UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-13-60
ANNUAL REPORT
FOR THE PERIOD
BEGINNING JANUARY 1, 1997 AND ENDING DECEMBER 31, 1997
TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
CENTRAL AND SOUTH WEST SERVICES, INC.
(EXACT NAME OF REPORTING COMPANY)
A SUBSIDIARY SERVICE COMPANY
("Mutual" or "Subsidiary")
Date of Incorporation JANUARY 8, 1969 If not Incorporated, Date of
Organization .
State or Sovereign Power under which Incorporated or Organized TEXAS
Location of Principal Executive Offices of Reporting Company TULSA, OKLAHOMA
Name, title, and address of officer to whom correspondence concerning this
report should be addressed:
R. RUSSELL DAVIS CONTROLLER P.O. BOX 21928 TULSA, OKLAHOMA 74121-1928
(Name) (Title) (Address)
NAME OF PRINCIPAL HOLDING COMPANY WHOSE SUBSIDIARIES ARE SERVED BY
REPORTING COMPANY:
CENTRAL AND SOUTH WEST CORPORATION
<PAGE>
<PAGE>
Page 3
INSTRUCTIONS FOR USE OF FORM U-13-60
1. TIME OF FILING. --Rule 94 provides that on or before the first day of May in
each calendar year, each mutual service company and each subsidiary service
company as to which the Commission shall have made a favorable finding pursuant
to Rule 88, and every service company whose application for approval or
declaration pursuant to Rule 88 is pending shall file with the Commission an
annual report on Form U-13-60 and in accordance with the Instructions for that
form.
2. NUMBER OF COPIES. --Each annual report shall be filed in duplicate. The
company should prepare and retain at least one extra copy for itself in case
correspondence with reference to the report becomes necessary.
3. PERIOD COVERED BY REPORT. --The first report filed by any company shall cover
the period from the date the Uniform System of Accounts was required to be made
effective as to that company under Rules 82 and 93 to the end of that calendar
year. Subsequent reports should cover a calendar year.
4. REPORT FORMAT. --Reports shall be submitted on the forms prepared by the
Commission. If the space provided on any sheet of such form is inadequate,
additional sheets may be inserted of the same size as a sheet of the form or
folded to each size.
5. MONEY AMOUNTS DISPLAYED. --All money amounts required to be shown in
financial statements may be expressed in whole dollars, in thousands of dollars
or in hundred thousands of dollars, as appropriate and subject to provisions of
Regulation S-X (210.3-01(b)).
6. DEFICITS DISPLAYED. --Deficits and other like entries shall be indicated by
the use of either brackets or a parenthesis with corresponding reference in
footnotes. (Regulation S-X,210.3-01(c))
7. MAJOR AMENDMENTS OR CORRECTIONS. --Any company desiring to amend or correct a
major omission or error in a report after it has been filed with the Commission
shall submit an amended report including only those pages, schedules, and
entries that are to be amended or corrected. A cover letter shall be submitted
requesting the Commission to incorporate the amended report changes and shall be
signed by a duly authorized officer of the company.
8. DEFINITIONS. --Definitions contained in Instruction 01-8 to the Uniform
System of Accounts for Mutual Service Companies and Subsidiary Service
Companies, Public Utility Holding Company Act of 1935, as amended February 2,
1979 shall be applicable to words or terms used specifically within this Form
U-13-60.
9. ORGANIZATION CHART. --The service company shall submit with each annual
report a copy of its current organization chart.
10. METHODS OF ALLOCATION. --The service company shall submit with each annual
report a listing of the currently effective methods of allocation being used by
the service company and on file with the Securities and Exchange Commission
pursuant to the Public Utility Holding Company Act of 1935.
11. ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED. --The service
company shall submit with each annual report a copy of the annual statement
supplied to each associate company in support of the amount of compensation for
use of capital billed during the calendar year.
<PAGE>
Page 4a
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
Schedule or Page
DESCRIPTION OF SCHEDULES AND ACCOUNTS ACCOUNT NUMBER NUMBER
Comparative Balance Sheet Schedule I 5-6
Service Company Property Schedule II 7
Accumulated Provision for Depreciation and
Amortization of Service Company Property Schedule III 8
Investments Schedule IV 9
Accounts Receivable from Associate Companies Schedule V 9
Fuel Stock Expenses Undistributed Schedule VI 10
Stores Expense Undistributed Schedule VII 10
Miscellaneous Current and Accrued Assets Schedule VIII 11
Miscellaneous Deferred Debits Schedule IX 11
Research, Development, or Demonstration
Expenditures Schedule X 11
Proprietary Capital Schedule XI 12
Long-Term Debt Schedule XII 13
Current and Accrued Liabilities Schedule XIII 14
Notes to Financial Statements Schedule XIV 14
Comparative Income Statement Schedule XV 15
Analysis of Billing - Associate Companies Account 457 16
Analysis of Billing - Non Associate Companies Account 458 17
Analysis of Charges for Service - Associate
and Non Associate Companies Schedule XVI 18
Schedule of Expense by Department or Service
Function Schedule XVII 19-20
Departmental Analysis of Salaries Account 920 21
<PAGE>
Page 4b
Schedule or Page
DESCRIPTION OF SCHEDULES AND ACCOUNTS ACCOUNT NUMBER NUMBER
Outside Services Employed Account 923 21
Employee Pensions and Benefits Account 926 22
General Advertising Expenses Account 930.1 22
Miscellaneous General Expenses Account 930.2 23
Rents Account 931 23
Taxes Other Than Income Taxes Account 408 24
Donations Account 426.1 24
Other Deductions Account 426.5 25
Notes to Statement of Income Schedule XVIII 25
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
Page
DESCRIPTION OF SCHEDULES AND ACCOUNTS NUMBER
Organization Chart 26
Methods of Allocation 26
Annual Statement of Compensation for Use of Capital Billed 26
<PAGE>
Page 5
ANNUAL REPORT OF Central and South West Services, Inc.
SCHEDULE I - COMPARATIVE BALANCE SHEET
(thousands)
Give balance sheet of the Company as of December 31 of the current and prior
year.
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
- ------- -----------------------
1997 1996
-------- --------
SERVICE COMPANY PROPERTY
101 Service company property (Schedule II) $116,683 $120,343
107 Construction work in progress (Schedule II) 2,450 --
-------- --------
Total Property 119,133 120,343
-------- --------
108 Less accumulated provision for depreciation
and amortization of service company property
(Schedule III) 33,572 28,822
-------- --------
Net Service Company Property 85,561 91,521
INVESTMENTS
123 Investments in associate companies (Schedule IV) -- --
124 Other investments (Schedule IV) 3,839 4,148
-------- --------
Total Investments 3,839 4,148
CURRENT AND ACCRUED ASSETS
131 Cash 4,963 1,270
134 Special deposits -- 323
135 Working funds 120 169
136 Temporary cash investments (Schedule IV) -- --
141 Notes receivable -- 3,006
143 Accounts receivable 2,277 3,513
144 Accumulated provision of uncollectible accounts -- --
146 Accounts receivable from associate companies
(Schedule V) 31,798 34,582
152 Fuel stock expenses undistributed (Schedule VI) -- --
154 Materials and supplies 14 --
163 Stores expense undistributed (Schedule VII) -- --
165 Prepayments 16,215 14,157
174 Miscellaneous current and accrued assets
(Schedule VIII) -- --
-------- --------
Total Current and Accrued Assets 55,387 57,020
DEFERRED DEBITS
181 Unamortized debt expense -- --
184 Clearing accounts 14 208
186 Miscellaneous deferred debits (Schedule IX) 344 134
188 Research, development, or demonstration
expenditures (Schedule X) -- --
190 Accumulated deferred income taxes 773 662
-------- --------
Total Deferred Debits 1,131 1,004
-------- --------
TOTAL ASSETS AND OTHER DEBITS $145,918 $153,693
======== ========
<PAGE>
Page 6
ANNUAL REPORT OF Central and South West Services, Inc.
SCHEDULE I - COMPARATIVE BALANCE SHEET
(thousands)
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
- ------- -----------------------------------
1997 1996
-------- --------
PROPRIETARY CAPITAL
201 Common stock issued (Schedule XI) $100 $100
211 Miscellaneous paid-in-capital (Schedule XI) -- --
215 Appropriated retained earnings (Schedule XI) -- --
216 Unappropriated retained earnings
(Schedule XI) -- --
-------- --------
Total Proprietary Capital 100 100
LONG-TERM DEBT
223 Advances from associate companies
(Schedule XII) -- --
224 Other long-term debt (Schedule XII) 60,000 60,000
225 Unamortized premium on long-term debt -- --
226 Unamortized discount on long-term debt-debit -- --
-------- --------
Total Long-Term Debt 60,000 60,000
CURRENT AND ACCRUED LIABILITIES
228 Accumulated provision for pensions and
benefits 1,487 --
231 Notes payable -- --
232 Accounts payable 28,433 24,304
233 Notes payable to associate companies
(Schedule XIII) 26,390 40,713
234 Accounts payable to associate companies
(Schedule XIII) 1,755 2,843
236 Tax accrued 1,499 412
237 Interest accrued 133 --
238 Dividends declared -- --
241 Tax collections payable 630 774
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 1,854 615
-------- --------
Total Current and Accrued Liabilities 62,181 69,661
DEFERRED CREDITS
253 Other deferred credits 9,049 9,387
255 Accumulated deferred investment tax credits -- --
-------- --------
Total Deferred Credits 9,049 9,387
282 ACCUMULATED DEFERRED INCOME TAXES 14,588 14,545
-------- --------
-------- --------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL $145,918 $153,693
======== ========
<PAGE>
Page 7a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE II - SERVICE COMPANY PROPERTY
(thousands)
<TABLE>
<CAPTION>
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER (1) AT CLOSE
DESCRIPTION OF YEAR ADDITIONS SALES CHANGES OF YEAR
<S> <C> <C> <C> <C> <C>
Service Company Property
Account
301 Organization $-- $-- $-- $-- $--
303 Miscellaneous Intangible Plant 2,353 507 -- -- 2,860
304 Land and Land Rights 6,381 -- -- -- 6,381
305 Structures and Improvements 42,077 96 -- -- 42,173
306 Leasehold Improvements 6,090 74 -- -- 6,164
307 Equipment (2) 29,808 5,046 (3,586) -- 31,268
308 Office Furniture and Equipment 14,421 264 (44) -- 14,641
309 Automobiles, Other Vehicles
and Related Garage Equipment 247 -- (52) -- 195
310 Aircraft and Airport Equipment 18,882 473 (6,437) -- 12,918
311 Other Service Company
Property (3) 84 -- (1) -- 83
---------------------------------------------------
SUB-TOTAL $120,343 $6,460 $(10,120) $-- $116,683
107 Non-Billable Construction Work
in Progress (4) -- 2,450 -- -- 2,450
---------------------------------------------------
TOTAL $120,343 $8,910 $(10,120) $-- $119,133
====================================================
(1) Provide an explanation of those changes considered material: None.
</TABLE>
<PAGE>
Page 7b
SCHEDULE II - CONTINUED
(thousands)
(2) Sub accounts are required for each class of equipment owned. The service
company shall provide a listing by sub account of equipment additions during the
year and the balance at the close of the year:
BALANCE
AT CLOSE
SUB ACCOUNT DESCRIPTION ADDITIONS OF YEAR
Account 307 - Equipment
Copy Machines $-- $--
Data Processing Equipment 4,733 25,103
Microfilm/Microfiche -- --
Communications Equipment 245 5,529
Other 68 636
---------- ---------
TOTAL $5,046 $31,268
========== =========
(3) Describe Other Service Company Property:
Refrigerators/Ice Makers $-- $10
Appliances -- 15
Industrial Hygiene Equipment -- 11
Power Wench -- 1
Portable Generator/Submersible Pump -- 1
10' Expandable Display -- 1
Soft Drink Vending Machines -- 4
Electric Trimmer -- 2
Projector -- 6
Aerial Work Platform -- 7
Power Punch Machine -- 3
Exercise Equipment -- 19
VCR/TV Combination -- 2
Desk Top Labeling System -- 1
---------- ---------
$-- $83
========== =========
(4) Describe Non-Billable Construction Work
in Progress:
Invoicing Software 299 299
Tailored Collaboration Billing System 446 446
Business Unit Reporting Project 1,705 1,705
---------- ---------
$2,450 $2,450
========== =========
<PAGE>
Page 8
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION
OF SERVICE COMPANY PROPERTY
(thousands)
<TABLE>
<CAPTION>
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER (1) AT CLOSE
DESCRIPTION OF YEAR ADDITIONS SALES CHANGES OF YEAR
<S> <C> <C> <C> <C> <C>
Account
301 Organization $-- $-- $-- $-- $--
303 Miscellaneous Intangible Plant 1,083 370 -- -- 1,453
304 Land and Land Rights -- -- -- -- --
305 Structures and Improvements 6,277 1,434 -- -- 7,711
306 Leasehold Improvements 1,101 473 -- -- 1,574
307 Equipment 13,045 4,925 (3,586) -- 14,384
308 Office Furniture and Equipment 4,965 1,486 (45) -- 6,406
309 Automobiles, Other Vehicles
and Related Garage Equipment 108 40 (14) -- 134
310 Aircraft and Airport Equipment 2,192 602 (942) -- 1,852
311 Other Service Company
Property 51 8 (1) -- 58
----------------------------------------------------
TOTALS $28,822 $9,338 $(4,588) $-- $33,572
====================================================
(1) Provide an explanation of those changes considered material: None.
</TABLE>
<PAGE>
Page 9a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE IV - INVESTMENTS
(thousands)
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124 "Other Investments", state each investment separately, with
description, including the name of issuing company, number of shares or
principal amount, etc.
Under Account 136, "Temporary Cash Investments", list each investment
separately.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING OF YEAR CLOSE OF YEAR
Account 123 - Investment in Associate Companies $-- $--
Account 124 - Other Investments
Purchase of Mortgages $2,934 $2,683
Preston Trail Golf Club Purchase of Membership 88 88
Lakewood Country Club Purchase of Membership 16 16
Northwood Club Purchase of Membership 124 110
River Bend Golf and Country Club Purchase of
Membership 5 5
Brook Hollow Golf Club Purchase of Membership 80 80
Las Colinas Sports Club Purchase of Membership 15 15
Bent Tree Country Club Purchase of Membership 30 30
Texas Stadium Purchase of Texas Stadium Box Seats 722 656
Gleneagles Country Club Purchase of Membership 48 68
Oak Cliff Country Club Purchase of Membership 2 2
Barton Creek Club Purchase of Membership 30 30
El Paso Country Club Purchase of Membership 6 6
Fairfax Country Club Purchase of Membership 27 27
Royal Oaks Country Club Purchase of Membership -- 2
Sports Club at Four Seasons Purchase of
Membership 21 21
----------------------------
TOTAL $4,148 $3,839
Account 136 - Temporary Cash Investments -- --
----------------------------
TOTAL $4,148 $3,839
============================
<PAGE>
Page 9b
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
(thousands)
INSTRUCTIONS: Complete the following schedule listing accounts receivable from
each associate company. Where the service company has provided accommodation or
convenience payments for associate companies, a separate listing of total
payments for each associate company by sub account should be provided.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING OF YEAR CLOSE OF YEAR
Account 146 - Accounts Receivable from
Associate Companies
Central and South West Corporation $5,435 $5,531
Central Power and Light Company 8,573 7,401
Public Service Company of Oklahoma 6,334 6,105
Southwestern Electric Power Company 7,610 7,357
West Texas Utilities Company 4,454 2,864
CSW Credit, Inc. 76 89
CSW Energy, Inc. 399 227
CSW International, Inc. 193 72
C3 Communications, Inc. 845 105
EnerShop, Inc. 29 174
CSW Leasing, Inc. 23 105
SEEBOARD 611 862
CSW Energy Services, Inc. -- 726
CSW Power Marketing, Inc. -- 180
------- -------
TOTAL $34,582 $31,798
======= =======
Analysis of Convenience or Accommodation Payments TOTAL PAYMENTS
Central and South West Corporation $29,875
Central Power and Light Company (1,197)
Public Service Company of Oklahoma (587)
Southwestern Electric Power Company (442)
West Texas Utilities Company (1,618)
CSW Credit, Inc. (91)
CSW Energy, Inc. 620
CSW International, Inc. 97
C3 Communications, Inc. 105
EnerShop, Inc. 226
CSW Leasing, Inc. --
SEEBOARD 51
CSW Energy Services, Inc. 18
CSW Power Marketing, Inc. --
--------
TOTAL $27,057
========
The majority of convenience payments consist of the payment of inter-company
billings from the associate companies to the services company, taxes, corporate
insurance, relocation expenses, industry dues, and deferred compensation
payments.
<PAGE>
Page 10
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
(thousands)
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
fuel stock expenses during the year and indicate amount attributable to each
associate company. Under the section headed "Summary" listed below give an
overall report of the fuel functions performed by the service company.
DESCRIPTION LABOR EXPENSES TOTAL
Account 152 - Fuel Stock Expenses
Undistributed $-- $-- $--
-------------------------------
TOTAL $-- $-- $--
===============================
Summary: The service company provides overall management of fuel supply and
transportation procurement, as well as general administration. The associated
costs are expensed as incurred.
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
(thousands)
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
stores expense during the year and indicate amount attributable to each
associate company.
DESCRIPTION LABOR EXPENSES TOTAL
Account 163 - Billable Stores Expense
Undistributed
Central Power and Light Company $543 $435 $978
Public Service Company of Oklahoma 394 310 704
Southwestern Electric Power Company 365 295 660
West Texas Utilities Company 167 132 299
-------------------------------
TOTAL $1,469 $1,172 $2,641
===============================
Note: The overall procurement and management of materials and supplies is
provided by the service company. The associated costs are charged to Account
163 and billed out to the appropriate company.
<PAGE>
Page 11
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE VIII - MISCELLANEOUS CURRENT AND ACCRUED ASSETS
(thousands)
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped, showing the number of items in each group.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING OF YEAR CLOSE OF YEAR
Account 174 - Miscellaneous Current
and Accrued Assets $-- $--
-----------------------------------
TOTAL $-- $--
===================================
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE IX - MISCELLANEOUS DEFERRED DEBITS
(thousands)
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped by class, showing the number of items in each class.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING OF YEAR CLOSE OF YEAR
Account 186 - Miscellaneous Deferred Debits
Non-Billable Deferred Project Costs $134 $344
Billable Project Costs - Central Power and
Light Company - 5,743
Billable Project Costs - Public Service
Company of Oklahoma - 4,473
Billable Project Costs - Southwestern Electric
Power Company - 4,632
Billable Project Costs - West Texas Utilities
Company - 1,764
Billable Project Costs - SEEBOARD - 1,330
-------- -------
TOTAL $134 $18,286
======== =======
Note: Beginning in 1997, this schedule includes Billable, as well as
Non-Billable, project costs.
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE X - RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
(thousands)
INSTRUCTIONS: Provide a description of each material research, development, or
demonstration project which incurred costs by the service corporation during the
year.
DESCRIPTION AMOUNT
Account 188 - Billable Research, Development, or
Demonstration Expenditures
West Texas Utilities Company $362
-----
TOTAL $362
=====
Note: Beginning in 1997, this schedule includes Billable, as well as
Non-Billable, project costs.
<PAGE>
Page 12
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XI - PROPRIETARY CAPITAL
(dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
NUMBER OF SHARES PAR OR STATED OUTSTANDING CLOSE OF PERIOD
ACCOUNT NUMBER CLASS OF STOCK AUTHORIZED VALUE PER SHARE NO. OF SHARES TOTAL AMOUNT
- -------------- -------------- ---------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Account 201 Common Stock Issued 10,000 $10 10,000 $100
INSTRUCTIONS: Classify amounts in each account with brief explanation,
disclosing the general nature of transactions which give rise to the reported
amounts.
</TABLE>
DESCRIPTION AMOUNT
Account 211 - Miscellaneous Paid-In Capital $--
Account 215 - Appropriate Retained Earnings --
------
TOTAL $--
======
INSTRUCTIONS: Give particulars concerning net income or (loss) during the year,
distinguishing between compensation for the use of capital owned or net loss
remaining from servicing non associates per the General Instructions of the
Uniform System of Accounts. For dividends paid during the year in cash or
otherwise, provide rate percentage, amount of dividend, date declared and date
paid.
<TABLE>
<CAPTION>
BALANCE AT NET INCOME DIVIDENDS BALANCE AT
DESCRIPTION BEGINNING OF YEAR OR (LOSS) PAID CLOSE OF YEAR
- ----------- ----------------- --------- ---- -------------
<S> <C> <C> <C> <C>
Account 216 - Unappropriated
Retained Earnings $-- $-- $-- $--
-------- ----- ---- -----
TOTAL $-- $-- $-- $--
======== ===== ==== =====
</TABLE>
<PAGE>
Page 13
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XII - LONG-TERM DEBT
(thousands)
INSTRUCTIONS: Advances from associate companies should be reported separately
for advances on notes and advances on open accounts. Names of associate
companies from which advances were received shall be shown under the class and
series of obligation column. For Account 224 - Other long-term debt provide the
name of creditor company or organization, terms of the obligation, date of
maturity, interest rate, and the amount authorized and outstanding.
<TABLE>
<CAPTION>
TERM OF OBLIGATION BALANCE AT BALANCE
CLASS & SERIES DATE OF INTEREST AMOUNT BEGINNING DEDUCTIONS AT CLOSE
NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS (1) OF YEAR
- ---------------- ------------- -------- ---- ---------- ------- --------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Account 223 - Advances
From Associate Companies: $-- $-- $-- $-- $--
Account 224 - Other
Long-Term Debt:
Wells Fargo Bank
as successor to
First Interstate Bank
of Texas CSWS Term Loan Facility 12/1/2001 Variable 60,000 60,000 -- -- 60,000
------------------------------------------------------
TOTAL $60,000 $60,000 $-- $-- $60,000
======================================================
(1) Give an explanation of deductions: N/A
</TABLE>
<PAGE>
Page 14a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
(thousands)
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current and accrued
liabilities. Items less than $10,000 may be grouped, showing the number of items
in each group.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING OF YEAR CLOSE OF YEAR
Account 233 - Notes Payable to
Associate Companies
Central and South West Corporation $40,713 $26,390
-------- --------
TOTAL $40,713 $26,390
======== ========
Account 234 - Accounts Payable to
Associate Companies
Central and South West Corporation $2,843 $1,755
-------- --------
TOTAL $2,843 $1,755
======== ========
Account 242 - Miscellaneous Current
and Accrued Liabilities
Payroll $610 $987
Directors' Deferred Compensation 5 291
Severance Accrual -- 576
-------- --------
TOTAL $615 $1,854
======== ========
<PAGE>
Page 14b
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
(thousands)
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars as to any
significant contingent assets or liabilities existing at the end of the year.
Notes relating to financial statements shown elsewhere in this report may be
indicated here by reference.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Effective January 1, 1996 Central and South West Services, Inc. (Company or
CSWS) adopted the Federal Energy Regulatory Commission (FERC) Uniform System of
Accounts. Prior to 1996, the Company followed the Uniform System of Accounts
for Mutual Service Companies and Subsidiary Service Companies prescribed by the
Securities and Exchange Commission. The Company, as a member of the Central and
South West System (CSW System), performs, at cost, various accounting,
engineering, tax, legal, financial, electronic data processing, centralized
economic dispatching of electric power, and other services for the CSW System
companies.
DEPRECIATION
For financial reporting purposes, provisions for depreciation of property are
computed by the Company using the straight-line method, generally at individual
rates applied to the various classes of depreciable property. The annual
composite rates averaged 9.00% for both 1997 and 1996.
FEDERAL INCOME TAXES
The Company, together with other members of the CSW System, files a consolidated
federal income tax return and participates in a tax sharing agreement with the
other members of the CSW System. The provision for deferred federal income
taxes resulted principally from the tax deductions under accelerated methods of
depreciation, as provided by federal income tax laws, being greater than these
expenses for book purposes.
2. BENEFIT PLANS
DEFINED BENEFIT PENSION PLAN
Prior to June 30, 1997, the CSW System maintained a tax qualified,
non-contributory defined benefit pension plan covering substantially all CSW
employees in the United States. Benefits were based on employees' years of
credited service, age at retirement, and final average annual earnings, with an
offset for the participant's primary Social Security benefit. The CSW Board of
Directors approved an amendment, effective July 1, 1997, which converted the
present value of accrued benefits under the existing pension plan into a cash
balance pension plan. Under the cash balance formula, each participant has an
account, for record-keeping purposes only, to which credits are allocated
annually based on a percentage of the participant's pay. The applicable
percentage is determined by age and years of vested service the participant has
with the CSW System as of December 31 of each year.
The purpose of the plan change is to continue to provide retirement income
benefits which are competitive both within the utility industry as well as with
other companies within the United States.
<PAGE>
Page 14c
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
(thousands)
As the plan sponsor, CSW will continue to reflect the costs of the pension plan
according to the provisions of SFAS No. 87 and allocate such costs to each of
the participating employers. As a result of the July 1, 1997 amendment, CSW
realized a savings in 1997 of approximately $20 million in pension expense and
will also realize significant ongoing reductions in operating and maintenance
expense because of the change. The change to the pension plan was applied
retroactively to the beginning of 1997, so these savings were recognized evenly
throughout 1997, with a portion being capitalized. The approximate savings
attributable to the service company for 1997 is $4.3 million.
Pension plan assets consist primarily of common stock and short-term and
imtermediate term fixed income investments.
Information about the pension plan, including: (1) pension plan net periodic
costs and contributions; (2) pension plan participation; and (3) assumptions
used in accounting for the pension plan follow.
1997 1996
(thousands)
------------------------
(1)Net Periodic Pension Cost
Service Cost $4,550 $4,183
Interest cost on projected benefit
obligation 14,916 12,653
Actual return on plan assets (37,604) (20,292)
Net amortization and deferral 15,473 5,074
----------- ---------
$(2,665) $1,618
=========== =========
Pension Plan Contributions $ - $ 5,162
(2)Approximate Number of Participants in the Plan
Active employees 1,299 1,059
Retirees 110 52
Terminated employees 691 123
(3)Assumptions used in Accounting for the Pension Plan
Discount rate 7.50% 8.00%
Salary scale 5.46% 5.46%
Return on plan assets 9.00% 9.50%
HEALTH AND WELFARE PLANS
The Company, with other members of the CSW System, has medical, dental, group
life insurance, dependent life insurance, and accidental death and dismemberment
plans for substantially all active CSW System employees. The contributions for
CSWS, recorded on a pay-as-you-go basis, for the years ended December 31, 1997
and 1996 were approximately $5,482,000 and $3,923,000, respectively.
<PAGE>
Page 14d
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
(thousands)
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The components of net periodic postretirement benefit cost follow.
1997 1996
(thousands)
----------------------
Net Periodic Postretirement Benefit Cost
Service Cost $1,037 $983
Interest cost on APBO 1,022 777
Actual return on plan assets (1,362) (244)
Amortization of transition obligation 355 195
Amortization of unrecognized gain (144) --
Net deferred asset gain (loss) 646 (49)
--------- ---------
$1,554 $1,662
========= =========
A reconciliation of the funded status of the plan to the amounts recognized on
the balance sheets follows.
1997 1996
(thousands)
----------------------
APBO
Retirees $6,650 $2,665
Other fully eligible participants 2,579 1,427
Other active participants 9,732 6,933
-------- --------
Total APBO 18,961 11,025
Less: Plan assets at fair value 11,235 5,182
-------- --------
APBO in excess of plan assets 7,726 5,843
Unrecognized transition obligation (5,412) (3,105)
Unrecognized gain or (loss) (2,068) (2,658)
-------- --------
Accrued Cost $246 $80
======== ========
The assumption used in accounting for Post Retirement Benefit Costs for
both 1997 and 1996 follow.
Discount rate 7.50% 8.00%
Long term rate of return on plan assets 9.00% 9.50%
Tax rate on trusts 39.60% 39.60%
<PAGE>
Page 14e
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
(thousands)
3. FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate fair
value.
CASH AND TEMPORARY CASH INVESTMENTS.
The carrying amount approximates fair value because of the short maturity of
those instruments.
NOTES PAYABLE TO ASSOCIATE COMPANIES.
The carrying amount approximates fair value because of the short maturity of
those instruments.
OTHER LONG-TERM DEBT.
The fair value of the Company's long-term debt is estimated based on quoted
market prices for the same or similar issues.
The estimated fair value of the Company's financial instruments are as follows:
1997
(thousands)
CARRYING AMOUNT FAIR VALUE
Cash and temporary cash investments $4,963 $4,963
Notes payable to associate companies 26,390 26,390
Other long-term debt 60,000 60,000
4. SHORT-TERM FINANCING
The CSW System uses short-term debt, primarily commercial paper, to meet
fluctuations in working capital requirements and other interim capital needs.
CSW has established a money pool to coordinate short-term borrowings for certain
subsidiaries and also incurs borrowings outside the money pool for other
subsidiaries. As of December 31, 1997, the CSW System had revolving credit
facilities totaling $1.4 billion to back up its commercial paper program. At
December 31, 1997, CSW had $721 million during December 1997. Of this amount,
$28.6 million pertained to the service company.
<PAGE>
Page 15
ANNUAL REPORT OF Central and South West Services, Inc.
SCHEDULE XV - COMPARATIVE INCOME STATEMENT
(thousands)
ACCOUNT DESCRIPTION CURRENT PRIOR
YEAR YEAR
--------- --------
INCOME
456 Other electric revenues $173 $--
457 Services rendered to associate
companies 264,070 251,177
458 Services rendered to non associate
companies 1,060 1,025
421 Miscellaneous income or loss 601 3,549
--------- --------
TOTAL INCOME 265,904 255,751
--------- --------
EXPENSES
500-559 Power production 16,877 16,202
560-579 Transmission 4,288 10,474
580-599 Distribution 3,388 715
902-903 Customer accounts expense 199 --
906-917 Customer service & information 17,420 11,235
920 Salaries and wages 82,752 86,976
921 Office supplies and expenses 27,629 28,828
922 Administrative expense
transferred - credit (37,449) (30,909)
923 Outside services employed 31,264 67,610
924 Property insurance 171 144
925 Injuries and damages 572 1,909
926 Employee pensions and benefits 7,488 9,935
927 Franchise requirements 1 --
928 Regulatory commission expense -- --
930.1 General advertising expenses 4,749 3,733
930.2 Miscellaneous general expenses 12,098 5,744
931 Rents 12,632 13,161
932 Maintenance of structures and
equipment 4,263 3,421
403-
405 Depreciation and amortization
expense 9,337 9,013
408 Taxes other than income taxes 7,695 7,113
409 Income taxes 1,012 (714)
410 Provision for deferred income
taxes (1,125) 1,756
411 Provision for deferred income
taxes - credit 1,056 (72)
417 Administrative - Business Venture 1,142 5
426.1 Donations 615 619
426.3 -
426.5 Other deductions 2,879 2,759
427 Interest on long-term debt 3,702 3,657
430 Interest on debt to associate
companies 2,056 2,330
431 Other interest expense 56 107
--------- --------
TOTAL EXPENSE - INCOME STATEMENT 216,767 255,751
--------- --------
COST OF SERVICE - BALANCE SHEET
107 Construction work in process 17,991 --
108 Accumulated provision for
depreciation and amortization
of service company property 159 --
163 Stores expense undistributed 2,641 --
165 Prepayments 1,821 --
183 Preliminary survey and investigation
charges 381 --
184 Clearing accounts 1,271 --
186 Miscellaneous deferred debits 17,942 --
188 Research, development, or
demonstration expenses 362 --
242 Miscellaneous current and accrued
liabilities 6,545 --
307 Equipment 21 --
308 Office furniture and equipment 3 --
--------- --------
TOTAL COST OF SERVICE - BALANCE SHEET 49,137 --
--------- --------
NET INCOME OR (LOSS) $-- $--
========= ========
Note: In 1996, only Income Statement accounts were shown "As Billed" on this
schedule. Beginning in 1997, all accounts on this schedule reflect amounts
"As Billed".
<PAGE>
Page 16
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
ASSOCIATE COMPANIES - ACCOUNT 457
(thousands)
DIRECT INDIRECT COMPENSATION TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
457-1 457-2 457-3
Central and South West Corporation $26,903 $1,605 $221 $28,729
Central Power and Light Company 68,703 6,550 616 75,869
Public Service Company of Oklahoma 46,966 4,294 417 51,677
Southwestern Electric Power Company 54,222 5,099 484 59,805
West Texas Utilities Company 27,607 2,758 244 30,609
CSW Credit, Inc. 1,032 120 9 1,161
CSW Energy, Inc. 1,929 221 17 2,167
CSW International, Inc. 594 65 6 665
CSW Communications, Inc. 3,699 181 25 3,905
CSW Leasing, Inc. 69 11 1 81
CSW Power Marketing, Inc. 309 16 1 326
CSW Energy Services, Inc. 1,351 66 5 1,422
EnerShop, Inc. 483 27 3 513
SEEBOARD 6,553 534 54 7,141
--------------------------------------------
TOTAL $240,420 $21,547 $2,103 $264,070
============================================
<PAGE>
Page 17
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
NON ASSOCIATE COMPANIES - ACCOUNT 458
(thousands)
INSTRUCTION: Provide a brief description of the services rendered to each non
associate company:
<TABLE>
<CAPTION>
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
COST COST FOR USE TOTAL OR AMOUNT
NAME OF NON ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED
- ----------------------------- ------- ------- ---------- ---- ---------- ------
458-1 458-2 458-3
<S> <C> <C> <C> <C> <C> <C>
Engineering Services:
1. Carter & Burgess $9 $-- $-- $9 $-- $9
2. City of Austin, Texas 18 -- -- 18 -- 18
3. Honeywell, Inc. 31 -- -- 31 -- 31
4. Electric Power Research
Institute 70 -- -- 70 -- 70
5. Kimberly Clark 22 -- -- 22 -- 22
6. Kelco 253 -- -- 253 -- 253
7. Lone Star Steel 128 -- -- 128 -- 128
8. Georgia Pacific 271 -- -- 271 -- 271
9. Valspar 10 -- -- 10 -- 10
10. NCE Corporation 51 -- -- 51 -- 51
11. University of Texas 31 -- -- 31 -- 31
12. TAMU Baseball 4 -- -- 4 -- 4
13. City of Marshall 4 -- -- -- 4 4
Environmental Lab Services:
1. Sabine Mining Company 25 -- -- 25 -- 25
2. Dolet Hills Mining
Venture 27 -- -- 27 -- 27
3. Other 4 -- -- 4 -- 4
Information Technology
Services:
1. Transok, Inc. 102 -- -- 102 -- 102
=====================================================
TOTAL $1,060 $-- $-- $1,056 $ 4 $1,060
=====================================================
</TABLE>
<PAGE>
Page 18a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XVI - ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE AND
NON ASSOCIATE COMPANIES
(thousands)
Instruction: Total cost of service will equal for associate and non-associate
companies the total amount billed under their separate analysis of billing
schedules.
<TABLE>
<CAPTION>
ASSOCIATE COMPANY CHARGES NON ASSOC. COMPANY CHARGES TOTAL CHARGES FOR SERVICE
DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT
ACCOUNT DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL
- ------- -------------------- ---- ---- ----- ---- ---- ----- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COST OF SERVICE - INCOME STATEMENT
456 Other Electric Revenues $(173) $-- $(173) $-- $-- $-- $(173) $-- $(173)
458 Services Rendered to Non
Assoc. Companies (4) - (4) 4 - 4 - - -
421 Miscellaneous Income or
Loss (601) - (601) - - - (601) - (601)
500-559 Power Production 16,133 793 16,926 (49) - (49) 16,084 793 16,877
560-579 Transmission 3,681 607 4,288 - - - 3,681 607 4,288
580-599 Distribution 3,120 268 3,388 - - - 3,120 268 3,388
902-903 Customer Accounts Expense 199 - 199 - - - 199 - 199
906-917 Customer Service, &
Information 16,515 905 17,420 - - - 16,515 905 17,420
920 Salaries and Wages 66,509 15,746 82,255 497 - 497 67,006 15,746 82,752
921 Office Supplies and
Expenses 25,725 1,730 27,455 174 - 174 25,899 1,730 27,629
922 Administrative Expense (37,697) 161 (37,536) 87 - 87 (37,610) 161 (37,449)
923 Outside Service Employed 30,299 618 30,917 347 - 347 30,646 618 31,264
924 Property Insurance 171 - 171 - - - 171 - 171
925 Injuries and Damages 572 - 572 - - - 572 - 572
926 Employee Pensions and
Benefits 7,461 27 7,488 - - - 7,461 27 7,488
927 Franchise Requirements 1 - 1 - - - 1 - 1
930.1 General Advertising
Expense 4,734 15 4,749 - - - 4,734 15 4,749
930.2 Miscellaneous General
Expense 11,629 469 12,098 - - - 11,629 469 12,098
931 Rents 12,546 86 12,632 - - - 12,546 86 12,632
935 Maintenance of Structures
and Equipment 4,243 20 4,263 - - - 4,243 20 4,263
403-405 Depreciation and
Amortization Expense 9,337 - 9,337 - - - 9,337 - 9,337
408 Taxes Other than Income
Taxes 7,695 - 7,695 - - - 7,695 - 7,695
409 Income Taxes 1,012 - 1,012 - - - 1,012 - 1,012
410 Provision for Deferred
Income Taxes (1,125) - (1,125) - - - (1,125) - (1,125)
411 Provision for Deferred
Income Taxes - Credit 1,056 - 1,056 - - - 1,056 - 1,056
417 Administrative - Business
Venture 1,119 23 1,142 - - - 1,119 23 1,142
426.1 Donations 615 - 615 - - - 615 - 615
426.3-
426.5 Other Deductions 2,841 38 2,879 - - - 2,841 38 2,879
427 Interest On Long-Term Debt 3,702 - 3,702 - - - 3,702 - 3,702
430 Interest On Debt To
Associate Companies 2,056 - 2,056 - - - 2,056 - 2,056
431 Other Interest Expense 56 - 56 - - - 56 - 56
------------------------------------------------------------------------------------
TOTAL COST OF SERVICE - INCOME
STATEMENT 193,427 21,506 214,933 1,060 -- 1,060 194,487 21,506 215,993
------------------------------------------------------------------------------------
(continued)
</TABLE>
<PAGE>
Page 18b
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XVI - ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE AND NON
ASSOCIATE COMPANIES
(thousands)
(cont'd)
<TABLE>
<CAPTION>
ASSOCIATE COMPANY CHARGES NON ASSOC. COMPANY CHARGES TOTAL CHARGES FOR SERVICE
DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT
ACCOUNT DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL
- ------- -------------------- ---- ---- ----- ---- ---- ----- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COST OF SERVICE - BALANCE SHEET
107 Construction Work in Process 17,991 - 17,991 - - - 17,991 - 17,991
108 Accum. Prov. for
Depreciation & Amortization 159 - 159 - - - 159 - 159
163 Stores Expense Undistributed 2,638 3 2,641 - - - 2,638 3 2,641
165 Prepayments 1,821 - 1,821 - - - 1,821 - 1,821
183 Preliminary Survey &
Investigation Charges 381 - 381 - - - 381 - 381
184 Clearing Accounts 1,247 - 1,247 - - - 1,247 - 1,247
186 Miscellaneous Deferred Debits 17,942 24 17,966 - - - 17,942 24 17,966
188 Research, Development, or
Demonstration Exp. 362 - 362 - - - 362 - 362
242 Miscellaneous Current &
Accrued Liabilities 6,531 14 6,545 - - - 6,531 14 6,545
307 Equipment 21 - 21 - - - 21 - 21
308 Office Furniture and Equipment 3 - 3 - - - 3 - 3
----------------------------------------------------------------------------------
TOTAL COST OF SERVICE - BALANCE SHEET 49,096 41 49,137 -- -- -- 49,096 41 49,137
----------------------------------------------------------------------------------
TOTAL COST OF SERVICE $242,523 $21,547 $264,070 $1,060 $-- $1,060 $243,583 $21,547 $265,130
==================================================================================
</TABLE>
<PAGE>
Page 19
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XVII - SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE FUNCTION
(thousands)
Instruction: Indicate each department or service function. (See Instruction
01-3 General Structure of Accounting System: Uniform System of Accounts).
<TABLE>
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
---------------------------------------------------
TOTAL TECH
ACCOUNT DESCRIPTION OF ITEMS AMOUNT OVERHEAD EXEC SVCS ADMIN FOSSIL PROD LEGAL
- ------- -------------------- ------ -------- ---- ---- ----- ------ ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
456 Other Electric Revenues (173) - - - - - (173) -
458 Services Rendered to Non
Assoc. Companies (4) - - - - (4) - -
421 Miscellaneous Income or Loss (601) (33) - (1) - - - -
500-559 Power Production 16,877 - 457 46 44 3,047 10,824 1
560-579 Transmission 4,288 - 1 2,676 (2) - 1,610 -
580-599 Distribution 3,388 - 12 1,591 - - 1,781 -
902-903 Customer Accounts Expense 199 - - 7 2 - - -
906-917 Customer Service, &
Information 17,420 - - 5 2 - - -
920 Salaries and Wages 82,752 556 6,391 3,118 18,519 64 1,573 4,926
921 Office Supplies and Expenses 27,629 2,641 579 558 2,962 34 671 851
922 Administrative Expense (37,449) - - 3,997 (43,347) 355 1 17
923 Outside Service Employed 31,264 870 154 802 3,522 190 437 11,116
924 Property Insurance 171 - - - 160 - 11 -
925 Injuries and Damages 572 - - - 425 - - -
926 Employee Pensions and
Benefits 7,488 25 24 - 6,569 6 21 1
927 Franchise Requirements 1 - - - - - - -
930.1 General Advertising Expense 4,749 - - - - - - 4
930.2 Miscellaneous General
Expense 12,098 - 34 30 7,853 - 1 545
931 Rents 12,632 3,489 48 4 354 1 152 419
935 Maintenance of Structures
and Equipment 4,263 790 4 - 394 - 1 23
403-405 Depreciation and
Amortization Expense 9,337 7,331 - - 2,006 - - -
408 Taxes Other than Income Taxes 7,695 619 - - 7,076 - - -
409 Income Taxes 1,012 - - - 1,012 - - -
410 Provision for Deferred
Income Taxes (1,125) - - - (1,125) - - -
411 Provision for Deferred
Income Taxes - Credit 1,056 - - - 1,056 - - -
417 Administrative - Business
Venture 1,142 - - 1 2 - - -
426.1 Donations 615 - 23 32 13 - - 13
426.3-
426.5 Other Deductions 2,879 - 435 21 468 - 42 1,753
427 Interest On Long-Term Debt 3,702 3,702 - - - - - -
430 Interest On Debt To
Associate Companies 2,056 - - - 2,056 - - -
431 Other Interest Expense 56 - - - 51 - 5 -
107 Construction Work in Process 17,991 - - 6,958 1,295 65 1,190 25
108 Accum. Prov. for
Depreciation & Amortization 159 - - 52 - 74 32 -
163 Stores Expense Undistributed 2,641 - 3 1,858 780 - - -
165 Prepayments 1,821 - - - 1,395 - - -
183 Preliminary Survey &
Investigation Charges 381 - - 381 - - - -
184 Clearing Accounts 1,271 - - 172 975 (2) 17 24
186 Miscellaneous Deferred
Debits 17,942 - - 27 402 15 168 6,622
188 Research, Development,
or Demonstration Exp. 362 - - 322 1 - 38 -
242 Miscellaneous Current &
Accrued Liabilities 6,545 - - - - - - -
307 Equipment 21 - - - - - - -
308 Office Furniture and
Equipment 3 - - - - - 3 -
--------------------------------------------------------------------------
TOTAL COST OF SERVICE $265,126 $19,990 $8,165 $22,657 $14,920 $3,845 $18,405 $26,340
==========================================================================
</TABLE>
<PAGE>
Page 20
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XVII - SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE FUNCTION
(thousands)
Instruction: Indicate each department or service function. (See Instruction
01-3 General Structure of Accounting System: Uniform System of Accounts).
<TABLE>
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
--------------------------------------------------------------------------
INFO
ACCOUNT DESCRIPTION OF ITEMS CORP SVCS MARKETING SERVICES NUCLEAR AUDITS CORP DEV FUEL
- ------- -------------------- --------- --------- -------- ------- ------ -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
456 Other Electric Revenues $-- $-- $-- $-- $-- $-- $--
458 Services Rendered to Non
Assoc. Companies - - - - - - -
421 Miscellaneous Income or
Loss (569) (5) - - - 7 -
500-559 Power Production 1 5 - - 9 - 2,443
560-579 Transmission - - - - - 3 -
580-599 Distribution - - - - - 3 1
902-903 Customer Accounts Expense 186 4 - - - - -
906-917 Customer Service, &
Information 2,302 15,102 1 - - 8 -
920 Salaries and Wages 11,912 3,365 16,840 267 2,127 11,784 1,310
921 Office Supplies and
Expenses 5,510 989 8,006 39 389 3,985 415
922 Administrative Expense 178 2 825 - 9 496 18
923 Outside Service Employed 2,467 1,355 4,050 19 100 5,719 463
924 Property Insurance - - - - - - -
925 Injuries and Damages 147 - - - - - -
926 Employee Pensions and
Benefits 464 14 5 - 5 354 -
927 Franchise Requirements - - - - - 1 -
930.1 General Advertising Expense 4,509 18 - - - 218 -
930.2 Miscellaneous General
Expense 1,365 2 508 1 - 1,804 (45)
931 Rents 228 148 7,662 - 5 117 5
935 Maintenance of Structures
and Equipment 785 34 2,050 - 2 175 5
403-405 Depreciation and
Amortization Expense - - - - - - -
408 Taxes Other than Income
Taxes - - - - - - -
409 Income Taxes - - - - - - -
410 Provision for Deferred
Income Taxes - - - - - - -
411 Provision for Deferred
Income Taxes - Credit - - - - - - -
417 Administrative - Business
Venture 1,127 10 - - - 2 -
426.1 Donations 533 - - - - 1 -
426.3-
426.5 Other Deductions 121 12 - 4 - 17 6
427 Interest On Long-Term
Debt - - - - - - -
430 Interest On Debt To
Associate Companies - - - - - - -
431 Other Interest Expense - - - - - - -
107 Construction Work in
Process - 89 7,607 - - 303 459
108 Accum. Prov. for
Depreciation &
Amortization - - 1 - - - -
163 Stores Expense
Undistributed - - - - - - -
165 Prepayments 426 - - - - - -
183 Preliminary Survey &
Investigation Charges - - - - - - -
184 Clearing Accounts (5) (2) 70 - - (4) 26
186 Miscellaneous Deferred
Debits 4,654 674 - - - 2,513 2,867
188 Research, Development,
or Demonstration Exp. - - - - - 1 -
242 Miscellaneous Current &
Accrued Liabilities - - - - - 6,545 -
307 Equipment 21 - - - - - -
308 Office Furniture and
Equipment - - - - - - -
---------------------------------------------------------------------------
TOTAL COST OF SERVICE $35,214 $22,933 $47,656 $330 $2,646 $34,052 $7,973
===========================================================================
</TABLE>
<PAGE>
Page 21a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
DEPARTMENTAL ANALYSIS OF SALARIES
(thousands)
DEPARTMENTAL SALARY EXPENSE
------------------------------------------
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO
------------------------------- NUMBER OF
INDICATE EACH DEPARTMENT TOTAL PARENT OTHER NON PERSONNEL
OR SERVICE FUNCTION AMOUNT COMPANY ASSOCIATES ASSOCIATES END OF YEAR
Administration $23,762 $522 $23,240 $-- 214
Audit 1,500 129 1,371 -- 25
Corporate Development 9,737 1,369 8,368 -- 135
Corporate Services 8,729 1,008 7,721 -- 254
Executive 4,970 2,877 2,093 -- 22
Fossil Generation 1,895 37 1,858 -- 25
Fuels 3,355 41 3,314 -- 56
Information Services 14,501 297 14,203 1 255
Legal 4,285 528 3,757 -- 67
Marketing 10,058 457 9,601 -- 147
Nuclear Engineering 194 2 192 -- 1
Production Engineering 8,933 512 8,143 278 145
Technical Services 10,731 116 10,615 -- 207
---------------------------------------------------
TOTAL $102,650 $7,895 $94,476 $279 1,553
===================================================
These amounts may include charges to accounts throughout the Income Statement
and Balance Sheet. Therefore, they cannot be identified in total with any
particular line on Schedule XV, but are distributed among various lines.
<PAGE>
Page 21b
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
OUTSIDE SERVICES EMPLOYED
(thousands)
INSTRUCTIONS: Provide a breakdown of outside services employed. If the
aggregate amount paid to any one payee and included within one category is less
than $100,000, only the aggregate number and amount of all such payments
included within the sub account need be shown. Provide a brief description of
the service rendered by each vendor listed.
FROM WHOM PURCHASED SERVICE PROVIDED AMOUNT
Auditing Services
Arthur Andersen, LLP Auditing Services $583
------
$583
------
Legal Services
Barlow & Hardtner, L.C. Legal Services $676
Bracewell & Patterson Legal Services 735
Broyles & Pratt Legal Services 3,054
Christy & Viener Legal Services 1,983
Clark, Thomas & Winters Legal Services 136
Doerner, Saunders, Daniel &
Anderson Legal Services 274
Gibbs & Burns LLP Legal Services 264
Graves, Dougherty, Hearon & Moody Legal Services 185
Haynes and Boone LLP Legal Services 922
Jones, Day, Reavis & Pogue Legal Services 995
Milbank, Tweed, Hadley & McCoy Legal Services 3,462
Sheinfeld, Maley & Kay Legal Services 1,599
Sidley & Austin Legal Services 1,062
Slover & Loftus Legal Services 735
Vinson & Elkins LLP Legal Services 2,902
Wagstaff, Alvis, Stubbeman,
Seamster & Longacre LLP Legal Services 795
Other (111) Legal Services 1,925
------
$21,704
------
Consulting Services
ABB Power T & D Company Consulting Services $132
Analysts International Corporation Consulting Services 153
Arthur Andersen, LLP Consulting Services 761
AT Kearney, Inc. Consulting Services 121
AXS Marketing, LLC Consulting Services 608
Burson-Marstell Consulting Services 111
CAP Ventures Consulting Services 116
Cegelec Esca Corporation Consulting Services 206
Craig, Steven C. Consulting Services 116
Data Base Administration, Inc. Consulting Services 157
Data Dynamics, Inc. Consulting Services 456
Deloitte & Touche Consulting Services 464
Desola Group Inc. Consulting Services 503
Dorsey & Company Consulting Services 101
Duthie Associates, Inc. Consulting Services 101
Continued
<PAGE>
Page 21c
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
OUTSIDE SERVICES EMPLOYED
(thousands)
FROM WHOM PURCHASED SERVICE PROVIDED AMOUNT
Consulting Services Continued
Edison Electric Institute Consulting Services 216
Ensemble Systems Consulting Consulting Services 168
Ernst & Young, LLP Consulting Services 500
Financo Inc. Consulting Services 154
Gartner Group Consulting Services 238
Global Compliance, LLC Consulting Services 118
Indus Group Consulting Services 440
Infosystems Corporation Consulting Services 157
Intergraph Corporation Consulting Services 105
Interiors Group, Inc. Consulting Services 210
James Martin & Company Consulting Services 1,445
M3I Systems, Inc. Consulting Services 208
Main Factors, Inc. Consulting Services 125
Management Applications
Consulting, Inc. Consulting Services 104
McKinsey & Company, Inc. Consulting Services 1,073
Morgan Stanley Consulting Services 336
NewData Strategies Consulting Services 120
R Duffy Wall & Associates Consulting Services 180
Read-Poland Associates Consulting Services 174
Reed Consulting Group Consulting Services 145
S & J Group Inc. Consulting Services 122
S4 Consulting Consulting Services 132
Scott Madden & Associates, Inc. Consulting Services 114
Soft-Tech Systems Consulting Services 109
SPR Systems & Programming Consulting Services 802
Stalter, AL/EDP Management
Consultant Consulting Services 243
Sun Technical Services Consulting Services 219
United Solar Systems Corp. Consulting Services 126
Utilities International Consulting Services 139
Other (161) Consulting Services 3,396
-------
$15,724
-------
Temporary Personnel
Accounting Principals Temporary Accounting Services $258
Imprimis Group, Inc. Temporary Office and
Accounting Services 477
Kelly Services Temporary Office and
Accounting Services 129
Key Temporary Temporary Office and
Accounting Services 1,004
Manpower, Inc. Temporary Office and
Accounting Services 139
TAD Resources International, Inc. Temporary Office and
Accounting Services 223
Vinson and Associates Temporary Office and
Accounting Services 309
Other (17) Temporary Office and
Accounting Services 538
-------
$3,077
-------
Continued
<PAGE>
Page 21d
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
OUTSIDE SERVICES EMPLOYED
(thousands)
FROM WHOM PURCHASED SERVICE PROVIDED AMOUNT
Outside Services - Other
A & A Transfer Company Office Relocation $124
Bowne of Dallas Printing & Proofing Services 209
City of McAllen Central Power & Light Rate
Case Preparation 121
Duff & Phelps Credit
Rating Company Credit Rating Fees 102
Electric Power Research
Institute Research 6,341
Electronic Data Systems Software Licensing and Maintenance 207
Entex PC workstation support 776
Espey, Huston & Associates Preparation of Operating Permits 164
Goldman, Sachs, & Company Brokerage Services 158
Hewitt Associates Actuarial/Pension Services 255
IBM Corporation Computer Maintenance & Support 166
ISS Cleaning Services
Group, Inc. Janitorial Services 174
Love Envelopes, Inc. Forms Printing 408
Mail Box Statement Mailing Services 157
Merrill Corporation Financial Securities Printing 345
Morgan Guaranty Trust Brokerage Services 151
Moody's Investor Service Security Anaysis and Ratings 131
Oklahoma Press
Service, Inc. Newspaper Press Release Services 135
Real Estate Tax
Services, Inc. Property Tax Management Services 210
Reynolds & Reynolds Forms Printing 162
Sodexho USA Catering/Food Services 127
Southwestern Bell Telephone System Maintenance 189
Standard & Poor's Security Analysis and Ratings 118
Summit Construction, Inc. Office Renovation Services 190
Trammel Crow Company Office Building Security & Engineering 389
Xerox Corporation Copier Rental & Maintenance Services 173
Other (317) 3,802
-------
$15,484
-------
TOTAL OUTSIDE SERVICES $56,572
=======
These amounts summarize all outside services employed and may include charges to
accounts throughout the Income Statement and Balance Sheet. Therefore, they
cannot be identified in total with any particular line on Schedule XV, but are
distributed among various lines.
<PAGE>
Page 22a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
EMPLOYEE PENSIONS AND BENEFITS - ACCOUNT 926
(thousands)
INSTRUCTIONS: Provide a listing of each pension plan and benefit program
provided by the service company. Such listing should be limited to $25,000.
DESCRIPTION AMOUNT
Pension * $(2,139)
Retirement Savings Plan 2,591
Medical Plan 4,727
Benefit Plan Trustee Fee 14
Employee Assistance Program 24
Employee Awards and Events Program 100
Job Incentive Credits (1,354)
Accidental Death and Disability 45
Group Life 522
Employee Publications 8
System Employee Benefits 148
Retired Employee Benefits 2,079
Educational Assistance 532
Executive Benefits 78
Health and Fitness Programs 51
Other 62
-------
TOTAL $7,488
-------
* Effective July 1, 1997, CSW changed pension plan funding and benefit
calculation methods. The present values of accrued benefits under the existing
pension plan were converted to a "cash balance" pension plan. As a result of
these changes, the service company realized a savings of approximately $4.3
million in pension expense in 1997, and will continue to realize significant
ongoing reductions in operating and maintenance expenses related to its pension
plan. (See Note 2 - Benefit Plans for further information related to pensions.)
<PAGE>
Page 22b
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
GENERAL ADVERTISING EXPENSE - ACCOUNT 930.1
(thousands)
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses", classifying the items according to the nature of
the advertising and as defined in the account definition. If a particular class
includes an amount in excess of $3,000 applicable to a single payee, show
separately the name of the payee and the aggregate amount applicable thereto.
DESCRIPTION NAME OF PAYEE AMOUNT
Fees to Advertising Agency - BSA Advertising $58
Employment Related Admasters, Inc. 52
Ross Martin Recruitment 25
-------
$135
-------
Fees for Investor/Public
Relations Ad Vantage Corporation (refund) $(4)
Dallas Business Journal 31
Halcyon Business Publications, Inc. 18
Institutional Investor 59
Read-Poland Associates 48
South Padre Island CVB 12
Team Aztecas 30
Texas Business 18
Tulsa Drillers 10
VNR-1 Video Public Relations, Inc. 5
Other (4) 4
-------
$231
-------
Advertising in Newspapers,
Billboards, Periodicals, 28 KORO Corpus Christi $3
Radio, TV, etc. Abilene Reporter 16
Affordable Vinyl Signs 5
Brothers & Co. 479
Cooper Outdoor Advertising, Inc. 13
Corpus Christi Caller Times 30
Expansion Management 5
GPC Publishing 7
Group C Communications, Inc. 12
Inventiva 109
JL Media, Inc. 1,918
Lammert Publications 3
Langdon Publishing 8
Laredo Morning Times 3
National Yellow Pages Directory 165
North Texas Public Broadcasting 150
Oklahoma Press Service, Inc. 312
Outdoor Placement of Texas 212
Pennwell Publishing Co. 6
Ruppman National Yellow Pages Svc. 51
San-Angelo Standard Times 9
South Texas Informer 4
Stokely Outdoor Advertising, Inc. 4
Sutherland & Associates 4
Technology Marketing 4
Texas Monthly 67
Texas Television, Inc. 7
VIELM Associates, Inc. 9
Wyndham Publications 8
Other (125) 77
-------
$3,700
-------
Advertising Matter such as
Posters, Bulletins, Academy Awards $6
Booklets and Related Items Golden Banner Press, Inc. 7
Proforma 9
Progressive Mktg, Inc. 396
Ross Martin 59
Topp Direct Marketing 4
Other (4) 2
-------
$483
-------
Fees for Marketing/General Lucas Group (Texas) $32
Noll HR Services 14
Pabst Creative Communications 4
Reddy Corporation, International 54
Villareal & Associates, Inc. 6
Whitley Company 5
Wingfield Smith 45
Other (51) 40
-------
$200
-------
Total $4,749
=======
<PAGE>
Page 23
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
MISCELLANEOUS GENERAL EXPENSES - ACCOUNT 930.2
(thousands)
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses" classifying such expenses according to their
nature. Payments and expenses permitted by Section 321 (b)(2) of the Federal
Election Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C. 441
(b)(2)) shall be separately classified.
DESCRIPTION AMOUNT
Membership Fees and Dues $8,045
Relocation Expenses 1,804
Trustee, Registrar, and Transfer Agent Fees 727
Directors' Fees and Expenses 532
Research and Development Expense 399
Annual Report Expenses 193
Corporate Financial Rating Fees 264
Miscellaneous 134
---------
TOTAL $12,098
---------
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
RENTS - ACCOUNT 931
(thousands)
INSTRUCTIONS: Provide a listing of the amount included in Account 931, "Rents",
classifying such expenses by major groupings of property, as defined in the
account definition of the Uniform System of Accounts.
TYPE OF PROPERTY AMOUNT
Office Space Rent $4,417
Offsite Storage Space Rent 79
Computer Timesharing Rent 96
Computer Software Rent 5,594
Computer Equipment Rent 2,334
Automobile Rent 130
Other Rent (18)
---------
TOTAL $12,632
---------
<PAGE>
Page 24a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
TAXES OTHER THAN INCOME TAXES - ACCOUNT 408
(thousands)
INSTRUCTIONS: Provide an analysis of Account 408 "Taxes Other Than Income
Taxes". Separate the analysis into two groups: (1) other than U.S. Government
taxes, and (2) U.S. Government taxes. Specify each of the various kinds of
taxes and show the amounts thereof. Provide a subtotal for each class of tax.
DESCRIPTION AMOUNT
Other Than U.S. Government Taxes:
State Unemployment Taxes $187
Property and Other Taxes 1,414
---------
SUBTOTAL 1,601
---------
U.S. Governmental Taxes:
Social Security Taxes 6,002
Federal Unemployment Taxes 92
---------
SUBTOTAL 6,094
---------
TOTAL $7,695
=========
<PAGE>
Page 24b
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
DONATIONS - ACCOUNT 426.1
(thousands)
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by their purpose. The aggregate number
and amount of all items of less than $3,000 may be shown in lieu of details.
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
American Red Cross - Dallas
Area Chapter Building project $10
Austin Lyric Opera To support the organization 5
Barbara Bush Foundation Sponsor a celebration of reading 5
Baylor Health Care System
Foundation Annual pledge 25
Boys and Girls Clubs of America To support the organization 5
Caritas of Austin Table sponsor for awards dinner 4
Center for Legislative Energy Annual contribution at supporter level 5
Child Care Group Annual donation 6
Circle Ten Council Boy Scouts Inner circle sponsorship 1997 & Boy
Scout Golf Classic 15
Community Services YMCA Corporate contribution 3
Cowboy Artists of America Contribution to support the
organization 10
Credentials, Inc. Corporate contribution 5
Dallas Ambassadors Forum To support activities of the
organization 10
Dallas Black Chamber of Commerce Annual contribution 5
Dallas Business Committee Obelish Award Event, June 7, 1997 3
Dallas CV, Inc. Corporate contribution 20
Dallas Museum of Art Corporate partner 10
Dallas Opera Corporate sponsor 25
Dallas Symphony Association, Inc. Annual contribution 25
Greater Dallas Chamber of Commerce Silver Sponsor Level 4
Greater Dallas Hispanic Contribution to support the
organization 3
continued
<PAGE>
Page 24c
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
DONATIONS - ACCOUNT 426.1
(thousands)
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
Greater Dallas Youth Orchestra Corporate Sponsorship of October
concert 6
Junior League of Dallas Annual special sponsor underwriting 5
Just for the Kids Sponsor John B. Connally Excellence
in Public Ed Award 10
Latino Cultural Center Funding for special development
project 20
Leadership Texas Sponsor 1997 Leadership Program
Partner Initiative 10
National Alliance of Business 1997 corporate contribution 5
National Council on Economic
Education Funding to improve economic literacy 5
Nature Conservancy of Texas Underwrite Dallas Corporate
Conservation Leadership Award 3
OSU Foundation Engineering energy laboratory 30
Our Children, Inc. Presenting sponsor for Our
Children's Store of Dallas 10
Project Shelter Annual golf tournament sponsorship 8
Salesmanship Club of Dallas Gold Sponsorship for '97 GTE Byron
Nelson Classic 22
Statewide African American 1997 donation for membership 5
TACA, Inc. Sponsor level participation in
auction and ball 3
Team Azteca 6/1 - 12/31/97 sponsorship for
Aztecas International 15
Texans for Lawsuit Reform Corporate contribution 5
Texas Association of Business Annual membership 35
Texas Business and Education 1997 contribution to promote
reform in the Texas Public
Education System 5
Texas Conservative Forum Sponsor Spring '97 Education/Work
Force Conference 5
Texas Council on Economic
Development Annual contribution for 1997 5
Texas Women's Hall of Fame Sponsor 1996-97 reception and dinner 5
Tulsa Area United Way Annual contribution 7
continued
<PAGE>
Page 24d
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
DONATIONS - ACCOUNT 426.1
(thousands)
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
United Way of Metropolitan
Dallas, Inc. Loaned Executive Program/
Corporate Pledge 67
University of Texas Corporate contribution 25
Utility Business Education Annual contribution 5
Women's Auxiliary to Children Annual donation to Family Night
at Six Flags for the Children's
Medical Center of Dallas 3
YMCA of Metropolitan Dallas Corporate sponsor 15
Zale Lipshy University Hospital Support for new neuroangiography
suite 10
Other (99) 63
-------
TOTAL $615
=======
<PAGE>
Page 25a
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
OTHER DEDUCTIONS - ACCOUNTS 426.3 - 426.5
(thousands)
INSTRUCTIONS: Provide a listing of the amount included in Accounts 426.3
through 426.5, "Other Deductions", classifying such expenses according to their
nature.
DESCRIPTION NAME OF PAYEE AMOUNT
Expenditures for Certain Civic, Company employee and administrative $2,263
Political & Related Activities costs for civic, political and
related activities
Other Miscellaneous Deductions Company expense 616
------
TOTAL $2,879
======
<PAGE>
Page 25b
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XVIII - NOTES TO STATEMENT OF INCOME
(thousands)
INSTRUCTIONS: The space below is provided for important notes regarding the
statement of income or any account thereof. Furnish particulars as to any
significant increase in services rendered or expenses incurred during the year.
Notes relating to financial statements shown elsewhere in this report may be
indicated here by reference.
The Data Center provides centralized computer services for all CSW System
companies. The following information is provided pursuant to a Securities
and Exchange Commission data request letter dated May 6, 1983.
(a) AGGREGATE BILLINGS BY THE DATA CENTER
The operating costs for the Data Center for the year ended December 31,
1997, were $8,546,565. See paragraph (b) for explanation of the 1997
billing procedure.
(b) BREAKDOWN OF DATA CENTER BILLINGS BY CRU
The actual 1997 costs for the operation of the Data Center were
$8,546,565. Costs of operation of the Data Center were charged back to
the system companies based on their usage of the computer resources.
CSWS allocates its costs for computer services rendered to CSW System
companies as follows:
COMPUTER RESOURCE UNIT (CRU) COMPONENT SIMPLIFICATION
CSWS utilizes the CRU, a measurement of computer services rendered to
allocate direct costs to the CSW companies. The CRU was previously made
up of forty components. CSWS, on April 1, 1990, reduced the number of
components making up the CRU to only three components: (a) tape storage
in terms of tape-days, which is used to allocate all tape related
costs, (b) disk storage in terms of track-days which is used to
allocate all disk related costs, and (c) CPU seconds which is used to
allocate all other processor related usage costs. Use of only three
components simplifies the computer billing process, reduces
administrative costs and makes the charges to the users clearer and
easier to understand.
USAGE COST ALLOCATION
Computer usage costs are allocated on the basis of two factors. A
"usage" portion is allocated based on the current number of CRUs used
reflecting incremental costs of utilizing the three CRU components. The
remaining "base" costs reflect the fixed costs of operating the data
center and are spread according to the CRU usage of each company.
The following page outlines the billing to companies separated into the
two components referenced above. It should be noted that one dollar of
usage cost equals one CRU.
<PAGE>
Page 25c
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1997
SCHEDULE XVIII - NOTES TO STATEMENT OF INCOME (CONT'D.)
(thousands)
Usage Base Total
COMPANY CRU'S BILLING BILLING BILLING
CPL 1,041,019 $1,041,019 $502,586 $1,543,605
PSO 734,559 734,559 337,519 1,072,078
SWEPCO 555,762 555,762 269,432 825,194
WTU 679,025 679,025 107,925 786,950
CSWS 2,806,512 2,806,512 1,378,451 4,184,963
CSW Energy 1,959 1,959 1,092 3,051
Non-affiliate (TRANSOK) 57,793 57,793 72,931 130,724
----------- ------------ ------------- -------------
TOTALS 5,876,629 $5,876,629 $2,669,936 $8,546,565
=========== ============ ============= =============
(c) STATEMENT OF DATA CENTER ACTIVITIES
The major activities of the Data Center during 1997 were the production
environment of Integrated Data Management System (IDMS) and Customer
Information Control System (CICS) for all of the system companies.
The operating costs for 1997 included salaries, equipment expenses,
software services, disaster recovery, site rentals and general
supplies.
<PAGE>
Page 26a
Central and South West Services
Executive Summary Chart - December 31, 1997
Chairman & Chief Exec Officer
--------------------------------------------------------------
| | | | | |
Sr VP & General Counsel | Sr VP Corp Sr VP External | Sr VP/Chief
| | Development Affairs | Financial
VP Assoc Gen Cnsl/Corp Sec | | | | Officer
| VP Human | |
| Resources | |
| VP Regulatory |
Exec VP Electric Affairs |
Operations |
| Pres & Chief
President/Energy Services---|--- VP Special Operating
| | Projects Officer
| | --------|-------
| | | |
VP Marketing |-----President VP Mergers & President
| CPL Acquisitions CSW
| Generation
President Energy Delivery---|-----President |
| | PSO ---------
| | |
|-VP Elect Del T&D |-----President |---VP Engineering
| | SWEPCO |
|-VP Operations Services | |---VP Fossil
|-----President | Generation
WTU |
|---VP Fuels
|
|---VP Nuclear
Plants
<PAGE>
Page 26b
ANNUAL REPORT OF Central and South West Services, Inc.
METHODS OF ALLOCATION
Central and South West Services, Inc. requested and the Securities and Exchange
Commission granted on March 7, 1997, July 11, 1997* and November 7, 1997* the
following 47 allocation methods. These allocation methods distribute costs
among the participating companies according to the ratio of each company's
applicable volumes to the total volume of all participating companies.
1.#BANKACCTS NUMBER OF BANK ACCOUNTS
DEPOSIT, DISBURSEMENT & MANAGER CHECKING ACCOUNTS
2.#CALCTRTEL NUMBER OF CALL CENTER TELEPHONES
PHONES LOCATED AT EACH OPCO'S CUSTOMER SERVICE PHONE CENTER
3.#CELLPHONE NUMBER OF CELL PHONES/PAGERS
4.#CISCUSTML NUMBER OF CIS CUSTOMER MAILINGS
INSERTS PLACED IN ELECTRIC BILLS
5.#CKSPRINTD NUMBER OF CHECKS PRINTED*
CHECKS ISSUED TO VENDORS (COULD BE SEVERAL INVOICES ON ONE CHECK)
6.#CREDITCAR NUMBER OF CREDIT CARDS**
COMPANY ISSUED CORPORATE CREDIT CARDS
7.#COMMCUSTS NUMBER OF COMMERCIAL CUSTOMERS
LESS THAN 1000 KW OF LOAD
8.#ELULTCUST NUMBER OF ELECTRIC ULTIMATE CUSTOMERS
RESIDENTIAL, COMMERCIAL, INDUSTRIAL, PUBLIC STREET & HIGHWAY
LIGHTING, RAILROADS, RAILWAYS, INTERDEPARTMENTAL SALES (FERC
ACCOUNTS 440-446 & 448)
9.#EMPLOYEES NUMBER OF EMPLOYEES
FULL-TIME AND PART-TIME (DOES NOT INCLUDE CONTRACTORS)
10.#GENPLTEMP NUMBER OF GENERATING PLANT EMPLOYEES
11.#GLTRANSAC NUMBER OF GENERAL LEDGER TRANSACTIONS
LINES OF ACCOUNTING DISTRIBUTION
12.#INDUSCUST NUMBER OF INDUSTRIAL CUSTOMERS
MORE THAN 1000 KW LOAD
13.#JCATRANSA NUMBER OF JOB COST ACCOUNTING TRANSACTIONS
LINES OF ACCOUNTING DISTRIBUTION ON JOB COST ACCOUNTING
SUB-SYSTEM
14.#OFROUTERS NUMBER OF ROUTERS
DEVICE THAT CONNECTS TWO OR MORE LOCAL AREA NETWORKS
15.#OFSERVERS NUMBER OF SERVERS
LARGE, FAST-CAPACITY COMPUTERS
16.#RADIOSMOB NUMBER OF RADIOS (BASE/MOBILE/HANDHELD)
17.#REMITITEM NUMBER OF REMITTANCE ITEMS
NUMBER OF ELECTRIC BILL PAYMENTS PROCESSED WHICH CANNOT BE
PROCESSED THROUGH THE LOCK BOX
continued
<PAGE>
18.#REMOTTERM NUMBER OF REMOTE TERMINAL UNITS Page 26c
SCADA SYSTEM CONNECTOR TO CONTROL ELECTRIC SYSTEM
19.#RESIDCUST NUMBER OF RESIDENTIAL CUSTOMERS
20.#TELEPHONE NUMBER OF TELEPHONES
INCLUDES ALL PHONE LINES
21.#TRAVELTRN NUMBER OF TRAVEL TRANSACTIONS
INCLUDES HOTEL, CAR RENTAL AND AIRLINE FLIGHTS
22.#VEHICLESS NUMBER OF VEHICLES
INCLUDES FLEET AND POOL CARS
23.#VENDINVPT NUMBER OF VENDOR INVOICE PAYMENTS
ACTUAL VOUCHERS
24.#WORKSTATN NUMBER OF WORKSTATIONS
NUMBER OF PERSONAL COMPUTERS
25.ALCOMMCHAN ACTIVE OWNED OR LEASED COMMUNICATION CHANNELS
26.AVGPKLD3YR AVERAGE PEAK LOAD FOR PAST THREE YEARS
27.KWHSALEULT KWH SALES
EACH COMPANY'S KILOWATT-HOUR SALES TO ULTIMATE CUSTOMERS
28.MMBTUBRALL PAST 3 MONTHS MMBTU'S BURNED (ALL FUEL TYPES)
29.MMBTUBRCOA PAST 3 MONTHS MMBTU'S BURNED (COAL ONLY)
30.MMBTUBRGAS PAST 3 MONTHS MMBTU'S BURNED (GAS TYPE ONLY)
31.MMBTUBROIL PAST 3 MONTHS MMBTU'S BURNED (OIL TYPE ONLY)
32.MMBTUSOLID PAST 3 MONTHS MMBTU'S BURNED (SOLID FUELS ONLY)
33.MWGENCAPAC MW GENERATING CAPACITY
34.MWHGENERAT MWH'S GENERATION
35.OVERHEADCR OVERHEAD CLEARING
36.PKAVGCUSAL AVERAGE OF PEAK LOAD/AVERAGE NUMBER CUSTOMERS/KWH SALES
GIVES EQUAL WEIGHTING TO PEAK LOAD, AVERAGE NUMBER OF
ULTIMATE CUSTOMERS AND KILOWATT-HOUR SALES TO ULTIMATE CUSTOMERS
37.TLGROSSREV TOTAL GROSS REVENUES FOR THE PREVIOUS FOUR QUARTERS**
38.TCSWSB-INT TOTAL CSWS BILLING LESS INDIRECT COST AND INTEREST
ALLOCATES COSTS AMONG THE PARTICIPATING COMPANIES BASED
ON THE PERCENTAGE OF COMPANY DIRECT WORK ORDERS BILLED TO EACH
CSW SYSTEM COMPANY
39.TFIXASSET$ TOTAL FIXED ASSET DOLLARS
40.TGRUTIPLNT TOTAL GROSS UTILLITY PLANT (INCLUDES CWIP) EACH COMPANY'S GROSS
UTILITY PLANT
41.TLASSET-NU TOTAL ASSETS LESS NUCLEAR PLANT
42.TTLASSETS$ TOTAL ASSET DOLLARS
TOTAL ASSETS LESS: A/R AFFILIATES; FACTORED,INTEREST RECEIVABLE
AFFILIATES; INVESTMENTS IN SUBSIDIARIES; MONEY POOL RECEIVABLES
43.TTPKLOADLY TOTAL PEAK LOAD (PRIOR YEAR)
44.CSWSPMBILL CSWS PRIOR MONTH BILL
45.CSWS3MBILL CSWS PAST 3 MONTHS BILL
46.EVENSPREAD EVEN SPREAD OF CHARGE BY COMPANY
47.___'3MBILL FUNCTIONAL DEPARTMENT'S PAST 3 MONTHS TOTAL BILL
<PAGE>
Page 26d
ANNUAL REPORT OF Central and South West Services, Inc.
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
The following annual statement was supplied to each associate company in
support of the amount of compensation for use of capital billed during 1997:
In accordance with Instruction 01-12 of the Securities and Exchange
Commission's Uniform System of Accounts for Mutual Service Companies and
Subsidiary Service Companies, Central and South West Services, Inc. submits the
following information on the billing of interest on borrowed funds to associated
companies for the year 1997:
A. Amount of interest billed to associate companies is contained on
page 16, Analysis of Billing.
B. The basis for billing of interest to the associated companies is
based on the Service Company prior month bill.
<PAGE>
Page 27
ANNUAL REPORT OF Central and South West Services, Inc.
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935 and the rules and regulations of the Securities and Exchange Commission
issued thereunder, the undersigned company has duly caused this report to be
signed on its behalf by the undersigned officer thereunto duly authorized.
Central and South West Services, Inc.
-------------------------------------------------
(Name of Reporting Company)
By: /s/ R. Russell Davis
-------------------------------------------------
(Signature of Signing Officer)
R. Russell Davis Controller
-------------------------------------------------
(Printed Name and Title of Signing Officer)
Date: April 29, 1998
- ------------------------
<TABLE> <S> <C>
<ARTICLE> OPUR2
<CIK> 0000025944
<NAME> Central and South West Services
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 85,561
<TOTAL-INVESTMENTS> 3,839
<TOTAL-CURRENT-ASSETS> 55,387
<TOTAL-DEFERRED-DEBITS> 1,131
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 145,918
<TOTAL-PROPRIETARY-CAPITAL> 100
<TOTAL-LONG-TERM-DEBT> 60,000
<NOTES-PAYABLE> 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 26,390
<OTHER-CURR-AND-ACCRUED-LIAB> 35,791
<TOTAL-DEFERRED-CREDITS> 9,049
<DEFERRED-INCOME-TAX> 14,588
<TOT-LIABIL-AND-PROPRIET-CAP> 145,918
<SERVICES-ASSOCIATE-COMPANIES> 264,070
<SERVICES-NON-ASSOCIATE-COMP> 1,060
<MISC-INCOME-OR-LOSS> 601
<TOTAL-INCOME> 265,904
<SALARIES-AND-WAGES> 102,650
<EMPLOYEE-PENSION-AND-BENEFIT> 7,488
<OTHER-EXPENSES> 155,766
<TOTAL-EXPENSES> 265,904
<NET-INCOME> 0
<TOTAL-EXPENSES-DIRECT-COST> 243,583
<TOTAL-EXPENSES-INDIRECT-COST> 21,547
<TOT-EXP-DIRECT-AND-INDIRECT> 265,130
<PERSONNEL-END-OF-YEAR> 1,553
</TABLE>
