0000004904-95-000095.txt : 19950815
0000004904-95-000095.hdr.sgml : 19950815
ACCESSION NUMBER: 0000004904-95-000095
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 19950630
FILED AS OF DATE: 19950814
SROS: NYSE
SROS: PHLX
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: APPALACHIAN POWER CO
CENTRAL INDEX KEY: 0000006879
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911]
IRS NUMBER: 540124790
STATE OF INCORPORATION: VA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-03457
FILM NUMBER: 95562392
BUSINESS ADDRESS:
STREET 1: 40 FRANKLIN RD SW
CITY: ROANOKE
STATE: VA
ZIP: 24011
BUSINESS PHONE: 7039852300
MAIL ADDRESS:
STREET 1: 1 RIVERSIDE PLAZA
CITY: COLUMBUS
STATE: OH
ZIP: 43215
10-Q
1
THE CONSOLIDATED 10-Q FOR AMERICAN ELECTRIC POWER CO., INC, AND
SUBSIDIARIES IS REQUESTED TO BE INCLUDED AS PART OF THE FILING.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period from to
Commission Registrant; State of Incorporation; I. R. S. Employer
File Number Address; and Telephone Number Identification No.
1-3525 AMERICAN ELECTRIC POWER COMPANY, INC. 13-4922640
(A New York Corporation)
1 Riverside Plaza, Columbus, Ohio 43215
Telephone (614) 223-1000
0-18135 AEP GENERATING COMPANY (An Ohio Corporation) 31-1033833
1 Riverside Plaza, Columbus, Ohio 43215
Telephone (614) 223-1000
1-3457 APPALACHIAN POWER COMPANY (A Virginia Corporation) 54-0124790
40 Franklin Road, Roanoke, Virginia 24011
Telephone (703) 985-2300
1-2680 COLUMBUS SOUTHERN POWER COMPANY (An Ohio Corporation) 31-4154203
215 North Front Street, Columbus, Ohio 43215
Telephone (614) 464-7700
1-3570 INDIANA MICHIGAN POWER COMPANY (An Indiana Corporation) 35-0410455
One Summit Square
P.O. Box 60, Fort Wayne, Indiana 46801
Telephone (219) 425-2111
1-6858 KENTUCKY POWER COMPANY (A Kentucky Corporation) 61-0247775
1701 Central Avenue, Ashland, Kentucky 41101
Telephone (606) 327-1111
1-6543 OHIO POWER COMPANY (An Ohio Corporation) 31-4271000
301 Cleveland Avenue S.W., Canton, Ohio 44702
Telephone (216) 456-8173
AEP Generating Company, Columbus Southern Power Company and Kentucky Power Company meet
the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are
therefore filing this Form 10-Q with the reduced disclosure format specified in General
Instruction H(2) to Form 10-Q.
Indicate by check mark whether the registrants (1) have filed all reports required to
be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrants were required to
file such reports), and (2) have been subject to such filing requirements for the past
90 days.
Yes X No
The number of shares outstanding of American Electric Power Company, Inc. Common Stock,
par value $6.50, at July 31, 1995 was 185,935,000.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
FORM 10-Q
For The Quarter Ended June 30, 1995
INDEX
Page
Part I. FINANCIAL INFORMATION
American Electric Power Company, Inc. and Subsidiary Companies:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . A-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . A-2 - A-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . A-4
Notes to Consolidated Financial Statements . . . . . . . . . A-5 - A-6
Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . . . . . . . . A-7 - A-9
AEP Generating Company:
Statements of Income and Statements of Retained Earnings . . B-1
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . B-2 - B-3
Statements of Cash Flows . . . . . . . . . . . . . . . . . . B-4
Notes to Financial Statements. . . . . . . . . . . . . . . . B-5
Management's Narrative Analysis of Results of Operations . . B-6 - B-7
Appalachian Power Company and Subsidiaries:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . C-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . C-2 - C-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . C-4
Notes to Consolidated Financial Statements . . . . . . . . . C-5
Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . . . . . . . . C-6 - C-8
Columbus Southern Power Company and Subsidiaries:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . D-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . D-2 - D-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . D-4
Notes to Consolidated Financial Statements . . . . . . . . . D-5
Management's Narrative Analysis of Results of Operations . . D-6 - D-7
Indiana Michigan Power Company and Subsidiaries:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . E-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . E-2 - E-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . E-4
Notes to Consolidated Financial Statements . . . . . . . . . E-5 - E-6
Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . . . . . . . . E-7 - E-9
Kentucky Power Company:
Statements of Income and Statements of Retained Earnings . . F-1
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . F-2 - F-3
Statements of Cash Flows . . . . . . . . . . . . . . . . . . F-4
Notes to Financial Statements. . . . . . . . . . . . . . . . F-5
Management's Narrative Analysis of Results of Operations . . F-6 - F-7
Ohio Power Company and Subsidiaries:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . G-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . G-2 - G-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . G-4
Notes to Consolidated Financial Statements . . . . . . . . . G-5
Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . . . . . . . . G-6 - G-8
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
FORM 10-Q
For The Quarter Ended June 30, 1995
INDEX
Page
Part II. OTHER INFORMATION
Item 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Item 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1 - II-3
Item 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3 - II-4
Item 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5
This combined Form 10-Q is separately filed by American Electric Power Company,
Inc., AEP Generating Company, Appalachian Power Company, Columbus Southern Power
Company, Indiana Michigan Power Company, Kentucky Power Company and Ohio Power Company.
Information contained herein relating to any individual registrant is filed by such
registrant on its own behalf. Each registrant makes no representation as to
information relating to the other registrants.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per-share amounts)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
OPERATING REVENUES . . . . . . . . . . . . $1,305,342 $1,348,563 $2,721,511 $2,836,747
OPERATING EXPENSES:
Fuel and Purchased Power . . . . . . . . 357,055 430,823 769,042 932,392
Other Operation. . . . . . . . . . . . . 288,467 244,398 549,023 490,730
Maintenance. . . . . . . . . . . . . . . 131,388 132,165 261,996 275,527
Depreciation and Amortization. . . . . . 147,243 142,611 294,420 281,442
Taxes Other Than Federal Income Taxes. . 117,271 121,963 247,256 250,183
Federal Income Taxes . . . . . . . . . . 52,702 57,176 131,071 129,597
TOTAL OPERATING EXPENSES . . . . 1,094,126 1,129,136 2,252,808 2,359,871
OPERATING INCOME . . . . . . . . . . . . . 211,216 219,427 468,703 476,876
NONOPERATING INCOME (LOSS) . . . . . . . . 83 (6,283) 4,881 957
INCOME BEFORE INTEREST CHARGES AND
PREFERRED DIVIDENDS . . . . . . . . . . . 211,299 213,144 473,584 477,833
INTEREST CHARGES . . . . . . . . . . . . . 100,721 96,036 201,134 194,607
PREFERRED STOCK DIVIDEND REQUIREMENTS
OF SUBSIDIARIES . . . . . . . . . . . . . 14,100 13,315 28,122 26,478
NET INCOME . . . . . . . . . . . . . . . . $ 96,478 $ 103,793 $ 244,328 $ 256,748
AVERAGE NUMBER OF SHARES OUTSTANDING . . . 185,671 184,535 184,494 184,535
EARNINGS PER SHARE . . . . . . . . . . . . $0.52 $0.56 $1.32 $1.39
CASH DIVIDENDS PAID PER SHARE. . . . . . . $0.60 $0.60 $1.20 $1.20
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
BALANCE AT BEGINNING OF PERIOD . . . . . . $1,362,170 $1,311,401 $1,325,581 $1,269,283
NET INCOME . . . . . . . . . . . . . . . . 96,478 103,793 244,328 256,748
DEDUCTIONS:
Cash Dividends Declared. . . . . . . . . 111,352 110,722 222,495 221,445
Other. . . . . . . . . . . . . . . . . . 36 436 154 550
BALANCE AT END OF PERIOD . . . . . . . . . $1,347,260 $1,304,036 $1,347,260 $1,304,036
See Notes to Consolidated Financial Statements.
/TABLE
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . . . $ 9,221,368 $ 9,172,766
Transmission . . . . . . . . . . . . . . . . . . . . . . 3,290,181 3,247,280
Distribution . . . . . . . . . . . . . . . . . . . . . . 4,053,712 3,966,442
General (including mining assets and nuclear fuel) . . . 1,460,057 1,529,436
Construction Work in Progress. . . . . . . . . . . . . . 282,223 258,700
Total Electric Utility Plant . . . . . . . . . . 18,307,541 18,174,624
Accumulated Depreciation and Amortization. . . . . . . . 6,955,693 6,826,514
NET ELECTRIC UTILITY PLANT . . . . . . . . . . . 11,351,848 11,348,110
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . . . 763,934 735,042
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . . . 129,198 62,866
Accounts Receivable. . . . . . . . . . . . . . . . . . . 459,935 436,915
Allowance for Uncollectible Accounts . . . . . . . . . . (7,236) (4,056)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . 341,474 306,700
Materials and Supplies . . . . . . . . . . . . . . . . . 221,276 216,741
Accrued Utility Revenues . . . . . . . . . . . . . . . . 155,301 167,486
Prepayments and Other. . . . . . . . . . . . . . . . . . 146,665 94,786
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . 1,446,613 1,281,438
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . . . 2,129,235 2,173,867
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . . . 269,038 360,080
TOTAL. . . . . . . . . . . . . . . . . . . . . $15,960,668 $15,898,537
See Notes to Consolidated Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock-Par Value $6.50:
1995 1994
Shares Authorized . . . .300,000,000 300,000,000
Shares Issued . . . . . .194,934,992 194,234,992
(8,999,992 shares were held in treasury) . . . . . . . $ 1,267,077 $ 1,262,527
Paid-in Capital. . . . . . . . . . . . . . . . . . . . . 1,650,719 1,641,522
Retained Earnings. . . . . . . . . . . . . . . . . . . . 1,347,260 1,325,581
Total Common Shareholders' Equity. . . . . . . . 4,265,056 4,229,630
Cumulative Preferred Stocks of Subsidiaries:
Not Subject to Mandatory Redemption. . . . . . . . . . 233,240 233,240
Subject to Mandatory Redemption. . . . . . . . . . . . 590,300 590,300
Long-term Debt . . . . . . . . . . . . . . . . . . . . . 4,731,543 4,686,648
TOTAL CAPITALIZATION . . . . . . . . . . . . . . 9,820,139 9,739,818
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . . . 788,189 735,689
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . . . 349,353 293,671
Short-term Debt. . . . . . . . . . . . . . . . . . . . . 430,875 316,985
Accounts Payable . . . . . . . . . . . . . . . . . . . . 164,712 251,186
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . 284,895 382,677
Interest Accrued . . . . . . . . . . . . . . . . . . . . 85,856 88,916
Obligations Under Capital Leases . . . . . . . . . . . . 87,937 93,252
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 312,046 339,998
TOTAL CURRENT LIABILITIES. . . . . . . . . . . . 1,715,674 1,766,685
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . . . . 2,644,540 2,659,377
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . . . 444,048 456,043
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . . . . . . 407,794 415,226
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . . . 140,284 125,699
CONTINGENCIES (Note 4)
TOTAL. . . . . . . . . . . . . . . . . . . . . $15,960,668 $15,898,537
See Notes to Consolidated Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
(in thousands)
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 244,328 $ 256,748
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . . . . . . . . 285,933 278,790
Deferred Income Taxes. . . . . . . . . . . . . . . . . . . . . 2,527 (3,429)
Deferred Investment Tax Credits. . . . . . . . . . . . . . . . (11,903) (16,302)
Amortization of Deferred Property Taxes. . . . . . . . . . . . 72,657 59,910
Amortization of Operating Expenses and
Carrying Charges (net). . . . . . . . . . . . . . . . . . . 35,448 3,808
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . . . . (19,840) (11,288)
Fuel, Materials and Supplies . . . . . . . . . . . . . . . . . (39,309) 28,974
Accrued Utility Revenues . . . . . . . . . . . . . . . . . . . 12,185 17,062
Prepayments and Other Current Assets . . . . . . . . . . . . . (51,879) (33,111)
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . (86,474) (13,745)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . . . . (97,782) (83,451)
Other (net). . . . . . . . . . . . . . . . . . . . . . . . . . . (12,247) (54,610)
Net Cash Flows From Operating Activities . . . . . . . . . 333,644 429,356
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . . . . (280,956) (292,509)
Proceeds from Sale of Property and Other . . . . . . . . . . . . 10,551 37,608
Net Cash Flows Used For Investing Activities . . . . . . . (270,405) (254,901)
FINANCING ACTIVITIES:
Issuance of Common Stock . . . . . . . . . . . . . . . . . . . . 23,371 -
Issuance of Cumulative Preferred Stock . . . . . . . . . . . . . - 88,787
Issuance of Long-term Debt . . . . . . . . . . . . . . . . . . . 264,415 335,771
Change in Short-term Debt (net). . . . . . . . . . . . . . . . . 113,890 88,327
Retirement of Cumulative Preferred Stock . . . . . . . . . . . . - (35,800)
Retirement of Long-term Debt . . . . . . . . . . . . . . . . . . (176,088) (440,310)
Dividends Paid on Common Stock . . . . . . . . . . . . . . . . . (222,495) (221,445)
Net Cash Flows From (Used For) Financing Activities. . . . 3,093 (184,670)
Net Increase (Decrease) in Cash and Cash Equivalents . . . . . . . 66,332 (10,215)
Cash and Cash Equivalents at Beginning of Period . . . . . . . . . 62,866 42,561
Cash and Cash Equivalents at End of Period . . . . . . . . . . . . $ 129,198 $ 32,346
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $197,982,000 and $194,515,000 and
for income taxes was $151,158,000 and $146,597,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $49,813,000 and $116,161,000 in 1995
and 1994, respectively.
See Notes to Consolidated Financial Statements.
/TABLE
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial state-
ments should be read in conjunction with the 1994 Annual Report
as incorporated in and filed with the Form 10-K. Certain
prior-period amounts have been reclassified to conform to
current-period presentation.
2. FINANCING AND RELATED ACTIVITIES
Significant financing transactions by subsidiaries during
the first six months of 1995 included the following:
Principal Amount
(in thousands)
Issuances: Junior Subordinated Deferrable
Interest Debentures
8.72% Series Due 2025 $40,000
First Mortgage Bonds
8% Series due 2025 50,000
8% Series due 2005 50,000
6.89% Series due 2005 30,000
Installment Purchase Contracts
6.55% Series 1995 A due 2025 50,000
(a) Series 1995 B due 2025 50,000
Retirements: First Mortgage Bonds
9-1/8% Series due 2019 $47,000
9-7/8% Series due 2020 26,900
Installment Purchase Contracts
9-1/4% Series due 2014 50,000
Notes Payable
8.79% due 1995 50,000
(a) The variable rate Series B will accrue interest at a daily,
weekly, commercial paper, or term rate as designated by the
Company and was issued at an initial weekly rate of 4.2%.
Redemption of a subsidiary's 9-1/8% Series First Mortgage
Bonds due in 2019 reduced the restriction on subsidiaries use
of retained earnings for the payment of cash dividends on their
common stock from $234 million to $230 million.
3. RESTRUCTURING
On July 31, 1995 management announced plans to reduce
staffing at the Company's fossil-fuel power plants. The plan
is part of an AEP restructuring program to realign functionally
all subsidiary company operations into separate AEP System
power generation, energy delivery and non-core business groups.
Job reductions throughout the Company's operations are expected
to begin in the fall of 1995 and continue into 1996.
Management is in the process of undertaking implementation
efforts and at this time is not in a position to estimate the
restructuring costs. The restructuring effort is expected to
result in charges in 1995 and 1996 which will adversely affect
results of operations.
4. CONTINGENCIES
The Company continues to be involved in certain matters
discussed in the 1994 Annual Report.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
SECOND QUARTER 1995 vs. SECOND QUARTER 1994
AND
YEAR-TO-DATE 1995 vs. YEAR-TO-DATE 1994
RESULTS OF OPERATIONS
Net income decreased 7% or $7.3 million in the second quarter
and 5% or $12.4 million in the year-to-date period reflecting a
decline in energy sales as a result of mild weather in 1995 and
increased other operation expenses and in the quarter, a rise in
interest charges.
Income statement items which changed significantly were:
Increase (Decrease)
Second Quarter Year-To-Date
(in millions) % (in millions) %
Operating Revenues . . . . . $(43.2) (3) $(115.2) (4)
Fuel and Purchased
Power Expense. . . . . . . (73.8) (17) (163.4) (18)
Other Operation Expense. . . 44.1 18 58.3 12
Maintenance. . . . . . . . . (0.8) (1) (13.5) (5)
Depreciation and
Amortization Expense . . . 4.6 3 13.0 5
Nonoperating Income (Loss) . 6.4 N.M. 3.9 N.M.
Interest Charges . . . . . . 4.7 5 6.5 3
N.M. = Not Meaningful
Operating revenues declined as a result of decreased energy
sales to wholesale customers and decreased fuel clause recoveries
from retail customers due to a reduction in the fuel cost component
of revenues and in the year-to-date period a 3% reduction in energy
sales to weather-sensitive residential customers reflecting the
mild weather. Wholesale energy sales declined 15% in the quarter
and 19% in the year-to-date period resulting from the mild weather
and increased availability of unaffiliated generating units in
1995. The reduction in the fuel cost component of revenues
resulted from rate commission orders reflecting decreased fuel
costs. Although energy sales to wholesale and residential
customers decreased, sales to industrial customers increased 3% in
each period reflecting increased usage due to increased production.
Fuel and purchased power expense decreased significantly in
both periods due to the weather-related decline in energy
consumption. Also contributing to the decline in both periods was
increased utilization of low-cost nuclear generation which had been
unavailable in 1994 due to refueling and maintenance outages at the
Cook Plant and a decrease in the average cost of fossil fuel due to
reduced coal prices.
Other operation expense increased in both periods due to rent
expense and other operating costs of the Gavin Plant's new flue gas
desulfurization systems which went into service in 1995; cost
related to the development of a new activity based budgeting
system; increased employee benefit costs; the effect of
capitalization of software development costs in 1994 in accordance
with a Virginia regulatory commission order; and regulatory-
approved increases in amortization, concurrent with rate recovery,
of certain low-income residential customers' payment programs.
The reduction in maintenance expense reflects the completion
of outage related maintenance at the Cook Plant nuclear units in
1994, reduced fossil plant maintenance due in part to the
retirement of the Breed Plant in 1994 and a reduction in
distribution line maintenance expenses. Distribution maintenance
in 1994 was higher than normal due to damage caused by a series of
severe winter storms.
Depreciation and amortization expense increased primarily due
to the conclusion of the Zimmer Plant phase-in deferrals on
February 1, 1994 and the subsequent amortization of previously
deferred balances commensurate with their recovery in rates.
The increase in nonoperating income was mainly due to a 1994
provision for loss of $8.2 million after tax regarding a demand
side management investment.
Interest charges rose in the quarter primarily as a result of
an increase in the balance of long-term debt outstanding.
FINANCIAL CONDITION
Total plant and property additions including capital leases for
the first six months were $332 million.
During the first six months subsidiaries issued $220 million
principal amount of long-term debt at interest rates ranging from
6.55% to 8.72% and $50 million at a variable rate which will accrue
interest at a daily, weekly, commercial paper, or term rate as
designated by the Company which was at an initial weekly rate of
4.2%; retired $174 million principal amount of long-term debt with
interest rates ranging from 8.79% to 9-7/8%; and increased short-
term debt by $114 million. Proceeds from the issuance of long-term
debt were used to retire long-term debt in August 1995.
RESTRUCTURING
As part of an AEP restructuring program, management announced
plans to reduce staffing at the Company's fossil-fuel power plants.
The restructuring program, which is part of management's efforts to
prepare for increased competition, calls for the functional
realignment of all subsidiary company operations into separate AEP
System power generation, energy delivery and non-core business
groups. Staffing reductions throughout the Company's operations
are expected to begin in the fall of 1995 and continue throughout
1996. Management is in the process of undertaking implementation
efforts and at this time is not in a position to estimate the
restructuring costs. The cost of the restructuring effort is
expected to adversely affect results of operations in 1995 and
1996.
AEP GENERATING COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
OPERATING REVENUES . . . . . . . . . . . $53,819 $59,530 $113,994 $119,431
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . 22,078 25,709 48,640 51,739
Rent - Rockport Plant Unit 2 . . . . . 14,977 16,574 31,626 33,152
Other Operation. . . . . . . . . . . . 3,005 2,680 5,677 5,283
Maintenance. . . . . . . . . . . . . . 3,458 2,790 6,341 5,575
Depreciation . . . . . . . . . . . . . 5,417 5,408 10,834 10,816
Taxes Other Than Federal Income Taxes. 534 1,403 1,747 2,492
Federal Income Taxes . . . . . . . . . 1,017 1,166 2,105 2,475
TOTAL OPERATING EXPENSES . . . 50,486 55,730 106,970 111,532
OPERATING INCOME . . . . . . . . . . . . 3,333 3,800 7,024 7,899
NONOPERATING INCOME. . . . . . . . . . . 992 868 1,821 1,685
INCOME BEFORE INTEREST CHARGES . . . . . 4,325 4,668 8,845 9,584
INTEREST CHARGES . . . . . . . . . . . . 2,391 2,392 4,792 4,817
NET INCOME . . . . . . . . . . . . . . . $ 1,934 $ 2,276 $ 4,053 $ 4,767
STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
BALANCE AT BEGINNING OF PERIOD . . . . . $4,387 $1,269 $4,268 $1,339
NET INCOME . . . . . . . . . . . . . . . 1,934 2,276 4,053 4,767
CASH DIVIDENDS DECLARED. . . . . . . . . 2,000 2,360 4,000 4,921
BALANCE AT END OF PERIOD . . . . . . . . $4,321 $1,185 $4,321 $1,185
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Financial Statements.
/TABLE
AEP GENERATING COMPANY
BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
ASSETS
ELECTRIC UTILITY PLANT:
Production. . . . . . . . . . . . . . . . . . . . . . . . $628,386 $627,429
General . . . . . . . . . . . . . . . . . . . . . . . . . 2,922 2,658
Construction Work in Progress . . . . . . . . . . . . . . 973 1,441
Total Electric Utility Plant. . . . . . . . . . . 632,281 631,528
Accumulated Depreciation. . . . . . . . . . . . . . . . . 208,138 199,264
NET ELECTRIC UTILITY PLANT. . . . . . . . . . . . 424,143 432,264
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . . . . . . 3 7
Accounts Receivable . . . . . . . . . . . . . . . . . . . 20,710 19,868
Fuel. . . . . . . . . . . . . . . . . . . . . . . . . . . 19,455 18,368
Materials and Supplies. . . . . . . . . . . . . . . . . . 4,097 4,167
Prepayments . . . . . . . . . . . . . . . . . . . . . . . 367 452
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . 44,632 42,862
REGULATORY ASSETS . . . . . . . . . . . . . . . . . . . . . 11,038 10,924
DEFERRED CHARGES. . . . . . . . . . . . . . . . . . . . . . 13,082 11,772
TOTAL . . . . . . . . . . . . . . . . . . . . . $492,895 $497,822
See Notes to Financial Statements.
AEP GENERATING COMPANY
BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - Par Value $1,000:
Authorized and Outstanding - 1,000 Shares . . . . . . . $ 1,000 $ 1,000
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . 47,735 47,735
Retained Earnings . . . . . . . . . . . . . . . . . . . . 4,321 4,268
Total Common Shareholder's Equity . . . . . . . . 53,056 53,003
Long-term Debt. . . . . . . . . . . . . . . . . . . . . . 53,416 53,340
TOTAL CAPITALIZATION. . . . . . . . . . . . . . . 106,472 106,343
OTHER NONCURRENT LIABILITIES. . . . . . . . . . . . . . . . 2,043 2,019
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . . . . . . 55,000 55,000
Short-term Debt - Notes Payable . . . . . . . . . . . . . 9,700 7,200
Accounts Payable. . . . . . . . . . . . . . . . . . . . . 6,349 9,506
Taxes Accrued . . . . . . . . . . . . . . . . . . . . . . 4,437 3,648
Interest Accrued. . . . . . . . . . . . . . . . . . . . . 2,956 2,955
Rent Accrued - Rockport Plant Unit 2. . . . . . . . . . . 4,963 6,490
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 2,384 4,579
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . 85,789 89,378
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2 . . . . . . . . . . . . . . . . . . 207,310 211,089
DEFERRED INVESTMENT TAX CREDITS . . . . . . . . . . . . . . 78,780 80,471
DEFERRED INCOME TAXES . . . . . . . . . . . . . . . . . . . 12,501 8,522
TOTAL . . . . . . . . . . . . . . . . . . . . . $492,895 $497,822
See Notes to Financial Statements.
/TABLE
AEP GENERATING COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
(in thousands)
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 4,053 $ 4,767
Adjustments for Noncash Items:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 10,834 10,816
Deferred Income Taxes. . . . . . . . . . . . . . . . . . 3,547 2,945
Deferred Investment Tax Credits. . . . . . . . . . . . . (1,691) (1,692)
Amortization of Deferred Gain on Sale
and Leaseback - Rockport Plant Unit 2. . . . . . . . . (3,779) (3,779)
Deferred Property Taxes. . . . . . . . . . . . . . . . . (1,533) (2,047)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable. . . . . . . . . . . . . . . . . . . (842) 115
Fuel, Materials and Supplies . . . . . . . . . . . . . . (1,017) (2,518)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (3,157) 1,810
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . 789 2,779
Rent Accrued - Rockport Plant Unit 2 . . . . . . . . . . (1,527) -
Other (net). . . . . . . . . . . . . . . . . . . . . . . . (1,615) 2,896
Net Cash Flows From Operating Activities . . . . . . 4,062 16,092
INVESTING ACTIVITIES - Construction Expenditures . . . . . . (2,566) (2,050)
FINANCING ACTIVITIES:
Capital Contributions Returned to Parent Company . . . . . - (4,100)
Change in Short-term Debt (net). . . . . . . . . . . . . . 2,500 (5,000)
Dividends Paid . . . . . . . . . . . . . . . . . . . . . . (4,000) (4,921)
Net Cash Flows Used For Financing Activities . . . . (1,500) (14,021)
Net Increase (Decrease) in Cash and Cash Equivalents . . . . (4) 21
Cash and Cash Equivalents at Beginning of Period . . . . . . 7 3
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 3 $ 24
Supplemental Disclosure:
Cash paid (received) for interest net of capitalized amounts was $4,632,000 and
$4,659,000 and for income taxes was $(1,269,000) and $(986,000) in 1995 and 1994,
respectively.
See Notes to Financial Statements.
AEP GENERATING COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
GENERAL
The accompanying unaudited financial statements should be
read in conjunction with the 1994 Annual Report as incorporated
in and filed with the Form 10-K. Certain prior-period amounts
have been reclassified to conform to current-period
presentation.
AEP GENERATING COMPANY
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
SECOND QUARTER 1995 vs. SECOND QUARTER 1994
AND
YEAR-TO-DATE 1995 vs. YEAR-TO-DATE 1994
Operating revenues are derived from the sale of Rockport Plant
energy and capacity to two affiliated companies and one
unaffiliated utility pursuant to Federal Energy Regulatory
Commission (FERC) approved long-term unit power agreements. The
unit power agreements provide for recovery of costs including a
FERC approved rate of return on common equity and a return on other
capital net of temporary cash investments. Net income declined
$0.3 million or 15% in the second quarter and $0.7 million or 15%
in the year-to-date period reflecting a reduction in common equity
on which a return is earned and a decreased return on other capital
due to an increase in temporary cash investments during 1995. The
reduction in common equity resulted from the return of $5.7 million
of capital to the parent company during the second and third
quarters of 1994.
Income statement items which changed significantly were:
Increase (Decrease)
Second Quarter Year-to-Date
(in millions) % (in millions) %
Operating Revenues . . . . . $(5.7) (10) $(5.4) (5)
Fuel Expense . . . . . . . . (3.6) (14) (3.1) (6)
Rent Expense-Rockport Plant
Unit 2. . . . . . . . . . . (1.6) (10) (1.5) (5)
Other Operation Expense. . . 0.3 12 0.4 7
Maintenance Expense. . . . . 0.7 24 0.8 14
Taxes Other Than Federal
Income Taxes . . . . . . . (0.9) (62) (0.7) (30)
Federal Income Taxes . . . . (0.1) (13) (0.4) (15)
Nonoperating Income. . . . . 0.1 14 0.1 8
The decrease in operating revenues for the second quarter and
year-to-date periods reflects the decrease in recoverable operating
expenses in accordance with the unit power agreements as well as
the reduced return on capital previously discussed.
Fuel expense decreased due to a 15% reduction in generation
during the second quarter and a 5% decrease in generation for the
year-to-date period. Generation was lower due to Rockport Plant
Unit 1 being out-of-service for general boiler inspection and
repair during the second quarter of 1995. Rent expense for
Rockport Plant Unit 2 decreased in both periods due to a favorable
determination by the Indiana state tax department which resulted in
the reversal of a provision recorded in the third quarter of 1994
for Indiana gross income tax applicable to the lease. Other
operation expense increased due to increased engineering charges.
The rise in maintenance expense during both periods was
attributable to the planned boiler inspection and repairs of
Rockport Plant Unit 1 which occurred during the second quarter of
1995.
Taxes other than federal income taxes decreased for the second
quarter and year-to-date periods reflecting a favorable Indiana
property tax accrual adjustment and lower Indiana supplemental net
income taxes attributable to reduced taxable income for state tax
purposes. Federal income tax expense attributable to operations
decreased in both periods due to a decrease in pre-tax operating
income. The increase in nonoperating income was primarily due to
an increase in interest income earned on temporary cash investments
which increased during the periods.
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
OPERATING REVENUES . . . . . . . . . . . $339,957 $369,862 $747,473 $807,957
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . 72,082 95,156 171,975 206,694
Purchased Power. . . . . . . . . . . . 72,894 76,741 136,852 171,604
Other Operation. . . . . . . . . . . . 55,942 45,875 105,915 94,467
Maintenance. . . . . . . . . . . . . . 32,962 30,419 69,426 70,996
Depreciation and Amortization. . . . . 33,338 31,670 66,428 63,182
Taxes Other Than Federal Income Taxes. 27,613 29,356 59,342 62,405
Federal Income Taxes . . . . . . . . . 6,287 11,983 29,552 30,005
TOTAL OPERATING EXPENSES . . . 301,118 321,200 639,490 699,353
OPERATING INCOME . . . . . . . . . . . . 38,839 48,662 107,983 108,604
NONOPERATING LOSS. . . . . . . . . . . . (3,804) (853) (4,639) (3,543)
INCOME BEFORE INTEREST CHARGES . . . . . 35,035 47,809 103,344 105,061
INTEREST CHARGES . . . . . . . . . . . . 26,549 23,801 52,921 48,521
NET INCOME . . . . . . . . . . . . . . . 8,486 24,008 50,423 56,540
PREFERRED STOCK DIVIDEND REQUIREMENTS. . 4,097 3,688 8,201 7,280
EARNINGS APPLICABLE TO COMMON STOCK. . . $ 4,389 $ 20,320 $ 42,222 $ 49,260
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
BALANCE AT BEGINNING OF PERIOD . . . . . $217,485 $229,721 $206,361 $227,816
NET INCOME . . . . . . . . . . . . . . . 8,486 24,008 50,423 56,540
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . 26,709 27,035 53,418 54,070
Cumulative Preferred Stock . . . . . 3,919 3,674 7,838 7,081
Capital Stock Expense. . . . . . . . . 178 185 363 370
BALANCE AT END OF PERIOD . . . . . . . . $195,165 $222,835 $195,165 $222,835
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
/TABLE
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $1,854,672 $1,848,263
Transmission . . . . . . . . . . . . . . . . . . . . 1,031,271 1,010,344
Distribution . . . . . . . . . . . . . . . . . . . . 1,366,009 1,315,915
General. . . . . . . . . . . . . . . . . . . . . . . 163,652 160,752
Construction Work in Progress. . . . . . . . . . . . 60,920 63,453
Total Electric Utility Plant . . . . . . . . 4,476,524 4,398,727
Accumulated Depreciation and Amortization. . . . . . 1,663,212 1,627,852
NET ELECTRIC UTILITY PLANT . . . . . . . . . 2,813,312 2,770,875
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 30,781 48,928
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 5,041 5,297
Accounts Receivable. . . . . . . . . . . . . . . . . 128,033 124,092
Allowance for Uncollectible Accounts . . . . . . . . (1,978) (830)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 82,259 65,581
Materials and Supplies . . . . . . . . . . . . . . . 49,599 49,451
Accrued Utility Revenues . . . . . . . . . . . . . . 42,303 51,686
Prepayments. . . . . . . . . . . . . . . . . . . . . 17,563 6,487
TOTAL CURRENT ASSETS . . . . . . . . . . . . 322,820 301,764
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 435,209 467,213
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 59,754 59,015
TOTAL. . . . . . . . . . . . . . . . . . . $3,661,876 $3,647,795
See Notes to Consolidated Financial Statements.
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 30,000,000 Shares
Outstanding - 13,499,500 Shares. . . . . . . . . . $ 260,458 $ 260,458
Paid-in Capital. . . . . . . . . . . . . . . . . . . 509,683 504,408
Retained Earnings. . . . . . . . . . . . . . . . . . 195,165 206,361
Total Common Shareholder's Equity. . . . . . 965,306 971,227
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . 55,000 55,000
Subject to Mandatory Redemption. . . . . . . . . . 190,300 190,300
Long-term Debt . . . . . . . . . . . . . . . . . . . 1,278,163 1,228,911
TOTAL CAPITALIZATION . . . . . . . . . . . . 2,488,769 2,445,438
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . 82,492 68,515
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 7,251 -
Short-term Debt. . . . . . . . . . . . . . . . . . . 112,475 122,825
Accounts Payable . . . . . . . . . . . . . . . . . . 77,540 93,712
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 38,537 34,623
Customer Deposits. . . . . . . . . . . . . . . . . . 14,395 14,362
Interest Accrued . . . . . . . . . . . . . . . . . . 17,581 17,347
Other. . . . . . . . . . . . . . . . . . . . . . . . 69,301 74,877
TOTAL CURRENT LIABILITIES. . . . . . . . . . 337,080 357,746
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . . 646,736 658,660
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 75,616 77,862
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 31,183 39,574
CONTINGENCIES (Note 4)
TOTAL. . . . . . . . . . . . . . . . . . . $3,661,876 $3,647,795
See Notes to Consolidated Financial Statements.
/TABLE
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
(in thousands)
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 50,423 $ 56,540
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . . . . . 67,262 64,453
Deferred Income Taxes. . . . . . . . . . . . . . . . . . (3,365) 12,492
Deferred Investment Tax Credits. . . . . . . . . . . . . (2,430) (2,448)
Deferred Power Supply Costs (net). . . . . . . . . . . . 3,022 5,959
Storm Damage Expense Deferrals . . . . . . . . . . . . . 11,548 (22,803)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . (2,793) (5,413)
Fuel, Materials and Supplies . . . . . . . . . . . . . . (16,826) (11,351)
Accrued Utility Revenues . . . . . . . . . . . . . . . . 9,383 14,399
Prepayments. . . . . . . . . . . . . . . . . . . . . . . (11,076) (7,563)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (16,172) 26,428
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . 3,914 (12,676)
Other (net). . . . . . . . . . . . . . . . . . . . . . . . 4,278 (1,904)
Net Cash Flows From Operating Activities . . . . . . 97,168 116,113
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (101,704) (103,295)
Proceeds from Sale of Property . . . . . . . . . . . . . . 7,050 483
Net Cash Flows Used For Investing Activities . . . . (94,654) (102,812)
FINANCING ACTIVITIES:
Capital Contributions from Parent Company. . . . . . . . . 15,000 -
Issuance of Cumulative Preferred Stock . . . . . . . . . . - 29,574
Issuance of Long-term Debt . . . . . . . . . . . . . . . . 128,785 -
Change in Short-term Debt (net). . . . . . . . . . . . . . (10,350) 75,650
Retirement of Long-term Debt . . . . . . . . . . . . . . . (74,950) (58,221)
Dividends Paid on Common Stock . . . . . . . . . . . . . . (53,418) (54,070)
Dividends Paid on Cumulative Preferred Stock . . . . . . . (7,837) (6,966)
Net Cash Flows Used For Financing Activities . . . . (2,770) (14,033)
Net Decrease in Cash and Cash Equivalents. . . . . . . . . . (256) (732)
Cash and Cash Equivalents at Beginning of Period . . . . . . 5,297 4,626
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 5,041 $ 3,894
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $51,472,000 and $49,161,000 and
for income taxes was $32,665,000 and $27,781,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $8,827,000 and $13,773,000 in 1995 and
1994, respectively.
See Notes to Consolidated Financial Statements.
/TABLE
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial statements should
be read in conjunction with the 1994 Annual Report as incorporated in and
filed with the Form 10-K. Certain prior-period amounts have been
reclassified to conform to current-period presentation.
2. FINANCING ACTIVITY
In 1995 the Company issued the following series of first mortgage
bonds:
Series Due Date Principal Amount
(in thousands)
8.00% 2005 $50,000
8.00% 2025 50,000
6.89% 2005 30,000
In April 1995 the Company redeemed the remaining $46.5 million
outstanding balance of its 9-1/8% Series First Mortgage Bonds due in 2019.
This redemption decreased the restriction on the use of retained earnings
for common stock cash dividends from $37.0 million to $33.2 million. Also
in June 1995, the Company redeemed at 103.95% $26.2 million of its 9-7/8%
Series First Mortgage Bonds due in 2020.
3. RESTRUCTURING
On July 31, 1995 management announced plans to reduce staffing at the
Company's power plants. The plan is part of an AEP restructuring program
to realign functionally all subsidiary company operations. Job reductions
throughout the Company's operations are expected to begin in the fall of
1995 and continue into 1996. Management is in the process of undertaking
implementation efforts and at this time is not in a position to estimate
the restructuring costs. The restructuring effort is expected to result in
charges in 1995 and 1996 which will adversely affect results of operations.
4. CONTINGENCIES
The Company continues to be involved in certain matters discussed in
the 1994 Annual Report.
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
SECOND QUARTER 1995 vs. SECOND QUARTER 1994
AND
YEAR-TO-DATE 1995 vs. YEAR-TO-DATE 1994
RESULTS OF OPERATIONS
Net income decreased 65% or $15.5 million in the second quarter and 11% or
$6.1 million in the year-to-date period primarily as a result of a decrease in
demand by weather-sensitive residential and wholesale customers and an increase
in other operation expense stemming from capitalization of software development
costs in 1994 in accordance with an order of the Virginia regulatory commission
and employee severance costs recorded in 1995. An increase in interest charges
and a nonoperating loss on sale of coal-mining assets also contributed to the
earnings decline.
Income statement items which changed significantly were:
Increase (Decrease)
Second Quarter Year-to-Date
(in millions) % (in millions) %
Operating Revenues . . . . $(29.9) (8) $(60.5) (7)
Fuel Expense . . . . . . . (23.1) (24) (34.7) (17)
Purchased Power Expense. . (3.8) (5) (34.8) (20)
Other Operation Expense. . 10.1 22 11.4 12
Maintenance. . . . . . . . 2.5 8 (1.6) (2)
Taxes Other Than Federal
Income Taxes . . . . . . (1.7) (6) (3.1) (5)
Federal Income Taxes . . . (5.7) (48) (0.5) (2)
Nonoperating Loss. . . . . 3.0 N.M. 1.1 31
Interest Charges . . . . . 2.7 12 4.4 9
N.M. = Not Meaningful
The decrease in revenues reflects reduced energy sales to unaffiliated
utilities resulting from mild weather and increased availability of unaffiliated
generating units in l995. Mild winter and spring weather reduced energy sales
to residential customers. However, total retail energy sales were virtually
unchanged due to a 4% increase in sales to industrial customers reflecting a
rise in production levels of industrial customers. A decrease in the fuel
component of Virginia retail rates of $28.9 million annually effective
November 1994 also reduced revenues. A reduction in fuel costs accounted for
the reduction in fuelrevenues.
Fuel expense decreased primarily due to a decrease in coal-fired net
generation reflecting reduced customer demand and in the year-to-date period a
lower average cost of fuel consumed reflecting lower coal prices. Purchased
power expense decreased as a result of reduced energy purchases from unaf-
filiated utilities for pass-through sales to other unaffiliated utilities
and a reduction in the AEP System Power Pool (Power Pool) capacity charges.
The decrease in Power Pool capacity charges resulted from a reduction in the
Company's prior twelve-month peak demand relative to the total peak demand of
all Power Pool members. Power Pool members whose internal demand exceeds
their capacity areallocated capacity costs based on the relative peak demands
and generatingreserves of all Power Pool members.
Other operation expense increased primarily due to the effect of a
$4.6 million favorable adjustment in 1994 for capitalization of software costs
explained above, employee severance costs resulting from an organizational
review study and in the year-to-date period an increase in uncollectible
accounts expense.
Maintenance expense increased for the quarter due to storm damage to
transmission and distribution facilities.
Taxes other than federal income tax expense declined due to a reduction in
the West Virginia business and occupation tax which was generation-based through
May 1995. Effective June 1995, the tax is based on generating capacity in West
Virginia rather than on generation in West Virginia. The reduction in the West
Virginia tax was due to a decrease in West Virginia generation and a favorable
effect of the change in the tax calcuation.
The decrease for the quarter in federal income tax expense attributable to
operations was due to a decrease in pre-tax operating income.
The increase in nonoperating loss resulted primarily from a loss on the
sale of coal-mining assets owned by the Company and one of its subsidiaries
which was formerly engaged in coal-mining. This was offset in part by the
negative effect in 1994 of the adoption of SFAS 112, Employers' Accounting
for Postemployment Benefits, by the Company's subsidiaries which were
formerly engaged in coal-mining.
Interest charges increased primarily as a result of an increase in the
balance of long-term debt outstanding and higher rates on increased average
balances of short-term borrowings.
FINANCIAL CONDITION
Total plant and property additions including capital leases for the first
six months of 1995 were $111 million.
During the first six months of 1995, the Company issued $130 million of
first mortgage bonds with interest rates ranging from 6.89% to 8% due from 2005
to 2025. The proceeds were used to refund long-term debt and repay short-term
debt. First mortgage bonds of $74 million principal amount with interest rates
ranging from 9-1/8% to 9-7/8% due in 2019 and 2020 were redeemed. Short-term
debt decreased by $10 million since the beginning of the year. The restriction
on the use of retained earnings for common stock cash dividends was reduced from
$37 million to $33.2 million by certain first mortgage bond redemptions. Also
in March 1995 the Company received a $15 million cash capital contribution from
its parent which was credited to paid-in capital.
RESTRUCTURING
As part of an AEP restructuring program, management announced plans to
reduce staffing at the Company's power plants. The restructuring program, which
is part of management's efforts to prepare for increased competition, calls for
the functional realignment of all subsidiary company operations. Staffing
reductions throughout the Company's operations are expected to begin in the fall
of 1995 and continue throughout 1996. Management is in the process of
undertaking implementation efforts and at this time is not in a position to
estimate the restructuring costs. The cost of the restructuring effort is
expected to adversely affect results of operations in 1995 and 1996.
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
OPERATING REVENUES . . . . . . . . . . . $246,165 $256,754 $503,170 $512,583
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . 36,748 48,022 88,054 101,654
Purchased Power. . . . . . . . . . . . 41,180 35,249 73,099 74,645
Other Operation. . . . . . . . . . . . 44,541 44,318 89,603 86,862
Maintenance. . . . . . . . . . . . . . 18,586 16,780 33,989 32,608
Depreciation . . . . . . . . . . . . . 21,307 20,728 42,454 41,318
Amortization of Zimmer
Plant Phase-in Costs . . . . . . . . 7,472 7,466 15,523 10,851
Taxes Other Than Federal Income Taxes. 27,161 26,148 54,192 51,444
Federal Income Taxes . . . . . . . . . 9,991 13,520 22,640 25,210
TOTAL OPERATING EXPENSES . . . 206,986 212,231 419,554 424,592
OPERATING INCOME . . . . . . . . . . . . 39,179 44,523 83,616 87,991
NONOPERATING INCOME:
Deferred Zimmer Plant Carrying
Charges (net of tax). . . . . . . . . 825 1,139 1,729 3,558
Other (net). . . . . . . . . . . . . . 248 317 710 998
TOTAL NONOPERATING INCOME. . . 1,073 1,456 2,439 4,556
INCOME BEFORE INTEREST CHARGES . . . . . 40,252 45,979 86,055 92,547
INTEREST CHARGES . . . . . . . . . . . . 19,702 20,737 39,980 42,653
NET INCOME . . . . . . . . . . . . . . . 20,550 25,242 46,075 49,894
PREFERRED STOCK DIVIDEND REQUIREMENTS. . 3,203 2,911 6,406 5,677
EARNINGS APPLICABLE TO COMMON STOCK. . . $ 17,347 $ 22,331 $ 39,669 $ 44,217
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
BALANCE AT BEGINNING OF PERIOD . . . . . $51,288 $22,942 $46,976 $18,288
NET INCOME . . . . . . . . . . . . . . . 20,550 25,242 46,075 49,894
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . 17,975 17,197 35,950 34,394
Cumulative Preferred Stock . . . . . 3,203 3,057 6,406 5,823
Capital Stock Expense. . . . . . . . . 35 35 70 70
BALANCE AT END OF PERIOD . . . . . . . . $50,625 $27,895 $50,625 $27,895
The common stock of the Company is wholly owned by American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $1,468,418 $1,461,484
Transmission . . . . . . . . . . . . . . . . . . . . 308,331 306,744
Distribution . . . . . . . . . . . . . . . . . . . . 817,155 797,570
General. . . . . . . . . . . . . . . . . . . . . . . 115,006 111,623
Construction Work in Progress. . . . . . . . . . . . 66,296 52,156
Total Electric Utility Plant . . . . . . . . 2,775,206 2,729,577
Accumulated Depreciation . . . . . . . . . . . . . . 918,892 884,237
NET ELECTRIC UTILITY PLANT . . . . . . . . . 1,856,314 1,845,340
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 26,269 26,744
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 10,644 14,065
Accounts Receivable. . . . . . . . . . . . . . . . . 52,272 55,705
Allowance for Uncollectible Accounts . . . . . . . . (2,876) (1,768)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 27,482 28,060
Materials and Supplies . . . . . . . . . . . . . . . 23,118 24,923
Accrued Utility Revenues . . . . . . . . . . . . . . 35,260 31,595
Prepayments. . . . . . . . . . . . . . . . . . . . . 42,684 31,241
TOTAL CURRENT ASSETS . . . . . . . . . . . . 188,584 183,821
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 458,128 475,019
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 35,854 63,418
TOTAL. . . . . . . . . . . . . . . . . . . $2,565,149 $2,594,342
See Notes to Consolidated Financial Statements.
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 24,000,000 Shares
Outstanding - 16,410,426 Shares. . . . . . . . . . $ 41,026 $ 41,026
Paid-in Capital. . . . . . . . . . . . . . . . . . . 565,742 565,642
Retained Earnings. . . . . . . . . . . . . . . . . . 50,625 46,976
Total Common Shareholder's Equity. . . . . . 657,393 653,644
Cumulative Preferred Stock - Subject to
Mandatory Redemption . . . . . . . . . . . . . . . 150,000 150,000
Long-term Debt . . . . . . . . . . . . . . . . . . . 917,836 917,608
TOTAL CAPITALIZATION . . . . . . . . . . . . 1,725,229 1,721,252
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . 40,252 38,072
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 30,000 80,000
Short-term Debt. . . . . . . . . . . . . . . . . . . 72,175 -
Accounts Payable . . . . . . . . . . . . . . . . . . 42,625 48,991
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 65,959 113,362
Interest Accrued . . . . . . . . . . . . . . . . . . 18,120 18,923
Other. . . . . . . . . . . . . . . . . . . . . . . . 25,753 25,310
TOTAL CURRENT LIABILITIES. . . . . . . . . . 254,632 286,586
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . . 462,414 467,593
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 62,759 64,597
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 19,863 16,242
CONTINGENCIES (Note 4)
TOTAL. . . . . . . . . . . . . . . . . . . $2,565,149 $2,594,342
See Notes to Consolidated Financial Statements.
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
(in thousands)
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 46,075 $ 49,894
Adjustments for Noncash Items:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 42,264 41,125
Deferred Income Taxes. . . . . . . . . . . . . . . . . . (2,804) 6,115
Deferred Investment Tax Credits. . . . . . . . . . . . . (1,834) (1,843)
Deferred Fuel Costs (net). . . . . . . . . . . . . . . . 2,913 (5,895)
Amortization of Zimmer Plant Operating Expenses and
Carrying Charges . . . . . . . . . . . . . . . . . . . 13,180 5,698
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . 4,541 185
Fuel, Materials and Supplies . . . . . . . . . . . . . . 2,383 7,780
Accrued Utility Revenues . . . . . . . . . . . . . . . . (3,665) (5,758)
Prepayments. . . . . . . . . . . . . . . . . . . . . . . (11,443) (7,251)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (6,366) (9,724)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . (47,403) (41,457)
Other (net). . . . . . . . . . . . . . . . . . . . . . . . 23,724 21,720
Net Cash Flows From Operating Activities . . . . . . 61,565 60,589
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (47,067) (32,952)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,262 365
Net Cash Flows Used For Investing Activities . . . . (44,805) (32,587)
FINANCING ACTIVITIES:
Issuance of Cumulative Preferred Stock . . . . . . . . . . - 24,596
Issuance of Long-term Debt . . . . . . . . . . . . . . . . - 198,298
Change in Short-term Debt (net). . . . . . . . . . . . . . 72,175 17,400
Retirement of Long-term Debt . . . . . . . . . . . . . . . (50,000) (225,835)
Dividends Paid on Common Stock . . . . . . . . . . . . . . (35,950) (34,394)
Dividends Paid on Cumulative Preferred Stock . . . . . . . (6,406) (5,531)
Net Cash Flows Used For Financing Activities . . . . (20,181) (25,466)
Net Increase (Decrease) in Cash and Cash Equivalents . . . . (3,421) 2,536
Cash and Cash Equivalents at Beginning of Period . . . . . . 14,065 6,633
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 10,644 $ 9,169
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $38,666,000 and $45,017,000
and for income taxes was $32,312,000 and $23,295,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $5,416,000 and $6,801,000 in 1995
and 1994, respectively.
See Notes to Consolidated Financial Statements.
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial
statements should be read in conjunction with the 1994 Annual
Report as incorporated in and filed with the Form 10-K.
Certain prior-period amounts have been reclassified to conform
with current-period presentation.
2. FINANCING ACTIVITIES
In April 1995, the Company redeemed an 8.79% note payable
for $50,000,000.
3. RESTRUCTURING
On July 31, 1995 management announced plans to reduce
staffing at the Company's power plants. The plan is part of
an AEP restructuring program to realign functionally all
subsidiary company operations. Job reductions throughout the
Company's operations are expected to begin in the fall of 1995
and continue into 1996. Management is in the process of
undertaking implementation efforts and at this time is not in
a position to estimate the restructuring costs. The
restructuring effort is expected to result in charges in 1995
and 1996 which will adversely affect results of operations.
4. CONTINGENCIES
The Company continues to be involved in certain matters
discussed in the 1994 Annual Report.
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
SECOND QUARTER 1995 vs. SECOND QUARTER 1994
AND
YEAR-TO-DATE 1995 vs. YEAR-TO-DATE 1994
Net income decreased $4.7 million or 19% for the quarter and
$3.8 million or 8% on a year-to-date basis due primarily to a
decrease in revenues of $10.6 million or 4% for the quarter and
$9.4 million or 2% for the year-to-date period.
The reduction in revenues resulted from a decrease in
wholesale energy sales in both the first and second quarters as
well as reduced retail fuel clause revenues in the second quarter.
The effects of mild winter weather and cooler spring weather
reduced wholesale energy sales to unaffiliated utilities. The
reduction in fuel clause revenues resulted from a Public Utilities
Commission of Ohio (PUCO) order establishing a new semi-annual fuel
clause rate effective June 1. The reduction in fuel clause
revenues did not affect net income since it was offset by a
reduction in the amortization of deferred fuel costs.
Other income statement lines which changed significantly were
as follows:
Increase (Decrease)
Second Quarter Year-to-Date
(in millions) % (in millions) %
Fuel Expense. . . . . . . $(11.3) (23) $(13.6) (13)
Purchased Power Expense . 5.9 17 (1.5) (2)
Maintenance Expense . . . 1.8 11 1.4 4
Amortization of Zimmer
Plant Phase-in Costs . . - - 4.7 43
Taxes Other Than Federal
Income Taxes . . . . . . 1.0 4 2.7 5
Federal Income Taxes. . . (3.5) (26) (2.6) (10)
Deferred Zimmer Plant
Carrying Charges
(net of tax) . . . . . . (0.3) (28) (1.8) (51)
Interest Charges. . . . . (1.0) (5) (2.7) (6)
Fuel expense declined in both the quarter and year-to-date
periods primarily due to decreased generation and in the year-to-
date period a decrease in the cost of fuel consumed offset in part
by the operation of the fuel clause adjustment mechanism which
resulted in an increase in the amortization of previously deferred
fuel costs. Under the fuel clause adjustment mechanism the Company
defers fuel expense to the extent it varies from the allowed
electric fuel component rate until such deferrals are amortized to
expense commensurate with their inclusion in fuel rates in later
months.
Maintenance outages at several Conesville Plant units and at
the Picway Plant in the second quarter reduced the Company's
generation resulting in the increase in purchased power expense
during the second quarter. The maintenance outages which were
primarily for scheduled repairs to the boiler facilities resulted
in the increase in maintenance expense.
The amortization of Zimmer Plant phase-in costs increased
during the year-to-date period due to the conclusion of phase-in
plan deferrals on February 1, 1994 and the subsequent amortization
of previously deferred balances in accordance with a PUCO rate
order.
The rise in taxes other than federal income taxes was due to
an increase in the gross receipts tax on increased retail revenues.
Federal income taxes declined during both periods due primarily
to a decrease in pre-tax operating income and in the second quarter
due to changes in certain book/tax differences accounted for on a
flow-through basis.
Deferred Zimmer Plant carrying charges declined reflecting the
cessation of deferrals in February 1994 commensurate with inclusion
of the Zimmer Plant investment in rate base.
Interest charges declined due to the retirement of long-term
debt during the second quarter.
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
OPERATING REVENUES . . . . . . . . . . . $307,820 $310,104 $634,997 $648,025
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . 56,863 46,885 119,617 99,943
Purchased Power. . . . . . . . . . . . 25,782 35,324 53,411 80,230
Other Operation. . . . . . . . . . . . 73,102 69,702 145,835 143,880
Maintenance. . . . . . . . . . . . . . 32,102 36,076 64,574 73,007
Depreciation and Amortization. . . . . 34,652 33,695 69,083 68,140
Amortization of Rockport Plant Unit 1
Phase-in Plan Deferrals. . . . . . . 3,911 3,911 7,822 7,822
Taxes Other Than Federal Income Taxes. 16,512 16,701 36,390 36,162
Federal Income Taxes . . . . . . . . . 13,569 13,178 30,687 25,394
TOTAL OPERATING EXPENSES . . . 256,493 255,472 527,419 534,578
OPERATING INCOME . . . . . . . . . . . . 51,327 54,632 107,578 113,447
NONOPERATING INCOME. . . . . . . . . . . 550 314 651 4,749
INCOME BEFORE INTEREST CHARGES . . . . . 51,877 54,946 108,229 118,196
INTEREST CHARGES . . . . . . . . . . . . 18,104 17,672 36,076 35,954
NET INCOME . . . . . . . . . . . . . . . 33,773 37,274 72,153 82,242
PREFERRED STOCK DIVIDEND REQUIREMENTS. . 2,907 2,890 5,797 5,870
EARNINGS APPLICABLE TO COMMON STOCK. . . $ 30,866 $ 34,384 $ 66,356 $ 76,372
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
BALANCE AT BEGINNING OF PERIOD . . . . . $224,385 $192,929 $216,658 $177,638
NET INCOME . . . . . . . . . . . . . . . 33,773 37,274 72,153 82,242
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . 27,713 26,652 55,426 53,304
Cumulative Preferred Stock . . . . . 2,890 2,890 5,780 5,870
Capital Stock Expense. . . . . . . . . 50 50 100 95
BALANCE AT END OF PERIOD . . . . . . . . $227,505 $200,611 $227,505 $200,611
The common stock of the Company is wholly owned
by American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $2,511,916 $2,494,834
Transmission . . . . . . . . . . . . . . . . . . . . 865,079 849,920
Distribution . . . . . . . . . . . . . . . . . . . . 651,476 644,720
General (including nuclear fuel) . . . . . . . . . . 183,030 204,909
Construction Work in Progress. . . . . . . . . . . . 71,612 74,923
Total Electric Utility Plant . . . . . . . . 4,283,113 4,269,306
Accumulated Depreciation and Amortization. . . . . . 1,710,903 1,659,940
NET ELECTRIC UTILITY PLANT . . . . . . . . . 2,572,210 2,609,366
NUCLEAR DECOMMISSIONING AND SPENT NUCLEAR
FUEL DISPOSAL TRUST FUNDS. . . . . . . . . . . . . . 389,351 341,089
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 136,456 127,424
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 55,416 9,907
Accounts Receivable. . . . . . . . . . . . . . . . . 124,274 132,053
Allowance for Uncollectible Accounts . . . . . . . . (232) (121)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 33,114 35,802
Materials and Supplies . . . . . . . . . . . . . . . 62,541 59,897
Accrued Utility Revenues . . . . . . . . . . . . . . 43,202 40,582
Prepayments. . . . . . . . . . . . . . . . . . . . . 13,588 8,414
TOTAL CURRENT ASSETS . . . . . . . . . . . . 331,903 286,534
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 549,229 574,577
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 52,822 49,604
TOTAL. . . . . . . . . . . . . . . . . . . $4,031,971 $3,988,594
See Notes to Consolidated Financial Statements.
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 2,500,000 Shares
Outstanding - 1,400,000 Shares . . . . . . . . . . $ 56,584 $ 56,584
Paid-in Capital. . . . . . . . . . . . . . . . . . . 734,511 734,511
Retained Earnings. . . . . . . . . . . . . . . . . . 227,505 216,658
Total Common Shareholder's Equity. . . . . . 1,018,600 1,007,753
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . 52,000 52,000
Subject to Mandatory Redemption. . . . . . . . . . 135,000 135,000
Long-term Debt . . . . . . . . . . . . . . . . . . . 1,034,849 929,887
TOTAL CAPITALIZATION . . . . . . . . . . . . 2,240,449 2,124,640
OTHER NONCURRENT LIABILITIES:
Nuclear Decommissioning. . . . . . . . . . . . . . . 244,763 211,963
Other. . . . . . . . . . . . . . . . . . . . . . . . 172,409 179,013
TOTAL OTHER NONCURRENT LIABILITIES . . . . . 417,172 390,976
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 90,000 140,000
Short-term Debt - Commercial Paper . . . . . . . . . 69,250 50,600
Accounts Payable . . . . . . . . . . . . . . . . . . 35,065 63,137
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 55,688 63,621
Interest Accrued . . . . . . . . . . . . . . . . . . 17,706 19,436
Obligations Under Capital Leases . . . . . . . . . . 30,700 39,003
Other. . . . . . . . . . . . . . . . . . . . . . . . 76,822 79,154
TOTAL CURRENT LIABILITIES. . . . . . . . . . 375,231 454,951
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . . 622,451 636,519
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 167,461 171,688
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . . . . 200,484 204,138
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 8,723 5,682
CONTINGENCIES (Note 4)
TOTAL. . . . . . . . . . . . . . . . . . . $4,031,971 $3,988,594
See Notes to Consolidated Financial Statements.
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
(in thousands)
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 72,153 $ 82,242
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . . . . . 73,979 73,938
Amortization of Rockport Plant Unit 1
Phase-in Plan Deferrals. . . . . . . . . . . . . . . . 7,822 7,822
Amortization (Deferral) of Incremental Nuclear
Refueling Outage Expenses (net). . . . . . . . . . . . 14,446 (9,712)
Deferred Income Taxes. . . . . . . . . . . . . . . . . . (11,610) 1,484
Deferred Investment Tax Credits. . . . . . . . . . . . . (3,993) (8,184)
Deferred Property Taxes. . . . . . . . . . . . . . . . . (1,268) (11,857)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . 7,890 (8,231)
Fuel, Materials and Supplies . . . . . . . . . . . . . . 44 7,871
Accrued Utility Revenues . . . . . . . . . . . . . . . . (2,620) (3,697)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (28,072) (11,429)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . (7,933) (7,948)
Other (net). . . . . . . . . . . . . . . . . . . . . . . . (28,110) (13,582)
Net Cash Flows From Operating Activities . . . . . . 92,728 98,717
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (51,710) (49,032)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 964 993
Net Cash Flows Used For Investing Activities . . . . (50,746) (48,039)
FINANCING ACTIVITIES:
Issuance of Cumulative Preferred Stock . . . . . . . . . . - 34,618
Issuance of Long-term Debt . . . . . . . . . . . . . . . . 96,819 89,221
Change in Short-term Debt (net). . . . . . . . . . . . . . 18,650 26,075
Retirement of Cumulative Preferred Stock . . . . . . . . . - (35,798)
Retirement of Long-term Debt . . . . . . . . . . . . . . . (50,736) (101,833)
Dividends Paid on Common Stock . . . . . . . . . . . . . . (55,426) (53,304)
Dividends Paid on Cumulative Preferred Stock . . . . . . . (5,780) (5,474)
Net Cash Flows From (Used For) Financing Activities. 3,527 (46,495)
Net Increase in Cash and Cash Equivalents. . . . . . . . . . 45,509 4,183
Cash and Cash Equivalents at Beginning of Period . . . . . . 9,907 3,752
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 55,416 $ 7,935
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $36,542,000 and $35,936,000 and
for income taxes was $50,575,000 and $43,560,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $9,254,000 and $44,662,000 in 1995 and
1994, respectively.
See Notes to Consolidated Financial Statements.
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial state-
ments should be read in conjunction with the 1994 Annual Report
as incorporated in and filed with the Form 10-K. Certain
prior-period amounts have been reclassified to conform to
current-period presentation.
2. FINANCING ACTIVITIES
On June 28, 1995, the Company entered into two series
(Series 1995 A and Series 1995 B) of $50 million City of
Rockport, Indiana, Installment Purchase Contracts (IPC) with
maturity dates of June 1, 2025. The proceeds from the Series
1995 A IPC, along with additional funds, were deposited with
a trustee to redeem the $50 million City of Rockport, Indiana,
9-1/4% Fixed Rate IPC, Series 1985 A, on August 1, 1995. In
accordance with Statement of Financial Accounting Standards
(SFAS) No. 76, Extinguishment of Debt, the Series 1985 A IPC
was considered retired. The proceeds from the Series 1995 B
IPC were used to redeem the $50 million City of Rockport,
Indiana, IPC, Series 1985 A on August 1, 1995. However, since
all of the requirements of SFAS 76 were not met, the Adjustable
Rate Series 1985 A IPC remained classified as Long-term Debt
Due Within One Year. The Series 1995 A IPC will accrue
interest at 6.55% per annum while the Series 1995 B IPC accrue
interest at a daily, weekly, commercial paper, or term rate as
designated by the Company. Initially, the Company selected a
weekly rate which was 4.2%.
Also on June 28, 1995, the Company entered into a letter
of credit agreement related to the $50 million City of
Rockport, Indiana, Floating Weekly Rate Demand IPC, Series 1985
A. With the signing of the letter of credit agreement which
expires in 2002, the long-term debt which had been classified
as due within one year is now classified as long-term.
3. RESTRUCTURING
On July 31, 1995 management announced plans to reduce
staffing at the Company's fossil-fuel power plants. The plan
is part of an AEP restructuring program to realign functionally
all subsidiary company operations. Job reductions throughout
the Company's operations are expected to begin in the fall of
1995 and continue into 1996. Management is in the process of
undertaking implementation efforts and at this time is not in
a position to estimate the restructuring costs. The
restructuring effort is expected to result in charges in 1995
and 1996 which will adversely affect results of operations.
4. CONTINGENCIES
The Company continues to be involved in certain matters
discussed in its 1994 Annual Report.
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
SECOND QUARTER 1995 vs. SECOND QUARTER 1994
AND
YEAR-TO-DATE 1995 vs. YEAR-TO-DATE 1994
RESULTS OF OPERATIONS
Net income decreased 9% or $3.5 million for the quarter and 12%
or $10 million year-to-date primarily as a result of a decline in
sales to residential customers and unaffiliated utilities due to
mild weather. The reduction in net income for the year-to-date
period also reflects the favorable effect of the retirement of the
Breed Plant in the first quarter of 1994.
Operating revenues decreased $2.3 million or 1% in the quarter
and $13 million or 2% year-to-date mainly due to a reduction in
fuel and power supply cost recoveries and a reduction in sales to
weather-sensitive residential and unaffiliated wholesale customers
reflecting the milder weather compared with 1994. These reductions
were partially offset by a substantial increase in energy provided
to the AEP System Power Pool (Power Pool) in both periods. The
reductions in fuel and power supply recoveries do not affect net
income as costs are matched with revenues in accordance with rate
commission orders. Although residential sales were down in both
periods, retail sales increased slightly reflecting an increase in
industrial sales due to an increase in usage reflecting a rise in
industrial production levels. The substantial increase in power
deliveries to the Power Pool resulted from the increased
availability of the Company's nuclear plant (Cook Plant) which had
been unavailable during part of the first half of 1994 as a result
of refueling and maintenance outages.
Other income statement items which changed significantly were:
Increase (Decrease)
Second Quarter Year-to-Date
(in millions) % (in millions) %
Fuel Expense. . . . . . . . $10.0 21 $ 19.7 20
Purchased Power Expense . . (9.5) (27) (26.8) (33)
Other Operation Expense . . 3.4 5 2.0 1
Maintenance Expense . . . . (4.0) (11) (8.4) (12)
Federal Income Taxes. . . . 0.4 3 5.3 21
Nonoperating Income . . . . 0.2 N.M. (4.1) (86)
N.M. = Not Meaningful
Fuel expense increased as generation increased by 47% in the
quarter and 52% year-to-date reflecting the increased availability
of the Cook Plant units. During 1994, one of the Cook Plant units
was out of service for refueling from mid-February until the end of
May and the other unit experienced an unscheduled maintenance
outage from late-February through late-April.
The decline in purchased power expense in both periods reflects
the increased availability of nuclear generating capacity and the
mild weather in 1995.
Other operation expense increased in the second quarter due to
increased provisions for nuclear decommissioning and accruals for
severance pay.
The reduced maintenance expense reflects lower planned
maintenance at the Cook Plant in 1995 reflecting the return to
service of the Cook Plant units in 1994 and reduced fossil plant
maintenance due primarily to the retirement of the Breed Plant in
1994.
Year-to-date federal income taxes attributable to operations
increased due to changes in certain book/tax timing differences
accounted for on a flow-through basis.
Nonoperating income declined in the year-to-date period
reflecting the favorable tax effect in 1994 of the retirement of
the Breed Plant.
FINANCIAL CONDITION
Total plant and property additions including capital leases for
the first six months of 1995 were $62 million. During the first
half of 1995 short-term debt outstanding increased $18.7 million
from year-end levels.
The Company entered into two series of $50 million City of
Rockport, Indiana Installment Purchase Contracts with maturity
dates of June 1, 2025. The proceeds were used to redeem
Installment Purchase Contracts.
RESTRUCTURING
As part of an AEP restructuring program, management announced
plans to reduce staffing at the Company's fossil-fuel power plants.
The restructuring program, which is part of management's efforts to
prepare for increased competition, calls for the functional
realignment of all subsidiary company operations. Staffing
reductions throughout the Company's operations are expected to
begin in the fall of 1995 and continue throughout 1996. Management
is in the process of undertaking implementation efforts and at this
time is not in a position to estimate the restructuring costs. The
cost of the restructuring effort is expected to adversely affect
results of operations in 1995 and 1996.
KENTUCKY POWER COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
OPERATING REVENUES . . . . . . . . . . . . $72,699 $76,656 $158,001 $163,113
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . 18,375 18,231 39,736 38,420
Purchased Power. . . . . . . . . . . . . 20,337 22,762 42,627 47,009
Other Operation. . . . . . . . . . . . . 11,988 9,830 22,281 18,841
Maintenance. . . . . . . . . . . . . . . 6,508 7,691 13,659 17,508
Depreciation and Amortization. . . . . . 6,087 5,738 12,119 11,453
Taxes Other Than Federal Income Taxes. . 1,526 1,863 4,020 4,268
Federal Income Tax Expense (Credit). . . (684) 534 1,354 2,627
TOTAL OPERATING EXPENSES. . . . . 64,137 66,649 135,796 140,126
OPERATING INCOME . . . . . . . . . . . . . 8,562 10,007 22,205 22,987
NONOPERATING LOSS. . . . . . . . . . . . . (32) (90) (100) (125)
INCOME BEFORE INTEREST CHARGES . . . . . . 8,530 9,917 22,105 22,862
INTEREST CHARGES . . . . . . . . . . . . . 5,983 5,132 11,743 10,274
NET INCOME . . . . . . . . . . . . . . . . $ 2,547 $ 4,785 $ 10,362 $ 12,588
STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
BALANCE AT BEGINNING OF PERIOD . . . . . . $91,258 $87,750 $89,173 $85,296
NET INCOME . . . . . . . . . . . . . . . . 2,547 4,785 10,362 12,588
CASH DIVIDENDS DECLARED. . . . . . . . . . 5,730 5,349 11,460 10,698
BALANCE AT END OF PERIOD . . . . . . . . . $88,075 $87,186 $88,075 $87,186
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Financial Statements.
KENTUCKY POWER COMPANY
BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $226,380 $224,365
Transmission . . . . . . . . . . . . . . . . . . . . 261,063 258,178
Distribution . . . . . . . . . . . . . . . . . . . . 302,035 297,754
General. . . . . . . . . . . . . . . . . . . . . . . 57,695 56,613
Construction Work in Progress. . . . . . . . . . . . 16,865 15,002
Total Electric Utility Plant . . . . . . . . 864,038 851,912
Accumulated Depreciation and Amortization. . . . . . 265,602 259,984
NET ELECTRIC UTILITY PLANT . . . . . . . . . 598,436 591,928
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 6,505 6,533
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 851 879
Accounts Receivable. . . . . . . . . . . . . . . . . 22,719 21,706
Allowance for Uncollectible Accounts . . . . . . . . (438) (260)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 10,972 11,735
Materials and Supplies . . . . . . . . . . . . . . . 9,877 9,615
Accrued Utility Revenues . . . . . . . . . . . . . . 4,910 9,128
Prepayments. . . . . . . . . . . . . . . . . . . . . 2,233 1,476
TOTAL CURRENT ASSETS . . . . . . . . . . . . 51,124 54,279
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 79,173 76,006
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 9,176 11,049
TOTAL. . . . . . . . . . . . . . . . . . . $744,414 $739,795
See Notes to Financial Statements.
KENTUCKY POWER COMPANY
BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - $50 Par Value:
Authorized - 2,000,000 Shares
Outstanding - 1,009,000 Shares . . . . . . . . . . $ 50,450 $ 50,450
Paid-in Capital. . . . . . . . . . . . . . . . . . . 68,750 68,750
Retained Earnings. . . . . . . . . . . . . . . . . . 88,075 89,173
Total Common Shareholder's Equity. . . . . . 207,275 208,373
First Mortgage Bonds . . . . . . . . . . . . . . . . 224,191 253,583
Subordinated Debentures. . . . . . . . . . . . . . . 38,835 -
TOTAL CAPITALIZATION . . . . . . . . . . . . 470,301 461,956
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . 12,359 11,449
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 29,436 -
Short-term Debt. . . . . . . . . . . . . . . . . . . 26,900 55,150
Accounts Payable . . . . . . . . . . . . . . . . . . 15,694 19,420
Customer Deposits. . . . . . . . . . . . . . . . . . 3,981 4,297
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 5,737 6,256
Interest Accrued . . . . . . . . . . . . . . . . . . 5,768 5,794
Other. . . . . . . . . . . . . . . . . . . . . . . . 11,442 14,467
TOTAL CURRENT LIABILITIES. . . . . . . . . . 98,958 105,384
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . . 142,722 140,490
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 14,803 15,288
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 5,271 5,228
CONTINGENCIES (Note 4)
TOTAL. . . . . . . . . . . . . . . . . . . $744,414 $739,795
See Notes to Financial Statements.
KENTUCKY POWER COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
(in thousands)
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 10,362 $ 12,588
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . . . . . 12,155 11,474
Deferred Income Taxes. . . . . . . . . . . . . . . . . . (1,041) (739)
Deferred Investment Tax Credits. . . . . . . . . . . . . (629) (634)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . (835) 132
Fuel, Materials and Supplies . . . . . . . . . . . . . . 501 (485)
Accrued Utility Revenues . . . . . . . . . . . . . . . . 4,218 5,001
Accounts Payable . . . . . . . . . . . . . . . . . . . . (3,726) 2,225
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . (519) 741
Other (net). . . . . . . . . . . . . . . . . . . . . . . . (2,624) 3,077
Net Cash Flows From Operating Activities . . . . . . 17,862 33,380
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (16,827) (21,682)
Proceeds from Sales of Property. . . . . . . . . . . . . . - 863
Net Cash Flows Used For Investing Activities . . . . (16,827) (20,819)
FINANCING ACTIVITIES:
Issuance of Subordinated Debentures. . . . . . . . . . . . 38,647 -
Change in Short-term Debt (net). . . . . . . . . . . . . . (28,250) (1,975)
Dividends Paid . . . . . . . . . . . . . . . . . . . . . . (11,460) (10,698)
Net Cash Flows Used For Financing Activities . . . . (1,063) (12,673)
Net Decrease in Cash and Cash Equivalents. . . . . . . . . . (28) (112)
Cash and Cash Equivalents at Beginning of Period . . . . . . 879 858
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 851 $ 746
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $11,646,000 and $10,293,000
and for income taxes was $2,027,000 and $3,015,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $1,857,000 and $2,612,000 in 1995 and
1994, respectively.
See Notes to Financial Statements.
KENTUCKY POWER COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited financial statements should be
read in conjunction with the 1994 Annual Report as incorporated
in and filed with the Form 10-K. Certain prior-period amounts
were reclassified to conform with current-period presentation.
2. FINANCING ACTIVITIES
In April 1995 the Company issued $40 million of 8.72%
Junior Subordinated Deferrable Interest Debentures Series A,
due 2025 and used the proceeds to reduce short-term debt.
3. RESTRUCTURING
On July 31, 1995 management announced plans to reduce
staffing at the Company's Big Sandy Power Plant. The plan is
part of an AEP restructuring program to realign functionally
all subsidiary company operations. Job reductions throughout
the Company's operations are expected to begin in the fall of
1995 and continue into 1996. Management is in the process of
undertaking implementation efforts and at this time is not in
a position to estimate the restructuring costs. The
restructuring effort is expected to result in charges in 1995
and 1996 which will adversely affect results of operations.
4. CONTINGENCIES
The Company continues to be involved in certain matters
discussed in the 1994 Annual Report.
KENTUCKY POWER COMPANY
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
SECOND QUARTER 1995 vs. SECOND QUARTER 1994
AND
YEAR-TO-DATE 1995 vs. YEAR-TO-DATE 1994
Net income decreased 47% to $2.5 million in the quarter and 18%
to $10.4 million in the year-to-date period primarily reflecting
decreased energy sales to wholesale customers due to mild weather
and an increase in interest expense due to additional long-term
borrowings.
Income statement items which changed significantly were:
Increase (Decrease)
Second Quarter Year-to-Date
(in millions) % (in millions) %
Operating Revenues . . . . . $(4.0) (5) $(5.1) (3)
Purchased Power Expense. . . (2.4) (11) (4.4) (9)
Other Operation. . . . . . . 2.2 22 3.4 18
Maintenance Expense. . . . . (1.2) (15) (3.8) (22)
Federal Income Taxes . . . . (1.2) N.M. (1.3) (48)
Interest Charges . . . . . . 0.9 17 1.5 14
N.M. - Not Meaningful
The decrease in operating revenues was due to decreased
wholesale energy sales to unaffiliated utilities reflecting the
effects of mild winter weather and cooler spring weather on energy
demand and the ability of those utilities to meet their demand with
their own generation.
The decrease in purchased power expense resulted from decreased
energy purchases from unaffiliated utilities for pass-through sales
due to the mild weather, decreased purchases from an affiliate
under a unit power agreement due to an outage and a reduction in
the cost of energy purchases from the AEP System Power Pool
reflecting increased availability of lower cost nuclear generation.
These decreases were partly offset by an increase in the Company's
share of AEP Power Pool capacity charges. As a Power Pool member
whose internal demand exceeds its capacity, the Company pays
capacity charges allocated to Power Pool members based on their
relative peak demands. An increase in the Company's prior twelve
month peak demand relative to the total peak demand of all Power
Pool members caused the increase in Power Pool capacity charges.
Other operation expense increased mainly due to increased
administrative expenses and higher accruals for uncollectible
accounts. The increase in administrative costs included severance
and incentive pay.
The decrease in maintenance expense resulted from the effect of
significant distribution line maintenance expenditures to repair
damage from severe winter storms in 1994 and a decrease in planned
steam plant maintenance.
The decrease in federal income tax expense attributable to
operations was primarily due to a decrease in pre-tax operating
income.
The increase in interest expense was due to the issuance in
April 1995 of $40 million of Junior Subordinated Debentures.
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
OPERATING REVENUES . . . . . . . . . . . . . $435,976 $417,352 $852,803 $904,393
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . 141,301 159,960 272,979 360,589
Purchased Power. . . . . . . . . . . . . . 9,561 17,648 29,803 38,158
Other Operation. . . . . . . . . . . . . . 82,106 52,803 141,806 102,706
Maintenance. . . . . . . . . . . . . . . . 36,302 36,935 71,200 73,080
Depreciation and Amortization. . . . . . . 33,839 32,852 67,729 65,582
Taxes Other Than Federal Income Taxes. . . 41,817 44,399 87,154 88,891
Federal Income Taxes . . . . . . . . . . . 23,180 17,000 46,933 44,772
TOTAL OPERATING EXPENSES . . . . . 368,106 361,597 717,604 773,778
OPERATING INCOME . . . . . . . . . . . . . . 67,870 55,755 135,199 130,615
NONOPERATING INCOME. . . . . . . . . . . . . 1,702 555 5,409 2,196
INCOME BEFORE INTEREST CHARGES . . . . . . . 69,572 56,310 140,608 132,811
INTEREST CHARGES . . . . . . . . . . . . . . 23,774 22,334 47,068 44,600
NET INCOME . . . . . . . . . . . . . . . . . 45,798 33,976 93,540 88,211
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . 3,893 3,825 7,718 7,650
EARNINGS APPLICABLE TO COMMON STOCK. . . . . $ 41,905 $ 30,151 $ 85,822 $ 80,561
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(in thousands)
BALANCE AT BEGINNING OF PERIOD . . . . . . . $492,248 $490,259 $483,222 $474,500
NET INCOME . . . . . . . . . . . . . . . . . 45,798 33,976 93,540 88,211
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . 34,857 34,617 69,714 69,234
Cumulative Preferred Stock . . . . . . . 3,825 3,825 7,650 7,650
Capital Stock Expense. . . . . . . . . . . 34 34 68 68
BALANCE AT END OF PERIOD . . . . . . . . . . $499,330 $485,759 $499,330 $485,759
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
/TABLE
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . . . . $ 2,531,595 $2,516,390
Transmission . . . . . . . . . . . . . . . . . . . . . . . 792,939 790,736
Distribution . . . . . . . . . . . . . . . . . . . . . . . 803,671 798,387
General (including mining assets). . . . . . . . . . . . . 723,724 782,719
Construction Work in Progress. . . . . . . . . . . . . . . 61,184 49,889
Total Electric Utility Plant . . . . . . . . . . . 4,913,113 4,938,121
Accumulated Depreciation and Amortization. . . . . . . . . 2,064,559 2,077,626
NET ELECTRIC UTILITY PLANT . . . . . . . . . . . . 2,848,554 2,860,495
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . . . . 110,764 120,856
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . . . . 55,568 30,700
Accounts Receivable. . . . . . . . . . . . . . . . . . . . 177,446 158,681
Allowance for Uncollectible Accounts . . . . . . . . . . . (1,579) (1,019)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,191 147,152
Materials and Supplies . . . . . . . . . . . . . . . . . . 70,989 67,719
Accrued Utility Revenues . . . . . . . . . . . . . . . . . 25,228 28,775
Prepayments. . . . . . . . . . . . . . . . . . . . . . . . 62,265 43,894
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . 558,108 475,902
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . . . . 562,786 540,080
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . . . . 96,395 153,807
TOTAL. . . . . . . . . . . . . . . . . . . . . . $ 4,176,607 $4,151,140
See Notes to Consolidated Financial Statements.
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 40,000,000 Shares
Outstanding - 27,952,473 Shares. . . . . . . . . . . . . $ 321,201 $ 321,201
Paid-in Capital. . . . . . . . . . . . . . . . . . . . . . 463,100 463,100
Retained Earnings. . . . . . . . . . . . . . . . . . . . . 499,330 483,222
Total Common Shareholder's Equity. . . . . . . . . 1,283,631 1,267,523
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . . . . 126,240 126,240
Subject to Mandatory Redemption. . . . . . . . . . . . . 115,000 115,000
Long-term Debt . . . . . . . . . . . . . . . . . . . . . . 1,089,253 1,188,319
TOTAL CAPITALIZATION . . . . . . . . . . . . . . . 2,614,124 2,697,082
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . . . . 189,510 181,446
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . . . . 99,667 670
Short-term Debt. . . . . . . . . . . . . . . . . . . . . . 91,350 17,235
Accounts Payable . . . . . . . . . . . . . . . . . . . . . 80,833 122,432
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . . 110,714 156,525
Interest Accrued . . . . . . . . . . . . . . . . . . . . . 22,530 22,681
Obligations Under Capital Leases . . . . . . . . . . . . . 26,351 25,314
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 85,051 95,218
TOTAL CURRENT LIABILITIES. . . . . . . . . . . . . 516,496 440,075
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . . . . . 724,603 712,646
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . . . . 41,476 42,828
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . . . . 90,398 77,063
CONTINGENCIES (Note 3)
TOTAL. . . . . . . . . . . . . . . . . . . . . . $4,176,607 $4,151,140
See Notes to Consolidated Financial Statements.
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
(in thousands)
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 93,540 $ 88,211
Adjustments for Noncash Items:
Depreciation, Depletion and Amortization . . . . . . . . . . 75,004 72,693
Deferred Income Taxes. . . . . . . . . . . . . . . . . . . . 19,058 (20,633)
Deferred Investment Tax Credits. . . . . . . . . . . . . . . (1,682) (1,773)
Deferred Fuel Costs (net). . . . . . . . . . . . . . . . . . (10,006) 4,189
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . . . (18,205) 5,334
Fuel, Materials and Supplies . . . . . . . . . . . . . . . . (24,309) 27,694
Accrued Utility Revenues . . . . . . . . . . . . . . . . . . 3,547 5,851
Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . (18,371) (15,068)
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . (41,599) (24,793)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . . . (45,811) (20,931)
Other (net). . . . . . . . . . . . . . . . . . . . . . . . . . 52,127 14,054
Net Cash Flows From Operating Activities . . . . . . . . 83,293 134,828
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . . . (56,777) (80,601)
Proceeds from Sale of Property and Other . . . . . . . . . . . 1,601 35,920
Net Cash Flows Used For Investing Activities . . . . . . (55,176) (44,681)
FINANCING ACTIVITIES:
Issuance of Long-term Debt . . . . . . . . . . . . . . . . . . - 48,251
Change in Short-term Debt (net). . . . . . . . . . . . . . . . 74,115 (16,747)
Retirement of Long-term Debt . . . . . . . . . . . . . . . . . - (54,425)
Dividends Paid on Common Stock . . . . . . . . . . . . . . . . (69,714) (69,234)
Dividends Paid on Cumulative Preferred Stock . . . . . . . . . (7,650) (7,650)
Net Cash Flows Used For Financing Activities . . . . . . (3,249) (99,805)
Net Increase (Decrease) in Cash and Cash Equivalents . . . . . . 24,868 (9,658)
Cash and Cash Equivalents at Beginning of Period . . . . . . . . 30,700 20,803
Cash and Cash Equivalents at End of Period . . . . . . . . . . . $ 55,568 $ 11,145
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $45,880,000 and $41,687,000 and
for income taxes was $34,447,000 and $46,274,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $17,504,000 and $27,189,000 in 1995 and
1994, respectively.
See Notes to Consolidated Financial Statements.
OHIO POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial state-
ments should be read in conjunction with the 1994 Annual
Report as incorporated in and filed with the Form 10-K.
2. RESTRUCTURING
On July 31, 1995 management announced plans to reduce
staffing at the Company's power plants. The plan is part of
an AEP restructuring program to realign functionally all
subsidiary company operations. Job reductions throughout
the Company's operations are expected to begin in the fall
of 1995 and continue into 1996. Management is in the
process of undertaking implementation efforts and at this
time is not in a position to estimate the restructuring
costs. The restructuring effort is expected to result in
charges in 1995 and 1996 which will adversely affect results
of operations.
3. CONTINGENCIES
The Company continues to be involved in certain matters
discussed in the 1994 Annual Report.
OHIO POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
SECOND QUARTER 1995 vs. SECOND QUARTER 1994
AND
YEAR-TO-DATE 1995 vs. YEAR-TO-DATE 1994
RESULTS OF OPERATIONS
Net income increased 35% or $11.8 million in the second
quarter and 6% or $5.3 million in the year-to-date period
primarily due to the favorable effect of a $12.7 million
adjustment to revenues recorded in June 1995 under a major
industrial contract.
Income statement items which changed significantly were:
Increase (Decrease)
Second Quarter Year-to-Date
(in millions) % (in millions) %
Operating Revenues . . . . $ 18.6 4 $(51.6) (6)
Fuel Expense . . . . . . . (18.7) (12) (87.6) (24)
Purchased Power Expense. . (8.1) (46) (8.4) (22)
Other Operation Expense. . 29.3 55 39.1 38
Federal Income Taxes . . . 6.2 36 2.2 5
Operating revenues rose in the second quarter reflecting the
adjustment to industrial revenues in June 1995, an increase in
retail base rates which was effective March 23, 1995 and a 2%
increase in total energy sales mainly due to growth in the number
of customers in all major retail customer classes and increased
usage by industrial customers.
Year-to-date operating revenues declined as a result of a
36% decrease in energy sales to wholesale customers resulting
from mild weather and increased availability of unaffiliated
generating units in 1995, and a reduction in energy sales to the
AEP System Power Pool. Energy supplied to the Power Pool was
reduced due to a decline in the Power Pool's energy requirements
reflecting the mild weather, maintenance and repair outages at
several of the Company's generating units in 1995, and the
availability during 1995 of an affiliate's two nuclear generating
units which had been out of service during 1994. Although energy
sales to weather sensitive residential customers decreased 3%,
total retail energy sales increased slightly due to a 3% rise in
energy sales to industrial customers mainly resulting from
increased usage due to a rise in production levels. Energy sales
to commercial customers remained constant.
The decreases in fuel expense in the second quarter and the
year-to-date period were due to a lower average cost of fuel
consumed and the effect of the abandonment of a dragline utilized
at an affiliated mining operation recorded in June 1994. The
significant decrease in fuel expense in the year-to-date period
was also attributable to decreased generation resulting from the
decline in energy demand and maintenance and repair outages at
several of the Company's generating units. Decreased energy
purchases from unaffiliated utilities for pass-through sales to
other unaffiliated utilities as a result of the milder weather in
1995 caused the substantial decline in purchased power expense.
Other operation expense increased in both periods due to
rent expense and other operating costs of the Gavin Plant's new
flue gas desulfurization systems which went into service in 1995,
increased employee benefit cost and regulatory-approved increases
in amortization, concurrent with rate recovery, of certain low-
income residential customers' payment programs.
The increase in both periods in federal income tax expense
attributable to operations was due to an increase in pre-tax
operating income. The year-to-date federal income tax expense
also increased due to changes in certain book/tax differences
which are accounted for on a flow-through basis.
FINANCIAL CONDITION
Total plant and property additions including capital leases
for the first six months of 1995 were $75 million.
During the first six months of 1995, there were no issuances
or retirements of long-term debt or preferred stock. Short-term
debt increased by $74 million since the beginning of the year.
RESTRUCTURING
As part of an AEP restructuring program, management
announced plans to reduce staffing at the Company's power plants.
The restructuring program, which is part of management's efforts
to prepare for increased competition, calls for the functional
realignment of all subsidiary company operations. Staffing
reductions throughout the Company's operations are expected to
begin in the fall of 1995 and continue throughout 1996.
Management is in the process of undertaking implementation
efforts and at this time is not in a position to estimate the
restructuring costs. The cost of the restructuring effort is
expected to adversely affect results of operations in 1995 and
1996.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Indiana Michigan Power Company ("I&M")
Reference is made to page 16 of the Annual Report on Form
10-K for the year ended December 31, 1994 ("1994 10-K") for a
discussion of the dismissal by the Federal Energy Regulatory
Commission ("FERC") of a complaint relating to the reasonableness
of coal costs from an unaffiliated supplier. On June 9, 1995,
the U.S. Court of Appeals for the District of Columbia Circuit
issued its decision upholding the FERC order.
Reference is made to pages 20 and 21 of the 1994 10-K and
page II-3 of the Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995 for a discussion of the disposal of nuclear
waste from the D.C. Cook Nuclear Plant. On May 30, 1995, I&M
filed a petition for review in the U.S. Court of Appeals for the
District of Columbia Circuit requesting that the court issue a
declaration that the Nuclear Waste Policy Act of 1982 imposes on
the U.S. Department of Energy ("DOE") an unconditional obligation
to begin acceptance of spent nuclear fuel and high level radioac-
tive waste by January 31, 1998. I&M also seeks, if warranted,
relief from the financial burden of fees being paid to DOE.
Reference is made to page 34 of the 1994 10-K for a discus-
sion of a complaint issued by Region V, U.S. Environmental
Protection Agency ("Federal EPA") which alleged violations by
Breed Plant of the Clean Water Act and proposed a penalty of
$70,000, which demand was subsequently reduced to $40,000. In
July 1995, I&M paid a civil penalty of $22,500 to settle this
matter.
Ohio Power Company ("OPCo")
Reference is made to page 34 of the 1994 10-K for a dis-
cussion of proceedings instituted by Federal EPA alleging that
OPCo's Kammer Plant has been operating in violation of applicable
federally enforceable air pollution control requirements for
sulfur dioxide since January 1, 1989. On July 7, 1995, the U.S.
District Court for the Northern District of West Virginia entered
an agreed order modifying the consent decree and extending the
Kammer compliance deadline from September 1, 1995 to January 15,
1996.
Item 4. Submission of Matters to a Vote of Security Holders.
American Electric Power Company, Inc. ("AEP")
The annual meeting of shareholders was held in Findlay, Ohio
on April 26, 1995. The holders of shares entitled to vote at the
meeting or their proxies cast votes at the meeting with respect
to the following two matters, as indicated below:
1. Election of 12 directors to hold office until the next
annual meeting and until their successors are duly
elected. Each nominee for director was elected by a
vote of the shareholders as follows:
Number of Shares Number of
Nominee Voted For Votes Withheld
Peter J. DeMaria 146,993,578 1,844,021
E. Linn Draper, Jr. 146,875,616 1,961,983
Robert M. Duncan 146,752,540 2,085,059
Arthur G. Hansen 146,510,534 2,327,065
Lester A. Hudson, Jr. 146,951,132 1,886,467
Gerald P. Maloney 146,996,140 1,841,459
Angus E. Peyton 146,877,724 1,959,875
Toy F. Reid 146,729,742 2,107,857
Donald G. Smith 146,829,596 2,008,003
Linda Gillespie Stuntz 145,635,993 3,201,606
Morris Tanenbaum 146,860,750 1,976,849
Ann Haymond Zwinger 146,594,471 2,243,128
2. Approve the appointment by the Board of Directors of
Deloitte & Touche LLP as independent auditors of AEP for
the year 1995. The proposal was approved by a vote of
the shareholders as follows:
Votes FOR 146,826,002
Votes AGAINST 892,732
Votes ABSTAINED 1,118,865
Broker NON-VOTES* 0
*A non-vote occurs when a nominee holding shares for a
beneficial owner votes on one proposal, but does not
vote on another proposal because the nominee does not
have discretionary voting power and has not received
instructions from the beneficial owner.
Appalachian Power Company ("APCo")
The annual meeting of stockholders was held on April 25,
1995 at 1 Riverside Plaza, Columbus, Ohio. At the meeting,
13,499,500 votes were cast FOR each of the following eight
persons for election as directors and there were no votes with-
held and such persons were elected directors to hold office for
one year or until their successors are elected and qualify:
Peter J. DeMaria William J. Lhota
E. Linn Draper, Jr. Gerald P. Maloney
Henry W. Fayne James J. Markowsky
Luke M. Feck Joseph H. Vipperman
No other business was transacted at the meeting.
I&M
The annual meeting of stockholders was held on April 25,
1995 at the principal office of I&M in Fort Wayne, Indiana. At
the meeting, 1,400,000 votes were cast FOR each of the following
eleven persons for election as directors and there were no votes
withheld and such persons were elected directors to hold office
for one year or until their successors are elected and qualify:
Mark A. Bailey Gerald P. Maloney
G. A. Clark James J. Markowsky
Peter J. DeMaria Richard C. Menge
W. N. D'Onofrio Albert H. Potter
E. Linn Draper, Jr. D. B. Synowiec
William J. Lhota
No other business was transacted at the meeting.
OPCo
The annual meeting of shareholders was held on May 2, 1995
at the principal office of OPCo in Canton, Ohio. At the meeting,
27,952,473 votes were cast FOR each of the following seven
persons for election as directors and there were no votes with-
held and such persons were elected directors to hold office for
one year or until their successors are elected and qualify:
Peter J. DeMaria William J. Lhota
E. Linn Draper, Jr. Gerald P. Maloney
Carl A. Erikson James J. Markowsky
Henry W. Fayne
No other business was transacted at the meeting.
Item 5. Other Information.
AEP, AEP Generating Company ("AEGCo"), APCo, Columbus Southern
Power Company ("CSPCo"), I&M, Kentucky Power Company ("KEPCo")
and OPCo
Reference is made to pages 2 and 3 of the 1994 10-K for a
discussion of possible changes to the Public Utility Holding
Company Act of 1935, as amended ("PUHCA"). On June 20, 1995, the
Securities and Exchange Commission released a report from its
Division of Investment Management recommending conditional repeal
of PUHCA by Congress, with specific federal authority preserved
to protect energy consumers. This specific authority would be
transferred to the FERC and would include access to the books and
records of holding company systems, audit authority over holding
companies and their subsidiaries and oversight over affiliate
transactions.
Reference is made to pages 5 and 6 of the 1994 10-K and
pages II-1 and II-2 of the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995 for a discussion of AEP's transmis-
sion access filing. On July 19, 1995, APCo, CSPCo, I&M, KEPCo
and OPCo and two other AEP System companies filed an offer of
settlement with the FERC, proposing to adopt the pro-forma point-
to-point and network transmission tariffs contained in the FERC's
Notice of Proposed Rulemaking of March 29, 1995. The proposed
tariffs will be modified, if necessary, to conform to the final
rules.
Reference is made to page 8 of the 1994 10-K for a discus-
sion of a declaratory judgment action filed by Detroit Edison, an
unaffiliated utility, in the U.S. District Court, challenging the
jurisdiction of the Michigan Public Service Commission ("MPSC")
to order retail wheeling. On May 8, 1995, the court granted a
motion by the MPSC to dismiss the Detroit Edison complaint on the
basis that the court lacked jurisdiction.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
APCo, CSPCo, I&M, KEPCo and OPCo
Exhibit 12 - Statement re: Computation of Ratios.
AEP, AEGCo, APCo, CSPCo, I&M, KEPCo and OPCo
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K:
AEP, AEGCo, APCo, CSPCo, I&M, KEPCo and OPCo
No reports on Form 8-K were filed during the quarter
ended June 30, 1995.
In the opinion of the companies, the financial statements contained
herein reflect all adjustments (consisting of only normal recurring accruals)
which are necessary to a fair presentation of the results of operations for
the interim periods.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. The signatures for each undersigned
company shall be deemed to relate only to matters having reference to such
company and any subsidiaries thereof.
AMERICAN ELECTRIC POWER COMPANY, INC.
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Treasurer
and Secretary
AEP GENERATING COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
APPALACHIAN POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
COLUMBUS SOUTHERN POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
INDIANA MICHIGAN POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
KENTUCKY POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
OHIO POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
Date: August 9, 1995
EX-12
2
EXHIBIT 12
APPALACHIAN POWER COMPANY
Computation of Consolidated Ratio of Earnings to Fixed Charges
(in thousands except ratio data)
Twelve
Months
Year Ended December 31, Ended
1990 1991 1992 1993 1994 6/30/95
Fixed Charges:
Interest on First Mortgage Bonds. . . . . . . . $66,403 $ 72,800 $ 84,177 $ 80,472 $ 75,815 $ 77,768
Interest on Other Long-term Debt. . . . . . . . 19,637 18,282 17,986 16,846 16,415 16,414
Interest on Short-term Debt . . . . . . . . . . 1,633 3,089 1,792 1,615 3,366 5,126
Miscellaneous Interest Charges. . . . . . . . . 1,999 3,011 2,617 2,954 3,913 4,239
Estimated Interest Element in Lease Rentals . . 5,300 5,700 6,700 7,900 7,700 7,700
Total Fixed Charges. . . . . . . . . . . . $94,972 $102,882 $113,272 $109,787 $107,209 $111,247
Earnings:
Net Income. . . . . . . . . . . . . . . . . . . $107,988 $140,419 $131,419 $125,132 $102,345 $ 96,228
Plus Federal Income Taxes . . . . . . . . . . . 41,194 47,227 46,017 51,681 39,599 40,800
Plus State Income Taxes . . . . . . . . . . . . 5,878 3,650 2,649 8,887 5,910 6,649
Plus Fixed Charges (as above) . . . . . . . . . 94,972 102,882 113,272 109,787 107,209 111,247
Total Earnings . . . . . . . . . . . . . . $250,032 $294,178 $293,357 $295,487 $255,063 $254,924
Ratio of Earnings to Fixed Charges. . . . . . . . 2.63 2.85 2.58 2.69 2.37 2.29
EX-27
3
ARTICLE UT FIN. DATA SCH. FOR 10-Q
UT
0000006879
APPALACHIAN POWER COMPANY
1,000
6-MOS
DEC-31-1994
JUN-30-1995
PER-BOOK
2,813,312
30,781
322,820
59,754
435,209
3,661,876
260,458
509,683
195,165
965,306
190,300
55,000
1,278,163
1,575
0
110,900
7,251
85
36,066
10,916
1,006,314
3,661,876
747,473
33,857
605,633
639,490
107,983
(4,639)
103,344
52,921
50,423
8,201
42,222
53,418
39,782
97,168
0
0
All common stock owned by parent company; no EPS required.