-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, SiBqU5EbY7ZDrzY/ENu50TAZdQXLfphx4ExZ8KTMjZlGx+8Qf++8JaA1hPyaqyO3 +C3reA7Wy5nYENHsDlbXUg== 0000018540-95-000083.txt : 19950516 0000018540-95-000083.hdr.sgml : 19950516 ACCESSION NUMBER: 0000018540-95-000083 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWESTERN ELECTRIC POWER CO CENTRAL INDEX KEY: 0000092487 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 720323455 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03146 FILM NUMBER: 95539660 BUSINESS ADDRESS: STREET 1: 428 TRAVIS ST CITY: SHREVEPORT STATE: LA ZIP: 71156 BUSINESS PHONE: 3182222141 10-Q 1 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 Quarter Ended March 31, 1995 OR ( ) 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. 1-1443 Central and South West Corporation 51-0007707 (A Delaware Corporation) 1616 Woodall Rodgers Freeway Dallas, Texas 75202-1234 (214) 777-1000 0-346 Central Power and Light Company 74-0550600 (A Texas Corporation) 539 North Carancahua Street Corpus Christi, Texas 78401-2802 (512) 881-5300 0-343 Public Service Company of Oklahoma 73-0410895 (An Oklahoma Corporation) 212 East 6th Street Tulsa, Oklahoma 74119-1212 (918) 599-2000 1-3146 Southwestern Electric Power Company 72-0323455 (A Delaware Corporation) 428 Travis Street Shreveport, Louisiana 71156-0001 (318) 222-2141 0-340 West Texas Utilities Company 75-0646790 (A Texas Corporation) 301 Cypress Street Abilene, Texas 79601-5820 (915) 674-7000 Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 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 Common Stock Outstanding at April 30, 1995 Shares Central and South West Corporation 191,225,584 Central Power and Light Company 6,755,535 Public Service Company of Oklahoma 9,013,000 Southwestern Electric Power Company 7,536,640 West Texas Utilities Company 5,488,560 This combined Form 10-Q is separately filed by Central and South West Corporation, Central Power and Light Company, Public Service Company of Oklahoma, Southwestern Electric Power Company and West Texas Utilities Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each other registrant makes no representation as to information relating to the other registrants. 2 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES INDEX TO QUARTERLY REPORT ON FORM 10-Q MARCH 31, 1995 Page Number GLOSSARY OF TERMS 3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. (Unaudited) 4 Central and South West Corporation and Subsidiary Companies 5 Consolidated Statements of Income 6 Consolidated Balance Sheets 7 Consolidated Statements of Cash Flows 9 Results of Operations 10 Central Power and Light Company 12 Statements of Income 13 Balance Sheets 14 Statements of Cash Flows 16 Results of Operations 17 Public Service Company of Oklahoma 19 Consolidated Statements of Income 20 Consolidated Balance Sheets 21 Consolidated Statements of Cash Flows 23 Results of Operations 24 Southwestern Electric Power Company 25 Statements of Income 26 Balance Sheets 27 Statements of Cash Flows 29 Results of Operations 30 West Texas Utilities Company 31 Statements of Income 32 Balance Sheets 33 Statements of Cash Flows 35 Results of Operations 36 Notes to Financial Statements 37 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 45 PART II - OTHER INFORMATION Item 1. Legal Proceedings. 47 Item 2. Changes in Securities. Inapplicable Item 3. Defaults Upon Senior Securities. Inapplicable Item 4. Submission of Matters to a Vote of Security-Holders. 50 Item 5. Other Information. 53 Item 6. Exhibits and Reports on Form 8-K. 58 Signatures. 59 3 GLOSSARY OF TERMS The following abbreviations or acronyms used in this text are defined below: Abbreviation or Acronym Definition Agreement in Principle....... Agreement in Principle to settle certain CPL regulatory matters ALJ.......................... Administrative Law Judge ANI.......................... American Nuclear Insurance APS.......................... Arizona Public Service Company Bankruptcy Court............. United States Bankruptcy Court for the Western District of Texas, Austin Division, before which the El Paso bankruptcy reorganization proceeding, Case No. 92-10148-FM, is pending Burlington Northern.......... Burlington Northern Railroad Company Cimmaron..................... Cimmaron Chemical Company Cities....................... Several cities in CPL's service territory Court of Appeals............. Court of Appeals, Third District of Texas, Austin, Texas CPL.......................... Central Power and Light Company, Corpus Christi, Texas CSW.......................... Central and South West Corporation, Dallas, Texas CSW Common................... Central and South West Corporation common stock, $3.50 par value per share CSWE......................... CSW Energy, Inc., Dallas, Texas CSW System................... Central and South West Corporation and subsidiaries CWIP......................... Construction work in progress Effective Date............... The effective date of the Modified Plan Electric Operating Companies. CPL, PSO, SWEPCO and WTU El Paso...................... El Paso Electric Company FPA.......................... Federal Power Act FERC......................... Federal Energy Regulatory Commission Holding Company Act.......... Public Utility Holding Company Act of 1935, as amended HSR Act...................... Hart-Scott-Rodino Antitrust Improvements Act of 1976 Kwh.......................... Kilowatt-hour Las Cruces................... City of Las Cruces, New Mexico MCPC......................... Mid-Continent Power Company MDEQ......................... Mississippi Department of Environmental Quality Merger....................... The proposed merger whereby El Paso would become a wholly owned subsidiary of CSW Merger Agreement............. Agreement and Plan of Merger between El Paso and CSW, dated as of May 8, 1993, as amended MGP.......................... Manufactured gas plant or coal gasification plant Mmbtu........................ Million Btu Modified Plan................ Modified Third Amended Plan of Reorganization Mw........................... Megawatt Mwh.......................... Megawatt- hour NEIL......................... Nuclear Electric Insurance Limited New Mexico Commission........ New Mexico Public Utility Commission NRC.......................... Nuclear Regulatory Commission Oklahoma Commission.......... Corporation Commission of the State of Oklahoma Oklaunion.................... Oklaunion Power Station Unit No. 1 Palo Verde................... Palo Verde Nuclear Generating Station PRP.......................... Potentially Responsible Party PSO.......................... Public Service Company of Oklahoma, Tulsa, Oklahoma RCRA......................... Federal Resource and Conservation Recovery Act of 1976 RFP.......................... Rate Filing Package SEC.......................... Securities and Exchange Commission SPS.......................... Southwestern Public Service Company STP.......................... South Texas Project nuclear electric generating station SWEPCO....................... Southwestern Electric Power Company, Shreveport, Louisiana Termination Date............. Merger Agreement termination June 8, 1995 Texas Commission............. Public Utility Commission of Texas TNRCC........................ Texas Natural Resource Conservation Commission Transok...................... Transok, Inc. and subsidiaries, Tulsa, Oklahoma Westinghouse................. Westinghouse Electric Corporation WTU.......................... West Texas Utilities Company, Abilene, Texas 4 PART I. FINANCIAL INFORMATION. Item 1. Financial Statements. (unaudited) 5 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES 6 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1995 1994 (Millions, except per share amounts) REVENUES Electric operating revenues $ 514 $ 673 Gas 136 172 Other diversified 9 5 659 850 OPERATING EXPENSES AND TAXES Fuel and purchased power 235 290 Gas purchased for resale 72 110 Gas extraction and marketing 28 22 Other operating 109 143 Maintenance 37 41 Depreciation and amortization 94 87 Taxes, other than federal income 37 49 Federal income taxes (43) 15 569 757 OPERATING INCOME 90 93 OTHER INCOME AND DEDUCTIONS Mirror CWIP liability amortization 10 17 Other 25 6 35 23 INCOME BEFORE INTEREST CHARGES 125 116 INTEREST CHARGES Interest on long-term debt 56 53 Interest on short-term debt and other 25 15 81 68 NET INCOME 44 48 Preferred stock dividends 5 5 NET INCOME FOR COMMON STOCK $ 39 $ 43 AVERAGE COMMON SHARES OUTSTANDING 190.8 188.5 EARNINGS PER SHARE OF COMMON STOCK $ 0.20 $ 0.23 DIVIDENDS PAID PER SHARE OF COMMON STOCK $ 0.430 $ 0.425 The accompanying notes to consolidated financial statements as they relate to CSW are an integral part of these statements. 7 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Millions) ASSETS PLANT Electric utility Production $ 5,809 $ 5,802 Transmission 1,393 1,377 Distribution 2,573 2,539 General 773 764 Construction work in progress 422 412 Nuclear fuel 161 161 Total electric 11,131 11,055 Gas 809 798 Other diversified 31 15 11,971 11,868 Less - Accumulated depreciation 3,961 3,870 8,010 7,998 CURRENT ASSETS Cash and temporary cash investments 34 27 Accounts receivable 661 837 Materials and supplies, at average cost 163 162 Electric fuel inventory, substantially at average cost 132 118 Gas inventory/products for resale 17 23 Under-recovered fuel costs -- 54 Accumulated deferred income taxes 34 2 Prepayments and other 35 42 1,076 1,265 DEFERRED CHARGES AND OTHER ASSETS Deferred plant costs 515 516 Mirror CWIP asset 319 322 Other non-utility investments 314 394 Income tax related regulatory assets, net 276 216 Other 306 274 1,730 1,722 $ 10,816 $ 10,985 The accompanying notes to consolidated financial statements as they relate to CSW are an integral part of these statements. 8 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Millions) CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock: $3.50 par value Authorized: 350,000,000 shares Issued and outstanding: 191.2 million shares in 1995 and 190.6 million shares in 1994 $ 669 $ 667 Paid-in capital 573 561 Retained earnings 1,781 1,824 Total Common Stock Equity 3,023 3,052 Preferred stock Not subject to mandatory redemption 292 292 Subject to mandatory redemption 35 35 Long-term debt 2,956 2,940 TOTAL CAPITALIZATION 6,306 6,319 CURRENT LIABILITIES Long-term debt and preferred stock due within twelve months 33 7 Short-term debt 897 910 Short-term debt - CSW Credit, Inc. 527 573 Accounts payable 216 286 Accrued taxes 62 111 Accrued interest 42 61 Refund due customers 52 -- Over-recovered fuel costs 57 21 Other 115 138 2,001 2,107 DEFERRED CREDITS Income taxes 2,102 2,048 Investment tax credits 317 320 Mirror CWIP liability and other 90 191 2,509 2,559 $ 10,816 $ 10,985 The accompanying notes to consolidated financial statements as they relate to CSW are an integral part of these statements. 9 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1995 1994 (Millions) OPERATING ACTIVITIES Net Income $ 44 $ 48 Non-cash Items Included in Net Income Depreciation and amortization 105 94 Deferred income taxes and investment tax credits (43) 20 Mirror CWIP liability amortization (10) (17) Restructuring charges (23) -- Changes in Assets and Liabilities Accounts receivable 23 29 Over and under- recoveries of fuel 90 (9) Accounts payable (62) (39) Accrued taxes (49) (35) Refund due customers 52 -- Other (34) 16 93 107 INVESTING ACTIVITIES Capital expenditures and acquisitions (100) (121) Non-affiliated accounts receivable collections 52 49 CSWE projects 61 68 Other (7) (9) 6 (13) FINANCING ACTIVITIES Common stock sold 15 9 Proceeds from issuance of long-term debt 40 40 Retirement of long-term debt (1) (1) Reacquisition of long-term debt -- (14) Redemption of preferred stock -- (4) Change in short-term debt (59) (30) Payment of dividends (87) (85) (92) (85) NET CHANGE IN CASH AND CASH EQUIVALENTS 7 9 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 27 62 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 34 $ 71 SUPPLEMENTARY INFORMATION Interest paid less amounts capitalized $ 89 $ 72 Income taxes paid $ 2 $ 6 The accompanying notes to consolidated financial statements as they relate to CSW are an integral part of these statements. 10 CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES Set forth below is information concerning the consolidated results of operations for CSW for the three month period ending March 31, 1995. For information concerning the results of operations for each of the Electric Operating Companies, see the discussions below under the heading RESULTS OF OPERATIONS following the financial statements of each of the Electric Operating Companies. RESULTS OF OPERATIONS COMPARISON OF THE QUARTERS ENDED MARCH 31, 1995 AND 1994 Net Income for Common Stock. Net income for common stock decreased 9% to $39 million during the first quarter of 1995 from $43 million during the first quarter of 1994. Earnings per share decreased to $0.20 from $0.23. The decrease reflects the impact of the Agreement in Principle to settle CPL regulatory matters, increased depreciation and amortization, increased interest costs and lower earnings from mirror CWIP amortization. Partially offsetting these factors were reduced operations and maintenance costs and lower ad valorem taxes. See NOTE 2. Litigation and Regulatory Proceedings for information related to the Agreement in Principle. Operating Revenues. Operating revenues decreased 23% to $659 million from $850 million. This decrease reflects $50 million of reserves for refunds and a $62.3 million write-off of fuel under- recovery recorded in the first quarter of 1995, as a result of the Agreement in Principle. In addition fuel revenues were lower in the first quarter of 1995 as compared to the first quarter of 1994, as described below. Total retail Kwh sales increased 2.6% in the first quarter of 1995 as compared to the first quarter of 1994. Commercial sales were up 2.2% and industrial sales were up 5%, while residential sales decreased by less than 1%. Gas revenues decreased 21% to $136 million or during the first quarter of 1995 from $172 million in the fourth quarter of 1994. This decrease was due to lower gas prices and lower gas volumes. Fuel and Purchased Power. Total fuel and purchased power expense decreased 19% to $235 million from $290 million. Total fuel expense decreased $50 million due to lower fuel cost. The total composite unit cost of fuel decreased 24% to $1.60 Mmbtu from $2.11 Mmbtu, reflecting lower gas, coal and lignite prices and increased use of less costly nuclear fuel. Purchased power decreased $5 million or 33% in the first quarter of 1995 as compared to the first quarter of 1994 due to increased generation from STP which replaced power that had been purchased during the first quarter of 1994 when STP was out of service. Gas Purchased for Resale. Gas purchased for resale decreased 35% to $72 million from $110 million. This decrease was due to a lower average cost of gas. Other Operating. Other operating expense decreased 24% to $109 million from $143 million. This decrease was primarily due to the recognition of a $23.3 million regulatory asset for previously recorded restructuring charges. Also contributing to the decrease is the reversal of $4.3 million in rate case costs pursuant to the Agreement in Principle and a reduction in employee related costs. Maintenance. Maintenance decreased 10% to $37 million from $41 million. This decrease was due to lower levels of maintenance activity at all the Electric Operating Companies, including lower levels of maintenance associated with STP. Maintenance expenditures at STP were lower in 1995 than the comparable period in 1994, but are 11 expected to remain at higher levels than before the 1993-1994 STP outage. Depreciation and Amortization. Depreciation and amortization increased 7% from $87 million to $94 million due to increases in all classes of depreciable plant. Taxes, Other than Federal Income. Taxes other than Federal income decreased 24% to $37 million from $49 million. This decrease was due primarily to lower ad valorem tax expense as a result of a true up to prior years estimates. Federal Income Taxes. Federal income taxes decreased $58 million during the first quarter of 1995 when compared to the first quarter of 1994. This decrease includes a reduction of deferred federal income taxes of $34 million, resulting from the Agreement in Principle as well as lower pre-tax income. Mirror CWIP Liability Amortization. Mirror CWIP liability amortization decreased 41% to $10 million from $17 million. The decrease reflects the original liability amortization schedule agreed upon in the settlement of CPL rate cases in 1990 and 1991. Other. Other income increased $18 million. This increase was due primarily to recognition of $8.1 million of previously deferred factoring income pursuant to the Agreement in Principle. Other income also increased $3.2 million as a result of the $2.7 million net gain on the sale by PSO of a non-utility fiber-optic telecommunication property. Interest on Short-Term Debt and Other. Interest on short-term debt and other increased $12 million during the first quarter of 1995 as compared to the first quarter of 1994. This increase reflects higher levels of short-term borrowing and higher short-term interest rates. 12 CENTRAL POWER AND LIGHT COMPANY 13 CENTRAL POWER AND LIGHT COMPANY STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) ELECTRIC OPERATING REVENUES $127,282 $263,229 OPERATING EXPENSES AND TAXES Fuel 60,064 78,024 Purchased power 3,071 15,799 Other operating 23,534 54,774 Maintenance 17,205 18,559 Depreciation and amortization 37,000 34,301 Taxes, other than Federal income 9,475 19,919 Federal income taxes (53,623) 4,910 96,726 226,286 OPERATING INCOME 30,556 36,943 OTHER INCOME AND DEDUCTIONS Mirror CWIP liability amortization 10,250 17,000 Other 8,096 1,038 18,346 18,038 INCOME BEFORE INTEREST CHARGES 48,902 54,981 INTEREST CHARGES Interest on long-term debt 28,560 26,679 Interest on short-term debt and other 5,299 3,969 Allowance for borrowed funds used during construction (1,319) (653) 32,540 29,995 NET INCOME 16,362 24,986 Preferred stock dividends 3,896 3,458 NET INCOME FOR COMMON STOCK $ 12,466 $ 21,528 The accompanying notes to financial statements as they relate to CPL are an integral part of these statements. 14 CENTRAL POWER AND LIGHT COMPANY BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) ASSETS ELECTRIC UTILITY PLANT Production $3,076,059 $3,070,005 Transmission 456,941 451,050 Distribution 842,008 828,350 General 219,567 216,888 Construction work in progress 144,154 142,724 Nuclear fuel 161,114 161,152 4,899,843 4,870,169 Less - Accumulated depreciation and amortization 1,437,831 1,400,343 3,462,012 3,469,826 CURRENT ASSETS Cash 1,325 642 Special deposits 668 668 Accounts receivable 44,684 29,865 Materials and supplies, at average cost 65,922 66,209 Fuel inventory, at average cost 24,541 22,916 Accumulated deferred income taxes 12,650 -- Under-recovered fuel costs -- 54,126 Prepayments and other 1,754 2,316 151,544 176,742 DEFERRED CHARGES AND OTHER ASSETS Deferred STP costs 488,775 488,987 Mirror CWIP asset 319,320 321,825 Income tax related regulatory assets, net 346,298 288,444 Other 104,148 76,875 1,258,541 1,176,131 $4,872,097 $4,822,699 The accompanying notes to financial statements as they relate to CPL are an integral part of these statements. 14 CENTRAL POWER AND LIGHT COMPANY BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $25 par value, authorized 12,000,000 shares; issued and outstanding 6,755,535 shares $ 168,888 $ 168,888 Paid-in capital 405,000 405,000 Retained earnings 834,933 857,466 Total Common Stock Equity 1,408,821 1,431,354 Preferred stock 250,351 250,351 Long-term debt 1,468,001 1,466,393 TOTAL CAPITALIZATION 3,127,173 3,148,098 CURRENT LIABILITIES Long-term debt due within twelve months 723 723 Advances from affiliates 214,663 161,320 Accounts payable 43,410 75,051 Accrued taxes 20,647 59,386 Accumulated deferred income taxes -- 13,812 Accrued interest 26,271 24,681 Over-recovered fuel costs 22,277 -- Refund due customers 52,250 -- Other 25,169 31,476 405,410 366,449 DEFERRED CREDITS Accumulated deferred income taxes 1,126,418 1,087,317 Investment tax credits 157,085 158,533 Mirror CWIP liability and other 56,011 62,302 1,339,514 1,308,152 $4,872,097 $4,822,699 The accompanying notes to financial statements as they relate to CPL are an integral part of these statements. 16 CENTRAL POWER AND LIGHT COMPANY STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) OPERATING ACTIVITIES Net Income $16,362 $24,986 Non-cash Items Included in Net Income Depreciation and amortization 43,984 37,414 Deferred income taxes and investment tax credits (46,663) 10,671 Mirror CWIP liability amortization (10,250) (17,000) Restructuring charges (23,330) -- Changes in Assets and Liabilities Accounts receivable (14,819) 5,889 Fuel inventory (1,625) (4,108) Accounts payable (31,641) (1,231) Accrued taxes (38,739) (31,157) Over- and under-recovered fuel costs 76,403 (10,556) Refund due customers 52,250 -- Other (3,994) (4,444) 17,938 10,464 INVESTING ACTIVITIES Construction expenditures (31,437) (36,472) Allowance for borrowed funds used during construction (1,319) (653) (32,756) (37,125) FINANCING ACTIVITIES Retirement of preferred stock -- (3,581) Change in advances from affiliates 53,342 53,733 Payment of dividends (37,841) (23,326) 15,501 26,826 NET CHANGE IN CASH AND CASH EQUIVALENTS 683 165 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 642 2,435 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,325 $ 2,600 SUPPLEMENTARY INFORMATION Interest paid less amounts capitalized $29,056 $31,168 Income taxes paid/(refunded) $ -- $ -- The accompanying notes to financial statements as they relate to CPL are an integral part of these statements. 17 CENTRAL POWER AND LIGHT COMPANY RESULTS OF OPERATIONS COMPARISON OF THE QUARTERS ENDED MARCH 31, 1995 AND 1994 Net Income for Common Stock. Net income for common stock decreased 42% to $12.5 million during the first quarter of 1995 from $21.5 million in the first quarter of 1994. The decrease was due primarily to the Agreement in Principle associated with several pending regulatory proceedings. See NOTE 2. Litigation and Regulatory Proceedings for information related to the Agreement in Principle. Electric Operating Revenues. Total revenues decreased $135.9 million, or 52%, in the first quarter of 1995 as compared to the first quarter of 1994 due primarily to a $50.0 million reserve for refund and a $62.3 million write-off of under-recovered fuel costs as a result of the Agreement in Principle. Under the Agreement in Principle, CPL will provide customers a one-time base rate refund of $50.0 million. In addition, CPL will not charge customers for $62.3 million in replacement power costs associated with the 1993-1994 STP outage. Also contributing to the decrease in revenue was a $31.0 million decrease in fuel revenue resulting from lower average unit fuel costs and purchased power as discussed below. Partially offsetting the decrease in fuel revenue was a $4.5 million increase in base revenue which reflected a 5% increase in retail Kwh sales and a 39% increase in lower margin sales for resale. The increase in retail sales is due primarily to warmer weather as well as customer growth. The increase in sales for resale is attributable to the increased availability of lower cost generating capacity and warmer weather. Fuel. Fuel expense decreased $18.0 million, or 23%, during the first quarter of 1995 as compared to the first quarter of 1994. The decrease in fuel expense was due primarily to a decrease in the average unit cost of fuel from $2.23 per Mmbtu in the first quarter of 1994 to $1.37 per Mmbtu in the first quarter of 1995 resulting from a decrease in the cost of gas and increased usage of lower unit cost nuclear fuel. The decrease in the cost of fuel was partially offset by a 26% increase in generation attributable to the restart of STP Unit 1 and Unit 2 in February and May 1994, respectively. Purchased Power. Purchased power decreased $12.7 million during the first quarter of 1995 as compared to the first quarter of 1994 due to increased generation at STP which replaced power that had been purchased during the first quarter of 1994 when STP was out of service. Other Operating. Other operating expense decreased $31.2 million or 57% during the first quarter of 1995 as compared to the first quarter of 1994. This decrease was primarily due to the recognition of a $23.3 million regulatory asset for previously recorded restructuring charges. Also contributing to the decrease is the reversal of $4.3 million in rate case costs pursuant to the Agreement in Principle and a reduction in employee related costs. Maintenance. Maintenance expense decreased $1.4 million, or 7%, during the first quarter of 1995 as compared to the first quarter of 1994, due primarily to decreases in transmission, distribution and nuclear maintenance expenses partially offset by higher steam maintenance expenses. Depreciation and Amortization. Depreciation and amortization increased $2.7 million, or 8%, during the first quarter of 1995 as compared to the first quarter of 1994 as a result of higher depreciable plant assets and the amortization of restructuring charges associated with the Agreement in Principle. 18 Taxes, Other than Federal Income. The $10.4 million decrease in other taxes during the first quarter of 1995 as compared to the first quarter of 1994 was due primarily to lower ad valorem tax expenses resulting from true up of prior year estimates. Federal Income Taxes. Federal income taxes decreased $58.5 million in the first quarter of 1995 as compared to the first quarter of 1994 due primarily to the accelerated flowback of $34.3 million of unprotected excess deferred income taxes in accordance with the Agreement in Principle, as well as lower pre-tax income. Other Income and Deductions. The Mirror CWIP liability amortization decreased $6.8 million when compared to the first quarter of 1994. CPL is amortizing its mirror CWIP liability in declining amounts over the years 1991 through 1995. The increase in other income was also due to the recognition during the first quarter of $8.1 million of factoring income pursuant to the Agreement in Principle. Interest Charges. Long-term debt interest expense increased $1.9 million during the first quarter of 1995 as compared to the first quarter of 1994 as a result of increased debt outstanding. 19 PUBLIC SERVICE COMPANY OF OKLAHOMA 20 PUBLIC SERVICE COMPANY OF OKLAHOMA CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) ELECTRIC OPERATING REVENUES $148,416 $157,509 OPERATING EXPENSES AND TAXES Fuel 70,473 70,086 Purchased power 4,743 13,115 Other operating 29,868 30,626 Maintenance 6,313 8,046 Depreciation and amortization 16,485 15,403 Taxes, other than Federal income 6,732 6,624 Federal income taxes 954 1,182 135,568 145,082 OPERATING INCOME 12,848 12,427 OTHER INCOME AND DEDUCTIONS Allowance for equity funds used during construction 480 96 Other 2,688 (102) 3,168 (6) INCOME BEFORE INTEREST CHARGES 16,016 12,421 INTEREST CHARGES Interest on long-term debt 7,399 7,398 Interest on short-term debt and other 1,766 989 Allowance for borrowed funds used during construction (598) (273) 8,567 8,114 NET INCOME 7,449 4,307 Preferred stock dividends 204 204 NET INCOME FOR COMMON STOCK $ 7,245 $ 4,103 The accompanying notes to consolidated financial statements as they relate to PSO are an integral part of these statements. 21 PUBLIC SERVICE COMPANY OF OKLAHOMA CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) ASSETS ELECTRIC UTILITY PLANT Production $ 902,929 $ 902,602 Transmission 346,433 346,433 Distribution 668,346 668,346 General 149,564 150,898 Construction work in progress 113,268 96,133 2,180,540 2,164,412 Less - Accumulated depreciation 875,973 859,894 1,304,567 1,304,518 CURRENT ASSETS Cash 10,567 5,453 Accounts receivable 22,659 21,531 Materials and supplies, at average cost 40,559 39,888 Fuel inventory, at LIFO cost 17,477 17,820 Accumulated deferred income taxes 10,695 6,670 Prepayments 2,265 7,889 104,222 99,251 DEFERRED CHARGES AND OTHER ASSETS 56,402 61,345 $1,465,191 $1,465,114 The accompanying notes to consolidated financial statements as they relate to PSO are an integral part of these statements. 22 PUBLIC SERVICE COMPANY OF OKLAHOMA CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $15 par value, authorized 11,000,000 shares; issued 10,482,000 shares and outstanding 9,013,000 shares $ 157,230 $ 157,230 Paid-in capital 180,000 180,000 Retained earnings 131,514 124,269 Total Common Stock Equity 468,744 461,499 Preferred stock 19,826 19,826 Long-term debt 378,127 402,752 TOTAL CAPITALIZATION 866,697 884,077 CURRENT LIABILITIES Long-term debt due within twelve months 25,000 -- Advances from affiliates 61,670 55,160 Payables to affiliates 19,711 27,876 Accounts payable 49,432 59,899 Payables to customers 33,345 22,655 Accrued taxes 13,632 17,356 Accrued interest 5,681 8,867 Other 15,190 15,157 223,661 206,970 DEFERRED CREDITS Accumulated deferred income taxes 283,032 281,139 Investment tax credits 48,313 49,011 Income tax related regulatory liabilities, net 17,904 18,611 Other 25,584 25,306 374,833 374,067 $1,465,191 $1,465,114 The accompanying notes to consolidated financial statements as they relate to PSO are an integral part of these statements. 23 PUBLIC SERVICE COMPANY OF OKLAHOMA CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) OPERATING ACTIVITIES Net Income $ 7,449 $ 4,307 Non-cash Items Included in Net Income Depreciation and amortization 17,637 16,496 Deferred income taxes and investment tax credits (3,537) (378) Allowance for equity funds used during construction (480) (96) Changes in Assets and Liabilities Accounts receivable (1,128) 2,744 Materials and supplies (328) 3,457 Prepayments 5,624 (510) Accounts payable (557) (15,611) Accrued taxes (3,724) (4,037) Other 3,091 (2,147) 24,047 4,225 INVESTING ACTIVITIES Construction expenditures (23,770) (30,501) Allowance for borrowed funds used during construction (598) (273) Other (871) (862) (25,239) (31,636) FINANCING ACTIVITIES Changes in advances from affiliates 6,510 30,792 Payment of dividends (204) (5,204) 6,306 25,588 NET CHANGE IN CASH AND CASH EQUIVALENTS 5,114 (1,823) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,453 2,429 CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,567 $ 606 SUPPLEMENTARY INFORMATION Interest paid less amounts capitalized $11,361 $ 7,694 Income taxes paid $ 2,372 $ -- The accompanying notes to consolidated financial statements as they relate to PSO are an integral part of these statements. 24 PUBLIC SERVICE COMPANY OF OKLAHOMA RESULTS OF OPERATIONS COMPARISON OF THE QUARTERS ENDED MARCH 31, 1995 AND 1994 Net Income for Common Stock. Net income for common stock increased 77% to $7.2 million during the first quarter of 1995 from $4.1 million in the first quarter of 1994. The increase resulted primarily from the sale of a non-utility fiber optic telecommunication property. Electric Operating Revenues. Revenues decreased approximately 6% to $148.4 million during the first quarter of 1995 from $157.5 million during the first quarter of 1994 due primarily to decreased fuel recovery. PSO recovers its monthly fuel and purchased power expenses currently in its revenues, and therefore the net decrease in these costs resulted in lower revenues. Also affecting revenues was an increase in sales for resale to other electric utilities due to increased market place demand. Fuel. Fuel expense increased less than 1% during the first quarter of 1995 as compared to the first quarter of 1994 as a result of a 20% increase in Kwh generation and an over-recovery of fuel costs from customers which was previously recorded as deferred fuel expense. Kwh generation was affected by the decrease in power purchases as discussed below. These increases were partially offset by a reduction in unit fuel costs. The average unit fuel cost for the first quarter of 1995 was $1.72 per Mmbtu, a decrease of approximately 18% from the same period last year. The decrease in per unit fuel costs reflects lower costs for natural gas and coal. See Part II - OTHER INFORMATION - - Item 1. Legal Proceedings for additional information related to coal transportation. Purchased Power. Purchased power decreased 64% to $4.7 million during the first quarter of 1995 from $13.1 million during the first quarter of 1994 due primarily to decreased purchases of economy energy. Maintenance. Maintenance expense decreased $1.7 million, or 22%, during the first quarter of 1995 as compared to the first quarter of 1994 due primarily to decreased overhead lines maintenance activities, primarily tree trimming. Depreciation and Amortization. The increase in depreciation and amortization expense of $1.1 million, or 7% during the first quarter of 1995 as compared to the first quarter of 1994 was due primarily to an increase in depreciable property. Other Income and Deductions. Other income and deductions increased $3.2 million primarily as a result of the $2.7 million net gain on the sale of a non-utility fiber optic telecommunication property. Interest on Short-term Debt and Other. Short-term debt and other increased $0.8 million primarily to higher levels of short-term debt at higher short-term interest rates. 25 SOUTHWESTERN ELECTRIC POWER COMPANY 26 SOUTHWESTERN ELECTRIC POWER COMPANY STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) ELECTRIC OPERATING REVENUES $169,240 $190,066 OPERATING EXPENSES AND TAXES Fuel 63,191 87,190 Purchased power 5,463 4,559 Other operating 28,592 28,002 Maintenance 9,345 8,976 Depreciation and amortization 20,284 19,762 Taxes, other than Federal income 10,865 12,900 Federal income taxes 4,913 3,857 142,653 165,246 OPERATING INCOME 26,587 24,820 OTHER INCOME AND DEDUCTIONS Allowance for equity funds used during construction 1,449 667 Other 410 1,050 1,859 1,717 INCOME BEFORE INTEREST CHARGES 28,446 26,537 INTEREST CHARGES Interest on long-term debt 11,321 10,813 Interest on short-term debt and other 2,848 1,580 Allowance for borrowed funds used during construction (1,248) (393) 12,921 12,000 NET INCOME 15,525 14,537 Preferred stock dividends 778 840 NET INCOME FOR COMMON STOCK $ 14,747 $ 13,697 The accompanying notes to financial statements as they relate to SWEPCO are an integral part of these statements. 27 SOUTHWESTERN ELECTRIC POWER COMPANY BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) ASSETS ELECTRIC UTILITY PLANT Production $1,402,342 $1,401,418 Transmission 395,605 385,113 Distribution 755,367 733,707 General 221,838 213,563 Construction work in progress 130,707 149,508 2,905,859 2,883,309 Less - Accumulated depreciation 1,048,269 1,026,751 1,857,590 1,856,558 CURRENT ASSETS Cash 557 1,296 Accounts receivable 48,947 54,344 Materials and supplies, at average cost 27,883 28,109 Fuel inventory, at average cost 74,168 61,701 Accumulated deferred income taxes 7,331 6,592 Prepayments and other 13,682 13,071 172,568 165,113 DEFERRED CHARGES AND OTHER ASSETS 54,749 57,536 $2,084,907 $2,079,207 The accompanying notes to financial statements as they relate to SWEPCO are an integral part of these statements. 28 SOUTHWESTERN ELECTRIC POWER COMPANY BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $18 par value, authorized 7,600,000 shares; issued and outstanding 7,536,640 shares $ 135,660 $ 135,660 Paid-in capital 245,000 245,000 Retained earnings 312,209 297,462 Total Common Stock Equity 692,869 678,122 Preferred stock Not subject to mandatory redemption 16,032 16,032 Subject to mandatory redemption 34,828 34,828 Long-term debt 594,489 595,833 TOTAL CAPITALIZATION 1,338,218 1,324,815 CURRENT LIABILITIES Long-term debt and preferred stock due within twelve months 6,445 5,270 Advances from affiliates 90,366 81,868 Accounts payable 37,621 50,138 Fuel refund due customers 14,293 12,200 Customer deposits 12,414 13,075 Accrued taxes 17,045 12,495 Accrued interest 7,461 17,175 Other 18,551 30,615 204,196 222,836 DEFERRED CREDITS Accumulated deferred income taxes 369,430 365,441 Investment tax credits 80,005 81,023 Income tax related regulatory liabilities, net 43,010 44,836 Other 50,048 40,256 542,493 531,556 $2,084,907 $2,079,207 The accompanying notes to financial statements as they relate to SWEPCO are an integral part of these statements. 29 SOUTHWESTERN ELECTRIC POWER COMPANY STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) OPERATING ACTIVITIES Net Income $15,525 $14,537 Non-cash Items Included in Net Income Depreciation and amortization 22,851 22,116 Deferred income taxes and investment tax credits 407 440 Allowance for equity funds used during construction (1,449) (667) Changes in Assets and Liabilities Accounts receivable 5,397 (4,974) Fuel inventory (12,467) 12,730 Accounts payable (12,517) (7,593) Accrued taxes 4,550 4,370 Accrued interest (9,714) (5,008) Over- and under-recovered fuel costs 2,093 1,170 Other 1,115 7,704 15,791 44,825 INVESTING ACTIVITIES Construction expenditures (19,853) (28,597) Allowance for borrowed funds used during construction (1,248) (393) Other (1,609) (1,286) (22,710) (30,276) FINANCING ACTIVITIES Change in advances from affiliates 8,498 (3,771) Retirement of long-term debt (1,499) (1,365) Reacquisition of long-term debt -- (1,714) Payment of dividends (819) (6,841) 6,180 (13,691) NET CHANGE IN CASH AND CASH EQUIVALENTS (739) 858 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,296 6,723 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 557 $ 7,581 SUPPLEMENTARY INFORMATION Interest paid less amounts capitalized $20,581 $16,434 Income taxes paid $ -- $ 373 The accompanying notes to financial statements as they relate to SWEPCO are an integral part of these statements. 30 SOUTHWESTERN ELECTRIC POWER COMPANY RESULTS OF OPERATIONS COMPARISON OF THE QUARTERS ENDED MARCH 31, 1995 AND 1994 Net Income for Common Stock. Net income for common stock increased 8% to $14.7 million during the first quarter of 1995 from $13.7 million during the first quarter of 1994. Electric Operating Revenues. Electric operating revenues decreased 11% to $169.2 million during the first quarter of 1995 from $190.1 million during the first quarter of 1994. This decrease in revenues was due primarily to a $16.3 million decrease in fuel revenue resulting from lower average unit fuel cost and a decrease in generation. Partially offsetting the decrease in fuel revenue was an $8.5 million increase in base revenue, which reflected a 3% increase in retail Kwh sales. Fuel. Fuel expense decreased 28% to $63.2 million during the first quarter of 1995 when compared to the first quarter of 1994, due primarily to a 12% decrease in generation and a decrease in the average unit fuel cost per Mmbtu from $1.90 in 1994 to $1.57 per Mmbtu in 1995. The decrease in unit fuel costs was due primarily to lower spot market natural gas prices. Purchased Power. Purchased power expense increased approximately $0.9 million or 20% in the first quarter of 1995 from $4.6 million during the corresponding quarter in 1994 due primarily to increased purchases of economy energy. Taxes, Other than Federal Income. Taxes, other than Federal income decreased 16% to $10.9 million during the first quarter of 1995 from $12.9 million during the first quarter of 1994 due primarily to a decrease in ad valorem taxes. Federal Income Taxes. Federal income taxes increased 27% to $4.9 million during the first quarter of 1995 from $3.9 million during the first quarter of 1994 primarily as a result of higher pre-tax income. Interest on Short-Term Debt and Other. Interest expense on short- term debt and other increased approximately $1.3 million due primarily to higher levels of short-term borrowings and higher short-term interest rates. 31 WEST TEXAS UTILITIES COMPANY 32 WEST TEXAS UTILITIES COMPANY STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) ELECTRIC OPERATING REVENUES $ 74,921 $ 83,319 OPERATING EXPENSES AND TAXES Fuel 31,165 39,530 Purchased power 1,343 787 Other operating 14,064 15,963 Maintenance 2,949 3,939 Depreciation and amortization 8,064 7,805 Taxes, other than Federal income 5,826 5,499 Federal income taxes 1,614 1,309 65,025 74,832 OPERATING INCOME 9,896 8,487 OTHER INCOME AND DEDUCTIONS Allowance for equity funds used during construction (3) 3 Other 211 280 208 283 INCOME BEFORE INTEREST CHARGES 10,104 8,770 INTEREST CHARGES Interest on long-term debt 4,840 4,383 Interest on short-term debt and other 1,198 884 Allowance for borrowed funds used during construction (167) (43) 5,871 5,224 NET INCOME 4,233 3,546 Preferred stock dividends 66 151 NET INCOME FOR COMMON STOCK $ 4,167 $ 3,395 The accompanying notes to financial statements as they relate to WTU are an integral part of these statements. 33 WEST TEXAS UTILITIES COMPANY BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) ASSETS ELECTRIC UTILITY PLANT Production $ 427,769 $ 427,736 Transmission 194,397 194,402 Distribution 307,388 308,905 General 72,986 73,938 Construction work in progress 32,485 23,257 1,035,025 1,028,238 Less - Accumulated depreciation 369,709 364,383 665,316 663,855 CURRENT ASSETS Cash 3,827 2,501 Accounts receivable 26,554 23,165 Materials and supplies, at average cost 16,568 16,519 Fuel inventory, at average cost 9,174 9,229 Coal inventory, at LIFO cost 6,160 6,442 Accumulated deferred income taxes 3,605 3,068 Prepayments and other 1,759 1,091 67,647 62,015 DEFERRED CHARGES AND OTHER ASSETS Deferred Oklaunion costs 26,708 26,914 Other 21,705 26,111 48,413 53,025 $ 781,376 $ 778,895 The accompanying notes to financial statements as they relate to WTU are an integral part of these statements. 34 WEST TEXAS UTILITIES COMPANY BALANCE SHEETS (Unaudited) March 31, December 31, 1995 1994 (Thousands) CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock, $25 par value, authorized 7,800,000 shares; issued and outstanding 5,488,560 shares $ 137,214 $ 137,214 Paid-in capital 2,236 2,236 Retained earnings 136,671 132,504 Total Common Stock Equity 276,121 271,954 Preferred stock 6,291 6,291 Long-term debt 250,415 210,047 TOTAL CAPITALIZATION 532,827 488,292 CURRENT LIABILITIES Long-term debt due within twelve months 650 650 Advances from affiliates 16,592 46,315 Accounts payable 20,603 35,407 Accrued taxes 3,248 7,452 Accrued interest 3,913 4,394 Other 4,554 4,329 49,560 98,547 DEFERRED CREDITS Accumulated deferred income taxes 147,225 146,146 Income tax related regulatory liabilities, net 9,245 9,217 Investment tax credits 31,552 31,882 Other 10,967 4,811 198,989 192,056 $ 781,376 $ 778,895 The accompanying notes to financial statements as they relate to WTU are an integral part of these statements. 35 WEST TEXAS UTILITIES COMPANY STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1995 1994 (Thousands) OPERATING ACTIVITIES Net Income $ 4,233 $ 3,546 Non-cash Items Included in Net Income Depreciation and amortization 8,411 8,183 Deferred income taxes and investment tax credits 239 3,087 Changes in Assets and Liabilities Accounts receivable (3,389) 3,479 Accounts payable (14,863) (28,416) Accrued taxes (4,204) (7,452) Under-recovered fuel costs 1,424 (4,871) Other 9,326 (4,455) 1,177 (26,899) NVESTING ACTIVITIES Construction expenditures (9,311) (8,516) Other (298) (433) (9,609) (8,949) FINANCING ACTIVITIES Proceeds from issuance of long-term debt 39,547 39,422 Reacquisition of long-term debt -- (12,125) Change in advances from affiliates (29,723) 17,570 Payment of dividends (66) (5,151) 9,758 39,716 NET CHANGE IN CASH AND CASH EQUIVALENTS 1,326 3,868 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,501 706 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,827 $ 4,574 SUPPLEMENTARY INFORMATION Interest paid less amounts capitalized $ 5,955 $ 250 Income taxes paid $ 7,662 $ 5,827 The accompanying notes to financial statements as they relate to WTU are an integral part of these statements. 36 WEST TEXAS UTILITIES COMPANY RESULTS OF OPERATIONS COMPARISON OF THE QUARTERS ENDED MARCH 31, 1995 AND 1994. Net Income for Common Stock. Net income for common stock increased 23% to $4.2 million during the first quarter of 1995 from $3.4 million in the first quarter of 1994. This increase was due primarily to decreased other operating and maintenance expenses. Electric Operating Revenues. Electric operating revenues decreased $8.4 million, or 10%, in the first quarter of 1995 as compared to the first quarter of 1994. This decrease was attributable primarily to a $5.5 million decrease in fuel revenues and a $2.8 million decrease in lower margin off-system sales for resale. Also contributing to the decrease was a 3% decrease in total Kwh sales and an interim rate reduction of approximately $5.7 million on an annual basis effective October 1, 1994. Fuel. Fuel expense decreased $8.4 million, or 21%, for the first quarter of 1995 as compared to the first quarter of 1994 due primarily to a decrease in average unit fuel costs from $2.38 per Mmbtu in 1994 to $2.03 per Mmbtu in 1995. The decrease in unit fuel costs was due primarily to lower spot market natural gas prices and a 4% decrease in generation. Purchased Power. Purchased power increased 71% to $1.3 million during the first quarter of 1995 from $0.8 during the first quarter of 1994, primarily as a result of additional economy energy purchases made during the first quarter of 1995. Other Operating. Other operating expenses decreased $1.9 million, or approximately 12%, in the first quarter of 1995 as compared to the first quarter of 1994 due primarily to decreased transmission expenses, decreased outside services, and lower employee benefit costs. Maintenance. Maintenance expenses decreased by $1 million, or 25%, during the first quarter of 1995 as compared to the first quarter of 1994 due primarily to decreased electric plant expenses that reflect plant overhauls in 1994 which have not occurred in 1995, decreased transmission station equipment expenses which reflect the accrual of warranty reimbursements, and decreased miscellaneous distribution expenses. 37 NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Principles of Preparation CSW, CPL, PSO, SWEPCO and WTU The condensed CSW, CPL, PSO, SWEPCO and WTU financial statements included herein have been prepared by each registrant pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although each registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in each registrant's Annual Report on Form 10-K for the year ended December 31, 1994. The unaudited financial information furnished herewith reflects all adjustments which are, in the opinion of management of such registrant, necessary for a fair statement of the results of operations for the interim periods. Information for quarterly periods is affected by seasonal variations in sales, rate changes, timing of fuel expense recovery and other factors. 2. Litigation and Regulatory Proceedings CSW, CPL, PSO, SWEPCO and WTU See each registrant's Annual Report on Form 10-K for the year ended December 31, 1994 for additional discussion of litigation and regulatory proceedings. Reference is also made to Part II-OTHER INFORMATION-Item 1. Legal Proceedings for additional discussion of litigation matters. CSW and CPL Reference is made to CSW's and CPL's Annual Reports on Form 10-K for the year ended December 31, 1994, for a discussion of regulatory and other issues involving STP. CPL Rate Cases CSW and CPL The Texas Commission General Counsel, several Cities in CPL's service territory and others initiated actions in late 1993 and early 1994 requesting a review by the Texas Commission of CPL's base rates. The requests for a review of CPL's rates arose out of the unscheduled 1993-1994 STP outage. On April 5, 1995, CPL reached an Agreement in Principle with four major parties to pending regulatory proceedings involving base rate, fuel and prudence issues relating to STP. A final agreement is expected in May 1995. The final agreement will then be presented to the Texas Commission for approval. As discussed below, pursuant to the Agreement in Principle, base rate and fuel refunds and the reduction of CPL's fuel factors are to be implemented on an interim basis during the summer of 1995. Hearings on the final agreement are expected during the summer of 1995 and the final Texas Commission order is expected in the fall of 1995. Under the Agreement in Principle, CPL will provide customers a one-time base rate refund of $50 million. In addition, CPL will refund approximately $24 million as a result of an agreement that customers will not be charged for $62.25 million in replacement power costs and related interest primarily associated with the 1993-1994 STP outage. There will be no ongoing change in base rate levels. However, CPL will reduce its future fuel factors by approximately $55 million on an annual basis beginning no later than August 1995 due to projections of lower fuel costs. CPL will continue to seek resolution 38 of its remaining non-nuclear fuel costs through the current fuel reconciliation proceeding, Docket No. 13650. Details of the items in the Agreement in Principle which had significant earnings impact during the first quarter of 1995, including several accounting provisions, are set forth in the table below: Earnings Impact of Significant Provisions of Agreement in Principle Pre-tax After-tax (millions) Base Rate Refund $ (50) $ (33) Fuel Write-off (62) (40) Current Flowback of Excess Deferred Federal Income Taxes 34 34 Capitalization of Previously Expensed Restructuring and Rate Case Costs 26 17 Recognition of Factoring Income 12 8 The Agreement in Principle additionally resolves (a) all STP prudence issues through June 30, 1994, (b) potential claims of excessive earnings for the five year period ending December 31, 1994 (a period in which CPL's rates were frozen), (c) certain issues with respect to the treatment of mirror CWIP and (d) certain other pending issues. The Agreement in Principle resolves two cases now pending at the Texas Commission, the rate inquiry in Docket No. 12820 and the prudence inquiry in Docket No. 13126. Other parties to the Agreement in Principle besides CPL include the CPL Cities Steering Committee, the Texas Commission General Counsel, the Texas Office of Public Utility Counsel and the Texas Industrial Energy Consumers. The Agreement in Principle may be subject to further hearings if any party opposes the settlement conditions. CPL has operated with its current rates in effect for more than four years under a previous rate freeze agreement. That rate freeze expired December 31, 1994. Under the Agreement in Principle, CPL has agreed not to file before September 28, 1995 for a change in base rates. CPL anticipates that it will file a new rate case with the Texas Commission after September 28, 1995 seeking to recover a retail revenue deficiency and to replace non-cash earnings from mirror CWIP with cash earnings. CPL is amortizing its mirror CWIP liability in declining amounts over the years 1991-1995. Non-cash earnings of $68 million were recognized in 1994, a decrease from the $75.7 million recognized in 1993. The remaining liability to be amortized for 1995 is $41 million, which will fully amortize the mirror CWIP liability. Civil Penalties CSW and CPL In May 1995, the NRC staff informed STP management that it revoked a proposed $100,000 civil penalty and associated violations filed against HLP in October 1994. As previously reported, the proposed penalty was the result of what the NRC believed was discrimination against a contractor employee at STP who brought complaints of possible safety problems to the NRC's attention. These actions resulted from the findings of an NRC investigation of alleged violations of STP security and work procedures in 1992. The incident cited by the NRC is the subject of a contested hearing that is scheduled in the spring of 1995 before a United States Department of Labor judge. 39 Power Purchases and Sales CSW and PSO MCPC Reference is made to CSW's and PSO's 1994 Annual Report on Form 10-K for background on agreements PSO entered into in 1989 with MCPC, a cogeneration development company located in northeastern Oklahoma. The agreements provided, among other matters, that PSO would deliver natural gas to MCPC for conversion to electrical energy and that MCPC would supply energy to PSO. Subsequent to 1989, a series of disputes arose between PSO and MCPC relating to the delivery of electric energy by MCPC to PSO and the charges for the energy. The disputes involved both a lawsuit in the District Court of Tulsa County, Oklahoma and proceedings before the Oklahoma Commission. On March 31, 1995, PSO, MCPC and the Oklahoma Commission Staff signed a joint settlement resolving all issues pursuant to the various proceedings before the Oklahoma Commission and the District Court. The settlement, among other things, eliminated a requirement that MCPC deliver an annual minimum of 394,200 Mwh of Assured Delivery Energy and related provisions associated with underdelivery charges. Most other provisions of the agreement between PSO and MCPC were kept intact. Approval of the settlement by the Oklahoma Commission through an order is expected in late May 1995. The settlement is on terms satisfactory to PSO and will not have a material adverse effect on CSW's or PSO's consolidated results of operations or financial condition. Rate Proceeding - Docket No. 13369 CSW and WTU On August 25, 1994, WTU filed a petition with the Texas Commission and cities with original jurisdiction to review WTU's rates, proposed an interim across-the-board base retail rate reduction of 3.25%, or approximately $5.7 million, effective October 1, 1994, and sought until February 28, 1995, to develop and file a RFP. WTU also requested the ability to "true-up", back to October 1, 1994, any difference in revenue requirements upon final order of the Texas Commission and proposed that any increases over the pre-October 1, 1994, base rates be implemented prospectively on the effective date of the final order. WTU's fuel reconciliation, Docket No. 13172, which was filed with the Texas Commission on June 30, 1994, was consolidated with this proceeding in September 1994. On February 28, 1995, WTU filed with the Texas Commission and cities with original jurisdiction an RFP which indicates a revenue increase of approximately $14.5 million. However, WTU simultaneously filed with the parties a settlement proposal to reduce overall base rate revenue by 3.25%, effective October 1, 1994, which would have an annual impact in the rate year beginning January 1, 1996 of approximately $5.9 million. The settlement proposal reflects WTU's desire to maintain competitive rates, recognizes the importance of competitive rates in the changing electric service marketplace, and demonstrates WTU's strong commitment to the long-term success of WTU and its customers. Although settlement was not reached by the May 8 extended deadline, WTU continues to remain open to settlement negotiations. On May 9, 1995, WTU filed an errata to its rate filing package requesting a revised revenue increase of $12.6 million. Unless a settlement accelerates the process, hearings are schedule to begin August 14, 1995 at the Texas Commission, with a final order anticipated in the fourth quarter 1995. Management cannot predict the outcome of the rate proceeding or the fuel reconciliation, but believes that the ultimate resolution of these matters will not 40 have a material adverse effect on CSW's or WTU's results of operations or financial condition. Rate Case Proceeding - Docket No. 7510 CSW and WTU On February 15, 1995, the Court of Appeals affirmed all aspects of the District Court judgment relating to the Texas Commission's allowance of non-Oklaunion depreciation rates and the surcharge of rate case expenses, reversed the District Court's judgment relating to the exclusion of deferred Oklaunion carrying costs in rate base, and remanded the case to the Texas Commission to reexamine the issue of deferred costs in light of the remand of Docket No. 7289. WTU filed a motion for rehearing at the Court of Appeals seeking clarification of certain aspects of its order and arguing that the Court of Appeals erred in remanding the case to the Texas Commission for it to determine to what extent deferred costs are necessary to preserve WTU's financial integrity because the issue was not briefed or argued to the Court of Appeals and was, therefore, waived. Other parties to the proceeding also filed motions for rehearing. All motions were denied by the Court of Appeals on April 26, 1995. Further appeals of this case would be by Application for Writ of Error to the Supreme Court of Texas seeking discretionary review by that Court. WTU intends to file an Application for Writ of Error with the Supreme Court of Texas to advance its argument that waiver has occurred. Other parties to the appeal may also seek review by the Supreme Court of Texas. WTU's Application for Writ of Error may, if granted, prevent further review of financial integrity issues with respect to deferred accounting in any remand of Docket No. 7510. If a broader remand is permitted and if the Texas Commission concludes in Docket No. 7289 that deferred accounting was necessary to preserve WTU's financial integrity during the deferral period, the Texas Commission must decide to what extent the deferred Oklaunion costs, including carrying costs, were necessary to preserve WTU's financial integrity. For additional information regarding WTU's regulatory matters see CSW's and WTU's Annual Reports on Form 10-K for the year ended December 31, 1994. Deferred Accounting CSW, CPL and WTU CPL was granted deferred accounting for certain STP Unit 1 and 2 costs and WTU was granted deferred accounting for certain Oklaunion costs by Texas Commission orders. Decisions on deferred accounting have been rendered in legal proceedings involving third parties in 1994 and 1995 that interpret the need to apply deferred accounting to maintain the financial integrity of a utility. These decisions may be the subject of additional appeals. Pending the ultimate resolution of deferred accounting issues by the courts and the Texas Commission, CPL and WTU are unable to predict how their deferred accounting orders will be ultimately resolved by the Texas Commission. If CPL's deferred accounting matters are not favorably resolved, CSW and CPL could experience a material adverse effect on their results of operations and financial condition. While CPL's management cannot predict the ultimate outcome of these matters, management believes CPL will receive approval of its deferred accounting orders or will be successful in renegotiation of its rate orders, so that there will be no material adverse effect on CSW's or CPL's results of operations or financial condition. If WTU's deferred accounting treatment is ultimately reversed or is substantially reduced, WTU could experience a material adverse effect on its results of operations. While management cannot predict the ultimate outcome of these matters, management believes that WTU's deferred accounting will be sustained by the Texas Commission on the basis of the financial integrity standard and therefore the ultimate 41 resolution of the issue will not have a material adverse effect on CSW's or WTU's results of operations or financial condition. For additional information on CPL's and WTU's deferred accounting proceedings, see CPL's and WTU's Annual Reports on Form 10-K for the year ended December 31, 1994. 3. Dividends CSW, CPL, PSO, SWEPCO and WTU The subsidiary companies' mortgage indentures, as amended and supplemented, contain certain restrictions on the use of their retained earnings for cash dividends on their common stock. These restrictions do not limit the ability of CSW to pay dividends to its shareholders. At March 31, 1995, approximately $1.4 billion of the subsidiary companies' retained earnings were available for payment of cash dividends by CSW to its shareholders. At March 31, 1995, the amount of retained earnings available for payment of cash dividends to CSW by the Electric Operating Companies was as follows: Retained Earnings Available for Company Dividends (millions) CPL $608 PSO 132 SWEPCO 312 WTU 137 4. Earnings and Dividends Per Share of Common Stock CSW Earnings per share of common stock are computed by dividing net income for common stock by the average number of common shares outstanding for the respective periods. Dividends per common share reflect per share amounts paid during the periods. 5. Commitments and Contingent Liabilities Proposed El Paso Merger CSW For information regarding the commitments and contingent liabilities relating to the proposed El Paso Merger, reference is made to PART II - OTHER INFORMATION-Item 5. Other Information. Environmental CSW and SWEPCO For information regarding environmental issues, reference is made to PART II - OTHER INFORMATION-Item 5. Other Information. 42 CSWE Projects CSW Mulberry CSWE has provided construction services to the Mulberry cogeneration facility through a wholly-owned subsidiary, CSW Development-I, Inc. The project achieved commercial operation in August 1994 and added 117 Mws of on-line capacity of which CSW Development-I, Inc. owns 50%. CSWE's maximum potential liability under the fixed price contract is $29 million and will decrease to zero over the next two years as contractual standards are met. Additionally, CSW Development-I, Inc. has entered into a fixed price contract of $14 million to construct the Mulberry thermal host facility. At March 31, 1995, the estimated contract costs to complete the host facility were approximately $42 million. The host facility is expected to be completed by the end of the second quarter of 1995. Negotiations are ongoing to determine if the costs exceeding the contract will be absorbed by CSW Development-I, Inc. or allocated between the partners as a capital contribution. Management does not believe that an unfavorable resolution of this issue will have a material adverse impact on CSW's consolidated results of operations or financial condition. CSW has provided additional guarantees to the project totaling approximately $42 million. Ft. Lupton CSWE has entered into a purchase agreement on the Fort Lupton project through a wholly-owned subsidiary, CSW Ft. Lupton Inc., to provide $79.5 million of equity upon the occurrence of certain events. As of March 31, 1995, $43 million of equity had been provided. CSWE has provided three letters of credit to the project totaling $18.3 million. During March 1995, CSW Fort Lupton Inc. closed permanent project financing on the Fort Lupton facility which allowed CSW Fort Lupton Inc. to repay its $100 million construction borrowings to CSW. Orange CSWE has committed to provide up to $125 million of construction financing to the Orange cogeneration project in which CSWE owns a 50% interest through CSW Development-I, Inc. Of this total, CSW Development-I, Inc. has provided $85 million at March 31, 1995. The 103 Mw facility is expected to commence commercial operation in June 1995. CSW Development-I, Inc. expects to obtain third party permanent financing for this project by year end. Other CSWE has posted security deposits and other security instruments of approximately $14 million on five additional projects in various stages of development, construction and operation. Nuclear Insurance CSW and CPL As previously reported, in connection with the licensing and operation of STP, the owners have purchased the maximum limits of nuclear liability insurance, as required by law, and have executed indemnification agreements with the NRC in accordance with the financial protection requirements of the Price-Anderson Act. The Price-Anderson Act, a comprehensive statutory arrangement providing limitations on nuclear liability and governmental indemnities, is in effect until August 1, 2002. The limit of liability under the Price-Anderson Act for licensees of nuclear power plants is $8.92 billion per incident, effective as of January 1995. The owners of STP are insured for their share of this liability through a combination of private insurance amounting to $200 million and a mandatory industry-wide program for self-insurance totaling 43 $8.72 billion. The maximum amount that each licensee may be assessed under the industry-wide program of self-insurance following a nuclear incident at an insured facility is $75.5 million per reactor, which may be adjusted for inflation, plus a five percent charge for legal expenses, but not more than $10 million per reactor for each nuclear incident in any one year. CPL and each of the other STP owners are subject to such assessments, which CPL and other owners have agreed will be allocated on the basis of their respective ownership interests in STP. For purposes of these assessments, STP has two licensed reactors. The owners of STP currently maintain on-site decontamination liability and property damage insurance in the amount of $2.75 billion provided by ANI and NEIL. Policies of insurance issued by ANI and NEIL stipulate that policy proceeds must be used first to pay decontamination and clean-up costs before being used to cover direct losses to property. Under project agreements, CPL and the other owners of STP will share the total cost of decontamination liability and property insurance for STP, including premiums and assessments, on a pro rata basis, according to each owner's respective ownership interest in STP. CPL purchases, for its own account, a NEIL I Business Interruption and/or Extra Expense policy. This insurance will reimburse CPL for extra expenses incurred, up to $1.65 million per week, for replacement generation or purchased power as the result of a covered accident that shuts down production at STP for more than 21 weeks. The maximum amount recoverable for Unit 1 is $111.3 million and for Unit 2 is $111.8 million. CPL is subject to an additional assessment up to $2.1 million for the current policy year in the event that losses as a result of a covered accident at a nuclear facility insured under the NEIL I policy exceeds the accumulated funds available under the policy. On August 28, 1994, CPL filed a claim under the NEIL I policy relating to the 1993 - 1994 outage at STP Units 1 and 2. NEIL is currently reviewing the claim. CPL management is unable to predict the ultimate outcome of this matter. Henry W. Pirkey Power Plant CSW and SWEPCO In connection with the lignite mining contract for its Henry W. Pirkey Power Plant, SWEPCO has agreed, under certain conditions, to assume the obligations of the mining contractor. As of March 31, 1995, the maximum SWEPCO would have to assume is $82.5 million. The maximum amount may vary as the mining contractor's need for funds fluctuates. The contractor's actual obligation outstanding as of March 31, 1995 is approximately $61.8 million. 44 6. Federal Income Taxes CSW and CPL Due to the tax implications of the Agreement in Principle on the financial statements of CSW and CPL the following reconciliation is presented. CSW 3 Months Ended March 31, 1995 (millions) Tax at statutory rates $ 2.5 Differences Amortization of ITC (3.5) Mirror CWIP (2.7) Prior period adjustments (35.3) Other (.2) $(39.1) Prior period adjustments reflect the accelerated flowback of $34.3 million of unprotected excess deferred income taxes in accordance with the Agreement in Principle and are the primary reason for differences between the statutory income tax rate and the effective tax rate for the first quarter of 1995. CPL 3 Months Ended March 31, 1995 (thousands) Tax at statutory rates $(11,822) Differences Amortization of ITC (1,447) Mirror CWIP (2,711) Prior period adjustments (35,289) Other 1,129 $(50,140) Prior period adjustments reflect the accelerated flowback of $34.3 million of unprotected excess deferred income taxes in accordance with the Agreement in Principle and are the primary reason for differences between the statutory income tax rate and the effective tax rate for the first quarter of 1995. 45 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Reference is made to Management's Discussion and Analysis of Financial Condition and Results of Operations included in each registrant's 1994 Annual Report on Form 10-K. Reference is also made to each registrant's unaudited Financial Statements and related Notes to Financial Statements included herein. The information included therein and herein should be read in conjunction with, and is essential in understanding, the following discussion and analysis. Results of Operations CSW, CPL, PSO, SWEPCO and WTU Reference is made to in PART I-FINANCIAL INFORMATION ITEM 1. Financial Statements. Capital Requirements, Liquidity and Financing CSW, CPL, PSO, SWEPCO and WTU Construction and Capital Expenditures Construction expenditures for the CSW System for the first quarter of 1995 were $96 million. These construction expenditures were primarily for improvements to existing production, transmission and distribution facilities, as well as enhancements by Transok of existing gas gathering and transmission systems. The improvements are required to meet the needs of new customers and to satisfy the changing requirements of existing customers. The CSW System anticipates that the majority of all funds required for construction for the remainder of the year will be provided from internal sources. Short-Term Financing The CSW System uses short-term debt to meet fluctuations in working capital requirements and other interim capital needs. The registrants, together with other members of the CSW System, have established a money pool to coordinate short-term borrowings through the issuance of CSW's commercial paper. Long-Term Financing The CSW System is committed to maintaining financial flexibility by maintaining a strong capital structure and favorable securities ratings which help to assure future access to capital markets when required. CSW, in order to strengthen its capital structure and support growth from time to time, may issue additional shares of its common stock. At March 31, 1995 the capitalization ratios of each of the registrants were as follows: Company Common Preferred Long Term Equity Stock Debt CSW 48% 5% 47% CPL 45% 8% 47% PSO 54% 2% 44% SWEPCO 52% 4% 44% WTU 52% 1% 47% CSW and WTU On March 2, 1995, WTU sold to underwriters in a negotiated offering $40 million of 7.50% First Mortgage Bonds, Series T, due April 1, 2000. The proceeds of the bonds were used to repay a portion of WTU's short-term debt, to provide working capital and for other general corporate purposes. 46 Recent Developments Consolidated Taxes As previously reported, in 1992 the Texas Commission changed its method of calculating the federal income tax component of rates to the "actual tax approach." This approach reduces rates by the tax benefits of deductions which are not considered for or included in setting rates for the utility. On April 13, 1995, the Texas Supreme Court issued a decision which holds that the Texas Commission is not required to use the tax benefits associated with the losses of unregulated affiliates to reduce tax expense in cost of service. The Texas Supreme Court also ruled that the Texas Commission cannot include the income tax deductions taken by the utility for disallowed expenses when determining the utility's federal income tax liability. This decision will allow CSW shareholders to retain the tax benefits associated with disallowed expenditures. The decision also does not require the Texas Commission to reduce rates by the tax benefits associated with the losses of unregulated affiliates. Regulatory Matters CSW, CPL, PSO, SWEPCO and WTU Reference is made to NOTE 2. Litigation and Regulatory Proceedings for a discussion of each of the Electric Operating Companies regulatory matters. Proposed El Paso Merger CSW Reference is made to PART II-OTHER INFORMATION-Item 5. Other Information for information regarding the proposed Merger with El Paso. For additional information relating to the proposed El Paso Merger, See CSW's Annual Report on Form 10-K for the year ended December 31, 1994. 47 PART II - OTHER INFORMATION For background and earlier developments relating to Part II information reference is made to each registrant's 1994 Annual Report on Form 10-K. Item 1. Legal Proceedings. Cimmaron Litigation CSW On January 12, 1994, Cimmaron brought suit against CSW and its wholly-owned subsidiary, CSWE, in the 125th District Court of Houston, Harris County, Texas. Cimmaron alleges that CSW and CSWE breached commitments to participate with Cimmaron in the failed BioTech Cogeneration project located in Colorado. Cimmaron claims breach of contract, fraud and negligent misrepresentation with alleged damages totaling $250 million, punitive damages of an unspecified amount, as well as attorney's fees. CSWE filed a counterclaim against Cimmaron and third-party claims against the principals of Cimmaron on December 22, 1994, alleging that they misrepresented and omitted material facts about their experience and background and about the proposed cogeneration project. CSWE seeks damages of $500,000, the earnest money paid when the letter of intent was executed, the costs associated with due diligence and punitive damages. On January 10, 1995, Cimmaron filed a first amended original petition suing CSWE board members at the time, personally. Pre-trial discovery on the case is presently underway with depositions of the parties being taken during March, April and May 1995. Trial was originally set for the week of April 10, 1995, but the parties filed a joint motion for continuance and the court re-set the case for January 17, 1996. Management of CSW cannot predict the outcome of this litigation, but believes that CSW and CSWE have defenses to these complaints and are pursuing them vigorously and that the ultimate resolution will not have a material adverse effect on CSW's consolidated results of operations or financial condition. Westinghouse Litigation CSW and CPL CPL and other owners of STP are plaintiffs in a lawsuit filed in October 1990 in District Court in Matagorda County, Texas against Westinghouse seeking damages and other relief. The suit alleges that Westinghouse supplied STP with defective steam generator tubes that are susceptible to stress corrosion cracking. Westinghouse filed an answer to the suit in March 1992 denying the plaintiffs allegations. The suit is set for trial in July 1995. Inspections have detected early indications of stress corrosion cracking in steam generator tubes at STP. Management believes the steam generator tubes will continue to deteriorate. The STP owners have authorized the plant to solicit competitive bids for replacement of the STP steam generators in 1999 for Unit 1 and 2000 for Unit 2. A preliminary damages report prepared by experts for the STP owners estimates that replacement of the STP Unit 1 and Unit 2 steam generators will cost approximately $285 million of which CPL's share would be approximately 25 percent. The estimated replacement cost of $285 million does not include replacement power costs, additional operating expenses and other costs that are being sought from Westinghouse in the pending litigation. Recoverability of these amounts and the steam generator replacement costs from Westinghouse is uncertain. Management believes that the ultimate resolution of this 48 matter will not have a material adverse effect on CSW's or CPL's results of operations or financial condition. Burlington Northern Transportation Contracts CSW and PSO In June 1992, PSO filed suit in Federal District Court in Tulsa, Oklahoma, against Burlington Northern seeking declaratory relief under a long-term contract for the transportation of coal. In July 1992, Burlington Northern asserted counterclaims against PSO alleging that PSO breached the contract. The counterclaims sought damages in a unspecified amount. In December 1993, PSO amended its suit against Burlington Northern seeking damages and declaratory relief under federal and state anti-trust laws. PSO and Burlington Northern filed motions for summary judgment dispositive of certain issues in the litigation. In March 1994, the court issued an order granting PSO's motions for summary judgment and denying Burlington Northern's motion. It was not necessary for the court to decide the federal and state anti-trust claims raised by PSO. Judgment was rendered in favor of PSO by the United States District Court in May 1994. In June 1994, Burlington Northern appealed this judgment to the United States Court of Appeals for the Tenth Circuit. In April 1995, the Tenth Circuit entered an order reversing the District Court's decision in part and affirming the order in part. On May 2, 1995, PSO filed a petition for rehearing by the Tenth Circuit. Additional litigation in the District Court may be necessary if PSO's petition for rehearing is not successful. Management believes the ultimate resolution of this matter will not have a material adverse effect on CSW's or PSO's consolidated results of operations or financial condition. CSW and SWEPCO On January 20, 1995, a state district court in Bowie County, Texas, entered judgment in favor of SWEPCO against Burlington Northern in a lawsuit regarding rates charged under two rail transportation contracts for delivery of coal to SWEPCO's Welsh and Flint Creek power plants. The court awarded SWEPCO approximately $72 million covering damages for the period from April 27, 1989 through September 26, 1994 and post-judgment interest and attorneys' fees and granted certain declaratory relief requested by SWEPCO. Burlington Northern has appealed the state district court's judgment to the Texas Court of Appeals. This appeal is now pending. PCB Cases CSW and PSO As previously reported, PSO has been named defendant in complaints filed in state court in Oklahoma alleging, among other things, that some of the plaintiffs were contaminated with PCBs and other toxic by- products following transformer malfunctions. As of May 1, 1995, the complaints totaled approximately $395 million, of which amount approximately one-third represents punitive damages. Some claims have been dismissed, certain of which resulted in settlements among the parties. The settlements have not had a material adverse effect on CSW's or PSO's consolidated results of operations or financial condition. Although management cannot predict the outcome of these proceedings, management believes that PSO has defenses to these claims and intends to pursue them vigorously. Moreover, management has reason to believe that PSO's insurance may cover some of these claims. Management also believes that the ultimate resolution of these cases will not have a material adverse effect on CSW's or PSO's consolidated results of operations or financial condition. 49 Other Legal Claims and Proceedings CSW, CPL, PSO, SWEPCO and WTU The CSW System is party to various other legal claims and proceedings arising in the normal course of business. Management does not expect disposition of these matters to have a material adverse effect on the registrants' results of operations or financial condition. See NOTE 2. Litigation and Regulatory Proceedings for a discussion of each of the Electric Operating Companies regulatory matters. 50 Item 4. Submission of Matters to a Vote of Security Holders. CSW (a) The annual meeting of stockholders of CSW was held on April 20, 1995. (b) The stockholders elected five directors at the annual meeting. The name of each nominee and the number of shares voted for or against were as follows: Nominee Votes for Votes against Glenn Biggs 165,629,077 929,897 E.R. Brooks 165,533,583 1,025,391 Robert W. Lawless 165,601,238 957,736 James L. Powell 165,582,313 976,661 Donald M. Carlton 165,597,922 961,052 In addition, stockholders voted to approve the appointment of Arthur Andersen LLP independent public accountants, as CSW's auditors for 1995, with 165,288,978 votes cast for approval, 664,580 votes cast against approval and 605,416 votes abstaining. (c) Other matters voted upon at the annual meeting of stockholders. No other matters (other than procedural matters) were voted upon at the annual meeting. CPL (a) The annual meeting of stockholders of CPL was held on April 13, 1995. (b) Directors elected at the annual meeting were: E. R. Brooks Pete Morales, Jr. Robert R. Carey S. Loyd Neal, Jr. Ruben M. Garcia H. Lee Richards David L. Hooper Melanie J. Richardson Harry D. Mattison J. Gonzalo Sandoval Robert A. McAllen Gerald E. Vaughn (c) Other matters voted upon at the annual meeting of stockholders. No other matters (other than procedural matters) were voted upon at the annual meeting. 51 PSO (a) The annual meeting of stockholders of PSO was held on April 18, 1995. (b) Directors elected at the annual meeting were: E. R. Brooks William R. McKamey Harry A. Clarke Mary M. Polfer Paul K. Lackey, Jr. Dr. Robert B. Taylor, Jr. Paula Marshall-Chapman Robert L. Zemanek Harry D. Mattison Waldo J. Zerger, Jr. (c) Other matters voted upon at the annual meeting of stockholders. No other matters (other than procedural matters) were voted upon at the annual meeting. SWEPCO (a) The annual meeting of stockholders of SWEPCO was held on April 12, 1995. (b) Directors elected at the annual meeting were: Richard H. Bremer Dr. Frederick E. Joyce E. R. Brooks Michael H. Madison James E. Davison Harry D. Mattison Al P. Eason, Jr. Marvin R. McGregor W. J. Googe, Jr. William C. Peatross (c) Other matters voted upon at the annual meeting of stockholders. No other matters (other than procedural matters) were voted upon at the annual meeting. 52 WTU (a) The annual meeting of stockholders of WTU was held on April 25, 1995. (b) Directors elected at the annual meeting were: Richard F. Bacon Tommy Morris C. Harwell Barber Dian G. Owen E. R. Brooks James M. Parker Paul. J. Brower Dennis M. Sharkey T.D. Churchwell F. L. Stephens Glenn Files Donald A. Welch Harry D. Mattison (c) Other matters voted upon at the annual meeting of stockholders. No other matters (other than procedural matters) were voted upon at the annual meeting. 53 Item 5. Other Information. Proposed El Paso Merger CSW Background In May 1993, CSW entered into a Merger Agreement pursuant to which El Paso would emerge from bankruptcy as a wholly-owned subsidiary of CSW. El Paso is an electric utility company headquartered in El Paso, Texas, which had filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code on January 8, 1992. On July 30, 1993, El Paso filed a Modified Plan, and on December 8, 1993, the Bankruptcy Court confirmed the Modified Plan. Under the Modified Plan, the total value of CSW's offer to acquire El Paso is approximately $2.2 billion. The Modified Plan generally provides for El Paso creditors and shareholders to receive shares of CSW Common and/or securities of El Paso, or to have their claims cured and reinstated. The Merger is subject to numerous conditions set forth in the Merger Agreement including, among others, receipt of all required regulatory approvals and the absence of a material adverse effect or facts or circumstances that could reasonably be expected to result in a material adverse effect on El Paso. The Merger Agreement also provides that CSW and El Paso have the right to terminate the Merger Agreement under specified circumstances including, among others, the failure of the Effective Date as defined in the Merger Agreement to occur on or before the Termination Date, which is defined as 18 months after the Confirmation Date or June 8, 1995. Required regulatory approvals and filings in connection with the Merger include approvals of the FERC, the SEC, the Texas Commission, the New Mexico Commission, the NRC, and filings with the Department of Justice and the Federal Trade Commission under the HSR Act. As of May 1, 1995 applications for all federal and state required regulatory approvals were pending, except that early termination of the waiting period was granted under the HSR Act on April 28, 1995. Although CSW contemplates that one or more additional required regulatory approvals may be forthcoming on or before June 8, 1995, CSW does not expect that all such required approvals will have been issued and become final before that date. The Termination Date can be extended up to six months to December 8, 1995 upon the mutual agreement of the parties. To date no request has been received from or sent to El Paso to extend the Termination Date. On September 12, 1994, in a letter responding to an earlier letter from El Paso dated August 5, 1994, CSW reiterated its position that continuing service to Las Cruces is a material element of CSW's bargain with El Paso and advised El Paso that the muncipalization efforts in Las Cruces and other matters, including (i) the potential loss of other customers in El Paso's service area, including the Holloman Air Force Base and the White Sands Missile Range in New Mexico, (ii) cracking in steam generator tubes at Palo Verde, (iii) intense political and regulatory opposition to the Merger, and (iv) a new "comparable transmission service" standard being imposed on the Merger by the FERC, place the completion of the Merger in jeopardy. CSW's September 12, 1994, letter further advised El Paso that the foregoing matters, individually and cumulatively, constitute a material adverse effect or failure of other closing conditions under the Merger Agreement which, unless timely resolved, could preclude closing of the proposed Merger. By letter dated September 16, 1994, El Paso disagreed with the positions set forth by CSW in its September 12 letter and asserted that CSW's September 12 letter "has inflicted irreparable harm on El Paso and the Merger process." Since September 1994, CSW and El Paso have exchanged a number of letters relating both to their disagreement with respect to the contingencies identified in CSW's September 12 letter as well as to various other issues under the Merger Agreement and Modified Plan. 54 Recent Developments On May 11, 1995, El Paso filed an amended complaint with the Bankruptcy Court in a existing adversarial proceeding seeking to enjoin the Texas Commission from entering rulings which El Paso believes are inconsistent with findings of fact entered by the Bankruptcy Court. Although CSW continues to use its best efforts to obtain the required regulatory approvals and work toward consummation of the Merger, CSW continues to monitor the aforementioned contingencies which could preclude the consummation of the Merger. Based upon the failure of El Paso to resolve the contingencies set forth above, the likelihood that the required regulatory approvals will not be obtained by June 8, 1995, and the potential impacts of the pending Bankruptcy Court hearings, CSW believes that it is uncertain and cannot presently predict whether, or if so when, the Merger will be consummated. If the Merger is not consummated, then under certain circumstances set forth in the Merger Agreement CSW or El Paso would be required to pay a $25 million termination fee to the other party. Additionally, under certain circumstances, if the Merger is not consummated, the Merger Agreement provides for CSW to pay El Paso a portion of certain interest costs and certain fees and expenses estimated as of March 31, 1995 to be approximately $20.5 million; however, the actual amount, if any, that CSW may be required to pay pursuant to these provisions depends on a number of contingencies and cannot presently be predicted. If the Merger Agreement is terminated, whether or not any termination fee is payable, CSW could be required to recognize as an expense deferred costs associated with the Merger, which amounted to approximately $40 million at March 31, 1995. In the event that the Merger is not consummated, there may be ensuing litigation between El Paso and CSW or among other parties to El Paso's bankruptcy proceedings and either or both El Paso and CSW. As previously reported, on October 11, 1994, the Bankruptcy Court granted an application by El Paso to employ special litigation counsel to advise El Paso as to ongoing activities with CSW and to assist El Paso as to the best means of preserving its rights. El Paso has recently taken the position that if, CSW attempts to terminate the Merger Agreement without proper justification or otherwise breaches the Merger Agreement, then litigation could ensue. The Merger Agreement provides for specific performance as a remedy and other damages may be available in the event of breach by either party of the Merger Agreement. Regulatory Approvals The following discussion updates previous disclosure concerning regulatory approvals required for the consummation of the Merger. Texas Commission Applications As previously reported, on March 3, 1995, the Texas Commission issued an interim order in the El Paso rate case and in the proceeding relating to the Merger with CSW. The interim order found the proposed Merger to be in the public interest and provides for a $24.9 million base rate increase for El Paso. The interim order adopted most of the recommendations of the presiding officers. A significant revision to the presiding officers recommendations was an increase in the allowed return on equity from 11.5% to 12%. The presiding officers' recommendations were adopted in the interim order for several significant issues even though agreement was not reached by the Texas Commission. CSW has taken the position that the interim order does not grant the regulatory rate treatment required by the Merger Agreement. El Paso has disagreed with this position. Motions for reconsideration on various issues were filed by CSW and El Paso and various other parties to the rate case. These issues included conditioning approval of the Merger on resolution of the Las Cruces 55 and Palo Verde issues, the rate treatment of the tax effects of lease rejection damages, recovery of any acquisition adjustment and deferred costs associated with the regulatory lag period prior to receiving rate treatment for Palo Verde Unit 3. The Texas Commission considered the motions for reconsideration at meetings on April 17 and May 3, 1995. On May 3, 1995, the Texas Commission heard oral arguments on the motions for reconsideration of its interim order and the effect on that order of the recent court decisions discussed below. The Texas Commission held additional discussions on the motions for reconsideration on May 10, 1995 and has scheduled a final interim order meeting on May 16, 1995. It is uncertain whether the Texas Commission will modify any of its previously adopted positions in its initial first interim order. Pending resolution of these issues, the Texas Commission allowed El Paso's bonded rates to remain in effect until a subsequent interim decision is issued. Recent court decisions at the Austin Court of Appeals and Supreme Court of Texas may affect the Texas Commission's rulings on treatment of the Palo Verde inventory plan for Unit 3 and actual taxes paid methodology. At this time both court decisions are subject to motions for rehearing. It is uncertain whether the courts' decisions will be modified or whether the Texas Commission will modify its interim order based upon such decisions. The Texas Commission severed fuel related issues from the El Paso rate case and issued a final order which allows for El Paso to lower its fixed fuel factors by $14.3 million annually and to refund $13.7 million in over-collected fuel costs over a twelve month period. New Mexico Commission Application As previously reported, on March 14, 1994, CSW and El Paso filed an application with the New Mexico Commission seeking approval of the pending Merger, the reacquisition of the leased Palo Verde assets and certain accounting treatments. On February 10, 1995, the New Mexico Commission Staff filed testimony recommending approval of each of these requests. Hearings in New Mexico were completed on March 2, 1995. This revised schedule allows for the issuance of a final order by the New Mexico Commission by June 1995. It is uncertain when a final order may be issued by the New Mexico Commission. On April 5, 1995, El Paso filed an application with the New Mexico Commission for authorization to issue the securities under the plan of reorganization. On May 1, 1995, the hearing examiner issued a procedural order setting a hearing on the application for May 25, 1995. The schedule established by the hearing examiner allows for the issuance by the New Mexico Commission of a final order by June 8, 1995. It is uncertain when a final order may be issued by the New Mexico Commission. FERC Application As previously reported, on August 1, 1994, the FERC issued orders in two proceedings that relate to the Merger. In an order issued under Section 211 of the Federal Power Act, the FERC preliminarily found that "a final order requiring SPS to provide the transmission service requested by the Applicants would comply with the statutory standards, once reliability concerns have been met." The FERC also issued an order under Section 203 of the FPA in which the FERC ruled that it will require merging utilities to offer transmission service to others on a basis that is comparable to their own uses of their transmission systems and consolidated the Section 203 and 205 proceedings of the FPA for hearing purposes. 56 On April 11, 1995, the FERC ALJ who presided over the hearings related to the Section 203 and Section 205 application issued a decision finding the Merger to be consistent with the public interest. The ALJ recommended that the Merger be approved subject to the FERC's deciding a number of issues concerning transmission service. The FERC will consider the ALJ's initial decision after all of the parties file briefs setting forth their exception to the initial decision. It is uncertain if the FERC will render a decision prior to June 8, 1995. SEC Application As previously reported, on January 10, 1994, CSW filed with the SEC an application under the Holding Company Act seeking authorization of the Merger and reacquisition of the Palo Verde leased assets. CSW subsequently amended the application to eliminate the request for authorization to engage in certain hedging transactions, at the request of the SEC staff. CSW has subsequently amended and supplemented the application and has filed a brief in response to intervention petitions. On April 6, 1995, CSW filed an amendment to the application in order to update and summarize for the SEC the record of the other federal and state regulatory proceedings relating to the Merger. In that filing, CSW requested the SEC to take action promptly on the application and issue an appropriate order as soon as possible. However, it is uncertain what action the SEC will take with respect to the application, or when such action will be taken. NRC Application As previously reported, on January 13, 1994, APS, as operating agent for Palo Verde, joined by El Paso, filed a request with the NRC for (i) consent to the indirect transfer of El Paso's interest in the operating licenses for Palo Verde Units 1, 2, and 3 that will occur as a result of the Merger, and (ii) to amend the operating licenses for Units 2 and 3 to delete provisions of those licenses related to El Paso's sale and leaseback transactions involving those units. The request to the NRC specifies that the proposed amendments to the operating licenses and consent become effective on the Effective Date, but it is uncertain whether and, if so, when the approvals and consent will be granted. HSR Act On April 28, 1995, the FTC granted early termination of the waiting period under the HSR Act. Other El Paso is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the SEC. For additional information concerning El Paso, and the Proposed El Paso Merger see El Paso's Annual Report on Form 10-K and the documents referenced therein. For additional information relating to the proposed El Paso Merger see CSW's Annual Report on Form 10-K for the year ended December 31, 1994. Environmental Matters CSW and SWEPCO Biloxi, Mississippi MGP Site SWEPCO has been notified by Mississippi Power Company that it may be a PRP at the former Biloxi MGP site formerly owned and operated by a predecessor of SWEPCO. SWEPCO is working with Mississippi Power Company to investigate the extent of contamination at this site. The MDEQ approved a site investigation work plan and, in January 1995, SWEPCO and Mississippi Power Company initiated sampling pursuant to that work plan. SWEPCO and Mississippi Power Company have learned that 57 the samples collected in January 1995 were held by the contractor for a period of time in excess of the permitted period and will have to be recollected. On an interim basis, SWEPCO and Mississippi Power Company are each paying fifty percent of the cost of implementing the site investigation work plan. That interim allocation is subject to a final allocation in the future. SWEPCO and Mississippi Power Company are investigating whether there are other PRPs at the Biloxi site. Until the extent of the contamination at the Biloxi site is identified, it is unknown what, if any, additional investigation or cleanup may be required. Marshall, Texas MGP Site SWEPCO conducted another round of groundwater sampling from the site's groundwater monitor wells. Sample results from each of the nine monitor wells indicate that there were no drinking water standards exceeded for RCRA Metals. In April 1995, additional off-site soil samples were collected and are being analyzed for metals concentrations to provide for statistical comparison of on-site soils metals concentrations with off-site or background levels. If metals concentrations are determined to be comparable to background levels, then SWEPCO will proceed with closure of the site under the TNRCC Risk Reduction Rules Option that enable SWEPCO to place a deed restriction on the site documenting the levels of any substances determined to be above lab detection levels. If on-site metals levels are above background levels then SWEPCO will proceed with a site specific risk assessment as required under the TNRCC Risk Reduction Rules. 58 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: (12) Computation of Ratio of Earnings to Fixed Charges CPL - (Exhibit 12.1) PSO - (Exhibit 12.3) SWEPCO - (Exhibit 12.4) WTU - (Exhibit 12.5) Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends CPL - (Exhibit 12.2) (27) Financial Data Schedules CSW - (Exhibit 27.1) CPL - (Exhibit 27.2) PSO - (Exhibit 27.3) SWEPCO - (Exhibit 27.4) WTU - (Exhibit 27.5) (b) Reports on Form 8-K: CSW CSW filed a Current Report on Form 8-K, dated January 17, 1995, Item 5. Other Events, reporting developments in the proposed El Paso Merger. CSW filed a Current Report on Form 8-K, dated April 5, 1995, Item 5. Other Events, reporting developments in CPL regulatory matters. CPL CPL filed a Current Report on Form 8-K, dated April 5, 1995, Item 5. Other Events, reporting developments in its regulatory matters. PSO No Current Reports on Form 8-K were filed for PSO. SWEPCO No Current Reports on Form 8-K were filed for SWEPCO. WTU WTU filed a Current Report on Form 8-K, dated February 17, 1995, Item 5. Other Events, providing unaudited financial information for the fiscal year ended December 31, 1994, in anticipation of a debt offering by WTU. 59 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned registrant shall be deemed to relate only to matters having reference to such registrant or its subsidiaries. CENTRAL AND SOUTH WEST CORPORATION Date: May 15, 1995 /s/ Wendy G.Hargus Wendy G. Hargus Controller and Chief Accounting Officer (Principal Accounting Officer) CENTRAL POWER AND LIGHT COMPANY PUBLIC SERVICE COMPANY OF OKLAHOMA SOUTHWESTERN ELECTRIC POWER COMPANY WEST TEXAS UTILITIES COMPANY Date: May 15, 1995 /s/ R. Russell Davis R. Russell Davis Controller and Chief Accounting Officer (Principal Accounting Officer) EX-12 2 EXHIBIT 12.1 CPL EXHIBIT 12.1 CENTRAL POWER AND LIGHT COMPANY RATIO OF EARNINGS TO FIXED CHARGES FOR THE TWELVE MONTHS ENDED MARCH 31, 1995 (Thousands Except Ratio) (Unaudited) Operating Income $249,863 Adjustments: Federal income taxes 54,946 Provision for deferred Federal income taxes (30,673) Deferred investment tax credits (5,789) Other income and deductions 8,370 Allowance for borrowed and equity funds used during construction 4,316 Mirror CWIP amortization 61,250 Earnings $342,283 Fixed Charges: Interest on long-term debt $113,288 Interest on short-term debt and other 13,695 Fixed Charges $126,983 Ratio of Earnings to Fixed Charges 2.70 EX-12 3 EXHIBIT 12.2 CPL EXHIBIT 12.2 CENTRAL POWER AND LIGHT COMPANY RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS FOR THE TWELVE MONTHS ENDED MARCH 31, 1995 (Thousands Except Ratio) (Unaudited) Operating Income $249,863 Adjustments: Federal income taxes 54,946 Provision for deferred Federal income taxes (30,673) Deferred investment tax credits (5,789) Other income and deductions 8,370 Allowance for borrowed and equity funds used during construction 4,316 Mirror CWIP amortization 61,250 Earnings $342,283 Fixed Charges: Interest on long-term debt $113,288 Interest on short-term debt and other 13,695 Preferred stock dividend requirements 15,583 Fixed Charges and Preferred Requirements $142,566 Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends 2.40 EX-12 4 EXHIBIT 12.3 PSO EXHIBIT 12.3 PUBLIC SERVICE COMPANY OF OKLAHOMA (CONSOLIDATED) RATIO OF EARNINGS TO FIXED CHARGES FOR THE TWELVE MONTHS ENDED MARCH 31, 1995 (Thousands Except Ratio) (Unaudited) Operating Income $ 98,679 Adjustments: Federal and state income taxes 32,851 Provision for deferred Federal and state income taxes 4,621 Deferred investment tax credits (2,789) Other income and deductions 3,723 Allowance for borrowed and equity funds used during construction 3,222 Earnings $140,307 Fixed Charges: Interest on long-term debt $29,595 Amortization of debt issuance cost 1,568 Other interest 3,053 Fixed Charges $ 34,216 Ratio of Earnings to Fixed Charges 4.10 EX-12 5 EXHIBIT 12.4 EXHIBIT 12.4 SOUTHWESTERN ELECTRIC POWER COMPANY RATIO OF EARNINGS TO FIXED CHARGES FOR THE TWELVE MONTHS ENDED MARCH 31, 1995 (Thousands except Ratio) (Unaudited) Operating Income $147,689 Adjustments: Federal and state income taxes 21,677 Provision for deferred Federal and state income taxes 22,183 Deferred investment tax credits (4,246) Other income and deductions 703 Allowance for borrowed and equity funds used during construction 2,697 Interest portion of financing leases 2,141 Earnings $192,844 Fixed Charges: Interest on long-term debt $43,903 Amortization of debt issuance cost 3,558 Other interest 5,278 Interest portion of financing leases 2,141 Fixed Charges $ 54,880 Ratio of Earnings to Fixed Charges 3.51 EX-12 6 EXHIBIT 12.5 WTU EXHIBIT 12.5 WEST TEXAS UTILITIES COMPANY RATIO OF EARNINGS TO FIXED CHARGES FOR THE TWELVE MONTHS ENDED MARCH 31, 1995 (Thousands Except Ratio) (Unaudited) Operating Income $56,172 Adjustments: Federal income taxes 10,789 Provision for deferred Federal income taxes 5,529 Deferred investment tax credits (1,321) Other income and deductions 4,141 Allowance for borrowed and equity funds used during construction 592 Earnings $75,902 Fixed Charges: Interest on long-term debt $19,004 Interest on short-term debt and other 3,849 Fixed Charges $22,853 Ratio of Earnings to Fixed Charges 3.32 EX-27 7
UT 001 CENTRAL AND SOUTH WEST CORPORATION 1,000,000 3-MOS 3-MOS DEC-31-1995 DEC-31-1994 MAR-31-1995 MAR-31-1994 PER-BOOK PER-BOOK 7,382 0 942 0 1,076 0 515 0 901 0 10,816 0 669 0 573 0 1,781 0 3,023 0 35 0 292 0 2,894 0 0 0 50 0 1,424 0 27 0 1 0 12 0 5 0 3,053 0 10,816 0 659 850 (43) 15 612 742 569 757 90 93 35 23 125 116 81 68 44 48 5 5 39 43 82 80 56 53 93 107 0.20 0.23 0.20 0.23
EX-27 8
UT 003 CENTRAL POWER AND LIGHT COMPANY 1,000 3-MOS 3-MOS DEC-31-1995 DEC-31-1994 MAR-31-1995 MAR-31-1994 PER-BOOK PER-BOOK 3,462,012 0 2,039 0 151,544 0 1,154,393 0 102,109 0 4,872,097 0 168,888 0 405,000 0 834,933 0 1,408,821 0 0 0 250,351 0 1,468,001 0 0 0 0 0 0 0 723 0 0 0 206 0 69 0 1,743,926 0 4,872,097 0 127,282 263,229 (53,623) 4,910 150,349 221,376 96,726 226,286 30,556 36,943 18,346 18,038 48,902 54,981 32,540 29,995 16,362 24,986 3,896 3,458 12,466 21,528 35,000 20,000 28,560 26,679 17,938 10,464 .07 .11 .07 .11
EX-27 9
UT 004 PUBLIC SERVICE COMPANY OF OKLAHOMA 1,000 3-MOS 3-MOS DEC-31-1995 DEC-31-1994 MAR-31-1995 MAR-31-1994 PER-BOOK PER-BOOK 1,304,567 0 4,506 0 104,222 0 16,835 0 35,061 0 1,465,191 0 157,230 0 180,000 0 131,514 0 468,744 0 0 0 19,826 0 378,127 0 61,670 0 0 0 0 0 25,000 0 0 0 0 0 0 0 511,824 0 1,465,191 0 148,416 157,509 1,470 1,577 134,098 143,505 135,568 145,082 12,848 12,427 3,168 (6) 16,016 12,421 8,567 8,114 7,449 4,307 204 204 7,245 4,103 0 5,000 7,399 7,398 24,047 4,225 .04 .02 .04 .02
EX-27 10
UT 0000092487 SOUTHWESTERN ELECTRIC POWER COMPANY 1,000 3-MOS 3-MOS DEC-31-1995 DEC-31-1994 MAR-31-1995 MAR-31-1994 PER-BOOK PER-BOOK 1,857,590 0 3,458 0 172,568 0 29,423 0 21,868 0 2,084,907 0 135,660 0 245,000 0 312,209 0 692,869 0 34,828 0 16,032 0 532,629 0 0 0 50,000 0 0 0 145 0 1,200 0 11,860 0 5,100 0 740,244 0 2,084,907 0 169,240 190,066 5,211 4,588 137,442 160,658 142,653 165,246 26,587 24,820 1,859 1,717 28,446 26,537 12,921 12,000 15,525 14,537 778 840 14,747 13,697 0 6,000 11,321 10,813 15,791 44,825 .08 .07 .08 .07
EX-27 11
UT 006 WEST TEXAS UTILITIES COMPANY 1,000 3-MOS 3-MOS dec-31-1995 DEC-31-1994 MAR-31-1995 MAR-31-1994 PER-BOOK PER-BOOK 665,316 0 961 0 67,647 0 26,708 0 20,744 0 781,376 0 137,214 0 2,236 0 136,671 0 276,121 0 0 0 6,291 0 250,415 0 16,592 0 0 0 0 0 650 0 0 0 0 0 0 0 231,307 0 781,376 0 74,921 83,319 1,614 1,309 63,411 73,523 65,025 74,832 9,896 8,487 208 283 10,104 8,770 5,871 5,224 4,233 3,546 66 151 4,167 3,395 0 5,000 4,840 4,383 1,177 (26,899) .02 .02 .02 .02
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