RELEASE OCT. 11, 1996
SPS ANNOUNCES 1996 FISCAL YEAR EARNINGS
(AMARILLO, TEXAS) -- Southwestern Public Service Company (NYSE:SPS)
today reported for the fiscal year ended Aug. 31, 1996, earnings of $2.52 per
share, down 28 cents, or 9.9 percent, from record earnings of $2.80 in fiscal
1995.
Bill D. Helton, SPS chairman of the board, noted that earnings in the
1995 comparison period had been enhanced by one-time adjustments totaling 24
cents per share.
Helton also noted the sale by the company's subsidiary Quixx
Corporation of water rights located in the Texas Panhandle affected fiscal 1996
earnings positively. The after-tax gain on the sale was $7.7 million, or 19
cents per share.
Helton additionally attributed the fiscal year 1996 comparative decline
in earnings to non-recurring expenses and to increased operating expenses.
Merger-related and business integration expenses during the period totaled
approximately $5.7 million and $2.2 million, respectively, decreasing earnings
per share by 17 cents. SPS expects to merge with Denver-based Public Service Co.
of Colorado (NYSE:PSR) in early 1997.
Operating expense increases were due primarily to greater production
maintenance expenses and to costs associated with the acquisition in September
1995 of electric properties in the Texas Panhandle from Texas-New Mexico Power
Company.
Helton reported that in fiscal 1996 SPS recorded increased operating
revenues of $899.4 million, up $65.3 million, or 7.8 percent, from last year.
Kilowatt-hour sales, excluding non-firm, increased by 4.9 percent.
Fiscal 1996 operating revenues increased due to greater kwh sales and
to higher fuel revenues, the latter a result of increased fuel costs caused
primarily by higher prices for natural gas. Fuel-rated revenues are a
pass-through item, and do not affect earnings.
Operating income of $150.7 million was down $3.5 million because
operating expenses substantially offset the effects of increased retail sales
and wholesale sales to rural electric cooperatives.
The increase in kwh sales, excluding non-firm sales, was primarily
attributable to hotter-than- normal late spring and early summer weather that
resulted in increased sales to all retail customers and to rural electric
cooperatives. Additionally, the West Texas area of Cap Rock Electric
Cooperative, of Midland, Texas, was a full-requirements customer of SPS during
only seven months of fiscal 1995, but throughout fiscal 1996. Improved economic
conditions in the SPS service area also bolstered sales.
Consolidated construction expenditures of $112.0 million in fiscal
1996 were up $17.3 million, or 18.3 percent, from the previous year. Fiscal 1997
consolidated construction is budgeted at $196.0 million.
Helton indicted that, assuming normal weather conditions, SPS expects
1997 operating income will remain relatively flat, but that net earnings for
1997 will be negatively impacted by increased merger-related and business
integration expenses.
The one-time adjustments to income in the 1995 fiscal year were
results of the previously reported FERC rate case settlement with New Mexico
wholesale customers and of an adjustment to delivered-but-not-billed kwh. Those
adjustments had added eleven cents and thirteen cents, respectively, to per
share earnings in fiscal 1995.
Southwestern Public Service company is a regional electric utility
that primarily provides electric service to a population of about one million
people in a 52,000-square-mile area covering eastern and southeastern New
Mexico, the South Plains and Panhandle of Texas, the Oklahoma Panhandle and
southwestern Kansas. Corporate headquarters is in Amarillo, Texas.
%INCREASE
EARNINGS SUMMARY 1996 1995 (DECREASE)
- -------------------------------------- ------------ ----------- ----------
(in thousands except per share amounts)
Operating revenues $899,397 $834,083 7.8%
Operating income 150,666 154,211 (2.3)%
Net Earnings 105,773 119,477 (11.5)%
Earnings applicable to common stock 103,279 114,599 (9.9)%
STATISTICAL SUMMARY
- --------------------------------------
Earnings per common share* $2.52 $2.80 (9.9)%
Dividends per common share 2.20 2.20 0.0%
Weighted average shares outstanding 40,918 40,918 0.0%
Total kilowatt-hour sales 20,888,439 20,335,576 2.7%
Electric customers 379,123 367,524 3.2%
Construction expenditures $111,986 $94,662 18.3%
* Based on weighted average shares outstanding.