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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 1-3280
Public Service Company of Colorado
(Exact name of registrant as specified in its charter)
Colorado 84-0296600
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1225 17th Street, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (303) 571-7511
--------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
At May 9, 1997, 65,433,203 shares of the registrant's Common Stock, $5.00
par value (the only class of common stock), were outstanding.
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<PAGE>
Table of Contents
PART I - FINANCIAL INFORMATION
Item l.Financial Statements ............................................... 1
Item 2.Management's Discussion and Analysis of Financial Condition
and Results of Operations ....................................... 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings................................................. 19
Item 6. Exhibits and Reports on Form 8-K.................................. 19
SIGNATURE.................................................................. 20
EXHIBIT INDEX.............................................................. 21
EXHIBIT 12(a).............................................................. 22
EXHIBIT 12(b).............................................................. 23
EXHIBIT 15 ................................................................ 24
In addition to the historical information contained herein, this report
contains a number of "forward-looking statements", within the meaning of the
Securities Exchange Act of 1934. Such statements address future events and
conditions concerning capital expenditures, resolution and impact of litigation,
regulatory matters, liquidity and capital resources, and accounting matters.
Actual results in each case could differ materially from those projected in such
statements due to a variety of factors including, without limitation,
restructuring of the utility industry; future economic conditions; earnings
retention and dividend payout policies; developments in the legislative,
regulatory and competitive environments in which the Company operates; and other
circumstances that could affect anticipated revenues and costs, such as
compliance with laws and regulations. These and other factors are discussed in
the Company's filings with the Securities and Exchange Commission including this
report.
i
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
ASSETS
March 31, December 31,
1997 1996
---- ----
(Unaudited)
Property, plant and equipment, at cost:
Electric .......................................... $4,012,454 $3,931,413
Gas................................................ 1,067,579 1,035,394
Steam and other.................................... 78,376 78,225
Common to all departments.......................... 429,123 418,262
Construction in progress........................... 108,101 181,597
------- -------
5,695,633 5,644,891
Less: accumulated depreciation .................... 2,079,254 2,045,996
--------- ---------
Total property, plant and equipment.............. 3,616,379 3,598,895
--------- ---------
Investments, at cost, and receivables................. 43,058 46,550
------- -------
Current assets:
Cash and temporary cash investments (Note 5)....... 368,418 9,406
Accounts receivable, less reserve for uncollectible
accounts ($3,434 at March 31, 1997;
$4,049 at December 31, 1996) .................... 203,604 218,132
Accrued unbilled revenues ......................... 69,992 85,894
Recoverable purchased gas and electric energy costs
- net (Note 1) .................................. 63,365 31,288
Materials and supplies, at average cost............ 47,419 48,972
Fuel inventory, at average cost.................... 24,572 24,739
Gas in underground storage, at cost (LIFO)......... 19,954 42,826
Regulatory assets recoverable within one year(Note 1) 44,020 44,110
Prepaid expenses and other......................... 40,375 41,790
------- -------
Total current assets.............................. 881,719 547,157
------- -------
Deferred charges:
Regulatory assets (Note 1)......................... 291,764 304,456
Unamortized debt expense .......................... 11,908 10,975
Other.............................................. 68,152 64,615
------- -------
Total deferred charges............................ 371,824 380,046
------- -------
$4,912,980 $4,572,648
========== ==========
The accompanying notes to consolidated condensed financial statements
are an integral part of these financial statements.
1
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of Dollars)
CAPITAL AND LIABILITIES
March 31, December 31,
1997 1996
---- ----
(Unaudited)
Common stock.......................................... $1,065,872 $1,048,447
Retained earnings..................................... 415,513 389,841
-------- -------
Total common equity............................... 1,481,385 1,438,288
Preferred stock:
Not subject to mandatory redemption................ 140,008 140,008
Subject to mandatory redemption at par............. 39,913 39,913
Long-term debt........................................ 1,482,816 1,259,528
--------- ---------
3,144,122 2,877,737
--------- ---------
Noncurrent liabilities:
Employees' postretirement benefits other than pensions 55,940 55,677
Employees' postemployment benefits................. 25,182 25,182
------ ------
Total noncurrent liabilities...................... 81,122 80,859
------ ------
Current liabilities:
Notes payable and commercial paper ................ 295,400 244,725
Long-term debt due within one year................. 255,076 155,030
Preferred stock subject to mandatory redemption
within one year ................................. 2,576 2,576
Accounts payable................................... 154,394 254,256
Dividends payable.................................. 37,210 36,973
Customers' deposits................................ 22,286 21,441
Accrued taxes...................................... 85,675 58,990
Accrued interest................................... 27,885 33,797
Defueling and decommissioning liability............ 7,913 8,665
Current portion of accumulated deferred income taxes 21,280 4,560
Other.............................................. 53,935 69,203
------ ------
Total current liabilities......................... 963,630 890,216
------- -------
Deferred credits:
Customers' advances for construction............... 47,013 50,269
Unamortized investment tax credits ................ 104,676 105,928
Accumulated deferred income taxes ................ 542,372 539,082
Other.............................................. 30,045 28,557
------ ------
Total deferred credits............................ 724,106 723,836
------- -------
Commitments and contingencies (Notes 4 and 5)......... -------- --------
$4,912,980 $4,572,648
========== ==========
The accompanying notes to consolidated condensed financial statements
are an integral part of these financial statements.
2
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(Thousands of Dollars Except per Share Data)
Three Months Ended
March 31,
1997 1996
---- ----
Operating revenues:
Electric.......................................... $373,953 $370,117
Gas............................................... 291,825 242,228
Other............................................. 11,882 10,572
------ ------
677,660 622,917
Operating expenses:
Fuel used in generation........................... 44,261 46,337
Purchased power................................... 122,626 122,435
Gas purchased for resale.......................... 207,352 160,724
Other operating expenses.......................... 82,828 73,890
Maintenance....................................... 15,113 14,372
Depreciation and amortization..................... 42,857 36,862
Taxes (other than income taxes)................... 22,488 22,305
Income taxes...................................... 35,317 41,146
-------- -------
572,842 518,071
Operating income..................................... 104,818 104,846
Other income and deductions:
Allowance for equity funds used during construction - 511
Miscellaneous income and deductions - net (Note 1) (889) (5,284)
---- ------
(889) (4,773)
Interest charges:
Interest on long-term debt........................ 26,906 22,068
Amortization of debt discount and expense less premium 928 977
Other interest.................................... 14,675 13,671
Allowance for borrowed funds used during construction (1,461) (1,072)
------ ------
41,048 35,644
Net income........................................... 62,881 64,429
Dividend requirements on preferred stock............. 2,943 2,972
----- -----
Earnings available for common stock.................. $ 59,938 $ 61,457
======== ========
Weighted average common shares outstanding (thousands) 65,122 63,679
====== ======
Earnings per weighted average
share of common stock outstanding................. $ 0.92 $ 0.97
======== ========
Dividends per share declared on common stock......... $ 0.525 $ 0.525
======== ========
The accompanying notes to consolidated condensed financial statements
are an integral part of these financial statements.
3
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Thousands of Dollars)
Three Months Ended
March 31,
1997 1996
---- ----
Operating activities:
Net income........................................ $ 62,881 $ 64,429
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization.................... 43,932 38,103
Amortization of investment tax credits........... (1,252) (1,241)
Deferred income taxes............................ 23,609 9,117
Allowance for equity funds used during construction - (511)
Change in accounts receivable.................... 14,528 (30,019)
Change in inventories............................ 24,592 28,845
Change in other current assets................... (15,659) 14,149
Change in accounts payable....................... (99,862) (15,532)
Change in other current liabilities.............. 15,366 35,537
Change in deferred amounts....................... 85 (1,158)
Change in noncurrent liabilities................. 264 (19,819)
Other............................................ (296) 1,396
------- -----
Net cash provided by operating activities..... 68,188 123,296
------- -------
Investing activities:
Construction expenditures......................... (57,545) (62,616)
Allowance for equity funds used during construction - 511
Proceeds from disposition of property, plant
and equipment .................................. 1,244 734
Purchase of other investments..................... (418) (1,316)
Sale of other investments......................... 4,205 2,034
----- -----
Net cash used in investing activities......... (52,514) (60,653)
------- -------
Financing activities:
Proceeds from sale of common stock................ 7,658 7,317
Proceeds from sale of long-term debt (Note 5)..... 323,733 -
Redemption of long-term debt...................... (1,755) (16,698)
Short-term borrowings - net....................... 50,675 (20,130)
Dividends on common stock......................... (34,030) (32,313)
Dividends on preferred stock...................... (2,943) (2,972)
------ -------
Net cash provided by (used in) financing
activities ................................. 343,338 (64,796)
------- -------
Net increase (decrease) in cash and temporary
cash investments ........................... 359,012 (2,153)
Cash and temporary cash investments at
beginning of period ........................ 9,406 14,693
Cash and temporary cash investments at end of
period ..................................... $ 368,418 $ 12,540
The accompanying notes to consolidated condensed financial statements
are an integral part of these financial statements.
4
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Accounting Policies
Business, Utility Operations and Regulation
The Company is an operating public utility engaged, together with its
utility subsidiaries, principally in the generation, purchase, transmission,
distribution and sale of electricity and in the purchase, transmission,
distribution, sale and transportation of natural gas. The Company is subject to
the jurisdiction of The Public Utilities Commission of the State of Colorado
("CPUC") with respect to its retail electric and gas operations and the Federal
Energy Regulatory Commission ("FERC") with respect to its wholesale electric
operations and accounting policies and practices. Approximately 90% of the
Company's electric and gas revenues are subject to CPUC jurisdiction. Cheyenne
Light, Fuel and Power Company ("Cheyenne") is subject to the jurisdiction of the
Public Service Commission of Wyoming ("WPSC"). WestGas Interstate, Inc. ("WGI")
and Texas-Ohio Pipeline, Inc. are subject to the jurisdiction of the FERC. The
gas marketing, power brokering and other operations of e prime, inc. and
Texas-Ohio Gas, Inc. (acquired September 1, 1996) are not regulated. The Company
also intends to invest in electricity systems outside the United States as
discussed in Note 5. The Company's international investments will be subject to
regulation in the countries in which such investments are made.
Regulatory Assets and Liabilities
The Company and its regulated subsidiaries prepare their financial
statements in accordance with the provisions of Statement of Financial
Accounting Standards No. 71 - "Accounting for the Effects of Certain Types of
Regulation" ("SFAS 71"). SFAS 71 recognizes that accounting for rate regulated
enterprises should reflect the relationship of costs and revenues introduced by
rate regulation. A regulated utility may defer recognition of a cost (a
regulatory asset) or recognize an obligation (a regulatory liability) if it is
probable that, through the ratemaking process, there will be a corresponding
increase or decrease in revenues. On January 1, 1996, the Company adopted
Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of" which
imposes stricter criteria for the continued recognition of regulatory assets on
the balance sheet by requiring that such assets be probable of future recovery
at each balance sheet date. The adoption of this statement did not have a
material impact on the Company's results of operations, financial position or
cash flows. The following regulatory assets are reflected in the Company's
consolidated condensed balance sheets:
5
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
March 31, December 31, Recovery
1997 1996 Through
---- ---- -------
(Thousands of Dollars)
Nuclear decommissioning costs, net (Note 2) $ 81,474 $ 89,731 2005
Income taxes ............................. 94,756 98,355 2006
Employees' postretirement benefits
other than pensions..................... 55,836 54,449 2013
Early retirement costs.................... 13,290 15,505 1998
Employees' postemployment benefits........ 24,700 24,797 Undetermined
Demand-side management costs.............. 42,416 41,462 2002
Unamortized debt reacquisition costs...... 19,408 19,914 2024
Other..................................... 3,904 4,353 1999
----- -----
Total................................... 335,784 348,566
Classified as current..................... 44,020 44,110
------ ------
Classified as noncurrent.................. $291,764 $304,456
======== ========
The regulatory assets of the Company and its regulated subsidiaries as of
March 31, 1997, are reflected in rates charged to customers over the recovery
periods noted above. The Company believes it will continue to be subject to rate
regulation to the extent necessary to recover these assets. In the event that a
portion of the Company's operations is no longer subject to the provisions of
SFAS 71 as a result of a change in regulation or the effects of competition, the
Company could be required to write-off related regulatory assets, determine any
impairment to other assets resulting from deregulation and write-down any
impaired assets to their estimated fair value.
On January 27, 1997, the CPUC issued its order on the Company's 1996 gas
rate case. The CPUC allowed recovery of postemployment benefit costs associated
with its gas operations on an accrual basis under Statement of Financial
Accounting Standards No. 112 - "Employers' Accounting for Postemployment
Benefits" ("SFAS 112") and denied amortization of the approximately $8.7 million
regulatory asset recognized upon the adoption of SFAS 112. The Company intends
to appeal the decision related to this issue and is assessing the impact of this
decision on the future recovery of the electric jurisdictional portion of
postemployment benefit costs totaling approximately $13.8 million. The Company
believes that it will be successful on appeal and that the associated regulatory
asset is realizable. If the appeal is unsuccessful, these amounts will be
written off.
Recovered/Recoverable Purchased Gas and Electric Energy Costs - Net
The Company's and Cheyenne's tariffs contain clauses which allow recovery
of certain purchased gas and electric energy costs in excess of the level of
such costs included in base rates. Currently, these cost adjustment tariffs are
revised periodically, as prescribed by the appropriate regulatory agencies, for
any difference between the total amount collected under the clauses and the
recoverable costs incurred. The cumulative effects are recognized as a current
asset or liability until adjusted by refunds or collections through future
billings to customers. The CPUC order related to the Company's merger rate
filing modified and replaced the Company's Energy Cost Adjustment ("ECA") with
an Incentive Cost Adjustment ("ICA"), which allows for a 50%/50% sharing of
certain fuel and energy cost increases or decreases among customers and
shareholders. As of March 31, 1997, the change did not impact cost recoveries.
Other Property
Property, plant and equipment includes approximately $18.4 million and
$25.4 million, respectively, for costs associated with the engineering design of
a planned future Pawnee 2 generating station and certain water
6
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
rights located in southeastern Colorado, also obtained for a future
generating station. The Company is earning a return on these investments based
on the Company's weighted average cost of debt and preferred stock in accordance
with a CPUC rate order.
Miscellaneous Income and Deductions - net
Miscellaneous income and deductions - net includes items which are
non-operating in nature or, in general, are not considered in the ratemaking
process. Such items include, among other things, Merger related costs (see Note
3), contributions, gains and losses on the sale of property and certain
litigation, severance and other accruals. Individually, these amounts did not
have a material impact on the Company's results of operations.
Statements of Cash Flows - Non-cash Transactions
Shares of common stock (250,058 in 1997 and 274,934 in 1996), valued at
the market price on date of issuance (approximately $10 million in 1997 and
1996), were issued to the Employees' Savings and Stock Ownership Plan of Public
Service Company of Colorado and Participating Subsidiary Companies. The
estimated issuance values were recognized in other operating expenses during the
respective preceding years. Shares of common stock (6,470 in 1996), valued at
the market price on the date of issuance ($0.2 million in 1996), were issued to
certain executives pursuant to the applicable provisions of the executive
compensation plans.
The stock issuances referenced above were non-cash financing activities
and are not reflected in the consolidated condensed statements of cash flows.
General
See Note 1. of the Notes to Consolidated Financial Statements in the
Company's 1996 Annual Report on Form 10-K for a summary of the Company's
significant accounting policies. Certain prior year amounts have been
reclassified to conform to the current year's presentation.
2. Fort St. Vrain
In 1989, the Company announced its decision to end nuclear operations at
the Fort St. Vrain Nuclear Generating Station ("Fort St. Vrain") and to proceed
with the defueling and decommissioning of the reactor. While the defueling of
the reactor to the Independent Spent Fuel Storage Facility ("ISFSI") was
completed in June 1992, several issues related to the ultimate storage/disposal
of Fort St. Vrain's spent nuclear fuel remained unresolved.
On February 9, 1996, the Company and the Department of Energy ("DOE")
entered into an agreement resolving all the defueling issues. As part of this
agreement, the Company has agreed to the following: 1) the DOE assumed title to
the fuel currently stored in the ISFSI, 2) the DOE will assume title to the
ISFSI and will be responsible for the future defueling and decommissioning of
the facility, 3) the DOE agreed to pay the Company $16 million for the
settlement of claims associated with the ISFSI, 4) ISFSI operating and
maintenance costs, including licensing fees and other regulatory costs, will be
the responsibility of the DOE, and 5) the Company provided to the DOE a full and
complete release of claims against the DOE resolving all contractual disputes
related to storage/disposal of Fort St. Vrain spent nuclear fuel. On December
17, 1996, the DOE submitted a request to the Nuclear Regulatory Commission
("NRC") to transfer the title of the ISFSI. This request is being reviewed by
the NRC and the Company anticipates approval in mid-1997.
On March 22, 1996, the Company and the decommissioning contractors
announced that the physical decommissioning activities at the facility have been
completed. The final site survey was completed in late October 1996. NRC site
release activities are continuing. The Company requested the NRC to terminate
the Part 50 license and
7
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
it is anticipated that the license will be terminated by mid-1997. Under the
Price-Anderson Act, the Company remains subject to potential assessments levied
in response to any nuclear incidents prior to early 1994, as disclosed in the
Company's 1996 Annual Report on Form 10-K. At March 31, 1997, a remaining $7.9
million defueling and decommissioning liability was reflected on the
consolidated condensed balance sheet. The Company believes this remaining
decommissioning liability is adequate to complete all final decommissioning
activities.
As a result of the DOE settlement, coupled with a complete review of
expected remaining decommissioning costs and establishment of the anticipated
refund to customers, pre-tax earnings for the first quarter of 1996 were
positively impacted by approximately $16 million. In accordance with the 1991
CPUC approval to recover certain decommissioning costs, 50% of any cash amounts
received from the DOE as part of a settlement, net of costs incurred by the
Company, including legal fees, is to be refunded or credited to customers. The
Company established an $8 million refund liability in the first quarter of 1996.
In early 1997, such obligation was reduced by approximately $1.1 million after
amounts to be refunded were finally determined and approved by the CPUC. Such
amounts will be refunded over a three year period.
3. Merger
In August 1995, the Company, Southwestern Public Service Company ("SPS"),
a New Mexico corporation, and New Century Energies, Inc. ("NCE"), a Delaware
corporation, entered into an Agreement and Plan of Reorganization ("Merger
Agreement") providing for a business combination as peer firms involving the
Company and SPS in a "merger of equals" transaction (the "Merger"). Based on the
outstanding common stock of the Company and SPS at March 31, 1997, the Merger
would result in the common shareholders of the Company owning 63% of the common
equity of NCE and the common shareholders of SPS owning 37% of the common equity
of NCE.
All required State and Federal regulatory agency authorizations have been
received, except for the approval by the Securities and Exchange Commission
("SEC"). The Company expects that the SEC will make its ruling on the Merger in
the very near term. It is currently expected that the Merger will be completed
in the second quarter of 1997.
It is management's intention that NCE begin realizing certain savings upon
the consummation of the Merger and, accordingly, costs associated with the
Merger and the transition planning and implementation are expected to negatively
impact earnings during 1997. The Company recognized approximately $1.3 and $2.8
million of costs associated with the Merger during the first three months of
1997 and 1996, respectively. The Merger is expected to qualify as a tax-free
reorganization and as a pooling of interests for accounting purposes.
4. Commitments and Contingencies
Regulatory Matters
1995 Merger Rate Filings
In connection with the Merger with SPS, in November 1995, the Company
filed comprehensive proposals with the CPUC, the WPSC and the FERC to obtain
approval of such Merger and the associated comprehensive proposals from such
regulatory agencies.
On November 29, 1996, and as modified on January 15, 1997, the CPUC issued
a written decision approving the Merger as well as the major provisions of a
stipulation and agreement entered into among the Company, the CPUC Staff, the
Colorado Office of Consumer Counsel ("OCC"), and substantially all other
parties. The decision establishes a five year performance based regulatory plan
and acknowledges that the Merger is in the public interest. The major provisions
of the decision include:
8
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
- a $6 million electric rate reduction, which was instituted October 1,
1996, followed by an additional $12 million electric rate reduction
effective with the implementation of new gas rates on February 1,
1997,
- an annual electric department earnings test with the sharing of
earnings in excess of an 11% return on equity for the calendar years
1997-2001 as follows:
Electric Department Sharing of Excess Earnings
--------------------------
Return on Equity Customers Shareholders
---------------- --------- ------------
11-12% 65% 35%
12-14% 50% 50%
14-15% 35% 65%
over 15% 100% 0%;
- the termination of the Qualifying Facilities Capacity Cost Adjustment
("QFCCA") earnings test which was to become effective on October 1,
1996;
- a freeze in base electric rates for the period through December
31, 2001 with the flexibility to make certain other rate changes,
including those necessary to allow for the recovery of DSM, Qualifying
Facility ("QF") and decommissioning costs;
- a replacement of the Company's ECA with an ICA to allow for a 50%/50%
sharing of certain fuel and energy cost increases or decreases among
customers and shareholders; and
- the implementation of a Quality of Service Plan ("QSP") which provides
for penalties totaling up to $5 million in year one and increasing to
$11 million in year five, if the Company does not achieve certain
performance measures relating to electric reliability, customer
complaints and telephone response to inquiries. A new docket was
opened on March 31, 1997 to address the implementation of a reward
structure for performance above certain standards.
The rate reductions, the earnings sharing, the QSP and the adoption of an
ICA will remain in effect even if the Merger is not consummated. The freeze in
base electric rates does not prohibit the Company from filing a general rate
case or deny any party the opportunity to initiate a complaint or show cause
proceeding.
Rate Cases
On June 5, 1996, the Company filed a retail rate case with the CPUC
requesting an annual increase in its jurisdictional gas department revenues of
approximately $34 million. In early 1997, the CPUC approved an overall increase
of approximately $18 million with an 11.25% return on equity, effective February
1, 1997. The Company intends to appeal the CPUC's decision which disallowed the
recovery of certain postemployment benefit costs under SFAS 112 (see Note 1) and
imputed anticipated merger related cost savings related to the gas business.
The Company filed a rate case with the FERC on December 29, 1995,
requesting a slight overall rate increase (less than 1%) from its wholesale
electric customers. This filing, among other things, requested approval for
recovery of Other Postretirement Employee Benefits ("OPEB") costs under
Statement of Financial Accounting Standards No. 106 - "Employers' Accounting for
Postretirement Benefits Other Than Pensions", postemployment benefit costs under
SFAS 112 and new depreciation rates based on the Company's most recent
depreciation study. On March 29, 1996, the FERC issued an order accepting for
filing and suspending certain proposed rate changes. Settlement agreements have
been reached with all parties and filed with the FERC, which, overall, results
in a slight decrease in rates. A final order is expected to be issued in the
second quarter of 1997.
Electric and Gas Cost Adjustment Mechanisms
During 1994 and 1995, the CPUC conducted several proceedings to review
issues related to the ECA. The CPUC opened a docket to review whether the ECA
should be maintained in its present form, altered or eliminated, and
9
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
on January 8, 1996, combined this docket with the merger docket discussed above.
The CPUC decision on the Merger modified and replaced the ECA with an ICA. The
ICA, which became effective October 1, 1996, allows for a 50%/50% sharing of
certain fuel and energy cost increases and decreases among customers and
shareholders.
The CPUC has had an on-going docket to review and prescribe a standardized
GCA process to determine the prudence of gas commodity and pipeline delivery
service costs incurred by gas utilities. Other issues addressed in this docket
included whether the GCA should be maintained in its present form, altered or
eliminated. The CPUC issued an order on April 8, 1997 which provides for the
current GCA to be maintained and the adoption of certain standardized filing and
gas purchase reporting requirements.
Environmental Issues
Environmental Site Cleanup
As described below, the Company has been or is currently involved with the
clean-up of contamination from certain hazardous substances. In all situations,
the Company is pursuing or intends to pursue insurance claims and believes it
will recover some portion of these costs through such claims. Additionally,
where applicable, the Company intends to pursue recovery from other Potentially
Responsible Parties ("PRPs"). To the extent such costs are not recovered, the
Company currently believes it is probable that such costs will be recovered
through the rate regulatory process. To the extent any costs are not recovered
through the options listed above, the Company would be required to recognize an
expense for such unrecoverable amounts.
Under the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), the U.S. Environmental Protection Agency ("EPA") has identified,
and a Phase II environmental assessment has revealed, low level, widespread
contamination from hazardous substances at the Barter Metals Company ("Barter")
properties located in central Denver. For an estimated 30 years, the Company
sold scrap metal and electrical equipment to Barter for reprocessing. The
Company has completed the cleanup of this site at a cost of approximately $9
million and has received responses from the Colorado Department of Public Health
and Environment ("CDPHE") indicating that no further action is required related
to these properties. On January 3, 1996, in a lawsuit by the Company against its
insurance providers, the Denver District Court entered final judgment in favor
of the Company in the amount of $5.6 million for certain cleanup costs at
Barter. Several appeals and cross appeals have been filed by one of the
insurance providers and the Company in the Colorado Court of Appeals. The
insurance provider has posted supersedeas bonds in the amount of $9.7 million
($7.7 million attributable to the Barter judgment). Previously, the Company had
received certain insurance settlement proceeds from other insurance providers
for Barter and other contaminated sites and a portion of those funds remains to
be allocated to this site by the trial court. In addition, the Company expects
to recoup additional expenditures beyond insurance proceeds through the sale of
the Barter property and from other PRPs. In August 1996, the Company filed a
lawsuit against four PRPs seeking recovery of certain Barter related costs.
Polychlorinated biphenyl ("PCB") presence was identified in the basement
of an historic office building located in downtown Denver. The Company was
negotiating the future cleanup with the current owners; however, on October 5,
1993, the owners filed a civil action against the Company in the Denver District
Court. The action alleged that the Company was responsible for the PCB releases
and additionally claimed other damages in unspecified amounts. On August 8,
1994, the Denver District Court entered a judgment approving a $5.3 million
offer of settlement between the Company and the building owners resolving all
claims. In December 1995, complaints were filed by the Company against all
applicable insurance carriers in the Denver District Court. A trial date
regarding the insurance carriers has been established for August 1997.
The Ramp Industries disposal facility, located in Denver, Colorado has been
designated by the EPA as a Superfund hazardous substance site pursuant to
CERCLA. On November 29, 1995, the Company received from the EPA a Notice of
Potential Liability and Request for Information related to such site and the
Company has responded to this request. The EPA is conducting an investigation of
the contamination at this site and is in the process of identifying
10
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
the nature and quantities of hazardous wastes delivered to, processed and
currently stored at the site by PRPs. In April, 1997, the EPA informed the
Company and more than 1,000 other PRPs (as well as the public) that it plans to
thermally treat and dispose of RAMP hazardous substances off-site. The EPA
estimates the cost of this remedy at between $900,000 and $1.4 million.
In addition to these sites, the Company has identified several sites where
cleanup of hazardous substances may be required. While potential liability and
settlement costs are still under investigation and negotiation, the Company
believes that the resolution of these matters will not have a material adverse
effect on its financial position, results of operations or cash flows. The
Company fully intends to pursue the recovery of all significant costs incurred
for such projects through insurance claims and/or the rate regulatory process.
Environmental Matters Related to Air Quality and Pollution Control
Under the Clean Air Act Amendments of 1990, coal burning power plants are
required to reduce sulfur dioxide ("SO2") and nitrogen oxide ("NOx") emissions
to specified levels through a phased approach. The Company`s facilities must
comply with the Phase II requirements which will be effective in the year 2000.
The Company expects to meet the Phase II emission standards placed on SO2
through the use of low sulfur coal and the operation of pollution control
equipment on certain generation facilities. The Company will be required to
modify certain boilers by the year 2000 to reduce the NOx emissions in order to
comply with Phase II requirements. The estimated Phase II costs for future plant
modifications to meet NOx requirements is approximately $13 million. The Company
is studying its options to reduce NOx and SO2 emissions and, currently does not
anticipate that these regulations will significantly impact its operations.
Craig Steam Electric Generating Station
On October 9, 1996, a conservation organization filed a complaint in the
U.S. District Court pursuant to provisions of the Federal Clean Air Act (the
"Act") against the joint owners of the Craig Steam Electric Generating Station.
Tri-State is the operator of the Craig station and the Company owns an undivided
interest (acquired in April 1992) in each of two units at the station totaling
approximately 9.7%. The plaintiff alleged that: 1) the station exceeded the 20%
opacity limitations in excess of 14,000 six minute intervals during the period
extending from the first quarter of 1991 through the second quarter of 1996, and
2) the owners failed to operate the station in a manner consistent with good air
pollution control practices. The complaint seeks, among other things, civil
monetary penalties and injunctive relief. The Act provides for penalties of up
to $25,000 per day per violation, but the level of penalties imposed in any
particular instance is discretionary. The Company does not believe that its
potential liability or the future impact of this litigation on plant operations
will have a material adverse impact on the Company's results of operations,
financial position or cash flows. This litigation is similar to the Hayden
Station complaint which was settled in 1996 as disclosed in the Company's 1996
Annual Report on Form 10-K.
Valmont Steam Electric Generating Station
On July 1, 1996, the Company received a Notice of Violation ("NOV") from
the CDPHE which alleges inadequate reporting of NOx and SO2 information and
excess NOx emissions at the Valmont Steam Electric Generating Station for the
period January 1, 1995 through August 22, 1995. In April 1997, the Company
settled the NOV with the CDPHE in a manner which did not have a material adverse
impact on the Company's results of operations, financial position or cash flows.
Employee Litigation
Several employee lawsuits have been filed against the Company involving
alleged discrimination and breach of certain fiduciary duties to employees. The
Company is actively contesting all such lawsuits and believes that the ultimate
outcome will not have a material adverse impact on the Company's results of
operations, financial position or cash flow.
11
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
On August 13, 1996, eighty-eight former Information Technology and Systems
("IT&S") employees filed a lawsuit against the Company. The complaint, which was
subsequently amended to add two other former IT&S employees, alleges that the
Company unfairly amended its severance plan in connection with a restructuring
in late 1994 to exclude the IT&S function/positions that were outsourced to IBM,
effective February 1, 1995. The Company believes that the amended severance plan
is lawful and enforceable and believes that the ultimate outcome of the lawsuit
will not have a material adverse impact on the Company's results of operations,
financial position or cash flows.
On July 19, 1996, a class action complaint was filed by fourteen
plaintiffs, which was subsequently amended to include three additional
plaintiffs, allegedly on behalf of all non-managerial, non-clerical women in the
Company's regional facilities. The complaint asserts that the Company has
engaged in a company-wide pattern and practice of sexual discrimination,
including sexual harassment and retaliation. A previous class complaint filed by
some of these plaintiffs along with other named plaintiffs, was withdrawn after
the Company filed its response. It is too early to predict the outcome of the
class action complaint. The Company intends to actively contest the class action
and believes the ultimate outcome of the individual plaintiffs' cases will not
have a material adverse impact on the Company's results of operations, financial
position or cash flows.
Certain employees terminated as part of the Company's 1991/1992
organizational analysis asserted breach of contract and promissory estoppel with
respect to job security and breach of the covenant of good faith and fair
dealing. Of the 21 actions filed, the trial court directed verdicts in favor of
the Company in 19 cases. A jury entered verdicts adverse to the Company in two
cases which were subsequently appealed by the Company. On February 6, 1997, the
Colorado Court of Appeals issued a decision on all issues in favor of the
Company and on April 3, 1997 the employees appealed the decision of the Colorado
Court of Appeals to the Colorado Supreme Court. The Company believes that the
ultimate outcome of the lawsuit will not have a material adverse impact on the
Company's results of operations, financial position or cash flow.
During 1996, the International Brotherhood of Electrical Workers, Local
111 ("IBEW Local 111") filed several grievances before the National Labor
Relations Board relating to the employment of certain non-union personnel to
perform services for the Company. A decision has been entered on three of the
multiple grievances, with two of those decisions requiring that the Company pay
union wage rates on new construction jobs performed by outside vendors. The
Company had filed suit seeking to reverse one of these decisions and challenging
the subcontracting provision of the labor agreement, all of the outstanding
subcontracting grievances and both of the existing adverse decisions as
violations of federal law. The Company and the union have reached a settlement
resolving all issues and the Company has withdrawn its' previously filed
lawsuit. Approximately 45% of the Company's workforce is represented by IBEW
Local 111.
5. Acquisition and Divestiture of Investments
Acquisition of Yorkshire Electricity
On February 24, 1997, the Company and American Electric Power ("AEP")
jointly announced that they had reached agreement with the board of directors of
Yorkshire Electricity Group plc ("Yorkshire Electricity"), a United Kingdom
regional electricity company, on the terms of a recommended cash tender offer
for all of the outstanding and to be issued ordinary shares of Yorkshire
Electricity. On April 1, 1997, the Company and AEP announced that Yorkshire
Holdings plc ("Yorkshire Holdings"), a joint venture among the Company and AEP,
had declared the cash tender offer wholly unconditional in all respects and,
thereby, committed to purchase all the outstanding shares of Yorkshire
Electricity.
As of April 30, 1997, valid acceptances of Yorkshire Holdings' offer to
purchase shares of Yorkshire Electricity have been received representing
approximately 96.25% of Yorkshire Electricity's issued share capital. Under the
provisions of the United Kingdom's Companies Act 1985, Yorkshire Holdings
intends to exercise its
12
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
rights to acquire, under the terms of the offer, the remaining shares in
Yorkshire Electricity in respect of which acceptances of the offer have not yet
been received.
Total consideration to be paid by Yorkshire Holdings is estimated to be
approximately $2.4 billion (1.5 billion pounds sterling). Yorkshire Holdings is
a wholly-owned subsidiary of Yorkshire Power Group Ltd. ("Yorkshire Power"),
which is equally owned by subsidiary companies of the Company and AEP. The
acquisition will be financed by Yorkshire Power through a combination of
approximately 25% equity and 75% debt, including the assumption of the existing
debt of Yorkshire Electricity. The funds for the acquisition will be obtained
from the Company's and AEP's investment in Yorkshire Power of approximately $360
million (220 million pounds sterling) each, with the remainder to be obtained by
Yorkshire Power through the issuance of non-recourse debt. Yorkshire Power will,
in turn, fund Yorkshire Holdings for the purpose of the acquisition. The Company
initially funded its entire equity investment in Yorkshire Power through $250
million of publicly issued secured medium-term notes with varying maturities and
drawings of $110 million on its short-term lines of credit pursuant to its
short-term credit agreement with Bank of America as agent. At March 31, 1997,
these funds were invested in temporary cash investments in anticipation of the
equity investment to be made in April 1997.
The Company will have an indirect 50% ownership interest in Yorkshire
Electricity, which will be accounted for using the equity method of accounting.
6. Management's Representations
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements include all adjustments necessary for the fair
presentation of the financial position of the Company and its subsidiaries at
March 31, 1997 and December 31, 1996, and the results of operations and cash
flows for the three months ended March 31, 1997 and 1996. The consolidated
condensed financial information and notes thereto should be read in conjunction
with the consolidated financial statements and notes for the years ended
December 31, 1996, 1995 and 1994 included in the Company's 1996 Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
Because of seasonal and other factors, the results of operations for the
three months ended March 31, 1997 should not be taken as an indication of
earnings for all or any part of the balance of the year.
13
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
PUBLIC SERVICE COMPANY OF COLORADO
We have reviewed the accompanying consolidated condensed balance sheet of Public
Service Company of Colorado (a Colorado corporation) and subsidiaries as of
March 31, 1997, and the related consolidated condensed statements of income and
cash flows for the three month periods ended March 31, 1997 and 1996. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Public Service Company of Colorado
and subsidiaries as of December 31, 1996 (not presented herein), and, in our
report dated February 24, 1997, we expressed an unqualified opinion on that
statement. In our opinion, the information set forth in the accompanying
consolidated condensed balance sheet as of December 31, 1996, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
ARTHUR ANDERSEN LLP
Denver, Colorado,
May 12, 1997
14
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Earnings
Earnings per share were $0.92 for the first quarter of 1997 as compared to
$0.97 for the first quarter of 1996. While earnings were positively impacted by
continued customer growth contributing to increased electric sales and gas
deliveries as well as the Company's cost containment efforts, there was a
decline in the 1997 first quarter earnings as compared to the same period in
1996. This decline was attributable to the favorable impact in 1996 of the
February 9, 1996 settlement agreement with the DOE resolving all spent nuclear
fuel storage and disposal issues at Fort St. Vrain (see Note 2. Fort St. Vrain
in Item 1. FINANCIAL STATEMENTS) offset, in part, by the recognition of various
non-recurring expense items during that period.
Electric Operations
The following table details the change in electric operating revenues and
energy costs for the first quarter of 1997 as compared to the same period in
1996.
Increase (Decrease)
-------------------
(Thousands of Dollars)
Electric operating revenues:
Retail............................................... $(5,799)
Wholesale............................................ 1,449
Non-regulated power marketing........................ 5,648
Other (including unbilled revenues).................. 2,538
-------
Total revenues...................................... 3,836
Fuel used in generation............................... (2,076)
Purchased power....................................... 191
-------
Net increase in electric margin..................... $ 5,721
=======
The following table compares electric Kwh sales by major customer classes
for the first quarter of 1997 and 1996.
Millions of Kwh Sales
---------------------
1997 1996 %Change *
---- ---- ---------
Residential ............................... 1,867 1,833 1.9%
Commercial and Industrial ................ 3,842 3,776 1.8
Public Authority .......................... 48 51 (6.4)
----- -----
Total Retail............................. 5,757 5,660 1.7
Wholesale.................................. 850 792 7.4
Non-regulated power marketing.............. 367 - -
----- -----
Total.................................... 6,974 6,452 8.1
===== =====
* Percentages are calculated using unrounded amounts
Electric margin increased in the first quarter of 1997, when compared to
the first quarter of 1996, primarily due to higher electric Kwh retail sales
resulting from customer growth offset, in part, by lower fuel costs and rate
reductions effective October 1, 1996 and February 1, 1997, which resulted from
the settlement of the Merger proceedings in Colorado (see Note 4. Commitments
and Contingencies - Merger in Item 1. FINANCIAL STATEMENTS). Power marketing
activities by non-regulated subsidiaries initiated in the third quarter of 1996
have contributed to increased operating revenues, however, the margin on such
sales is minimal.
The Company and Cheyenne have cost adjustment mechanisms which recognize
the majority of the effects of changes in fuel used in generation and purchased
power costs and allow recovery of such costs on a timely basis. As a result, the
changes in revenues associated with these mechanisms during the first quarters
of 1997 and 1996 had little impact on net income. However, as discussed in Note
4. Commitments and
15
<PAGE>
Contingencies - Regulatory Matters in Item 1. FINANCIAL STATEMENTS, in its
decision on the Merger, the CPUC replaced the Company's ECA with an ICA,
effective October 1, 1996, which allows for a 50%/50% sharing of certain fuel
and energy cost increases and decreases among customers and shareholders. The
change did not impact the cost recoveries for the first quarter of 1997.
Fuel used in generation expense decreased approximately 4.5% during the
first quarter of 1997, as compared to the same quarter in 1996, due to decreased
generation levels at the Company's power plants and lower coal supply costs in
the first quarter of 1997.
Purchased power expense increased slightly during the first quarter of
1997, as compared to the same quarter in 1996. Costs incurred in connection with
the increased non-regulated power marketing sales were partially offset by the
lower costs of economy purchases from other utilities to meet customer demand.
Gas Operations
The following table details the change in revenues from gas sales and gas
purchased for resale for the first quarter of 1997 as compared to the same
period in 1996.
Increase (Decrease)
-------------------
(Thousands of Dollars)
Revenues from gas sales (including unbilled revenues). 48,470
Gas purchased for resale.............................. 46,628
-------
Net increase in gas sales margin..................... $ 1,842
=======
The following table compares gas decatherm (Dth) deliveries by major
customer classes for the first quarter of 1997 and 1996.
Millions of Dth Deliveries
--------------------------
1997 1996 % Change *
---- ---- ----------
Residential................................ 39.6 39.0 1.4%
Commercial................................. 21.3 22.3 (4.4)
Non-regulated gas marketing................ 15.6 0.7 **
----- -----
Total Sales.............................. 76.5 62.0 23.4
Gathering and Processing................... 0.1 0.2 **
Transportation............................. 25.1 22.3 12.6
----- -----
Total.................................... 101.7 84.5 20.3
===== =====
* Percentages are calculated using unrounded amounts
** Percentage change is significant, but presentation of the amount is not
meaningful
Gas sales margin increased in the first quarter of 1997, when compared to
the first quarter of 1996, primarily due to an increase in the Company's base
revenues associated with the higher rates effective February 1, 1997, resulting
from the Company's 1996 rate case and higher retail gas sales resulting from
annual customer growth of approximately 3.5%. In addition, gas marketing
activities by non-regulated subsidiaries favorably contributed to the increase
in gas sales margin. Gas costs were higher during the first quarter of 1997, as
compared to the same period of 1996, as a result of higher gas prices incurred
through the winter heating season.
Gas transportation, gathering, processing and other revenues increased
$1.1 million during the first quarter of 1997, when compared to the first
quarter of 1996, primarily due to an increase in transport deliveries. The
higher transport deliveries are attributable to the shifting of various Company
commercial sales customers to firm transport customers. Historically, this
shifting has not had an impact on gas margin and is not expected to have an
impact in the future.
16
<PAGE>
The Company and Cheyenne have in place GCA mechanisms for natural gas
sales, which recognize the majority of the effects of changes in the cost of gas
purchased for resale and adjust revenues to reflect such changes in cost on a
timely basis. As a result, the changes in revenues associated with these
mechanisms during the first quarters of 1997 and 1996 had little impact on net
income. However, the fluctuations in gas sales impact the amount of gas the
Company must purchase and, therefore, along with the increases and decreases in
the per-unit cost of gas, affect total gas purchased for resale.
Non-Fuel Operating Expenses
Other operating and maintenance expenses increased $9.7 million during the
first quarter of 1997, as compared to the same period in 1996, primarily due to
the favorable impact on 1996 first quarter earnings of the February 9, 1996
settlement agreement with the DOE resolving all spent nuclear fuel storage and
disposal issues at Fort St. Vrain (approximately $16 million) offset, in part,
by costs incurred during the first quarter of 1996 associated with the
settlement agreement of certain environmental issues related to the operations
of the Hayden Steam Electric Generation Station. In addition, the current period
results were favorably impacted by lower employee benefit costs and other
general reductions resulting from the Company's cost containment efforts.
Depreciation and amortization expense increased $6.0 million, or 16.3%, in
the first quarter of 1997, as compared to the same period in 1996, primarily due
to the depreciation of property additions and the higher amortization of
software costs.
The decrease in income taxes for the first quarter of 1997, as compared to
the same period in 1996, is primarily due to lower pre-tax income, the tax
effects of recognizing certain non-deductible environmental and Merger costs in
1996 and the prior year accrual for additional tax liabilities.
Miscellaneous income and deductions - net increased $4.4 million primarily
due to lower Merger costs in 1997 and higher interest income on temporary cash
investments, which resulted from the borrowings in anticipation of the
investment to be made in acquiring Yorkshire Electricity. See Note 5.
Acquisition and Divestiture of Investments Acquisition of Yorkshire Electricity
in Item 1. FINANCIAL STATEMENTS.
Interest expense increased $5.4 million during the first quarter of 1997,
when compared to the same quarter in 1996, primarily due to interest on
borrowings utilized to finance capital expenditures and the anticipated
acquisition of Yorkshire Electricity. These borrowings included the issuance of
$75 million and $250 million of medium-term notes in January and March 1997,
respectively.
Financial Position
Accounts payable decreased approximately $100 million at March 31, 1997,
as compared to December 31, 1996, primarily due to the impact of seasonally
lower gas purchases. This also contributed to the reduction in accounts
receivable.
Commitments and Contingencies
Issues relating to regulatory and environmental matters are discussed in
Note 4 in Item 1. FINANCIAL STATEMENTS. These matters and the future resolution
thereof may impact the Company's future results of operations, financial
position or cash flows.
Common Stock Dividend
In March 1997, the Board of Directors ("the Board") approved a common
stock dividend at the rate of $0.525 per share. In anticipation of the effective
date of the Merger, in April 1997 the Board approved a partial dividend payable
to shareholders of the Company covering the period April 12, 1997 through the
day prior to the Merger completion, based on the quarterly dividend rate of
$0.525, but prorated for the number of days in the interim
17
<PAGE>
period. This dividend is approved as long as the effective date of the Merger is
not later than July 1, 1997. During the first quarter of 1996, the Company
increased the quarterly common stock dividend of $0.51 per share to $0.525 per
share. The Company's common stock dividend level is dependent upon the Company's
results of operations, financial position, cash flows and other factors. The
Board of Directors of the Company will continue to evaluate the common stock
dividend level on a quarterly basis. After consummation of the Merger, dividends
will be paid to NCE as the holder of all of the Company's common stock.
Liquidity and Capital Resources
Cash Flows - Three Months Ended March 31
1997 1996 Decrease
---- ---- --------
Net cash provided by operating activities (in millions) $68.2 $123.3 $(55.1)
Cash provided by operating activities decreased in the first three months
of 1997, when compared to the first three months of 1996, primarily due to the
increase in payments to gas suppliers resulting from the higher gas costs in
late 1996 and early 1997. A portion of these higher gas costs have been deferred
through the GCA and will be recovered from customers in the future. These
decreases were offset, in part, by an increase in accounts receivable which was
attributable to a gas refund made late in 1995 that was applied directly to
customers' accounts and served to lower cash receipts during the first quarter
of 1996.
1997 1996 Decrease
---- ---- --------
Net cash used in investing activities (in millions) $(52.5) $(60.7) $(8.2)
Cash used in investing activities decreased during the three months ended
March 31, 1997, when compared to the same period in 1996, primarily due to lower
construction expenditures.
1997 1996 Increase
---- ---- --------
Net cash provided by (used in)
financing activities (in millions) $343.3 $(64.8) $408.1
Cash provided by financing activities increased (indicating that there
were more borrowings) in the first three months of 1997, when compared to the
first three months of 1996, primarily due to the issuance of $75 million and
$250 million of medium term notes in January and March 1997, respectively. The
proceeds from the $75 million financing were used to fund the Company's
construction program. The Company used the proceeds from the $250 million medium
term notes, together with additional borrowings of approximately $110 million on
its short-term lines of credit, to fund its acquisition of Yorkshire
Electricity. See Note 5. Acquisition and Divestiture of Investments -
Acquisition of Yorkshire Electricity in Item 1. FINANCIAL STATEMENTS.
18
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Part 1. See Note 4. Commitments and Contingencies in Item 1, Part 1.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4(a) Supplemental Indenture dated as of February 1, 1997, establishing a
series of First Mortgage Bonds under the Indenture dated as of
December 31, 1939
4(b) Supplemental Indenture No. 6 dated as of February 1, 1997
establishing a series of Secured Medium-Term Notes under the
Indenture dated as of October 1, 1993.
12(a) Computation of Ratio of Consolidated Earnings to Consolidated Fixed
Charges is set forth at page 22 herein.
12(b) Computation of Ratio of Consolidated Earnings to Consolidated
Combined Fixed Charges and Preferred Stock Dividends is set forth
at page 23 herein.
15 Letter from Arthur Andersen LLP regarding unaudited interim
information is set forth at page 24 herein.
27 Financial Data Schedule UT
(b) Reports on Form 8-K
The following reports on Form 8-K were filed since the beginning of the
first quarter of 1997.
- A report on Form 8-K dated February 24, 1997, was filed on February 24,
1997. The item reported was Item 5. Other Events: On February 24, 1997,
the Company and AEP jointly announced that they reached agreement with the
board of directors of Yorkshire Electricity, on the terms of a recommended
cash tender offer for all of the outstanding and to be issued ordinary
shares of Yorkshire Electricity.
- A report on Form 8-K dated April 1, 1997, was filed on April 15, 1997
which included the following two items:
Item 2. Acquisition or Disposition of Assets: On April 1, 1997, the
Company and AEP announced that Yorkshire Holdings, a joint venture among
the Company and AEP, had declared the cash tender offer to purchase all
the outstanding and to be issued shares of Yorkshire Electricity wholly
unconditional in all respects and, thereby, is committed to purchase all
the outstanding shares of Yorkshire Electricity.
Item 7. Financial Statements and Exhibits: (a) Financial Statements of
Business Acquired and (b) Pro Forma Financial Information. For both topics
(a) and (b), it was impracticable to provide the required financial
statements or pro forma financial information for Yorkshire Electricity at
the date the report was filed. The required financial statements or pro
forma financial information will be filed as soon as practicable, but no
later than 60 days after the date the report was filed.
19
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Public Service Company of Colorado has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
PUBLIC SERVICE COMPANY OF COLORADO
By /s/ R. C. Kelly
---------------------------------
R. C. KELLY
Senior Vice President,
Finance, Treasurer and
Chief Financial Officer
Dated: May 14, 1997
20
<PAGE>
EXHIBIT INDEX
4(a) Supplemental Indenture dated as of February 1, 1997, establishing a
series of First Mortgage Bonds under the Indenture dated as of December
31, 1939.
4(b) Supplemental Indenture No. 6 dated as of February 1, 1997
establishing a series of Secured Medium-Term Notes under the
Indenture dated as of October 1, 1993.
12(a) Computation of Ratio of Consolidated Earnings to Consolidated Fixed
Charges is set forth at page 22 herein.
12(b) Computation of Ratio of Consolidated Earnings to Consolidated
Combined Fixed Charges and Preferred Stock Dividends is set forth at
page 23 herein.
15 Letter from Arthur Andersen LLP regarding unaudited interim information
is set forth at page 24 herein.
27 Financial Data Schedule UT.
21
<PAGE>
EXHIBIT 12(a)
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS
TO CONSOLIDATED FIXED CHARGES
(not covered by Report of Independent Public Accountants)
Three Months Ended
March 31,
1997 1996
---- ----
(Thousands of Dollars, except ratios)
Fixed charges:
Interest on long-term debt................... $ 26,906 $ 22,068
Interest on borrowings against corporate-owned
life insurance contracts................... 10,736 9,258
Other interest............................... 3,939 4,413
Amortization of debt discount and expense less
premium ................................... 928 977
Interest component of rental expense......... 2,583 2,746
------ ------
Total ..................................... $ 45,092 $ 39,462
======== ========
Earnings (before fixed charges and taxes on income):
Net income................................... $ 62,881 $ 64,429
Fixed charges as above....................... 45,092 39,462
Provisions for Federal and state taxes on income,
net of investment tax credit amortization.... 35,317 41,146
------ ------
Total...................................... $143,290 $145,037
======== ========
Ratio of earnings to fixed charges.............. 3.18 3.68
==== ====
22
<PAGE>
EXHIBIT 12(b)
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS
TO CONSOLIDATED COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(not covered by Report of Independent Public Accountants)
Three Months Ended
March 31,
1997 1996
---- ----
(Thousands of Dollars, except ratios)
Fixed charges and preferred stock dividends:
Interest on long-term debt.................. $ 26,906 $ 22,068
Interest on borrowings against corporate-owned
life insurance contracts.................. 10,736 9,258
Other interest.............................. 3,939 4,413
Amortization of debt discount and expense less
premium ................................. 928 977
Interest component of rental expense........ 2,583 2,746
Preferred stock dividend requirement........ 2,943 2,972
Additional preferred stock dividend requirement 1,653 1,898
----- -----
Total .................................... $ 49,688 $ 44,332
======== ========
Earnings (before fixed charges and taxes on income):
Net income.................................. $ 62,881 $ 64,429
Interest on long-term debt.................. 26,906 22,068
Interest on borrowings against corporate-owned
life insurance contracts.................. 10,736 9,258
Other interest.............................. 3,939 4,413
Amortization of debt discount and expense less
premium .................................. 928 977
Interest component of rental expense........ 2,583 2,746
Provisions for Federal and state taxes on income,
net of investment tax credit amortization... 35,317 41,146
------ -------
Total..................................... $143,290 $145,037
======== ========
Ratio of earnings to fixed charges
and preferred stock dividends................ 2.88 3.27
==== ====
23
<PAGE>
EXHIBIT 15
May 12, 1997
Public Service Company of Colorado:
We are aware that Public Service Company of Colorado has incorporated by
reference in its Registration Statement (Form S-3, File No. 33-62233) pertaining
to the Automatic Dividend Reinvestment and Common Stock Purchase Plan; the
Company's Registration Statement (Form S-3, File No. 33-37431), as amended on
December 4, 1990, pertaining to the shelf registration of the Company's First
Mortgage Bonds; the Company's Registration Statement (Form S-8, File No.
33-55432) pertaining to the Omnibus Incentive Plan; the Company's Registration
Statement (Form S-3, File No. 33-51167) pertaining to the shelf registration of
the Company's First Collateral Trust Bonds; and the Company's Registration
Statement (Form S-3, File No. 33-54877) pertaining to the shelf registration of
the Company's First Collateral Trust Bonds and Cumulative Preferred Stock, its
Form 10-Q for the quarter ended March 31, 1997, which includes our report dated
May 12, 1997, covering the unaudited consolidated condensed financial statements
contained therein. Pursuant to Regulation C of the Securities Act of 1933, that
report is not considered a part of the registration statement prepared or
certified by our Firm or a report prepared or certified by our Firm within the
meaning of Sections 7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
24
<PAGE>
EXHIBIT 4(a)
SUPPLEMENTAL INDENTURE
Dated as of February 1, 1997
PUBLIC SERVICE COMPANY OF COLORADO
TO
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION,
As Trustee
Creating an Issue of First Mortgage Bonds,
Collateral Series E
(Supplemental to Indenture dated as of December 1, 1939, as amended)
<PAGE>
SUPPLEMENTAL INDENTURE, dated as of February 1, 1997, between PUBLIC
SERVICE COMPANY OF COLORADO, a corporation organized and existing under the laws
of the State of Colorado (the "Company"), party of the first part, and FIRST
TRUST OF NEW YORK, NATIONAL ASSOCIATION, a national banking association, as
successor trustee (the "Trustee") to Morgan Guaranty Trust Company of New York
(formerly Guaranty Trust Company of New York), party of the second part.
WHEREAS, the Company heretofore executed and delivered to the
Trustee its Indenture, dated as of December 1, 1939 (the "Principal Indenture"),
to secure its First Mortgage Bonds from time to time issued thereunder; and
WHEREAS, the Company has heretofore executed and delivered to the
Trustee the Supplemental Indentures referred to in Schedule A hereto for certain
purposes, including the creation of series of bonds, the subjection to the lien
of the Principal Indenture of property acquired after the execution and delivery
thereof, the amendment of certain provisions of the Principal Indenture and the
appointment of the successor Trustee; and
WHEREAS, the Principal Indenture as supplemented and amended by all
Supplemental Indentures heretofore executed by the Company and the Trustee is
hereinafter referred to as the "Indenture," and, unless the context requires
otherwise, references herein to Articles and Sections of the Indenture shall be
to Articles and Sections of the Principal Indenture as so amended; and
WHEREAS, the Company proposes to create a new series of First
Mortgage Bonds to be designated as First Mortgage Bonds, Collateral Series E
(the "Collateral Series E Bonds"), to be issued and delivered from time to time
to the trustee under the 1993 Mortgage (as hereinafter defined) as the basis for
the authentication and delivery under the 1993 Mortgage of a series of
securities constituting medium-term notes, all as hereinafter provided, and to
vary in certain respects the covenants and provisions contained in Article V of
the Indenture, to the extent that such covenants and provisions apply to the
Collateral Series E Bonds; and
WHEREAS, the Company, pursuant to the provisions of the Indenture,
has, by appropriate corporate action, duly resolved and determined to execute
this Supplemental Indenture for the purpose of providing for the creation of the
Collateral Series E Bonds and of specifying the form, provisions and particulars
thereof, as in the Indenture provided or permitted and of giving to the
Collateral Series E Bonds the protection and security of the Indenture; and
WHEREAS, the Company has acquired the additional property
hereinafter described, and the Company desires that such additional property so
acquired be specifically subjected to the lien of the Indenture; and
WHEREAS, the Company represents that all acts and proceedings
required by law and by the charter and by-laws of the Company, including all
action requisite on the part of its shareholders, directors and officers,
necessary to make the Collateral Series E Bonds, when executed by the Company,
authenticated and delivered by the Trustee and duly issued, the valid, binding
and legal obligations of the Company, and to constitute the Principal Indenture
and all indentures supplemental thereto, including this Supplemental Indenture,
valid, binding and legal instruments for the security of the bonds of all
series, including the Collateral Series E Bonds, in accordance with the terms of
such bonds and such instruments, have been done, performed and fulfilled, and
the execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
<PAGE>
That Public Service Company of Colorado, the Company named in the
Indenture, in consideration of the premises and of One Dollar to it duly paid by
the Trustee at or before the ensealing and delivery of these presents, the
receipt whereof is hereby acknowledged, and in pursuance of the direction and
authority of the Board of Directors of the Company given at a meeting thereof
duly called and held, and in order to create the Collateral Series E Bonds and
to specify the form, terms and provisions thereof, and to make definite and
certain the lien of the Indenture upon the premises hereinafter described and to
subject said premises directly to the lien of the Indenture, and to secure the
payment of the principal of and premium, if any, and interest, if any, on all
bonds from time to time outstanding under the Indenture, including the
Collateral Series E Bonds, according to the terms of said bonds, and to secure
the performance and observance of all of the covenants and conditions contained
in the Indenture, has executed and delivered this Supplemental Indenture and has
granted, bargained, sold, warranted, aliened, remised, released, conveyed,
assigned, transferred, mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, warrant, alien, remise, release, convey,
assign, transfer, mortgage, pledge, set over and confirm unto First Trust of New
York, National Association, as Trustee, and its successor or successors in the
trust and its and their assigns forever, the property described in Schedule B
hereto (which is described in such manner as to fall within and under the
headings or parts or classifications set forth in the Granting Clauses of the
Principal Indenture);
TO HAVE AND TO HOLD the same and all and singular the properties,
rights, privileges and franchises described in the Principal Indenture and in
the several Supplemental Indentures hereinabove referred to and in this
Supplemental Indenture and owned by the Company on the date of the execution and
delivery hereof (other than property of a character expressly excepted from the
lien of the Indenture as therein set forth) unto the Trustee and its successor
or successors and assigns forever;
SUBJECT, HOWEVER, to permitted encumbrances as defined in the
Indenture;
IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the
Indenture, for the equal and proportionate benefit and security of all present
and future holders of the bonds and coupons issued and to be issued under the
Indenture, including the Collateral Series E Bonds, without preference, priority
or distinction as to lien (except as any sinking, amortization, improvement or
other fund established in accordance with the provisions of the Indenture or any
indenture supplemental thereto may afford additional security for the bonds of
any particular series) of any of said bonds over any others thereof by reason of
series, priority in the time of the issue or negotiation thereof, or otherwise
howsoever, except as provided in Section 2 of Article IV of the Indenture.
ARTICLE ONE
CREATION AND DESCRIPTION OF THE COLLATERAL SERIES E BONDS
SECTION 1. A new series of bonds to be issued from time to time
under and secured by the Indenture is hereby created, the bonds of such new
series to be designated First Mortgage Bonds, Collateral Series E. The
Collateral Series E Bonds shall be limited to an aggregate principal amount of
One Hundred Fifty Million dollars ($150,000,000), excluding any Collateral
Series E Bonds which may be authenticated and exchanged for or in lieu of or in
substitution for or on transfer of other Collateral Series E Bonds pursuant to
any provisions of the Indenture. The Collateral Series E Bonds shall not bear
interest and each Collateral Series E Bond shall (a) be issued in such principal
amount, (b) mature on such date not less than nine months nor more than thirty
years from its Original Issue Date (as hereinafter defined), and (c) have such
other terms and conditions as shall not be inconsistent with the provisions of
the Indenture, all as shall be specified by the Company in a certificate,
executed by the President, any Vice President, the Treasurer or any Assistant
Treasurer of the Company, delivered to the Trustee relating to such Collateral
3
<PAGE>
Series E Bond and referring to this Supplemental Indenture (each such
certificate being deemed to constitute a part of this Supplemental Indenture and
being hereinafter sometimes called an "Issuance Certificate"), such
specification by such an officer of the Company in an Issuance Certificate
having been heretofore authorized in a resolution of the Board of Directors of
the Company.
The principal of each Collateral Series E Bond shall be payable,
upon presentation thereof, at the office or agency of the Company in the city in
which the principal corporate trust office of the 1993 Mortgage Trustee (as
hereinafter defined) is located, in any coin or currency of the United States of
America which at the time of payment shall be legal tender for the payment of
public and private debts.
The Collateral Series E Bonds shall be issued and delivered from
time to time by the Company to First Trust of New York, National Association, as
successor trustee under the Indenture, dated as of October 1, 1993, as
supplemented (the "1993 Mortgage"), of the Company to such trustee (the "1993
Mortgage Trustee"), as the basis for the authentication and delivery under the
1993 Mortgage of a series of securities. As provided in the 1993 Mortgage, the
Collateral Series E Bonds will be registered in the name of the 1993 Mortgage
Trustee or its nominee and will be owned and held by the 1993 Mortgage Trustee,
subject to the provisions of the 1993 Mortgage, for the benefit of the holders
of all securities from time to time outstanding under the 1993 Mortgage, and the
Company shall have no interest therein.
Any payment by the Company under the 1993 Mortgage of the principal
of any securities which shall have been authenticated and delivered under the
1993 Mortgage on the basis of the issuance and delivery to the 1993 Mortgage
Trustee of Collateral Series E Bonds (other than by the application of the
proceeds of a payment in respect of such Collateral Series E Bonds) shall, to
the extent thereof, be deemed to satisfy and discharge the obligation of the
Company, if any, to make a payment of principal of such Collateral Series E
Bonds which is then due.
The Trustee may conclusively presume that the obligation of the
Company to pay the principal of any Collateral Series E Bonds as the same shall
become due and payable shall have been fully satisfied and discharged unless and
until it shall have received a written notice from the 1993 Mortgage Trustee,
signed by an authorized officer thereof, stating that the principal of specified
Collateral Series E Bonds has become due and payable and has not been fully
paid, and specifying the amount of funds required to make such payment.
Each Collateral Series E Bond shall be dated as of the date of its
authentication.
The Collateral Series E Bonds shall be issued as fully registered
bonds only, in denominations of $1,000 and integral multiples thereof.
The Collateral Series E Bonds shall be registerable and exchangeable
at the office or agency of the Company in the city in which the principal
corporate trust office of the 1993 Mortgage Trustee is located, in the manner
and upon the terms set forth in Section 5 of Article II of the Indenture;
provided, however, that the Collateral Series E Bonds shall not be transferrable
except to a successor trustee under the 1993 Mortgage. No service charge shall
be made for any exchange or transfer of any Collateral Series E Bond.
If and to the extent necessary to eliminate any apparent
inconsistency between any provision of this Supplemental Indenture and any
provision of the Indenture all Collateral Series E Bonds having the same
Original Issue Date, Stated Maturity, interest rate, and other terms and
conditions shall be deemed to be a separate series of bonds, and such Original
Issue Date, Stated Maturity, interest rate, if any, and other terms and
conditions shall be deemed to be a part of the designation of such series.
4
<PAGE>
As used herein, the term "Original Issue Date" shall mean, with
respect to any Collateral Series E Bond, the date of authentication and delivery
hereunder of such Collateral Series E Bond, or, in the case of any particular
Collateral Series E Bond which has been authenticated and delivered upon the
registration of transfer or exchange of, or in substitution for, another
Collateral Series E Bond, the date of the original authentication and delivery
hereunder of the first Collateral Series E Bond authenticated and delivered
hereunder representing all or a portion of the same obligation as that evidenced
by such particular Collateral Series E Bond; the term "Stated Maturity" shall
mean, with respect to any Collateral Series E Bond, the date on which the
principal of such Collateral Series E Bond is stated to be due and payable
(without regard to any provision for acceleration, redemption or similar
provisions); and the term "Maturity" shall mean, with respect to any Collateral
Series E Bond, the date on which the principal of such Collateral Series E Bond
becomes due and payable, whether at Stated Maturity, by declaration of
acceleration, upon call for redemption or otherwise.
SECTION 2. The text of the Collateral Series E Bonds shall be
substantially in the form attached hereto as Exhibit A.
SECTION 3. The Collateral Series E Bonds may be executed by the
Company and delivered to the Trustee and, upon compliance with all applicable
provisions and requirements of the Indenture in respect thereof, shall be
authenticated by the Trustee and delivered (without awaiting the filing or
recording of this Supplemental Indenture), from time to time, in accordance with
the written order or orders of the Company.
ARTICLE TWO
REDEMPTION OF THE COLLATERAL SERIES E BONDS
SECTION 1. No Collateral Series E Bond shall be subject to any
sinking fund or other mandatory redemption (whether at the option of the holder
thereof or otherwise) unless otherwise specified in the Issuance Certificate
relating to such Collateral Series E Bond. Each Collateral Series E Bond shall
be redeemable at the option of the Company in whole at any time, or in part from
time to time, prior to Stated Maturity, at a redemption price equal to 100% of
the principal amount thereof to be redeemed.
SECTION 2. The provisions of Sections 3, 4, 5, 6 and 7 of Article V
of the Indenture shall be applicable to the Collateral Series E Bonds, except
that (a) no publication of notice of redemption of the Collateral Series E Bonds
shall be required and (b) if less than all the Collateral Series E Bonds are to
be redeemed, the Collateral Series E Bonds to be redeemed shall be selected from
the maturities, and in the principal amounts, designated to the Trustee by the
Company, and except as such provisions may otherwise be inconsistent with the
provisions of this Article Two.
SECTION 3. The holder of each and every Collateral Series E Bond
issued hereunder hereby agrees to accept payment thereof prior to Stated
Maturity on the terms and conditions provided for in this Article Two.
ARTICLE THREE.
ACKNOWLEDGMENT OF RIGHT TO VOTE
OR CONSENT WITH RESPECT TO
CERTAIN AMENDMENTS TO INDENTURE
5
<PAGE>
The Company hereby acknowledges the right of the holders of the
Collateral Series E Bonds to vote or consent with respect to any or all of the
modifications to the Indenture referred to in Article Three of the Supplemental
Indenture, dated as of March 1, 1980, irrespective of the fact that the Bonds of
the Second 1987 Series are no longer outstanding; provided, however, that such
acknowledgment shall not impair (a) the right of the Company to make such
modifications without the consent or other action of the holders of the Bonds of
the 2020 Series or the bonds of any other series subsequently created under the
Indenture with respect to which the Company has expressly reserved such right or
(b) the right of the Company to reserve the right to make such modifications
without the consent or other action of the holders of bonds of one or more, or
any or all, series created subsequent to the creation of the Collateral Series E
Bonds.
ARTICLE FOUR
THE TRUSTEE
The Trustee accepts the trusts created by this Supplemental
Indenture upon the terms and conditions set forth in the Indenture and this
Supplemental Indenture. The recitals in this Supplemental Indenture are made by
the Company only and not by the Trustee. Each and every term and condition
contained in Article XII of the Indenture shall apply to this Supplemental
Indenture with the same force and effect as if the same were herein set forth in
full, with such omissions, variations and modifications thereof as may be
appropriate to make the same conform to this Supplemental Indenture.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 1. Subject to the variations contained in Article Two of
this Supplemental Indenture, the Indenture is in all respects ratified and
confirmed and the Principal Indenture, this Supplemental Indenture and all other
indentures supplemental to the Principal Indenture shall be read, taken and
construed as one and the same instrument. Neither the execution of this
Supplemental Indenture nor anything herein contained shall be construed to
impair the lien of the Indenture on any of the properties subject thereto, and
such lien shall remain in full force and effect as security for all bonds now
outstanding or hereafter issued under the Indenture.
All covenants and provisions of the Indenture shall continue in full
force and effect and this Supplemental Indenture shall form part of the
Indenture.
SECTION 2. If the date for making any payment or the last date for
performance of any act or the exercising of any right, as provided in this
Supplemental Indenture, shall not be a Business Day (as defined in the 1993
Mortgage), such payment may be made or act performed or right exercised on the
next succeeding Business Day with the same force and effect as if done on the
nominal date provided in this Supplemental Indenture.
SECTION 3. The terms defined in the Indenture shall, for all
purposes of this Supplemental Indenture, have the meaning specified in the
Indenture except as set forth in Section 4 of this Article or otherwise set
forth in this Supplemental Indenture or unless the context clearly indicates
some other meaning to be intended.
SECTION 4. Any term defined in Section 303 of the Trust Indenture
Act of 1939, as amended, and not otherwise defined in the Indenture shall, with
6
<PAGE>
respect to this Supplemental Indenture and the Collateral Series E Bonds, have
the meaning assigned to such term in Section 303 as in force on the date of the
execution of this Supplemental Indenture.
SECTION 5. This Supplemental Indenture may be executed in any number
of counterparts, and all of said counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
7
<PAGE>
IN WITNESS WHEREOF, Public Service Company of Colorado, party hereto
of the first part, has caused its corporate name to be hereunto affixed, and
this instrument to be signed by its President or any Vice President, and its
corporate seal to be hereunto affixed and attested by its Secretary or an
Assistant Secretary for and in its behalf; and First Trust of New York, National
Association, the party hereto of the second part, in evidence of its acceptance
of the trust hereby created, has caused its corporate name to be hereunto
affixed, and this instrument to be signed and its corporate seal to be affixed
by one of its Vice Presidents and attested by one of its Assistant Secretaries,
for and in its behalf, all as of the day and year first above written.
PUBLIC SERVICE COMPANY OF COLORADO
By: /s/ R. C. Kelly
R. C. Kelly
Senior Vice President,Treasurer,
and Chief Financial Officer
ATTEST: /s/ W. Wayne Brown
W. Wayne Brown
Secretary
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ Catherine F. Donohue
Catherine F. Donohue
Vice President
ATTEST:/s/ Alfia Monastra
Alfia Monastra
Assistant Secretary
8
<PAGE>
STATE OF COLORADO )
) ss.:
CITY AND COUNTY OF DENVER )
On this 26th day of February, 1997, before me, Marilyn Albaitis, a duly
authorized Notary Public in and for said City and County in the State aforesaid,
personally appeared R. C. Kelly and W. Wayne Brown, to me known to be a Senior
Vice President and the Secretary, respectively, of PUBLIC SERVICE COMPANY OF
COLORADO, a corporation organized and existing under the laws of the State of
Colorado, one of the corporations that executed the within and foregoing
instrument; and the said R. C. Kelly and W. Wayne Brown, severally, acknowledged
the said instrument to be the free and voluntary act and deed of said
corporation, for the uses and purposes therein mentioned, and on oath stated
that they were authorized to execute said instrument and that the seal affixed
thereto is the corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ Marilyn Albaitis
Marilyn Albaitis
Notary Public, State of Colorado
Commission Expires September 21, 2000
9
<PAGE>
STATE OF NEW YORK )
) ss.:
CITY AND COUNTY OF NEW YORK )
On this 26th day of February, 1997, before me, Joanne E. Ilse, a duly
authorized Notary Public in and for said City and County in the State aforesaid,
personally appeared Catherine F. Donohue and Alfia Monastra, to me known to be a
Vice President and an Assistant Secretary, respectively, of First TRUST OF NEW
YORK, National Association, a national banking association, one of the
corporations that executed the within and foregoing instrument; and the said
Catherine F. Donohue and Alfia Monastra, severally, acknowledged the said
instrument to be the free and voluntary act and deed of said corporation, for
the uses and purposes therein mentioned, and on oath stated that they were
authorized to execute said instrument and that the seal affixed thereto is the
corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ Joanne E. Ilse
Joanne E. Ilse
Notary Public, State of New York
Commission Expires October 4, 1997
10
<PAGE>
EXHIBIT A
FORM OF COLLATERAL SERIES E BOND
This bond is not transferable except to a successor trustee under the
Indenture, dated as of October 1, 1993, as supplemented, between Public Service
Company of Colorado and First Trust of New York, National
Association, as successor trustee thereunder.
PUBLIC SERVICE COMPANY OF COLORADO
FIRST MORTGAGE BOND,
CoLLATERAL SERIES E
REGISTERED REGISTERED
No.................. $..................
Original Issue Date:
Stated Maturity:
Other/Additional Provisions:
Addendum Attached
[ ] Yes
[ ] No
FOR VALUE RECEIVED, PUBLIC SERVICE COMPANY OF COLORADO, a corporation
organized and existing under the laws of the State of Colorado (hereinafter
sometimes called the "Company"), promises to pay to First Trust of New York,
National Association, as successor trustee (the "1993 Mortgage Trustee") under
the Indenture, dated as of October 1, 1993 (the "1993 Mortgage"), of the
Company, or registered assigns,
Dollars on the Stated Maturity specified above (unless this bond shall then be
deemed to have been paid in accordance with the provisions of the Indenture
referred to below) at the office or agency of the Company in the city in which
the principal corporate trust office of the 1993 Mortgage Trustee is located.
This bond shall not bear interest. The principal of this bond shall be payable
in any coin or currency of the United States of America which at the time of
payment shall be legal tender for the payment of public and private debts.
Any payment by the Company under the 1993 Mortgage of the principal of
securities which shall have been authenticated and delivered under the 1993
Mortgage on the basis of the issuance and delivery to the 1993 Mortgage Trustee
of this bond (the "1993 Mortgage Securities") (other than by the application of
the proceeds of a payment in respect of this bond) shall, to the extent thereof,
be deemed to satisfy and discharge the obligation of the Company, if any, to
make a payment of principal of this bond which is then due.
A-1
<PAGE>
If an Addendum is attached hereto or "Other/Additional Provisions" apply
to this bond, this bond shall be subject to the terms set forth in such Addendum
or such "Other/Additional Provisions".
This bond is one of an issue of bonds of the Company, issued and to be
issued in one or more series under and equally and ratably secured (except as
any sinking, amortization, improvement or other fund, established in accordance
with the provisions of the indenture hereinafter mentioned, may afford
additional security for the bonds of any particular series) by a certain
indenture, dated as of December 1, 1939, made by the Company to First Trust of
New York, National Association, as successor trustee (hereinafter called the
"Trustee"), to Morgan Guaranty Trust Company of New York (formerly Guaranty
Trust Company of New York), as amended and supplemented by several indentures
supplemental thereto, including the Supplemental Indenture dated as of February
1, 1997 (said Indenture as amended and supplemented by said indentures
supplemental thereto being hereinafter called the "Indenture"), to which
Indenture reference is hereby made for a description of the property mortgaged,
the nature and extent of the security, the rights and limitations of rights of
the Company, the Trustee, and the holders of said bonds, under the Indenture,
and the terms and conditions upon which said bonds are secured, to all of the
provisions of which Indenture and of all indentures supplemental thereto in
respect of such security, including the provisions of the Indenture permitting
the issue of bonds of any series for property which, under the restrictions and
limitations therein specified, may be subject to liens prior to the lien of the
Indenture, the holder, by accepting this bond, assents. To the extent permitted
by and as provided in the Indenture, the rights and obligations of the Company
and of the holders of said bonds (including those pertaining to any sinking or
other fund) may be changed and modified, with the consent of the Company, by the
holders of at least 75% in aggregate principal amount of the bonds then
outstanding (excluding bonds disqualified from voting by reason of the Company's
interest therein as provided in the Indenture); provided, however, that without
the consent of the holder hereof no such modification or alteration shall be
made which will extend the time of payment of the principal of this bond or
reduce the principal amount hereof or effect any other modification of the terms
of payment of such principal or will reduce the percentage of bonds required for
the aforesaid actions under the Indenture. The Company has reserved the right to
amend the Indenture without any consent or other action by holders of any series
of bonds created after October 31, 1975 (including this series) so as to change
75% in the foregoing sentence to 60% and to change certain procedures relating
to bondholders' meetings. This bond is one of a series of bonds designated as
the First Mortgage Bonds, Collateral Series E, of the Company.
Unless otherwise specified in an Addendum attached hereto, this bond
shall not be subject to any sinking fund or other mandatory redemption (whether
at the option of the holder hereof or otherwise). This bond shall be redeemable
at the option of the Company in whole at any time, or in part from time to time,
prior to the Stated Maturity specified above, at a redemption price equal to
100% of the principal amount thereof to be redeemed.
The principal of this bond may be declared or may become due before the
Stated Maturity specified above, on the conditions, in the manner and at the
times set forth in the Indenture, upon the happening of an event of default as
therein provided.
This bond is not transferable except to a successor trustee under the
1993 Mortgage, any such transfer to be made at the office or agency of the
Company in the city in which the principal corporate trust office of the 1993
Mortgage Trustee is located, upon surrender and cancellation of this bond, and
thereupon a new bond of this series of a like principal amount and having the
same Original Issue Date, Stated Maturity and other terms and conditions, will
be issued to the transferee in exchange therefor, as provided in the Indenture.
The Company, the Trustee, any paying agent and any registrar may deem and treat
the person in whose name this bond is registered as the absolute owner hereof
for the purpose of receiving payment and for all other purposes. This bond,
alone or with other bonds of this series, may in like manner be exchanged at
A-2
<PAGE>
such office or agency for one or more new bonds of this series of the same
aggregate principal amount, and having the same Original Issue Date, Stated
Maturity, and other terms and conditions, all as provided in the Indenture. No
service charge shall be made to any holder of any bond of this series for any
exchange or transfer of bonds.
No recourse under or upon any covenant or obligation of the Indenture,
or of any bonds thereby secured, or for any claim based thereon, or otherwise in
any manner in respect thereof, shall be had against any incorporator, subscriber
to the capital stock, shareholder, officer or director, as such, of the Company,
whether former, present or future, either directly, or indirectly through the
Company or the Trustee, by the enforcement of any subscription to capital stock,
assessment or otherwise, or by any legal or equitable proceeding by virtue of
any statute or otherwise (including, without limiting the generality of the
foregoing, any proceeding to enforce any claimed liability of shareholders of
the Company based upon any theory of disregarding the corporate entity of the
Company or upon any theory that the Company was acting as the agent or
instrumentality of the shareholders), any and all such liability of
incorporators, shareholders, subscribers, officers and directors, as such, being
released by the holder hereof, by the acceptance of this bond, and being
likewise waived and released by the terms of the Indenture under which this bond
is issued.
This bond shall not be valid or become obligatory for any purpose until
the certificate of authentication endorsed hereon shall have been signed by
First Trust of New York, National Association, or its successor, as Trustee
under the Indenture.
A-3
<PAGE>
IN WITNESS WHEREOF, Public Service Company of Colorado has caused this
bond to be signed in its name by the facsimile signature of a Senior Vice
President and its corporate seal to be imprinted hereon and attested by the
facsimile signature of its Secretary.
Dated: PUBLIC SERVICE COMPANY OF
COLORADO
By:
Senior Vice President
ATTEST:________________________
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the securities of the series designated therein referred
to in the within-mentioned Supplemental Indenture.
Dated: FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION,
AS TRUSTEE
By:
Authorized Officer
A-4
<PAGE>
SCHEDULE A
SUPPLEMENTAL INDENTURES
Date of Principal
Supplemental Principal Amount
Indenture Series of Bonds Amount Issued Outstanding
--------- --------------- ------------- -----------
March 14, 1941 None -- --
May 14, 1941 None -- --
April 28, 1942 None -- --
April 14, 1943 None -- --
April 27, 1944 None -- --
April 18, 1945 None -- --
April 23, 1946 None -- --
April 9, 1947 None -- --
June 1, 1947* 2-7/8% Series due 1977 $ 40,000,000 None
April 1, 1948 None -- --
May 20, 1948 None -- --
October 1, 1948 3-1/8% Series due 1978 10,000,000 None
April 20, 1949 None -- --
April 24, 1950 None -- --
April 18, 1951 None -- --
October 1, 1951 3-1/4% Series due 1981 15,000,000 None
April 21, 1952 None -- --
December 1, 1952 None -- --
April 15, 1953 None -- --
April 19, 1954 None -- --
October 1, 1954* 3-1/8% Series due 1984 20,000,000 None
April 18, 1955 None -- --
April 24, 1956 None -- --
May 1, 1957* 4-3/8% Series due 1987 30,000,000 None
April 10, 1958 None -- --
May 1, 1959 4-5/8% Series due 1989 20,000,000 None
April 18, 1960 None -- --
April 19, 1961 None -- --
I-1
<PAGE>
Date of Principal
Supplemental Principal Amount
Indenture Series of Bonds Amount Issued Outstanding
--------- --------------- ------------- -----------
October 1, 1961 4-1/2% Series due 1991 30,000,000 None
March 1, 1962 4-5/8% Series due 1992 8,800,000 None
June 1, 1964 4-1/2% Series due 1994 35,000,000 None
May 1, 1966 5-3/8% Series due 1996 35,000,000 None
July 1, 1967* 5-7/8% Series due 1997 35,000,000 35,000,000
July 1, 1968* 6-3/4% Series due 1998 25,000,000 25,000,000
April 25, 1969 None -- --
April 21, 1970 None -- --
September 1, 1970 8-3/4% Series due 2000 35,000,000 None
February 1, 1971 7-1/4% Series due 2001 40,000,000 None
August 1, 1972 7-1/2% Series due 2002 50,000,000 None
June 1, 1973 7-5/8% Series due 2003 50,000,000 None
March 1, 1974 Pollution Control Series A 24,000,000 22,500,000
December 1, 1974 Pollution Control Series B 50,000,000 None
October 1, 1975 9-3/8% Series due 2005 50,000,000 None
April 28, 1976 None -- --
April 28, 1977 None -- --
November 1, 1977* 8-1/4% Series due 2007 50,000,000 None
April 28, 1978 None -- --
October 1, 1978 9-1/4% Series due 2008 50,000,000 None
October 1, 1979* Pollution Control Series C 50,000,000 None
March 1, 1980* 15% Series due 1987 50,000,000 None
April 28, 1981 None -- --
November 1, 1981* Pollution Control Series D 27,380,000 None
December 1, 1981* 16-1/4% Series due 2011 50,000,000 None
April 29, 1982 None -- --
May 1, 1983* Pollution Control Series E 42,000,000 None
April 30, 1984 None -- --
March 1, 1985* 13% Series due 2015 50,000,000 None
November 1, 1986* Pollution Control Series F 27,250,000 27,250,000
I-2
<PAGE>
Date of Principal
Supplemental Principal Amount
Indenture Series of Bonds Amount Issued Outstanding
--------- --------------- ------------- -----------
May 1, 1987* 8.95% Series due 1992 75,000,000 None
July 1, 1990* 9-7/8% Series due 2020 75,000,000 75,000,000
December 1, 1990* Secured Medium-Term Notes, 191,500,000** 108,500,000
Series A
March 1, 1992* 8-1/8% Series due 2004 and 100,000,000 100,000,000
8-3/4% Series due 2022 150,000,000 150,000,000
April 1, 1993* Pollution Control Series G 79,500,000 79,500,000
June 1, 1993* Pollution Control Series H 50,000,000 50,000,000
November 1, 1993* Collateral Series A 134,500,000 134,500,000
January 1, 1994* Collateral Series B due 2001 102,667,000 102,667,000
Collateral Series B due 2004 110,000,000 110,000,000
September 2, 1994 (appointment of None None
successor trustee)
May 1, 1996* Collateral Series C 125,000,000 125,000,000
due 2006
November 1, 1996* Collateral Series D due from 150,000,000*** 150,000,000
9 months to 30 years
from date of issue
- ----------------------
* Contains amendatory provisions
** $200,000,000 authorized
*** $250,000,000 authorized
I-3
<PAGE>
SCHEDULE B
PROPERTY DESCRIPTION
PART SECOND
(SUBSTATIONS)
The following electric substations and substation sites of the Company,
including all buildings, structures, towers, poles, lines, and all equipment,
appliances and devices for transforming, converting and distributing electric
energy, and all the right, title and interest of the Company in and to the land
on which the same are situated, and all of the Company's lands, easements,
rights-of-way, rights, franchises, privileges, machinery, equipment, appliances,
devices, appurtenances and supplies forming a part of said substations or any of
them, or used or enjoyed, or capable of being used or enjoyed, in conjunction or
connection with any thereof, all situated in the State of Colorado and the
counties thereof, more particularly described as follows:
ARAPAHOE COUNTY
1. QUINCY SUBSTATION
A parcel of land located in the SW 1/4 Section 5, Township 5 South, Range 64
West of the 6th Principal Meridian, Arapahoe County, Colorado, more particularly
described as follows:
Commencing at the SE corner of said SW 1/4 Section 5; Whence the SW corner of
said Section 5 bears N 89 Degrees 42'59" W a distance of 2,635.92 feet; Thence N
89 Degrees 42'59" W along the South line of said SW 1/4 Section 5 a distance of
350.00 feet to a point; Thence N 00 Degrees 17'01" E a distance of 55.00 feet to
a point on the North line of County Road 30 (Quincy Avenue) as described in Book
2826, Page 722, Reception No. 1761586, Arapahoe County Clerk and Recorder, also
being the true point of beginning; Thence along the North Line of said County
Road 30 (Quincy Avenue), N 89 Degrees 42'59" W a distance of 190.00 feet to a
point; Thence N 00 Degrees 17'01"E a distance of 455.00 feet to a point; Thence
S 89 Degrees 42'59" E a distance of 190.00 feet to a point; Thence S 00 Degrees
17'01" W a distance of 455.00 feet to the point of beginning, County of
Arapahoe, State of Colorado
<PAGE>
EXHIBIT 4(b)
PUBLIC SERVICE COMPANY
OF COLORADO
TO
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION,
as Trustee
---------------------
Supplemental Indenture No. 6
Dated as of February 1, 1997
Supplemental to the Indenture
dated as of October 1, 1993
---------------------
Establishing the Securities of Series No. 5
designated Secured Medium-Term Notes, Series C
<PAGE>
SUPPLEMENTAL INDENTURE NO. 6, dated as of February 1, 1997, between PUBLIC
SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under the
laws of the State of Colorado (hereinafter sometimes called the "Company"), and
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION, a national banking association
(hereinafter sometimes called the "Trustee"), as successor trustee to Morgan
Guaranty Trust Company of New York under the Indenture, dated as of October 1,
1993 (hereinafter called the "Original Indenture"), as previously supplemented
and as further supplemented by this Supplemental Indenture No. 6. The Original
Indenture and any and all indentures and other instruments supplemental thereto
are hereinafter sometimes collectively called the "Indenture".
Recitals of the Company
The Original Indenture was authorized, executed and delivered by the
Company to provide for the issuance from time to time of its Securities (such
term and all other capitalized terms used herein without definition having the
meanings assigned to them in the Original Indenture), to be issued in one or
more series as contemplated therein, and to provide security for the payment of
the principal of and premium, if any, and interest, if any, on the Securities.
The Company has heretofore executed and delivered to the Trustee the
Supplemental Indentures referred to in Schedule A hereto for the purpose of
establishing various series of bonds and of appointing the successor trustee.
The Company desires to establish a series of Securities to be designated
"Secured Medium-Term Notes, Series C", being a series of First Collateral Trust
Bonds, such series of Securities to be hereinafter sometimes called "Series No.
5".
The Company has duly authorized the execution and delivery of this
Supplemental Indenture No. 6 to establish the Securities of Series No. 5 and
has duly authorized the issuance of such Securities; and all acts necessary
to make this Supplemental Indenture No. 6 a valid agreement of the Company,
and to make the Securities of Series No. 5 valid obligations of the Company,
have been performed.
Granting Clauses
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 6 WITNESSETH, that, in
consideration of the premises and of the purchase of the Securities by the
Holders thereof, and in order to secure the payment of the principal of and
premium, if any, and interest, if any, on all Securities from time to time
Outstanding and the performance of the covenants contained therein and in the
Indenture and to declare the terms and conditions on which such Securities are
secured, the Company hereby grants, bargains, sells, releases, conveys, assigns,
transfers, mortgages, pledges, sets over and confirms to the Trustee, and grants
to the Trustee a security interest in, the following:
Granting Clause First
All right, title and interest of the Company, as of the date of the
execution and delivery of this Supplemental Indenture No. 6, in and to
property (other than Excepted Property), real, personal and mixed and
wherever situated, in any case used or to be used in or in connection with
the Electric Utility Business (whether or not such use is the sole use of
such property), including without limitation (a) all lands and interests
in land described or referred to in Schedule B hereto; (b) all other
lands, easements, servitudes, licenses, permits, rights of way and other
rights and interests in or relating to real property used or to be used in
or in connection with the Electric Utility Business or relating to the
occupancy or use of such real property, subject however, to the exceptions
<PAGE>
and exclusions set forth in clause (a) of Granting Clause First of the
Original Indenture; (c) all plants, generators, turbines, engines,
boilers, fuel handling and transportation facilities, air and water
pollution control and sewage and solid waste disposal facilities and other
machinery and facilities for the generation of electric energy; (d) all
switchyards, lines, towers, substations, transformers and other machinery
and facilities for the transmission of electric energy; (e) all lines,
poles, conduits, conductors, meters, regulators and other machinery and
facilities for the distribution of electric energy; (f) all buildings,
offices, warehouses and other structures used or to be used in or in
connection with the Electric Utility Business; (g) all pipes, cables,
insulators, ducts, tools, computers and other data processing and/or
storage equipment and other equipment, apparatus and facilities used or to
be used in or in connection with the Electric Utility Business; (h) any or
all of the foregoing properties in the process of construction; and (i)
all other property, of whatever kind and nature, ancillary to or otherwise
used or to be used in conjunction with any or all of the foregoing or
otherwise, directly or indirectly, in furtherance of the Electric Utility
Business;
Granting Clause Second
Subject to the applicable exceptions permitted by Section 810(c),
Section 1303 and Section 1305 of the Original Indenture, all property
(other than Excepted Property) of the kind and nature described in
Granting Clause First which may be hereafter acquired by the Company, it
being the intention of the Company that all such property acquired by the
Company after the date of the execution and delivery of this Supplemental
Indenture No. 6 shall be as fully embraced within and subjected to the
Lien hereof as if such property were owned by the Company as of the date
of the execution and delivery of this Supplemental Indenture No. 6;
Granting Clause Fourth
All other property of whatever kind and nature subjected or required
to be subjected to the Lien of the Indenture by any of the provisions
thereof;
Excepted Property
Expressly excepting and excluding, however, from the Lien and
operation of the Indenture all Excepted Property of the Company, whether
now owned or hereafter acquired;
TO HAVE AND TO HOLD all such property, real, personal and mixed, unto the
Trustee, its successors in trust and their assigns forever;
SUBJECT, HOWEVER, to (a) Liens existing at the date of the execution and
delivery of the Original Indenture (including, but not limited to, the Lien of
the PSCO 1939 Mortgage), (b) as to property acquired by the Company after the
date of the execution and delivery of the Original Indenture, Liens existing or
placed thereon at the time of the acquisition thereof (including, but not
limited to, the Lien of any Class A Mortgage and purchase money Liens), (c)
Retained Interests and (d) any other Permitted Liens, it being understood that,
with respect to any property which was at the date of execution and delivery of
the Original Indenture or thereafter became or hereafter becomes subject to the
Lien of any Class A Mortgage, the Lien of the Indenture shall at all times be
junior, subject and subordinate to the Lien of such Class A Mortgage;
2
<PAGE>
IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and
security of the Holders from time to time of all Outstanding Securities without
any priority of any such Security over any other such Security;
PROVIDED, HOWEVER, that the right, title and interest of the Trustee in
and to the Mortgaged Property shall cease, terminate and become void in
accordance with, and subject to the conditions set forth in, Article Nine of the
Original Indenture, and if, thereafter, the principal of and premium, if any,
and interest, if any, on the Securities shall have been paid to the Holders
thereof, or shall have been paid to the Company pursuant to Section 603 of the
Original Indenture, then and in that case the Indenture shall terminate, and the
Trustee shall execute and deliver to the Company such instruments as the Company
shall require to evidence such termination; otherwise the Indenture, and the
estate and rights thereby granted, shall be and remain in full force and effect;
and
THE PARTIES HEREBY FURTHER COVENANT AND AGREE as follows:
ARTICLE ONE
Securities of Series No. 5
There are hereby established the Securities of Series No. 5, which shall
have the terms and characteristics set forth below (the lettered subdivisions
set forth below corresponding to the lettered subdivisions of Section 301 of the
Original Indenture):
(a) the title of the Securities of such series shall be "Secured
Medium-Term Notes, Series C", being a series of First Collateral Trust
Bonds; provided, however, that, at any time after the PSCO 1939 Mortgage
shall have been satisfied and discharged, the Company shall have the right,
without any consent or other action by the Holders of such Securities, to
change such title in such manner as shall be deemed by the Company to be
appropriate to reflect such satisfaction and discharge, such change to be
evidenced in an Officer's Certificate;
(b) there shall be no limit upon the aggregate principal amount
of the Securities of Series No. 5 which may be authenticated and
delivered under the Indenture. The Securities of Series No. 5
shall be initially authenticated and delivered from time to time
in the aggregate principal amount of up to $150,000,000;
(c) interest on the Securities of Series No. 5 shall be payable to the
Persons in whose names such Securities are registered at the close of
business on the Regular Record Date for such interest, except as otherwise
expressly provided in the form of such Security attached as Exhibit A
hereto;
(d) the principal of each Security of Series No. 5 shall be
payable on such date as is specified in the Officer's Certificate
applicable to such Security;
(e) an Officer's Certificate with respect to each Security of Series No. 5
shall specify the rate at which such Security of Series No. 5 shall bear
interest, the date from which interest shall accrue, the Interest Payment
Dates if other than February 1 and August 1 of each year and the Regular
Record Dates with respect to the Interest Payment Dates if other than
January 15 and July 15;
(f) the Corporate Trust Office of First Trust of New York, National
3
<PAGE>
Association, in New York, New York shall be the place at which (i) the
principal of, premium, if any, and interest, if any, on the Securities of
Series No. 5 shall be payable, (ii) registration of transfer of such
Securities may be effected, (iii) exchanges of such Securities may be
effected and (iv) notices and demands to or upon the Company in respect of
such Securities and the Indenture may be served; and First Trust of New
York, National Association, shall be the Security Registrar for the
Securities; provided, however, that the Company reserves the right to
change, by one or more Officer's Certificates, any such place or the
Security Registrar; and provided, further, that the Company reserves the
right to designate, by one or more Officer's Certificates, its principal
office in Denver, Colorado as any such place or itself as the Security
Registrar;
(g) each Security of Series No. 5 shall be redeemable only if
and to the extent specified in the Officer's Certificate
applicable to such Security of Series No. 5;
(h) not applicable to any Security of Series No. 5, except to the
extent specified in the Officer's Certificate applicable to a
particular Security of Series No. 5;
(i) the Securities of Series No. 5 shall be issuable in denominations
of $100,000 and any greater amount which is an integral multiple of
$1,000;
(j) not applicable;
(k) not applicable;
(l) not applicable;
(m) not applicable;
(n) not applicable to any Security of Series No. 5, except to the
extent specified in the Officer's Certificate applicable to a
particular Security of Series No. 5;
(o) not applicable;
(p) not applicable;
(q) each Security of Series No. 5 is to be initially registered in the
name of Cede & Co., as nominee for The Depository Trust Company (the
"Depositary"). The Securities of Series No. 5 shall not be transferable or
exchangeable, nor shall any purported transfer be registered, except as
follows:
(i) a Security of Series No. 5 may be transferred in whole, and
appropriate registration of transfer effected, if such transfer is
by such nominee to the Depositary, or by the Depositary to another
nominee thereof, or by any nominee of the Depositary to any other
nominee thereof, or by the Depositary or any nominee thereof to any
successor securities depositary or any nominee thereof; and
(ii) a Security of Series No. 5 may be exchanged for
certificated notes registered in the respective names of the
beneficial holders thereof, and thereafter shall be transferable
without restriction, if:
(A) The Depositary, or any successor securities depositary,
shall have notified the Company and the Trustee that it is
4
<PAGE>
unwilling or unable to continue to act as securities
depositary with respect to such Security of Series No. 5 or
the Company becomes aware that the Depositary has ceased to be
a clearing agency registered under the Securities Exchange Act
of 1934, as amended, and, in any such case, the Trustee shall
not have been notified by the Company within ninety (90) days
of the identity of a successor securities depositary with
respect to such Security of Series No. 5;
(B) The Company shall have delivered to the Trustee a Company
Order to the effect that such Security of Series No. 5 shall
be so exchangeable on and after a date specified therein; or
(C) (1) an Event of Default shall have occurred and be
continuing, (2) the Trustee shall have given notice of such
Event of Default pursuant to Section 1102 of the Original
Indenture and (3) there shall have been delivered to the
Company and the Trustee an Opinion of Counsel to the effect
that the interests of the beneficial owners of such Security
of Series No. 5 in respect thereof will be materially impaired
unless such owners become Holders of certificated notes.
(r) not applicable;
(s) no service charge shall be made for the registration of transfer or
exchange of any Securities of Series No. 5 provided, however, that the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with any such exchange or
transfer;
(t) not applicable;
(u) (i) If the Company shall have caused the Company's indebtedness
in respect of any Security of Series No. 5 to have been satisfied
and discharged prior to the Maturity of such Security of Series
No. 5, as provided in Section 901 of the Original Indenture, the
Company shall, promptly after the date of such satisfaction and
discharge, give a notice to each Person who was a Holder of any
such Security of Series No. 5 on such date stating (A)(1) the
aggregate principal amount of such Security of Series No. 5 and
(2) the aggregate amount of any money (other than amounts, if
any, deposited in respect of accrued interest on such Security of
Series No. 5) and the aggregate principal amount of, the rate or
rates of interest on, and the aggregate fair market value of, any
Eligible Obligations deposited pursuant to Section 901 of the
Original Indenture with respect to such Security of Series No. 5
and (B) that the Company will provide (and the Company shall
promptly so provide) to such Person, or any beneficial owner of
such Security of Series No. 5 holding through such Person (upon
written request to the Company sent to an address specified in
such notice), such other information as such Person or beneficial
owner, as the case may be, reasonably may request in order to
enable it to determine the federal income tax consequences to it
resulting from the satisfaction and discharge of the Company's
indebtedness in respect of such Security of Series No. 5.
Thereafter, the Company shall, within forty-five (45) days after
the end of each calendar year, give to each Person who at any
time during such calendar year was a Holder of such Security of
Series No. 5 a notice containing (X) such information as may be
necessary to enable such Person to report its income, gain or
loss for federal income tax purposes with respect to such
Security of Series No. 5 or the assets held on deposit in respect
thereof during such calendar year or the portion thereof during
5
<PAGE>
which such Person was a Holder of such Security of Series No. 5,
as the case may be (such information to be set forth for such
calendar year as a whole and for each month during such year) and
(Y) a statement to the effect that the Company will provide (and
the Company shall promptly so provide) to such Person, or any
beneficial owner of such Security of Series No. 5 holding through
such Person (upon written request to the Company sent to an
address specified in such notice), such other information as such
Person or beneficial owner, as the case may be, reasonably may
request in order to enable it to determine its income, gain or
loss for federal income tax purposes with respect to such
Security of Series No. 5 or such assets for such year or portion
thereof, as the case may be. The obligation of the Company to
provide or cause to be provided information for purposes of
income tax reporting by any Person as described in the first two
sentences of this paragraph shall be deemed to have been
satisfied to the extent that the Company has provided or caused
to be provided substantially comparable information pursuant to
any requirements of the Internal Revenue Code of 1986, as amended
from time to time (the "Code"), and United States Treasury
regulations thereunder.
(ii) Notwithstanding the provisions of subparagraph (i) above, the
Company shall not be required to give any notice specified in such
subparagraph or to otherwise furnish any of the information
contemplated therein if the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holder of such
Security of Series No. 5 will not recognize income, gain or loss for
federal income tax purposes as a result of the satisfaction and
discharge of the Company's indebtedness in respect of such Security
of Series No. 5 and such Holder will be subject to federal income
taxation on the same amounts and in the same manner and at the same
times as if such satisfaction and discharge had not occurred.
(iii) Anything in this clause (u) to the contrary notwithstanding,
the Company shall not be required to give any notice specified in
subparagraph (i) or to otherwise furnish the information
contemplated therein or to deliver any Opinion of Counsel
contemplated by subparagraph (ii) if the Company shall have caused
the applicable Security of Series No. 5 to be deemed to have been
paid for purposes of the Indenture, as provided in Section 901 of
the Original Indenture, but shall not have effected the satisfaction
and discharge of its indebtedness in respect of such Security of
Series No. 5 pursuant to such Section.
(v) each Security of Series No. 5 shall be substantially in the form
attached as Exhibit A hereto and shall have such further terms as are set
forth in such form.
ARTICLE TWO
Miscellaneous Provisions
This Supplemental Indenture No. 6 is a supplement to the Original
Indenture. As previously supplemented and further supplemented by this
Supplemental Indenture No. 6, the Original Indenture is in all respects
ratified, approved and confirmed, and the Original Indenture, all previous
supplements thereto and this Supplemental Indenture No. 6 shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 6 to be duly executed as of the day and year first above written.
6
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
By: /s/ R. C. Kelly
R. C. Kelly
Senior Vice President, Treasurer,
and Chief Financial Officer
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION, Trustee
By: /s/ Catherine F. Donohue
Catherine F. Donohue
Vice President
7
<PAGE>
STATE OF COLORADO )
) ss.:
CITY AND COUNTY OF DENVER )
On the 26th day of February, 1997, before me personally came R. C.
Kelly, to me known, who, being by me duly sworn, did depose and say that he is a
Senior Vice President of Public Service Company of Colorado, one of the
corporations described in and which executed the foregoing instrument; and that
he signed his name thereto by authority of the Board of Directors of said
corporation.
/s/ Marilyn Albaitis
Marilyn Albaitis
Notary Public, State of Colorado
Commission Expires September 21, 2000
8
<PAGE>
STATE OF NEW YORK )
) ss.:
CITY AND COUNTY OF NEW YORK )
On the 26th day of February, 1997, before me personally came
Catherine F. Donohue, to me known, who, being by me duly sworn, did depose and
say that she is a Vice President of First Trust of New York, National
Association, the national banking association described in and which executed
the foregoing instrument; and that she signed her name thereto by authority of
the Board of Directors of said national banking association.
/s/ Joanne E. Ilse
Joanne E. Ilse
Notary Public, State of New York
Commission Expires October 4, 1997
9
<PAGE>
EXHIBIT A
FORM OF SECURITY
(See legend at the end of this Security for
restrictions on transfer and change of form)
PUBLIC SERVICE COMPANY OF COLORADO
Secured Medium-Term Note, Series C
(being a First Collateral Trust Bond)
Original Issue Date: Regular Record Dates:
Interest Rate: Initial Redemption Date:
Default Rate: Initial Redemption Percentage:
Stated Maturity: Annual Redemption Percentage
Interest Payment Dates: Reduction:
Addendum Attached Optional Repayment Dates:
[ ] Yes
[ ] No Other/Additional Provisions:
This Note is not a Discount Security
within the meaning of the within-mentioned Indenture.
-----------------------------------------
Principal Amount Registered No.
$ CUSIP
PUBLIC SERVICE COMPANY OF COLORADO, a corporation duly organized and
existing under the laws of the State of Colorado (herein called the "Company,"
which term includes any successor corporation under the Indenture referred to
below), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
Dollars on the Stated Maturity specified above (or any Redemption Date or
Repayment Date as defined below), and to pay interest thereon from the Original
Issue Date specified above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on
the Interest Payment Dates specified above in each year, commencing with the
Interest Payment Date next succeeding the Original Issue Date specified above,
and at Maturity, at the Interest Rate per annum specified above, computed on the
A-1
<PAGE>
basis of a 360-day year consisting of twelve 30-day months, until the principal
hereof is paid or duly provided for and, to the extent that payment of such
interest shall be legally enforceable, at the Default Rate per annum specified
above on any overdue payment of principal, premium, if any, and/or interest. The
interest so payable, and paid or duly provided for, on any Interest Payment Date
shall, as provided in such Indenture, be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date specified above (whether or not a Business
Day) next preceding such Interest Payment Date except that if the Original Issue
Date of this Note is after a Regular Record Date specified above and before the
corresponding Interest Payment Date, the first payment of interest on this Note
shall be made to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
with respect to the next succeeding Interest Payment Date. Notwithstanding the
foregoing, interest payable at Maturity shall be paid to the Person to whom
principal shall be paid. Except as otherwise provided in said Indenture, any
such interest not so paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice of which shall be
given to Holders of Securities of this series not less than 15 days prior to
such Special Record Date, or paid in such other manner as permitted by the
Indenture.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified on the face
hereof, this Note shall be subject to the terms set forth in such Addendum or
such "Other/Additional Provisions".
Payment of the principal of and premium, if any, on this Note and interest
hereon at Maturity shall be made upon presentation of this Note (and with
respect to any applicable repayment of this Note, a duly completed election form
as contemplated below) at the Corporate Trust Office of First Trust of New York,
National Association, in New York, New York or at such other office or agency as
may be designated for such purpose by the Company from time to time. Payment of
interest on this Note (other than interest at Maturity) shall be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Note Register, except that if such Person shall be a securities
depositary, such payment may be made by such other means in lieu of check as
shall be agreed upon by the Company, the Trustee and such Person. Payment of the
principal of and premium, if any, and interest on this Note, as aforesaid, shall
be made in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts.
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes"), issued and issuable in one or more series under and
equally secured by an Indenture, dated as of October 1, 1993 (such Indenture as
originally executed and delivered and as supplemented or amended from time to
time thereafter, together with any constituent instruments establishing the
terms of particular Securities, being herein called the "Indenture"), between
the Company and First Trust of New York, National Association, as successor
trustee (herein called the "Trustee," which term includes any further successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the property mortgaged,
pledged and held in trust, the nature and extent of the security and the
respective rights, limitations of rights, duties and immunities of the Company,
the Trustee and the Holders of the Securities thereunder and of the terms and
conditions upon which the Securities are, and are to be, authenticated and
delivered and secured. The acceptance of this Note shall be deemed to constitute
the consent and agreement by the Holder hereof to all of the terms and
provisions of the Indenture. This Note is one of the series designated above.
If any Interest Payment Date, any Redemption Date or the Stated Maturity
shall not be a Business Day (as hereinafter defined), payment of the amounts due
on this Note on such date may be made on the next succeeding Business Day; and,
A-2
<PAGE>
if such payment is made or duly provided for on such Business Day, no interest
shall accrue on such amounts for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to such Business
Day.
Unless otherwise specified in an Addendum attached hereto, this Note shall
not be subject to any sinking fund or other mandatory redemption and, unless
otherwise specified on the face hereof in accordance with the provisions of the
following four paragraphs, this Note is not subject to optional redemption or
repayment prior to the Stated Maturity hereof.
This Note is subject to redemption at the option of the Company at any
time on or after the Initial Redemption Date, if any, specified on the face
hereof, as a whole at any time or from time to time in part, in increments of
$1,000 (provided that any remaining principal amount hereof shall be at least
$100,000), at the Redemption Price (as defined below), plus unpaid accrued
interest hereon to the date fixed for redemption (each, a "Redemption Date").
The "Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof multiplied by the unpaid principal amount of this
Note to be redeemed. The Initial Redemption Percentage shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage,
if any, specified on the face hereof until the Redemption Price is 100% of the
unpaid principal amount to be redeemed.
Notice of redemption shall be given by mail to the Holder of this Note,
not less than 30 days nor more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. As provided in the Indenture,
notice of redemption at the election of the Company as aforesaid may state that
such redemption shall be conditional upon the receipt by the Paying Agent or
Agents for this Note, on or prior to the date fixed for such redemption, of
money sufficient to pay the principal of and premium, if any, and interest, on
this Note; a notice of redemption so conditioned shall be of no force or effect
if such money is not so received and, in such event, the Company shall not be
required to redeem this Note.
In the event of redemption of this Note in part only, a new Note or Notes
of this series, of like tenor, for the unredeemed portion hereof and otherwise
having the same terms as this Note will be issued in the name of the Holder
hereof upon the cancellation hereof.
This Note will be subject to repayment by the Company at the option of the
Holder hereof on the Optional Repayment Date(s), if any, specified on the face
hereof, in whole or in part in increments of $1,000 (provided that any remaining
principal amount hereof shall be at least $100,000), at a repayment price equal
to 100% of the unpaid principal amount to be repaid, plus unpaid interest
accrued hereon to the date fixed for repayment (each a "Repayment Date"). For
this Note to be repaid, this Note must be received not more than 60 nor less
than 30 calendar days prior to the Repayment Date, together with the form hereon
entitled "Option to Elect Repayment" duly completed, by the Trustee at its
Corporate Trust Office in New York, New York or such other office or agency as
may be designated by the Company from time to time. Exercise of such repayment
option by the Holder hereof will be irrevocable. In the event of repayment of
this Note in part only, a new Note or Notes of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note will be issued
in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal of
this Note may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Trustee to enter into one or more supplemental indentures for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, the Indenture with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all series then
Outstanding under the Indenture, considered as one class; provided, however,
A-3
<PAGE>
that if there shall be Securities of more than one series Outstanding under the
Indenture and if a proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series so directly
affected, considered as one class, shall be required; and provided, further,
that if the Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so directly
affected, considered as one class, shall be required; and provided, further,
that the Indenture permits the Trustee to enter into one or more supplemental
indentures for limited purposes without the consent of any Holders of
Securities. The Indenture also contains provisions permitting the Holders of a
majority in principal amount of the Securities then Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
As provided in the Indenture and subject to certain limitations therein
set forth, this Note or any portion of the principal amount hereof will be
deemed to have been paid for all purposes of the Indenture and to be no longer
Outstanding thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and discharged, if
there has been irrevocably deposited with the Trustee or any Paying Agent (other
than the Company), in trust, money in an amount which will be sufficient and/or
Eligible Obligations, the principal of and interest on which when due, without
regard to any reinvestment thereof, will provide moneys which, together with
moneys so deposited, will be sufficient, to pay when due the principal of and
premium, if any, and interest on this Note when due.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the Corporate Trust
Office of First Trust of New York, National Association, in New York, New York
or such other office or agency as may be designated by the Company from time to
time, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities of this series of authorized denominations and of like
tenor and aggregate principal amount, will be issued to the designated
transferee or transferees.
The Notes are issuable only as registered Notes, without coupons, and in
denominations of $100,000 and in any greater amount in integral multiples of
$1,000. As provided in the Indenture and subject to certain limitations therein
set forth, the Notes are exchangeable for a like aggregate principal amount of
Notes of the same series and Tranche, of any authorized denominations, as
requested by the Holder surrendering the same, and of like tenor upon surrender
of the Note or Notes to be exchanged at the Corporate Trust Office of First
Trust of New York, National Association, in New York, New York or such other
office or agency as may be designated by the Company from time to time.
The Company shall not be required to execute or provide for the
registration of transfer of or the exchange of this Note during a period of 15
days immediately preceding the date notice is given calling this Note or any
part hereof for redemption, except with respect to the unredeemed portion of any
Note being redeemed in part.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
A-4
<PAGE>
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the absolute owner hereof for
all purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.
As used herein "Business Day" means any day, other than a Saturday or
Sunday, which is not a day on which banking institutions or trust companies in
The City of New York, New York or other city in which is located any office or
agency maintained for the payment of the principal of, or premium, if any, or
interest on this Note, are generally authorized or required by law, regulation
or executive order to remain closed. All other terms used in this Note which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
As provided in the Indenture, no recourse shall be had for the payment of
the principal of, premium, if any, or interest on any Securities, or any part
thereof, or for any claim based thereon or otherwise in respect thereof, or of
the indebtedness represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability whatsoever
shall attach to, or be incurred by, any incorporator, shareholder, officer or
director, as such, past, present or future of the Company or of any predecessor
or successor corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that the
Indenture and all the Securities are solely corporate obligations and that any
such personal liability is hereby expressly waived and released as a condition
of, and as part of the consideration for, the execution of the Indenture and the
issuance of the Securities.
Unless the certificate of authentication hereon has been executed by the
Trustee or an Authenticating Agent by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
A-5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal to be hereunto affixed and attested.
PUBLIC SERVICE COMPANY OF COLORADO
By:___________________________________
Senior Vice President
Attest:
_____________________
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated:________________
FIRST TRUST OF NEW YORK, OR FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION NATIONAL ASSOCIATION,
as Trustee as Trustee
By: By: [ ],
Authorized Officer as Authenticating Agent
By:
Authorized Officer
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
This Note may not be transferred or exchanged, nor may any purported
transfer be registered, except (i) this Note may be transferred in whole, and
appropriate registration of transfer effected, if such transfer is by Cede &
Co., as nominee for The Depository Trust Company (the "Depositary"), to the
Depositary, or by the Depositary to another nominee thereof, or by any nominee
of the Depositary to any other nominee thereof, or by the Depositary or any
nominee thereof to any successor securities depositary or any nominee thereof;
and (ii) this Note may be exchanged for definitive Notes registered in the
respective names of the beneficial holders hereof, and thereafter shall be
transferable without restrictions if: (A) the Depositary, or any successor
securities depositary, shall have notified the Company and the Trustee that it
is unwilling or unable to continue to act as securities depositary with respect
to this Note or the Company becomes aware that the Depositary has ceased to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and in any such case the Trustee shall not have been notified by the
Company within ninety (90) days of the identity of a successor securities
A-6
<PAGE>
depositary with respect to this Note; (B) the Company shall have delivered to
the Trustee an Officer's Certificate to the effect that this Note shall be so
exchangeable on and after a date specified therein; or (C)(1) an Event of
Default shall have occurred and be continuing, (2) the Trustee shall have given
notice of such Event of Default pursuant to Section 1102 of the Indenture and
(3) there shall have been delivered to the Company and the Trustee an Opinion of
Counsel to the effect that the interests of the beneficial owners of this Note
in respect thereof will be materially impaired unless such owners become Holders
of definitive Notes.
--------------------
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
[please insert social security or other identifying number of assignee]
[please print or typewrite name and address of assignee]
the within Note of PUBLIC SERVICE COMPANY OF COLORADO and does hereby
irrevocably constitute and appoint______________________________, Attorney, to
transfer said Note on the books of the within-mentioned Company, with full
power of substitution in the premises.
Dated:
Notice: The signature to this assignment must correspond with the name
as written upon the face of the Note in every particular without alteration or
enlargement or any change whatsoever.
A-7
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at __________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its Corporate
Trust Office in New York, New York not more than 60 nor less than 30 calendar
days prior to the Repayment Date, this Note with this "Option to Elect
Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of $1,000 (provided that
any remaining principal amount hereof shall be at least $100,000)) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be a minimum of $100,000) of the Notes to be issued to the Holder
for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $______________ ____________________________
Date: Notice: The signature(s)
-------------------------
on this Option to Elect
Repayment must correspond
with the name(s) as written
upon the face of this Note
in every particular,
without alteration or
enlargement or any change
whatsoever.
A-8
<PAGE>
SCHEDULE A
SUPPLEMENTAL INDENTURES
Date of Principal
Supplemental Principal Amount
Indenture Series of Bonds Amount Issued Outstanding
--------- --------------- ------------- -----------
November 1, 1993 Series No. 1 $134,500,000 $134,500,000
January 1, 1994 Series No. 2 due 2001 and $102,667,000 $102,667,000
Series No. 2 due 2024 $110,000,000 $110,000,000
September 2, 1994 Appointment of None None
Successor Trustee
May 1, 1996 Series No. 3 due 2006 $125,000,000 $125,000,000
November 1, 1996 Series No. 4 due from $150,000,000* $150,000,000
9 months to 30 years
from date of issue
* $250,000,000 authorized
I-1
<PAGE>
SCHEDULE B
PROPERTY DESCRIPTION
The following properties are situated in the State of Colorado and the counties
thereof:
ARAPAHOE COUNTY
1. QUINCY SUBSTATION
A parcel of land located in the SW 1/4 Section 5, Township 5 South, Range 64
West of the 6th Principal Meridian, Arapahoe County, Colorado, more particularly
described as follows:
Commencing at the SE corner of said SW 1/4 Section 5; Whence the SW corner of
said Section 5 bears N 89 Degrees 42'59" W a distance of 2,635.92 feet; Thence N
89 Degrees 42'59" W along the South line of said SW 1/4 Section 5 a distance of
350.00 feet to a point; Thence N 00 Degrees 17'01" E a distance of 55.00 feet to
a point on the North line of County Road 30 (Quincy Avenue) as described in Book
2826, Page 722, Reception No. 1761586, Arapahoe County Clerk and Recorder, also
being the true point of beginning; Thence along the North Line of said County
Road 30 (Quincy Avenue), N 89 Degrees 42'59" W a distance of 190.00 feet to a
point; Thence N 00 Degrees 17'01"E a distance of 455.00 feet to a point; Thence
S 89 Degrees 42'59" E a distance of 190.00 feet to a point; Thence S 00 Degrees
17'01" W a distance of 455.00 feet to the point of beginning, County of
Arapahoe, State of Colorado
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM PUBLIC SERVICE COMPANY OF COLORADO AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEET AS OF MARCH 31, 1997 AND CONSOLIDATED STATEMENTS OF INCOME
AND CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,616,379
<OTHER-PROPERTY-AND-INVEST> 43,058
<TOTAL-CURRENT-ASSETS> 881,719
<TOTAL-DEFERRED-CHARGES> 371,824
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,912,980
<COMMON> 326,350
<CAPITAL-SURPLUS-PAID-IN> 739,522
<RETAINED-EARNINGS> 415,513
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,481,385
39,913
140,008
<LONG-TERM-DEBT-NET> 1,482,816
<SHORT-TERM-NOTES> 132,250
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 163,150
<LONG-TERM-DEBT-CURRENT-PORT> 255,076
2,576
<CAPITAL-LEASE-OBLIGATIONS> 43,270
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,215,806
<TOT-CAPITALIZATION-AND-LIAB> 4,912,980
<GROSS-OPERATING-REVENUE> 677,660
<INCOME-TAX-EXPENSE> 35,317
<OTHER-OPERATING-EXPENSES> 82,828
<TOTAL-OPERATING-EXPENSES> 572,842
<OPERATING-INCOME-LOSS> 104,818
<OTHER-INCOME-NET> (889)
<INCOME-BEFORE-INTEREST-EXPEN> 103,929
<TOTAL-INTEREST-EXPENSE> 41,048
<NET-INCOME> 62,881
2,943
<EARNINGS-AVAILABLE-FOR-COMM> 59,938
<COMMON-STOCK-DIVIDENDS> 34,267
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 68,188
<EPS-PRIMARY> 0.920
<EPS-DILUTED> 0.920
</TABLE>
