Form 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
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 33-64951
NEW CENTURY ENERGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1334327
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1225 17th Street, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (303) 571-7511
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12 (g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
As of March 22, 1996, 200 shares of the Registrant's Common Stock, $1 par
value (the only class of common stock), were issued and outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents, previously filed with the Securities and
Exchange Commission (the "SEC") are incorporated by reference in Parts I, II,
III and IV hereof.
1. Annual Report of Public Service Company of Colorado ("PSCo"), a Colorado
corporation, on Form 10-K for the year ended December 31, 1995 (File No.1-3280).
2. PSCo's 1996 Proxy Statement for the 1996 Annual Meeting of Shareholders.
3. Annual Report of Southwestern Public Service Company ("SPS"), a New Mexico
corporation, on Form 10-K for the year ended August 31,1995 (File No. 1-3789).
4. Quarterly Report of SPS on From 10-Q for the quarter ended November 30, 1995
(File No. 1-3789).
5. Registration Statement of New Century Energies, Inc. on Form S-4 under the
Securities Act of 1933 (Joint Proxy Statement/Prospectus) (File No. 33-64951).
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TABLE OF CONTENTS
PART I
Item 1. Business.................................................. 1
Item 2. Properties................................................ 2
Item 3. Legal Proceedings......................................... 2
Item 4. Submission of Matters to a Vote of Security Holders....... 2
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters ..................................... 2
Item 6. Selected Financial Data................................... 2
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 2
Item 8. Financial Statements and Supplementary Data............... 3
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure...................... 7
PART III
Item 10. Directors and Executive Officers of the Registrant....... 7
Item 11. Executive Compensation................................... 7
Item 12. Security Ownership of Certain Beneficial Owners
and Management ......................................... 7
Item 13. Certain Relationships and Related Transactions........... 8
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K ............................................ 8
Signatures........................................................ 9
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PART I
Item l. Business
The Company
New Century Energies, Inc. ("NCE") was incorporated under the laws of the
State of Delaware on August 21, 1995 (formerly M-P New Co.) with 50% of its
outstanding 200 shares, $1.00 par value, common stock purchased by Public
Service Company of Colorado ("PSCo") and 50% purchased by Southwestern Public
Service Company ("SPS").
NCE, PSCo and SPS entered into an Agreement and Plan of Reorganization
(the "Merger Agreement"), dated August 22, 1995, as amended on December 8, 1995,
providing for a business combination as peer firms involving PSCo and SPS in a
"merger of equals" transaction (the "Merger"). As part of the Merger, NCE will
become the parent company of both PSCo and SPS. Additionally, NCE will be a
holding company registered under the Public Utility Holding Company Act of 1935,
as amended. The Merger is expected to occur shortly after all of the conditions
to the consummation of the Merger, including applicable regulatory approvals,
are met or waived. It is expected that the Merger will be completed in the third
quarter of 1996; however, the timing of the effective date of the Merger is
primarily dependent upon the regulatory process as described below.
Under the terms of the Merger Agreement, NCE will form PSCo Merger Corp.,
which will be merged with and into PSCo and NCE will form SPS Merger Corp.,
which will be merged with and into SPS. PSCo and SPS will be the surviving
corporations and will become wholly-owned subsidiaries of NCE. Each share of NCE
common stock issued and outstanding immediately prior to the effective time of
the Merger will be canceled, and no consideration shall be delivered in exchange
for such stock. Each outstanding share of PSCo common stock, par value $5.00 per
share, will be canceled and converted into the right to receive one share of NCE
common stock and each outstanding share of SPS common stock, $1.00 par value,
will be canceled and converted into the right to receive 0.95 of one share of
NCE common stock. At December 31, 1995, PSCo had 63.4 million common shares
outstanding and SPS had 40.9 million shares outstanding. Based on such
capitalization, the Merger would result in the common shareholders of PSCo
owning 62% of the common equity of NCE and the common shareholders of SPS owning
38% of the common equity of NCE.
NCE filed a registration statement on Form S-4 with the SEC which became
effective on December 13, 1995 with respect to the shares of common stock of NCE
issuable in the mergers discussed above. On January 31, 1996, the shareholders
of PSCo and SPS approved the Merger Agreement.
As noted above, the Merger is subject to customary closing conditions,
including the receipt of all necessary governmental approvals and the making of
all necessary governmental filings, including approvals and findings of state
utility regulators in Colorado, Texas, New Mexico, Wyoming and Kansas as well as
the approval of the Federal Energy Regulatory Commission ("FERC"), the Nuclear
Regulatory Commission ("NRC"), the Securities and Exchange Commission ("SEC")
and the expiration or termination of the applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Applications
to the state regulatory commissions and the FERC have been completed. The
required authorizations from the Kansas Corporation Commission and the NRC have
been obtained. On January 30, 1996, NCE filed its application with the SEC to be
a registered public utility holding company and the parent company for PSCo and
SPS.
The corporate offices of NCE will be located in Denver, Colorado with
significant operating functions based in Amarillo, Texas. NCE's Board of
Directors will consist of a total of 14 directors, eight of whom will be
designated by PSCo and six of whom will be designated by SPS.
1
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NCE currently engages in no significant operations other than the
organization of the proposed public utility holding company. Other than the
Mergers, NCE currently has no plans, understandings or agreements concerning any
acquisition. Descriptions of the businesses of PSCo and SPS are contained in
their reports under Section 13 or 15(d) of the Securities and Exchange Act of
1934 (the "1934 Act Reports") incorporated herein by reference.
Item 2. Properties
None.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
NCE's common stock has not been and, until the effectiveness of the
Mergers will not be, traded on any public market. It is anticipated that, upon
consummation of the Mergers, the common stock of NCE will be listed on the New
York Stock Exchange, Inc. NCE may also apply for listings on other exchanges. At
December 31, 1995, 200 shares of NCE common stock were issued and outstanding.
Item 6. Selected Financial Data
See Item 8. Financial Statements and Supplementary Data. Additionally,
reference is made to the selected financial data of PSCo and SPS contained in
their respective 1934 Act Reports, incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
NCE engages in no significant operations other than the organization of
the proposed public utility holding company. See Item 1. Business and Item
8. Financial Statements and Supplementary Data.
2
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Item 8. Financial Statements and Supplementary Data
BALANCE SHEET OF NEW CENTURY ENERGIES, INC.
Report of Independent Public Accountants
We have audited the accompanying balance sheet of New Century Energies,
Inc. (a Delaware corporation, formerly M-P New Co.) as of December 31, 1995.
This financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in
all material respects, the financial position of New Century Energies, Inc. as
of December 31, 1995, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Denver, Colorado
March 27, 1996
3
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NEW CENTURY ENERGIES, INC.
BALANCE SHEET
At December 31, 1995
ASSETS
Cash................................................. $ 200
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities........................................... $ __
Shareholders' equity -
Common Stock, $1.00 par value (Note 1):
200 shares authorized;
200 shares issued and outstanding................. 200
----------
Total liabilities and shareholders' equity...... $ 200
==========
The accompanying notes are an integral part of this balance sheet.
4
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NEW CENTURY ENERGIES, INC.
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1995
1. Formation and Organization
New Century Energies, Inc. ("NCE") was incorporated under the laws of the
State of Delaware on August 21, 1995 (formerly M-P New Co.) with 50% of its
outstanding 200 shares, $1.00 par value, common stock purchased by Public
Service Company of Colorado ("PSCo") and 50% purchased by Southwestern Public
Service Company ("SPS").
NCE, PSCo and SPS entered into an Agreement and Plan of Reorganization (the
"Merger Agreement"), dated August 22, 1995, as amended December 8, 1995,
providing for a business combination as peer firms involving PSCo and SPS in a
"merger of equals" transaction (the "Merger"). As part of the Merger, NCE will
become the parent company of both PSCo and SPS. Additionally, NCE will be a
holding company registered under the Public Utility Holding Company Act of 1935,
as amended. The Merger is expected to occur shortly after all of the conditions
to the consummation of the Merger, including applicable regulatory approvals,
are met or waived. It is expected that the Merger will be completed in the third
quarter of 1996; however, the timing of the effective date of the merger is
primarily dependent upon the regulatory process as described below.
Under the terms of the Merger Agreement, NCE will form PSCo Merger Corp.,
which will be merged with and into PSCo and NCE will form SPS Merger Corp.,
which will be merged with and into SPS. PSCo and SPS will be the surviving
corporations and will become wholly-owned subsidiaries of NCE. Each share of NCE
common stock issued and outstanding immediately prior to the effective time of
the Merger will be canceled, and no consideration shall be delivered in exchange
for such stock. Each outstanding share of PSCo common stock, par value $5.00 per
share, will be canceled and converted into the right to receive one share of NCE
common stock and each outstanding share of SPS common stock, $1.00 par value,
will be canceled and converted into the right to receive 0.95 of one share of
NCE common stock. At December 31, 1995, PSCo had 63.4 million common shares
outstanding and SPS had 40.9 million shares outstanding. Based on such
capitalization, the Merger would result in the common shareholders of PSCo
owning 62% of the common equity of NCE and the common shareholders of SPS owning
38% of the common equity of NCE.
NCE filed a registration statement on Form S-4 with the SEC which became
effective on December 13, 1995 with respect to the shares of common stock of NCE
issuable in the mergers discussed above. On January 31, 1996, the shareholders
of PSCo and SPS approved the Merger Agreement.
As noted above, the Merger is subject to customary closing
conditions, including the receipt of all necessary governmental approvals and
the making of all necessary governmental filings, including approvals and
findings of state utility regulators in Colorado, Texas, New Mexico, Wyoming and
Kansas as well as the approval of the Federal Energy Regulatory Commission
("FERC"), the Nuclear Regulatory Commission ("NRC"), the Securities and Exchange
Commission ("SEC") and the expiration or termination of the applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended. Applications to the state regulatory commissions and the FERC have been
completed. The required authorizations from the Kansas Corporation Commission
and the NRC have been obtained. On January 30, 1996, NCE filed its application
with the SEC to be a registered public utility holding company and the parent
company for PSCo and SPS.
NCE currently engages in no significant operations
other than the organization of the proposed public utility holding company.
Other than the Mergers, NCE currently has no plans, understandings or agreements
concerning any acquisition.
5
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2. Related Party Transactions
During 1995, PSCo and SPS incurred all costs related to the formation of
NCE, including those costs associated with the registration of NCE's common
stock and its application to be a registered public utility holding company.
Such costs, estimated to be approximately $2.5 million through December 31,
1995, were not charged to NCE. Accordingly, the Company has no operating or cash
flow activities to report in a statement of income or a statement of cash flows
for the period from inception (August 22,1995) to December 31, 1995.
6
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Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Doyle R. Bunch II Age 49 Mr. Bunch has been the Executive Vice
Chairman of the Board President of SPS since September 1987. Mr.
and Secretary Bunch held the position of Financial Vice
President from April 1986 to September 1987. He
also served as Secretary from July 1979 to
January 1988. Mr. Bunch served as Treasurer from
September 1979 to April 1986. He received his
B.B.A in Accounting from Texas Tech University
and is a Certified Public Accountant.
Richard C. Kelly Age 49 Mr. Kelly has been Senior Vice President of
Director, President and PSCo since January 1990 and became Treasurer
Treasurer in June 1994. He has served as Director of
Cheyenne Light, Fuel & Power Co., a wholly-owned
subsidiary of PSCo; since March 1990, and
Treasurer; since July 1994. Mr. Kelly serves as
Director, Vice President and Treasurer of e
prime, inc., also a wholly-owned subsidiary of
PSCo and Young Gas Storage Company, a
wholly-owned subsidiary of e-prime, inc.; since
January 1995 and June 1995, respectively. PSCo
additionally has two wholly-owned subsidiaries,
PS Colorado Credit Corporation, a finance
company with the primary purpose of financing
certain of PSCo's current assets, and PSR
Investment, Inc. that owns and manages life
insurance policies for which Mr. Kelly has
served as Director and Vice President since
March, 1987 and September, 1986, respectively.
Mr. Bunch and Mr. Kelly were each appointed to serve in the offices as
listed above by unanimous written consent of the Board of Directors of NCE,
dated August 21, 1995. Mr. Bunch and Mr. Kelly will hold each office until a
successor for such offices shall have been appointed and shall have qualified.
There were no directors, officers or beneficial owner of more than ten
percent of any class of equity securities who failed to file Forms 3, 4 or 5 on
a timely basis.
There are no contracts of employment or similar arrangements between NCE
and Mr. Bunch or Mr. Kelly and they will serve in their respective offices until
the Merger is effected and new officers are elected as provided in the Merger
Agreement.
Item 11. Executive Compensation
None.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The Directors and named Executive Officers do not own any shares of NCE.
7
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Item 13. Certain Relationships and Related Transactions
See Note 2. Related Party Transactions in Item 8. Financial Statements and
Supplementary Data.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
Page
1. Financial Statements:
Balance Sheet at December 31, 1995 .................................... 4
The unaudited pro forma combined balance sheet and statements of income for
NCE are incorporated herein by reference to the Registration Statement of NCE on
Form S-4 (File No. 33-64951).
2. Financial Statement Schedules:
None.
3. Exhibits:
2(a) Merger Agreement and Plan of Reorganization dated August 22, 1995, as
amended on December 8, 1995 (incorporated by reference to Form S-4,
File No. 33-64951).
3(a) Restated Certificate of Incorporation of New Century Energies, Inc.
(incorporated by reference to Annex VIII of Form S-4, File No.
33-64951).
3(b) Restated Bylaws of New Century Energies, Inc. (incorporated by
reference to Annex IX of Form S-4, File No. 33-64951).
*10(a) Form of Employment Agreement between New Century Energies, Inc. and
Bill D. Helton (incorporated by reference to Annex VI of Form S-4,
File No. 33-64951).
*10(b) Form of Employment Agreement between New Century Energies, Inc. and
Wayne H. Brunetti (incorporated by reference to Annex VII of Form S-4,
File No. 33-64951).
(b) No reports on Form 8-K were filed during 1995 by the Registrant.
- --------------
* Required to be filed as an Exhibit to this Form 10-K by Item 14(c) hereof.
8
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, New Century Energies, Inc. duly caused this report to be
signed on its behalf by the undersigned, there unto duly authorized on the 27th
day of March, 1996.
NEW CENTURY ENERGIES, INC.
By /s/R. C. Kelly
---------------------------------
R. C. KELLY
Director, President and
Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of New Century
Energies, Inc. in the capacities and on the date indicated.
Signature Title Date
- --------------------------------------------------------------------------------
/s/Doyle R. Bunch II
_________________________ Principal Executive Officer March 27, 1996
Doyle R. Bunch II
Chairman of the Board and
Secretary
/s/R. C. Kelly
_________________________ Principal Financial Officer March 27, 1996
R. C. Kelly
Director, President and
Treasurer
9
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