UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT 1934
For the Fiscal Year Ended August 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission file number 1-3789
Southwestern Public Service Company
Employee Investment Plan
(Title of plan)
NEW CENTURY ENERGIES, INC.
(Name of issuer of the securities held pursuant to the plan)
1225 17th Street
Denver, Colorado 80202
(Address of principal executive offices)
<PAGE>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Page
Report's of Independent Public Accountants 1
Financial Statements and Supplemental Schedules:
Statements of Net Assets Available for Benefits
as of August 31, 1997 and 1996 3
Statements of Changes in Net Assets Available for Benefits
for the Years Ended August 31, 1997 and 1996 4
Notes to Financial Statements 5
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
as of August 31, 1997 (Schedule 1) 11
Item 27b - Schedule of Loans or Fixed-Income Obligations
in Default or Uncollectible for the Year Ended
August 31, 1997 (Schedule 2) 12
Item 27c - Schedule of Leases in Default or Uncollectible
for the Year Ended August 31, 1997 (Schedule 2) 12
Item 27d - Schedule of Reportable Transactions for the
Year Ended August 31, 1997 (Schedule 3) 13
Items 27e and 27f - Schedule of Nonexempt Transactions
with Parties-in-Interest for the Year Ended August
31, 1997 (Schedule 4) 14
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the New Century Energies, Inc. ERISA Committee:
We have audited the accompanying statement of net assets available for benefits
of Southwestern Public Service Company Employee Investment Plan (the "Plan") as
of August 31, 1997, and the related statement of changes in net assets available
for benefits for the year then ended. These financial statements and the
schedules referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
August 31, 1997 and the changes in net assets available for benefits for the
year then ended in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes, loans or fixed-income obligations in default or
uncollectible, leases in default or uncollectible, reportable transactions and
nonexempt transactions with parties-in-interest are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labo's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Denver, Colorado
February 9, 1998
1
<PAGE>
Report of Independent Auditors'
To the New Century Energies, Inc. ERISA Committee:
We have audited the accompanying statement of net assets available for benefits
of Southwestern Public Service Company Employee Investment Plan (the "Plan") as
of August 31, 1996, and the related statement of changes in net assets available
for benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
August 31, 1996 and the changes in assets available for benefits for the year
then ended in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Dallas, Texas
November 15, 1996
2
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF AUGUST 31, 1997 AND 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS 1997 1996
INVESTMENTS AT FAIR VALUE:
Company Common Stock Fund (Note 1) -
Participant Directed $ 11,484,530 $ 11,081,772
Non-Participant Directed 74,427,804 64,805,503
Boatmen's Short-Term Investment Fund 283,871 102,562
Fidelity Value Fund 3,027,877 1,144,349
T Rowe Price International Stock Fund 775,935 357,693
Strong Government Securities Fund 445,796 248,159
Total investments 90,445,813 77,740,038
RECEIVABLES:
Employers' contributions 77,801 55,569
Participant' contributions 259,408 292,468
Accrued interest and dividends 1,071,131 1,252,442
1,408,340 1,600,479
NET ASSETS AVAILABLE FOR BENEFITS $ 91,854,153 $ 79,340,517
The accompanying notes to financial statements are an integral part of these financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED AUGUST 31, 1997 AND 1996
- ---------------------------------------------------------------------------------
<S> <C> <C>
1997 1996
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of
investments $ 13,491,966 $ 5,991,805
Interest 161,544 122,541
Dividends 4,857,647 4,926,539
Other - 1,153
----- -----
Total investment income 18,511,157 11,042,038
---------- ----------
Contributions:
Employers' contributions - Company
common stock 2,643,023 1,686,054
Participants' contributions 6,733,705 7,115,865
Rollover contributions 66,952 71,869
------ ------
Total contributions 9,443,680 8,873,788
--------- ---------
Total additions 27,954,837 19,915,826
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants - cash 301,760 123,080
Distributions to participants - Company common stock 10,155,262 3,519,441
Company common stock dividends paid to participants 4,984,179 4,721,684
--------- ---------
Total deductions 15,441,201 8,364,205
---------- ---------
NET INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS 12,513,636 11,551,621
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 79,340,517 67,788,896
---------- ----------
End of year $91,854,153 $79,340,517
=========== ===========
The accompanying notes to the financial statements are an integral part of these statements.
</TABLE>
4
<PAGE>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 1997 and 1996
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the Southwestern Public Service Company
Employee Investment Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
Plan Merger - The plan sponsor, Southwestern Public Service Company (the
"Company" or "Employer") merged the Southwestern Public Service Company
Employee Stock Ownership Plan and Trust (the "ESOP") into the Southwestern
Public Service Company Tax Benefit Plan and Trust (the "Tax Benefit Plan")
effective March 1, 1995, and renamed the combined plans the Southwestern
Public Service Company Employee Investment Plan.
Company Merger - Effective August 1, 1997, the Company merged with Public
Service Company of Colorado to form and become wholly owned subsidiaries of
New Century Energies, Inc. ("NCE"). As a result, each outstanding share of
Company stock was cancelled and converted into the right to receive 0.95 of
one share of NCE common stock in accordance with the terms of the merger
agreement. Company Common Stock, referred to in these financial statements,
may consist of either NCE or Southwestern Public Service Company common
stock.
General - The Plan is a defined contribution plan covering all full-time
employees of the Company who have completed one year of service, as
defined. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"). The Plan is administered by a committee
appointed by the NCE's Board of Directors.
Participation - Any eligible employee who was a participant in the ESOP or
Tax Benefit Plan prior to March 1, 1995 is a participant in this Plan.
After March 1, 1995, employees shall be eligible to participate in the Plan
on the June 1, September 1, December 1 or March 1 following the date the
employee completes one year of service.
Contributions - Each year, participants may elect to contribute up to 15
percent of pretax annual compensation, as defined in the Plan. The Company,
at its descretion, may make matching contributions and/or additional
contributions to the Plan each Plan quarter in cash or shares of the
Company's common stock. Company contributions are subject to certain
limitations.
For the years ended August 31, 1997 and 1996, the Company contributed to the
Plan the maximum contribution allowable, calculated in accordance with the
Plan agreement, reduced by administrative and investment expenses of
$148,649 and $55,569, respectively, as salary match, deferral match and
optional employer contributions.
Investment Options - Participants may direct up to 25 percent of their
contributions and Company matching contributions in any of the following
four investment options. If participants do not elect one of the investment
options, all of their contributions are invested in shares of the Company's
common stock.
5
<PAGE>
Fidelity Value Fund - The Fund seeks long-term capital appreciation by
investing mainly in the common stocks of companies believed to be
undervalued in relation to the companies' assets, earnings or growth
potential.
T Rowe Price International Stock Fund - The Fund seeks long-term growth of
capital and income principally through a diversified portfolio of
established non-U.S. stocks.
Strong Government Securities Fund - The Fund seeks a high level of current
income from investments principally in a diversified portfolio of securities
issued or guaranteed as to principal and interest by the U.S. Government and
its agencies or instrumentalities.
Boatmen's Short-Term Investment Fund - The Fund seeks to preserve investment
capital. As a secondary objective, the Fund seeks to provide a reasonable
level of current income. The Fund invests in a diversified portfolio of
money market instruments such as U.S. Treasury Bills, certificates of
deposit, commercial paper and demand notes.
Allocations - The Employer deferral match and optional contributions are
allocated in the proportion each participant's contribution to the Plan
bears to the contributions of all participants. The Employer salary match
is allocated in the proportion each participant's salary bears to the
salaries of all participants.
Vesting - Employees are fully vested in their contributions and in their
allocated amount of the Compan's contributions.
Distributions - On termination of employment for any reason, distributions
of benefits to participants, which are less than $3,500, are to be made
within a reasonable period of time, generally not to exceed 60 days
following the close of the plan year in which such termination occurs.
Distributions of benefits to participants which exceed $3,500 are generally
made when the participant reaches age 65. However, terminated participants
may provide a written request to the administrative committee to receive
benefits at an earlier date. The Plan provides for hardship withdrawls
under certain conditions. Distributions are made in full shares of Company
common stock and cash for any partial shares. The balance of the account is
paid in cash.
Termination of the Plan - The Plan may be terminated at any time by the
Employer. In the event of termination, the Plan's administrative committee
shall direct the Trustee to distribute the assets remaining in the Plan to
participants and beneficiaries in proportion to their respective account
balances.
Administrative and Investment Expenses - The Plan provides that
administrative expenses may be paid by the Plan; however, administrative
expenses and fees incurred in connection with the investment of funds for
the Plan have been paid by the Company in 1997 and 1996, and such amounts
have reduced the amount of the Employer contributions to the Plan.
Trust Management - Boatmen's National Bank of Amarillo (the "Trustee")
manages the assets of the Plan under the terms of a trust agreement.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements of the Plan have
been prepared under the accrual method of accounting.
6
<PAGE>
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Investment Valuation and Income Recognition - The Plan's investments are
stated at fair value. Shares of registered investment companies are valued
at quoted market prices, which represent the net asset value of shares held
by the Plan at year-end. The Company common stock is valued at its quoted
market price. The change in the difference between fair value and the cost
of investments, including realized and unrealized gains or losses, is
reflected in the statement of changes in net assets available for benefits
as net appreciation (depreciation) in fair value of investments during the
year.
Securities transactions are recognized on the trade date (the date the order
to buy or sell is executed). Dividend income is recorded on the ex-dividend
date.
Payment of Benefits - Benefits are recorded when paid.
Reclassifications - Certain prior year amounts have been reclassified to
conform with the current year presentation.
3. DIVIDENDS PAYABLE
In accordance with Plan provisions, dividends received on shares of Company
common stock are distributed to participants in the course of six bi-weekly
pay periods beginning one month after the dividends are received. Dividends
declared in July and August 1997, but not received until after the Plan's
year-end, were $1,062,085, and are due to participants and will be
distributed in accordance with the Plan provisions.
4. FEDERAL INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated October 24, 1996 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
("IRC"). The Plan has been amended since receiving the determination
letter. However, the Plan administrator believes that the Plan is designed
and is currently being operated in compliance with the applicable provisions
of the IRC.
5. PLAN AMENDMENTS
The Plan will be amended from time to time, as required, to comply with
legal requirements upon the advice of the Plan's legal counsel. Other
amendments may be necessary to ensure that the Plan is appropriate within
the industry and community.
7
<PAGE>
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 for the plan year ending August
31, 1997:
August 31, 1997 August 31, 1996
Net assets available for benefits per the
financial statements $ 91,854,153 $ 79,340,517
Amounts allocated to withdrawing participants (34,281) -
------- ------
Net assets available for benefits per the
Form 5500 $ 91,819,872 $ 79,340,517
============ ============
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
August 31, 1997
Benefits paid to participants per the financial
statements $15,441,201
Add: Amounts allocated to withdrawing
participants at August 31, 1997 34,281
Less: Amounts allocated to withdrawing
participants at August 31, 1996 -
--------
Benefits paid to participants per the Form 5500 $15,475,482
===========
8
<PAGE>
7. FUND INFORMATION
Participants' contributions, distributions to participants, net appreciation
(depreciation) in fair value of investments and dividend income by fund are
as follows for the years ended August 31, 1997 and 1996:
1997 1996
Participants' contributions:
Company Common Stock Fund $ 5,722,772 $ 6,226,831
Fidelity Value Fund 622,651 495,204
T Rowe Price International Stock Fund 212,091 180,750
Strong Government Securities Fund 116,268 145,383
Boatmen's Short-Term Investment Fund 59,923 67,697
------ ------
$ 6,733,705 $ 7,115,865
=========== ===========
Distribution to participants:
Company Common Stock Fund - Cash distribution $ 301,760 $ 123,080
Company Common Stock Fund - Common stock
distribution 10,155,262 3,519,441
---------- ---------
$10,457,022 $ 3,642,521
=========== ===========
Net appreciation (depreciation) in fair value
of investments:
Company Common Stock Fund $12,863,034 $ 5,889,247
Fidelity Value Fund 573,482 88,096
T Rowe Price International Stock Fund 42,715 23,558
Strong Government Securities Fund 12,735 (9,096)
------ ------
$13,491,966 $ 5,991,805
=========== ===========
Dividend income:
Company Common Stock Fund $ 4,817,082 $ 4,919,621
Fidelity Value Fund 27,876 4,127
T Rowe Price International Stock Fund 12,689 2,791
------ -----
$ 4,857,647 $ 4,926,539
=========== ===========
8. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of Company Common Stock. Certain Plan
investments are shares of pooled separate accounts and short-term
investments managed by Boatmen's National Bank of Amarillo ("Boatmen's").
Boatmen's is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest. Fees incurred for investment
management services are paid by the Company on behalf of the Plan.
9. SUBSEQUENT EVENTS
Change in Service Providers - Effective February 1, 1998, The Vanguard Group
has been selected, by the Board of Directors of NCE, to be the trustee and
recordkeeper for the Plan. As a result, current investment fund options
will be transferred into certain Vanguard and American Century investment
fund options effective February 1, 1998. Because Vanguard will need time to
9
<PAGE>
receive, process and reconcile Plan records, there will be a "freeze" from
February 1 to early May 1998. During the freeze period, no investment fund
changes and no payments from the Plan will be processed.
Future Plan Change - In anticipation of the merger of the Company and PSCo,
the Board of Directors of NCE approved an amendment to the Plan on March 25,
1997. In summary, this amendment allowed former employees of the Company,
who were transferred to a subsidiary company of NCE, to continue to be
eligible to participate in the Plan until January 1, 1998 or such date to be
determined by resolution of the NCE Board of Directors. On December 16,
1997, the NCE Board of Directors approved the spin-off of the assets and
accrued benefits for actively-employed participants, who are not covered by
a collective bargaining agreement, to create a separate defined contribution
savings plan. This separate plan is expected to be effective July 1, 1998.
10
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<TABLE>
<CAPTION>
Schedule 1
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF AUGUST 31, 1997
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Number of
Type of Investment and Issuer Shares Cost Fair Value
Company Common Stock Fund:
New Century Energies, Inc.
common stock (1) 2,068,709 $ 57,908,364 $ 83,524,110
Southwestern Public Service Company
common stock (1)(3) 27,550 730,371 1,151,932
Short-Term Investment Co. Prime
Portfolio (2) 1,236,292 1,236,292 1,236,292
--------- ---------
59,875,027 85,912,334
Boatmen's Short-Term Investment Fund (1) 283,871 283,871 283,871
Fidelity Value Fund (2) 48,522 2,519,380 3,027,877
T Rowe Price International Stock Fund (2) 54,029 714,830 775,935
Strong Government Securities Fund (2) 42,293 439,980 445,796
------- -------
TOTAL INVESTMENTS $63,833,088 $90,445,813
=========== ===========
(1) Represents transaction with party-in-interest (Note 8).
(2) Registered investment company
(3) Subsequent to August 31, 1997, this stock was exchanged for New Century Energies, Inc. common stock.
The accompanying notes to financial statements are an integral part of this schedule.
</TABLE>
11
<PAGE>
SOUTHWESTERN PUBLIC SERVICE COMPANY Schedule 2
EMPLOYEE INVESTMENT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED-INCOME OBLIGATIONS IN DEFAULT OR
UNCOLLECTIBLE
ITEM 27c - SCHEDULE OF LEASES IN DEFAULT OR UNCOLLECTIBLE
FOR THE YEAR ENDED AUGUST 31, 1997
A schedule of loans or fixed-income obligations in default or classified as
uncollectible and a schedule of leases in default or classified as uncollectible
were not presented because there were no loans, fixed-income obligations or
leases which are in default or classified as uncollectible.
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY Schedule 3
EMPLOYEE INVESTMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED AUGUST 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Current
Value of
Asset on Net
Identity of Party Selling Transaction Gain
Involved Description of Asset Purchase Price Cost of Date (Loss)
Price Asset
Boatmen's Trust Co* Purchase - Short-Term $7,393,754 $ - $7,393,754 $7,393,754 $ -
Investment Company
Prime Portfolio
Boatmen's Trust Co* Sale - Short-Term - 7,872,288 7,872,288 7,872,288 -
Investment Company
Prime Portfolio
Boatmen's Trust Co* Purchase - Company 8,853,053 - 8,853,053 8,853,053 -
Common Stock
Boatmen's Trust Co* Sale - Company Common - 1,466,916 1,064,542 1,466,916 402,374
Stock
*Represents transaction with party-in-interest (Note 8)
The accompanying notes to financial statements are an integral part of this schedule.
</TABLE>
13
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SOUTHWESTERN PUBLIC SERVICE COMPANY Schedule 4
EMPLOYEE INVESTMENT PLAN
ITEM 27e & f - SCHEDULE OF NONEXEMPT TRANSACTIONS WITH PARTIES-IN-INTEREST
FOR THE YEAR ENDED AUGUST 31, 1997
A schedule of nonexempt transactions with parties-in-interest has not been
presented because there were no nonexempt transactions which are prohibited by
ERISA Section 406 and for which there is no statutory or administrative
exemption.
14
<PAGE>
NEW CENTURY ENERGIES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
New Century Energies, Inc. ERISA Committee has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized on the 27th
day of February, 1998.
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN
(The Plan)
By /s/R. C. Kelly
---------------------------------
R. C. KELLY
Executive Vice President and
Chief Financial Officer of
New Century Energies, Inc. and
Member of the New Century Energies, Inc.
ERISA Committee
15
Exhibit 23(a). Consent of Arthur Andersen LLP
Consent of Independent Public Accountant
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated February 9, 1998, included in this Form 11-K of
Southwestern Public Service Company Employee Investment Plan for the year ended
August 31, 1997, into the Company's previously filed Registration Statement No.
333-28639 of New Century Energies, Inc. on Form S-8 and Registration Statement
Nos. 33-57869 and 33-27452 of Southwestern Public Service Company on Forms S-8
and Registration Statement No. 333-05199 of Southwestern Public Service Company
on Form S-3.
Arthur Andersen LLP
Denver, Colorado
February 27, 1998
16
<PAGE>
Exhibit 23(b). Consent of Deloitte & Touche LLP
Independent Auditors' Consent
We consent to the incorporation by reference in Registration Statement No.
333-28639 of New Century Energies, Inc. on Form S-8 and Registration Statements
No. 33-57869 and 33-27452 of Southwestern Public Service Company on Form S-8
and Registration Statement No. 333-05199 of Southwestern Public Service Company
on Form S-3, respectively, of our report dated November 15, 1996, appearing in
this Annual Report on Form 11-K of Southwestern Public Service Company Employee
Investment Plan for the year ended August 31, 1996.
Deloitte & Touche LLP
Dallas, Texas
February 27, 1998
17
