 | | **Net Income** | **$1,736** | **$1,597** | **$1,473** | Consolidated Balance Sheet Highlights (in Millions) | Line Item | Dec. 31, 2022 | Dec. 31, 2021 | | :--- | :--- | :--- | | Total Assets | $61,188 | $57,851 | | Long-Term Debt | $22,813 | $21,779 | | Total Common Stockholders' Equity | $16,675 | $15,612 | | **Total Liabilities and Equity** | **$61,188** | **$57,851** | [Item 9A — Controls and Procedures](index=148&type=section&id=Item%209A%20%E2%80%94%20Controls%20and%20Procedures) As of December 31, 2022, Xcel Energy's management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the fourth quarter of 2022 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[757](index=757&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the most recent fiscal quarter[758](index=758&type=chunk) PART III [Items 10, 11, 12, 13, and 14](index=148&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for these items, covering Directors, Executive Compensation, Security Ownership, Related Transactions, and Principal Accountant Fees, is incorporated by reference from Xcel Energy Inc.'s definitive Proxy Statement for its 2023 Annual Meeting of Shareholders - Information regarding directors, executive compensation, security ownership, related transactions, and accountant fees is incorporated by reference from the company's 2023 Proxy Statement[761](index=761&type=chunk)[762](index=762&type=chunk)[763](index=763&type=chunk)[764](index=764&type=chunk)[765](index=765&type=chunk) PART IV [Item 15 — Exhibit and Financial Statement Schedules](index=150&type=section&id=Item%2015%20%E2%80%94%20Exhibit%20and%20Financial%20Statement%20Schedules) This section provides an index of all financial statements, schedules, and exhibits included in or incorporated by reference into the Form 10-K filing, encompassing consolidated financial statements, condensed registrant information, and various corporate and legal documents - This item provides an index of all financial statements, schedules, and exhibits included in or incorporated by reference into the Form 10-K filing[766](index=766&type=chunk)[767](index=767&type=chunk)[768](index=768&type=chunk)

Financial Data and Key Metrics Changes - Xcel Energy reported earnings per share (EPS) of $3.17 for 2022, up from $2.96 in 2021, representing a growth of 7.1% [22] - The company has consistently met or exceeded its earnings guidance for 18 consecutive years [6] - The annual dividend was raised for the 19th consecutive year, increasing by $0.12 per share or 6.6% [6] Business Line Data and Key Metrics Changes - Weather-adjusted electric sales increased by 1.8%, driven by higher commercial and industrial (C&I) sales [24] - The company anticipates a modest slowing of sales growth to 1% in 2023 [24] - O&M expenses increased by $170 million in 2022, but are expected to decline by approximately 2% in 2023 due to continuous improvement programs [25] Market Data and Key Metrics Changes - Xcel Energy's residential electric bills are more than 20% below the national average [7] - The company generated approximately $1 billion in fuel-related customer savings in 2022 through its wind farms [8] - Estimated carbon emissions were approximately 52% below 2005 levels, with a target of 80% reduction by 2030 [10] Company Strategy and Development Direction - The company has extended its long-term investment plan with a 10-year capital outlook featuring approximately 7% rate base growth [7] - Xcel Energy aims to be coal-free by the end of 2030 and is actively transitioning to renewable energy sources [9] - The company is pursuing advanced storage opportunities and has partnered with Form Energy to develop long-duration energy storage pilot projects [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustainable organic growth over the next decade, focusing on affordable renewable additions and responsible community transitions [13] - The Inflation Reduction Act is expected to enhance cash flow and improve the competitiveness of renewable offerings [11] - Management reaffirmed 2023 earnings guidance in the range of $3.30 to $3.40 per share, consistent with long-term growth objectives [32] Other Important Information - The company has been recognized for its ESG leadership, receiving an upgraded rating from MSCI and being named among the world's most ethical companies [12] - Xcel Energy is actively working on hydrogen hub concepts and has received favorable notice from the Department of Energy for its proposals [16] Q&A Session Summary Question: O&M reduction and sustainability - Management highlighted continuous improvement efforts and investments in technology as key drivers for O&M reduction, with expectations for sustainable improvements [38] Question: Minnesota Electric case settlement likelihood - Management expressed confidence in the case and indicated a willingness to engage in settlements if beneficial [42] Question: Clean Heat Plan in Colorado - Management discussed the Clean Heat Plan as an opportunity to align on decarbonization strategies, with a focus on reducing methane emissions and promoting energy efficiency [45] Question: Long-duration storage projects - Management indicated that long-duration storage could be a significant part of the solution for balancing electric system needs, with several hundred megawatts potentially realizable in the next five to ten years [52] Question: Rate filings and structural lag - Management aims to reduce structural lag in regulatory filings and is focused on improving regulatory constructs to benefit customers [88]

ESSENTIAL Wells Fargo Conference December 8, 2022 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 those relating to 2022 and 2023 EPS guidance, long-term EPS and dividend growth rate objectives, future sales, future expenses, future tax rates, future operating performance, estimated base capital expenditures ...