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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 24, 1999
Northern States Power Company
(Exact Name of Registrant as Specified in Charter)
Minnesota 1-3034 41-0448030
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
414 Nicollet Mall 55401
Minneapolis, Minnesota (Zip Code)
(Address of Principal Executive
Offices)
(612) 330-5500
(Registrant's telephone number, including area code)
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<PAGE>
ITEM 5. OTHER EVENTS.
On March 25, 1999, Northern States Power Company, a Minnesota corporation
("NSP"), and New Century Energies, Inc., a Delaware corporation ("NCE"), issued
a joint press release announcing that they had entered into an Agreement and
Plan of Merger, dated as of March 24, 1999 (the "Merger Agreement"), providing
for a strategic business combination of NSP and NCE. Pursuant to the Merger
Agreement, NCE will be merged with and into NSP, with NSP as the surviving
corporation in the merger (the "Merger"). Subject to the terms of the Merger
Agreement, at the time of the Merger, each share of common stock, par value
$1.00 per share, of NCE ("NCE Common Stock")(other than certain shares to be
cancelled), together with any associated preferred share purchase rights, will
be converted into the right to receive 1.55 shares of common stock, par value
$2.50 per share, of NSP ("NSP Common Stock"). Cash will be paid in lieu of any
fractional shares of NSP Common Stock which holders of NCE Common Stock would
otherwise receive.
Consummation of the Merger is subject to the satisfaction or waiver of certain
closing conditions, including, among others, approval by the shareholders of NSP
and NCE, approval or regulatory review by certain state utilities regulators,
the Securities and Exchange Commission under the Public Utility Holding Company
Act of 1935, as amended, the Federal Energy Regulatory Commission, the Nuclear
Regulatory Commission and the Federal Communications Commission, and expiration
or termination of the waiting period applicable to the Merger under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The Merger is expected to be a tax-free, stock-for-stock exchange for share-
holders of both companies (except with respect to any cash received by NCE
shareholders in lieu of fractional shares), and to be accounted for as a
pooling of interests. Each of NSP and NCE has agreed to certain undertakings
and limitations regarding the conduct of their respective businesses prior to
the closing of the transaction. The Merger is expected to take from 12 to 18
months to complete.
The Merger Agreement and the joint press release announcing the execution of the
Merger Agreement are filed herewith as Exhibits 2.1 and 99.1, respectively, and
are hereby incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, AND EXHIBITS.
(c) Exhibits
Exhibit 2.1 Agreement and Plan of Merger, dated as of March 24,
1999, by and between Northern States Power Company
and New Century Energies, Inc. (incorporated by
reference to Exhibit 2.1 to the Current Report on
Form 8-K of New Century Energies, Inc., dated
March 24, 1999).
Exhibit 99.1 Joint Press Release of Northern States Power
Company and New Century Energies, Inc., dated
March 25, 1999.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTHERN STATES POWER COMPANY
By: /s/ Gary R. Johnson
-------------------------------------
Name: Gary R. Johnson
Title: Vice President and General Counsel
Date: March 25, 1999
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement and Plan of Merger, dated as of March 24, 1999, by and
between Northern States Power Company and New Century Energies,
Inc. (incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K of New Century Energies, Inc.,
dated March 24, 1999).
99.1 Joint Press Release of Northern States Power Company and New
Century Energies, Inc., dated March 25, 1999.
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Exhibit 99.1
Joint News Release
[NCE Logo] [NSP Logo]
For NCE: For NSP:
Media Relations: Media Relations:
(303) 294-8900 (612) 337-2167
Investors: Investors:
Mike Pritchard Richard Kolkman
(303) 294-2588 (612) 330-6622
www.ncenergies.com www.nspco.com
For Immediate Release
NEW CENTURY ENERGIES AND NORTHERN STATES POWER
TO MERGE
------------------------------------------------------------
MERGED COMPANY WELL POSITIONED IN RAPIDLY CHANGING
UTILITIES INDUSTRY
DENVER and MINNEAPOLIS, March 25, 1999 -- New Century Energies (NYSE:NCE)
and Northern States Power Co. (NYSE:NSP) today announced that they have entered
into a definitive merger agreement.
"This merger combines two well-managed, mid-continent electric and gas
companies in order to provide a strong platform for assuring low-cost, quality
service to the region during a time of rapid change in the utility industry,"
said James J. Howard, president, chairman and CEO of Northern States Power Co.
The merged company will stretch from Mexico to the Canadian border, and
also will have a strong global presence, with operations in the United Kingdom,
Central Europe, Australia and South America. It will be headquartered in
Minneapolis and certain key business units or operations will be based in
Wisconsin, Denver and Amarillo, Texas. The company will be named later.
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<PAGE>
The merger is expected to be a tax-free, stock-for-stock exchange for
shareholders of both companies, and to be accounted for as a pooling of
interests. NCE and NSP anticipate that the merger will be accretive in the first
full year and thereafter to both sets of shareholders assuming realization of
anticipated net cost savings. Upon completion, holders of New Century Energies
stock will receive 1.55 shares of the merged company stock for each share of NCE
stock. Each share of Northern States Power stock will continue as one share of
the combined company.
Howard said, "The merger prepares the combined company for where the
industry will be -- an environment of customer choice -- rather than
where the industry is today. The merger is predicated on providing our customers
continued low-cost, reliable energy while maintaining high levels of customer
service. This will be extremely important to customers as the utility
environment continues to change."
In addition, Howard said the combined companies are committed to meeting
and exceeding environmental standards.
Bill D. Helton, chairman and CEO of Denver-based New Century Energies
said, "The merger provides both the combined company and its operating units
with the scale necessary to remain competitive in a changing industry
marketplace."
Helton added that NSP and New Century are an excellent fit. "Our
philosophies of focusing on excellence in customer service are the same; we both
have succeeded in keeping our costs among the lowest in the industry; and our
strategies, customer base and utility operations are very similar." He said the
combined company will "integrate two strong companies with similar customer
demographics within a single region, creating more growth in shareholder value
than would the stand-alone companies."
The companies said they expect the merger to result in net cost savings of
approximately $1.1 billion in the first 10 years of operations.
Wayne H. Brunetti, vice chairman, president and COO of New Century said,
"We expect significant cost savings from the elimination of duplicate programs,
greater purchasing efficiencies and streamlined business processes."
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<PAGE>
"The company intends to honor all existing union contracts," he said. "And
we can achieve our target merger savings while still supporting our local
communities and continuing to offer the same excellent prices and service."
Howard, 63, will serve as chairman of the holding company for the first
full year of operations. Brunetti, 56, will be president and CEO upon closing
and will assume the responsibilities as chairman upon Howard's retirement. New
Century Energies' Helton, 60, will retire at the completion of the merger. The
board will consist of an equal number of members from Northern States Power and
New Century Energies.
In the United States, the merged company will serve 3 million electricity
customers and approximately 1.5 million natural gas customers in 12 states
including Arizona, Colorado, Kansas, Michigan, Minnesota, New Mexico, North
Dakota, Oklahoma, South Dakota, Texas, Wisconsin, and Wyoming. Internationally,
the company will serve about 2 million electric customers and 400,000 natural
gas customers in the United Kingdom.
Based on year-end 1998 capacity, as a combined entity, the company will
have total generating capacity of 21,720 megawatts, of which 15,133 is regulated
in the United States. It also will have 6,587 megawatts of non-regulated
generation in the United States and internationally, including operations in the
United Kingdom, Central Europe, Australia and South America.
Based on 1998 results, the combined company would have revenues of $6.4
billion, earnings of $618.8 million and assets totaling approximately $15.1
billion.
The merger requires the approval by the shareholders of the two existing
holding companies, as well as approval or regulatory review by the Securities
and Exchange Commission, the Federal Energy Regulatory Commission, the Federal
Trade Commission, the Department of Justice, the Federal Communications
Commission, the Nuclear Regulatory Commission, and state regulators in nine of
the states currently served by the two companies. The merger is expected to take
from 12 to 18 months to complete.
It is anticipated the holding company will adopt the NCE dividend payment
level, adjusted for the exchange ratio. Based on the exchange ratio of 1.55, the
pro forma dividend for
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<PAGE>
the merged company will be $1.50 per share on an annual basis, following
completion of the merger. This maintains the dividend level for NCE shareholders
and provides a slight increase for NSP shareholders.
Based on the number of common shares currently outstanding, New Century
Energies shareholders will own 54 percent of the common equity of the combined
company and Northern States Power shareholders will own 46 percent. As of March
15, New Century Energies had approximately 114.9 million common shares
outstanding, and NSP had 153.1 million common shares outstanding. Debt holders
and preferred stockholders will continue with their present holdings under
existing terms.
SG Barr Devlin served as financial advisor to New Century Energies, and
Northern States Power was advised by The Blackstone Group.
New Century Energies serves approximately 1.5 million electricity
customers and more than a million natural gas customers in Colorado, Texas, New
Mexico, Wyoming, Kansas and Oklahoma. Its operating companies include Public
Service Co. of Colorado, Southwestern Public Service Co. and Cheyenne Light,
Fuel & Power. Wholly owned subsidiaries include: New Century International,
which owns a 50 percent interest in Yorkshire Electricity in the United Kingdom;
Utility Engineering, which provides engineering, design, construction,
management and other related services to utilities; Quixx, which invests in and
develops cogeneration and other energy-related projects; Planergy, which
provides energy services to commercial and industrial customers; eprime, which
is an unregulated commodity marketing affiliate currently engaged in gas and
electricity marketing and trading.
Northern States Power provides electricity to about 1.5 million customers
in portions of Minnesota, Wisconsin, North Dakota, Michigan, South Dakota. It
distributes natural gas to more than 475,000 customers in Minnesota, Wisconsin,
North Dakota, Michigan and Arizona. Wholly owned subsidiaries include NRG
Energy, Inc., which operates and has ownership interests in non-regulated energy
businesses around the world, with major projects in the United States, Germany
and Australia. Other subsidiaries include Viking Gas Transmission Company, a
natural gas transmission company; Energy Masters International, an energy
service company; Seren Innovations, which is building communication networks to
deliver telephone, cable TV
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<PAGE>
and high-speed Internet and data services; and Eloigne Company, which has
interests in affordable housing projects.
This press release includes forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements reflect numerous assumptions, and involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are: electric load and customer growth; abnormal weather conditions;
economic conditions in the company's service territory; fluctuations in
energy-related commodity prices, realization of net cost savings in a timely
manner, and other uncertainties. Other risk factors are detailed from time to
time in the two companies' SEC reports.
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<PAGE>
MERGER FACTS AT A GLANCE
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NEW CENTURY NORTHERN STATES COMBINED
ENERGIES POWER CO.
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MARKET VALUE $4.446 billion $4.175 billion $8.621 billion
(as of Mar. 24)
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LONG-TERM DEBT $2.206 billion $1.851 billion $4.057 billion
TRUST/PREFERRED $294 million $305.3 million $599.3 million
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REVENUE FROM ELECTRICITY $2.473 billion $2.352 billion $5.049 billion
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REVENUE FROM GAS $817 million $457 million $1.298 billion
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TOTAL REVENUES $3.611 billion $2.819 billion $6.43 billion
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TOTAL EARNINGS $341,957,000 $276,825,000 $618,782,000
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EARNINGS PER SHARE $3.06 $1.84 N/A
- BASIC
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EARNINGS PER SHARE $3.05
- DILUTED
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TOTAL ASSETS $7.7 billion $7.4 billion $15.1 billion
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ELECTRICITY CUSTOMERS 1,601,000 1,459,000 3,060,000
(UNITED STATES-CURRENT)
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ELECTRICITY CUSTOMERS 2,080,000 2,080,000
(INTERNATIONAL)
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ELECTRICITY CAPACITY 7,984 megawatts 7,149 megawatts 15,133 megawatts
(U.S. REGULATED)
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ELECTRICITY CAPACITY 247 megawatts 6,340 megawatts* 6,587 megawatts*
(NON-REGULATED)
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MILES OF ELECTRIC 10,236 6,843 17,079
TRANSMISSION
LINES
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NATURAL GAS CUSTOMERS 1,057,000 475,000 1,532,000
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MILES OF GAS PIPELINES 16,063 10,573 26,636
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EMPLOYEES 6,305 7,455 13,760
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AVG. RETAIL ELECTRICITY 5.4 cents/kwh 5.9 cents/kwh
RATES
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STATES SERVED Colorado, Arizona,
Kansas, New Michigan,
Mexico, Minnesota, South
Oklahoma, Texas, Dakota, North
Wyoming Dakota, Wisconsin
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(Based on 1998 year-end information, except where noted)
* Includes projects operating, under construction, or under contract,
expected to close by 7/1/99.
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