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 for the fiscal year ended August 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 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
<PAGE>
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
(the "Plan") as of August 31, 1996 and 1995, 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,
1996 and 1995, 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,
1996, and Item 27d - Schedule of Reportable Transactions for the year ended
August 31, 1996, 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.
November 15, 1996
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<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AUGUST 31, 1996 AND 1995
<S> <C> <C>
ASSETS 1996 1995
INVESTMENTS AT FAIR VALUE:
Southwestern Public Service Company Common Stock $ 73,990,962 $ 64,632,180
Boatmen's Short-Term Investment Fund 1,998,875 989,218
Shares of registered investment companies:
Fidelity Value Fund 1,144,349 241,341
T Rowe Price International Stock Fund 357,693 95,849
Strong Government Securities Fund 248,159 60,276
Total investments 77,740,038 66,018,864
RECEIVABLES:
Employer's contributions 55,569 278,758
Participants' contributions 292,468 297,682
Accrued interest and dividends 1,252,442 1,190,661
1,600,479 1,767,101
CASH - 2,931
NET ASSETS AVAILABLE FOR BENEFITS $ 79,340,517 $ 67,788,896
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN AND TRUST
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED AUGUST 31, 1996 AND 1995
<S> <C> <C>
1996 1995
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 5,991,805 $ 4,948,819
Interest 122,541 44,488
Dividends 4,926,539 4,189,784
Other 1,153 -
Total investment income 11,042,038 9,183,091
Contributions:
Employer's contributions 1,686,054 1,147,087
Participants' contributions 7,115,865 4,251,646
Rollover contributions 71,869 7,118
Total contributions 8,873,788 5,405,851
Total additions 19,915,826 14,588,942
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants - cash 123,080 73,168
Distributions to participants - Southwestern Public Service
Company common stock 3,519,441 2,779,407
Dividends paid to participants 4,721,684 1,738,747
Total deductions 8,364,205 4,591,322
EXCESS OF ADDITIONS OVER DEDUCTIONS 11,551,621 9,997,620
TRANSFER OF NET ASSETS FROM EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST - 23,812,030
NET INCREASE (DECREASE) IN NET ASSETS AVAILABLE
FOR BENEFITS 11,551,621 33,809,650
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 67,788,896 33,979,246
End of year $ 79,340,517 $ 67,788,896
See notes to financial statements.
</TABLE>
<PAGE>
SOUTHWESTERN PUBLIC SERVICE COMPANY
EMPLOYEE INVESTMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1996 and 1995
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 year ended August 31, 1996, the Company contributed to the Plan
the maximum contribution, reduced by administrative and investment
expenses of approximately $55,569, 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 participants who have withdrawn from the Plan as of August
31, 1996, included 30,886 shares of Company common stock with a year-end
value of approximately $1,011,517.
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 1996 and 1995, 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 common stock are distributed to participants in the course of six
biweekly pay periods beginning one month after the dividends are received.
Dividends declared on August 31, 1996, but not received by the Plan until
after year-end, were approximately $186,844, 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. 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 certain legal requirements.
<PAGE>
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, 1996 and 1995:
<TABLE>
<CAPTION>
<S> <C> <C>
1996 1995
Participant contributions:
Southwestern Public Service Company
Common stock $ 6,226,831 $ 3,821,073
Fidelity Value Fund 495,204 240,087
T Rowe Price International Stock Fund 180,750 96,549
Strong Government Securities Fund 145,383 62,038
Boatmen's Short-Term Investment Fund 67,697 31,899
$ 7,115,865 $ 4,251,646
Distribution to participants:
Southwestern Public Service Company
Common Stock - Cash distribution $ 123,075 $ 73,168
Southwestern Public Service Company
Common Stock - Common stock distribution 3,519,441 $ 2,779,407
T Rowe Price International Stock Fund - Cash distributions 5 -
$ 3,642,521 $ 2,852,575
Net appreciation (depreciation) in fair value of investments:
Southwestern Public Service Company
Common Stock $ 5,889,247 $ 4,938,218
Fidelity Value Fund 88,096 9,021
T Rowe Price International Stock Fund 23,558 1,077
Strong Government Securities Fund (9,096) 503
$ 5,991,805 $ 4,948,819
Dividend income:
Southwestern Public Service Company
Common Stock $ 4,919,621 $ 4,189,335
Fidelity Value Fund 4,127 449
T Rowe Price International Stock Fund 2,791 -
$ 4,926,539 $ 4,189,784
</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, 1996
<S> <C> <C> <C>
Number of
Type of Investment and Issuer Shares Cost Fair Value
COMMON STOCKS:
Southwestern Public Service Company
Common Stock* 2,259,266 $ 57,406,341 $ 73,990,962
SHORT-TERM INVESTMENTS:
Boatmen's Short-Term Investment Fund* 1,998,875 1,998,875 1,998,875
REGISTERED INVESTMENT COMPANIES:
Fidelity Value Fund 21,510 1,066,072 1,144,349
T Rowe Price International Stock Fund 27,037 337,874 357,693
Strong Government Securities Fund 24,401 256,969 248,159
TOTAL $ 61,066,131 $ 77,740,038
*Represents transaction with party-in-interest.
</TABLE>
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<TABLE>
<CAPTION>
EMPLOYEE INVESTMENT PLAN FOR EMPLOYEES OF SOUTHWESTERN SCHEDULE 2
PUBLIC SERVICE COMPANY
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS - MODIFIED CASH BASIS
YEAR ENDED JUNE 30, 1996
<S> <C> <C> <C> <C> <C> <C>
Current
Value of
Asset on Net
Identity of Party Selling Cost of Transaction Gain
Involved Description of Asset Purchase Price Price Asset Date (Loss)
Boatmen's Trust Co. Purchase - Boatmen's $6,749,965 $ - $6,749,965 $6,749,965 $ -
Short-Term Funds*
Boatmen's Trust Co. Sale - Boatmen's 5,740,308 5,740,308 5,740,308 -
Short-Term Funds*
Boatmen's Trust Co. Purchase - SPS Common 7,289,753 7,289,753 7,289,753 -
Stock*
Boatmen's Trust Co. Sale - SPS Common Stock* 301,921 301,921 301,921 -
*Represents transaction with party-in-interest
See accompanying independent auditors' report.
</TABLE>
<PAGE>
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
/s/ 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 21, 1997
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-27452 and 333-05199 of Southwestern Public Service Company on Form S-8 of our
report dated November 15, 1996, 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, 1996.
DELOITTE & TOUCHE LLP
Dallas, Texas
January 21, 1997
