UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-13-60
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1998 and Ending December 31, 1998
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>
2 of 27 Pages (Blank)
<PAGE>
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.
3 of 27 pages
<PAGE>
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(a)
Accounts Receivable from Associate Companies Schedule V 9(b)
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(a)
Notes to Financial Statements Schedule XIV 14(b)-(f)
Comparative Income Statement Schedule XV 15
Analysis of Billing - Associate Companies Account 457 16
Analysis of Billing - Nonassociate Companies Account 458 17
Analysis of Charges for Service - Associate and
Nonassociate Companies Schedule XVI 18
Schedule of Expense by Department or Service Function Schedule XVII 19-20
Departmental Analysis of Salaries Accounts - All 21(a)
4(a) of 27 pages
<PAGE>
Schedule or Page
Description of Schedules and Accounts Account Number Number
Outside Services Employed Accounts - All 21(b)-(d)
Employee Pensions and Benefits Account 926 22(a)
General Advertising Expenses Account 930.1 22(b)-(c)
Miscellaneous General Expenses Account 930.2 23
Rents Account 931 23
Taxes Other Than Income Taxes Account 408 24(a)
Donations Account 426.1 24(b)-(c)
Other Deductions Account 426.5 25(a)
Notes to Statement of Income Schedule XVIII 25(b)-(c)
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
Page
Description of Reports or Statements Number
Organization Chart 26(a)
Methods of Allocation 26(b)-(c)
Annual Statement of Compensation for Use of Capital Billed 26(d)
Signature Clause 27
4(b) of 27 pages
<PAGE>
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
- ------- -----------------------
1998 1997
------------ ------------
SERVICE COMPANY PROPERTY
301-
311 Service company property (Schedule II) $119,596 $116,683
107 Construction work in progress (Schedule II) 4,474 2,450
------------ ------------
Total Property 124,070 119,133
------------ ------------
108-
111 Less accumulated provision for depreciation
and amortization of service company
property (Schedule III) 39,626 33,572
------------ ------------
Net Service Company Property 84,444 85,561
INVESTMENTS
123 Investments in associate companies
(Schedule IV) -- --
124 Other investments (Schedule IV) 1,392 3,839
------------ ------------
Total Investments 1,392 3,839
CURRENT AND ACCRUED ASSETS
131 Cash 1,418 4,963
134 Special deposits -- --
135 Working funds 85 120
136 Temporary cash investments (Schedule IV) -- --
141 Notes receivable -- --
143 Accounts receivable 1,553 2,277
144 Accumulated provision for uncollectible
accounts -- --
146 Accounts receivable from associate
companies (Schedule V) 38,393 31,798
152 Fuel stock expenses undistributed (Schedule VI) -- --
154 Materials and supplies 23 14
163 Stores expense undistributed (Schedule VII) -- --
165 Prepayments 19,833 16,215
174 Miscellaneous current and accrued assets
(Schedule VIII) -- --
------------ ------------
Total Current and Accrued Assets 61,305 55,387
DEFERRED DEBITS
181 Unamortized debt expense -- --
184 Clearing accounts 124 14
186 Miscellaneous deferred debits (Schedule IX) -- 344
188 Research, development, or demonstration
expenditures (Sch. X) -- --
190 Accumulated deferred income taxes 1,502 773
------------ ------------
Total Deferred Debits 1,626 1,131
------------ ------------
TOTAL ASSETS AND OTHER DEBITS $148,767 $145,918
============ ============
5 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
SCHEDULE I - COMPARATIVE BALANCE SHEET
(thousands)
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
- ------- -----------------------------------
1998 1997
------------ ------------
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
225 Unamortized premium on long-term debt -- --
226 Unamortized discount on long-term debt-debit -- --
------------ ------------
Total Long-Term Debt -- 60,000
CURRENT AND ACCRUED LIABILITIES
228 Accumulated provision for pensions and benefits 993 1,487
231 Notes payable -- --
232 Accounts payable 23,192 28,433
233 Notes payable to associate companies
(Schedule XIII) 97,103 26,390
234 Accounts payable to associate companies
(Schedule XIII) 1,225 1,755
236 Taxes accrued 1,221 1,499
237 Interest accrued 451 133
238 Dividends declared -- --
241 Tax collections payable 743 630
242 Miscellaneous current and accrued liabilities
(Schedule XIII) 1,358 1,854
------------ ------------
Total Current and Accrued Liabilities 126,286 62,181
DEFERRED CREDITS
253 Other deferred credits 8,197 9,049
255 Accumulated deferred investment tax credits -- --
------------ ------------
Total Deferred Credits 8,197 9,049
282 ACCUMULATED DEFERRED INCOME TAXES 14,184 14,588
------------ ------------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL $148,767 $145,918
============ ============
6 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE II - SERVICE COMPANY PROPERTY
(thousands)
<TABLE>
<CAPTION>
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER (1) AT CLOSE
ACCOUNT DESCRIPTION OF YEAR ADDITIONS SALES CHANGES OF YEAR
<S> <C> <C> <C> <C> <C> <C>
301 Organization $ -- $ -- $ -- $ -- $ --
303 Miscellaneous Intangible Plant 2,860 511 -- -- 3,371
304 Land and Land Rights 6,381 -- -- -- 6,381
305 Structures and Improvements 42,173 -- -- -- 42,173
306 Leasehold Improvements 6,164 66 -- -- 6,230
307 Equipment (2) 31,268 5,892 (3,630) -- 33,530
308 Office Furniture and Equipment 14,641 100 -- -- 14,741
309 Automobiles, Other Vehicles
and Related Garage Equipment 195 -- (1) -- 194
310 Aircraft and Airport Equipment 12,918 -- -- (21) 12,897
311 Other Service Company
Property (3) 83 -- (4) -- 79
--------------------------------------------------------------------------------------
SUB-TOTALS 116,683 6,569 (3,635) (21) 119,596
107 Non-Billable Construction Work
in Progress (4) 2,450 2,024 -- -- 4,474
--------------------------------------------------------------------------------------
TOTALS $119,133 $8,593 $(3,635) $(21) $124,070
======================================================================================
</TABLE>
7(a) of 27 pages
<PAGE>
SCHEDULE II - SERVICE COMPANY PROPERTY (Continued)
(thousands)
FOOTNOTES
(1) Provide an explanation of those changes considered material: None.
(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
Data Processing Equipment $5,548 $27,671
Communications Equipment 274 5,224
Other 70 635
-------------------------
TOTALS $5,892 $33,530
=========================
(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 (retired in '98) -- --
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
-------------------------
TOTALS $-- $79
=========================
(4) Describe Non-Billable Construction Work in Progress:
MV90PBS - Software (PRJ2001) $150 $448
Tailored Collaboration Billing System (PRJ2001) 196 642
Property Tax Renditions Ad Valorem Project 193 193
Business Unit Reporting Project 1,333 3,039
Customer Service Virtual Call Center 152 152
-------------------------
TOTALS $2,024 $4,474
=========================
7(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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
ACCOUNT DESCRIPTION OF YEAR ADDITIONS SALES CHANGES OF YEAR
<S> <C> <C> <C> <C> <C> <C>
301 Organization $ -- $ -- $ -- $-- $ --
303 Miscellaneous Intangible Plant 1,453 432 -- -- 1,885
304 Land and Land Rights -- -- -- -- --
305 Structures and Improvements 7,711 1,452 -- -- 9,163
306 Leasehold Improvements 1,574 478 -- -- 2,052
307 Equipment 14,384 5,158 (3,631) -- 15,911
308 Office Furniture and Equipment 6,406 1,653 -- -- 8,059
309 Automobiles, Other Vehicles
and Related Garage Equipment 134 31 -- -- 165
310 Aircraft and Airport Equipment 1,852 477 -- -- 2,329
311 Other Service Company
Property 58 8 (4) -- 62
-----------------------------------------------------------------
TOTALS $33,572 $9,689 $(3,635) $-- $39,626
=================================================================
</TABLE>
FOOTNOTES
(1) Provide an explanation of those changes considered material: None.
8 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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.
<TABLE>
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING CLOSE
ACCOUNT DESCRIPTION OF YEAR OF YEAR
<S> <C> <C>
Account 123 - Investment in Associate Companies $ -- $ --
Account 124 - Other Investments
Purchase of Mortgages 2,683 252
Preston Trail Golf Club Purchase of Membership 88 88
Lakewood Country Club Purchase of Membership 16 16
Northwood Club Purchase of Membership 110 110
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 41
Texas Stadium Purchase of Texas Stadium Box Seats 656 591
Gleneagles Country Club Purchase of Membership 68 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 2
Sports Club at Four Seasons Purchase of Membership 21 46
Canyon Creek Country Club -- 4
Trophy Club Country Club -- 9
-------------- --------------
SUB-TOTALS 3,839 1,392
Account 136 - Temporary Cash Investments -- --
-------------- --------------
TOTALS $3,839 $1,392
============== ==============
</TABLE>
9(a) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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
BEGINNING CLOSE
ACCOUNT DESCRIPTION OF YEAR OF YEAR
Account 146 - Accounts Receivable from
Associate Companies
Central and South West Corporation $5,531 $7,165
Central Power and Light Company 7,401 10,064
Public Service Company of Oklahoma 6,105 6,946
Southwestern Electric Power Company 7,357 7,873
West Texas Utilities Company 2,864 4,041
CSW Credit, Inc. 89 170
CSW Energy, Inc. 227 410
CSW International, Inc. 72 89
C3 Communications, Inc. 105 164
EnerShop, Inc. 174 91
CSW Leasing, Inc. 105 212
SEEBOARD 862 841
CSW Energy Services, Inc. 726 270
CSW Power Marketing, Inc. 180 57
------------ -------------
TOTALS $31,798 $38,393
============ =============
TOTAL
Analysis of Convenience or Accommodation Payments PAYMENTS
--------
Central and South West Corporation $2,689
Central Power and Light Company 2,286
Public Service Company of Oklahoma (1,862)
Southwestern Electric Power Company 2,356
West Texas Utilities Company 4,930
CSW Credit, Inc. --
CSW Energy, Inc. 968
CSW International, Inc. 172
C3 Communications, Inc. 186
EnerShop, Inc. 112
CSW Leasing, Inc. --
SEEBOARD 73
CSW Energy Services, Inc. 184
CSW Power Marketing, Inc. 18
-------------
TOTAL PAYMENTS $12,112
=============
The majority of the 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.
9(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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.
ACCOUNT DESCRIPTION LABOR EXPENSES TOTAL
Account 152 - Fuel Stock Expenses Undistributed $-- $-- $--
------------------------------
TOTALS $-- $-- $--
==============================
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.
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.
ACCOUNT DESCRIPTION LABOR EXPENSES TOTAL
Account 163 - Billable Stores Expense Undistributed
Central Power and Light Company $806 $478 $1,284
Public Service Company of Oklahoma 545 368 913
Southwestern Electric Power Company 520 330 850
West Texas Utilities Company 257 164 421
CSW Corporation 112 19 131
Others 1 4 5
------------------------------
TOTALS $2,241 $1,363 $3,604
==============================
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.
10 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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
BEGINNING CLOSE
ACCOUNT DESCRIPTION OF YEAR OF YEAR
Account 174 - Miscellaneous Current and
Accrued Assets $-- $--
----------------------------
TOTALS $-- $--
============================
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
BEGINNING CLOSE
ACCOUNT DESCRIPTION OF YEAR OF YEAR
Account 186 - Miscellaneous Deferred Debits
Non-Billable Deferred Project Costs $344 $--
------------ -------------
TOTALS $344 $--
============ =============
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.
ACCOUNT DESCRIPTION AMOUNT
Account 188 - Billable Research, Development, or
Demonstration Expenditures $--
-------------
TOTAL $--
=============
11 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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
</TABLE>
Instructions: Classify amounts in each account with brief explanation,
disclosing the general nature of transactions which give rise to the
reported amounts.
<TABLE>
<CAPTION>
ACCOUNT DESCRIPTION AMOUNT
<S> <C>
Account 211 - Miscellaneous Paid-In Capital $--
Account 215 - Appropriated Retained Earnings --
----------
TOTAL $--
==========
</TABLE>
Instructions: Give particulars concerning net income or (loss) during the year,
distinguishing between compensation for the use of capital owed or net loss
remaining from servicing nonassociates 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 BALANCE AT
BEGINNING NET INCOME DIVIDENDS CLOSE
ACCOUNT DESCRIPTION OF YEAR OR (LOSS) PAID OF YEAR
- ------------------- ------- --------- ---- -------
<S> <C> <C> <C> <C>
Account 216 - Unappropriated Retained Earnings $-- $-- $-- $--
---------- ---------- ----------- ----------
TOTALS $-- $-- $-- $--
========== ========== =========== ==========
</TABLE>
12 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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 AT
NAME OF CLASS & SERIES DATE OF INTEREST AMOUNT BEGINNING DEDUCTIONS CLOSE
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) --
---------------------------------------------------------------
TOTALS $60,000 $60,000 $-- $(60,000) $--
===============================================================
</TABLE>
(1) Give an explanation of deductions:
Loan was paid off in two payments in 1998 -
$30 million on 1/28/98
$30 million on 4/27/98
13 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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
BEGINNING CLOSE
ACCOUNT DESCRIPTION OF YEAR OF YEAR
Account 233 - Notes Payable to Associate
Companies
Central and South West Corporation $26,390 $97,103
---------- ----------
TOTALS $26,390 $97,103
========== ==========
Account 234 - Accounts Payable to Associate
Companies
Central and South West Corporation $1,755 $1,225
---------- ----------
TOTALS $1,755 $1,225
========== ==========
Account 242 - Miscellaneous Current and
Accrued Liabilities
Payroll $987 $1,358
Directors' Deferred Compensation 291 --
Severance Accrual 576 --
---------- ----------
TOTALS $1,854 $1,358
========== ==========
14(a) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
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 9.27% for 1998 and 9.00% for 1997.
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.
14(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
As the plan sponsor, CSW will continue to reflect the costs of the pension plan
according to the provisions of SFAS No. 87 and report those results in
accordance with SFAS No. 132 and allocate such costs to each of the
participating employers. As a result of the July 1, 1997 amendment, CSWS will
realize ongoing reductions in operations and maintenance expense.
Pension plan assets consist primarily of common stocks and short-term and
intermediate 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:
1998 1997
(thousands)
------------------------------
Net Periodic Pension Cost
Service Cost $5,611 $4,550
Interest Cost 18,164 14,916
Expected Return on Plan Assets (26,097) (20,928)
Amortization of Unrecognized:
Transition Obligation 407 407
Prior Service Cost (1,610) (1,610)
------------------------------
$(3,525) $(2,665)
Pension Plan Contributions $ - $ -
Approximate Number of Participants in the Plan
Active employees 1,600 1,299
Retirees 122 110
Terminated employees 735 691
Assumptions used in accounting for the Pension Plan
Discount rate 6.75% 7.50%
Salary scale 4.96% 5.46%
Return on plan assets 9.00% 9.00%
Interest Crediting rate 5.25% 6.50%
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, 1998
and 1997 were approximately $9,053,000 and $5,482,000, respectively.
14(c) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
Postretirement Benefits Other Than Pensions
The components of net periodic postretirement benefit costs follow:
1998 1997
(thousands)
------------------------------
Benefits Obligations and Plan Assets
Benefit obligation:
Retirees $7,345 $6,650
Other fully eligible participants 4,391 2,579
Other active participants 14,806 9,732
---------- ----------
Total APBO $26,542 $18,961
Plan assets at fair value $12,344 $10,943
Change in Accumulated Post-
Retirement Benefit Obligation
Benefit Obligation at beginning of year $18,961 $13,353
Service Cost 1,464 1,037
Interest Cost 1,400 1,022
Amendments (462) --
Benefit payments (593) (395)
Plan participants' contributions 51 13
Benefits Paid 5,721 3,931
---------- ----------
Fair Value of plan assets at end of year $26,542 $18,961
Change in fair value of plan assets
Fair value of plan assets at
beginning of yr $10,943 $8,278
Actual return on plan assets (421) 1,344
Employer contributions 2,364 1,703
Plan participants' contributions 51 13
Benefits Paid (593) (395)
---------- ----------
Fair Value of plan assets at end of year $12,344 $10,943
Reconciliation of Funded Status
Funded status end of year $(13,346) $(7,726)
Unrecognized:
Transition Obligation 5,051 5,412
(Gain)/Loss 8,295 2,068
---------- ----------
Prepaid (accrued) benefit cost
before balance sheet adjustments $-- $(246)
Components of Net
Periodic Benefit Cost
Service Cost $1,464 $1,037
Interest Cost 1,400 1,022
Expected Return on Plan Assets (865) (716)
Amortization of Unrecognized:
Transition Obligation 361 355
(Gain) / Loss 20 (144)
---------- ----------
Total Net Periodic Benefit Cost $2,380 $1,554
14(d) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
Amounts Recognized in 1998 1997
Balance Sheets (thousands)
------------------------------
Prepaid Benefit Cost $1,301 $657
Accrued Benefit Cost (1,301) (903)
---------- ----------
Prepaid (Accrued) Benefit Cost $-- $(246)
Effect of 1% Change in Assumed
Health Care Cost Trend Rate
1% Increase
Service Cost Plus
Interest Cost $654
APBO $3,563
1% Decrease
Service Cost Plus
Interest Cost $(531)
APBO $(2,970)
As permitted, the amortization of any prior service cost is determined using
straight-line amortization of the cost over the average remaining service period
of employees expected to receive benefits under the plan.
The assumptions used in accounting for Postretirement benefit costs for both
1998 and 1997 are:
Discount rate 6.75% 7.50%
Tax rate on trusts 39.60% 39.60%
Return on plan assets 9.00% 9.00%
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.
14(e) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XIV - NOTES TO FINANCIAL STATEMENTS
The estimated fair value of the Company's financial instruments are as follows:
1998
(thousands)
Carrying Fair
Amount Value
Cash and temporary cash investments $1,418 $1,418
Notes payable to associate companies 97,103 97,103
Other long-term debt -- --
1997
(thousands)
Carrying Fair
Amount 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, 1998, the CSW System had revolving credit
facilities totaling $1.0 billion to back up its commercial paper program. At
December 31, 1998, CSW had $811 million outstanding in short-term borrowings.
The maximum amount of such short-term borrowings outstanding during the year,
which had a weighted average interest yield for the year of 5.8%, was $1.1
billion during June 1998. Of this amount, $96.5 million pertained to the service
company.
14(f) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XV - COMPARATIVE INCOME STATEMENT
(thousands)
ACCOUNT DESCRIPTION CURRENT PRIOR
YEAR YEAR
-------- --------
INCOME
456 Other electric revenues $ 88 $ 173
457 Services rendered to associate companies 284,242 264,070
458 Services rendered to non associate companies 2,138 1,060
421 Miscellaneous income or loss 524 601
447 Impact Studies 178 --
-------- --------
TOTAL INCOME 287,170 265,904
-------- --------
EXPENSES
500-559 Power production 20,447 16,877
560-579 Transmission 8,394 4,288
580-599 Distribution 13,933 3,388
902-903 Customer accounts expense 10,657 199
906-917 Customer service & information 9,320 17,420
920 Salaries and wages 97,424 82,752
921 Office supplies and expenses 22,299 27,629
922 Administrative expense transferred - credit (40,196) (37,449)
923 Outside services employed 33,163 31,264
924 Property insurance 215 171
925 Injuries and damages 1,153 572
926 Employee pensions and benefits 8,932 7,488
927 Franchise requirements -- 1
928 Regulatory commission expense -- --
930.1 General advertising expenses 4,129 4,749
930.2 Miscellaneous general expenses 13,519 12,098
931 Rents 11,883 12,632
935 Maintenance of structures and equipment 5,995 4,263
403-405 Depreciation and amortization expense 9,690 9,337
408 Taxes other than income taxes 7,542 7,695
409 Income taxes 2,813 1,012
410 Provision for deferred income taxes (1,394) (1,125)
411 Provision for deferred income taxes - credit 262 1,056
417 Administrative - Business Venture 3,053 1,142
426.1 Donations 660 615
426.3-
426.5 Other deductions 3,148 2,879
427 Interest on long-term debt 750 3,702
430 Interest on debt to associate companies 4,388 2,056
431 Other interest expense 112 56
-------- --------
TOTAL EXPENSE - INCOME STATEMENT 252,291 216,767
-------- --------
COST OF SERVICE - BALANCE SHEET
107 Construction work in progress 18,945 17,991
108 Retirement work in progress 192 159
163 Stores expense undistributed 3,604 2,641
165 Prepayments 478 1,821
183 Preliminary survey and investigation charges 627 381
184 Clearing accounts 1,703 1,271
186 Miscellaneous deferred debits 9,147 17,942
188 Research, development, or demonstration expenses 183 362
242 Miscellaneous current and accrued liabilities -- 6,545
307 Equipment -- 21
308 Office furniture and equipment -- 3
-------- --------
TOTAL COST OF SERVICE - BALANCE SHEET 34,879 49,137
-------- --------
NET INCOME OR (LOSS) $ -- $ --
======== ========
Note: All accounts on this schedule reflect amounts "As Billed".
15 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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 $40,472 $3,744 $728 $44,944
Central Power and Light Company 64,474 10,301 1,203 75,978
Public Service Company of Oklahoma 46,321 6,575 843 53,739
Southwestern Electric Power Company 56,285 8,493 1,033 65,811
West Texas Utilities Company 24,968 4,024 460 29,452
CSW Credit, Inc. 731 127 13 871
CSW Energy, Inc. 1,594 252 30 1,876
CSW International, Inc. 535 107 11 653
C3 Communications, Inc. 318 (15) 5 308
CSW Leasing, Inc. 87 19 2 108
CSW Power Marketing, Inc. 610 72 12 694
CSW Energy Services, Inc. 2,436 503 49 2,988
EnerShop, Inc. 411 82 8 501
SEEBOARD 5,275 941 103 6,319
--------------------------------------------
TOTALS $244,517 $35,225 $4,500 $284,242
============================================
16 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES - ACCOUNT 458
(thousands)
Instruction: Provide a brief description of the services rendered to each
nonassociate company.
<TABLE>
<CAPTION>
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
COST COST FOR USE TOTAL OR AMOUNT
NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED
- ---------------------------- ------- ------- ---------- ---- ---------- ------
458-1 458-2 458-3 458-4
<S> <C> <C> <C> <C> <C> <C>
Engineering Services:
1. Cowley Sugarhouse $ 4 $-- $-- $ 4 $ 4 $ 8
2. Sinclair Oil 7 -- -- 7 6 13
3. Global Octanes Texas 7 -- -- 7 2 9
4. Electric Power Research Institute 561 -- -- 561 -- 561
5. Kimberly Clark 5 -- -- 5 7 12
6. Kelco 211 -- -- 211 100 311
7. Lone Star Steel 80 -- -- 80 6 86
8. Georgia Pacific 164 -- -- 164 34 198
9. Valspar 4 -- -- 4 1 5
10. NCE Corporation 70 -- -- 70 10 80
11. University of Texas 3 -- -- 3 1 4
12. TAMU Baseball 169 -- -- 169 131 300
13. Honeywell 215 -- -- 215 -- 215
14. Tampa Electric 45 -- -- 45 -- 45
15. HEB Grocery 239 -- -- 239 -- 239
16. Texas Tech 4 -- -- 4 -- 4
17. Other (18) -- -- (18) -- (18)
Environmental Lab Services:
1. Sabine Mining Company 19 -- -- 19 12 31
2. Dolet Hills Mining Venture -- -- -- -- 5 5
3. Other 24 -- -- 24 6 30
-------------------------------------------------------------------------
TOTALS $1,813 $-- $-- $1,813 $325 $2,138
=========================================================================
</TABLE>
17 of 27 pages
<PAGE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XVI - ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE AND NONASSOCIATE COMPANIES
(thousands)
Instruction: Total cost of service will equal for associate and nonassociate
companies the total amount billed under their separate analysis of billing
schedules.
ASSOCIATE COMPANY CHARGES NONASSOCIATE 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
- ------- -------------------- ---- ---- ----- ---- ---- ----- ---- ---- -----
COST OF SERVICE - INCOME STATEMENT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
456 Other Electric Revenues $(85) $(3) $(88) $-- $-- $-- $(85) $(3) $(88)
458 Services Rendered to
Nonassociate Companies (325) - (325) 325 - 325 - - -
421 Miscellaneous Income or Loss (440) (84) (524) - - - (440) (84) (524)
447 Impact Studies (178) - (178) - - - (178) - (178)
500-559 Power Production 18,033 2,403 20,436 11 - 11 18,044 2,403 20,447
560-579 Transmission 7,827 567 8,394 - - - 7,827 567 8,394
580-599 Distribution 13,571 362 13,933 - - - 13,571 362 13,933
902-903 Customer Accounts Expense 10,657 - 10,657 - - - 10,657 - 10,657
906-917 Customer Service & Information 9,179 141 9,320 - - - 9,179 141 9,320
920 Salaries and Wages 72,563 21,944 94,507 64 - 64 72,627 21,944 94,571
921 Office Supplies and Expenses 18,247 3,146 21,393 223 - 223 18,470 3,146 21,616
922 Administrative Expense (28,613) (625) (29,238) - - - (28,613) (625) (29,238)
923 Outside Service Employed 30,710 1,925 32,635 44 - 44 30,754 1,925 32,679
924 Property Insurance 215 - 215 - - - 215 - 215
925 Injuries and Damages 1,079 74 1,153 - - - 1,079 74 1,153
926 Employee Pensions and Benefits 8,326 605 8,931 - - - 8,326 605 8,931
927 Franchise Requirements - - - - - - - - -
930.1 General Advertising Expense 3,986 143 4,129 - - - 3,986 143 4,129
930.2 Miscellaneous General Expense 12,077 1,305 13,382 - - - 12,077 1,305 13,382
931 Rents 6,300 742 7,042 - - - 6,300 742 7,042
935 Maintenance of Structures
and Equipment 4,216 529 4,745 - - - 4,216 529 4,745
403-405 Depreciation and Amortization
Expense 8,735 246 8,981 - - - 8,735 246 8,981
408 Taxes Other than Income Taxes 7,376 166 7,542 - - - 7,376 166 7,542
409 Income Taxes - 2,813 2,813 - - - - 2,813 2,813
410 Provision for Deferred Income
Taxes - (1,394) (1,394) - - - - (1,394) (1,394)
411 Provision for Deferred Income
Taxes - Credit - 262 262 - - - - 262 262
417 Administrative - Business Venture 1,591 (6) 1,585 1,468 - 1,468 3,059 (6) 3,053
426.1 Donations 657 3 660 - - - 657 3 660
426.3-
426.5 Other Deductions 3,238 (90) 3,148 - - - 3,238 (90) 3,148
427 Interest On Long-Term Debt 731 19 750 - - - 731 19 750
430 Interest On Debt To Associate
Companies 4,388 - 4,388 - - - 4,388 - 4,388
431 Other Interest Expense 112 - 112 - - - 112 - 112
----------------------------------------------------------------------------------------
TOTAL COST OF SERVICE - INCOME STATEMENT 214,173 35,193 249,366 2,135 -- 2,135 216,308 35,193 251,501
----------------------------------------------------------------------------------------
</TABLE>
(continued)
18(a) of 27 pages
<PAGE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XVI - ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE AND NONASSOCIATE COMPANIES
(thousands)
(continued)
ASSOCIATE COMPANY CHARGES NONASSOCIATE 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
- ------- -------------------- ---- ---- ----- ---- ---- ----- ---- ---- -----
COST OF SERVICE - BALANCE SHEET
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
107 Construction Work in Progress 18,942 - 18,942 3 - 3 18,945 - 18,945
108 Retirement Work in Progress 192 - 192 - - - 192 - 192
163 Stores Expense Undistributed 3,586 18 3,604 - - - 3,586 18 3,604
165 Prepayments 478 - 478 - - - 478 - 478
183 Preliminary Survey &
Investigation Charges 627 - 627 - - - 627 - 627
184 Clearing Accounts 1,689 14 1,703 - - - 1,689 14 1,703
186 Miscellaneous Deferred Debits 9,147 - 9,147 - - - 9,147 - 9,147
188 Research, Development, or
Demonstration Exp. 183 - 183 - - - 183 - 183
----------------------------------------------------------------------------------------
TOTAL COST OF SERVICE - BALANCE SHEET 34,844 32 34,876 3 -- 3 34,847 32 34,879
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
TOTAL COST OF SERVICE $249,017 $35,225 $284,242 $2,138 $-- $2,138 $251,155 $35,225 $286,380
========================================================================================
</TABLE>
18(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XVII - SCHEDULE OF EXPENSE DISTRIBUTION 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 TECHNICAL
ACCOUNT DESCRIPTION OF ITEMS AMOUNT OVERHEAD EXECUTIVE SERVICES ADMIN FOSSIL PRODUCTION LEGAL
- ------- -------------------- ------ -------- --------- -------- ----- ------ ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
456 Other Electric Revenues $(88) $- $- $- $(3) $(2) $(33) $-
458 Services Rendered to Nonassociate Companies - - - - - - - -
421 Miscellaneous Income or Loss (524) (40) - - (13) - - -
447 Impact Studies (178) - - (178) - - - -
500-559 Power Production 20,447 - 472 28 2 4,063 12,749 -
560-579 Transmission 8,394 - - 6,717 - - 1,677 -
580-599 Distribution 13,933 - 17 12,380 55 - 1,476 -
902-903 Customer Accounts Expense 10,657 - - 122 6,061 - - -
906-917 Customer Service & Information 9,320 - - 48 9 - - 2
920 Salaries and Wages 97,424 1,288 7,248 3,556 21,514 205 493 6,240
921 Office Supplies and Expenses 22,299 1,304 716 525 2,628 21 475 1,193
922 Administrative Expense (40,196) - - 4,255 (46,276) 436 - 11
923 Outside Service Employed 33,163 919 138 309 3,661 1 168 11,816
924 Property Insurance 215 - - - (6) - 1 -
925 Injuries and Damages 1,153 - - - 298 - - 2
926 Employee Pensions and Benefits 8,932 2 6 2 8,155 1 7 3
927 Franchise Requirements - - - - - - - -
930.1 General Advertising Expense 4,129 - - - - - - -
930.2 Miscellaneous General Expense 13,519 - 65 4 8,373 - 4 444
931 Rents 11,883 4,002 - - 331 1 3 378
935 Maintenance of Structures and Equipment 5,995 1,860 - - 300 - 6 38
403-405 Depreciation and Amortization Expense 9,690 7,597 - - 2,093 - - -
408 Taxes Other than Income Taxes 7,542 837 - - 6,702 - - -
409 Income Taxes 2,813 - - - 2,813 - - -
410 Provision for Deferred Income Taxes (1,394) - - - (1,394) - - -
411 Provision for Deferred Income Taxes - Credit 262 - - - 262 - - -
417 Administrative - Business Venture 3,053 - - 2 - 1 1,780 -
426.1 Donations 660 - 56 5 1 - - 52
426.3-
426.5 Other Deductions 3,148 - 385 24 314 10 27 2,130
427 Interest On Long-Term Debt 750 750 - - - - - -
430 Interest On Debt To Associate Companies 4,388 - - - 4,388 - - -
431 Other Interest Expense 112 - - - 112 - - -
107 Construction Work in Progress 18,945 - - 7,974 1,047 195 1,519 97
108 Retirement Work in Progress 192 - - 63 22 44 61 -
163 Stores Expense Undistributed 3,604 - - 3,168 92 342 - -
165 Prepayments 478 - - - - - - -
183 Preliminary Survey & Investigation Charges 627 - - 627 - - - -
184 Clearing Accounts 1,703 - - 828 808 16 6 7
186 Miscellaneous Deferred Debits 9,147 - - 12 449 - 62 3,049
188 Research, Development, or Demonstration Exp. 183 - - 172 - - 2 -
------------------------------------------------------------------------------
TOTAL COST OF SERVICE $286,380 $18,519 $9,103 $40,643 $22,798 $5,334 $20,483 $25,462
==============================================================================
</TABLE>
19 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XVII - SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT
OR SERVICE FUNCTION
(thousands)
(continued)
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
--------------------------------------------------------------------------------
CORPORATE INFORMATION CORPORATE CUSTOMER
ACCOUNT DESCRIPTION OF ITEMS SERVICES MARKETING SERVICES NUCLEAR AUDITS DEVELOPMENT FUEL SERVICES
- ------- -------------------- -------- --------- -------- ------- ------ ----------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
456 Other Electric Revenues $-- $-- $-- $-- $-- $(50) $-- $--
458 Services Rendered to Nonassociate Companies - - - - - - - -
421 Miscellaneous Income or Loss (435) - - - - (36) - -
447 Impact Studies - - - - - - - -
500-559 Power Production - 5 (1) 55 3 178 2,893 -
560-579 Transmission - - - - - - - -
580-599 Distribution - - - - - 1 - 4
902-903 Customer Accounts Expense 62 10 - - - - - 4,402
906-917 Customer Service & Information 1,872 4,040 1 - - - - 3,348
920 Salaries and Wages 12,825 3,035 21,528 240 2,276 11,448 1,079 4,449
921 Office Supplies and Expenses 5,566 537 4,638 16 438 2,845 297 1,100
922 Administrative Expense 155 - 853 - 6 360 4 -
923 Outside Service Employed 3,348 970 6,073 - 317 3,802 917 724
924 Property Insurance 220 - - - - - - -
925 Injuries and Damages 853 - - - - - - -
926 Employee Pensions and Benefits 413 1 19 - - 310 - 13
927 Franchise Requirements - - - - - - - -
930.1 General Advertising Expense 4,059 - - - - 70 - -
930.2 Miscellaneous General Expense 3,130 14 174 6 - 1,164 138 3
931 Rents 296 527 6,334 - 3 5 3 -
935 Maintenance of Structures and Equipment 634 35 3,011 - - 74 - 37
403-405 Depreciation and Amortization Expense - - - - - - - -
408 Taxes Other than Income Taxes - - - - - 3 - -
409 Income Taxes - - - - - - - -
410 Provision for Deferred Income Taxes - - - - - - - -
411 Provision for Deferred Income Taxes - Credit - - - - - - - -
417 Administrative - Business Venture 2 1,227 2 - - - 39 -
426.1 Donations 544 1 - 1 - - - -
426.3-
426.5 Other Deductions 206 8 - 5 - 33 2 4
427 Interest On Long-Term Debt - - - - - - - -
430 Interest On Debt To Associate Companies - - - - - - - -
431 Other Interest Expense - - - - - - - -
107 Construction Work in Progress - 539 4,354 - - 66 1,114 2,040
108 Retirement Work in Progress - - 2 - - - - -
163 Stores Expense Undistributed - - 2 - - - - -
165 Prepayments 478 - - - - - - -
183 Preliminary Survey & Investigation Charges - - - - - - - -
184 Clearing Accounts 2 (14) 52 - - (22) 15 5
186 Miscellaneous Deferred Debits 235 1,099 - - - 2,984 1,257 -
188 Research, Development, or Demonstration Exp. 8 1 - - - - - -
-------------------------------------------------------------------------------
TOTAL COST OF SERVICE $34,473 $12,035 $47,042 $323 $3,043 $23,235 $7,758 $16,129
===============================================================================
</TABLE>
20 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
DEPARTMENTAL ANALYSIS OF SALARIES
(thousands)
<TABLE>
<CAPTION>
DEPARTMENTAL SALARY EXPENSE
-------------------------------------------------------------------------------
INCLUDED IN AMOUNTS BILLED TO
-------------------------------------------------------------
NAME OF DEPARTMENT NUMBER OF
INDICATE EACH DEPARTMENT TOTAL PARENT OTHER NON NON PERSONNEL
OR SERVICE FUNCTION AMOUNT COMPANY ASSOCIATES ASSOCIATES BILLABLE END OF YEAR
- ------------------- ------ ------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Administration $27,122 $5,259 $21,651 $-- $212 186
Audit 1,613 254 1,359 -- -- 22
Corporate Development 9,537 1,694 7,730 -- 113 130
Corporate Services 9,657 1,700 7,946 1 10 118
Customer Service 6,861 248 6,600 -- 13 299
Executive 5,735 3,849 1,886 -- -- 27
Fossil Generation 2,910 120 2,787 -- 3 36
Fuels 3,478 153 3,325 -- -- 52
Information Services 17,216 1,195 14,048 -- 1,973 267
Legal 4,778 1,650 3,128 -- -- 60
Marketing 5,079 435 4,641 -- 3 40
Nuclear Engineering 211 4 207 -- -- 1
Production Engineering 9,058 512 8,218 320 8 142
Technical Services 12,159 569 11,562 2 26 206
--------------------------------------------------------------------------------- -------
TOTALS $115,414 $17,642 $95,088 $323 $2,361 1,586
================================================================================= =======
</TABLE>
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.
21(a) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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.
<TABLE>
<CAPTION>
FROM WHOM PURCHASED SERVICE PROVIDED AMOUNT
- ------------------- ---------------- -------
<S> <C> <C>
Auditing Services
Arthur Andersen, LLP Auditing Services $386
--------
$386
--------
Legal Services
Abernathy MacGregor Frank Legal Services $131
Barlow & Hardtner, L.C. Legal Services 330
Bracewell & Patterson Legal Services 590
Broyles & Pratt Legal Services 2,430
Christy & Viener Legal Services 2,347
Clark, Thomas & Winters Legal Services 100
Doerner, Saunders, Daniel
& Anderson Legal Services 523
Graves, Dougherty, Hearon & Moody Legal Services 462
Jones, Day, Reavis & Pogue Legal Services 1,464
Milbank, Tweed, Hadley & McCoy Legal Services 2,340
Sheinfeld, Maley & Kay Legal Services 1,713
Sidley & Austin Legal Services 389
Slover & Loftus Legal Services 411
Vinson & Elkins LLP Legal Services 2,187
Wagstaff, Alvis, Stubbeman,
Seamster & Longacre LLP Legal Services 424
White, Coffey, Galt & Fite Legal Services 448
Wilkinson, Carmody & Gilliam Legal Services 292
Other (66) Legal Services 916
--------
$17,497
--------
Consulting Services
AIMS Consulting Inc. Consulting Services $133
Al Stalter & Associates Consulting Services 333
Analysts International Corporation Consulting Services 859
Arthur Andersen, LLP Consulting Services 1,018
AXS Marketing, LLC Consulting Services 166
AYCO Corporation Consulting Services 260
Brothers & Co. Consulting Services 225
Business Information Technology Consulting Services 205
Commercial Roofing Inc. Consulting Services 118
Compass Management and Leasing Consulting Services 104
Craig Stevens C. Consulting Services 161
Data Dynamics Inc. Consulting Services 707
Database Consultants Inc. Consulting Services 217
Deloitte & Touche Consulting Services 1,438
Economists Incorporated Consulting Services 188
</TABLE>
21(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
OUTSIDE SERVICES EMPLOYED
(thousands)
<TABLE>
<CAPTION>
FROM WHOM PURCHASED SERVICE PROVIDED AMOUNT
- ------------------- ---------------- -------
Consulting Services (Continued)
<S> <C> <C>
Edison Electric Institute Consulting Services $189
FINANCO Consulting Services 116
Global Corporation Consulting Services 105
Hewitt Associates Consulting Services 668
INDUS Consulting Services 122
Infosystems Corporation Consulting Services 176
Inventiva Consulting Services 136
ITRON Consulting Services 229
James Martin & Company Consulting Services 1,560
Management Applications
Consulting Inc. Consulting Services 209
Market Strategies Inc. Consulting Services 329
Marketing Decision Research Group Consulting Services 126
Maxim Group Consulting Services 220
New Energy Associates Consulting Services 136
Provide Technologies Consulting Services 137
Read-Poland Associates Consulting Services 107
Reed Consulting Consulting Services 103
Rex Lee Consulting Consulting Services 152
Reynolds & Reynolds Consulting Services 326
RHI Consulting Consulting Services 240
Small Change Organization Consulting Services 106
Soft-Tech Systems Consulting Services 152
SPR Systems & Programming Consulting Services 683
Sun Technical Services Inc. Consulting Services 274
Sungard CSS Consulting Services 163
UBICS Incorporated Consulting Services 249
US Web Corporation Consulting Services 133
Utilities International Consulting Services 397
Utility Data Resources Consulting Services 453
Zond Systems Inc. Consulting Services 149
Other (161) Consulting Services 3,226
--------
$17,503
--------
Temporary Personnel Services
Accounting Principals Temporary Accounting Services $281
Imprimis Group Inc. Temporary Office and Accounting Services 366
Kelly Services Temporary Office and Accounting Services 354
Key Temporary Temporary Office and Accounting Services 1,081
TAD Resources International Inc. Temporary Office and Accounting Services 140
Vinson and Associates Temporary Office and Accounting Services 498
Other (17) Temporary Office and Accounting Services 687
--------
$3,407
--------
</TABLE>
21(c) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
OUTSIDE SERVICES EMPLOYED
(thousands)
<TABLE>
<CAPTION>
FROM WHOM PURCHASED SERVICE PROVIDED AMOUNT
- ------------------- ---------------- -------
<S> <C> <C>
Other Outside Services
ACCLIVUS Corporation Training Services $187
Advanced Applicators Line Spraying Services 113
Americorp Relocation Services 393
Aspect Telecommunications Telecommunications Services 317
Asplundh Tree Experts Tree Trimming Services 6,044
Bank of Oklahoma Banking Services 285
Chase Manhattan Bank Banking Services 102
Computational Systems Inc. Services Utility 249
Credit Bureau of Bartlesville Credit Bureau 114
Davey Tree Surgery Company Tree Trimming Services 253
Desola Group Inc. Business Technical Process Consulting Services 236
Electric Power Research Institute Research 5,127
Entex PC workstation support 607
Equifax Credit Information Services 218
Espey, Huston & Associates Preparation of Operating Permits 126
ISS Cleaning Services Group, Inc. Janitorial Services 223
Love Envelopes, Inc. Forms Printing 498
Mail Box Statement Mailing Services 269
McCoy Tree Surgery Tree Trimming Services 1,720
Moody's Investor Service Security Analysis and Ratings 106
Oklahoma Press Service, Inc. Newspaper Press Release Services 121
Red River Specialties Inc. Tree Trimming Services 758
Red Simpson Inc. Storm Damage Restoration Services 162
Simuflite Train Aviation Training 104
Sodexho USA Catering/Food Services 185
Standard & Poor's Security Analysis and Ratings 110
Summit Helicopters Aerial Line Treatment 307
Trammel Crow Company Office Building Security & Engineering 448
Trees Inc. Tree Trimming Services 1,287
Willow Wood Lawn Maintenance Landscaping Services 168
World Wide Products Inc. Engineering Services 109
Wright Tree Service Tree Trimming Services 3,660
Other (317) Various Services 6,723
--------
$31,329
--------
Total Outside Services $70,122
========
</TABLE>
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.
21(d) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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 (1) $(3,518)
Retirement Savings Plan 3,579
Medical 8,402
Educational Assistance 239
Employee Awards and Events Program 164
Job Incentive Credits (1,080)
Accidental Death and Disability 62
Group Life 70
Long Term Disability 361
Retired Employee Benefits 2,351
Outplacement Services 104
Executive Benefits 51
Health and Fitness Programs 44
Other (1,897)
---------------
TOTAL $8,932
---------------
FOOTNOTES
- ---------
(1) 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 will continue to realize ongoing reductions
in operating and maintenance expenses related to its pension plan. (See Note 2 -
Benefit Plans for further information related to pensions.)
22(a) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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
General Advertising Abilene Reporter News $20
Brothers & Company 71
Corpus Christi Broadcasting Company 15
Donrey Outdoor Adventures 4
Golden Banner Press, Inc. 123
Inventiva 50
J L Media Inc. 375
Jeff Davis County Mountain Dispatch 4
KTBS Inc. 20
Langdon Publishing 9
Moore Document Solutions 4
National Yellow Pages Direct 170
National Cinema Network 5
New Orleans Publishing Group 7
Oklahoma Press Service, Inc. 247
Outdoor Placement of Texas 112
Pabst Creative Communications 30
Progressive Marketing 374
Read-Poland Associates 36
Rio Shelters Incorporated 12
Shreveport Baseball, Inc. 5
Standard Times 8
Texas Television Inc. 28
Towery Publishing Inc. 5
Tulsa Drillers 10
Vielmassociates 13
Wingfield Smith / Clean Sweep Campaign 68
Others (96) 37
----------
SUB-TOTAL $1,862
----------
Recruiting and
Employment AdvertisingCareer Shop $5
Computer Management Search 15
JWG Associates 24
Others (46) 30
----------
SUB-TOTAL $74
----------
22(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
GENERAL ADVERTISING EXPENSE - ACCOUNT 930.1
(thousands)
DESCRIPTION NAME OF PAYEE AMOUNT
Public Relations and
Institutional Image Ark-La-Tex Hockey, LLC. $6
Brothers & Company 430
Associated Business Forms 3
Corpus Christi Ballet Company 31
Dallas Mavericks 39
Global Media Corporation, LTD. 30
Inventiva 217
J L Media Inc. 573
Langdon Publishing 15
Money Magazine 30
National Association of Investors Corp. 6
New Orleans Publishing Group 5
North Texas Public Broadcasting 175
Oklahoma Press Service, Inc. 90
Oklahoma Today 4
Outdoor Placement of Texas 58
Pabst Creative Communications 35
Progressive Marketing 5
Public Strategies Incorporated 50
Team Azteca 85
Texas Television Inc. 94
Texas Monthly 22
Tulsa Oilers Hockey, Inc. 7
Tulsa Drillers 6
Tulsa Baseball, Inc. 5
University of Tulsa 20
Urban Tulsa / Renegade Publishing, Inc. 4
Victoria Advocate 4
Wingfield Smith / Clean Sweep Campaign 37
World Publishing Company 4
Others (205) 103
----------
SUB-TOTAL $2,193
----------
TOTAL $4,129
==========
22(c) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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 $8,239
Relocation Expenses 2,718
Trustee, Registrar, and Transfer Agent Fees 815
Directors' Fees and Expenses 969
Annual Report Expenses 336
Corporate Financial Rating Fees 302
Miscellaneous 140
-------------
TOTAL $13,519
=============
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 $4,542
Offsite Storage Space Rent 25
Computer Timesharing Rent 87
Computer Software Rent 4,599
Computer Equipment Rent 1,978
Office Equipment Rent 534
Other Miscellaneous Rent 118
-------------
TOTAL $11,883
=============
23 of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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 $137
Property, Franchise, Ad Valorem and Other Taxes 1,142
-------------
SUBTOTAL 1,279
-------------
U.S. Governmental Taxes
Social Security Taxes 6,195
Federal Unemployment Taxes 68
-------------
SUBTOTAL 6,263
-------------
TOTAL $7,542
=============
24(a) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
DONATIONS - ACCOUNT 426.1
(thousands)
Instructions: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The aggregate number and
amount of all items of less than $3,000 may be shown in lieu of details.
<TABLE>
<CAPTION>
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
<S> <C> <C>
American Red Cross - Dallas Area Chapter Donation for Capital Campaign $10
Austin Lyric Opera Donation to Support 1998 Season 5
Boys and Girls Clubs of America Support of Chairmans Dinner 5
Central Dallas Association 1998 Membership 5
Child Care Group Annual donation 6
Circle Ten Council Boy Scouts Inner circle sponsorship 1998 & Boy Scout Golf Classic 15
Cowboy Artists of America Museum Contribution to support the organization 8
Dallas Ambassadors Forum Sponsorship of 1998 Forum 10
Dallas Arboretum Visitor Education Pavilion Building Fund 21
Dallas Area Interfaith Donation in support of DAI programs 3
Dallas Business Committee for the Arts Membership Dues for 1998 5
Dallas Citizens Council Membership Commitment 1998 6
Dallas Council of World Affairs Annual Sponsor of H. Neil Mallow Award Dinner 5
Dallas Museum of Art Corporate partner 10
Dallas Opera Corporate sponsor 4
Dallas Symphony Association, Inc. Annual contribution 17
Dallas Theater Center Corporate Partners Renewal 13
Dallas Women's Golf Classic Corporate Sponsor 3
Executive Leadership Council Membership Dues 3
Greater Dallas Chamber Of Commerce Annual Membership Dues 32
Junior League of Dallas Annual special sponsor underwriting 3
Leadership Texas Sponsor 1998 Leadership Program Partner Initiative 10
Lisa Landry Childress Foundation 1998 Golf with the Legends Tournament 5
</TABLE>
24(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
DONATIONS - ACCOUNT 426.1
(thousands)
<TABLE>
<CAPTION>
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
<S> <C> <C>
National Alliance of Business 1998 corporate contribution $5
National Multiple Sclerosis Sponsor of Dinner Of Champions 7
National Paralysis Foundation 1999 Southwestern Ball Sponsor 15
Nature Conservancy of Texas Underwrite Dallas Corporate Conservation Leadership Award 3
Our Children, Inc. Presenting sponsor for Our Children's Store of Dallas 25
Progressive Marketing Corporate Support 6
Project Shelter Annual golf tournament sponsorship 8
Salesmanship Club of Dallas Gold Sponsorship for '98 GTE Byron Nelson Classic 23
Southwestern Ball Southwestern Medical Center of Dallas 1998 Sponsor 10
Square One Productions Corporate Contribution 5
Taste of the South Fundraiser to Benefit Centers for Youth and Families 5
Texans for Lawsuit Reform Annual Donation 5
Texas Civil Justice League 1998 Annual Corporate Dues 5
Texas Council on Economic Development Annual contribution for 1998 5
Texas Engineering Foundation Corporate Donation 3
Texas Tech University Commitment to Capital and Bilking Campaign 20
Tulsa Area United Way Corporate Gift 60
U. S. Energy Association Support World Energy Conference 25
United Way of Metropolitan Dallas, Inc. Corporate Contribution 76
Utility Business Education Annual Contribution 5
VWP Group Corporate Sponsor 3
Women's Auxiliary to Children Annual donation to Family Night at Six Flags for the
Children's Medical Center of Dallas 3
Young Concert Artists Corporate Contribution 5
YMCA of Metropolitan Dallas Pledge for Capital Campaign 10
Other (134) 119
------------
TOTAL $660
============
</TABLE>
24(c) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
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 Company employee and administrative
Civic, Political & costs for civic, political and
Related Activities related activities $2,927
Other Miscellaneous
Deductions Company expense 221
------
TOTAL $3,148
======
25(a) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XVIII - NOTES TO STATEMENT OF INCOME
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,
1998, were $8,276,253. See paragraph (b) for explanation of the 1998
billing procedure.
(b)Breakdown of Data Center Billings by CRU
The actual 1998 costs for the operation of the Data Center were
$8,276,253. 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.
25(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
For the Year Ended December 31, 1998
SCHEDULE XVIII - NOTES TO STATEMENT OF INCOME
(continued)
Usage Base Total
Company CRU's Billing Billing Billing
CPL 1,482,523 $1,482,523 $265,862 $1,748,385
PSO 1,179,660 1,179,660 362,352 1,542,012
SWEPCO 1,214,125 1,214,125 348,178 1,562,303
WTU 712,121 712,121 187,276 899,397
CSWS 1,992,828 1,992,828 530,475 2,523,303
CSW Energy 416 416 437 853
---------- ------------- -------------- -------------
TOTALS 6,581,673 $6,581,673 $1,694,580 $8,276,253
========== ============= ============== =============
(c)Statement of Data Center Activities
The major activities of the Data Center during 1998 were the production
environment of Integrated Data Management System (IDMS) and Customer
Information Control System (CICS) for all of the system companies. Year
2000 testing was also a major activity.
The operating costs for 1998 included salaries, equipment expenses,
software services, disaster recovery, site rentals and general supplies.
25(c) of 27 pages
<PAGE>
-----------------------------------------------
| Central and South West Services |
| Executive Summary Chart - December 31, 1998 |
----------------------------------------------
Chairman & Chief Exec Officer
|
|
|----------Dir Audits
|
|
---------------------------------------|----------
| | |
Exec VP/ EVP/CFO Pres & Chief
General Counsel | Operating Officer
| | |
| Controller |
VP Assoc Gen Treasurer |
Cnsl/Corp Sec |
|
|
|
|
------------------------------------------|---------------------------|
| | |
| | |
| | |
Sr VP External Affairs SVP Electric Operations |
| | |
| |-----| |
CSW LA/AR-SWEPCO President | |
CSW Texas President |----- VP Business Opertunities |
President/PSO | |
VP Governmental Affairs |----- President/Energy Services |
| |
|----- President/Energy Delivery |
| | |
| VP Elect Del/T & D |
| VP Operations Services |
| |
|----- President CSW Generation |
| |
| |
VP Engineering |
VP Fossil Generation |
VP Fuels |
VP Nuclear Plants |
|
|
|---------------------------------|
|
|------SVP Cust Relations & Corp Dev
|
| |
| VP Customer Relations
| VP Human Resources
|
|------VP AEP Merger
26(a) of 27 pages
<PAGE>
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*, November 7, 1997** and
January 23, 1998*** the following 51 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 #HELPCALLS NUMBER OF INFORMATION SERVICES CALLS***
14. #JCATRANSA NUMBER OF JOB COST ACCOUNTING TRANSACTIONS
Lines of accounting distribution on Job Cost Accounting
Sub-system
15. #OFROUTERS NUMBER OF ROUTERS
Device that connects two or more Local Area Networks
16. #OFSERVERS NUMBER OF SERVERS
Large, fast-capacity computers
17. #RADIOSMOB NUMBER OF RADIOS (BASE/MOBILE/HANDHELD)
18. #REMITITEM NUMBER OF REMITTANCE ITEMS
Number of electric bill payments processed which cannot be
processed through the lock box
26(b) of 27 pages
<PAGE>
ANNUAL REPORT OF Central and South West Services, Inc.
METHODS OF ALLOCATION
(continued)
Central and South West Services, Inc. requested and the Securities and Exchange
Commission granted on March 7, 1997, July 11, 1997*, November 7, 1997** and
January 23, 1998*** the following 51 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.
19. #REMOTTERM NUMBER OF REMOTE TERMINAL UNITS
SCADA system connector to control electric system
20. #RESIDCUST NUMBER OF RESIDENTIAL CUSTOMERS
21. #TELEPHONE NUMBER OF TELEPHONES
Includes all phone lines
22. #TRAVELTRN NUMBER OF TRAVEL TRANSACTIONS
Includes Hotel, Car Rental and Airline flights
23. #VEHICLESS NUMBER OF VEHICLES
Includes fleet and pool cars
24. #VENDINVPT NUMBER OF VENDOR INVOICE PAYMENTS
Actual vouchers
25. #WORKSTATN NUMBER OF WORKSTATIONS
Number of personal computers
26. ALCOMMCHAN ACTIVE OWNED OR LEASED COMMUNICATION CHANNELS
27. AVGPKLD3YR AVERAGE PEAK LOAD FOR PAST THREE YEARS
28. KWHSALEULT KWH SALES
Each company's kilowatt-hour sales to ultimate customers
29. MMBTUBRALL PAST 3 MONTHS MMBTU'S BURNED (ALL FUEL TYPES)
30. MMBTUBRCOA PAST 3 MONTHS MMBTU'S BURNED (COAL ONLY)
31. MMBTUBRGAS PAST 3 MONTHS MMBTU'S BURNED (GAS TYPE ONLY)
32. MMBTUBROIL PAST 3 MONTHS MMBTU'S BURNED (OIL TYPE ONLY)
33. MMBTUSOLID PAST 3 MONTHS MMBTU'S BURNED (SOLID FUELS ONLY)
34. MWGENCAPAC MW GENERATING CAPACITY
35. MWHGENERAT MWH'S GENERATION
36. OVERHEADCR OVERHEAD CLEARING
37. 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
38. TLGROSSREV TOTAL GROSS REVENUES FOR THE PREVIOUS FOUR QUARTERS**
39. 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
40. TFIXASSET$ TOTAL FIXED ASSET DOLLARS
41. TFIXAS-NU$ TOTAL FIXED ASSET DOLLARS - NUCLEAR
42. TGRUTIPLNT TOTAL GROSS UTILLITY PLANT (INCLUDES CWIP)
Each company's gross utility plant
43. TPOLEMILES NUMBER OF MILES OF TRANSMISSION LINES
44. TLASSET-NU TOTAL ASSETS LESS NUCLEAR PLANT
45. TTLASSETS$ TOTAL ASSET DOLLARS
Total Assets less: a/r affiliates; factored,interest receivable
affiliates; investments in subsidiaries; money pool receivables
46. TTPKLOADLY TOTAL PEAK LOAD (PRIOR YEAR)
47. CSWSPMBILL CSWS PRIOR MONTH BILL
48. CSWS3MBILL CSWS PAST 3 MONTHS BILL
49. EVENSPREAD EVEN SPREAD OF CHARGE BY COMPANY
50. ___'3MBILL FUNCTIONAL DEPARTMENT'S PAST 3 MONTHS TOTAL BILL
51. DPOLEMILES NUMBER OF MILES OF DISTRIBUTION LINES
26(c) of 27 pages
<PAGE>
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 1998:
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 1998:
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.
26(d) of 27 pages
<PAGE>
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 30, 1999
--------------
27 of 27 pages
<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-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 119,596
<TOTAL-INVESTMENTS> 1,392
<TOTAL-CURRENT-ASSETS> 61,305
<TOTAL-DEFERRED-DEBITS> 1,626
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 148,767
<TOTAL-PROPRIETARY-CAPITAL> 100
<TOTAL-LONG-TERM-DEBT> 0
<NOTES-PAYABLE> 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 97,103
<OTHER-CURR-AND-ACCRUED-LIAB> 29,183
<TOTAL-DEFERRED-CREDITS> 8,197
<DEFERRED-INCOME-TAX> 14,184
<TOT-LIABIL-AND-PROPRIET-CAP> 148,767
<SERVICES-ASSOCIATE-COMPANIES> 284,242
<SERVICES-NON-ASSOCIATE-COMP> 2,138
<MISC-INCOME-OR-LOSS> 524
<TOTAL-INCOME> 287,170
<SALARIES-AND-WAGES> 115,414
<EMPLOYEE-PENSION-AND-BENEFIT> 8,932
<OTHER-EXPENSES> 162,824
<TOTAL-EXPENSES> 287,170
<NET-INCOME> 0
<TOTAL-EXPENSES-DIRECT-COST> 251,155
<TOTAL-EXPENSES-INDIRECT-COST> 35,225
<TOT-EXP-DIRECT-AND-INDIRECT> 286,380
<PERSONNEL-END-OF-YEAR> 1,586
</TABLE>
