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: Tax Benefit 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 Administrative Committee
Southwestern Public Service Company
Tax Benefit Plan and Trust:
We have audited the accompanying statement of net assets available for benefits
of the Southwestern Public Service Company Tax Benefit 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 accompanying supplemental
schedules, Item 27a - Schedule of Assets Held for Investment Purposes as of
August 31, 1994, and Item 27d - Schedule of Reportable Transactions for the
year ended August 31, 1994, 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 1994 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.
/s/ Deloitte & Touche LLP
Dallas, Texas
October 28, 1994
INDEPENDENT AUDITORS' REPORT
The Administrative Committee
Southwestern Public Service Company
Tax Benefit Plan and Trust:
We have audited the accompanying statement of net assets available for benefits
of the Southwestern Public Service Company Tax Benefit 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
<CAPATION>
SOUTHWESTERN PUBLIC SERVICE COMPANY
TAX BENEFIT PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AUGUST 31, 1994 AND 1993
ASSETS
1994
1993
INVESTMENT IN SOUTHWESTERN PUBLIC SERVICE
COMPANY COMMON STOCK, AT FAIR VALUE (COST OF
$35,494,908 IN 1994 AND $31,179,477 IN 1993; 1,219,462
SHARES IN 1994 AND 1,083,654 SHARES IN 1993)
$ 32,620,608
$ 33,186,904
RECEIVABLES:
Employer's contribution
205,437
217,382
Participants' contributions
482,602
495,677
Accrued dividends
670,704
596,010
CASH (BANK OVERDRAFT)
(105)
346
NET ASSETS AVAILABLE FOR BENEFITS
$ 33,979,246
$ 34,496,319
See notes to financial statements.
SOUTHWESTERN PUBLIC SERVICE COMPANY
TAX BENEFIT PLAN AND TRUST
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED AUGUST 31, 1994 AND 1993
1994
1993
ADDITIONS:
Employer contributions
$ 205,437
$ 217,382
Participant contributions
3,215,576
3,173,165
Dividends
2,548,004
2,260,835
Total additions
5,969,017
5,651,382
DEDUCTIONS - Distributions to participants
2,071,130
1,163,403
EXCESS OF ADDITIONS OVER DEDUCTIONS
3,897,887
4,487,979
NET DEPRECIATION IN FAIR VALUE OF INVESTMENT
IN SOUTHWESTERN PUBLIC SERVICE COMPANY
COMMON STOCK
(4,414,960)
(2,153,774)
NET (DECREASE) INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS
(517,073)
2,334,205
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year
34,496,319
32,162,114
End of year
$ 33,979,246
$ 34,496,319
See notes to financial statements.
SOUTHWESTERN PUBLIC SERVICE COMPANY
TAX BENEFIT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements of the Southwestern Public Service
Company Tax Benefit 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 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 1985 to provide
eligible employees with an opportunity to defer a portion of their
pretax compensation and to encourage additional ownership of Company
common stock. Benefits are based on employee contributions. 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.
Contributions
The Plan was established to conform with the guidelines set forth in
Internal Revenue Code (the Code) Section 401(k) and other laws and
regulations relating to qualified plans. Employees are eligible for
participation upon completion of one year of service.
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 Company common stock owned by the Southwestern
Public Service Company Employee Stock Ownership Plan (ESOP) and the
additional tax benefit resulting from the Employer's contribution to the
Plan and the ESOP.
The Company contributed to the Plan 25% of the maximum contribution
described above, reduced by combined administrative and investment
expenses of the Plan and the ESOP of approximately $162,000 and $123,000
in 1994 and 1993, respectively. The remaining 75% was contributed to
the ESOP.
Contributions by employees are limited to 6% of base salary per pay
period in addition to the amount which is received in dividends from the
ESOP. Pursuant to the Code, an employee's before-tax voluntary
contribution to his account may not exceed $9,240 for 1994 and $8,994
for 1993.
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 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.
Amounts due to terminated participants of the Plan as of August 31, 1994
and 1993, were approximately $2,206,000 and $1,855,000, respectively.
Allocations
Employer contributions are allocated in the proportion each
participant's contribution to the Plan bears to the contributions of all
participants. In allocating Employer contributions to individual
participants' accounts, the amount of a participant's contribution that
can be considered is limited to 6% of such participant's annual
compensation.
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 nor is aware of
any occurrences that could result in the termination of 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 both the Plan and the ESOP 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 January 29, 1990, which stated that the Plan is a qualified plan
under Section 401(a) of 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 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.
SOUTHWESTERN PUBLIC SERVICE COMPANY SCHEDULE 1
TAX BENEFIT PLAN AND TRUST
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AUGUST 31, 1994
Number of
Type of Investment and Issuer Shares Cost Fair Value
Investment in Southwestern Public
Service Company common stock* 1,219,462 $35,494,908 $32,620,608
* Represents transaction with party-in-interest.
SOUTHWESTERN PUBLIC SERVICE COMPANY SCHEDULE 2
TAX BENEFIT PLAN AND TRUST
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED AUGUST 31, 1994
Expenses incurred
Identity of party involved Description of transaction Purchase price with transaction
Boatmen's First National 21 purchases of $5,910,665 $6,141
Bank of Amarillo Southwestern Public
Service Company common
stock (204,637 shares)*
Current value of asset Net gain
Cost of asset on transaction date (loss)
$5,916,806 $5,910,665 --
* Represents transaction with party-in-interest.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Tax Benefit 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
TAX BENEFIT PLAN AND TRUST
/s/ Bill D. Helton
Chairman of the Board
and Chief Executive Officer
of Southwestern Public Service Company
Member of the Tax Benefit Plan and
Trust Administrative Committee
DATE: January 18, 1995