New Mexico also proposes to issue and sell to Federal 118,200 shares of its common stock without nominal or par value for $1,232,000. The proceeds from the sale of the new bonds and said common stock, aggregating $3,252,000, will be applied as follows: (1) To the retirement of $2,000,000 principal amount of the company's first mortgage gold bonds, series A 5% due January 1, 1958 and $109,500 principal amount of first mortgage gold bonds, series B 5% due January 1, 1958, in the following manner: $700,000 principal amount of said series A bonds held by the public to be called at 103% (exclusive of accrued interest) __ $721, 000. 00 Balance of old bonds, namely $1,409,500 principal amount to be acquired from Federal at the cost to Federal (exclusive of accrued interest) -- (2) To the retirement of 3,000 shares of the company's $7 cumulative preferred stock without nominal or par value, in the following manner: 272 shares held by the public to be called at 105%178 shares to be acquired from Albuquerque Gas and Electric Company, and associate company, at cost to that company--2,550 shares to be acquired from Federal at cost to Federal__ (3) To the retirement of the company's indebtedness to Federal, which indebtedness (exclusive of accrued interest) is as follows: 8% demand note_. Open account_ 1, 127, 600. 00 28, 560.00 17, 780. 00 240, 000. 00 $513, 561. 61 (4) To the payment of estimated expenses of the financing_ (5) To the payment of interest overlap‒‒‒‒‒ (6) To be added to general funds of the company_. Total 39, 000. 00 4,375.00 62, 399. 02 3, 252, 000. 00 The Tucson Gas, Electric Light and Power Company proposes to issue and sell $3,500,000 principal amount of its first mortgage bonds, 32% series due 1966, at a price of 102% of the principal amount, namely $3,570,000, thereof plus accrued interest to the date of purchase. Tucson also proposes to issue and sell to Federal 20,000 shares of its common stock without nominal or par value at the price of $10.00 per share, namely $200,000. The proceeds from the sale of the new bonds and said common stock, aggregating $3,770,000, will be applied as follows: (1) To the retirement of all of the company's indebtedness to Federal, which indebtedness (exclusive of accrued interest) is as follows: First mortgage sinking fund 6% 20-year gold bonds which became due May 1, 1927 of which bonds $35,000 principal amount bear additional interest at the rate of 1% per annum 8% demand notes_ Open account__ $297, 000. 00 2,653, 045. 79 604, 939. 33 $3,554, 985, 12 (2) To the acquisition of 225 shares of the company's 5% pre- Total $22, 500.00 52, 500.00 140, 014. 88 3,770, 000. 00 After appropriate public notice a hearing was held and having examined the record the Commission makes the findings contained herein. CAPITALIZATION AND FINANCIAL RATIOS The capitalization, surplus and unappropriate reserves as of February 28, 1941 of Federal and the five subsidiaries involved (as per books) are shown in the following tables (certain pertinent ratios and details of the proposed financing are also contained in such tables): FEDERAL LIGHT & TRACTION COMPANY Represents reserve for possible losses on investment in and advances to subsidiary companies of $2,698,432.76 actual and $2,274,598.39 pro forma. This reduction in the reserve is proposed since Federal Light & Traction proposes to make capital donations totaling $423,834.37 to Deming Ice & Electric Co. and Las Vegas Light & Power Co., or $288,508,59 and $135,325.78 respectively. Percent of total capitalization as shown above (as of February 28, Represents issuance and sale to Federal Light & Traction of an additional 14,760 shares of common stock of $100 par value at the par thereof, namely, $1,476,000. > The surplus balance (actual) includes $307,734.16 earned since date of acquisition of control by Federal Light & Traction in 1910 and $72,083.54 accumulated prior thereto as to which full information is not available. Giving effect to proposed increase in Albuquerque's balance in depreciation and retirement reserve which was increased to approximately 10% of the property account by a charge to surplus of $177,000. The balance or $4,000 represents the estimated expenses incurred in connection with the proposed issuance of additional common stock. 9 S. E. C. Percent of total capitalization as shown above (as of February 28, 1941): • Albuquerque admits an upward revaluation of 1.75 percent of property or $106,629.60 on May 31, 1917, at date of consolidation of two predecessor companies. • Gives effect to proposed increase in common stock of 3,364 shares of $100 par value and sale at par to Federal Light & Traction for $336,400. Deficit, represented by parentheses. • Gives effect to elimination of deficit by capital contribution by Federal Light & Traction totaling $285,922.80. This contribution is proposed to be used by Federal to cancel open account debt of $96,944.76 and $188,978.04 of Deming's 8 percent demand notes through entry as capital surplus and then eliminated by transfer thereto of the surplus deficit of Deming. Finally, $34,069.34 of this capital contribution will be used to bolster up depreciation and retirement reserve to approximately 10 percent of property by a charge to surplus. Percent of total capitalization as shown above (as of February 28, • Deming claims all write-ups and upward revaluations have been eliminated prior to this applica • Gives effect to proposed increase in common stock of 841 shares of $100 par value capital stock and sale at par to Federal Light & Traction for $84,100. Deficit, represented by parentheses. Gives effect to elimination of deficit by capital contribution by Federal Light & Traction totaling $157,551.18. This contribution is proposed to be used by Federal to cancel open-account debt of $49,291.39 and $108,259.79 of Las Vegas' 8% demand notes through entry as capital surplus and then eliminated by transfer thereto of the surplus deficit of Las Vegas. Finally $40,041.07 of this capital contribution will be used to bolster up depreciation and retirement reserve to approximately 10 percent of property by a charge to surplus. |