SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 99. Unaudited Pro Forma Information
The following unaudited pro forma combined balance sheets at March 31, 1997
and December 31, 1996, give effect to the Merger as if it had occurred at March
31, 1997 and December 31, 1996, respectively. The unaudited pro forma statements
of income for the three months ended March 31,1997 and twelve months ended
December 31, 1996, give effect to the Merger as if it had occurred on January
1, 1996. These statements are prepared on the basis of accounting as required
under a pooling of interests and do not reflect any cost savings or other
synergies anticipated by management as a result of the Merger. Accordingly, the
pro forma information is not necessarily indicative of the financial position or
results of operations that would have occurred had the Merger been consummated
for the periods for which it is given effect, nor is it necessarily indicative
of future operating results or financial condition.
NEW CENTURY ENERGIES, INC.
Unaudited Pro Forma Combined Balance Sheet
March 31, 1997
SPS PSCo Pro Forma
--- ---- ---------
(In Thousands)
Assets
Property, plant and equipment, at cost:
Electric ............................ $2,519,287 $4,012,454 $6,531,741
Gas ................................. - 1,067,579 1,067,579
Steam and other ..................... 38,149 78,376 116,525
Common to all departments ........... - 429,123 429,123
Construction work in progress ....... 103,825 108,101 211,926
------- ------- -------
2,661,261 5,695,633 8,356,894
Less: accumulated depreciation ....... 956,944 2,079,254 3,036,198
------- --------- ---------
Total property, plant and equipment . 1,704,317 3,616,379 5,320,696
--------- --------- ---------
Investments, at cost, and receivables . 35,153 43,058 78,211
Current assets:
Cash and temporary cash investments . 50,709 368,418 419,127
Accounts receivable - net ........... 64,169 203,604 267,773
Accrued unbilled revenues ........... 15,634 69,992 85,626
Recoverable purchased electric
energy costs ....................... 11,456 63,365 74,821
Materials and supplies, at average cost 18,149 47,419 65,568
Fuel inventory, at average cost ..... 2,318 24,572 26,890
Gas in underground storage, at
cost (LIFO) ........................ - 19,954 19,954
Regulatory assets recoverable within
one year ........................... - 44,020 44,020
Prepaid expenses and other .......... 5,201 40,375 45,576
----- ------ ------
Total current assets ................ 167,636 881,719 1,049,355
------- ------- ---------
Deferred charges
Regulatory assets ................... 139,553 291,764 431,317
Unamortized debt expense ............ 9,814 11,908 21,722
Other ............................... 33,779 68,152 101,931
------ ------ -------
Total deferred charges ............. 183,146 371,824 554,970
------- ------- -------
$2,090,252 $4,912,980 $7,003,232
========== ========== ==========
The accompanying notes to unaudited pro forma combined balance sheets and
statements of income are an integral part of this statement.
57
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 99. Unaudited Pro Forma Information
NEW CENTURY ENERGIES, INC.
Unaudited Pro Forma Combined Balance Sheet, Continued
March 31, 1997
SPS PSCo Pro Forma
--- ---- ---------
(In Thousands)
Capitalization and Liabilities
Common stock (2) ........................ $ 40,918 $ 326,350 $ 104,142
Paid-in capital (2) ..................... 307,484 739,522 1,310,132
Retained earnings (5) ................... 379,062 415,513 787,122
------- ------- -------
Total common equity ................... 727,464 1,481,385 2,201,396
Preferred stock:
Not subject to mandatory redemption ... - 140,008 140,008
Subject to mandatory redemption ....... - 39,913 39,913
SPS Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary
Trust Holding soley subordinated
debentures of SPS ................... 100,000 - 100,000
Long-term debt .......................... 620,597 1,482,816 2,103,413
------- --------- ---------
1,448,061 3,144,122 4,584,730
--------- --------- ---------
Noncurrent liabilities:
Employees' postretirement benefits
other than pensions ................... 3,158 55,940 59,098
Employees' postemployment benefits .... 1,340 25,182 26,522
----- ------ ------
Total noncurrent liabilities ........ 4,498 81,122 85,620
----- ------ ------
Current liabilities:
Notes payable and commercial paper .... 119,586 295,400 414,986
Long-term debt due within one year .... 229 255,076 255,305
Preferred stock subject to
mandatory redemption within one year .. - 2,576 2,576
Accounts payable ...................... 76,758 154,394 231,152
Dividends payable ..................... - 37,210 37,210
Customers' deposits ................... 5,761 22,286 28,047
Accrued taxes ......................... 13,948 85,675 99,623
Accrued interest ...................... 9,672 27,885 37,557
Defueling and decommissioning liability - 7,913 7,913
Current portion of accumulated
deferred income taxes ................. (3,568) 21,280 17,712
Merger costs (5) ..................... - - 7,453
Other ................................. 29,162 53,935 83,097
------ ------ ------
Total current liabilities ............ 251,548 963,630 1,222,631
------- ------- ---------
Deferred credits:
Customers' advances for construction 412 47,013 47,425
Unamortized investment tax credits 5,657 104,676 110,333
Accumulated deferred income taxes 369,304 542,372 911,676
Other 10,772 30,045 40,817
------ ------ ------
Total deferred credits 386,145 724,106 1,110,251
------- ------- ---------
$2,090,252 $4,912,980 $7,003,232
========== ========== ==========
The accompanying notes to unaudited pro forma combined balance sheets and
statements of income are an integral part of this statement.
58
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 99. Unaudited Pro Forma Information
NEW CENTURY ENERGIES, INC.
Unaudited Pro Forma Combined Statement of Income
For the three months ended March 31, 1997
SPS PSCo Pro Forma
--- ---- ---------
(In Thousands, Except Per Share Data)
Operating revenues:
Electric $214,495 $373,953 $588,448
Gas - 291,825 291,825
Other 6,800 11,882 18,682
----- ------ ------
221,295 677,660 898,955
Operating expenses:
Fuel used in generation 104,618 44,261 148,879
Purchased power 5,207 122,626 127,833
Gas purchased for resale - 207,352 207,352
Other operating expenses 30,020 82,828 112,848
Maintenance 6,931 15,113 22,044
Depreciation and amortization 18,230 42,857 61,087
Taxes (other than income taxes) 11,526 22,488 34,014
Income taxes 10,292 35,317 45,609
------ ------ ------
186,824 572,842 759,666
------- ------- -------
Operating income 34,471 104,818 139,289
Other income and deductions:
Allowance for equity funds used
during construction 5 - 5
Miscellaneous income and
deductions - net (3) (2,522) (889) (3,411)
(2,517) (889) (3,406)
Interest charges:
Interest on long-term debt 11,025 26,906 37,931
Amortization of debt discount
and expense less premium 562 928 1,490
Other interest 1,026 14,675 15,701
Allowance for borrowed funds
used during construction (840) (1,461) (2,301)
Dividends on SPS obligated mandatorily
redeemable preferred securities of
subsidiary trust holding solely
subordinated debentures of SPS 1,963
Dividend requirements on
preferred stock of subsidiaries - 2,943 2,943
--- ----- -----
13,736 43,991 57,727
------ ------ ------
Net Income $ 18,218 $ 59,938 $ 78,156
========= ======== =========
Weighted average common shares
outstanding (2) 40,918 65,122 103,994
====== ====== =======
Earnings per weighted average
share of common stock outstanding $0.45 $0.92 $0.75
===== ===== =====
The accompanying notes to unaudited pro forma consolidated balance sheets and
statements of income are an integral part of this statement.
59
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 99. Unaudited Pro Forma Information
NEW CENTURY ENERGIES, INC.
Unaudited Pro Forma Combined Balance Sheet
December 31, 1996
SPS PSCo Pro Forma
--- ---- ---------
(In Thousands)
Assets
Property, plant and equipment, at cost:
Electric ............................ $2,517,580 $3,931,413 $6,448,993
Gas ................................. - 1,035,394 1,035,394
Steam and other ..................... 37,541 78,225 115,766
Common to all departments ........... - 418,262 418,262
Construction work in progress ....... 79,346 181,597 260,943
------ ------- -------
2,634,467 5,644,891 8,279,358
Less: accumulated depreciation ...... 944,279 2,045,996 2,990,275
------- --------- ---------
Total property, plant and equipment 1,690,188 3,598,895 5,289,083
--------- --------- ---------
Investments, at cost, and receivables 34,446 46,550 80,996
Current assets:
Cash and temporary cash investments 40,609 9,406 50,015
Accounts receivable - net .......... 67,780 218,132 285,912
Accrued unbilled revenues .......... 20,304 85,894 106,198
Recoverable purchased electric energy
costs ............................. 15,715 31,288 47,003
Materials and supplies, at average cost 17,776 48,972 66,748
Fuel inventory, at average cost .... 2,320 24,739 27,059
Gas in underground storage,
at cost (LIFO) ..................... - 42,836 42,826
Regulatory assets recoverable within
one year ........................... 8,000 44,110 52,110
Prepaid expenses and other ......... 4,983 41,790 46,773
----- ------ ------
Total current assets ............... 177,487 547,157 724,644
------- ------- -------
Deferred charges
Regulatory assets .................. 109,545 304,456 414,001
Unamortized debt expense ........... 9,864 10,975 20,839
Other .............................. 23,264 64,615 87,879
------ ------ ------
Total deferred charges ........... 142,673 380,046 522,719
------- ------- -------
$2,044,794 $4,572,648 $6,617,442
========== ========== ==========
The accompanying notes to unaudited pro forma combined balance sheets and
statements of income are an integral part of this statement.
60
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 99. Unaudited Pro Forma Information
NEW CENTURY ENERGIES, INC.
Unaudited Pro Forma Combined Balance Sheet
December 31, 1996
SPS PSCo Pro Forma
--- ---- ---------
(In Thousands)
Capitalization and Liabilities
Common stock (2) ..................... $ 40,918 $ 324,094 $ 103,691
Paid-in capital (2) .................. 307,484 724,353 1,293,158
Retained earnings (5) ................ 383,350 389,841 764,646
------- ------- -------
Total common equity .............. 731,752 1,438,288 2,161,495
Preferred stock:
Not subject to mandatory redemption - 140,008 140,008
Subject to mandatory redemption .... - 39,913 39,913
SPS Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary
Trust Holding soley subordinated
debentures of SPS ................... 100,000 - 100,000
Long-term debt ....................... 620,400 1,259,528 1,879,928
------- --------- ---------
1,452,152 2,877,737 4,321,344
--------- --------- ---------
Noncurrent liabilities:
Employees' postretirement benefits
other than pensions ................. 2,874 55,677 58,551
Employees' postemployment benefits .. 2,369 25,182 27,551
----- ------ ------
Total noncurrent liabilities ...... 5,243 80,859 86,102
----- ------ ------
Current liabilities:
Notes payable and commercial paper . 53,836 244,725 298,561
Long-term debt due within one year . 15,231 155,030 170,261
Preferred stock subject to mandatory
redemption within one year ......... - 2,576 2,576
Accounts payable ................... 63,004 254,256 317,260
Dividends payable .................. - 36,973 36,973
Customers' deposits ................ 5,842 21,441 27,283
Accrued taxes ...................... 19,999 58,990 78,989
Accrued interest ................... 13,151 33,797 46,948
Defueling and decommissioning liability - 8,665 8,665
Current portion of accumulated
deferred income taxes .............. 3,583 4,560 8,143
Merger costs (5) ................... - - 8,545
Other .............................. 28,596 69,203 97,799
------ ------ ------
Total current liabilities ........ 203,242 890,216 1,102,003
Deferred credits:
Customers' advances for construction 366 50,269 50,635
Unamortized investment tax credits . 5,719 105,928 111,647
Accumulated deferred income taxes .. 367,272 539,082 906,354
Other .............................. 10,800 28,557 39,357
------ ------ ------
Total deferred credits ........... 384,157 723,836 1,107,993
------- ------- ---------
$2,044,794 $4,572,648 $6,617,442
========== ========== ==========
The accompanying notes to unaudited pro forma combined balance sheets and
statements of income are an integral part of this statement.
61
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 99. Unaudited Pro Forma Information
NEW CENTURY ENERGIES, INC.
Unaudited Pro Forma Combined Balance Sheet
December 31, 1996
SPS PSCo Pro Forma
--- ---- ---------
(In Thousands, Except Per Share Data)
Operating revenues:
Electric $927,549 $1,488,990 $2,416,539
Gas - 640,497 640,497
Other 32,047 41,899 73,946
------ ------ ------
959,596 2,171,386 3,130,982
Operating expenses:
Fuel used in generation 439,838 195,442 635,280
Purchased power 20,154 490,428 510,582
Gas purchased for resale - 393,163 393,163
Other operating expenses 133,657 336,100 469,757
Maintenance 34,916 63,908 98,824
Depreciation and amortization 70,234 154,631 224,865
Taxes (other than income taxes) 46,081 82,899 128,980
Income taxes 57,322 96,331 153,653
------ ------ -------
802,202 1,812,902 2,615,104
------- --------- ---------
Operating income 157,394 358,484 515,878
Other income and deductions:
Allowance for equity funds used
during construction 179 757 936
Miscellaneous income and
deductions - net (3) (10,202) (19,015) (29,217)
------- ------- -------
(10,023) (18,258) (28,281)
Interest charges:
Interest on long-term debt 46,096 92,205 138,301
Amortization of debt discount
and expense less premium 2,145 3,621 5,766
Other interest 6,241 57,398 63,639
Allowance for borrowed funds
used during construction (2,601) (3,344) (5,945)
Dividends on SPS obligated
mandatorily redeemable preferred
securities of subsidiary trust holding
solely subordinated debentures of SPS 1,526 - 1,526
Dividend requirements on
preferred stock of subsidiaries 121 11,848 11,969
--- ------ ------
53,528 161,728 215,256
------ ------- -------
Earnings available for common stock $ 93,834 $ 178,498 $ 272,341
======== ========== ==========
Weighted average common shares
outstanding (2) 40,918 64,187 103,059
====== ====== =======
Earnings per weighted average
share of common stock outstanding $2.29 $2.78 $2.64
===== ===== =====
The accompanying notes to unaudited pro forma consolidated balance sheets and
statements of income are an integral part of this statement.
62
SOUTHWESTERN PUBLIC SERVICE COMPANY
EXHIBIT 99. Unaudited Pro Forma Information
NEW CENTURY ENERGIES, INC.
Notes To Unaudited Pro Forma Combined Financial Information
(1) The unaudited pro forma combined statements of income have been
prepared from the historical consolidated financial statements of PSCo and SPS
and are presented as if the companies were combined during the periods presented
herein. Certain items have been reclassified on the consolidated financial
statements of SPS to conform with the NCE presentation, including the
reclassification on the Statement of Income of UE and Quixx revenues and
expenses from Other Income, Net to Operating Revenues and Operating Expenses.
(2) The unaudited pro forma combined balance sheets and statements of
income reflect the conversion of each outstanding share of PSCo Common Stock
into one share of NCE Common Stock, and each outstanding share of SPS Common
Stock into 0.95 of one share of NCE Common Stock in accordance with the terms of
the Merger Agreement.
(3) There were no intercompany transactions and, accordingly, no pro forma
elimination adjustments were made.
(4) For discussion regarding material commitments and contingencies
relating to SPS, see Note (6) of Notes to Consolidated Financial Statements. For
PSCo, reference is made to its 1996 Annual Report on Form 10-K and its Form 10-Q
for the quarter ended March 31, 1997.
(5) The unaudited pro forma combined financial statements include
nonrecurring charges directly related to the Merger totaling approximately $1.0
million for the three months ended March 31, 1997, and approximately $9.4
million for the year ended December 31, 1996. These nonrecurring charges include
merger related and business integration expenses and benefits expense resulting
from an accelerated vesting of certain benefits. The unaudited pro forma
combined statement of income do not reflect future nonrecurring charges directly
related to the Merger. These costs are estimated to total approximately $7.5
million and $8.5 million at March 31, 1997 and December 31, 1996, respectively.
The pro forma combined balance sheets at March 31, 1997 and December 31, 1996,
respectively have been adjusted to include these items with the recognition of
additional current liabilities and the reduction of retained earnings.
63