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, 1995
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 Investment 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
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INDEPENDENT AUDITORS' REPORT
To the Administrative Committee
Southwestern Public Service Company
Employee Investment Plan and Trust:
We have audited the accompanying statements of net assets available for benefits
of the Southwestern Public Service Company Employee Investment Plan and Trust
(formerly Southwestern Public Service Company Tax Benefit Plan and Trust) (the
"Plan") as of August 31, 1995 and 1994, and the related statements of changes in
net assets available for benefits for the years 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 audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of August 31,
1995 and 1994, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules,
Item 27a - Schedule of Assets Held for Investment Purposes as of August 31,
1995, and Item 27d - Schedule of Reportable Transactions for the year ended
August 31, 1995, are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are 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. These supplemental schedules are the responsibility of the Plan's
management. Such supplemental schedules have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
October 27, 1995
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AUGUST 31, 1995 AND 1994
ASSETS 1995 1994
<S> <C> <C>
INVESTMENTS AT FAIR VALUE:
Southwestern Public Service Company Common Stock $64,632,180 $32,620,608
Boatmen's Short-Term Investment Fund 989,218
Shares of registered investment companies:
Fidelity Value Fund 241,341
T Rowe Price International Stock Fund 95,849
Strong Government Securities Fund 60,276
66,018,864 32,620,608
RECEIVABLES:
Employer's contributions 278,758 205,437
Participants' contributions 297,682 482,602
Accrued interest and dividends 1,190,661 670,704
1,767,101 1,358,743
CASH 2,931
Total assets 67,788,896 33,979,351
LIABILITIES
BANK OVERDRAFT 105
NET ASSETS AVAILABLE FOR BENEFITS $67,788,896 $33,979,246
See notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN AND TRUST
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED AUGUST 31, 1995 AND 1994
1995 1994
<S> <C> <C>
ADDITIONS:
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value of investments $ 4,948,819 $(4,414,960)
Interest 44,488
Dividends 4,189,784 2,548,004
9,183,091 (1,866,956)
Contributions:
Employer's contributions 1,147,087 205,437
Participants' contributions 4,251,646 3,215,576
Rollover contributions 7,118
5,405,851 3,421,013
Total additions 14,588,942 1,554,057
DEDUCTIONS:
Deductions from net assets attributed to:
Distributions to participants 2,852,575 2,071,130
Dividends paid to participants 1,738,747
Total deductions 4,591,322 2,071,130
EXCESS (DEFICIENCY) OF ADDITIONS OVER DEDUCTIONS 9,997,620 (517,073)
TRANSFER OF NET ASSETS FROM EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST 23,812,030
NET INCREASE (DECREASE) IN NET ASSETS AVAILABLE
FOR BENEFITS 33,809,650 (517,073)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 33,979,246 34,496,319
End of year $67,788,896 $33,979,246
See notes to financial statements.
</TABLE>
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SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1995 AND 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Plan Merger - The plan sponsor, Southwestern Public Service Company (the
"Company" or "Employer") merged the Southwestern Public Service Company
Employee Stock Ownership Plan and Trust (the "ESOP") into the Southwestern
Public Service Company Tax Benefit Plan and Trust (the "Tax Benefit Plan")
effective March 1, 1995, and renamed the combined plans the Southwestern
Public Service Company Employee Investment Plan and Trust (the "Plan").
Accordingly, the statement of changes in net assets available for benefits
for the year ended August 31, 1995, reflects the transfer of the ESOP's
assets to effect the merger.
Basis of Presentation - The accompanying financial statements of the Plan
(formerly Southwestern Public Service Company Tax Benefit Plan and Trust)
have been prepared on the accrual basis of accounting.
Investments - The Plan's investments are stated at fair value. Shares of
registered investment companies are valued at quoted market prices, which
represent the net asset value of shares held by the Plan at year- end. The
Company common stock is valued at its quoted market price. 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.
In addition to participant and Employer matching contributions directed to
the Boatmen's Short-Term Investment Fund, this fund also includes
uninvested participant and Employer matching contributions and
undistributed dividends (see Note 3).
Trust Management - Boatmen's 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 to provide
eligible employees who elect to participate in the savings portion of the
Plan an opportunity to save by having a portion of their pretax
compensation deferred and contributed to the Plan, and to provide all
eligible employees with an opportunity to accumulate capital ownership in
the Company. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974. The Plan is administered by an
Administrative Committee appointed by the Company's Board of Directors.
Participation - Any eligible employee who was a participant in the ESOP or
Tax Benefit Plan prior to the effective date of this Plan (March 1, 1995)
is a participant in this Plan as of the effective date.
After March 1, 1995, employees shall be eligible to participate in the
Plan on the June 1, September 1, December 1 or March 1 following the date
the employee completes one year of service.
Contributions - The Company, at its discretion, may make matching and/or
additional contributions to the Plan each Plan Quarter in cash or shares
of the Company's common stock. However, the Employer's contributions for
any year, including payment of related administrative and investment
expenses, cannot exceed the amount of federal income tax benefit to the
Company resulting from the deduction for cash dividends paid on shares of
Company common stock owned by the Plan and the additional tax benefit
resulting from the Employer's contribution to the Plan.
For the six-month period ended March 1, 1995, the Company contributed to
the Plan 25% of the maximum contribution, reduced by combined
administrative and investment expenses of the Tax Benefit Plan and the
ESOP of approximately $160,000. The remaining 75% was contributed to the
ESOP.
For the six-month period ended August 31, 1995, the Company contributed to
the Plan the maximum contribution, reduced by administrative and
investment expenses of approximately $146,000, as salary match, deferral
match and optional employer contributions.
Contributions by employees are limited to 15% of base salary. Under the
Tax Benefit Plan provisions, all contributions were invested in shares of
the Company common stock. Effective March 1, 1995, participants may elect
to have 25% of their contributions and Company matching contributions,
invested among the following investment options: Fidelity Value Fund, T
Rowe Price International Stock Fund, Strong Government Securities Fund and
Boatmen's Short-Term Investment Fund. If participants do not elect one of
the aforementioned investment options, all of their contributions and
matching contributions are invested in shares of the Company's common
stock.
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.
Vesting - Employees are fully vested in their contributions and are fully
vested in their pro rata share of the Employer's contributions.
Distributions - The Plan provides that, upon termination of employment for
any reason, distributions of benefits to participants which are less than
$3,500 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 of benefits to participants
which exceed $3,500 are generally made when the participant reaches age
65. However, terminated participants may provide a written request to the
Administrative Committee to receive benefits at an earlier date.
Distributions are made in full shares of Company common stock and cash for
any partial shares. The balance of the account is paid in cash.
The Plan provides for hardship withdrawals under certain conditions.
Amounts due to previous participants of the Plan as of August 31, 1995,
included 16,148 shares, representing a year-end market value of
approximately $486,000.
Allocations - The Employer deferral match and optional contributions are
allocated in the proportion each participant's contribution to the Plan
bears to the contributions of all participants. The Employer salary match
is allocated in the proportion each participant's salary bears to the
salaries 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 Administrative Committee
shall direct the Trustee to distribute the assets remaining in the Plan to
participants and beneficiaries in proportion to their respective account
balances. The Employer has no intentions of terminating the Plan.
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
the Plan have been paid by the Company in 1995 and 1994, and such amounts
have reduced the amount of the Employer contribution to the Plan. Included
in that amount are reimbursements of certain personnel-related expenses
incurred by the Company.
3. DIVIDENDS PAYABLE
In accordance with plan provisions, dividends received on shares of
Company stock are distributed to participants in the course of six
biweekly pay periods beginning one month after the dividends are received.
For dividends declared May 31, 1995, and received by the Plan on June 1,
1995, the amount due to participants as of August 31, 1995, was
approximately $578,000.
Dividends declared on August 31, 1995, but not received by the Plan until
after year-end, were approximately $1,185,000, and are also due to
participants and will be distributed in accordance with the Plan
provisions.
4. FEDERAL INCOME TAXES
The Tax Benefit Plan and the ESOP received favorable determination letters
dated July 25, 1995, and August 24, 1995, respectively, covering all
amendments made to the plans before the merger. A determination letter
request for the Plan was filed subsequent to year-end with the Internal
Revenue Service to cover the Plan merger and a recent plan amendment (see
Note 5). However, in the opinion of the plan administrator, the Plan and
its underlying trust is designed and is currently being operated in
compliance with the applicable requirements of the Internal Revenue Code.
5. 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 an amendment subsequent to
year-end to conform with legal requirements.
6. FUND INFORMATION
Participant contributions, distributions to participants, net appreciation
(depreciation) in fair value of investments and dividend income by fund
are as follows for the years ended August 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Participant contributions:
Southwestern Public Service Company
Common stock $ 3,821,073 $ 3,215,576
Fidelity Value Fund 240,087
T Rowe Price International Stock Fund 96,549
Strong Government Securities Fund 62,038
Boatmen's Short-Term Investment Fund 31,899
$ 4,251,646 $ 3,215,576
Distribution to participants:
Southwestern Public Service Company
Common Stock $ 2,852,575 $ 2,071,130
Net appreciation (depreciation) in fair value of investments:
Southwestern Public Service Company
Common Stock $ 4,938,218 $ (4,414,960)
Fidelity Value Fund 9,021
T Rowe Price International Stock Fund 1,077
Strong Government Securities Fund 503
$ 4,948,819 $ (4,414,960)
Dividend income:
Southwestern Public Service Company
Common Stock $ 4,189,335 $ 2,548,004
Strong Government Securities Fund 449
$ 4,189,784 $ 2,548,004
</TABLE>
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY SCHEDULE 1
EMPLOYEE INVESTMENT PLAN AND TRUST
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AUGUST 31, 1995
<S> <C> <C> <C>
Number of
Type of Investment and Issuer Shares Cost Fair Value
COMMON STOCKS:
Southwestern Public Service Company
Common Stock* 2,154,406 $ 53,176,419 $ 64,632,180
REGISTERED INVESTMENT COMPANIES:
Fidelity Value Fund 5,076.584 232,320 241,341
T Rowe Price International Stock Fund 7,914.878 94,772 95,849
Strong Government Securities Fund 5,751.549 59,773 60,276
SHORT-TERM INVESTMENTS:
Boatmen's Short-Term Investment Fund* 989,218 989,218 989,218
TOTAL $ 54,552,502 $ 66,018,864
*Represents transaction with party-in-interest.
</TABLE>
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<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY SCHEDULE 2
EMPLOYEE INVESTMENT PLAN AND TRUST
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED AUGUST 31, 1995
<S> <C> <C> <C> <C> <C> <C>
Expenses
Incurred Current Value
Description With of Asset on Net Gain
Identity of Party Involved of Transaction Purchase Price Transaction Cost of Asset Transaction Date (Loss)
Boatmen's Trust Company 21 purchases of $6,111,830 $6,597 $6,105,233 $6,111,830 --
Southwestern Public
Service Company
common stock
(219,891 shares)*
Boatmen's Trust Company 20 purchases of 3,248,577 -- 3,248,577 3,248,577 --
Boatmen's Short-Term
Investment Fund
(3,248,577 shares)*
Boatmen's Trust Company 20 sales of 2,259,329 -- 2,259,329 2,259,329 --
Boatmen's Short-Term
Investment Fund
(2,259,329 shares)*
* Represents transaction with party-in-interest
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Investment 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 INVESTMENT PLAN AND TRUST
Bill D. Helton
Chairman of the Board
and Chief Executive Officer
of Southwestern Public Service Company
Member of the Employee Investment Plan and
Trust Administrative Committee
DATE: January 12, 1996
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-27452 of Southwestern Public Service Company on Form S-8 of our report dated
October 27, 1995, appearing in this Annual Report on Form 11-K of Southwestern
Public Service Company Employee Investment Plan and Trust for the year ended
August 31, 1995.
DELOITTE & TOUCHE LLP
Dallas, Texas
January 12, 1996
