<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 27, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
Rule 424(a)
File No. 333-33785
P_R_O_S_P_E_C_T_U_S
4,000,000 SHARES
NORTHERN STATES POWER COMPANY
(A MINNESOTA CORPORATION)
COMMON STOCK
(PAR VALUE $2.50 PER SHARE)
-------------------
Of the 4,000,000 shares of Common Stock, par value $2.50 per share (the
"Common Stock"), of Northern States Power Company (the "Company") offered
hereby, 3,200,000 shares are being offered initially in the United States and
Canada by the U.S. Underwriters (the "U.S. Offering") and the remaining 800,000
shares of Common Stock are being offered initially in a concurrent offering
outside the United States and Canada by the International Managers (the
"International Offering" and, together with the U.S. Offering, the "Offerings").
The outstanding shares of Common Stock are, and the shares of Common Stock
offered hereby will be, listed on the New York Stock Exchange, the Chicago Stock
Exchange and the Pacific Exchange under the symbol "NSP." The last reported sale
price of the Common Stock on August 26, 1997 on the New York Stock Exchange
Composite Tape was $48 5/8 per share. See "Common Stock Dividends and Price
Information."
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
<S> <C> <C> <C>
Per Share............................................ $ $ $
Total (3)............................................ $ $ $
</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Before deducting expenses payable by the Company estimated at $175,000.
(3) The Company has granted the U.S. Underwriters and the International Managers
options to purchase up to an additional 480,000 shares and 120,000 shares,
respectively, of Common Stock to cover over-allotments, if any. If all such
shares are purchased, the total Price to Public, Underwriting Discount and
Proceeds to Company will be $ , $ and $ , respectively. See
"Underwriting."
-------------------
The Common Stock offered hereby is offered by the Underwriters subject to
prior sale, when, as and if issued to and accepted by the Underwriters, and
subject to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the Common Stock offered hereby will be made in New York, New
York, on or about , 1997.
-------------------
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
DAIN BOSWORTH PIPER JAFFRAY INC.
INCORPORATED
-------------------
The date of this Prospectus is , 1997.
<PAGE>
NSP
[Map of service territory of utility operations]
Regulated Operations
[Map showing location of NRG projects]
NRG Projects in Operation or in Advanced Development
CERTAIN PERSONS PARTICIPATING IN THESE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SHARES OF COMMON
STOCK. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK
TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements included elsewhere in this
Prospectus, including the information contained in the documents incorporated
herein by reference.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered....................... 4,000,000 shares of Common Stock (1)
U.S. Offering.......................... 3,200,000 shares
International Offering................. 800,000 shares
Number of Shares of Common Stock to be
Outstanding............................ Approximately 73,292,619(1)
Price Range of Common Stock
(8/26/96-8/26/97)...................... $44 1/2 to $52 15/16
NYSE Listing Symbol...................... NSP
Current Indicated Annual Dividend Rate... $2.82
Book Value Per Common Share at 6/30/97... $30.46
Use of Proceeds.......................... General corporate purposes, including retirement
of $100 million of first mortgage bonds,
construction program and repayment of short-term
borrowings
Principal Business....................... Electric and Gas Utility
Service Area............................. Portions of Minnesota, North Dakota and South
Dakota. Wholly-owned Wisconsin subsidiary serves
customers in Wisconsin and Michigan. Majority of
customers are concentrated in the
Minneapolis-St. Paul metropolitan area. In 1996
approximately 62% of retail electric revenues
and 56% of retail gas revenues were derived from
sales in this area.
Estimated Population of Service Area..... 3,000,000
Approximate Number of Customers at
12/31/96............................... Electric--1,415,325; Gas--438,997
Estimated Net 1997 Summer Electric
Capability............................. 8,826 MW
Sources of Electric Energy in 1996....... Coal -- 47%; Nuclear -- 28%; Purchase and
interchange -- 21%; Hydro and other fuels -- 4%
</TABLE>
- ------------------------
(1) Assumes the U.S. Underwriters' and International Managers' over-allotment
options are not exercised. See "Underwriting."
3
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
12 MONTHS ENDED ----------------------------------------
JUNE 30, 1997 1996 1995 1994
---------------- ------------ ------------ ------------
(UNAUDITED) (FROM AUDITED AMOUNTS IN FORM 10-K)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Electric Revenues.................................. $ 2,144.9 $ 2,127.4 $ 2,142.8 $ 2,066.6
Gas Revenues....................................... 535.2 526.8 425.8 419.9
Net Income......................................... 248.0(1) 274.5 275.8(2) 243.5
Earnings Available for Common Stock................ 235.5(1) 262.3 263.3(2) 231.1
Average Number of Common and Equivalent Shares
Outstanding (000's).............................. 68,859 68,679 67,416 66,845
Earnings per Average Common Share.................. $ 3.42(1) $ 3.82 $ 3.91(2) $ 3.46
Dividends Declared per Common Share................ $ 2.775 $ 2.745 $ 2.685 $ 2.625
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997
------------------------------------------------
PERCENT OF ADJUSTED
ACTUAL AS ADJUSTED(3) CAPITALIZATION
--------- -------------- ---------------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Short-term Debt (including current maturities).................... $ 563.0 $ %
Long-term Debt, due after one year................................ $ 1,839.7
Manditorily Redeemable Preferred Securities of Subsidiary Trust... 200.0
Cumulative Preferred Stock (including premium).................... 200.3
Common Stockholders' Equity (including premium)................... 2,104.3
--------- -------------- ---
Total Capitalization.......................................... $ 4,907.3 $ 100%
--------- -------------- ---
--------- -------------- ---
Total Assets...................................................... $ 6,869.0
</TABLE>
- ------------------------
(1) 1997 results include a non-recurring charge of $17.1 million (after-tax), or
$0.25 per share, due to merger-related costs. On May 16, 1997, NSP and
Wisconsin Energy Corporation mutually agreed to terminate their plans to
merge the two companies. As a result, NSP charged to expense its share of
deferred merger-related costs.
(2) 1995 results include non-recurring income of $14.7 million, or $0.22 per
share.
(3) Adjusted to give effect to the sale of 4,000,000 shares of Common Stock
(based on net proceeds to the Company of $ million and assuming the
Underwriters' over-allotment option is not exercised).
4
<PAGE>
NSP
OVERVIEW
Northern States Power Company, a Minnesota corporation (the "Company"), is
an operating public utility engaged in the generation, transmission and
distribution of electricity in Minnesota, North Dakota and South Dakota, and the
distribution of natural gas in Minnesota and North Dakota. Through its wholly-
owned subsidiary, Northern States Power Company, a Wisconsin corporation, NSP
also is engaged in the generation, transmission and distribution of electricity
and the distribution of natural gas in Wisconsin and Michigan.
The Company's other primary subsidiaries include NRG Energy, Inc. ("NRG"),
which operates and has ownership interests in independent, non-regulated power
and energy businesses in the United States and other countries; Viking Gas
Transmission Company ("Viking"), which owns and operates a 500-mile interstate
natural gas pipeline providing gas transportation services to customers in the
Upper Midwest from connections with three major pipelines in the United States
and Canada; Eloigne Company ("Eloigne") which has ownership interests in
affordable housing projects, principally within the Company's service territory;
and Cenerprise, Inc. ("Cenerprise"), which delivers natural gas and electric
products and services to commercial and industrial customers, utilities,
municipalities and energy marketers, and offers performance contracting to
customers nationwide. The Company and its subsidiaries collectively are referred
to herein as NSP.
For the twelve months ended June 30, 1997, NSP reported assets of $6.87
billion, revenues of approximately $2.68 billion, after tax income from ongoing
operations of $265 million (excluding merger costs) and earnings per common
share from ongoing operations of $3.67 (excluding merger costs). For this same
period, the earnings contributions of NRG, Eloigne and Cenerprise were $0.37,
$0.05 and $(0.10) per share, respectively.
The Company was incorporated in 1909 under the laws of Minnesota. The
Company's executive offices are located at 414 Nicollet Mall, Minneapolis,
Minnesota 55401 (Phone 612-330-5500).
REGULATED UTILITY ACTIVITIES
NSP generates, transmits and distributes electricity throughout a 49,000
square mile service area encompassing portions of Minnesota, Wisconsin, North
Dakota, South Dakota and Michigan, and transports and distributes gas in 152
communities within this area. Net utility plant for the year ended December 31,
1996, was $4.34 billion, operating utility revenues were $2.65 billion and the
portion of NSP's net income related to utility activities was approximately
$258.2 million. NSP derived approximately 80% of its gross utility operating
revenues from its electric business and 20% from its gas business. Approximately
89% of NSP's utility operating income before taxes was attributable to its
electric business and the balance was attributable to its gas business.
Of the approximately 3 million people in NSP's service area, the majority is
concentrated in the Minneapolis-St. Paul metropolitan area. For 1996,
approximately 62% of NSP's retail electric revenues were derived from sales in
the Minneapolis-St. Paul metropolitan area and approximately 56% of retail gas
revenues came from sales in the St. Paul area.
5
<PAGE>
NSP has a residential, diversified commercial and industrial, and
agricultural customer base. During 1996, NSP's electric and gas operating
revenues were derived from the following types of customers:
<TABLE>
<CAPTION>
ELECTRIC
<S> <C>
Residential.................................. 34%
Small commercial and industrial.............. 18%
Medium commercial and industrial............. 19%
Large commercial and industrial.............. 21%
Other retail................................. 1%
Sales for resale............................. 5%
Miscellaneous................................ 2%
GAS
Residential.................................. 51%
Firm commercial and industrial............... 28%
Interruptible commercial and industrial...... 12%
Other........................................ 9%
</TABLE>
NSP is not dependent on any one customer or group of customers. NSP's
largest electric customer accounts for less than 2% of electric revenue. The
largest 10 electric customers account for about 7% of electric revenue. NSP's
largest retail gas customer accounts for about 1% of gas revenue and the largest
10 customers account for less than 5% of gas revenue.
NSP's electric capability for the summer of 1997 is estimated to be 8,826
megawatts ("MW") (net of contract sales), of which 7,096 MW is Company-owned
capability. The remainder of the capability consists of 903 MW of contracted
purchases from the Manitoba Hydro-Electric Board, a Canadian Crown Corporation,
and 827 MW of other contracted purchases. The Company-owned electric generating
capability includes 3,841 MW of coal-fired generation and 1,571 MW of nuclear
generation. NSP currently owns and operates three nuclear units that were placed
in service in 1971, 1973 and 1974. NSP has no additional nuclear units under
construction. NSP's nuclear plants currently hold the Institute of Nuclear Power
Operations' (INPO) top rating for plant operations and training. In addition,
INPO has awarded NSP's plants the INPO Excellence Award, which is a rigorous
peer review process that recognizes plants with the highest levels of excellence
in operational safety and reliability and which have no significant weaknesses.
For the year ended December 31, 1996, 47% of all electric energy sold by NSP was
coal fueled, 28% was nuclear fueled, 21% was purchased and 4% was generated from
other sources, including hydro.
NSP provides retail gas service in portions of the St. Paul metropolitan
area, portions of eastern North Dakota and northwestern Minnesota, and other
regional centers in Minnesota (Mankato, St. Cloud and Winona) and Wisconsin (Eau
Claire, LaCrosse and Ashland). NSP is directly connected to four interstate
natural gas pipelines serving these regions: Northern Natural Gas Company
("Northern"), Viking, Williston Basin Interstate Pipeline Company and Great
Lakes Transmission Limited Partnership. Approximately 81 percent of NSP's retail
gas customers are served from the Northern pipeline system.
NSP's wholly-owned pipeline subsidiary, Viking, owns and operates a 500 mile
interstate natural gas pipeline serving portions of Minnesota, Wisconsin and
North Dakota with a capacity of approximately 420 million cubic feet per day.
The Viking pipeline currently serves 10 percent of NSP's gas distribution system
needs. Viking operates exclusively as a transporter of natural gas for
third-party shippers under authority granted by the Federal Energy Regulatory
Commission ("FERC"). Rates for Viking's transportation services are regulated by
FERC.
In January 1997, NSP entered into a non-binding letter of intent with
TransCanada PipeLines Limited ("TransCanada") regarding a potential natural gas
pipeline expansion and extension project to serve the Upper Midwest U.S. gas
market, and the potential purchase by TransCanada of a 50% interest in Viking.
The proposed project, called Viking Voyageur, would involve installing a new
pipeline parallel to the existing Viking pipeline, and extending the new
pipeline to the Chicago area. If constructed, the new pipeline could transport
between 1.2 billion and 2.0 billion cubic feet of natural gas per day to markets
in Minnesota, Wisconsin, North Dakota and Illinois. The anticipated project cost
is approximately $1.0 billion (U.S. currency), and the new pipeline is proposed
to be placed in service in late 1999. The project would be constructed only if
sufficient market demand exists, and would be subject to extensive
pre-construction
6
<PAGE>
regulatory and environmental reviews by the FERC and other appropriate
government agencies. In July 1997, Viking Voyageur and NICOR Inc., the parent
company of Northern Illinois Gas, signed a letter of intent to make NICOR a 20%
owner of Viking Voyageur and extend the proposed pipeline by approximately 60
miles. Under this proposal, NSP and TransCanada would each own 40% of Viking
Voyageur.
NON-REGULATED ACTIVITIES
Total non-regulated assets of NSP as of December 31, 1996 were approximately
$808 million. In 1996, operating revenues and sales from non-regulated
activities were approximately $304 million, equity income from unconsolidated
non-regulated projects was approximately $31 million and the portion of NSP's
net income related to non-regulated activities was approximately $16.3 million.
NSP's equity investment in its largest wholly-owned non-regulated subsidiary,
NRG, as of June 30, 1997 was approximately $496 million. One of NSP's objectives
is to increase the earnings contribution from NRG to 20% of NSP's earnings by
the year 2000. NSP expects to meet this goal through the growing profitability
of existing NRG businesses and the addition of new NRG businesses. NRG's goal is
for its operations to be split evenly between domestic and international
projects.
NRG, is principally engaged in the acquisition, development and operation
of, and ownership of interests in, independent power production and cogeneration
facilities, thermal energy production and transmission facilities and resource
recovery facilities. The power generation facilities in which NRG had interests
as of August 1, 1997 (including those under construction) had a total design
capacity of 7,010 MW, of which NRG had or will have operational responsibility
for 4,582 MW and net ownership of or leasehold interests in 2,097 MW. In
addition, NRG has substantial interests in district heating and cooling systems
and steam generation and transmission operations; at December 31, 1996, these
businesses had a thermal capacity of more than 900 MW equivalents. NRG's
refuse-derived fuel ("RDF") plants processed more than 808,000 tons of municipal
solid waste into approximately 644,000 tons of RDF in 1996.
As of August 1, 1997, NRG had interests in 26 power generation facilities
worldwide (not including those facilities in which NEO Corporation ("NEO") has
an interest), including projects under construction. The location of these
projects, along with their design capacity and NRG ownership are as follows:
<TABLE>
<CAPTION>
NUMBER OF FACILITIES DESIGN CAPACITY NRG NET OWNERSHIP
----------------------- --------------- -------------------
<S> <C> <C> <C>
United States...................... 11 531 MW 176 MW
Germany............................ 4 1,160 MW 267 MW
Australia.......................... 4 4,039 MW 1,244 MW
Colombia........................... 2 299 MW 16 MW
Czech Republic..................... 1 382 MW 214 MW
Jamaica............................ 1 74 MW 6.5 MW
Peru............................... 1 155 MW 5.5 MW
Honduras........................... 1 80 MW 6 MW
Bolivia............................ 1 218 MW 126.5 MW
</TABLE>
In addition, through its wholly-owned project subsidiary, NEO, NRG had
interests on August 1, 1997 in 28 small hydroelectric and landfill gas-fired
power generation facilities located in the United States with total design
capacity of 72 MW, of which NRG has net ownership of 35 MW.
At any time, NRG has a number of projects under consideration or in
development and is in various stages of negotiations regarding other potential
projects in the United States and abroad. NRG is currently developing a number
of significant domestic and international projects. These potential projects
include a 45% interest in the West Java Project, a 400 MW coal-fired project in
Indonesia in partnership with Ansaldo Energia and P.T. Kiani Metra; a 27.75%
interest in the 390 MW Alto Cachapoal greenfield hydroelectric complex in
central Chile in partnership with Nordic Power Invest AB and Construtora
7
<PAGE>
Andrade Gutierrez S.A.; and a 50% interest in the Enfield Energy Centre, a 350
MW power project under development in Enfield, England. In addition, NRG and
representatives of the Estonian Government and the state-owned Eesti Energia
signed a Development and Cooperation Agreement under which the parties are to
establish a plan to develop and refurbish two power plants. A business plan for
the joint project was submitted in June 1997. NRG and two partners have filed a
plan in federal bankruptcy court to acquire the fossil-fueled generating assets
of Cajun Electric Power Cooperative of Baton Rouge, Louisiana. Because of the
many complexities inherent in the development, financing and acquisition of such
projects, there can be no assurance that any of these transactions will be
consummated.
NSP's non-regulated wholly-owned subsidiary, Cenerprise, markets natural gas
and electricity to end-use customers and provides customized value-added energy
services to customers, both inside NSP's service territory and on a national
basis. In response to increased market volatility and an increased focus on
end-use customers, Cenerprise discontinued its gas trading operations during
1996. Losses associated with this discontinued business line reduced NSP's 1996
earnings by approximately $0.06 per share. Cenerprise continues to seek to
expand its energy products and services and recently completed the acquisition
of two energy services firms.
Through its non-regulated subsidiary, Eloigne, NSP has investments in
various domestic affordable housing projects. As of December 31, 1996,
approximately $48 million had been invested in Eloigne projects, including $15
million in wholly-owned properties (at net book value) and $33 million in equity
interests in jointly-owned projects.
8
<PAGE>
USE OF PROCEEDS
The proceeds from the sale of the shares offered hereby, after deducting an
underwriting discount and expenses of the offering payable by the Company, are
estimated to be $ million ($ million if the Underwriters' over-allotment
option is exercised in full). These proceeds will be added to the general funds
of the Company and used for general corporate purposes, including the retirement
at maturity of $100 million principal amount of the Company's 5 7/8% First
Mortgage Bonds, Series due October 1, 1997, expenditures for the Company's
construction program and the repayment of a portion of outstanding short-term
borrowings. Short-term borrowings of the Company are expected to exceed $260
million immediately prior to the sale of the shares offered hereby. See "Capital
Spending and Financing" and "Underwriting".
CAPITAL SPENDING AND FINANCING
NSP's utility capital expenditures (including allowance for funds used
during construction) are currently estimated to be $420 million for 1997 and
$2.0 billion for the five years ending December 31, 2001. These estimates do not
include potential capital expenditures for the proposed Viking Voyageur natural
gas pipeline project. Included in NSP's projected utility capital expenditures
is $50 million in 1997 and $280 million during the five years ending December
31, 2001 for nuclear fuel for the Company's three existing nuclear units. The
remaining capital expenditures through 2001 are for many utility projects, none
of which are extraordinarily large relative to the total capital expenditure
program. Approximately 90% of the 1997 utility capital expenditures and
approximately 95% of the 1997-2001 utility capital expenditures are expected to
be provided by internally generated funds. Internally generated funds from all
operations are expected to equal approximately 42% and 75%, respectively, of
NSP's total capital requirements (including equity investments in non-regulated
projects) anticipated for 1997 and the five-year period 1997-2001. The foregoing
estimates of utility capital expenditures and internally generated funds may be
subject to substantial changes due to unforeseen factors, such as changed
economic conditions, competitive conditions, resource planning requirements, new
government regulations, changed tax laws and rate regulation.
Although they may vary depending on the success, timing, level of
involvement in planned and future projects and other unforeseen factors,
potential capital requirements for investments in existing and additional
non-regulated projects are estimated to be $500 million in 1997 and $940 million
for the five year period 1997-2001. The majority of these non-regulated capital
requirements relate to equity investments (excluding costs financed by project
debt) in NRG's projects. The remainder consists mainly of affordable housing
investments by Eloigne Company. Equity investments by NRG and Eloigne would be
funded through their own internally generated funds, equity investments by the
Company, or long-term debt issued by the non-regulated subsidiary. Such equity
investments by the Company are expected to be financed on a long-term basis
through the Company's internally generated funds.
NSP continues to evaluate opportunities to enhance its competitive position
and shareholder returns through strategic acquisitions of existing businesses.
Long-term non-regulated financing may be required for any such future
acquisitions that NSP consummates.
9
<PAGE>
COMMON STOCK DIVIDENDS AND PRICE INFORMATION
The Company has increased the annual dividend for 23 consecutive years. The
following tabulation shows cash dividends declared per share of Common Stock and
the high and low sale prices thereof, as reported on the New York Stock Exchange
Composite Tape, during the periods indicated:
<TABLE>
<CAPTION>
DIVIDENDS
HIGH LOW DECLARED
------- ------- ------
<S> <C> <C> <C>
1994.................................... $47 $38 3/4 $2.625
1995.................................... 49 1/2 42 1/2 2.685
First Quarter......................... 46 3/4 42 1/2 .660
Second Quarter........................ 47 3/8 42 7/8 .675
Third Quarter......................... 46 7/8 42 1/2 .675
Fourth Quarter........................ 49 1/2 45 1/8 .675
<CAPTION>
DIVIDENDS
HIGH LOW DECLARED
------- ------- ------
<S> <C> <C> <C>
1996.................................... $53 3/8 $44 1/2 $2.745
First Quarter......................... 53 3/8 47 5/8 .675
Second Quarter........................ 49 5/8 45 1/2 .690
Third Quarter......................... 49 3/4 44 1/2 .690
Fourth Quarter........................ 49 1/8 45 1/2 .690
1997
First Quarter......................... 49 1/8 45 1/2 .690
Second Quarter........................ 52 44 1/2 .705
Third Quarter (through 8/26/97)....... 52 15/16 48 9/16
</TABLE>
The reported last sale price on the New York Stock Exchange Composite Tape
on August 26, 1997 was $48 5/8 per share. As of June 30, 1997 there were 84,797
shareholders of record of the Common Stock.
The next quarterly dividend is expected to be paid on October 20, 1997 to
shareholders of record on October 1, 1997.
Future dividends will depend upon the future earnings and financial
condition of the Company and other factors affecting dividend policy that are
not currently determinable. Reference is made to "Description of Common Stock --
Dividend Rights" for information concerning certain restrictions upon the
payment of dividends on the Common Stock.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company's Dividend Reinvestment and Stock Purchase Plan (the "Plan")
permits participants to reinvest their dividends paid by the Company in
additional shares of the Company's Common Stock and to make optional cash
payments (not exceeding $10,000 per calendar quarter). The shares purchased
under the Plan may be authorized but unissued shares of Common Stock or Common
Stock purchased on the open market. During the remainder of 1997, the shares
purchased under the Plan are expected to come from the Company's authorized but
unissued common stock.
10
<PAGE>
DESCRIPTION OF COMMON STOCK
GENERAL
The capital stock of the Company consists of two classes: Common Stock, par
value $2.50 per share (160,000,000 shares authorized of which 69,292,619 shares
were outstanding as of July 31, 1997); and Preferred Stock, par value $100 per
share (the "Cumulative Preferred Stock") (7,000,000 shares authorized, of which
the following series were outstanding as of July 31, 1997: $3.60 Series --
275,000 shares; $4.08 Series -- 150,000 shares; $4.10 Series -- 175,000 shares;
$4.11 Series -- 200,000 shares; $4.16 Series -- 100,000 shares; $4.56 Series --
150,000 shares; Variable Rate Series A -- 300,000 shares; and Variable Rate
Series B -- 650,000 shares). The Board of Directors of the Company is authorized
to provide for the issue from time to time of Cumulative Preferred Stock in
series and, as to each series, to fix the designation, dividend rates and times
of payment, redemption price, and liquidation price or preference as to assets
in voluntary liquidation. Cumulative dividends, redemption provisions and
sinking fund requirements, to the extent that some or all of these features are
or may be present when Cumulative Preferred Stock is issued, could have an
adverse effect on the availability of earnings for distribution to the holders
of the Common Stock or for other corporate purposes.
The statements under this caption, except as otherwise indicated, are
summaries of certain provisions of the Restated Articles of Incorporation of the
Company as amended, and are subject to the detailed provisions thereof.
DIVIDEND RIGHTS
Before any dividends may be paid on the Common Stock, the holders of each
series of the Company's Cumulative Preferred Stock are entitled to receive their
dividends at the respective rates provided for the shares of the respective
series. In addition, the Company may not, except in certain limited
circumstances, declare or pay any dividends on its Common Stock if the Company
has deferred payment of interest on its Junior Subordinated Debentures that were
issued in connection with the Trust Originated Preferred Securities (TOPrS)
issued and sold by its subsidiary trust, NSP Financing I.
LIMITATIONS ON PAYMENT OF DIVIDENDS ON AND ACQUISITIONS OF COMMON STOCK
So long as any shares of Cumulative Preferred Stock are outstanding,
dividends (other than dividends payable in Common Stock) or distributions on, or
acquisitions for value of, Common Stock (i) may not exceed 50% of net income of
the Company for a preceding twelve-month period, after deducting dividends
accruing on any Cumulative Preferred Stock during the period, if the sum of the
capital represented by the Common Stock, premiums on capital stock (restricted
to premiums on Common Stock only by Commission Orders), and surplus accounts is
less than 20% of the sum of the total capital, premiums on capital stock,
surplus accounts and debt maturing more than one year after date of issue, (ii)
may not exceed 75% of net income for such preceding twelve-month period, as
adjusted, if such capitalization ratio is 20% or more but less than 25%, and
(iii) if such capitalization ratio exceeds 25%, such dividends, distributions or
acquisitions may not reduce such ratio to less than 25% except to the extent
permitted by clauses (i) and (ii) above.
In the Company's Trust Indenture dated February 1, 1937, as supplemented
(the "Trust Indenture"), securing its First Mortgage Bonds, the Company has
covenanted that the sum of (i) all dividends and distributions on the Common
Stock of the Company after September 30, 1954 (other than in Common Stock), and
(ii) the cost of all shares of its Common Stock acquired by it after that date
shall not exceed the sum of (a) the earned surplus of the Company and certain of
its former subsidiary companies, consolidated, at September 30, 1954, and (b) an
amount equal to the net income of the Company and certain of its former
subsidiary companies, consolidated, earned after September 30, 1954, after
making provisions for all dividends accruing after that date on preferred stock
of the Company and after taking into consideration all proper charges and
credits to earned surplus made after that date. In computing net
11
<PAGE>
income for the purpose of this covenant, there will be deducted an amount, if
any, by which 15% of the consolidated gross operating revenues of such
companies, as defined in the Trust Indenture, after certain deductions, exceeds
the aggregate of the amounts expended for maintenance and provided for
depreciation. None of the foregoing provisions are expected to impair the
Company's ability to pay dividends in the foreseeable future.
The Company's Supplemental and Restated Trust Indenture dated May 1, 1988
(the "Restated Indenture") amends and restates the Trust Indenture. The Restated
Indenture will not become effective and operative until all First Mortgage Bonds
of each series issued under the Trust Indenture prior to July 1989 shall have
been retired through payment or redemption or, subject to certain limitations,
until the holders of the requisite principal amount of such First Mortgage Bonds
shall have consented to the amendments contained in the Restated Indenture (the
"Effective Date"). The Restated Indenture will replace the dividend restriction
described in the preceding paragraph with the requirement that (a) the sum of:
(i) all dividends and distributions on the Company's Common Stock after the
Effective Date (other than in Common Stock) and (ii) the amount, if any, by
which the considerations given by the Company for the purchase or other
acquisition of its Common Stock after the Effective Date exceeds the
considerations received by it after the Effective Date from the sale of Common
Stock, shall not exceed (b) the sum of: (i) the retained earnings of the Company
at the Effective Date, and (ii) an amount equal to the net income of the Company
earned after the Effective Date, after deducting all dividends accruing after
the Effective Date on all classes and series of preferred stock of the Company.
In computing net income for the purpose of this amended covenant, there will be
deducted the amount, if any, by which, after the date commencing 365 days prior
to the Effective Date, the actual expenditures or charges for ordinary repairs
and maintenance and the charges for reserves, renewals, replacements,
retirements, depreciation and depletion are less than 2.50% of the Company's
completed depreciable property, as defined in the Restated Indenture.
VOTING RIGHTS
The holders of shares of Cumulative Preferred Stock of the $3.60 Series are
entitled to three votes for each share held, and the holders of shares of Common
Stock and shares of Cumulative Preferred Stock of all other series are entitled
to one vote for each share held on all matters submitted to a vote of the
Company's stockholders; provided that when dividends payable on the Cumulative
Preferred Stock of any series outstanding are in default in an amount equivalent
to the amount payable thereon during the immediately preceding twelve-month
period, and until such default shall have been remedied, the holders of shares
of Cumulative Preferred Stock, voting as a class and without regard to series,
are entitled to elect the smallest number of directors necessary to constitute a
majority of the Board of Directors and the holders of shares of Common Stock,
voting as a class, are entitled to elect the remaining directors of the Company.
The affirmative vote or consent of the holders of various specified
percentages of Cumulative Preferred Stock is required to effect certain changes
in the capital structure of the Company and certain other transactions that
might affect their rights. Except to the extent required by law, holders of
Common Stock do not vote as a class in case of any modification of their rights.
CHANGE OF CONTROL
The Company's By-laws and the Minnesota Business Corporation Act, as amended
(the "Minnesota BCA"), contain provisions that could discourage or make more
difficult a change of control of the Company. Such provisions are designed to
protect the Company's shareholders against coercive, unfair or inadequate tender
offers and other abusive takeover tactics and to encourage any person
contemplating a business combination with the Company to negotiate with its
Board of Directors for the fair and equitable treatment of all of the Company's
shareholders.
12
<PAGE>
ELECTION OF DIRECTORS. In electing directors, shareholders may cumulate
their votes in the manner provided in the Minnesota BCA. The Board of Directors
is divided into three classes as nearly equal in number as possible with
staggered terms of office so that only approximately one-third of the directors
are elected at each annual meeting of shareholders. The existence of a
classified Board along with cumulative voting rights may make it more difficult
for a group owning a significant amount of the Company's voting securities to
effect a change in the majority of the Board than would be the case if
cumulative voting did not exist.
BY-LAW PROVISIONS. The Company's By-laws require advance notice of the
introduction by shareholders of business at annual or special meetings of
shareholders of the Company. For any such proposal to be properly brought before
an annual or special meeting, a shareholder must comply with the shareholder
proposal requirements under the federal proxy rules or deliver a written notice
to the Secretary of the Company not less than 20 days nor more than 90 days
prior to the scheduled annual or special meeting, as the case may be; provided
that if the date of such meeting is not disclosed at least 30 days in advance, a
shareholder notice will be timely delivered if received by the close of business
on the tenth day following the earlier of the day on which notice of the date of
the scheduled meeting was mailed or the day on which public disclosure of the
meeting date occurred. The required notice from a shareholder must contain (i) a
description of the proposed business and the reasons for conducting such
business, (ii) the name and address of each shareholder supporting the proposal
as it appears on the Company' s books, (iii) the class and number of shares
beneficially owned by each such shareholder, and (iv) a description of any
financial or other interest of each such shareholder in the proposal.
MINNESOTA BCA. Section 302A.671 of the Minnesota BCA applies to potential
acquirers of 20% or more of the Company's voting shares. Section 302A.671
provides in substance that shares acquired by such acquirer will not have any
voting rights unless (a) the acquisition is approved by (i) a majority of the
voting power of all shares of the Company entitled to vote and (ii) a majority
of the voting power of all shares of the Company entitled to vote excluding all
shares owned by the acquirer or by any officer of the Company, or (b) the
acquisition (i) is pursuant to an all-cash tender offer for all of the voting
shares of the Company, (ii) results in the acquirer becoming the owner of at
least a majority of the outstanding voting shares of the Company, and (iii) has
been approved by a committee of disinterested directors.
Section 302A.673 of the Minnesota BCA generally prohibits public Minnesota
corporations, including the Company, from engaging in any business combination
with a person or entity owning 10% or more of the Company's voting shares for a
period of four years after the date of the transaction in which such person or
entity became a 10% shareholder unless the business combination or the
acquisition resulting in 10% ownership was approved by a committee of
disinterested directors prior to the date such person or entity became a 10%
shareholder.
Section 302A.675 of the Minnesota BCA provides in substance that a person or
entity making a takeover offer (an "offeror") for the Company is prohibited from
acquiring any additional Company shares within two years following the last
purchase of shares pursuant to a takeover offer with respect to that class
unless (i) the acquisition is approved by a committee of disinterested directors
before the purchase of any shares by the offeror pursuant to a takeover offer or
(ii) shareholders of the Company are afforded, at the time of the acquisition, a
reasonable opportunity to dispose of their shares to the offeror upon
substantially equivalent terms as those provided in the earlier takeover offer.
LIQUIDATION RIGHTS
In the event of liquidation, after the holders of all series of Cumulative
Preferred Stock have received $100 per share in the case of involuntary
liquidation, and the then applicable redemption prices in the case of voluntary
liquidation, plus in either case an amount equal to all accumulated and unpaid
dividends, the holders of the Common Stock are entitled to the remaining assets.
13
<PAGE>
PREEMPTIVE AND SUBSCRIPTION RIGHTS
No holder of stock of the Company has the preemptive right to purchase or
subscribe for any additional capital stock of the Company.
The Company's Common Stock is listed on the New York Stock Exchange, the
Chicago Stock Exchange and the Pacific Exchange. The Transfer Agent for the
Common Stock is the Company and the Registrar is Norwest Bank Minnesota, N.A.
LEGAL OPINIONS
Legal opinions relating to the Common Stock will be rendered by John P.
Moore, Jr., 414 Nicollet Mall, Minneapolis, Minnesota, counsel for the Company,
and by Gardner, Carton & Douglas, 321 North Clark Street, Chicago, Illinois,
counsel for the Underwriters. John P. Moore, Jr., Corporate Secretary of the
Company, is the beneficial owner of 3,728 shares of Company Common Stock.
Matters pertaining to local laws will be passed upon by counsel for the Company
and as to these matters Gardner, Carton & Douglas will rely on their opinions.
Gardner, Carton & Douglas from time to time acts as special counsel for NSP in
connection with certain matters.
EXPERTS
The consolidated historical financial statements of the Company as of and
for the years ended December 31, 1996 and 1995 and the consolidated historical
financial statements of Wisconsin Energy Corporation incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, and the consolidated financial statements of NRG as of
and for the years ended December 31, 1996 and 1995 incorporated in this
Prospectus by reference to the Company's Current Report on Form 8-K dated May
30, 1997, have been so incorporated in reliance upon the reports of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The consolidated historical financial statements for the Company for the
year ended December 31, 1994 incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
have been audited by Deloitte and Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
14
<PAGE>
CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a person who is not a "U.S. person" (a "Non-U.S. Holder"). For this
purpose, a "U.S. person" is any person who is, for United States federal income
tax purposes, (i) a citizen or resident of the United States, (ii) a corporation
or partnership created or organized in or under the laws of the United States or
of any State, (iii) an estate the income of which is subject to U.S. federal
income tax, regardless of its source, or (iv) a trust if (a) a court within the
United States is able to exercise primary supervision over the administration of
the trust and (b) one or more United States fiduciaries have the authority to
control all substantial decisions of the trust. This discussion does not address
all aspects of United States federal income and estate taxes and does not deal
with foreign, state and local consequences that may be relevant to such Non-U.S.
Holders in light of their personal circumstances. Furthermore, this discussion
is based on provisions of the United States Internal Revenue Code of 1986, as
amended, existing and proposed regulations promulgated thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change (possibly with retroactive effect).
An individual may, subject to certain exceptions, be deemed to be a resident
alien (as opposed to a non-resident alien) by virtue of being present in the
United States on at least 31 days in the calendar year and for an aggregate of
at least 183 days during a three-year period ending in the current calendar year
(counting for such purposes all of the days present in the current year,
one-third of the days present in the immediately preceding year, and one-sixth
of the days present in the second preceding year). Resident aliens are generally
subject to U.S. federal tax as if they were U.S. citizens and, thus, are not
Non-U.S. Holders for purposes of this discussion.
THIS DISCUSSION IS FOR GENERAL INFORMATION PURPOSES ONLY. EACH PROSPECTIVE
PURCHASER OF COMMON STOCK IS ADVISED TO CONSULT A TAX ADVISOR WITH RESPECT TO
CURRENT AND POSSIBLE FUTURE TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING
OF COMMON STOCK AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF
ANY FOREIGN, STATE, LOCAL OR OTHER TAXING JURISDICTION.
DIVIDENDS
Dividends paid to a Non-U.S. Holder of Common Stock generally will be
subject to withholding of United States federal income tax either at a rate of
30% of the gross amount of the dividends or at such lower rate as may be
specified by an applicable income tax treaty. However, dividends that are
effectively connected with the conduct of a trade or business by the Non-U.S.
Holder within the United States and, where a tax treaty applies, are
attributable to a United States permanent establishment of the Non-U.S. Holder,
are not subject to the withholding tax (provided the Non-U.S. Holder files
appropriate documentation, including, under current law, Form 4224, with the
payor of the dividend), but instead are subject to United States federal income
tax on a net income basis at applicable graduated income tax rates. Any such
effectively connected dividends received by a Non-U.S. Holder that is a
corporation may, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.
In order to claim the benefit of an applicable tax treaty, a Non-U.S. Holder
of Common Stock may have to file with the Company or its dividend paying agent
an exemption or reduced treaty rate certificate or letter in accordance with the
terms of the treaty. Under current law, dividends paid to an address outside the
United States are presumed to be paid to a resident of such country (unless the
payor has knowledge to the contrary) for purposes of the withholding discussed
above and for purposes of determining the applicability of a tax treaty rate.
However, under proposed Treasury regulations not currently in
15
<PAGE>
effect, in the case of dividends paid after December 31, 1997 (December 31, 1999
in the case of dividends paid to accounts in existence on or before the date
that is 60 days after the proposed regulations are published as final
regulations), a Non-U.S. Holder of Common Stock who wishes to claim the benefit
of an applicable treaty rate would be required to satisfy applicable
certification and other requirements either directly or through an intermediary.
In addition, backup withholding, as discussed below, may apply in certain
circumstances if applicable certification and other requirements are not met.
A Non-U.S. Holder of Common Stock eligible for a reduced rate of United
States withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
Internal Revenue Service (the "IRS").
GAIN ON DISPOSITION OF COMMON STOCK
A Non-U.S. Holder will generally not be subject to United States federal
income tax with respect to gain recognized on a sale or other disposition of
Common Stock unless (i) the gain is effectively connected with a trade or
business of the Non-U.S. Holder in the United States, and, where a tax treaty
applies, is attributable to a United States permanent establishment of the
Non-U.S. Holder, (ii) in the case of a Non-U.S. Holder who is an individual and
holds the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the sale or other disposition
and certain other conditions are met, or (iii) the Company is or has been a
"U.S. real property holding corporation" for United States federal income tax
purposes. The Company believes it is not and does not anticipate becoming a
"U.S. real property holding corporation" for United States federal income tax
purposes. Further, an exemption to the U.S. real property holding corporation
rules applies for persons holding 5 percent or less of the class of stock, such
ownership to be determined using constructive ownership rules.
If an individual Non-U.S. Holder falls under clause (i) in the preceding
paragraph, he will, unless an applicable treaty provides otherwise, be taxed on
his net gain derived from the sale under regular graduated United States federal
income tax rates. If an individual Non-U.S. Holder falls under clause (ii) in
the preceding paragraph, he will be subject to a flat 30% tax on the gain
derived from the sale, which may be offset by certain United States-source
capital losses. Certain individual Non-U.S. Holders who were once United States
citizens may be subject to special rules applicable to United States
expatriates.
If a Non-U.S. Holder that is a corporation falls under clause (i) in the
next preceding paragraph, it will be taxed on its gain under regular graduated
United States federal income tax rates and may be subject to an additional
branch profits tax at a 30% rate, unless it qualifies for a lower rate under an
applicable income tax treaty.
FEDERAL ESTATE TAX
Common Stock held by an individual who is not a citizen or resident (as
specifically defined for United States federal estate tax purposes) of the
United States at the time of death will be included in such holder's gross
estate for United States federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
The Company must report annually to the IRS and to each Non-U.S. Holder the
amount of dividends paid to such holder and the tax withheld with respect to
such dividends, regardless of whether withholding was required. Copies of the
information returns reporting such dividends and withholding may also be made
available to the tax authorities in the country in which the Non-U.S. Holder
resides under the provisions of an applicable income tax treaty.
United States backup withholding tax is imposed at the rate of 31% on
certain payments to persons not otherwise exempt that fail to furnish certain
identifying information to the payor. Under current law,
16
<PAGE>
backup withholding generally will not apply to dividends paid to a Non-U.S.
Holder at an address outside the United States (unless the payor has knowledge
that the payee is a U.S. person), but generally will apply to dividends paid on
Common Stock at addresses inside the United States to Non-U.S. Holders that fail
to provide certain identifying information in the manner required. However,
under proposed Treasury regulations not currently in effect, in the case of
dividends paid after December 31, 1997 (December 31, 1999 in the case of
dividends paid to accounts in existence on or before the date that is 60 days
after the proposed regulations are published as final regulations), a Non-U.S.
Holder generally would be subject to backup withholding at a 31% rate, unless
certain certification procedures (or, in the case of payments made outside the
United States with respect to an offshore account, certain documentary evidence
procedures) are complied with, directly or through an intermediary, or a
Non-U.S. Holder otherwise establishes an exemption from backup withholding.
Payment of the proceeds of a sale of Common Stock by or through a United
States office of a broker is subject to both backup withholding and information
reporting unless the beneficial owner provides the payor with its name and
address and certifies under penalties of perjury that it is a Non-U.S. Holder,
or otherwise establishes an exemption. In general, backup withholding and
information reporting will not apply to a payment of the proceeds of a sale of
Common Stock by or through a foreign office of a broker. If, however, such
broker is, for United States federal income tax purposes a U.S. person, a
controlled foreign corporation, or a non-United States person that derives 50%
or more of its gross income for certain periods from the conduct of a trade or
business in the United States, such payments will not be subject to backup
withholding but will be subject to information reporting, unless (i) such broker
has documentary evidence in its records that the beneficial owner is a Non-U.S.
Holder and certain other conditions are met, or (ii) the beneficial owner
otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules generally will be
allowed as a refund or a credit against such holder's U.S. federal income tax
liability provided the required information is furnished in a timely manner to
the IRS.
17
<PAGE>
UNDERWRITING
The Underwriters named below (the "U.S. Underwriters"), acting through their
Representatives, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman,
Sachs & Co., Salomon Brothers Inc, Dain Bosworth Incorporated and Piper Jaffray
Inc. (the "Representatives") have severally agreed, subject to the terms and
conditions of the purchase agreement relating to the Common Stock (the "U.S.
Purchase Agreement") and concurrently with the sale of 800,000 shares of Common
Stock to certain underwriters outside the United States and Canada (the
"International Managers" and, together with the U.S. Underwriters, the
"Underwriters"), to purchase from the Company the number of shares of Common
Stock offered hereby set forth below opposite their respective names. Under
certain circumstances, the commitments of non-defaulting U.S. Underwriters or
International Managers may be increased.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- --------------------------------------------------------------------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...........................................................
Goldman, Sachs & Co..............................................................
Salomon Brothers Inc.............................................................
Dain Bosworth Incorporated.......................................................
Piper Jaffray Inc................................................................
----------
Total.................................................................. 3,200,000
----------
----------
</TABLE>
The Company has also entered into a purchase agreement (the "International
Purchase Agreement") with the International Managers. Subject to the terms and
conditions set forth in the International Purchase Agreement, and concurrently
with the sale of 3,200,000 shares of Common Stock to the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, the Company has agreed to sell to the
International Managers, and the International Managers have severally agreed to
purchase from the Company, an aggregate of 800,000 shares of Common Stock. The
initial public offering price per share of the Common Stock and the total
underwriting discount per share of the Common Stock are identical under the
International Purchase Agreement and the U.S. Purchase Agreement.
In the U.S. Purchase Agreement and the International Purchase Agreement, the
U.S. Underwriters and the International Managers, respectively, have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Common Stock being sold pursuant to each such Purchase Agreement if
any of such shares of Common Stock being sold pursuant to each such Purchase
Agreement are purchased. The closings with respect to the sale of the shares to
be purchased by the U.S. Underwriters and the International Managers are
conditioned upon one another.
The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and the International Managers are permitted to
sell shares of Common Stock to each other for purposes of resale at the initial
public offering price, less an amount not greater than the selling concession.
Under the terms of the Intersyndicate Agreement, the U.S. Underwriters and any
dealer to whom they sell shares of Common Stock will not offer to sell or sell
shares of Common Stock to persons who are non-United States or non-Canadian
persons or to persons they believe intend to resell to persons who are
non-United States or non-Canadian persons, and the International Managers and
any dealer to whom they sell shares of Common Stock will not offer to sell or
sell shares of Common Stock to United States or Canadian persons or to persons
they believe intend to resell to persons who are United States or Canadian
persons, except in each case for transactions pursuant to the Intersyndicate
Agreement.
18
<PAGE>
The U.S. Representatives have advised the Company that the several U.S.
Underwriters propose initially to offer the shares of Common Stock to the public
at the public offering price set forth on the cover page of this Prospectus, and
to certain dealers (who may include International Managers) at such price less a
concession not in excess of $ per share. The U.S. Underwriters may allow,
and such dealers may reallow, a discount not in excess of $ per share on
sales to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.
The Company has granted the U.S. Underwriters an option, exercisable within
thirty days after the date the U.S. Purchase Agreement is executed, to purchase
up to 480,000 additional shares of Common Stock to cover over-allotments, if
any, at the initial public offering price, less the underwriting discount. If
the U.S. Underwriters exercise this option, each of the U.S. Underwriters will
have a firm commitment, subject to certain conditions, to purchase approximately
the same percentage of such additional shares that the number of shares to be
purchased by it shown in the foregoing table bears to the 3,200,000 shares of
Common Stock initially offered hereby.
The Company has agreed that for a period of 120 days after the date of this
Prospectus it will not, without the prior written consent of Merrill Lynch,
directly or indirectly issue, pledge, sell, offer to sell, grant any option for
the sale of, or otherwise transfer or dispose of any share of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
except for (i) the Common Stock to be sold in the Offerings, (ii) any shares of
Common Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company and its subsidiaries or (iii) any
shares of Common Stock issued pursuant to dividend reinvestment and stock
purchase plans of the Company.
Until the distribution of the Common Stock is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Common Stock. As an exception to these
rules, the Representatives are permitted to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Common Stock.
If the Underwriters create a short position in the Common Stock in
connection with the Offerings (i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus), the Representatives
may reduce that short position by purchasing Common Stock in the open market.
The Representatives may also elect to reduce any short position through the
exercise of all or part of the over-allotment option described above.
The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of the Common Stock, they may reclaim the
amount of the selling concession from the Underwriters and selling group members
who sold those shares as part of the Offerings.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
that Company nor any of the Underwriters makes any representation that the
Representatives will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
In the Purchase Agreements, the Company has agreed to indemnify the
Underwriters against certain liabilities under the Act or to contribute to
payments the Underwriters may be required to make in respect thereof.
19
<PAGE>
From time to time, in the ordinary course of their respective businesses,
the Underwriters and their affiliates have engaged and may engage in commercial
and investment banking transactions with the Company and its affiliates.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information on file can be inspected at the public
reference offices of the Commission currently at 450 Fifth Street, N.W.,
Washington, D.C. 20549; 500 West Madison Street, Chicago, Illinois 60661; and 7
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
In addition, reports, proxy material and other information concerning the
Company may be inspected at the Library of the New York Stock Exchange, 20 Broad
Street, New York, New York, at the office of the Chicago Stock Exchange, 440
South LaSalle Street, Chicago, Illinois, and at the office of the Pacific
Exchange, 301 Pine Street, San Francisco, California, on which exchanges the
Company's Common Stock is listed. In addition, electronically filed documents,
including reports, proxy statements and other information regarding the Company
can be obtained from the Commission's website at http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference into this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1996;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997; and
3. The Company's Current Reports on Form 8-K dated January 8, 1997, January
21, 1997, January 24, 1997, January 31, 1997, April 22, 1997, May 19,
1997, May 30, 1997 and July 30, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in the Prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON (INCLUDING ANY
BENEFICIAL OWNER) TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE
WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE
DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN INCORPORATED IN THIS PROSPECTUS BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO THE CORPORATE SECRETARY, NORTHERN STATES POWER COMPANY,
414 NICOLLET MALL, MINNEAPOLIS, MINNESOTA 55401 (612-330-7550).
20
<PAGE>
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements under the captions "NSP", "Capital Spending and
Financing", "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" included or incorporated by reference in
this Prospectus constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 ("Reform Act"). Such
forward-looking statements are intended to be identified by the words
"anticipate", "estimate", "expect", "objective", "possible", "potential" and
similar expressions. Actual results may vary materially. Factors that could
cause actual results to differ materially include, but are not limited to:
general economic conditions, including their impact on capital expenditures;
business conditions in the energy industry; competitive factors; unusual
weather; changes in federal or state legislation; the higher degree of risk
associated with the Company's non-regulated businesses as compared to the
Company's regulated businesses; and the other factors listed from time to time
by the Company in reports filed with the Commission, including Exhibit 99.01 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997.
21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
NSP....................................................................... 5
Use of Proceeds........................................................... 9
Capital Spending and Financing............................................ 9
Common Stock Dividends and Price Information.............................. 10
Description of Common Stock............................................... 11
Legal Opinions............................................................ 14
Experts................................................................... 14
Certain United States Tax Consequences to Non-United States Holders....... 15
Underwriting.............................................................. 18
Available Information..................................................... 20
Documents Incorporated by Reference....................................... 20
Special Note Regarding Forward Looking Statements......................... 21
</TABLE>
4,000,000 SHARES
NORTHERN STATES
POWER COMPANY
COMMON STOCK
(PAR VALUE $2.50 PER SHARE)
NSP
---------------------
PROSPECTUS
---------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
DAIN BOSWORTH
INCORPORATED
PIPER JAFFRAY INC.
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
