File No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM U-1
-------------------------------
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
SOUTHERN OHIO COAL COMPANY
OHIO POWER COMPANY
1 Riverside Plaza, Columbus, Ohio 43215
(Name of company or companies filing this statement
and address of principal executive office)
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
* * *
A. A. Pena, Senior Vice President and Treasurer
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
Susan Tomasky, General Counsel
American Electric Power Service Corporation
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION:
A. Background
Southern Ohio Coal Company ("SOCCo"), a West Virginia corporation, is a
subsidiary of Ohio Power Company ("Ohio Power"), an electric utility subsidiary
of American Electric Power Company, Inc. ("American"), a registered holding
company under the Public Utility Holding Company Act of 1935, as amended (the
"1935 Act"). Pursuant to an order issued by the Commission on September 13, 1996
in File No. 70-8311 (HCAR No. 26573), SOCCo was authorized to return excess
capital to Ohio Power through declaration of dividends on SOCCo's common stock
out of capital surplus. Specifically, SOCCo was authorized to pay up to
$68,000,000 out of capital surplus to Ohio Power by December 31, 1998, as one or
more dividends on its common stock. Dividends in that amount have been paid to
Ohio Power and the authority under that order has expired.
In June of 1997, SOCCo received approximately $50,000,000 from an
institutional investor from the sale-leaseback of its Meigs Division coal
preparation plant, intermine coal conveyor and overland coal conveyor ("SOCCo
Plant"), as fully described in File No. 70-8311. The remaining sale-leaseback
proceeds and the cash generated from SOCCo's Meigs Division are in excess of
$15,800,000 and exceed the amount of its working capital requirements, which are
estimated to be $9,928,000. Therefore, SOCCo desires, pending the Commission's
authorization, to pay out of capital surplus dividends in the amount up to
$15,807,000 through December 31, 2001.
B. Current Transaction
SOCCo proposes herein that its Board of Directors declare a dividend out
of its capital surplus of an amount up to $15,807,000 when the cash is
available, but in no event later than December 31, 2001.
Pursuant to Section 31-1-100 of the West Virginia Corporation Act, a West
Virginia corporation is permitted to make a distribution to its shareholders out
of capital surplus if the Articles of Incorporation so provide or if such
distribution is authorized by the affirmative vote of the holders of a majority
of the outstanding shares of each class. Since the Articles of Incorporation of
SOCCo contain no such provision, it is proposed that the distribution will be
authorized by the affirmative vote of Ohio Power, which is the sole holder of
the issued and outstanding shares of common stock of SOCCo. Copies of the
proposed form of action by Ohio Power and the proposed form of resolutions to be
adopted by the Board of Directors of SOCCo are attached hereto as Exhibits B-1
and B-2, respectively.
Surplus is defined as the excess of a corporation's assets over its
liabilities plus stated capital. As shown on the attached financial statements,
at December 31, 1998. SOCCo had a surplus of $68,027,000. <F1> SOCCo's capital
structure at December 31, 1998 consisted of long-term debt, including capital
lease obligations, in the amount of $81,880,000 and common equity in the amount
of $68,032,000; stated differently, SOCCo's debt ratio was 27.3 percent and its
equity ratio was 22.7 percent. The attached financial statements indicate
SOCCo's capital structure after paying such dividends.
In accordance with this Commission's orders dated December 10, 1982 (HCAR
No. 22770; File No. 70-6447) and September 13, 1996 (HCAR 26573; File No.
70-6311), Ohio Power is entitled to earn up to a specified rate of return on its
capital contributions to SOCCo. <F2> The terms of the Indenture dated as of
October 1, 1972, as amended, between SOCCo and Ohio Power, include such return
as a component of the compensation payable to SOCCo for supplying coal to Ohio
Power. If the Commission authorizes SOCCo to pay the requested dividend, Ohio
Power's total capital investment in SOCCo will be reduced by the amount of such
dividend. The effect of this reduction in Ohio Power's capital investment will
be to remove from Ohio Power's cost of coal the return associated with the
portion of its capital investment represented by the amount of the dividend,
thereby reducing Ohio Power's cost of coal.
SOCCo is seeking authorization from the Commission to pay Ohio Power
dividends of an amount up to $15,807,000 on its common stock out of capital
surplus.
Compliance with Rule 54
Rule 54 provides that in determining whether to approve certain
transactions other than those involving an exempt wholesale generator ("EWG") or
a foreign utility company ("FUCO"), as defined in the 1935 Act, the Commission
will not consider the effect of the capitalization or earnings of any subsidiary
which is an EWG or FUCO if Rule 53(a), (b) and (c) are satisfied. As set forth
below, all applicable conditions of Rule 53(a) are currently satisfied and none
of the conditions set forth in Rule 53(b) exist or will exist as a result of the
transactions proposed herein, thereby satisfying such provision and making Rule
53(c) inapplicable.
Rule 53(a)(1). As of December 31, 1998, American, through its subsidiary,
AEP Resources, Inc., had aggregate investment in FUCOs of $810,049,000. This
investment represents approximately 48.4% of $1,674,221,000, the average of the
consolidated retained earnings of American reported on Forms 10-Q and 10-K for
the four consecutive quarters ended September 30, 1998.
Rule 53(a)(2). Each FUCO in which American invests will maintain books and
records and make available the books and records required by Rule 53(a)(2).
Rule 53(a)(3). No more than 2% of the employees of the operating company
subsidiaries of American will, at any one time, directly or indirectly, render
services to any FUCO.
Rule 53(a)(4). American has submitted and will submit a copy of Item 9 and
Exhibits G and H of American's Form U5S to each of the public service
commissions having jurisdiction over the retail rates of American's operating
company subsidiaries.
Rule 53(b). (i) Neither American nor any subsidiary of American is the
subject of any pending bankruptcy or similar proceeding; (ii) American's average
consolidated retained earnings for the four most recent quarterly periods
($1,674,221,000) represented an increase of approximately $19,636,000 (or 1%) in
the average consolidated retained earnings from the previous four quarterly
periods ($1,654,585,000); and (iii) for the fiscal year ended December 31, 1998,
American did not report operating losses attributable to American's direct or
indirect investments in EWGs and FUCOs.
American was authorized to invest up to 100% of its consolidated retained
earnings in EWGs and FUCOs (HCAR No. 26864, April 27, 1998) (the '100% Order')
in File No. 70-9021. In connection with its consideration of American's
application for the 100% Order, the Commission reviewed American's procedures
for evaluating EWG or FUCO investments. Based on projected financial ratios and
on procedures and conditions established to limit the risks to American involved
with investments in EWGs and FUCOs, the Commission determined that permitting
American to invest up to 100% of its consolidated retained earnings in EWGs and
FUCOs would not have a substantial adverse impact upon the financial integrity
of the AEP System, nor would it have an adverse impact on any of the operating
company subsidiaries or their customers, or on the ability of state commissions
to protect the operating company subsidiaries or their customers. Since similar
considerations are involved hereunder with respect to Rule 54, Applicant should
not be required to make subsequent Rule 54 filings once American's aggregate
investment in EWGs and FUCOs exceeds 50% of its consolidated retained earnings.
ITEM 2. FEES, COMMISSIONS AND EXPENSES:
"No fees, commissions or expenses other than expenses estimated not
to exceed $1,000 to be billed at cost by American Electric Power Service
Corporation, are to be paid by the Companies or any associate company in
connection with the authority sought in this filing."
ITEM 3. APPLICABLE STATUTORY PROVISIONS:
"The Companies consider Section 12(c) of the 1935 Act and Rule 46
thereunder to be applicable to the proposed dividends."
ITEM 4. REGULATORY APPROVALS:
No commission other than the Securities and Exchange Commission has
jurisdiction over the proposed transaction.
ITEM 5. PROCEDURE:
It is requested, pursuant to Rule 23(c) of the Rules and Regulations of
the Commission, that the Commission's order granting and permitting to become
effective this Application or Declaration be issued on or before July 1, 1999.
SOCCo waives any recommended decision by a hearing officer or by any other
responsible officer of the Commission and waives the 10-day waiting period
between the issuance of the Commission's order and the date it is to become
effective, since it is desired that the Commission's order, when issued, becomes
effective forthwith. The Companies consent to the Office of Public Utility
Regulation assisting in the preparation of the Commission's decision and/or
order in this matter, unless the Office opposes the matter covered by this
Application or Declaration.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS:
The following exhibits, financial statements are filed as part of this
statement:
(a) Exhibits:
Exhibit B-1 Copy of proposed form of action by sole shareholder
of SOCCo.
Exhibit B-2 Copy of proposed form of resolutions to be adopted
by Board of Directors of SOCCo.
Exhibit F Opinion of Counsel.
(b) Financial statements:
Balance Sheets as of December 31, 1998 and Statements of Income and
Retained Earnings for the twelve months ended December, 1998, of
SOCCo, Ohio Power and American Electric Power Company, Inc., and its
subsidiaries consolidated, together with journal entries reflecting
the proposed transaction.
Exhibit 27 Financial Data Schedules
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
It is believed that the granting and permitting to become effective of
Application or Declaration will not constitute a major Federal action
significantly affecting the quality of the human environment. No other Federal
agency has prepared or is preparing an environmental impact statement with
respect to the proposed transaction.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned companies have duly caused this statement to be signed on
its behalf by their duly authorized officer.
SOUTHERN OHIO COAL COMPANY
OHIO POWER COMPANY
By: /s/ A. A. PENA
Treasurer
May 28, 1999
Footnotes:
F1 Total assets as of December 31,1998 were $300,074,000; total liabilities were
$232,042,000; stated capital was $5,000. Since capital surplus is the excess of
assets over liabilities plus stated capital, SOCCo had surplus of $68,027,000
($300,074,000 minus $232,042,000 minus $5,000 equals $68,027,000). The capital
surplus as of December 31, 1998, was comprised of retained earnings in the
amount of $23,338,000, of which $138,000 is allocable to Meigs and $23,200,000
is allocable to SOCCo's currently inactive Martinka Division, and other paid-in
capital in the amount of $44,689,000.
F2 As of December 31, 1998, Ohio Power's common equity in SOCCo totals
$68,032,000 comprised of $5,000 in common stock, $23,338,000 of retained
earnings and $44,689,000 of paid-in capital. The retained earnings balance does
not generate a return. The equity investment has a current 10.43% annual rate of
return.
SOCCo sold its Martinka Division and most of the Martinka-related coal
reserves to an unaffiliated company. No return on equity investment associated
with that operation has been billed since the Division ceased mining coal
effective July 1, 1992. All costs associated with the Martinka Division since
then are billed to Ohio Power, thereby eliminating any earnings effect to SOCCo.
Since July 1, 1992, SOCCo's billable equity investments have been distributed to
the Meigs and Martinka Divisions based on a frozen net book value formula
method, with 74.37 percent allocable to the Meigs Division.
Exhibit B-1
SOUTHERN OHIO COAL COMPANY
ACTION BY WRITTEN CONSENT OF SOLE SHAREOLDER
WITHOUT A MEETING
Pursuant to the authority contained in Section 31-1-73 of the West
Virginia Corporation Act, the undersigned, being the sole shareholder of
Southern Ohio Coal Company (the "Company"), does hereby take and adopt the
following action in writing, without a meeting, in order to authorize the Board
of Directors of the Company to pay a dividend out of capital surplus:
RESOLVED, that the Board of Directors of this Company be, and
it hereby is, authorized to declare and pay to the sole shareholder
of the Company up to [$15,807,000] out of the capital surplus of
this Company at the time of such distribution.
OHIO POWER COMPANY
By: ________________________
Vice President
_____________, 1999
Exhibit B-2
SOUTHERN OHIO COAL COMPANY
___________, 1999
The Chairman stated that, pursuant to the applicable provisions of
the Public Utility Holding Company Act of 1935, the officers of the Company had
caused to be filed with the Securities and Exchange Commission ("SEC") an
Application or Declaration on Form U-1 to declare and pay dividends out of
paid-in capital and that by Order dated ______________, 1999, the SEC in File
No. 70-____ authorized the declaration and payment of dividends on the Company's
common stock in an aggregate amount not to exceed $15,807,000 from such paid-in
capital through December 31, 2001.
Thereupon, upon motion duly made and seconded, it was
unanimously
RESOLVED, that the actions taken by the officers of and
counsel for the Company in connection with the execution and filing
of an Application or Declaration on Form U-1 with the Securities and
Exchange Commission pursuant to the applicable provisions of the
Public Utility Holding Company Act of 1935 be, and the same hereby
are, ratified, confirmed and approved in all respects, and said
officers and counsel be, and they hereby are, authorized and
directed to take such further action in connection therewith as they
may deem necessary or desirable; and further
RESOLVED, that periodic distributions of up to $15,807,000 on
the issued and outstanding common stock of the Company be declared
out of the capital surplus of the Company, pursuant to the
authorization of the Securities and Exchange Commission; and further
RESOLVED, that pursuant to the requirements of Section
31-1-100 of the West Virginia Corporation Law, such distributions,
when made, shall be identified as a distribution from capital
surplus and the amount per share shall be disclosed to the
shareholders receiving the same concurrently with the distribution
thereof.
Exhibit F
(614) 223-1649
May 28, 1999
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Gentlemen:
In connection with the transactions proposed and described in the Application or
Declaration on Form U-1 filed with the Securities and Exchange Commission by
Southern Ohio Coal Company, a coal subsidiary of Ohio Power Company, to which
this opinion is an exhibit, I have examined, among other things, the Application
or Declaration on Form U-1 and the documents referred to in it and such other
documents as I have found necessary to form the basis of this opinion.
I am of the opinion that, in the event that the proposed transactions are
consummated in accordance with said Application or Declaration, as the same may
be amended:
(a) All state laws applicable to the proposed transactions will have
been complied with;
(b) The Southern Ohio Coal Company may lawfully return excess capital to
Ohio Power Company through declaration of a dividend on its common
stock out of capital surplus;
(c) Consummation of the proposed transactions will not violate the legal
rights of the holders of any securities issued by the Southern Ohio
Coal Company, Ohio Power Company or any associate company thereof.
I hereby consent to the filing of this opinion as an exhibit to the
above-mentioned Application or Declaration.
Very truly yours,
/S/ Ann B. Graf
Ann B. Graf
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 1
SOUTHERN OHIO COAL COMPANY
BALANCE SHEET
December 31, 1998
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
ASSETS
MINING PLANT:
Mining Plant in Service . . . . . . . . . . . $377,002 $377,002
Accumulated Depreciation and Amortization . . 241,071 241,071
-------- --------
NET MINING PLANT. . . . . . . . . . . 135,931 135,931
-------- --------
OTHER PROPERTY AND INVESTMENTS. . . . . . . . . 87,652 87,652
-------- --------
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . 4,500 $(15,807) (11,307)*
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . 3,607 3,607
Affiliated Companies. . . . . . . . . . . . 9,015 9,015
Coal. . . . . . . . . . . . . . . . . . . . . 1,794 1,794
Materials and Supplies. . . . . . . . . . . . 10,819 10,819
Accrued Tax Benefit . . . . . . . . . . . . . 1,753 1,753
Other . . . . . . . . . . . . . . . . . . . . 644 644
-------- -------- --------
TOTAL CURRENT ASSETS. . . . . . . . . 32,132 (15,807) 16,325
-------- -------- --------
REGULATORY ASSETS . . . . . . . . . . . . . . . 41,167 41,167
-------- --------
DEFERRED CHARGES. . . . . . . . . . . . . . . . 3,192 3,192
-------- -------- --------
TOTAL . . . . . . . . . . . . . . . $300,074 $(15,807) $284,267
======== ======== ========
The Pro Forma Adjustments are shown on Page 3 of these Financial Statements.
* The proposed dividends will be paid as the cash becomes available. Through
December 31, 2001, Southern Ohio Coal Company will continue to receive a
stream of income under the terms of the coal supply agreement and will pay
dividends to its parent, Ohio Power Company from those earnings.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 2
SOUTHERN OHIO COAL COMPANY
BALANCE SHEET
December 31, 1998
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
SHAREOWNER'S EQUITY:
Common Stock. . . . . . . . . . . . . . . . . $ 5 $ 5
Paid-in Capital . . . . . . . . . . . . . . . 44,689 $(15,807) 28,882
Retained Earnings . . . . . . . . . . . . . . 23,338 23,338
-------- -------- --------
TOTAL SHAREOWNER'S EQUITY . . . . . . 68,032 (15,807) 52,225
-------- -------- --------
LONG-TERM DEBT. . . . . . . . . . . . . . . . . 55,042 55,042
-------- --------
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . 26,838 26,838
Worker's Compensation Claims. . . . . . . . . 6,350 6,350
Postretirement Benefits Other Than Pensions . 37,984 37,984
Other . . . . . . . . . . . . . . . . . . . . 29,512 29,512
-------- --------
TOTAL OTHER NONCURRENT LIABILITIES. . 100,684 100,684
-------- --------
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . 10,903 10,903
Short-term Debt . . . . . . . . . . . . . . . 6,000 6,000
Accounts Payable:
General . . . . . . . . . . . . . . . . . . 8,343 8,343
Affiliated Companies. . . . . . . . . . . . 2,834 2,834
Interest Accrued. . . . . . . . . . . . . . . 798 798
Accrued Vacation Pay. . . . . . . . . . . . . 3,555 3,555
Workers' Compensation Claims. . . . . . . . . 7,704 7,704
Obligations Under Capital Leases. . . . . . . 13,945 13,945
Other . . . . . . . . . . . . . . . . . . . . 5,035 5,035
-------- --------
TOTAL CURRENT LIABILITIES . . . . . . 59,117 59,117
-------- --------
DEFERRED INCOME TAXES . . . . . . . . . . . . . 15,837 15,837
-------- --------
DEFERRED CREDITS. . . . . . . . . . . . . . . . 1,362 1,362
-------- -------- --------
TOTAL . . . . . . . . . . . . . . . $300,074 $(15,807) $284,267
======== ======== ========
The Pro Forma Adjustments are shown on Page 3 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 3
SOUTHERN OHIO COAL COMPANY
BALANCE SHEET
December 31, 1998
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Paid-in Capital $15,807
Cash and Cash Equivalents $15,807
To record the proposed repayment of capital surplus through December 31, 2001
as the cash becomes available.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 3A
SOUTHERN OHIO COAL COMPANY
STATEMENT OF INCOME
Twelve Months Ended December 31, 1998
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Operating Revenues $(2,556)
Federal Income Taxes (895)
To reflect the pro forma changes in operating
revenues associated with the proposed
transaction and the related federal income
tax effect.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 4
SOUTHERN OHIO COAL COMPANY
STATEMENT OF INCOME
Twelve Months Ended December 31, 1998
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
OPERATING REVENUES. . . . . . . . . . . . . . . $227,523 $(2,556) $224,967
OPERATING EXPENSES:
Other Operation . . . . . . . . . . . . . . . 131,489 131,489
Maintenance . . . . . . . . . . . . . . . . . 54,565 54,565
Depreciation, Depletion and Amortization. . . 19,643 19,643
Taxes Other Than Federal Income Taxes . . . . 12,114 12,114
Federal Income Taxes. . . . . . . . . . . . . 5,973 (895) 5,078
-------- ------- --------
TOTAL OPERATING EXPENSES. . . . . . . . . 223,784 (895) 222,889
-------- ------- --------
OPERATING INCOME. . . . . . . . . . . . . . . . 3,739 (1,661) 2,078
NONOPERATING INCOME . . . . . . . . . . . . . . 750 750
-------- ------- --------
INCOME BEFORE INTEREST CHARGES. . . . . . . . . 4,489 (1,661) 2,828
INTEREST CHARGES. . . . . . . . . . . . . . . . 2,836 2,836
-------- ------- --------
NET INCOME (LOSS) . . . . . . . . . . . . . . . $ 1,653 $(1,661) $ (8)
======== ======= ========
The Pro Forma Adjustments are shown on Page 3A of these Financial Statements.
</TABLE>
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<TABLE>
FINANCIAL STATEMENTS
PAGE 5
SOUTHERN OHIO COAL COMPANY
STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED December 31, 1998
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD. . . . . . . . . . . . . . . . . . . $23,335
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,653
CASH DIVIDENDS DECLARED . . . . . . . . . . . . . . . . . . . . . . 1,650
-------
BALANCE AT END OF PERIOD. . . . . . . . . . . . . . . . . . . . . . $23,338
=======
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 6
OHIO POWER COMPANY
BALANCE SHEET
December 31, 1998
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . $2,646,597 $2,646,597
Transmission . . . . . . . . . . . . . . . . . 838,742 838,742
Distribution . . . . . . . . . . . . . . . . . 949,085 949,085
General. . . . . . . . . . . . . . . . . . . . 218,637 218,637
Construction Work in Progress. . . . . . . . . 126,579 126,579
---------- ----------
Total Electric Utility Plant . . . . . 4,779,640 4,779,640
Accumulated Depreciation and Amortization. . . 2,144,206 2,144,206
---------- ----------
NET ELECTRIC UTILITY PLANT . . . . . . 2,635,434 2,635,434
---------- ----------
OTHER PROPERTY AND INVESTMENTS*. . . . . . . . . 187,030 $(15,807) 171,223
---------- -------- ----------
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . 22,580 15,807 38,387
Accounts Receivable (net). . . . . . . . . . . 306,006 306,006
Fuel . . . . . . . . . . . . . . . . . . . . . 92,929 92,929
Materials and Supplies . . . . . . . . . . . . 65,406 65,406
Accrued Utility Revenues . . . . . . . . . . . 43,501 43,501
Energy Marketing and Trading Contracts . . . . 19,790 19,790
Prepayments. . . . . . . . . . . . . . . . . . 33,440 33,440
---------- -------- ----------
TOTAL CURRENT ASSETS . . . . . . . . . 583,652 15,807 599,459
---------- -------- ----------
REGULATORY ASSETS. . . . . . . . . . . . . . . . 513,794 513,794
---------- -------- ----------
DEFERRED CHARGES . . . . . . . . . . . . . . . . 98,098 98,098
---------- -------- ----------
TOTAL. . . . . . . . . . . . . . . . $4,018,008 $ - $4,018,008
---------- ======== ==========
*Includes Investments in Subsidiaries of $68,228,000 Per Books and $52,421,000 Pro
Forma.
The Pro Forma Adjustments are shown on Page 8 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 7
OHIO POWER COMPANY
BALANCE SHEET
December 31, 1998
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 40,000,000 Shares
Outstanding - 27,952,473 Shares. . . . . . . $ 321,201 $ 321,201
Paid-in Capital. . . . . . . . . . . . . . . . 462,335 462,335
Retained Earnings. . . . . . . . . . . . . . . 587,500 587,500
---------- ----------
Total Common Shareholder's Equity . . . . 1,371,036 1,371,036
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . 17,370 17,370
Subject to Mandatory Redemption. . . . . . . 11,850 11,850
Long-term Debt . . . . . . . . . . . . . . . . 1,011,842 1,011,842
---------- ----------
TOTAL CAPITALIZATION. . . . . . . . . . . 2,412,098 2,412,098
---------- ----------
OTHER NONCURRENT LIABILITIES . . . . . . . . . . 117,261 117,261
---------- ----------
CURRENT LIABILITIES:
Short-term Debt. . . . . . . . . . . . . . . . 123,005 123,005
Accounts Payable . . . . . . . . . . . . . . . 233,917 233,917
Taxes Accrued. . . . . . . . . . . . . . . . . 159,481 159,481
Interest Accrued . . . . . . . . . . . . . . . 13,389 13,389
Obligations Under Capital Leases . . . . . . . 13,436 13,436
Energy Marketing and Trading Contracts . . . . 22,480 22,480
Other. . . . . . . . . . . . . . . . . . . . . 70,993 70,993
---------- ----------
TOTAL CURRENT LIABILITIES . . . . . . . . 636,701 636,701
---------- ----------
DEFERRED INCOME TAXES. . . . . . . . . . . . . . 750,816 750,816
---------- ----------
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . 39,296 39,296
---------- ----------
DEFERRED CREDITS . . . . . . . . . . . . . . . . 61,836 61,836
---------- -------- ----------
TOTAL. . . . . . . . . . . . . . . . . $4,018,008 $ - $4,018,008
========== ======== ==========
The Pro Forma Adjustments are shown on Page 8 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 8
OHIO POWER COMPANY
BALANCE SHEET
December 31, 1998
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash and Cash Equivalents $15,807
Other Property and Investments -
Investments in Subsidiaries $15,807
To record the return of invested capital by Southern Ohio Coal Co. through
December 31, 2001 as the cash becomes available.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 8A
OHIO POWER COMPANY
STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1998
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Operating Revenues = $(2,556)
Fuel Expense = (2,556)
Nonoperating Income - Equity in Earnings
of Subsidiary Companies = (1,661)
To reflect the pro forma effects on fuel recovery revenues and fuel expense and
the pro forma changes in equity in earnings of the subsidiary company associated
with the proposed transactions. </TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 9
OHIO POWER COMPANY
STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . $2,115,000 $(2,556) $2,112,444
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . 752,962 (2,556) 750,406
Purchased Power. . . . . . . . . . . . . . 150,733 150,733
Other Operation. . . . . . . . . . . . . . 353,194 353,194
Maintenance. . . . . . . . . . . . . . . . 139,611 139,611
Depreciation and Amortization. . . . . . . 144,493 144,493
Taxes Other Than Federal Income Taxes. . . 169,353 169,353
Federal Income Taxes . . . . . . . . . . . 117,131 117,131
---------- ------- ----------
TOTAL OPERATING EXPENSES . . . . . 1,827,477 (2,556) 1,824,921
---------- ------- ----------
OPERATING INCOME . . . . . . . . . . . . . . 287,523 - 287,523
NONOPERATING LOSS. . . . . . . . . . . . . . (207) (1,661) (1,868)
---------- ------- ----------
INCOME BEFORE INTEREST CHARGES . . . . . . . 287,316 (1,661) 285,655
INTEREST CHARGES . . . . . . . . . . . . . . 77,391 77,391
---------- ------- ----------
NET INCOME . . . . . . . . . . . . . . . . . 209,925 (1,661) 208,264
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . 1,474 1,474
---------- ------- ----------
EARNINGS APPLICABLE TO COMMON STOCK. . . . . $ 208,451 $(1,661) $ 206,790
---------- ======= ==========
The common stock of the Company is wholly owned by American Electric Power
Company, Inc.
The Pro Forma Adjustments are shown on Page 8A of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 10
OHIO POWER COMPANY
STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
<CAPTION>
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $590,151
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 209,925
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 211,101
Cumulative Preferred Stock . . . . . . . . . . . . . . . . 1,475
--------
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $587,500
--------
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 11
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
C0NSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
ASSETS
ELECTRIC UTILITY PLANT:
Production. . . . . . . . . . . . . . . . . . . $ 9,591,211 $ 9,591,211
Transmission. . . . . . . . . . . . . . . . . . 3,570,717 3,570,717
Distribution. . . . . . . . . . . . . . . . . . 4,779,772 4,779,772
General
(including mining assets & nuclear fuel). . . 1,641,676 1,641,676
Construction Work In Progress . . . . . . . . . 562,891 562,891
----------- -----------
Total Electric Utility Plant. . . . . . 20,146,267 20,146,267
Accumulated Depreciation
and Amortization. . . . . . . . . . . . . . . 8,416,397 8,416,397
----------- -----------
NET ELECTRIC UTILITY PLANT. . . . . . . 11,729,870 11,729,870
----------- -----------
OTHER PLANT . . . . . . . . . . . . . . . . . . . 841,451 841,451
----------- -----------
OTHER PROPERTY AND INVESTMENTS. . . . . . . . . . 2,515,103 2,515,103
----------- -----------
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . 172,985 172,985
Accounts Receivable . . . . . . . . . . . . . . 918,165 918,165
Allowance for Uncollectible Accounts. . . . . . (11,075) (11,075)
Fuel. . . . . . . . . . . . . . . . . . . . . . 215,699 215,699
Materials and Supplies. . . . . . . . . . . . . 279,823 279,823
Accrued Utility Revenues. . . . . . . . . . . . 186,006 186,006
Energy Marketing and Trading Contracts. . . . . 372,380 372,380
Prepayments and Other . . . . . . . . . . . . . 83,686 83,686
----------- -----------
TOTAL CURRENT ASSETS. . . . . . . . . . 2,217,669 2,217,669
----------- -----------
REGULATORY ASSETS . . . . . . . . . . . . . . . . 1,846,718 1,846,718
----------- -----------
DEFERRED CHARGES. . . . . . . . . . . . . . . . . 332,391 332,391
----------- ------- -----------
TOTAL . . . . . . . . . . . . . . . . $19,483,202 $ - $19,483,202
=========== ======= ===========
The Pro Forma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 12
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
C0NSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock. . . . . . . . . . . . . . . . . . $ 1,305,307 $ 1,305,307
Paid-in Capital . . . . . . . . . . . . . . . . 1,852,912 1,852,912
Retained Earnings . . . . . . . . . . . . . . . 1,683,561 1,683,561
----------- -----------
Total Common Shareholders' Equity . . . 4,841,780 4,841,780
Cumulative Preferred Stocks of Subsidiaries:
Not Subject to Mandatory Redemption . . . . . 46,002 46,002
Subject to Mandatory Redemption . . . . . . . 127,605 127,605
Long-term Debt. . . . . . . . . . . . . . . . . 6,799,641 6,799,641
----------- -----------
TOTAL CAPITALIZATION. . . . . . . . . . 11,815,028 11,815,028
----------- -----------
OTHER NONCURRENT LIABILITIES. . . . . . . . . . . 1,428,968 1,428,968
----------- -----------
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . 206,476 206,476
Short-term Debt . . . . . . . . . . . . . . . . 616,604 616,604
Accounts Payable. . . . . . . . . . . . . . . . 618,019 618,019
Taxes Accrued . . . . . . . . . . . . . . . . . 381,905 381,905
Interest Accrued. . . . . . . . . . . . . . . . 75,184 75,184
Obligations Under Capital Leases. . . . . . . . 81,661 81,661
Energy Marketing and Trading Contracts. . . . . 360,248 360,248
Other . . . . . . . . . . . . . . . . . . . . . 461,540 461,540
----------- -----------
TOTAL CURRENT LIABILITIES . . . . . . . 2,801,637 2,801,637
----------- -----------
DEFERRED INCOME TAXES . . . . . . . . . . . . . . 2,601,402 2,601,402
----------- -----------
DEFERRED INVESTMENT TAX CREDITS . . . . . . . . . 350,946 350,946
----------- -----------
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2 . . . . . . . . . . . . . 222,042 222,042
----------- -----------
DEFERRED CREDITS. . . . . . . . . . . . . . . . . 263,179 263,179
----------- ------- -----------
TOTAL . . . . . . . . . . . . . . . . $19,483,202 $ - $19,483,202
=========== ======= ===========
The Pro Forma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
PAGE 13
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
C0NSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
PRO FORMA ADJUSTMENTS
The proposed transactions has no effect on the consolidated balance sheet as it
is between affiliates and would be eliminated in consolidation.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 13A
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
C0NSOLIDATED STATEMENT OF INCOME
Twelve Months Ended December 31, 1998
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Operating Revenues $(2,556)
Federal Income Taxes (895)
To reflect the pro forma changes in operating
revenues associated with the proposed
transaction and the related federal income
tax effect.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 14
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
Twelve Months Ended December 31, 1998
(in thousands, except per share amounts)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
OPERATING REVENUES. . . . . . . . . . . . . . . . $6,345,902 $(2,556) $6,343,346
OPERATING EXPENSES:
Fuel. . . . . . . . . . . . . . . . . . . . . . 1,717,177 1,717,177
Purchased Power . . . . . . . . . . . . . . . . 436,388 436,388
Other Operation . . . . . . . . . . . . . . . . 1,303,084 1,303,084
Maintenance . . . . . . . . . . . . . . . . . . 542,935 542,935
Depreciation and Amortization . . . . . . . . . 579,997 579,997
Taxes Other Than Federal Income Taxes . . . . . 493,386 493,386
Federal Income Taxes. . . . . . . . . . . . . . 316,201 (895) 315,306
---------- ------- ----------
TOTAL OPERATING EXPENSES. . . . . . . . . . 5,389,168 (895) 5,388,273
---------- ------- ----------
OPERATING INCOME . . . . . . . . . . . . . . . . 956,734 (1,661) 955,073
NONOPERATING INCOME . . . . . . . . . . . . . . . 9,463 9,463
---------- ------- ----------
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS . . . . . . . . . . . . 966,197 (1,661) 964,536
INTEREST CHARGES. . . . . . . . . . . . . . . . . 419,088 419,088
PREFERRED STOCK DIVIDEND
REQUIREMENTS OF SUBSIDIARIES. . . . . . . . . . 10,926 10,926
---------- ------- ----------
NET INCOME . . . . . . . . . . . . . . . . . . . $ 536,183 $(1,661) $ 534,522
========== ======= ==========
AVERAGE NUMBER OF SHARES OUTSTANDING. . . . . . . 190,774 190,774
======= =======
EARNINGS PER SHARE. . . . . . . . . . . . . . . . $2.81 $2.80
===== =====
CASH DIVIDENDS PAID PER SHARE . . . . . . . . . . $2.40 $2.40
===== =====
The Pro Forma Adjustments are shown on Page 13A of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 15
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED DECEMBER 31, 1998
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD. . . . . . . . . . . . . . . . . . . . $1,605,017
NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536,183
DEDUCTIONS:
Cash Dividends Declared . . . . . . . . . . . . . . . . . . . . . . 457,638
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
----------
BALANCE AT END OF PERIOD. . . . . . . . . . . . . . . . . . . . . . . $1,683,561
==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000310339
<NAME> SOUTHERN OHIO COAL COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 135,931
<OTHER-PROPERTY-AND-INVEST> 87,652
<TOTAL-CURRENT-ASSETS> 32,132
<TOTAL-DEFERRED-CHARGES> 3,192
<OTHER-ASSETS> 41,167
<TOTAL-ASSETS> 300,074
<COMMON> 5
<CAPITAL-SURPLUS-PAID-IN> 44,689
<RETAINED-EARNINGS> 23,338
<TOTAL-COMMON-STOCKHOLDERS-EQ> 68,032
0
0
<LONG-TERM-DEBT-NET> 55,042
<SHORT-TERM-NOTES> 6,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 10,903
0
<CAPITAL-LEASE-OBLIGATIONS> 26,838
<LEASES-CURRENT> 13,945
<OTHER-ITEMS-CAPITAL-AND-LIAB> 119,314
<TOT-CAPITALIZATION-AND-LIAB> 300,074
<GROSS-OPERATING-REVENUE> 227,523
<INCOME-TAX-EXPENSE> 5,973
<OTHER-OPERATING-EXPENSES> 217,811
<TOTAL-OPERATING-EXPENSES> 223,784
<OPERATING-INCOME-LOSS> 3,739
<OTHER-INCOME-NET> 750
<INCOME-BEFORE-INTEREST-EXPEN> 4,489
<TOTAL-INTEREST-EXPENSE> 2,836
<NET-INCOME> 1,653
0
<EARNINGS-AVAILABLE-FOR-COMM> 1,653
<COMMON-STOCK-DIVIDENDS> 1,650
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 28,912
<EPS-BASIC> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000310339
<NAME> SOUTHERN OHIO COAL COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 135,931
<OTHER-PROPERTY-AND-INVEST> 87,652
<TOTAL-CURRENT-ASSETS> 16,325
<TOTAL-DEFERRED-CHARGES> 3,192
<OTHER-ASSETS> 41,167
<TOTAL-ASSETS> 284,267
<COMMON> 5
<CAPITAL-SURPLUS-PAID-IN> 28,882
<RETAINED-EARNINGS> 23,338
<TOTAL-COMMON-STOCKHOLDERS-EQ> 52,225
0
0
<LONG-TERM-DEBT-NET> 55,042
<SHORT-TERM-NOTES> 6,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 10,903
0
<CAPITAL-LEASE-OBLIGATIONS> 26,838
<LEASES-CURRENT> 13,945
<OTHER-ITEMS-CAPITAL-AND-LIAB> 119,314
<TOT-CAPITALIZATION-AND-LIAB> 284,267
<GROSS-OPERATING-REVENUE> 224,967
<INCOME-TAX-EXPENSE> 5,078
<OTHER-OPERATING-EXPENSES> 217,811
<TOTAL-OPERATING-EXPENSES> 222,889
<OPERATING-INCOME-LOSS> 2,078
<OTHER-INCOME-NET> 750
<INCOME-BEFORE-INTEREST-EXPEN> 2,828
<TOTAL-INTEREST-EXPENSE> 2,836
<NET-INCOME> (8)
0
<EARNINGS-AVAILABLE-FOR-COMM> (8)
<COMMON-STOCK-DIVIDENDS> 1,650
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 28,912
<EPS-BASIC> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 1
<NAME> OHIO POWER COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,635,434
<OTHER-PROPERTY-AND-INVEST> 187,030
<TOTAL-CURRENT-ASSETS> 583,652
<TOTAL-DEFERRED-CHARGES> 98,098
<OTHER-ASSETS> 513,794
<TOTAL-ASSETS> 4,018,008
<COMMON> 321,201
<CAPITAL-SURPLUS-PAID-IN> 462,335
<RETAINED-EARNINGS> 587,500
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,371,036
11,850
17,370
<LONG-TERM-DEBT-NET> 1,011,842
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 123,005
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 86,776
<LEASES-CURRENT> 13,436
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,382,693
<TOT-CAPITALIZATION-AND-LIAB> 4,018,008
<GROSS-OPERATING-REVENUE> 2,115,000
<INCOME-TAX-EXPENSE> 119,874
<OTHER-OPERATING-EXPENSES> 1,707,603
<TOTAL-OPERATING-EXPENSES> 1,827,477
<OPERATING-INCOME-LOSS> 287,523
<OTHER-INCOME-NET> (207)
<INCOME-BEFORE-INTEREST-EXPEN> 287,316
<TOTAL-INTEREST-EXPENSE> 77,391
<NET-INCOME> 209,925
1,474
<EARNINGS-AVAILABLE-FOR-COMM> 208,451
<COMMON-STOCK-DIVIDENDS> 211,101
<TOTAL-INTEREST-ON-BONDS> 33,663
<CASH-FLOW-OPERATIONS> 314,198
<EPS-BASIC> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 1
<NAME> OHIO POWER COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,635,434
<OTHER-PROPERTY-AND-INVEST> 171,223
<TOTAL-CURRENT-ASSETS> 599,459
<TOTAL-DEFERRED-CHARGES> 98,098
<OTHER-ASSETS> 513,794
<TOTAL-ASSETS> 4,018,008
<COMMON> 321,201
<CAPITAL-SURPLUS-PAID-IN> 462,335
<RETAINED-EARNINGS> 587,500
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,371,036
11,850
17,370
<LONG-TERM-DEBT-NET> 1,011,842
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 123,005
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 86,776
<LEASES-CURRENT> 13,436
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,382,693
<TOT-CAPITALIZATION-AND-LIAB> 4,018,008
<GROSS-OPERATING-REVENUE> 2,112,444
<INCOME-TAX-EXPENSE> 119,874
<OTHER-OPERATING-EXPENSES> 1,705,047
<TOTAL-OPERATING-EXPENSES> 1,824,921
<OPERATING-INCOME-LOSS> 287,523
<OTHER-INCOME-NET> (1,868)
<INCOME-BEFORE-INTEREST-EXPEN> 285,655
<TOTAL-INTEREST-EXPENSE> 77,391
<NET-INCOME> 208,264
1,474
<EARNINGS-AVAILABLE-FOR-COMM> 206,790
<COMMON-STOCK-DIVIDENDS> 211,101
<TOTAL-INTEREST-ON-BONDS> 33,663
<CASH-FLOW-OPERATIONS> 314,198
<EPS-BASIC> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 2
<NAME> AMERICAN ELECTRIC POWER COMPANY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 11,729,870
<OTHER-PROPERTY-AND-INVEST> 3,356,554
<TOTAL-CURRENT-ASSETS> 2,217,669
<TOTAL-DEFERRED-CHARGES> 332,391
<OTHER-ASSETS> 1,846,718
<TOTAL-ASSETS> 19,483,202
<COMMON> 1,305,307
<CAPITAL-SURPLUS-PAID-IN> 1,852,912
<RETAINED-EARNINGS> 1,683,561
<TOTAL-COMMON-STOCKHOLDERS-EQ> 4,841,780
127,605
46,002
<LONG-TERM-DEBT-NET> 6,799,641
<SHORT-TERM-NOTES> 197,304
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 419,300
<LONG-TERM-DEBT-CURRENT-PORT> 206,476
0
<CAPITAL-LEASE-OBLIGATIONS> 450,922
<LEASES-CURRENT> 81,661
<OTHER-ITEMS-CAPITAL-AND-LIAB> 6,312,511
<TOT-CAPITALIZATION-AND-LIAB> 19,483,202
<GROSS-OPERATING-REVENUE> 6,345,902
<INCOME-TAX-EXPENSE> 334,548
<OTHER-OPERATING-EXPENSES> 5,054,620
<TOTAL-OPERATING-EXPENSES> 5,389,168
<OPERATING-INCOME-LOSS> 956,734
<OTHER-INCOME-NET> 9,463
<INCOME-BEFORE-INTEREST-EXPEN> 966,197
<TOTAL-INTEREST-EXPENSE> 419,088
<NET-INCOME> 536,183
10,926 <F1>
<EARNINGS-AVAILABLE-FOR-COMM> 536,183
<COMMON-STOCK-DIVIDENDS> 457,638
<TOTAL-INTEREST-ON-BONDS> 202,889
<CASH-FLOW-OPERATIONS> 1,029,526
<EPS-BASIC> 2.81
<EPS-DILUTED> 2.81
<FN>
<F1>Represents preferred stock dividend requirements of subsidiaries; deducted
before computation of net income.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 2
<NAME> AMERICAN ELECTRIC POWER COMPANY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 11,729,870
<OTHER-PROPERTY-AND-INVEST> 3,356,554
<TOTAL-CURRENT-ASSETS> 2,217,669
<TOTAL-DEFERRED-CHARGES> 332,391
<OTHER-ASSETS> 1,846,718
<TOTAL-ASSETS> 19,483,202
<COMMON> 1,305,307
<CAPITAL-SURPLUS-PAID-IN> 1,852,912
<RETAINED-EARNINGS> 1,683,561
<TOTAL-COMMON-STOCKHOLDERS-EQ> 4,841,780
127,605
46,002
<LONG-TERM-DEBT-NET> 6,799,641
<SHORT-TERM-NOTES> 197,304
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 419,300
<LONG-TERM-DEBT-CURRENT-PORT> 206,476
0
<CAPITAL-LEASE-OBLIGATIONS> 450,922
<LEASES-CURRENT> 81,661
<OTHER-ITEMS-CAPITAL-AND-LIAB> 6,312,511
<TOT-CAPITALIZATION-AND-LIAB> 19,483,202
<GROSS-OPERATING-REVENUE> 6,343,346
<INCOME-TAX-EXPENSE> 333,653
<OTHER-OPERATING-EXPENSES> 5,054,620
<TOTAL-OPERATING-EXPENSES> 5,388,273
<OPERATING-INCOME-LOSS> 955,073
<OTHER-INCOME-NET> 9,463
<INCOME-BEFORE-INTEREST-EXPEN> 964,536
<TOTAL-INTEREST-EXPENSE> 419,088
<NET-INCOME> 534,522
10,926 <F1>
<EARNINGS-AVAILABLE-FOR-COMM> 534,522
<COMMON-STOCK-DIVIDENDS> 457,638
<TOTAL-INTEREST-ON-BONDS> 202,889
<CASH-FLOW-OPERATIONS> 1,029,526
<EPS-BASIC> 2.80
<EPS-DILUTED> 2.80
<FN>
<F1>Represents preferred stock dividend requirements of subsidiaries; deducted
before computation of net income.
</FN>
</TABLE>
