UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME Exhibit 99
FOR THE PROPOSED MERGER OF WASHINGTON ENERGY COMPANY
AND PUGET SOUND POWER & LIGHT COMPANY
FOR NINE MONTHS ENDED SEPTEMBER 30, 1996
Pro Forma
Puget WECo Combined (1)
(in thousands, except per share)
OPERATING REVENUES $841,208 $298,216 $1,139,424
OPERATING EXPENSES (4):
Purchased and interchanged power and gas purchases 300,227 121,942 422,169
Other operating expenses and maintenance 180,032 62,339 242,371
Depreciation and amortization 81,919 26,727 108,646
Taxes other than federal income taxes 84,664 27,778 112,442
Federal income taxes 56,776 9,744 66,520
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Total operating expenses 703,618 248,530 952,148
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OPERATING INCOME 137,590 49,686 187,276
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OTHER INCOME (EXPENSE):
Preferred dividend requirement - WNG (5) - (5,265) -
Other - net of taxes 8,020 702 8,722
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Total other income (expense) 8,020 (4,563) 8,722
-----------------------------------------------
INCOME BEFORE INTEREST CHARGES 145,610 45,123 195,998
INTEREST CHARGES 57,438 30,565 88,003
-----------------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE
PREFERRED DIVIDENDS 88,172 14,558 107,995
PREFERRED STOCK DIVIDEND ACCRUALS (5) 11,337 - 16,602
LOSS FROM DISCONTINUED OPERATIONS
LOSS FROM OPERATIONS, NET OF INCOME TAX - 1,119 1,119
LOSS ON DISPOSAL, NET OF INCOME TAX - 446 446
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EARNINGS ON COMMON STOCK $76,835 $12,993 $89,828
===============================================
COMMON SHARES OUTSTANDING WEIGHTED AVERAGE (2) and (3) 63,641 24,193 84,447
EARNINGS (LOSS) PER COMMON SHARE
FROM CONTINUING OPERATIONS $1.21 $0.60 $1.08
FROM DISCONTINUED OPERATIONS - ($0.06) ($0.02)
-----------------------------------------------
EARNINGS PER COMMON SHARE $1.21 $0.54 $1.06
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements
UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME Exhibit 99
FOR THE PROPOSED MERGER OF WASHINGTON ENERGY COMPANY
AND PUGET SOUND POWER & LIGHT COMPANY
FOR TWELVE MONTHS ENDED SEPTEMBER 30, 1996
Pro Forma
Puget WECo Combined (1)
(in thousands, except per share)
OPERATING REVENUES $1,172,017 $425,711 1,597,728
OPERATING EXPENSES (4):
Purchased and interchanged power and gas purchases 416,443 177,719 594,162
Other operating expenses and maintenance 245,993 85,689 331,682
Depreciation, depletion and amortization 108,710 35,777 144,487
Taxes other than federal income taxes 113,176 39,308 152,484
Federal income taxes 85,815 15,232 101,047
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Total operating expenses 970,137 353,725 1,323,862
-----------------------------------------------
OPERATING INCOME 201,880 71,986 273,866
-----------------------------------------------
OTHER INCOME (EXPENSE):
Preferred dividend requirement - WNG (5) - (7,020) -
Other - net of taxes 9,169 1,150 10,319
-----------------------------------------------
Total other income (expense) 9,169 (5,870) 10,319
-----------------------------------------------
INCOME BEFORE INTEREST CHARGES 211,049 66,116 284,185
INTEREST CHARGES 77,786 41,156 118,942
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INCOME FROM CONTINUING OPERATIONS BEFORE
PREFERRED DIVIDENDS 133,263 24,960 165,243
PREFERRED STOCK DIVIDEND ACCRUALS (5) 15,139 - 22,159
LOSS FROM DISCONTINUED OPERATIONS
LOSS FROM OPERATIONS, NET OF INCOME TAX - 1,386 1,386
LOSS ON DISPOSAL, NET OF INCOME TAX - 446 446
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EARNINGS ON COMMON STOCK $118,124 $23,128 $141,252
===============================================
COMMON SHARES OUTSTANDING WEIGHTED AVERAGE (2) and (3) 63,641 24,159 84,418
EARNINGS (LOSS) PER COMMON SHARE
FROM CONTINUING OPERATIONS $1.86 $1.03 $1.69
FROM DISCONTINUED OPERATIONS - ($0.07) ($0.02)
-----------------------------------------------
EARNINGS PER COMMON SHARE $1.86 $0.96 $1.67
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET Exhibit 99
FOR THE PROPOSED MERGER OF WASHINGTON ENERGY COMPANY
AND PUGET SOUND POWER & LIGHT COMPANY
AT SEPTEMBER 30, 1996
Pro Forma
Puget WECo Combined
(in thousands)
ASSETS
Property, Plant and Equipment:
Utility plant $3,465,960 $1,129,849 $4,595,809
Accumulated provisions for depreciation
and amortization 1,171,428 293,979 1,465,407
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Net property, plant and equipment 2,294,532 835,870 3,130,402
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Other Property and Investments:
Investment in Bonneville Exchange Power Contract 88,678 - 88,678
Investment in and advances to subsidiaries 105,776 - 105,776
Investment in unconsolidated affiliates - 69,352 69,352
Other 12,979 5,270 18,249
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Total other property and investments 207,433 74,622 282,055
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Current Assets:
Cash 2,466 599 3,065
Accounts receivable 96,173 11,714 107,887
Estimated unbilled revenue 59,872 12,199 72,071
PRAM accrued revenues 61,451 - 61,451
Materials and supplies, at average cost 37,904 24,955 62,859
Prepayments and other 5,356 13,509 18,865
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Total current assets 263,222 62,976 326,198
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Long-Term Assets:
Regulatory asset for deferred income taxes 236,781 19,353 256,134
Unamortized energy conservation charges 40,193 - 40,193
Other 117,748 41,615 159,363
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Total long-term assets 394,722 60,968 455,690
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TOTAL ASSETS $3,159,909 $1,034,436 $4,194,345
===============================================
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET Exhibit 99
FOR THE PROPOSED MERGER OF WASHINGTON ENERGY COMPANY
AND PUGET SOUND POWER & LIGHT COMPANY
AT SEPTEMBER 30, 1996
Pro Forma
Puget WECo Combined
(in thousands)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock and additional paid-in capital $965,372 $326,650 $1,292,022
Earnings reinvested (accumulated deficit) 199,560 (127,299) 72,261
Preferred stock not subject to mandatory redemption 125,000 90,000 215,000
Preferred stock subject to mandatory redemption 87,840 - 87,840
Long-term debt 920,549 344,920 1,265,469
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Total capitalization 2,298,321 634,271 2,932,592
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Current Liabilities:
Accounts payable 49,798 21,891 71,689
Short-term debt 121,305 177,709 299,014
Current maturities of long-term debt 8,000 140 8,140
Accrued taxes 85,459 14,202 99,661
Other 17,243 73,185 90,428
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Total current liabilities 281,805 287,127 568,932
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Deferred Taxes:
Deferred income taxes 493,707 75,119 568,826
Deferred investment credits - 8,479 8,479
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Total deferred taxes 493,707 83,598 577,305
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Other Deferred Credits:
Customer advances for construction 21,548 5,334 26,882
Other 64,528 24,106 88,634
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Total other deferred credits 86,076 29,440 115,516
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TOTAL CAPITALIZATION AND LIABILITIES $3,159,909 $1,034,436 $4,194,345
===============================================
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements
Exhibit 99
NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
(1) Puget's fiscal year ends on December 31. Washington Energy Company's
("WECo") fiscal year ends on September 30. The pro forma financial data
for the nine months and twelve months ended September 30, 1996 are the
results of nine months and twelve months ended September 30, 1996 for
Puget and WECo.
(2) The pro forma condensed financial statements reflect the conversion of
each share of WECo common stock outstanding into .860 share of Puget Sound
Energy ("PSE") common stock and the conversion of each WNG preferred share
into one share of PSE preferred stock. The pro forma condensed financial
statements are presented as if the merger had been consummated prior to
the periods presented.
(3) The number of shares of common stock outstanding, by company, were as
follows:
Puget WECo Pro Forma
----------- ----------- -----------
at September 30, 1996 63,641,000 24,268,000 84,511,000
(4) The pro forma financial statements do not reflect the $370 million net
cost savings estimated to be achieved in the ten-year period following
consummation of the merger because the terms and conditions under which
the WUTC may approve the merger are unknown.
(5) Assumes WNG preferred stock has been exchanged for PSE preferred
stock. In the pro forma condensed statements of income, these
dividend requirements are included in the "preferred stock dividend
accruals", instead of "preferred dividend requirement-WNG".