United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 11-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED] for the fiscal year ended August 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED] for the transition period from
__________________________ to __________________________
Commission file number 1-3789
A. Full title of plan: Employee Stock Ownership Plan and Trust
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Southwestern Public Service Company
Tyler at Sixth, Amarillo, Texas 79101
INDEPENDENT AUDITORS' REPORT
To the Administration Committee
Southwestern Public Service Company
Employee Stock Ownership Plan and Trust:
We have audited the accompanying statement of net assets available for benefits
of the Southwestern Public Service Company Employee Stock Ownership Plan and
Trust (the Plan) as of August 31, 1994, and the related statement of changes in
net assets available for benefits for the year then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such 1994 financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of August 31,
1994, and the changes in net assets available for benefits for the year then
ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule, Item 27a -
Schedule of Assets Held for Investment Purposes as of August 31, 1994, is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedule
is the responsibility of the Plan's management. Such supplemental schedule has
been subjected to the auditing procedures applied in our audit of the basic
1994 financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
/s/ Deloitte & Touche LLP
Dallas, Texas
October 28, 1994
INDEPENDENT AUDITORS' REPORT
The Administrative Committee
Southwestern Public Service Company
Employee Stock Ownership Plan and Trust:
We have audited the accompanying statement of net assets available for benefits
of the Southwestern Public Service Company Employee Stock Ownership Plan and
Trust (the Plan) as of August 31, 1993, and the related statement of changes in
net assets available for benefits for the year then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 1993 financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of August 31, 1993, and the changes in net assets available for benefits for
the year then ended in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
Amarillo, Texas
November 12, 1993
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SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AUGUST 31, 1994 AND 1993
ASSETS
1994
1993
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INVESTMENT IN SOUTHWESTERN PUBLIC SERVICE
COMPANY COMMON STOCK, AT FAIR VALUE (COST
OF $13,011,832 IN 1994 AND $13,021,952 IN 1993; 808,981
SHARES IN 1994 AND 841,375 SHARES IN 1993)
$ 21,640,242
$ 25,767,109
RECEIVABLES:
Employer contribution
616,311
652,147
Accrued dividends
444,940
462,756
CASH
18
40
TOTAL ASSETS
22,701,511
26,882,052
LIABILITIES
DIVIDENDS PAYABLE TO PARTICIPANTS
444,940
462,756
NET ASSETS AVAILABLE FOR BENEFITS
$ 22,256,571
$ 26,419,296
See notes to financial statements.
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SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED AUGUST 31, 1994 AND 1993
1994
1993
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ADDITIONS:
Employer contributions
$ 616,311
$ 652,147
Dividends
1,808,373
1,863,146
Total additions
2,424,684
2,515,293
DEDUCTIONS:
Distributions to participants
1,601,797
1,069,538
Dividends paid
1,808,373
1,863,146
Total deductions
3,410,170
2,932,684
EXCESS OF DEDUCTIONS OVER ADDITIONS
(985,486)
(417,391)
NET DEPRECIATION IN FAIR VALUE OF
INVESTMENT IN SOUTHWESTERN PUBLIC
SERVICE COMPANY COMMON STOCK
(3,177,239)
(1,714,418)
NET DECREASE IN NET ASSETS
AVAILABLE FOR BENEFITS
(4,162,725)
(2,131,809)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year
26,419,296
28,551,105
End of year
$ 22,256,571
$ 26,419,296
See notes to financial statements.
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements of the Southwestern Public Service
Company Employee Stock Ownership Plan and Trust (the Plan) have been
prepared on the accrual basis of accounting.
Investment
The investment in Southwestern Public Service Company (Company or
Employer) common stock is stated at fair value, based on the New York
Stock Exchange published market quotations as of the last business day
of the Plan's fiscal year. The change in the difference between fair
value and the cost of investments, including realized gains or losses,
is reflected in the statement of changes in net assets available for
benefits as net appreciation (depreciation) in fair value of investments
during the year.
Securities transactions are recognized on the trade date (the date the
order to buy or sell is executed). Dividend income is recorded on the
ex-dividend date.
Trust Management
Boatmen's First National Bank of Amarillo (the Trustee) manages the
assets of the Plan under the terms of a trust agreement.
2. DESCRIPTION OF THE PLAN
The following brief description of the Plan is provided for general
information only. Participants should refer to the Plan Agreement for
more complete information.
General
The Plan is a defined contribution plan established in 1974 to enable
eligible employees to accumulate ownership of Company common stock.
Employees are eligible for participation upon completion of one year of
service. Benefits are based on individual compensation. The Plan pays
all dividends to the employees in cash, rather than in additional shares
of the Company's common stock. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974. The Plan is
administered by an Administration Committee appointed by the Company's
Board of Directors.
Contributions
The amount of the Company's annual contribution to the Plan is
discretionary. However, the Employer's contribution for any year,
including payment of related administrative and investment expenses paid
by the Company, cannot exceed the amount of federal income tax benefit
to the Company resulting from the deduction for cash dividends paid by
the Company on shares of common stock held by the Plan and the
additional tax benefit resulting from the Employer's contributions to
the Plan and the Southwestern Public Service Company Tax Benefit Plan
(the Tax Benefit Plan).
The Company contributed to the Plan 75% of the maximum contribution
described above, reduced by combined administrative and investment
expenses of the Plan and the Tax Benefit Plan of approximately $162,000
and $123,000 in 1994 and 1993, respectively. The remaining 25% was
contributed to the Tax Benefit Plan.
Annual additions to a participant's account may not exceed the lesser of
25% of the participant's compensation for the year or $30,000. This
limitation applies to the total Employer contributions allocated to a
participant for all defined contribution plans of the Employer.
Vesting
Employees become fully vested at the time amounts are allocated to their
accounts, generally on the last day of the Plan's fiscal year.
Distributions
The Plan provides that upon termination of employment for any reason,
distributions of benefits to participants are to be made within a
reasonable time following termination, generally not to exceed 60 days
following the close of the plan year in which such termination occurs.
Distributions are made in full shares of Company common stock and cash
for any partial shares.
Amounts due to terminated participants of the Plan as of August 31, 1994
and 1993, were approximately $1,655,000 and $1,573,000 respectively.
Allocations
Employer contributions are allocated in the proportion each
participant's compensation, up to $100,000, for the plan year bears to
the compensation of all participants.
Termination of the Plan
The Plan may be terminated at any time by the Employer. In the event of
termination, the Plan's Administration Committee shall direct the
Trustee to distribute the assets remaining in the Plan to participants
and beneficiaries in proportion to their respective account balances.
Administrative and Investment Expenses
The Plan provides that administrative expenses may be paid by the Plan;
however, administrative expenses and fees incurred in connection with
the investment of funds for both the Plan and the Tax Benefit Plan have
been paid by the Company in 1994 and 1993, and such amounts have reduced
the amount of the Employer contribution to the Plan, as previously
described. Included in that amount are reimbursements of certain
personnel-related expenses incurred by the Company.
3. FEDERAL INCOME TAXES
The Internal Revenue Service issued its latest determination letter
dated October 25, 1989, which stated that the Plan is a qualified plan
under Section 401(a) of the Internal Revenue Code (the Code), and the
trust, which forms part of the qualified Plan, is exempt from federal
income taxes under Section 501(a) of the Code. The Plan has been
amended since receiving the latest determination letter. A
determination letter request is currently pending with the Internal
Revenue Service to cover these amendments made to the Plan as required
by recent legislative changes. In the opinion of the Plan
administrator, the Plan and its underlying trust have operated within
the terms of the Plan and remain qualified under the applicable
provisions of the Code.
4. PLAN AMENDMENTS
The Plan will be amended from time to time, as required, to comply with
legal requirements upon the advice of the Plan's legal counsel. Other
amendments may be necessary to ensure that the Plan is appropriate
within the industry and community. The Plan adopted several amendments
subsequent to year-end to conform with legal requirements.
5. SUBSEQUENT EVENT
The Company is proposing to merge the Employee Stock Ownership Plan and
Trust into the Tax Benefit Plan and Trust effective March 1, 1995. The
proposed new plan will provide for two levels of discretionary Company
contributions: one level, contemplated to equal approximately 25% of the
tax savings generated by the cash dividends paid to participants, will
be allocated among all eligible employees on the basis of their base
compensation. The second level, contemplated to equal approximately 50%
of the tax savings, will be allocated to employees on the basis of their
salary deferrals. The remaining 25% of the tax savings will be
available for other uses.
Employee salary deferral contributions in the proposed new plan will be
increased to allow all participants to contribute from 1% to 15%,
subject to legal limits. In addition, employees will also have the
opportunity to elect to diversify 25% of future salary deferral and
Company contributions into investments other than Company stock. The
remaining 75% of salary deferrals and Company contributions will be
invested in Company stock.
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SOUTHWESTERN PUBLIC SERVICE COMPANY
SCHEDULE 1
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AUGUST 31, 1994
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Number of
Type of Investment and Issuer
Shares
Cost
Fair Value
Investment in Southwestern Public
Service Company common stock*
808,981
$ 13,011,832
$ 21,640,242
* Represents transaction with party-in-interest.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Stock Ownership Plan and Trust Administrative Committee has duly
caused this Annual Report to be signed on its behalf by the undersigned
hereunto duly authorized.
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
/s/ Bill D. Helton
Chairman of the Board
and Chief Executive Officer
of Southwestern Public Service Company
Member of the Employee Stock Ownership Plan
and Trust Administrative Committee
DATE: January 18, 1995
Independent Auditors' Consent
We consent to incorporation by reference in Registration Statement No. 33-27452
of Southwestern Public Service Company on Form S-8 of our report dated October
28, 1994, appearing in this Annual Report on Form 11-K of Southwestern Public
Service Company Employee Stock Ownership Plan and Trust for the year ended
August 31, 1994.
/s/ Deloitte & Touche LLP
Dallas, Texas
January 18, 1995
Independent Auditors' Consent
The Board of Directors
Southwestern Public Service Company:
We consent to incorporation by reference in the registration statement on Form
S-8 (No. 33-27452) of Southwestern Public Service Company of our report dated
November 12, 1993, relating to the statement of net assets available for
benefits of the Southwestern Public Service Company Employee Stock Ownership
Plan and Trust as of August 31, 1993, and the related statement of changes in
net assets available for benefits for the year then ended, which report appears
in the August 31, 1994 annual report on Form 11-K of the Southwestern Public
Service Company Employee Stock Ownership Plan and Trust.
/s/ KPMG Peat Marwick LLP
Amarillo, Texas
February 13, 1995
