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, 1996
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 February 7, 1997, 200 shares of the Registrant's Common Stock, $1
par value (the only class of common stock), were issued and outstanding.
<PAGE>
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. Quarterly Reports of PSCo on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996 (File No. 1-3280).
4. PSCo's Reports on Form 8-K dated, January 18, 1996, January 31, 1996 and
May 21, 1996 (File No. 1-3280).
5. Annual Report of Southwestern Public Service Company ("SPS"), a New Mexico
corporation, on Form 10-K for the year ended August 31,1996 (File No. 1-3789).
6. SPS's 1997 Proxy Statement for the 1997 Annual Meeting of Shareholders.
7. Quarterly Report of SPS on Form 10-Q for the quarter ended November 30,
1996 (File No. 1-3789).
8. SPS's Report on Form 8-K dated, October 11, 1996 (File No. 1-3789).
9. 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).
<PAGE>
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
Consent of Independent Public Accountants.......................... 9
Signatures......................................................... 10
<PAGE>
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 with 50% of its outstanding 200 shares of
common stock, $1.00 par value, 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"). NCE will be a holding company
registered under the Public Utility Holding Company Act of 1935, as amended.
Accordingly, as part of the Merger, 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. Discussions with the SEC have been held and
will continue, as needed, in an effort to expedite their approval. 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 during the spring of 1997; 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, 1996, PSCo had 64.8 million common shares
outstanding and SPS had 40.9 million common shares outstanding. Based on such
capitalization, the Merger would result in the common shareholders of PSCo
owning 63% of the common equity of NCE and the common shareholders of SPS owning
37% 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.
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"),
the Federal Trade Commission and the U.S. Department of Justice ("DOJ") in
addition to the expiration or termination of the applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR"), as
amended. The required authorizations from the Public Utilities Commission of the
State of Colorado, the Public Utility Commission of Texas, the Public Service
Commission of Wyoming, the New Mexico Public Utility Commission, the Kansas
Corporation Commission, the NRC and the DOJ have been obtained and the waiting
period under the HSR Act has expired. Related to FERC approval, hearings were
held in late September 1996 and a non-unanimous settlement agreement was
reached. On January 23, 1997, the sole party opposing the settlement agreement
filed a notice with the FERC withdrawing all of its pleadings. PSCo and SPS have
1
<PAGE>
requested that the FERC give the matter expedited consideration, and accordingly
a final FERC order is expected shortly. The Company expects that the SEC will
make its ruling on the Merger within 30-60 days following the FERC decision.
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.
NCE currently engages in no significant operations other than the
organization of the proposed public utility holding company. 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 Merger
will not be, traded on any public market. Upon consummation of the Merger the
common stock of NCE will be listed on the New York Stock Exchange, Inc. At
December 31, 1996, 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
<PAGE>
Item 8. Financial Statements and Supplementary Data
Report of Independent Public Accountants
TO NEW CENTURY ENERGIES, INC.
We have audited the accompanying balance sheets of New Century Energies,
Inc. (a Delaware corporation) as of December 31, 1996 and 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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 sheets are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheets. 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 audits provide a reasonable basis for our opinion.
In our opinion, the balance sheets referred to above present fairly, in
all material respects, the financial position of New Century Energies, Inc. as
of December 31, 1996 and 1995, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Denver, Colorado
February 6, 1997
3
<PAGE>
NEW CENTURY ENERGIES, INC.
BALANCE SHEETS
At December 31, 1996 and 1995
ASSETS
1996 1995
---- ----
Cash................................................. $ - $ 200
Receivable from shareholder (Note 2).................. 200 -
-------- --------
Total assets.................................... $ 200 $ 200
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities........................................... $ - $ -
Shareholders' equity -
Common Stock, $1.00 par value (Note 1):
260,000,000 shares authorized;
200 shares issued and outstanding................. 200 200
Preferred Stock, $1.00 par value:
20,000,000 shares authorized;
No shares issued or outstanding................... - -
-------- --------
Total liabilities and shareholders' equity...... $ 200 $ 200
======== ========
The accompanying notes are an integral part of these balance sheets.
4
<PAGE>
NEW CENTURY ENERGIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. Formation and Organization
New Century Energies, Inc. ("NCE") was incorporated under the laws of the
State of Delaware on August 21, 1995 with 50% of its outstanding 200 shares of
common stock, $1.00 par value, 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"). NCE will be a holding company
registered under the Public Utility Holding Company Act of 1935, as amended.
Accordingly, as part of the Merger, 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. Discussions with the SEC have been held and
will continue, as needed, in an effort to expedite their approval. 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 during the spring of 1997; 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, 1996, PSCo had 64.8 million common shares
outstanding and SPS had 40.9 million common shares outstanding. Based on such
capitalization, the Merger would result in the common shareholders of PSCo
owning 63% of the common equity of NCE and the common shareholders of SPS owning
37% 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"), the Federal Trade Commission and the U.S. Department of Justice ("DOJ")
in addition to the expiration or termination of the applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR"), as
amended. The required authorizations from the Public Utilities Commission of the
State of Colorado, the Public Utility Commission of Texas, the Public Service
Commission of Wyoming, the New Mexico Public Utility Commission, the Kansas
Corporation Commission, the NRC and the DOJ have been obtained. The waiting
period under the HSR Act has expired. Related to FERC approval, hearings were
held in late September 1996 and a non-unanimous settlement agreement was
reached. On January 23, 1997, the sole party opposing the settlement agreement
filed a notice with the FERC withdrawing all of its pleadings. PSCo and SPS have
requested that the FERC give the matter expedited consideration, and accordingly
a final FERC order is expected shortly. The Company expects that the SEC will
make its ruling on the Merger within 30-60 days following the FERC decision.
5
<PAGE>
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.
NCE currently engages in no significant operations other than the
organization of the proposed public utility holding company. 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.
2. Related Party Transactions
PSCo and SPS have 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,
approximately $2.0 and $1.5 million in 1996 and 1995, respectively, were not
charged to NCE. Accordingly, the Company has no operating or cash flow
activities to report in statements of income or statements of cash flows for the
year ended December 31, 1996 and for the period from inception (August 22, 1995)
to December 31, 1995.
The cash held by NCE at December 31, 1995 was deposited into a PSCo bank
account during the first quarter of 1996 and, accordingly, NCE has recognized
this amount as a receivable from shareholder at December 31, 1996.
6
<PAGE>
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 50 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 50 Mr. Kelly has been Senior Vice President,
Director, President and Finance of PSCo since January 1990 and became
Treasurer Treasurer in June 1994. He has served as
Director of WestGas InterState, Inc., Cheyenne
Light, Fuel & Power Co., Green and Clear Lakes
Company and 1480 Welton, Inc., all wholly-owned
subsidiaries of PSCo; since April 1993, March
1990, December 1990 and March 1989,
respectively, and as 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. In September 1996, Mr. Kelly was
elected to serve as Director of Texas-Ohio Gas,
Inc. and Texas-Ohio Pipeline Inc., both
wholly-owned subsidiaries of e prime, inc. 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 elected to serve in the offices as listed
above by the Board of Directors of NCE on September 16, 1996. 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
<PAGE>
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:
Report of Independent Public Accountants............................... 3
Balance Sheets at December 31, 1996 and 1995 .......................... 4
Notes to Financial Statements.......................................... 5
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) and SPS's 1996 Annual Report on Form 10-K (File No.
1-3789)
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).
23 The Consent of Arthur Andersen LLP is set forth at page 9 herein.
27 Financial Data Schedule UT
(b) No reports on Form 8-K were filed during 1996 by the Registrant.
- --------------
* Required to be filed as an Exhibit to this Form 10-K by Item 14(c) hereof.
8
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 10-K of our report dated December 11, 1995, covering the
New Century Energies, Inc. balance sheet as of October 31, 1995, included in the
Form S-4 Joint Proxy Statement/Prospectus Registration Statement of New Century
Energies, Inc. File No. 33-64951.
ARTHUR ANDERSEN LLP
Denver, Colorado
February 6, 1997
9
<PAGE>
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 10th
day of February, 1997.
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 February 10, 1997
Doyle R. Bunch II
Chairman of the Board and
Secretary
/s/R. C. Kelly
____________________________ Principal Financial Officer February 10, 1997
R. C. Kelly
Director, President and
Treasurer
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM NEW CENTURY ENERGIES, INC. BALANCE SHEET
AS OF DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 200
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 200
<COMMON> 200
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 0
<TOTAL-COMMON-STOCKHOLDERS-EQ> 200
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 0
<TOT-CAPITALIZATION-AND-LIAB> 200
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 0
<TOTAL-OPERATING-EXPENSES> 0
<OPERATING-INCOME-LOSS> 0
<OTHER-INCOME-NET> 0
<INCOME-BEFORE-INTEREST-EXPEN> 0
<TOTAL-INTEREST-EXPENSE> 0
<NET-INCOME> 0
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>