UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1995
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 1-3789
SOUTHWESTERN PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
New Mexico 75-0575400
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Tyler at Sixth, Amarillo, Texas 79101
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code (806) 378-2121
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 __
As of April 10, 1995, 40,917,908 shares of the Company's common stock
were outstanding.
SOUTHWESTERN PUBLIC SERVICE COMPANY
FORM 10-Q
For the Quarter Ended February 28, 1995
TABLE OF CONTENTS
Page
PART I. Financial Information
(Unaudited, except Condensed Consolidated Balance Sheet
at August 31, 1994)
Condensed Consolidated Balance Sheets at February 28, 1995
and August 31, 1994 3, 4
Condensed Consolidated Statements of Earnings for the three,
six and twelve months ended February 28, 1995 and
February 28, 1994 5
Condensed Consolidated Statements of Cash Flows for the six and
twelve months ended February 28, 1995 and February 28, 1994 6
Notes to Condensed Consolidated Financial Statements 7
Independent Accountants' Report 8
Management's Discussion and Analysis of Financial Condition and
Results of Operations 9, 10
PART II. Other Information 11
Signatures 12
Exhibit 12. Statement of Computation of Ratio of Earnings 13
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Balance Sheets
Assets
<S> <C> <C>
February 28, August 31,
1995 1994
(Unaudited)
(In Thousands)
Utility plant:
Utility plant in service $2,279,721 $2,280,126
Accumulated depreciation (818,264) (794,102)
Net plant in service 1,461,457 1,486,024
Construction work in progress 61,453 22,590
Net utility plant 1,522,910 1,508,614
Nonutility property and investments 53,508 41,868
Current assets:
Cash and temporary investments 16,261 20,782
Accounts receivable, net 55,753 69,357
Accrual for unbilled revenues 2,498 21,318
Materials and supplies, at average cost 20,669 18,238
Prepayments and other current assets 7,227 8,555
Total current assets 102,408 138,250
Deferred debits 127,761 132,503
Total assets $1,806,587 $1,821,235
Continued . . .
</TABLE>
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Balance Sheets
Capitalization and Liabilities
<S> <C> <C>
February 28, August 31,
1995 1994
(Unaudited)
(In Thousands)
Capitalization:
Common stock, $1 par value, authorized - 100,000,000 shares;
issued and outstanding - 40,917,908 shares $ 40,918 $ 40,918
Premium on capital stock 306,376 306,376
Retained earnings 341,275 348,878
Total common shareholders' equity 688,569 696,172
Preferred stock - redemption not required 72,680 72,680
Long-term debt 576,259 506,487
Total capitalization 1,337,508 1,275,339
Current liabilities:
Short-term debt -- 14,994
Current maturities of long-term debt 500 16,741
Accounts payable 8,321 12,301
Liability for refunds to customers 3,362 3,804
Interest accrued 8,834 8,799
Fuel and purchased power expense accrued 26,279 40,884
Taxes accrued 5,369 30,359
Dividends payable on common stock 22,505 22,505
Other current liabilities 32,506 35,092
Total current liabilities 107,676 185,479
Deferred credits:
Deferred income taxes 344,233 339,456
Unamortized investment tax credits 6,178 6,303
Other 10,992 14,658
Total deferred credits 361,403 360,417
Total capitalization and liabilities $1,806,587 $1,821,235
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Statements of Earnings
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Three Months Ended Six Months Ended Twelve Months Ended
2-28-95 2-28-94 2-28-95 2-28-94 2-28-95 2-28-94
(In Thousands, Except Per Share Amounts)
Operating revenues $181,848 $189,392 $369,065 $392,463 $820,050 $830,193
Operating expenses:
Operation:
Fuel 83,622 93,826 167,648 189,440 381,415 394,131
Purchased power 1,232 1,138 2,331 2,435 4,500 4,924
Other 25,679 25,068 51,411 50,655 108,051 106,489
Maintenance 8,056 6,933 15,946 13,605 30,617 27,673
Depreciation and amortization 15,287 15,348 30,579 31,233 59,897 61,846
Taxes other than property and
income taxes 4,857 4,868 9,667 9,774 19,364 18,868
Property taxes 6,017 5,487 11,861 10,937 23,392 22,401
Income taxes (note 2) 9,313 10,355 21,749 24,158 55,448 56,991
Total operating expenses 154,063 163,023 311,192 332,237 682,684 693,323
Operating income 27,785 26,369 57,873 60,226 137,366 136,870
Other income, net:
Income taxes (note 2) (731) (405) (1,217) (1,252) (496) (1,893)
Other, net 1,972 1,402 3,507 4,419 2,491 7,737
Total other income, net 1,241 997 2,290 3,167 1,995 5,844
Earnings before interest charges 29,026 27,366 60,163 63,393 139,361 142,714
Interest charges 10,349 9,995 20,317 19,977 40,764 40,131
Net earnings 18,677 17,371 39,846 43,416 98,597 102,583
Dividends and premiums on
cumulative preferred stock 1,220 1,220 2,439 2,439 4,878 5,261
Earnings applicable to common
stock $ 17,457 $ 16,151 $ 37,407 $ 40,977 $ 93,719 $ 97,322
Earnings per common share* $ 0.43 $ 0.39 $ 0.91 $ 1.00 $ 2.29 $ 2.38
Weighted average shares
outstanding 40,918 40,918 40,918 40,918 40,918 40,918
Dividends declared per
common share $ 0.55 $ 0.55 $ 1.10 $ 1.10 $ 2.20 $ 2.20
( ) Denotes deduction.
*Based on weighted average shares outstanding.
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<S> <C> <C> <C> <C>
Six Months Ended Twelve Months Ended
2-28-95 2-28-94 2-28-95 2-28-94
(In Thousands)
Operating Activities:
Cash received from customers $400,557 $421,091 $831,068 $828,608
Cash paid to suppliers and employees (258,663) (264,583) (530,698) (523,017)
Interest paid (20,207) (19,540) (40,236) (38,618)
Income taxes paid (32,882) (34,205) (45,803) (55,306)
Taxes other than income taxes paid (31,145) (30,756) (41,777) (44,049)
Other operating cash receipts and payments, net 2,938 194 15,497 6,540
Net cash provided by operating activities 60,598 72,201 188,051 174,158
Investing Activities:
Construction expenditures (44,567) (46,877) (89,479) (87,098)
Nonutility property and investments (11,640) (7,185) (17,219) (9,581)
Net cash used in investing activities (56,207) (54,062) (106,698) (96,679)
Financing Activities:
Issuance of long-term debt 70,000 -- 70,000 --
Retirement of long-term debt (16,469) (25,580) (16,433) (26,086)
Change in short-term debt (14,994) 44,500 (44,500) 44,500
Dividends paid (common and preferred) (47,449) (47,449) (94,898) (94,896)
Net cash used in financing activities (8,912) (28,529) (85,831) (76,482)
Net Increase (Decrease) in Cash and Temporary Investments (4,521) (10,390) (4,478) 997
Cash and Temporary Investments at Beginning of Period 20,782 31,129 20,739 19,742
Cash and Temporary Investments at End of Period $ 16,261 $ 20,739 $ 16,261 $ 20,739
Reconciliation of Net Earnings to Net Cash Provided
by Operating Activities:
Net earnings $ 39,846 $ 43,416 $ 98,597 $102,583
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 30,579 31,233 59,897 61,846
Deferred income taxes 5,570 3,277 13,857 7,087
Investment tax credits (125) (125) (250) (250)
Allowance for equity funds used during construction (43) (571) (31) (1,616)
Total 75,827 77,230 172,070 169,650
Cash flows impacted by changes in:
Accounts receivable 13,604 15,362 2,322 271
Accrual for unbilled revenues 18,820 13,723 7,401 1,881
Materials and supplies (2,431) (1,858) (2,068) (333)
Accounts payable (3,980) 250 (3,159) 2,952
Fuel and purchased power expense accrued (14,605) (11,300) (3,611) 1,365
Taxes accrued (24,990) (21,909) 1,531 (3,227)
Liability for refunds to customers (442) 54 2,272 (2,677)
Other, net (1,205) 649 11,293 4,276
Net cash provided by operating activities $ 60,598 $ 72,201 $188,051 $174,158
See accompanying notes to condensed consolidated financial statements.
</TABLE>
SOUTHWESTERN PUBLIC SERVICE COMPANY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(1) Interim periods. The results of operations for the interim periods are
not necessarily an indication of the expected results for the fiscal year
due to the seasonal nature of Southwestern Public Service Company's (the
Company) business. The unaudited condensed consolidated financial statements
included herein were prepared from the books of the Company in accordance
with generally accepted accounting principles and reflect all adjustments
(none of which are other than normal recurring adjustments) which are, in
the opinion of management, necessary to provide a fair statement of the
results of operations and financial position for the interim periods. Such
financial statements generally conform to the presentation reflected in the
Company's Annual Report to Shareholders. The current interim periods
reported herein are included in the fiscal year subject to independent audit
at the end of the year.
(2) Income taxes. The components of income tax expense (benefit) are as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Three Months Ended Six Months Ended Twelve Months Ended
2-28-95 2-28-94 2-28-95 2-28-94 2-28-95 2-28-94
(In Thousands)
Taxes on operating income:
Federal-current $ 5,831 $ 7,183 $15,490 $19,568 $39,800 $47,589
Federal-deferred 3,207 2,940 5,697 3,942 14,142 7,767
Investment tax credits (63) (63) (125) (125) (250) (250)
State-current 338 295 687 773 1,756 1,885
9,313 10,355 21,749 24,158 55,448 56,991
Taxes on other income:
Federal-current 837 381 1,332 1,917 769 2,573
Federal-deferred (118) 24 (127) (665) (285) (680)
State-current 12 -- 12 -- 12 --
731 405 1,217 1,252 496 1,893
Total income taxes $10,044 $10,760 $22,966 $25,410 $55,944 $58,884
</TABLE>
(3) Long-Term Debt. The Company made a public offering of $70 million of
First Mortgage Bonds (Bonds) on February 22, 1995. The proceeds from the
Bonds were applied primarily to the retirement of short-term debt.
(4) Rate and Regulatory Matters. On December 19, 1989, the FERC issued its
order regarding the 1985 rate case (see Note 10 in Form 10-K for fiscal
years 1985 and 1989), and on October 18, 1990, denied rehearing of that
order. The Company appealed certain portions of the order that related to
recognition in rates of the reduction of the federal income tax rate from
46% to 34%. The United States Court of Appeals for the District of Columbia
Circuit remanded the case, directing the FERC to reconsider the Company's
claim of an offsetting cost and limiting the FERC's actions. The FERC issued
its Order on Remand in July, 1992, required filings were made and a hearing
was completed in February 1994. In October 1994, the administrative law
judge issued a favorable initial decision that, if approved by the FERC,
would result in a substantial recovery by the Company. Until a final order
is issued by the FERC, the Company is unable to accurately estimate the
amount recoverable from these proceedings.
(5) General. See note (1) of Notes to Consolidated Financial Statements in
the Company's 1994 Annual Report on Form 10-K for a summary of the Company's
significant accounting policies.
Independent Accountants' Report
Southwestern Public Service Company:
We have reviewed the accompanying condensed consolidated balance sheet of
Southwestern Public Service Company and subsidiaries as of February 28,
1995, and the related condensed consolidated statements of earnings for the
three-month, six-month and twelve-month periods ended February 28, 1995 and
1994, and cash flows for the six-month and twelve-month periods ended
February 28, 1995 and 1994. 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 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 such condensed consolidated financial statements 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 and statement of capitalization of
Southwestern Public Service Company and subsidiaries as of August 31, 1994,
and the related consolidated statements of income, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated October 7, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of February 28,
1995, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
Deloitte & Touche LLP
April 10, 1995
Dallas, Texas
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Operating Revenues and Kilowatt-Hour Sales
Substantially all of the Company's operating revenues result from the sale
of electric energy. The principal factors determining revenues are the
amount and price per unit of energy sold. The following table describes the
principal components of changes in revenues.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Increase (Decrease) From Corresponding Prior Period
Three Months Six Months Twelve Months
Ended Ended Ended
2-28-95 2-28-95 2-28-95
(Dollars In Thousands)
Estimated effect on revenues of variations in:
Kilowatt-hour (kwh) sales* $ 961 $ 1,929 $ 28,942
Rates 2,805 (401) (9,971)
Fuel and purchased power cost recovery (5,063) (13,759) (13,955)
Subtotal (1,297) (12,231) 5,016
Non-firm kwh sales (6,247) (11,167) (15,159)
Total revenue decrease $(7,544) $(23,398) $(10,143)
Increase in kwh sales* (in millions) 48 95 742
Decrease in non-firm kwh sales (in millions) (253) (423) (541)
<F>
*Comprised of retail and wholesale excluding economy and interruptible
(non-firm) wholesale kwh sales.
</F>
</TABLE>
Variations in Kwh Sales. The revenue increases in the three- and six-month
periods are attributable primarily to increased sales to rural electric
cooperatives (RECs). These increases are principally due to sales to Cap
Rock Electric Cooperative that began in February 1994. The twelve-month
increase was primarily the result of dry, warm weather last summer that
favorably impacted agriculture-related sales and a modest improvement in the
service area's economy that contributed to all periods presented.
Variations in Rates. Revenues increased in the three-month period due
primarily to contractually set demand charges for certain wholesale
customers. Although firm wholesale kwh sales declined, the average revenue
per kwh sold increased due to such contractual demand charges. Also
contributing to the revenue increase in the three-month period were demand
charges for REC customers. These REC demand charges are based on the highest
monthly usage of the past twelve months which, for such period, included
unusually hot weather. The declines in the six- and twelve-month periods
resulted primarily from the effects of the retail rate reductions in Texas
and New Mexico. In Texas reduced rates totaling approximately $13 million
annually were implemented October 15, 1993. In New Mexico an approximate $4
million annual reduction became effective April 1, 1994.
Variations in Fuel and Purchased Power Cost Recovery. Revenue decreases
are due to lower natural gas prices in all periods. Lower coal costs
contributed to the decline in the six- and twelve-month periods.
Variations in Non-Firm Kwh Sales. The amount of revenues arising from non-
firm sales is dependent, in large part, upon the availability of
hydroelectric power from the Northwest and competing generation from major
plants in the West. Lower non-firm sales in all periods were due primarily
to available power from these major western plants and excess hydroelectric
power in the Northwest. Mild weather throughout the region also contributed
to the decline for the three- and six-month periods.
Operating Expenses and Non-Operating Items
Fuel and purchased power expense comprised 55.1%, 54.6% and 56.5% of total
operating expenses for the three, six and twelve months ended February 28,
1995, respectively. When compared to the corresponding periods last year,
these expenses decreased $10.1 million or 10.6%, $21.9 million or 11.4%, and
$13.1 million or 3.3%, respectively. Fuel expense (excluding purchased power
expense), per net kwh generated, decreased from 1.90 to 1.77 cents, from
1.88 to 1.72 cents, and from 1.87 to 1.79 cents for the respective three-,
six- and twelve-month periods because of lower spot-market prices for
natural gas in all periods and lower coal costs in the six- and twelve-month
periods. The low spot-market prices for natural gas are expected to be
temporary in nature.
Total operating expenses, excluding fuel and purchased power increased
$1.4 million or 1.7%, $0.9 million or 0.6%, and $2.5 million or 0.8% for the
respective three-, six- and twelve-month periods. These increases resulted
primarily from scheduled power plant maintenance. Property taxes were
greater in all periods due to continuing escalation of ad valorem taxes in
the state of Texas related to school funding. Increased utility plant also
contributed to the rise in property taxes. Management does not expect
significant increases in the future related to Texas school funding.
A decline in "other income" in the six-month period reflects the receipt
last year of interest on a wholesale rate case settlement and decreased
allowance for funds used during construction (AFUDC) of $0.5 million or
92.5% in the current period. The decreased "other income" in the twelve-
month period was caused by the recognition in August 1994 of nonrecurring
expenses totaling $3.4 million. These nonrecurring expenses related to
engineering and design costs of a previously planned generating facility and
business development costs related to a generation project in Missouri. In
the twelve-month period, AFUDC decreased $1.6 million or 98.1%, which also
contributed to the decline in "other income."
Earnings
Current operating income and earnings applicable to common stock increased
for the three-month period due principally to the increased kilowatt-hour
sales to RECs. The declines in earnings for the six- and twelve-month
periods were caused primarily by the implementation of lower retail rates in
Texas and New Mexico. Also influencing the twelve-month period was the
reduced "other income."
Assuming normal weather conditions, earnings for the 1995 fiscal year are
expected to remain relatively level or decline somewhat due to the 1994
retail rate reductions and increased operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's demand for capital is primarily related to the construction
of utility plant and equipment. Cash construction expenditures excluding
AFUDC for the three, six and twelve months ended February 28, 1995, were
$22.4 million, $44.6 million and $89.5 million, respectively. The Company
cannot accurately forecast the portion of capital expenditures to be
provided from internally generated funds, but expects that it will be
approximately 70% in fiscal 1995.
The Company issued $70 million principal amount of 8.5% First Mortgage
Bonds (Bonds) on February 22, 1995. The proceeds from the Bonds were applied
primarily to the retirement of short-term debt. The Company has effective a
shelf registration under which an aggregate of $130 million of Bonds and
Cumulative Preferred Stock remains available for issue (a maximum of $40
million Preferred Stock is issuable thereunder).
CHANGES IN ACCOUNTING STANDARDS
In November 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 112 "Employers' Accounting
for Postemployment Benefits" (Statement 112). Statement 112 requires the
accrual of certain postemployment benefits provided to former or inactive
employees. The implementation of Statement 112 in the current period did not
have a material effect on the Company's financial position or results of
operations.
PART II. OTHER INFORMATION
Item 4. Other Information.
The Company's Annual Meeting of Shareholders was held January 11, 1995.
The following persons, with the exception of R. R. Hemminghaus, were
reelected to the Company's Board of Directors to hold office until the
Annual Meeting of Shareholders in 1998. Mr. Hemminghaus was reelected to the
Company's Board of Directors to hold office until the Annual Meeting of
Shareholders in 1996.
Director In Favor Withheld
Gene H. Bishop 33,970,305 419,280
C. Coney Burgess 34,042,675 346,910
J. Howard Mock 34,044,181 345,404
Gary W. Wolf 33,740,743 648,841
R. R. Hemminghaus 33,972,157 417,428
Item 5. Other Information.
The Company's ratio of earnings to fixed charges for the twelve months
ended February 28, 1995, was 4.55. The ratio of earnings to fixed charges
and preferred dividend requirements combined was 3.87 for such period.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
12 Statement showing computations of ratio of earnings for the
twelve months ended February 28, 1995
15 Letter of Deloitte & Touche LLP regarding unaudited condensed
consolidated interim financial information
(b) Reports on Form 8-K:
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SOUTHWESTERN PUBLIC SERVICE COMPANY
Doyle R. Bunch II
Executive Vice-President
Accounting and Corporate Development
DATE: April 10, 1995
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 12. Statement of Computation of Ratio of Earnings
Twelve Months Ended
February 28, 1995
(Dollars In Thousands)
<S> <C>
Computation of Ratio of Earnings to Fixed Charges:
Fixed charges, as defined:
Interest on long-term debt $ 37,766
Amortization of debt premium, discount and expense 517
Other interest 4,058
Estimated interest factor of rental charges 1,184
Total fixed charges $ 43,525
Earnings as defined:
Net earnings per statement of earnings $ 98,597
Fixed charges as shown 43,525
Income taxes:
Federal-current 40,569
Federal-deferred 13,857
State 1,768
Investment tax credits (250)
Earnings available for fixed charges $198,066
Ratio of earnings to fixed charges 4.55
Computation of Ratio of Earnings to Fixed Charges
and Preferred Dividend Requirements Combined:
Total fixed charges, as shown above $ 43,525
Preferred dividend requirements* 7,596
Total fixed charges and preferred dividend
requirements combined $ 51,121
Earnings available for fixed charges and preferred dividend
requirements combined $198,066
Ratio of earnings to fixed charges and preferred dividend
requirements combined 3.87
*Preferred dividend requirements:
Annual preferred dividend requirement $ 4,878
Less amount deductible for income tax purposes 84
Net requirement [A] $ 4,794
1 / (100% - effective tax rate) [B] 1.567
Effective tax rate 36.2%
[A] x [B] $ 7,512
Add amount deductible for income tax purposes 84
Preferred dividend requirements $ 7,596
</TABLE>
EXHIBIT 15.
Southwestern Public Service Company:
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited
condensed consolidated interim financial information of Southwestern Public
Service Company and subsidiaries for the periods ended February 28, 1995 and
1994, as indicated in our report dated April 10, 1995; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, is
incorporated by reference in Amendment No. 1 to Registration Statement No.
33-53171 on Form S-3 and Registration Statement Nos. 33-27452 and 33-57869
on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the
Registration Statement prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of Sections 7 and
11 of that Act.
Deloitte & Touche LLP
April 10, 1995
Dallas, Texas
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> FEB-28-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,522,910
<OTHER-PROPERTY-AND-INVEST> 53,508
<TOTAL-CURRENT-ASSETS> 102,408
<TOTAL-DEFERRED-CHARGES> 127,761
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,806,587
<COMMON> 40,918
<CAPITAL-SURPLUS-PAID-IN> 306,479
<RETAINED-EARNINGS> 341,275
<TOTAL-COMMON-STOCKHOLDERS-EQ> 688,672
0
72,680
<LONG-TERM-DEBT-NET> 576,259
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 500
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 107,073
<TOT-CAPITALIZATION-AND-LIAB> 1,806,587
<GROSS-OPERATING-REVENUE> 369,065
<INCOME-TAX-EXPENSE> 21,749
<OTHER-OPERATING-EXPENSES> 289,443
<TOTAL-OPERATING-EXPENSES> 311,192
<OPERATING-INCOME-LOSS> 57,873
<OTHER-INCOME-NET> 2,290
<INCOME-BEFORE-INTEREST-EXPEN> 60,163
<TOTAL-INTEREST-EXPENSE> 20,317
<NET-INCOME> 39,846
2,439
<EARNINGS-AVAILABLE-FOR-COMM> 37,407
<COMMON-STOCK-DIVIDENDS> 45,010
<TOTAL-INTEREST-ON-BONDS> 19,059
<CASH-FLOW-OPERATIONS> 60,598
<EPS-PRIMARY> 0.91
<EPS-DILUTED> 0
</TABLE>
