72903--2/23/2007--XCEL_ENERGY

related topics

{operation, natural, condition}

{cost, contract, operation}

{gas, price, oil}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{condition, economic, financial}

{capital, credit, financial}

{system, service, information}

{provision, law, control}

Risks Associated with Our Business Our profitability depends in part on the ability of our utility subsidiaries to recover their costs from their customers and there may be changes in circumstances or in the regulatory environment that impair the ability of our utility subsidiaries to recover costs from their customers. Any reductions in our credit ratings could increase our financing costs and the cost of maintaining certain contractual relationships. We are subject to commodity risks and other risks associated with energy markets. We are subject to interest rate risk. We are subject to credit risks. Our subsidiary, PSCo, has received a notice from the IRS proposing to disallow certain interest expense deductions that PSCo claimed under a COLI policy. Should the IRS ultimately prevail on this issue, our liquidity position and financial results could be materially adversely affected. We are subject to environmental laws and regulations, compliance with which could be difficult and costly. Our subsidiary, NSP-Minnesota, is subject to the risks of nuclear generation. Economic conditions could negatively impact our business. Our operations could be impacted by war, acts of terrorism or threats of terrorism. A disruption or black-out of the regional electric transmission grid could negatively impact our business. Reduced coal availability could negatively impact our business. Rising energy prices could negatively impact our business. Our operating results may fluctuate on a seasonal and quarterly basis and can be adversely affected by milder weather. Our natural gas distribution activities involve numerous risks that may result in accidents and other operating risks and costs. Increase risks of regulatory penalties Increasing costs associated with our defined benefit retirement plans and other employee-related benefits may adversely affect our results of operations, financial position, or liquidity. Increasing costs associated with health care plans may adversely affect our results of operations, financial position or liquidity. Risks Associated with Our Holding Company Structure We must rely on cash from our subsidiaries to make dividend payments. Certain provisions of law, as well as provisions in our bylaws and shareholder rights plan, may make it more difficult for others to obtain control of us, even though some shareholders might consider this favorable.

Full 10-K form ▸

72903--2/23/2007--XCEL_ENERGY_INC