SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U5S
ANNUAL REPORT
For the year ended December 31, 1993
Filed pursuant to the
Public Utility Holding Company Act of 1935 by
ALLEGHENY POWER SYSTEM, INC.
12 East 49th Street, New York, NY 10017
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<TABLE>
<CAPTION>
FORM U5S - ANNUAL REPORT
For the Calendar Year 1993
ITEMS
ITEM 1. SYSTEM COMPANIES AND INVESTMENT THEREIN AS OF DECEMBER 31, 1993
Number of % of Issuer's Owner's
Common Voting Book Book
Name of Company Shares Owned Power Value Value
(Thousands of Dollars)
Allegheny Power System, Inc. (APS)
<S> <C> <C> <C> <C>
Allegheny Power Service Corporation (APSC) 5,000 100 $ 50 $ 50
Monongahela Power Company (MP) 5,891,000 100 483,030 483,030
The Potomac Edison Company (PE) 22,385,000 100 626,467 626,467
West Penn Power Company (1) (WPP) 22,361,586 100 893,969 893,969
West Virginia Power and
Transmission Company* 30,000 100 2,615 2,612
West Penn West Virginia
Water Power Company* 5 100 (2) 1
Unsecured debt 12 12
Subsidiaries of More Than One
System Company
Allegheny Generating Company (AGC)
Owners:
Monongahela Power Company 270 27 61,698 61,698
The Potomac Edison Company 280 28 63,984 63,984
West Penn Power Company 450 45 102,830 102,830
Allegheny Pittsburgh Coal Company* (APC)
Owners:
Monongahela Power Company 2,500 25 (2,900) (2,900)
Unsecured debt 3,495 3,495
The Potomac Edision Company 2,500 25 (2,900) (2,900)
Unsecured debt 3,617 3,617
West Penn Power Company 5,000 50 (5,800) (5,800)
Unsecured debt 7,061 7,061
*Inactive
(1) Exempt from registration as a holding company under Section 3(a)
pursuant to Rule 2.
</TABLE>
****************
Allegheny Power System, Inc. owns 12-1/2% of the capital
stock of Ohio Valley Electric Corporation, which owns 100% of the
capital stock of Indiana-Kentucky Electric Corporation. These
companies were formed October 1, 1952, to build electric generating
facilities to supply power under a long-term contract to the Energy
Research and Development Administration's (formerly Atomic Energy
Commission) uranium diffusion project at Portsmouth, Ohio. See
Holding Company Act Release No. 13313 as to proceedings pending
before the Securities and Exchange Commission.
<PAGE>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS.
No System company acquired or sold utility assets in
excess of $1,000,000 in the aggregate during the calendar
year 1993 except as reported in certificates filed
pursuant to Rule 24.
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM
SECURITIES.
None, except as reported in certificates filed pursuant
to Rule 24, Form U-6B-2, and Form 10-K, 1993, Schedules
IX, for Monongahela Power Company, The Potomac Edison
Company, and West Penn Power Company.
<PAGE>
ITEM 4. ACQUISITION, REDEMPTION, OR RETIREMENT OF SYSTEM SECURITIES
<TABLE>
<CAPTION>
Calendar Year 1993
(Dollar Amounts in Thousands)
Name of
Company
Acquiring,
Redeeming,
or Retiring Number of Shares or Principal Amount Commission
Name of Issuer and Title of Issue Securities Acquired Redeemed Retired Consideration Authorization
Monongahela Power Company:
<S> <C> <C> <C> <C> <C> <C>
8-1/8% First Mortgage Bonds MP $10,000 $10,000 $10,185 File 22-23488
7-7/8% First Mortgage Bonds MP 30,000 30,000 30,774 File 22-23488
7-1/2% First Mortgage Bonds MP 20,000 20,000 20,250 File 22-23488
9-1/2% Series A Bonds - Monongalia County MP 7,050 7,050 7,262 File 70-6757
The Potomac Edison Company:
Common Stock (no par) APS 2,500,000 shs. 50,000 None
4.70% Cumulative Preferred Stock
Series B (par $100) PE 4,046 shs. 4,046 shs. 409 File 70-8082
$7.16 Series J Cumulative Preferred Stock
(par $100) PE 12,000 shs. 12,000 shs. 1,200 File 70-7259
7% First Mortgage Bonds PE 25,000 25,000 25,330 File 33-46209
7-5/8% First Mortgage Bonds PE 15,000 15,000 15,252 File 33-46209
8-3/8% First Mortgage Bonds PE 20,000 20,000 20,490 File 33-56258
7-1/2% First Mortgage Bonds PE 12,000 12,000 12,324 File 33-56258
8-5/8% First Mortgage Bonds PE 15,000 15,000 15,546 File 33-56258
8-5/8% First Mortgage Bonds PE 25,000 25,000 26,088 File 33-56258
9-1/2% Series A Bonds - Monongalia County PE 8,600 8,600 8,858 File 70-6757
West Penn Power Company:
Common Stock (no par) APS 5,000,000 shs. 100,000 None
7-5/8% First Mortgage Bonds WPP 35,000 35,000 35,921 File 33-56260
7-7/8% First Mortgage Bonds WPP 25,000 25,000 25,403 File 33-56260
8-1/8% First Mortgage Bonds WPP 40,000 40,000 40,924 File 33-56260
7% First Mortgage Bonds WPP 25,000 25,000 25,215 File 33-56260
7-1/8% First Mortgage Bonds WPP 52,000 52,000 52,624 File 33-56260
9-3/8% Series A Bonds - Monongalia County WPP 7,750 7,750 7,983 File 70-6757
9-3/4% Series B Bonds - Washington County WPP 30,000 30,000 30,900 File 70-6505
9-1/2% Series C Bonds - Washington County WPP 31,500 31,500 32,445 File 70-6505
Allegheny Generating Company:
8% Debentures AGC 50,000 50,000 50,555 File 33-6173
9-1/8% Debentures AGC 100,000 100,000 106,130 File 33-66344
8-3/4% Debentures AGC 50,000 50,000 52,905 File 33-66344
</TABLE>
The amounts of consideration applicable to preferred stock shown
above are exclusive of accrued dividends.
<PAGE>
ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES.
1. Seven investments aggregating $82,685, one of which
at $82,000 is related to industrial development.
2. None
ITEM 6. OFFICERS AND DIRECTORS
Part 1. Names, principal business addresses, and
positions of executives, officers and
directors of all system companies as of
December 31, 1993.
The following symbols are used in the tabulation:
CH - Chairman D - Director
P - President X - Member of Executive
Committee
EVP - Executive Vice President A - Member of Audit Committee
SVP - Senior Vice President F - Member of Finance
Committee
VP - Vice President O - Member of Operating
Committee
T - Treasurer M - Member of Management Review
Committee
S - Secretary NB - Member of New Business
Committee
C - Comptroller df - Director's fees
s - Salary
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART I. - Continued
<TABLE>
<CAPTION>
Allegheny Allegheny Monongahela The West Allegheny
Power Power Power Potomac Penn Generating
System, Service Company Edison Power Company
Inc. Corporation Company Company
<S> <C> <C> <C> <C> <C> <C>
Eileen M. Beck S s S S
12 E. 49th St. NY, NY
Klaus Bergman CH P D s CH P CH D CH D CH D P D
12 E. 49th St. NY, NY F NB X D X O X O X O X
Nancy L. Campbell VP T s VP T T
12 E. 49th St. NY, NY
Richard J. Gagliardi VP s VP
12 E. 49th St. NY, NY
Stanley I. Garnett, II VP s VP D O D O VP O D VP D
12 E. 49th St. NY, NY
Nancy H. Gormley VP s VP VP
12 E. 49th St. NY, NY
Kenneth M. Jones VP C s VP C VP D
12 E. 49th St. NY, NY
Peter J. Skrgic VP s VP D O VP D O D O VP D
12 E. 49th St. NY, NY
Eleanor Baum df D F D df D df D df D
51 Astor Pl. NY, NY M
William L. Bennett df D A D df D df D df D
667 Madison Ave. NY, NY NB
Phillip E. Lint df D A D df D df D df D
19 High Point Rd. F NB
Westport, CT
Edward H. Malone df D F D df D df D df D
5601 Turtle Bay Dr.
Naples, FL
Frank A. Metz, Jr. df D F D X df D X df D X df D X
P.O.Box 26 M X
Sloatsburg, NY
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART I. - Continued
<TABLE>
<CAPTION>
Allegheny Allegheny Monongahela The West Allegheny
Power Power Power Potomac Penn Generating
System, Service Company Edison Power Company
Inc. Corporation Company Company
<S> <C> <C> <C> <C> <C> <C>
Clarence F. Michalis df D F D X df D X df D X df D X
44 E. 64th St. NY, NY M X
Steven H. Rice df D A D df D df D df D
50 Main St. M NB
White Plains, NY
Gunnar E. Sarsten df D NB D df D df D df D
11436 Scarborough's
Neck Rd. P.O. Box 459
Belle Haven, VA
Peter L. Shea df D A D df D df D df D
515 Madison Ave., NY, NY
Thomas A. Barlow s VP
1310 Fairmont Ave.
Fairmont, WV
Benjamin H. Hayes s P D O
1310 Fairmont Ave.
Fairmont, WV
Charles S. Mullett s S T
1310 Fairmont Ave.
Fairmont, WV
Richard E. Myers s C
1310 Fairmont Ave.
Fairmont, WV
Robert R. Winter s VP
1310 Fairmont Ave.
Fairmont, WV
Thomas J. Kloc s C C
10435 Downsville Pike
Hagerstown, MD
James D. Latimer s VP
10435 Downsville Pike
Hagerstown, MD
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART I. - Continued
<TABLE>
<CAPTION>
Allegheny Allegheny Monongahela The West Allegheny
Power Power Power Potomac Penn Generating
System, Service Company Edison Power Company
Inc. Corporation Company Company
<S> <C> <C> <C>
Robert B. Murdock s VP
10435 Downsville Pike
Hagerstown, MD
Alan J. Noia s P D O
10435 Downsville Pike
Hagerstown, MD
Dale F. Zimmerman s S T
10435 Downsville Pike
Hagerstown, MD
Charles V. Burkley s C
800 Cabin Hill Drive
Greensburg, PA
Carole R. Chamberlain s
800 Cabin Hill Drive
Greensburg, PA
David E. Gervenak s
800 Cabin Hill Drive
Greensburg, PA
Ralph F. Haffner s
800 Cabin Hill Drive
Greensburg, PA
Thomas K. Henderson s VP
800 Cabin Hill Drive
Greensburg, PA
Kenneth D. Mowl s S T
800 Cabin Hill Drive
Greensburg, PA
Jay S. Pifer s P D O
800 Cabin Hill Drive
Greensburg, PA
Carl F. Schlenke s
800 Cabin Hill Drive
Greensburg, PA
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART I. - Continued
Allegheny Allegheny Monongahela The West Allegheny
Power Power Power Potomac Penn Generating
System, Service Company Edison Power Company
Inc. Corporation Company Company
John D. Brodt
P.O. Box 468
Piketon, OH
William N. D'Onofrio
One Summit Sq.
Fort Wayne, IN
E. Linn Draper
1 Riverside Plaza
Columbus, OH
Murray E. Edelman
P. O. Box 94661
Cleveland, OH
Carl A. Erickson
215 N. Front St.
Columbus, OH
David L. Hart
1 Riverside Plaza
Columbus, OH
Chris Hermann
P. O. Box 32030
Louisville, KY
Allen M. Hill
P. O. Box 1247
Dayton, OH
Willard R. Holland
73 S. Main St.
Akron, OH
David E. Jones
P. O. Box 468
Piketon, OH
Robert L. Kensinger
P. O. Box 891
Newcastle, PA
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART I. - Continued
Allegheny Allegheny Monongahela The West Allegheny
Power Power Power Potomac Penn Generating
System, Service Company Edison Power Company
Inc. Corporation Company Company
Gerald P. Maloney
1 Riverside Plaza
Columbus, OH
James J. Markowsky
1 Riverside Plaza
Columbus, OH
Richard C. Menge
One Summit Sq.
Fort Wayne, IN
John T. Newton
1 Quality St.
Lexington, KY
Jackson H. Randolph
P. O. Box 960
Cincinatti, OH
Ronald G. Reherman
20 NW Fourth St.
Evansville, IN
Joseph H. Vipperman
40 Franklin Rd.
Roanoke, VA
Norman P. Wagner
20 NW Fourth St.
Evansville, IN
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART I. - continued
<TABLE>
<CAPTION>
Allegheny West West Penn Ohio Valley Indiana
Pittsburgh Virginia West Virginia Electric Kentucky
Coal Power and Water Power Corporation Electric
Company Transmission Company Corporation
Company
<S> <C> <C> <C>
Eileen M. Beck
12 E. 49th St. NY, NY
Klaus Bergman P D D X
12 E. 49th St. NY, NY
Nancy L. Campbell
12 E. 49th St. NY, NY
Richard J. Gagliardi
12 E. 49th St. NY, NY
Stanley I. Garnett, II VP D D
12 E. 49th St. NY, NY
Nancy H. Gormley
12 E. 49th St. NY, NY
Kenneth M. Jones D
12 E. 49th St. NY, NY
Peter J. Skrgic D D D X
12 E. 49th St. NY, NY
Eleanor Baum
51 Astor Place, NY, NY
William L. Bennett
667 Madison Ave, NY, NY
Phillip E. Lint
19 High Point Rd.
Westport, CT
Edward H. Malone
5601 Turtle Bay Drive
Naples, FL
Frank A. Metz, Jr.
P. O. Box 26
Sloatsburg, NY
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART I. - continued
<TABLE>
<CAPTION>
Allegheny West West Penn Ohio Valley Indiana
Pittsburgh Virginia West Virginia Electric Kentucky
Coal Power and Water Power Corporation Electric
Company Transmission Company Corporation
Company
<S> <C> <C>
Clarence F. Michalis
44 E. 64th St. NY, NY
Steven H. Rice
50 Main St.
White Plains, NY
Gunnar E. Sarsten
11436 Scarborough's
Neck Rd.
P. O. Box 459
Belle Haven, VA
Peter L. Shea
515 Madison Ave. NY, NY
Thomas A. Barlow
1310 Fairmont Ave.
Fairmont, WV
Benjamin H. Hayes VP D
1310 Fairmont Ave.
Fairmont, WV
Charles S. Mullett T
1310 Fairmont Ave.
Fairmont, WV
Richard E. Myers C
1310 Fairmont Ave.
Fairmont, WV
Robert R. Winter
1310 Fairmont Ave.
Fairmont, WV
Thomas J. Kloc
10435 Downsville Pike
Hagerstown, MD
James D. Latimer
10435 Downsville Pike
Hagerstown, MD
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
Part 1. - continued
<TABLE>
<CAPTION>
Allegheny West West Penn Ohio Valley Indiana
Pittsburgh Virginia West Virginia Electric Kentucky
Coal Power and Water Power Corporation Electric
Company Transmission Company Corporation
Company
<S> <C> <C> <C>
Robert B. Murdock
10435 Downsville Pike
Hagerstown, MD
Alan J. Noia
10435 Downsville Pike
HAgerstown, MD
Dale F. Zimmerman
10435 Downsville Pike
Hagerstown, MD
Charles V. Burkley C D C D
800 Cabin Hill Drive
Greensburg, PA
Carole R. Chamberlain S
800 Cabin Hill Drive
Greensburg, PA
David E. Gervenak VP D
800 Cabin Hill Drive
Greensburg, PA
Ralph F. Haffner D
800 Cabin Hill Drive
Greensburg, PA
Thomas K. Henderson VP D VP D
800 Cabin Hill Drive
Greensburg, PA
Kenneth D. Mowl S T S T D
800 Cabin Hill Drive
Greensburg, PA
Jay S. Pifer P D P D
800 Cabin Hill Drive
Greensburg, PA
Carl F. Schlenke D
800 Cabin Hill Drive
Greensburg
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
Part 1. - continued
<TABLE>
<CAPTION>
Allegheny West West Penn Ohio Valley Indiana
Pittsburgh Virginia West Virginia Electric Kentucky
Coal Power and Water Power Corporation Electric
Company Transmission Company Corporation
Company
<S> <C> <C>
John D. Brodt s S T S T
P. O. Box 468
Piketon, OH
William N. D'Onofrio D
One Summit Sq.
Fort Wayne, IN
E. Linn Draper P D X P D X
1 Riverside Plaza
Columbus, OH
Murray E. Edelman D
P. O. Box 94661
Cleveland, OH
Carl A. Erickson D
215 N. Front St.
Columbus, OH
David L. Hart VP VP
1 Riverside Plaza
Columbus, OH
Chris Hermann D X
P. O. Box 32030
Louisville, KY
Allen M. Hill D
P. O. Box 1247
Dayton, OH
Willard R. Holland D X D X
73 S. Main St.
Akron, OH
David E. Jones s VP VP
P. O. Box 468
Piketon, OH
Robert L. Kensinger D
P. O. Box 891
Newcastle, PA
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS - continued
PART 1. continued
<TABLE>
<CAPTION>
Allegheny West West Penn Ohio Valley Indiana
Pittsburgh Virginia West Virginia Electric Kentucky
Coal Power and Water Power Corporation Electric
Company Transmission Company Corporation
Company
<S> <S> <C>
Gerald P. Maloney VP VP
1 Riverside Plaza
Columbus, OH
James J. Markowsky D
1 Riverside Plaza
Columbus, OH
Ricahrd C. Menge D
One Summit Square
Fort Wayne, IN
John R. Newton D
1 Quality St.
Lexington, KY
Jackson H. Randolph D X
P. O. Box 960
Cincinnati, OH
Ronald G. Reherman D
20 N.W. Fourth St.
Evansville, IN
Joseph H. Vipperman D
40 Franklin Road
Roanoke, VA
Norman P. Wagner D D
20 NW Fourth St.
Evansville, IN
</TABLE>
<PAGE>
Item 6. OFFICERS AND DIRECTORS (continued)
Part II. Financial connections of officers and directors as of December 31, 1993
Name of Officer Name and Location of Positions Held in Applicable
or Director Financial Institution Financial Institution Exemption Rule
M. R. Edelman Society National Bank Director Pub. Utility
Clevelnad, OH Holding Company Act
Section 3(a)(1)
B. H. Hayes City National Bank Director Reg. 250.70 (a)(4)(iii)
Fairmont, WV
A. M. Hill Citizens Federal Bank, S.F.B. Director No interlocking
Dayton, OH authority required
R. L. Kensinger First Western Bank Director SEC order 4/26/79
Newcastle, PA Release No. 21019
R. C. Menge Fort Wayne National Bank Director Rule 70 (a)(4)(c) & (d)
Fort Wayne National Corporation Director Rule 70 (a)(4)(c) & (d)
Fort Wayne, IN
J. T. Newton Bank One, Lexington NA Director 17 CFR Rule 250.70 (c) or (d)
Lexington, KY
J. H. Randolph PNC Bank OH, N.A. Director Reg. 250.70 (e)
Cincinnati, OH
PNC Bank Corporation Director Reg. 250.70 (e)
Pittsburgh, PA
R. G. Reherman National City Bancshares Director No interlocking
authority required
National City Bank of Evansville
Evansville, IN Director No interlocking
authority required
J. H. Vipperman First Union Director No interlocking
Roanoke, VA authority required
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS (continued)
PART III. Disclosures for each System companies are as follows:
(1) Allegheny Power System, Inc. (APS), Allegheny
Power Service Corporation (APSC), Monongahela Power
Company (Monongahela and M), The Potomac Edison Company
(Potomac Edison and PE), West Penn Power Company (West
Penn and WP), and Allegheny Generating Company (AGC)
sections of the combined Annual Report on Form 10-K for
1993 of APS, M, PE, WP, and AGC on pages 11 through 16
and of the APS Proxy Statement on pages 16A and 16B. The
executive officers of APS are also executive officers of
APSC and receive their compensation from APSC as shown
on page 11 and together with the directors owned
beneficially 52,030 shares of common stock of APS, and
55 shares of WP 4.50% preferred stock. APSC does not
file a proxy statement or Form 10-K.
(2) Allegheny Pittsburgh Coal Company, West Virginia
Power and Transmission Company, and
West Penn West Virginia Water Power Company
These companies do not file proxy statements or Form 10-
K's. Their directors and executive officers do not
receive any compensation from these companies, but
receive compensation as employees of certain of the
companies as reported in (1) above, except for a
director and executive officer whose cash compensation
was $182,991 from (1) above and who together with two
directors owned beneficially 14,035 shares of common
stock of Allegheny Power System, Inc., which are not
included in the reporting for (1) above.
(3) Ohio Valley Electric Corporation and
Indiana-Kentucky Electric Corporation
These companies do not file proxy statements or Form 10-
K's. These companies are not wholly owned by Allegheny
Power System, Inc., or its subsidiaries (see page 1 of
this Form U5S) and none of their executive officers are
employees of the Allegheny Power System companies.
Except for two executive officers whose compensation was
$173,081, directors and executive officers do not
receive any compensation from these companies. The
compensation and interest in System securities of
directors who are employees of the Allegheny Power
System companies are reported in (1) above.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
ITEM 11. EXECUTIVE COMPENSATION
During 1993, and for 1992 and 1991, the annual compensation
paid by each of the System companies, APS, APSC, Monongahela, Potomac
Edison, West Penn, and AGC directly or indirectly for services in
all capacities to such companies to their Chief Executive Officer and
each of the four most highly paid executive officers of each such
company whose cash compensation exceeded $100,000 was as follows:
<TABLE>
<CAPTION>
Summary Compensation Tables
APS
Annual Compensation (a)
Other All
Name Annual Other
and Compen- Compen-
Principal sation sation
Position Year Salary($) Bonus($)(b) ($)(c) ($)(d)
<S> <C> <C> <C> <C> <C>
Klaus Bergman, 1993 460,008 80,000 46,889
Chief Executive 1992 445,008 80,000 13,529(e)
Officer and 1991 425,004 70,000 6,037
President (f)
Stanley I. Garnett, II 1993 206,004 35,000 24,006
Vice President (f) 1992 195,600 35,000 7,939(e)
1991 180,600 29,000 5,752
Peter J. Skrgic, 1993 185,004 31,000 (g) 18,678
Vice President (f) 1992 175,008 29,000 (g) 8,325(e)
1991 161,004 27,000 (g) 5,696
Nancy H. Gormley, 1993 162,504 28,000 15,446
Vice President (f) 1992 150,000 26,000 8,159(e)
1991 137,508 (h) 4,755
Kenneth M. Jones, 1993 155,004 27,000 17,423(i) 12,879
Vice President (f) 1992 147,504 23,000 17,457(i) 9,359(e)
1991 135,629 (h) 5,304
</TABLE>
(a) APS has no paid employees. All salaries and bonuses are paid by APSC.
(b) Bonus amounts are determined and paid in April of the year in which
the figure appears and are based upon performance in the prior year.
(c) Amounts constituting less than 10% of the total annual salary and
bonus are not disclosed. All officers did receive miscellaneous
other items amounting to less than 10% of total annual salary and
bonus.
(d) Effective January 1, 1992, the basic group life insurance provided
employees was reduced from two times salary during employment, which
reduced to one times salary after 5 years in retirement, to a
new plan which provides one times salary until retirement
and $25,000 thereafter. Executive officers and other senior managers
remain under the prior plan. In order to pay for this insurance for
these executives, during 1992 insurance was
purchased on the lives of each of them. Effective January 1, 1993,
APS started to provide funds to pay for the future benefits
due under the supplemental retirement plan (Secured Benefit Plan)
as described in note (a) on p. 58. To do this, APS
purchased, during 1993, life insurance on the lives of the
covered executives. The premium costs of both the 1992 and 1993
policies plus a factor for the use of the money are returned to
APS at the earlier of (a) death of the insured or (b) the later of
age 65 or 10 years from the date of the policy's inception. The
figures in this column include the present value of the
executives' cash value at retirement attributable to the
current year's premium payment for both the Executive Life Insurance
and Secured Benefit Plans (based upon the premium, future valued to
retirement, using the policy internal rate
<PAGE>
of return minus the corporation's premium payment), as well as the
premium paid for the basic Group Life Insurance program
plan and the contribution for the 401(k) plan. For 1993, the
figure shown includes amounts representing (a) the aggregate
of life insurance premiums and dollar value of the benefit
to the executive officer of the remainder of the premium
paid on the Group Life Insurance program and the Executive Life
Insurance and Secured Benefit Plans and (b) 401(k) contributions
as follows: Mr. Bergman $42,392 and $4,497; Mr. Garnett $19,509
and $4,497; Mr. Skrgic $14,181 and $4,497; Ms. Gormley $11,152
and $4,294; and Mr. Jones $8,382 and $4,497, respectively.
(e) These amounts as previously reported did not include the following
amounts representing the dollar value of the benefit to the
executive officer of the remainder of the premium paid on the
Executive Life Insurance Plan: Mr. Bergman $786;
Mr. Garnett $210; Mr. Skrgic $218; Ms. Gormley $232; and Mr. Jones
$519.
(f) See Executive Officers of the Registrants for other positions held.
(g) Although less than 10% of total annual salary and bonus, Mr. Skrgic
received a $15,000 housing allowance in 1993, 1992 and 1991.
(h) The incentive plan was not in effect for these officers in 1991.
(i) Includes $15,000 housing allowance for both 1993 and 1992 and
miscellaneous other items totaling $2,423 and
$2,457 for 1993 and 1992, respectively.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
<TABLE>
<CAPTION>
Summary Compensation Tables
MONONGAHELA
Annual Compensation
Name All Other
and Compen-
Principal sation
Position Year Salary($) Bonus($)(a) ($)(b)
<S> <C> <C> <C> <C>
Klaus Bergman, 1993
Chief Executive 1992
Officer (c) 1991
Benjamin H. Hayes, 1993 189,996 30,000 19,668
President 1992 180,000 27,000 11,114(d)
1991 156,250 27,000 5,151
Thomas A. Barlow, 1993 119,496 16,000 12,777
Vice President 1992 113,247 15,000 7,145(d)
1991 105,999 (e) 4,197
Robert R. Winter, 1993 119,502 17,000 19,529
Vice President 1992 112,002 15,000 6,332(d)
1991 103,998 (e) 4,120
Richard E. Myers, 1993 110,121 10,000 17,246
Comptroller 1992 104,581 10,000 7,486(d)
1991 98,000 (e) 3,882
</TABLE>
(a) Bonus amounts are determined and paid in April of the year in
which the figure appears and are based upon
performance in the prior year.
(b) Effective January 1, 1992, the basic group life insurance provided
employees was reduced from two times salary
during employment, which reduced to one times salary after 5 years
in retirement, to a new plan which provides
one times salary until retirement and $25,000 thereafter.
Executive officers and other senior managers remain
under the prior plan. In order to pay for this insurance for these
executives, during 1992 insurance was
purchased on the lives of each of them. Effective January 1, 1993,
APS started to provide funds to pay for
the future benefits due under the supplemental retirement plan
(Secured Benefit Plan) as described in note
(a) on p. 58. To do this, APS purchased, during 1993, life
insurance on the lives of the covered executives.
The premium costs of both the 1992 and 1993 policies plus a factor
for the use of the money are returned to
APS at the earlier of (a) death of the insured or (b) the later of
age 65 or 10 years from the date of the
policy's inception. The figures in this column include the
present value of the executives' cash value at
retirement attributable to the current year's premium payment for
both the Executive Life Insurance and
Secured Benefit Plans (based upon the premium, future valued to
retirement, using the policy internal rate
of return minus the corporation's premium payment), as well as the
premium paid for the basic Group Life
Insurance program plan and the contribution for the 401(k) plan.
For 1993, the figure shown includes amounts
representing (a) the aggregate of life insurance premiums and
dollar value of the benefit to the executive
officer of the remainder of the premium paid on the Group Life
Insurance program and the Executive Life
Insurance and Secured Benefit Plans and (b) 401(k) contributions
as follows: Mr. Hayes $15,171 and $4,497;
Mr. Barlow $9,194 and $3,583; Mr. Winter $15,946 and $3,583; and
Mr. Myers $13,944 and $3,302, respectively.
(c) The total compensation Messrs. Bergman, Garnett, Skrgic, Jones and
Ms. Gormley received for services in all
capacities to APS, APSC and the Subsidiaries is set forth in the
Summary Compensation Table for APS.
(d) These amounts as previously reported did not include the following
amounts representing the dollar value of
the benefit to the executive officer of the remainder of the
premium paid on the Executive Life Insurance
Plan: Mr. Hayes $381; Mr. Barlow $494; Mr. Winter $147; and Mr.
Myers $215.
(e) The incentive plan was not in effect for these officers in 1991.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
Summary Compensation Tables
POTOMAC EDISON
Annual Compensation
<TABLE>
<CAPTION>
Name All Other
and Compen-
Principal sation
Position Year Salary($) Bonus($)(a) ($)(b)
<S> <C> <C> <C> <C>
Klaus Bergman, 1993
Chief Executive 1992
Officer (c) 1991
Alan J. Noia, 1993 212,500 38,000 20,107
President 1992 200,000 38,000 7,975(d)
1991 185,833 35,000 6,990
Robert B. Murdock, 1993 135,000 19,000 12,936
Vice President 1992 128,914 18,000 8,853(d)
1991 122,501 (e) 5,831
James D. Latimer, 1993 119,996 15,000 12,971
Vice President 1992 111,666 15,000 7,625(d)
1991 103,255 (e) 4,969
Thomas J. Kloc, 1993 112,500 10,000 11,204
Comptroller 1992 107,004 9,000 5,366(d)
1991 100,500 (e) 4,839
</TABLE>
(a) Bonus amounts are determined and paid in April of the year in
which the figure appears and are based upon
performance in the prior year.
(b) Effective January 1, 1992, the basic group life insurance provided
employees was reduced from two times salary
during employment, which reduced to one times salary after 5 years
in retirement, to a new plan which provides
one times salary until retirement and $25,000 thereafter. Executive
officers and other senior managers remain
under the prior plan. In order to pay for this insurance for these
executives, during 1992 insurance was
purchased on the lives of each of them. Effective January 1, 1993,
APS started to provide funds to pay for
the future benefits due under the supplemental retirement plan
(Secured Benefit Plan) as described in note
(a) on p. 58. To do this, APS purchased, during 1993, life
insurance on the lives of the covered executives.
The premium costs of both the 1992 and 1993 policies plus a factor
for the use of the money are returned to
APS at the earlier of (a) death of the insured or (b) the later of
age 65 or 10 years from the date of the
policy's inception. The figures in this column include the
present value of the executives' cash value at
retirement attributable to the current year's premium payment for
both the Executive Life Insurance and
Secured Benefit Plans (based upon the premium, future valued to
retirement, using the policy internal rate
of return minus the corporation's premium payment), as well as the
premium paid for the basic Group Life
Insurance program plan and the contribution for the 401(k) plan.
For 1993, the figure shown includes amounts
representing (a) the aggregate of life insurance premiums and dollar
value of the benefit to the executive
officer of the remainder of the premium paid on the Group Life
Insurance program and the Executive Life
Insurance and Secured Benefit Plans and (b) 401(k) contributions as
follows: Mr. Noia $15,610 and $4,497;
Mr. Murdock $9,081 and $3,855; Mr. Latimer $9,371 and $3,600; and Mr.
Kloc $7,829 and $3,375, respectively.
(c) The total compensation Messrs. Bergman, Garnett, Skrgic, Jones and
Ms. Gormley received for services in all
capacities to APS, APSC and the Subsidiaries is set forth in the
Summary Compensation Table for APS.
(d) These amounts as previously reported did not include the following
amounts representing the dollar value of
the benefit to the executive officer of the remainder of the premium
paid on the Executive Life Insurance
Plan: Mr. Noia $186; Mr. Murdock $310; Mr. Latimer $211; and Mr.
Kloc $99.
(e) The incentive plan was not in effect for these officers in 1991.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
Summary Compensation Tables
WEST PENN
Annual Compensation
<TABLE>
<CAPTION>
Name All Other
and Compen-
Principal sation
Position Year Salary($) Bonus($)(a) ($)(b)
<S> <C> <C> <C> <C>
Klaus Bergman, 1993
Chief Executive 1992
Officer (c) 1991
Jay S. Pifer, 1993 175,500 28,000 18,093
President 1992 156,495 26,000 9,870(d)
1991 133,754 (e) 4,854
Thomas K. Henderson, 1993 124,004 17,000 17,570
Vice President 1992 117,838 15,000 6,887(d)
1991 110,924 (e) 4,335
Charles S. Ault, 1993 114,419 15,000 12,673
Vice President 1992 107,129 14,000 6,764(d)
1991 99,335 (e) 5,266
Charles V. Burkley, 1993 112,996 10,000 10,544
Comptroller 1992 106,913 10,000 6,748(d)
1991 96,706 (e) 3,780
</TABLE>
(a) Bonus amounts are determined and paid in April of the year in which
the figure appears and are based upon
performance in the prior year.
(b) Effective January 1, 1992, the basic group life insurance provided
employees was reduced from two times salary
during employment, which reduced to one times salary after 5 years
in retirement, to a new plan which provides
one times salary until retirement and $25,000 thereafter. Executive
officers and other senior managers remain
under the prior plan. In order to pay for this insurance for these
executives, during 1992 insurance was
purchased on the lives of each of them. Effective January 1, 1993,
APS started to provide funds to pay for
the future benefits due under the supplemental retirement plan
(Secured Benefit Plan) as described in note
(a) on p. 58. To do this, APS purchased, during 1993, life
insurance on the lives of the covered executives.
The premium costs of both the 1992 and 1993 policies plus a factor
for the use of the money are returned to
APS at the earlier of (a) death of the insured or (b) the later of
age 65 or 10 years from the date of the
policy's inception. The figures in this column include the
present value of the executives' cash value at
retirement attributable to the current year's premium payment for
both the Executive Life Insurance and
Secured Benefit Plans (based upon the premium, future valued to
retirement, using the policy internal rate
of return minus the corporation's premium payment), as well as the
premium paid for the basic Group Life
Insurance program plan and the contribution for the 401(k) plan. For
1993, the figure shown includes amounts
representing (a) the aggregate of life insurance premiums and dollar
value of the benefit to the executive
officer of the remainder of the premium paid on the Group Life
Insurance program and the Executive Life
Insurance and Secured Benefit Plans and (b) 401(k) contributions as
follows: Mr. Pifer $13,596 and $4,497;
Mr. Henderson $13,850 and $3,720; Mr. Ault $9,240 and $3,433; and
Mr. Burkley $7,154 and $3,390, respectively.
(c) The total compensation Messrs. Bergman, Garnett, Skrgic, Jones and
Ms. Gormley received for services in all
capacities to APS, APSC and the Subsidiaries is set forth in the
Summary Compensation Table for APS.
(d) These amounts as previously reported did not include the following
amounts representing the dollar value of
the benefit to the executive officer of the remainder of the premium
paid on the Executive Life Insurance
Plan: Mr. Pifer $270; Mr. Henderson $174; Mr. Ault $191; and Mr.
Burkley $280.
(e) The incentive plan was not in effect for these officers in 1991.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
Summary Compensation Tables
AGC
Annual Compensation (a)
Name All Other
and Compen-
Principal sation
Position Year Salary($) Bonus($) ($)
(a) AGC has no paid employees.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
<TABLE>
<CAPTION>
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
Estimated
Name and Capacities Annual Benefits
Company in Which Served on Retirement (a)
<S> <C> <C>
APS (b)
Klaus Bergman, President* $235,270
and Chief Executive
Officer (c)
Stanley I. Garnett, II, 112,320
Vice President, Finance (c)
Peter J. Skrgic, 126,000
Vice President (c)
Kenneth M. Jones, 90,004
Vice President and
Comptroller (c)
Nancy H. Gormley, 78,404
Vice President (c)
Monongahela
Klaus Bergman, $
Chief Executive Officer (c)(d)
Benjamin H. Hayes, 113,364
President
Thomas A. Barlow, 70,788
Vice President
Robert R. Winter, 67,896
Vice President
Richard E. Myers, 67,200
Comptroller
* Elected Chairman of the Board effective January 1, 1994.
</TABLE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
<TABLE>
<CAPTION>
Estimated
Name and Capacities Annual Benefits
Company in Which Served on Retirement (a)
<S> <C> <C>
Potomac Edison
Klaus Bergman, $
Chief Executive Officer (c)(d)
Alan J. Noia, 133,200
President
Robert B. Murdock, 80,677
Vice President
James D. Latimer, 75,298
Vice President
Thomas J. Kloc, 68,591
Comptroller
West Penn
Klaus Bergman, $
Chief Executive Officer (c)(d)
Jay S. Pifer, 111,463
President
Thomas K. Henderson, 73,127
Vice President
Charles S. Ault, 71,100
Vice President
Charles V. Burkley, 66,442
Comptroller
Allegheny
Generating Company
No paid employees.
</TABLE>
- - ----------------------------
(a) Assumes present insured benefit plan and salary continue and
retirement at age 65 with single life annuity. Under plan
provisions, the annual rate of benefits payable at the normal
retirement age of 65 are computed by adding (i) 1% of final
average pay up to covered compensation times years of service
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
up to 35 years, plus (ii) 1.5% of final average pay in excess
of covered compensation times years of service up to 35 years,
plus (iii) 1.3% of final average pay times years of service in
excess of 35 years. Covered compensation is the average of the
maximum taxable Social Security wage bases during the 35 years
preceding the member's retirement, except that years before
1959 are not taken into account for purposes of this average.
The final average pay benefit is based on the member's average
total earnings during the highest-paid 60 consecutive calendar
months or, if smaller, the member's highest rate of pay as of
any July 1st. Effective July 1, 1993 the maximum amount of any
employee's compensation that may be used in these computations
is $235,840. The maximum amount will be reduced to $150,000
effective July 1, 1994 as a result of The Omnibus Budget
Reconciliation Act of 1993. Benefits for employees retiring
between 55 and 62 differ from the foregoing.
Pursuant to a supplemental plan (Secured Benefit Plan), senior
executives of Allegheny Power System companies who retire at
age 60 or over with 40 or more years of service are entitled to
a supplemental retirement benefit in an amount that, together
with the benefits under the basic plan and from other
employment, will equal 60% of the executive's highest average
monthly earnings for any 36 consecutive months. The
supplemental benefit is reduced for less than 40 years service
and for retirement age from 60 to 55. It is included in the
amounts shown where applicable. In order to provide funds to
pay such benefits, effective January 1, 1993 the Company
purchased insurance on the lives of the plan participants. The
Secured Benefit Plan has been designed that if the assumptions
made as to mortality experience, policy dividends, and other
factors are realized, the Company will recover all premium
payments, plus a factor for the use of the Company's money.
All executive officers are participants in the Secured Benefit
Plan. This does not include benefits from an Employee Stock
Ownership and Savings Plan (ESOSP) established as a non-
contributory stock ownership plan for all eligible employees
effective January 1, 1976, and amended in 1984 to include a
savings program. Under the ESOSP for 1993, all eligible
employees may elect to have from 2% to 7% of their compensation
contributed to the Plan as pre-tax contributions and an
additional 1% to 6% as post-tax contributions. Employees
direct the investment of these contributions into one or more
of five available funds. Each System company matches 50% of
the pre-tax contributions up to 6% of compensation with common
stock of Allegheny Power System, Inc. Effective January 1,
1993 the maximum amount of any employee's compensation that may
be used in these computations is $235,840. Effective January
1, 1994, the amount was reduced to $150,000 as a result of The
Omnibus Budget Reconciliation Act of 1993. Employees'
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
interests in the ESOSP vest immediately. Their pre-tax
contributions may be withdrawn only upon meeting certain
financial hardship requirements or upon termination of
employment.
(b) APS has no paid employees. These executives are employees of
APSC.
(c) See Executive Officers of the Registrants for other positions
held.
(d) The total estimated annual benefits on retirement payable to
Mr. Bergman for services in all capacities to APS, APSC and the
Subsidiaries is set forth in the table for APS.
Compensation of Directors
In 1993, APS directors who were not officers or employees of System
companies received for all services to System companies (a) $16,000 in
retainer fees, (b) $800 for each committee meeting attended, except
Executive Committee meetings which are $200, and (c) $250 for each Board
meeting of each company attended. Under an unfunded deferred
compensation plan, a director may elect to defer receipt of all or part
of his or her director's fees for succeeding calendar years to be
payable with accumulated interest when the director ceases to be such,
in equal annual installments,
or, upon authorization by the Board of Directors, in a lump sum.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The table below shows the number of shares of APS common stock that
are beneficially owned, directly or indirectly, by each director and
executive officer of APS, Monongahela, Potomac Edison, West Penn, and AGC and
by all directors and executive officers of each such company as a group as of
January 14, 1994. To the best of the knowledge of APS, there is no
person who is a beneficial owner of more than 5% of the voting securities
of APS other than the one shareholder shown below.
<TABLE>
<CAPTION>
Executive Shares of
Officer or APS Percent
Name Director of Common Stock of Class
<S> <C> <C> <C>
Charles S. Ault WP 4,072 Less than .01%
Thomas A. Barlow MP 6,725 "
Eleanor Baum APS,MP,PE,WP 2,000 "
William L. Bennett APS,MP,PE,WP 2,362 "
Klaus Bergman APS,MP,PE,WP,AGC 9,519 "
Charles V. Burkley WP 2,134 "
Stanley I. Garnett, II APS,MP,PE,WP,AGC 3,940 "
Nancy H. Gormley APS, MP 5,001 "
Benjamin H. Hayes MP 5,082 "
Thomas K. Henderson WP 3,444 "
Kenneth M. Jones APS,AGC 3,996 "
Thomas J. Kloc PE,AGC 2,823 "
James D. Latimer PE 4,765 "
Phillip E. Lint APS,MP,PE,WP 600 "
Edward H. Malone APS,MP,PE,WP 1,468 "
Frank A. Metz, Jr. APS,MP,PE,WP 1,795 "
Clarence F. Michalis APS,MP,PE,WP 1,000 "
Robert B. Murdock PE 7,571 "
Richard E. Myers MP 3,899 "
Alan J. Noia PE 10,235 "
Jay S. Pifer WP 7,087 "
Steven H. Rice APS,MP,PE,WP 2,030 "
Gunnar E. Sarsten APS,MP,PE,WP 5,000 "
Peter L. Shea APS,MP,PE,WP 900 "
Peter J. Skrgic APS,MP,PE,WP,AGC 5,026 "
Robert R. Winter MP 2,997 "
Franklin Resources, Inc. 6,393,300 5.4%
777 Mariners Island Blvd.
San Mateo, CA 94404
All directors and executive officers
of APS as a group (17 persons) 53,030 Less than .06%
All directors and executive officers
of MP as a group (17 persons) 58,200 "
All directors and executive officers
of PE as a group (17 persons) 65,830 "
All directors and executive officers
of WP as a group (17 persons) 54,433 "
All directors and executive officers
of AGC as a group (6 persons) 27,354 "
</TABLE>
All of the shares of common stock of Monongahela (5,891,000), Potomac Edison
(22,385,000), and West Penn (22,361,586) are owned by APS. All of the
common stock of AGC is owned by Monongahela 270 shares), Potomac Edison
(280 shares), and West Penn (450 shares).
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For APS and the Subsidiaries, none.
MANAGEMENT REVIEW COMMITTEE REPORT
GENERAL
The compensation program for executive officers of the Company
and its subsidiaries is directed by the Management Review Committee
of the Company's Board of Directors. The Committee recommends the
annual compensation program for each year to the Board of Directors
of the Company and of each subsidiary for its approval.
The executive compensation program is intended to meet three
objectives:
* Create a strong link between executive compensation and
total return to stockholders, reliable and economical
service to customers, and System financial stability,
integrity, and overall performance.
* Offer compensation opportunities that are competitive with
the median level of opportunity in the marketplace, at
expected levels of performance.
* Ensure internal compensation equity - maintaining a
reasonable relationship between compensation and the duties
and responsibilities of each executive position.
It recognizes that the Company's financial success depends, at
least in part, on regulators' perceptions of customer satisfaction,
which depends on our supplying reliable electric service at
reasonable prices in an environmentally acceptable way.
EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program has two components:
salary and incentive awards (as described below) and, if approved by
the shareholders will, in future years, have a third component, the
Performance Share Plan.
The Company's executive compensation is both market- and
performance-based. The Committee believes that it is necessary to
use both market-and performance-based compensation to meet the
challenges of intensifying competitive, economic and regulatory
pressures.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
To ensure that the System's salary structure and total
compensation continue to be competitive, they are compared each
year through an annual compensation survey with those of comparable
electric utilities - over 30 companies in recent years. The survey
companies are either similar in type and size to Allegheny,
contiguous to our geographic territory, or have a similar fuel mix.
In 1993, over 80% of these survey companies are included in the
Dow Jones Electric Index to which the Company's performance is
compared on page 12 of this proxy statement. This comparison,
conducted by a national compensation consulting firm, involves
matching System positions, including the Chairman, President and
Chief Executive Officer (CEO), with those in the survey companies
that have comparable duties and responsibilities. For 1993, the
survey indicated that the System's executive salary structure was
slightly below the median. As in prior years, this survey data
became the basis for the consulting firm's recommendations as to
salary structure position placement and total compensation, and 1993
base salary ranges for each position in line with the survey average
for comparable positions.
Base salary:
The base salaries of all executive officers, including the CEO,
are reviewed annually by the Committee, which makes recommendations
to the Boards of Directors. In recommending base salary levels, the
Committee gives most weight to the performance of each executive.
The Committee receives a report from the CEO including (a) the
performance rating of each executive (other than himself) based on
that executive's position-specific responsibilities and performance
evaluation by his or her supervisor, and (b) a specific salary
recommendation for each. In determining its recommendations to the
Boards, the Committee also takes into consideration operating
performance, including such factors as safety, efficiency, and
customer satisfaction, and financial results, including such things
as total returns, earnings per share, quality of earnings,
dividends paid and dividends payout ratio.
Annual Performance Incentive:
The Allegheny Power System Annual Performance Incentive Plan (the
"Incentive Plan") is designed to supplement base salaries and
provide cash incentive compensation opportunities to attract, retain
and motivate a senior group of managers of Allegheny Power System,
including executive officers selected by the Management Review
Committee. The Incentive Plan provides for establishment of
individual incentive awards based on meeting specific predetermined
performance targets. The performance targets are based on net income
available to common shareholders, achieved shareholder return, and
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
overall corporate financial results (changes in earnings per share,
quality of earnings, dividends paid per share and dividend payout
ratios) quality and cost of service to customers and System
performance. In addition, personal performance goals as to operating
factors such as efficiency and safety are set on a position specific
basis for participants.
Specific operating, management, or financial areas to be
emphasized, as well as performance targets, are determined each
year by the Committee with the recommendations of the CEO. If the
performance targets are not met, no awards are paid. The target
awards under the Plan are a percent of base compensation determined
by the Committee, and participants may earn up to 1 and one fourth times the
target award. For named officers for the 1992 Plan the targets were
20% of 1991 base compensation. Targets for other participants were
20% or less. Incentive Plan awards earned are paid in the year after
the year for which they are earned. Awards earned for performance in
1991 and 1992 are set forth in the Summary Compensation Table for
those years under the column "Incentive Awards" for the individuals
named therein. The awards, if any, for 1993, payable in 1994, have
not as yet been determined.
For the CEO, the Management Review Committee develops salary and
incentive award recommendations for the Board's consideration. The
base salary recommendation was based upon the Committee's evaluation
of the CEO's performance of his responsibilities in the context of
the Company's overall financial and operating performance, including
the factors described in the next sentence, and the quality and cost
of service rendered to its customers. The incentive award
recommendation was based primarily on 1992 corporate financial
results, including total shareholder return, changes in earnings per
share, quality of earnings, dividends paid per share, and dividend
payout ratios. The overall quality and cost of service rendered to
customers and overall System performance were also considered. Mr.
Bergman's 1993 total compensation reflected the Committee's
evaluation of his performance and the described 1992 financial
results, total return to shareholders, and service to the Company's
customers and its efficient operations.
The executive compensation program, which is annually reviewed
by the Committee and the Board, is intended to reward the individual
performance of each executive relative to the overall financial
performance of the Company, the service provided to customers, and
its cost. The program is further intended to provide competitive
compensation to help the Company attract, motivate, and retain the
executives needed to ensure continued stockholder return and
reliable and economical electric service to customers.
<PAGE>
ITEM 6. Part III (Continued)
(1) APS, AGC, MP, PE, WPP
(from 1993 Form 10-K)
Recently enacted Section 162(m) of the Internal Revenue Code
generally limits to $1 million the corporate deduction for
compensation paid to executive officers named in the Proxy
Statement, unless certain requirements are met. This Committee has
carefully considered the effect of this new tax code provision on
the current executive compensation program. At this time,
Allegheny's deduction for officer compensation is not limited by the
provisions of Sections 162(m). The Committee intends to take such
actions with respect to the executive compensation program, if
necessary, to preserve the corporate tax deduction for executive
compensation paid.
No current member of the Management Review Committee is or ever
was an employee of the Company or any of its subsidiaries.
Clarence F. Michalis, Chairman
Eleanor Baum
Frank A. Metz, Jr.
Steven H. Rice
* Incentive awards are based upon performance in the year in
which the figure appears but are paid in the second quarter
of the following year. Any awards that may be granted in
1994 with respect to the 1993 plan and performance have not
yet been determined. Whether the incentive award plan will
be continued for 1994 has also not yet been determined.
* Supercedes, as to specific named individuals amounts
referred to in the Summary Compensation Tables: on page 11
for APS, footnote (b) and on pages 12 and 13 for MP, PE and
WP, footnote (a).
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
None
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
<TABLE>
<CAPTION>
Calendar Year 1993
Part I. Between System Companies
In Effect
Date of on Dec. 31
Transaction Serving Company Receiving Company Compensation Contract (Yes or No)
<S> <C> <C> <C> <C> <C>
Operating, maintenance, accounting, Monongahela Power Company The Potomac Edison Company $808,951 5/29/73 Yes
supervisory, and other adminis- effective
trative or other services 5/31/74
West Penn Power Company has an Operational Service Contract with The Potomac Edison Company (effective 12/23/77) for which the
compensation was less than $100,000 in 1993.
West Penn Power Company tests meters for The Potomac Edison Company. The compensation for this service was $50,896 in 1993.
</TABLE>
Part II. Between System Companies and others
<TABLE>
<CAPTION>
In effect
Date of on Dec. 31
Transaction Serving Company Receiving Company Compensation Contract (Yes or No)
<S> <C> <C> <C> <C> <C>
Engineering, drafting and other American Electric Power Ohio Valley Electric $1,226,165 12/27/56 Yes
technical and administrative Service Corporation Corporation
Engineering, drafting and other American Electric Power Indiana-Kentucky $7,620,258 12/27/56 Yes
technical and administrative Service Corporation Electric Corporation
Maintenance Services Appalachian Power Ohio Valley Electric $ 598,305 1/1/79 Yes
Company Corporation
</TABLE>
Ohio Valley Electric Corporation has a Maintenance Service Contract
(effective 7/10/69) with Cincinnati Gas & Electric Company, Indiana-
Kentucky Electric Corporation has an Operational Service Contract (effective
6/28/55) with Indiana Michigan Power Company and (effective
1/1/79) with Appalachian Power Company. The compensation for each of these
contracts was less than $100,000 in 1993.
Part III.
None.
<PAGE>
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Financial statements are filed as listed on Page A of Appendix 1.
EXHIBITS
EXHIBIT A. Financial Statements incorporated herein by reference
are as follows:
The financial statements of Allegheny Power System, Inc. and its
subsidiaries, and of Monongahela Power Company, The Potomac Edison
Company, West Penn Power Company and its subsidiaries, and
Allegheny Generating Company, listed under ITEM 8 of their
combined Annual Report on Form 10-K for the year ended December
31, 1993, together with the reports of Price Waterhouse with
respect thereto, all dated February 3, 1994 are incorporated in
this Annual Report by reference to such Annual Reports on Form
10-K.
*******************************************
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the foregoing incorporation by reference in
this Annual Report on Form U5S of our reports which apply to the
financial statements and schedules in the above-mentioned Annual
Report on Form 10-K.
PRICE WATERHOUSE
New York, New York
February 3, 1994
EXHIBIT B. Constituent instruments defining the rights of
holders of equity securities of system companies are
incorporated herein by reference as listed on pages
F-1 and F-2 of Appendix 2.
EXHIBIT C. Constituent instruments defining the rights of
holders of debt securities of System companies are
incorporated herein by reference as listed on pages
F-3 and F-4 of Appendix 2.
EXHIBIT D. Consolidated Tax Agreement, dated June 13, 1963, as
amended November 3, 1993, is filed as Exhibit D.
EXHIBIT E. None
EXHIBIT F. None
<PAGE>
SIGNATURE
The undersigned system company has duly caused this
annual report to be signed on its behalf by the undersigned
thereunto duly authorized pursuant to the requirements of the Public
Utility Holding Company Act of 1935.
ALLEGHENY POWER SYSTEM, INC.
By NANCY H. GORMLEY
Nancy H. Gormley
Counsel for Allegheny Power System, Inc.
Dated: April 29, 1994
<PAGE>
APPENDIX 1
CONSOLIDATING AND OTHER FINANCIAL STATEMENTS
(See Index on Page A)
<PAGE>
<TABLE>
<CAPTION>
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
INDEX TO APPENDIX 1--CONSOLIDATING AND OTHER FINANCIAL STATEMENTS
Consolidating Statements Other Statements
Allegheny Power West Penn
System, Inc. Power Company Indiana-Kentucky Ohio Valley
and Subsidiary and Subsidiary Electric Electric
Companies Companies Corporation Corporation
Balance Sheets -
<S> <C> <C> <C> <C>
December 31, 1993 A-1, 2 B-1, 2 C-1 C-4
Statements of Income -
Year ended December 31, 1993 A-3 B-3 C-2 C-5
Statements of Retained Earnings
and Other Paid-in Capital -
Year ended December 31, 1993 A-4 B-4 - -
Statements of Cash Flows
Year ended December 31, 1993 A-5 B-5 C-3 C-6
Long-Term Debt of Subsidiaries -
December 31, 1993 A-6, 7, 8 - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-1
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's)
ASSETS APS APSC MP PE WPP Subtotal
(See page B-1)
Property, plant and equipment:
<S> <C> <C> <C> <C> <C> <C>
At original cost - 1,809 1,684,322 1,857,961 2,803,811 6,347,903
Accumulated depreciation - (528) (664,947) (632,269) (962,623) (2,260,367)
Investments and other assets:
Securities of subsidiaries consolidated:
Common stock, at equity 2,003,516 - - - - 2,003,516
Excess of cost over book equity at acquisition 15,077 - - - - 15,077
Investment in APC:
Common stock, at equity - - (2,900) (2,900) (5,800) (11,600)
Advances - - 3,495 3,617 7,061 14,173
AGC - common stock, at equity - - 61,698 63,984 102,830 228,512
Securities of associated company 1,250 - - - - 1,250
Other 23,971 7 - 103 276 24,357
Current assets:
Cash and temporary cash investments 69 138 135 1,489 565 2,396
Accounts receivable:
Electric service - - 50,079 45,782 95,696 191,557
Allowance for uncollectible accounts - - (1,084) (1,208) (1,126) (3,418)
Affiliated and other 390 4,894 14,596 6,382 22,372 48,634
Notes receivable from affiliates 1,830 - - 4,600 24,900 31,330
Materials and supplies - at average cost:
Operating and construction - - 22,393 26,153 36,030 84,576
Fuel - - 19,904 18,596 32,892 71,392
Deferred power costs - - 10,823 959 2,272 14,054
Prepaid taxes 1 19,788 12,523 10,827 43,139
Other 33 22 3,772 3,041 4,855 11,723
Deferred charges:
Regulatory assets 1,769 162,842 76,962 331,755 573,328
Unamortized loss on reacquired debt - - 12,228 9,188 11,645 33,061
Other - 1,647 10,309 24,800 26,525 63,281
Total assets 2,046,137 9,758 1,407,453 1,519,763 2,544,763 7,527,874
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-1a
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's) APS Inc.
Combined Eliminations, Consolidated
ASSETS Subtotal APC AGC Totals etc. Totals
Property, plant and equipment:
<S> <C> <C> <C> <C> <C> <C>
At original cost 6,347,903 4,040 824,904 7,176,847 - 7,176,847
Accumulated depreciation (2,260,367) (16)(128,375) (2,388,758) - (2,388,758)
Investments and other assets:
Securities of subsidiaries consolidated:
Common stock, at equity 2,003,516 - - 2,003,516 (2,003,516)(1) -
Excess of cost over book equity at acquisition 15,077 - - 15,077 - 15,077
Investment in APC:
Common stock, at equity (11,600) - - (11,600) 11,600 (1) -
Advances 14,173 - - 14,173 (14,173)(2) -
AGC - common stock, at equity 228,512 - - 228,512 (228,512)(1) -
Securities of associated company 1,250 - - 1,250 - 1,250
Other 24,357 - - 24,357 - 24,357
Current assets:
Cash and temporary cash investments 2,396 6 15 2,417 - 2,417
Accounts receivable:
Electric service 191,557 - - 191,557 - 191,557
Allowance for uncollectible accounts (3,418) - - (3,418) - (3,418)
(3) (2)
Affiliated and other 48,634 - 8,617 57,251 (49,512) (3 7,736
Notes receivable from affiliates 31,330 - - 31,330 (31,330)(2) -
Materials and supplies - at average cost:
Operating and construction 84,576 - 2,190 86,766 - 86,766
Fuel 71,392 - - 71,392 - 71,392
Deferred power costs 14,054 - - 14,054 - 14,054
Prepaid taxes 43,139 - - 43,139 - 43,139
Other 11,723 401 241 12,365 (1,974)(10 10,391
Deferred charges:
Regulatory assets 573,328 - 4,489 577,817 - 577,817
Unamortized loss on reacquired debt 33,061 - 11,374 44,435 - 44,435
Other 63,281 - 12,474 75,755 (1,646)(10 74,109
Total assets 7,527,874 4,431 735,929 8,268,234 (2,319,066) 5,949,168
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-2
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's)
CAPITALIZATION AND LIABILITIES APS APSC MP PE WPP Subtotal
(see page B-2)
Capitalization:
<S> <C> <C> <C> <C> <C> <C>
Common stock of Allegheny Power System, Inc. 147,079 - - - - 147,079
Common stock of affiliate consolidated - - - - - -
Common stock of subsidiaries consolidated - 50 294,550 447,700 425,994 1,168,294
Other paid-in capital 931,063 - 2,994 2,714 55,687 992,458
Retained earnings 877,673 - 185,486 176,053 412,288 1,651,500
Preferred stock of subsidiaries:
Not subject to mandatory redemption - - 64,000 36,378 149,708 250,086
Subject to mandatory redemption - - - 26,400 - 26,400
Long-term debt (see pages A-6, A-7, A-8) - - 460,129 517,910 782,369 1,760,408
Notes and advances payable to affiliates - - - - - -
Current liabilities:
Short-term debt 67,536 - 63,100 - - 130,636
Long-term debt and preferred stock
due within one year - - - 17,200 - 17,200
Accounts payable to affiliates 13,629 1,885 8,184 15,606 9,451 48,755
Accounts payable - others 7,845 1,359 31,752 41,986 105,493 188,435
Taxes accrued:
Federal and state income - - - 2,970 11,533 14,503
Other - 36 21,261 13,552 22,823 57,672
Interest accrued:
Affiliate - - - - - -
Other 398 - 10,641 8,632 13,855 33,526
Other 643 5,873 18,994 22,445 20,954 68,909
Deferred credits and other liabilities:
Unamortized investment credit - - 26,883 30,308 55,524 112,715
Deferred income taxes - - 192,466 133,027 424,000 749,493
Regulatory liabilities - - 19,179 18,490 40,834 78,503
Other 271 555 7,834 8,392 14,250 31,302
Total capitalization and liabilities 2,046,137 9,758 1,407,453 1,519,763 2,544,763 7,527,874
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-2a
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's)
APS Inc.
Combined Eliminations, Consolidated
CAPITALIZATION AND LIABILITIES Subtotal APC AGC Totals etc. Totals
Capitalization:
<S> <C> <C> <C> <C> <C> <C>
Common stock of Allegheny Power System, Inc. 147,079 - - 147,079 - 147,079
Common stock of affiliate consolidated - 1 1 2 (2)(1) -
Common stock of subsidiaries consolidated 1,168,294 - - 1,168,294 (1,168,294)(1) -
Other paid-in capital 992,458 555 209,999 1,203,012 (271,949)(1) 931,063
Retained earnings 1,651,500 (12,156) 18,512 1,657,856 (780,183)(1) 877,673
Preferred stock of subsidiaries:
Not subject to mandatory redemption 250,086 - - 250,086 - 250,086
Subject to mandatory redemption 26,400 - - 26,400 - 26,400
Long-term debt (see pages A-6, A-7, A-8) 1,760,408 - 247,696 2,008,104 - 2,008,104
Notes and advances payable to affiliates - 14,173 29,500 43,673 (43,673)(2) -
Current liabilities:
Short-term debt 130,636 1,830 - 132,466 (1,830)(2) 130,636
Long-term debt and preferred stock
due within one year 17,200 - 10,000 27,200 - 27,200
Accounts payable to affiliates 48,755 1 5 48,761 (48,761)(3) -
Accounts payable - others 188,435 - 6 188,441 (751)(3) 187,690
Taxes accrued:
Federal and state income 14,503 23 163 14,689 - 14,689
Other 57,672 - 86 57,758 - 57,758
Interest accrued:
Affiliate - 3 - 3 (3)(2) -
Other 33,526 - 5,100 38,626 - 38,626
Other 68,909 1 6,531 75,441 (1,974)(10) 73,467
Deferred credits and other liabilities:
Unamortized investment credit 112,715 - 53,613 166,328 - 166,328
Deferred income taxes 749,493 - 125,848 875,341 (1,646)(10) 873,695
Regulatory liabilities 78,503 - 28,869 107,372 - 107,372
Other 31,302 - - 31,302 - 31,302
Total capitalization and liabilities 7,527,874 4,431 735,929 8,268,234 (2,319,066) 5,949,168
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-3
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1993
(000's)
APS APSC MP PE WPP Subtotal
Electric operating revenues: (see page B-3)
<S> <C> <C> <C> <C> <C> <C>
Residential - - 185,141 274,359 358,900 818,400
Commercial - - 110,762 124,667 194,773 430,202
Industrial - - 187,669 175,902 309,847 673,418
Nonaffiliated utilities - - 86,032 108,132 152,541 346,705
Affiliated companies - 87,899 61,677 3,041 40,169 192,786
Other - - 10,563 26,484 28,747 65,794
Total operating revenues - 87,899 641,844 712,585 1,084,977 2,527,305
Operating expenses:
Operation:
Fuel - - 144,408 143,587 256,664 544,659
Purchased power and exchanges, net - - 155,601 205,073 235,772 596,446
Deferred power costs, net - - (2,488) (9,953) 979 (11,462)
Other 3,302 83,733 66,506 74,438 131,854 359,833
Maintenance - 994 67,770 64,376 96,706 229,846
Depreciation - 152 56,056 56,449 80,872 193,529
Taxes other than income taxes 16 3,287 34,076 46,813 89,249 173,441
Federal and state income taxes - (359) 33,612 30,086 51,529 114,868
Total operating expenses 3,318 87,807 555,541 610,869 943,625 2,201,160
Operating income (3,318) 92 86,303 101,716 141,352 326,145
Other income and deductions:
Allowance for other than borrowed funds used
during construction - - 3,093 4,329 5,077 12,499
Other, net 219,855 4 7,203 8,419 12,728 248,209
Total other income and deductions 219,855 4 10,296 12,748 17,805 260,708
Income before interest charges and
preferred dividends 216,537 96 96,599 114,464 159,157 586,853
Interest charges and preferred dividends:
Interest on long-term debt - - 35,555 42,695 58,857 137,107
Other interest 781 96 2,033 1,107 1,728 5,745
Allowance for borrowed funds used during construction - - (2,688) (2,806) (3,489) (8,983)
Dividends on preferred stock of subsidiaries - - - - - -
Total interest charges and preferred dividends 781 96 34,900 40,996 57,096 133,869
Net income 215,756 - 61,699 73,468 102,061 452,984
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-3a
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1993
(000's) APS Inc.
Combined Eliminations, Consolidated
Subtotal APC AGC Totals etc. Totals
Electric operating revenues:
<S> <C> <C> <C> <C> <C> <C>
Residential 818,400 - - 818,400 - 818,400
Commercial 430,202 - - 430,202 - 430,202
Industrial 673,418 - - 673,418 - 673,418
Nonaffiliated utilities 346,705 - - 346,705 - 346,705
Affiliated companies 192,786 - 95,516 288,302 (200,404)(4) -
(87,898)(5)
Other 65,794 - (4,910) 60,884 1,917 (4) 62,801
Total operating revenues 2,527,305 - 90,606 2,617,911 (286,385) 2,331,526
Operating expenses:
Operation:
Fuel 544,659 - - 544,659 - 544,659
Purchased power and exchanges, net 596,446 - - 596,446 (178,997)(4) 417,449
Deferred power costs, net (11,462) - - (11,462) - (11,462)
Other 359,833 - 4,298 364,131 (19,490)(4) 257,732
(86,909)(5)
Maintenance 229,846 - 2,311 232,157 (994)(5) 231,163
Depreciation 193,529 - 16,899 210,428 - 210,428
Taxes other than income taxes 173,441 - 5,347 178,788 - 178,788
Federal and state income taxes 114,868 13,262 128,130 - 128,130
Total operating expenses 2,201,160 - 42,117 2,243,277 (286,390) 1,956,887
Operating income 326,145 - 48,489 374,634 5 374,639
Other income and deductions:
Allowance for other than borrowed funds used
during construction 12,499 - - 12,499 - 12,499
(20,498)(1)
(102)(5)
(59)(6)
Other, net 248,209 (248) 328 248,289 (1,130)(7) (6)
(226,506)(8)
Total other income and deductions 260,708 (248) 328 260,788 (248,295) 12,493
Income before interest charges and
preferred dividends 586,853 (248) 48,817 635,422 (248,290) 387,132
Interest charges and preferred dividends:
Interest on long-term debt 137,107 - 21,186 158,293 (844)(7) 157,449
Other interest 5,745 59 450 6,254 (59)(6) 5,812
(286)(7)
(97)(5)
Allowance for borrowed funds used (8,983) - - (8,983) - (8,983)
during construction
Dividends on preferred stock of subsidiaries - - - - 17,098 (9) 17,098
Total interest charges and preferred dividend 133,869 59 21,636 155,564 15,812 171,376
Net income 452,984 (307) 27,181 479,858 (264,102) 215,756
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-4
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1993
(000's)
APS MP PE WPP Subtotal
RETAINED EARNINGS (see page B-4)
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 849,398 178,083 167,411 400,515 1,595,407
Add:
Net Income 215,756 61,699 73,468 102,061 452,984
Total 1,065,154 239,782 240,879 502,576 2,048,391
Deduct:
Dividends on common stock of Allegheny Power
System, Inc. 187,475 - - - 187,475
Dividends on capital stock of subsidiary companies: -
Preferred - 4,458 4,434 8,206 17,098
Common - 49,838 60,386 82,082 192,306
Charges on redemption of PE preferred stock 6 - 6 - 12
Total deductions 187,481 54,296 64,826 90,288 396,891
Balance at December 31, 1993 877,673 185,486 176,053 412,288 1,651,500
OTHER PAID-IN CAPITAL
Balance at January 1, 1993 836,038 2,994 2,714 55,831 897,577
Add:
Excess of amounts received from sales of
common stock over the par value thereof 95,459 - - - 95,459
Expenses related to stock split (290) - - - (290)
Expenses related to WPP's
preferred stock transactions (144) - - (144) (288)
Balance at December 31, 1993 931,063 2,994 2,714 55,687 992,458
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-4a
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1993
(000's) APS Inc.
Combined Eliminations,Consolidated
Subtotal APC AGC Totals etc. Totals
RETAINED EARNINGS
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993 1,595,407 (11,849) 25,531 1,609,089 (759,691) 849,398
Add:
Net Income 452,984 (307) 27,181 479,858 (264,102) 215,756
Total 2,048,391 (12,156) 52,712 2,088,947 (1,023,793) 1,065,154
Deduct:
Dividends on common stock of Allegheny Power
System, Inc. 187,475 - - 187,475 - 187,475
Dividends on capital stock of subsidiary companies:
Preferred 17,098 - - 17,098 (17,098)(9) -
Common 192,306 - 34,200 226,506 (226,506)(8) -
Charges on redemption of PE preferred stock 12 - - 12 (6)(1) 6
Total deductions 396,891 - 34,200 431,091 (243,610) 187,481
Balance at December 31, 1993 1,651,500 (12,156) 18,512 1,657,856 (780,183) 877,673
OTHER PAID-IN CAPITAL
Balance at January 1, 1993 897,577 555 209,999 1,108,131 (272,093) 836,038
Add:
Excess of amounts received from sales of
common stock over the par value thereof 95,459 - - 95,459 - 95,459
Expenses related to stock split (290) - - (290) - (290)
Expenses related to WPP's
preferred stock transactions (288) - - (288) 144 (1) (144)
Balance at December 31, 1993 992,458 555 209,999 1,203,012 (271,949) 931,063
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-5
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1993
(000's)
APS APSC MP PE WPP Subtotal
(see page B-5)
Cash Flows from Operations:
<S> <C> <C> <C> <C> <C> <C>
Net Income 215,756 * 61,699 73,468 102,061 452,984
Depreciation - - 56,056 56,449 80,872 193,377
Deferred investment credit and income taxes, net - - 6,352 (3,119) (10,115) (6,882)
Deferred power costs, net - - (2,488) (9,953) 979 (11,462)
Unconsolidated subsidiaries' dividends
in excess of earnings - - 1,971 2,042 3,311 7,324
Allowance for other than borrowed funds used
during construction (AOFDC) - - (3,093) (4,329) (5,077) (12,499)
Changes in other current assets and liabilities:
Accounts receivable, net (339) 1,374 (8,412) (7,640) (5,947) (20,964)
Materials and supplies - - 12,917 13,971 26,889 53,777
Accounts payable 14,285 (8,734) 129 2,762 3,196 11,638
Taxes accrued - 7 (5,674) 240 9,198 3,771
Interest accrued 395 (20) 290 1,664 (5,146) (2,817)
Other, net (23,721) 7,152 3,294 14,005 8,878 9,608
Total Cash Flows from Operations 206,376 (221) 123,041 139,560 209,099 677,855
Cash Flows from Investing:
Construction expenditures - (33) (140,748) (179,433) (251,017) (571,231)
AOFDC - - 3,093 4,329 5,077 12,499
Investments in subsidiaries (175,171) - - - - (175,171)
Total Cash Flows from Investing (175,171) (33) (137,655) (175,104) (245,940) (733,903)
Cash Flows from Financing:
Sale of common stock 99,875 - - 50,000 100,000 249,875
Retirement of preferred stock - - - (1,611) - (1,611)
Issuance of long-term debt - - 82,331 142,171 268,766 493,268
Retirement of long-term debt - - (68,471) (123,888) (251,414) (443,773)
Short-term debt, net 56,331 - 63,100 - - 119,431
Notes receivable from affiliates (4) - - 33,400 (4,000) 29,396
Notes payable to affiliates - - (8,030) - - (8,030)
Dividends on capital stock:
Preferred stock - - (4,458) (4,434) (8,206) (17,098)
Common stock (187,475) - (49,838) (60,386) (82,082) (379,781)
Total Cash Flows from Financing (31,273) - 14,634 35,252 23,064 41,677
Net Change in Cash and Temporary
Cash Investments** (68) (254) 20 (292) (13,777) (14,371)
Cash and Temporary Cash Investments at January 1 137 392 115 1,781 14,342 16,767
Cash and Temporary Cash Investments at December 31 69 138 135 1,489 565 2,396
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-5 (continued)
Supplemental cash flow information:
Cash paid during the year for:
<S> <C> <C> <C> <C> <C> <C>
Interest (net of amount capitalized) 781 (2) 33,941 37,427 61,329 133,476
Income taxes 16 436 30,982 30,378 55,111 116,923
</TABLE>
*Pursuant to service contracts, Allegheny Power Service Corporation's
expenses ($87,903) have been apportioned to System companies.
**Temporary cash investments with original maturities of three months or
less, generally in the form of commercial paper, certificates of
deposit, and repurchase agreements, are considered to be the equivalent of
cash.
<PAGE>
<TABLE>
<CAPTION>
A-5a
ALLEGHENY POWER SYSTEM, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1993
(000's) APS Inc.
Combined Eliminations, Consolidated
Subtotal APC AGC Totals etc. Totals
Cash Flows from Operations:
<S> <C> <C> <C> <C> <C> <C>
Net Income 452,984 (307) 27,181 479,858 (264,102) 215,756
Depreciation 193,377 - 16,899 210,276 152 (5) 210,428
Deferred investment credit and income taxes, net (6,882) - 5,321 (1,561) (827)(5) (2,388)
Deferred power costs, net (11,462) - - (11,462) - (11,462)
Unconsolidated subsidiaries' dividends
in excess of earnings 7,324 - - 7,324 (7,324) -
Allowance for other than borrowed funds used
during construction (AOFDC) (12,499) - - (12,499) - (12,499)
Changes in other current assets and liabilities:
Accounts receivable, net (20,964) - (6,118) (27,082) 11,689 (15,393)
Materials and supplies 53,777 - (163) 53,614 - 53,614
Accounts payable 11,638 1 6 11,645 (11,950) (305)
Taxes accrued 3,771 1 (153) 3,619 - 3,619
Interest accrued (2,817) - 633 (2,184) 20 (2,164)
Other, net 9,608 302 4,851 14,761 2,651 18,087
(152)(5)
827 (5)
Total Cash Flows from Operations 677,855 (3) 48,457 726,309 (269,016) 457,293
Cash Flows from Investing:
Construction expenditures (571,231) - (2,739) (573,970) - (573,970)
AOFDC 12,499 - - 12,499 - 12,499
Investments in subsidiaries (175,171) - - (175,171) 175,171 -
Total Cash Flows from Investing (733,903) - (2,739) (736,642) 175,171 (561,471)
Cash Flows from Financing:
Sale of common stock 249,875 - - 249,875 (150,000) 99,875
Retirement of preferred stock (1,611) - - (1,611) - (1,611)
Issuance of long-term debt 493,268 - 198,075 691,343 - 691,343
Retirement of long-term debt (443,773) - (209,598) (653,371) 21,371 (632,000)
Short-term debt, net 119,431 4 - 119,435 (4) 119,431
Notes receivable from affiliates 29,396 - - 29,396 (29,396) -
Notes payable to affiliates (8,030) - - (8,030) 8,030 -
Dividends on capital stock:
Preferred stock (17,098) - - (17,098) 17,098 -
Common stock (379,781) - (34,200) (413,981) 226,506 (187,475)
Total Cash Flows from Financing 41,677 4 (45,723) (4,042) 93,605 89,563
Net Change in Cash and Temporary
Cash Investments** (14,371) 1 (5) (14,375) (240) (14,615)
Cash and Temporary Cash Investments at January 1 16,767 5 20 16,792 240 17,032
Cash and Temporary Cash Investments at December 31 2,396 6 15 2,417 - 2,417
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
A-5(a) (continued)
Supplemental cash flow information:
Cash paid during the year for:
<S> <C> <C> <C> <C> <C> <C>
Interest (net of amount capitalized) 133,476 - 21,109 154,585 (1,130) 153,455
Income taxes 116,923 (164) 8,220 124,979 - 124,979
</TABLE>
*Pursuant to service contracts, Allegheny Power Service Corporation's
expenses ($87,903) have been apportioned to System companies.
**Temporary cash investments with original maturities of three months or
less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreeements, are considered to be the equivalent of cash.
<PAGE>
ALLEGHENY POWER SYSTEM, INC. A-6
Long-Term Debt of Subsidiaries at December 31, 1993
(000's)
Date of Principal
First mortgage bonds: Issue Amount
Monongahela Power Company:
5-1/2% Series Due 1996 1966 18,000
6-1/2% Series Due 1997 1967 15,000
5-5/8% Series Due 2000 1993 65,000
7-3/8% Series Due 2002 1992 25,000
7-1/4% Series Due 2007 1992 25,000
8-7/8% Series Due 2019 1989 70,000
8-5/8% Series Due 2021 1991 50,000
8-1/2% Series Due 2022 1992 65,000
8-3/8% Series Due 2022 1992 40,000
Total 373,000
The Potomac Edison Company:
4-5/8% Series Due 1994 1964 16,000
5-7/8% Series Due 1996 1966 18,000
5-7/8% Series Due 2000 1993 75,000
8% Series Due 2006 1991 50,000
9-1/4% Series Due 2019 1989 65,000
9-5/8% Series Due 2020 1990 80,000
8-7/8% Series Due 2021 1991 50,000
8% Series Due 2022 1992 55,000
7-3/4% Series Due 2023 1993 45,000
Total 454,000
Less current maturities 16,000
Total 438,000
West Penn Power Company:
4-7/8% Series U, Due 1995 1965 27,000
5-1/2% Series JJ, Due 1998 1993 102,000
6-3/8% Series KK, Due 2003 1993 80,000
7-7/8% Series GG, Due 2004 1991 70,000
7-3/8% Series HH, Due 2007 1992 45,000
9% Series EE, Due 2019 1989 30,000
8-7/8% Series FF, Due 2021 1991 100,000
7-7/8% Series II, Due 2022 1992 135,000
Total 589,000
Total first mortgage bonds 1,416,000
Less current maturities 16,000
1,400,000
<PAGE>
<TABLE>
<CAPTION>
ALLEGHENY POWER SYSTEM, INC. A-7
Long-Term Debt of Subsidiaries at December 31, 1993 (Cont'd)
(000's) Liability
Date of Date of Interest Due Within
Issue Maturity Rate One Year Long-Term
Debentures:
<S> <C> <C> <C> <C>
Allegheny Generating Company 9- 1-93 9- 1- 23 6.875% 100,000
9- 1-93 9- 1- 03 5.625% 50,000
150,000
Secured notes:
Pleasants pollution control facilities:
Monongahela Power Company 11- 1-77 11- 1-98 to 11- 1-07 6.375% 14,500
11- 1-77 11- 1-12 6.375% 3,000
2- 1-79 2- 1-01 to 2- 1-09 7.75% 25,000
42,500
The Potomac Edison Company 11- 1-77 11- 1-98 to 11- 1-07 6.30 % 30,000
8- 1-78 8- 1-02 to 8- 1-08 7.30 % 21,000
51,000
West Penn Power Company 11- 1-77 11- 1-98 to 11- 1-07 6.125% 45,000
8- 1-78 8- 1-99 to 8- 1-03 6.95% 11,500
8- 1-78 8- 1-04 to 8- 1-08 7.00% 20,000
76,500
Mitchell pollution control facilities:
West Penn Power Company 3- 1-93 3- 1-03 4.95% 61,500
4- 1-85 4- 1-14 9.375% 15,400
76,900
Fort Martin pollution control facilities:
Monongahela Power Company 4- 1-93 4- 1-13 5.950% 7,050
The Potomac Edison Company 4- 1-93 4- 1-13 5.950% 8,600
West Penn Power Company 4- 1-93 4- 1-13 5.950% 7,750
23,400
Harrison pollution control facilities:
Monongahela Power Company 4-15-92 4-15-22 6.875% 5,000
5-1-93 5- 1-23 6.250% 10,675
15,675
Less funds on deposit with trustee 971
14,704
The Potomac Edison Company 4-15-92 4-15-22 6.875% 6,550
5-1-93 5- 1-23 6.250% 13,990
20,540
1,274
19,266
West Penn Power Company 4-15-92 4-15-22 6.875% 8,450
5-1-93 5- 1-23 6.300% 18,040
26,490
1,645
24,845
Secured notes 333,005
Less funds on deposit with trustee 3,890
Total secured notes 329,115
</TABLE>
<TABLE>
<CAPTION>
ALLEGHENY POWER SYSTEM, INC. A-8
Long-Term Debt of Subsidiaries at December 31, 1993 (Cont'd)
(000's) Liability
Date of Date of Interest Due Within
Issue Maturity Rate One Year Long-Term
Unsecured notes:
Hatfield's Ferry pollution control
facilities:
<S> <C> <C> <C> <C>
Monongahela Power Company 2- 1-77 2- 1-96 to 2- 1-02 6.30 % 3,560
2- 1-77 2- 1-03 to 2- 1-07 6.40 % 1,000
2- 1-77 2- 1-12 6.40 % 3,000
7,560
The Potomac Edison Company 2- 1-77 2- 1-96 to 2- 1-02 6.30 % 5,500
West Penn Power Company 2- 1-77 2- 1-00 to 2- 1-07 6.10 % 14,435
Total unsecured notes 27,495
Instalment purchase obligations:
Monongahela Power Company -
Rivesville pollution control facilities 4- 1-88 4- 1-98 6.875% 3,055
Willow Island pollution control facilities 4- 1-88 4- 1-98 6.875% 10,145
Albright pollution control facilities 4- 1-88 4- 1-98 6.875% 5,900
19,100
Medium-term notes:
Allegheny Generating Company Various 1994-1998 5.75-7.93% 10,000 77,975
Commercial paper:
Allegheny Generating Company Various Various 3.53* 21,362
Unamortized debt discount and premium, net:
Monongahela Power Company (3,785)
The Potomac Edison Company (4,456)
West Penn Power Company (7,061)
Allegheny Generating Company (1,641)
Total unamortized debt discount and
premium, net (16,943)
*Weighted average interest rate at December 31, 1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
B-1
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's)
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water
ASSETS Company Company Power Company
Property, plant, and equipment:
<S> <C> <C> <C> <C>
At original cost 2 801 459 2 342 10
Accumulated depreciation (962 623) - -
Investments and other assets:
Securities of subsidiaries consolidated 2 445 1 -
Equity in undistributed earnings of subsidiaries 167 - -
Indebtedness of subsidiary consolidated-not current - 12 -
Investment in Allegheny Pittsburgh Coal Company:
Common stock, at equity (5 800) - -
Advances 7 061 - -
Investment in Allegheny Generating Company
common stock, at equity 102 830 - -
Other assets 276 - -
Current assets:
Cash and temporary cash investments 316 249 -
Accounts receivable:
Electric service 95 696 - -
Allowance for uncollectible accounts (1 126) - -
Affiliated and other 22 372 - -
Notes receivable from affiliates 24 900 - -
Materials and supplies - at average cost:
Operating and construction 36 030 - -
Fuel 32 892 - -
Deferred power costs 2 272 - -
Prepaid taxes 10 827 - -
Other 4 855 - -
Deferred charges:
Regulatory assets 331 755 - -
Unamortized loss on reacquired debt 11 645 - -
Other 26 524 1 -
Total assets 2 544 773 2 605 10
</TABLE>
<TABLE>
<CAPTION>
B-1
(continued)
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's)
Consolidated
Totals
Combined Eliminations (Carried to
ASSETS Totals etc. page A-1)
Property, plant, and equipment:
<S> <C> <C> <C>
At original cost 2 803 811 - 2 803 811
Accumulated depreciation (962 623) - (962 623)
Investments and other assets:
Securities of subsidiaries consolidated 2 446 (1) (2 446) -
Equity in undistributed earnings of subsidiaries 167 (2) (167) -
Indebtedness of subsidiary consolidated-not current 12 (3) (12) -
Investment in Allegheny Pittsburgh Coal Company:
Common stock, at equity (5 800) - (5 800)
Advances 7 061 - 7 061
Investment in Allegheny Generating Company
common stock, at equity 102 830 - 102 830
Other assets 276 - 276
Current assets:
Cash and temporary cash investments 565 - 565
Accounts receivable:
Electric service 95 696 - 95 696
Allowance for uncollectible accounts (1 126) - (1 126)
Affiliated and other 22 372 - 22 372
Notes receivable from affiliates 24 900 - 24 900
Materials and supplies - at average cost:
Operating and construction 36 030 - 36 030
Fuel 32 892 - 32 892
Deferred power costs 2 272 - 2 272
Prepaid taxes 10 827 - 10 827
Other 4 855 - 4 855
Deferred charges:
Regulatory assets 331 755 331 755
Unamortized loss on reacquired debt 11 645 - 11 645
Other 26 525 - 26 525
Total assets 2 547 388 (2 625) 2 544 763
</TABLE>
<TABLE>
<CAPTION>
B-2
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's)
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water
CAPITALIZATION AND LIABILITIES Company Company Power Company
Capitalization:
<S> <C> <C> <C>
Common stock of West Penn Power Company 425 994 - -
Common stock of subsidiaries consolidated - 3 000 1
Other paid-in capital 55 687 (555) -
Retained earnings 412 288 170 (3)
Preferred stock:
Not subject to mandatory redemption 149 708 - -
Long-term debt 782 369 - -
Indebtedness to affiliated consolidated - not current - - 12
Current liabilities:
Accounts payable to affiliates 9 451 - -
Accounts payable - others 105 493 - -
Taxes accrued:
Federal and state income 11 533 - -
Other 22 833 (10) -
Interest accrued 13 855 - -
Other 20 954 - -
Deferred credits and other liabilities:
Unamortized investment credit 55 524 - -
Deferred income taxes 424 000 - -
Regulatory liabilities 40 834 - -
Other 14 250 - -
Total capitalization and liabilities 2 544 773 2 605 10
</TABLE>
<TABLE>
<CAPTION>
B-2
(continued)
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET - DECEMBER 31, 1993
(000's)
Consolidated
Totals
Combined Eliminations (Carried to
CAPITALIZATION AND LIABILITIES Totals etc. page A-2)
Capitalization:
<S> c> <C> <C>
Common stock of West Penn Power Company 425 994 - 425 994
Common stock of subsidiaries consolidated 3 001 (1) (3 001) -
Other paid-in capital 55 132 (1) 555 55 687
Retained earnings 412 455 (2) (167) 412 288
Preferred stock:
Not subject to mandatory redemption 149 708 - 149 708
Long-term debt 782 369 - 782 369
Indebtedness to affiliated consolidated - not current 12 (3) (12) -
Current liabilities:
Accounts payable to affiliates 9 451 - 9 451
Accounts payable - others 105 493 - 105 493
Taxes accrued:
Federal and state income 11 533 - 11 533
Other 22 823 - 22 823
Interest accrued 13 855 - 13 855
Other 20 954 - 20 954
Deferred credits and other liabilities:
Unamortized investment credit 55 524 - 55 524
Deferred income taxes 424 000 - 424 000
Regulatory liabilities 40 834 - 40 834
Other 14 250 - 14 250
Total capitalization and liabilities 2 547 388 (2 625) 2 544 763
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
B-3
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1993
(000's)
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water
Company Company Power Company
Electric operating revenues:
<S> <C> <C> <C>
Residential 358 900 - -
Commercial 194 773 - -
Industrial 309 847 - -
Nonaffiliated utilities 152 541 - -
Affiliated companies 40 169 - -
Other 28 747 - -
Total operating revenues 1 084 977 - -
Operating expenses:
Operation:
Fuel 256 664 - -
Purchased power and exchanges, net 235 772 - -
Deferred power costs, net 979 - -
Other 131 854 - -
Maintenance 96 706 - -
Depreciation 80 872 - -
Taxes other than income taxes 89 249 - -
Federal and state income taxes 51 529 - -
Total operating expenses 943 625 - -
Operating income 141 352 - -
Other income and deductions:
Allowance for other than borrowed funds used
during construction 5 077 - -
Other, net 12 728 (71) (1)
Total other income and deductions 17 805 (71) (1)
Income before interest charges 159 157 (71) (1)
Interest charges:
Interest on long-term debt 58 857 - -
Other interest 1 728 - -
Allowance for borrowed funds used during
construction (3 489) - -
Total interest charges 57 096 - -
NET INCOME 102 061 (71) (1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
B-3
(continued)
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 1993
(000's)
Consolidated
Totals
Combined Eliminations (Carried to
Totals etc. page A-3)
Electric operating revenues:
<S> <C> <C> <C>
Residential 358 900 - 358 900
Commercial 194 773 - 194 773
Industrial 309 847 - 309 847
Nonaffiliated utilities 152 541 - 152 541
Affiliated companies 40 169 - 40 169
Other 28 747 - 28 747
Total operating revenues 1 084 977 - 1 084 977
Operating expenses:
Operation:
Fuel 256 664 - 256 664
Purchased power and exchanges, net 235 772 - 235 772
Deferred power costs, net 979 - 979
Other 131 854 - 131 854
Maintenance 96 706 - 96 706
Depreciation 80 872 - 80 872
Taxes other than income taxes 89 249 - 89 249
Federal and state income taxes 51 529 - 51 529
Total operating expenses 943 625 - 943 625
Operating income 141 352 - 141 352
Other income and deductions:
Allowance for other than borrowed funds used
during construction 5 077 - 5 077
Other, net 12 656 (2) 72 12 728
Total other income and deductions 17 733 72 17 805
Income before interest charges 159 085 72 159 157
Interest charges:
Interest on long-term debt 58 857 - 58 857
Other interest 1 728 - 1 728
Allowance for borrowed funds used during
construction (3 489) - (3 489)
Total interest charges 57 096 - 57 096
NET INCOME 101 989 72 102 061
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1993
(000's)
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water
RETAINED EARNINGS Company Company Power Company
<S> <C> <C> <C>
Balance at January 1, 1993 400 515 241 (2)
Add:
Net Income 102 061 (71) (1)
Total 502 576 170 (3)
Deduct:
Dividends on capital stock of West Penn Power Co.:
Preferred stock
4-1/2% 1 337 - -
4.20% Series B 210 - -
4.10% Series C 205 - -
$7.00 Series D 700 - -
$7.12 Series E 712 - -
$8.08 Series G 808 - -
$7.60 Series H 760 - -
$7.64 Series I 764 - -
$8.20 Series J 1 640 - -
Auction 1 070 - -
Common stock 82 082 - -
Total deductions 90 288 - -
Balance at December 31, 1993 412 288 170 (3)
OTHER PAID-IN CAPITAL
Balance at December 31, 1993 55 687 (555) -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
B-4
(continued)
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
FOR YEAR ENDED DECEMBER 31, 1993
(000's)
Consolidated
Totals
Combined Eliminations (Carried to
RETAINED EARNINGS Totals etc. page A-4)
<S> <C> <C> <C>
Balance at January 1, 1993 400 754 (2) (239) 400 515
Add:
Net Income 101 989 (2) 72 102 061
Total 502 743 (167) 502 576
Deduct:
Dividends on capital stock of West Penn Power Co.:
Preferred stock
4-1/2% 1 337 - 1 337
4.20% Series B 210 - 210
4.10% Series C 205 - 205
$7.00 Series D 700 - 700
$7.12 Series E 712 - 712
$8.08 Series G 808 - 808
$7.60 Series H 760 - 760
$7.64 Series I 764 - 764
$8.20 Series J 1 640 - 1 640
Auction 1 070 - 1 070
Common stock 82 082 - 82 082
Total deductions 90 288 - 90 288
Balance at December 31, 1993 412 455 (167) 412 288
OTHER PAID-IN CAPITAL
Balance at December 31, 1993 55 132 (1) 555 55 687
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1993
(000's)
West Virginia Power
and Transmission
Company and Subsidiary
West Virginia West Penn
West Penn Power and West Virginia
Power Transmission Water
Company Company Power Company
Cash Flows from Operations:
<S> <C> <C> <C>
Net Income 102 061 (71) (1)
Depreciation 80 872 - -
Deferred investment credit and income taxes, net (10 115) - -
Deferred power costs, net 979 - -
Allowance for other than borrowed funds used
during construction (5 077) - -
Unconsolidated subsidiaries' dividends in excess
of earnings 3 311 - -
Changes in other current assets and liabilities:
Accounts receivable, net (5 947) - -
Materials and supplies 26 889 - -
Accounts payable 3 196 - -
Taxes accrued 9 232 (34) -
Interest accrued (5 146) - -
Other, net 8 967 (18) 1
Total Cash Flows From Operations 209 222 (123) -
Cash Flows from Investing:
Construction expenditures (251 017) - -
AOFDC 5 077 - -
Total Cash Flows from Investing (245 940) - -
Cash Flows from Financing:
Sale of common stock 100 000 - -
Issuance of long-term debt 268 766 - -
Retirement of long-term debt (251 414) - -
Notes receivable from affiliates (4 000) - -
Dividends on capital stock:
Preferred stock (8 206) - -
Common stock (82 082) - -
Total Cash Flows From Financing 23 064 - -
Net Change in Cash and Temporary Cash Investments* (13 654) (123) -
Cash and Temporary Cash Investments at January 1 13 970 372 -
Cash and Temporary Cash Investments at December 31 316 249 -
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 61 329 - -
Income taxes 55 022 89 -
</TABLE>
*Temporary cash investments with original maturities of three months or less,
generally in the form of commercial paper, certificates of deposit, and
repurchase agreements, are considered to be the equivalent of cash.
<PAGE>
<TABLE>
<CAPTION>
B-5
(continued)
WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 1993
(000's)
Consolidated
Totals
Combined Eliminations (Carried to
Totals etc. page A-5)
Cash Flows from Operations:
<S> <C> <C> <C>
Net Income 101 989 (2) 72 102 061
Depreciation 80 872 - 80 872
Deferred investment credit and income taxes, net (10 115) - (10 115)
Deferred power costs, net 979 - 979
Allowance for other than borrowed funds used
during construction (5 077) - (5 077)
Unconsolidated subsidiaries' dividends in excess
of earnings 3 311 - 3 311
Changes in other current assets and liabilities:
Accounts receivable, net (5 947) - (5 947)
Materials and supplies 26 889 - 26 889
Accounts payable 3 196 - 3 196
Taxes accrued 9 198 - 9 198
Interest accrued (5 146) - (5 146)
Other, net 8 950 (72) 8 878
Total Cash Flows From Operations 209 099 - 209 099
Cash Flows from Investing:
Construction expenditures (251 017) - (251 017)
AOFDC 5 077 - 5 077
Total Cash Flows from Investing (245 940) - (245 940)
Cash Flows from Financing:
Sale of common stock 100 000 - 100 000
Issuance of long-term debt 268 766 - 268 766
Retirement of long-term debt (251 414) - (251 414)
Notes receivable from affiliates (4 000) - (4 000)
Dividends on capital stock:
Preferred stock (8 206) - (8 206)
Common stock (82 082) - (82 082)
Total Cash Flows From Financing 23 064 - 23 064
Net Change in Cash and Temporary Cash Investments* (13 777) - (13 777)
Cash and Temporary Cash Investments at January 1 14 342 - 14 342
Cash and Temporary Cash Investments at December 31 565 - 565
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) 61 329 - 61 329
Income taxes 55 111 - 55 111
</TABLE>
*Temporary cash investments with original maturities of three months or less,
generally in the form of commercial paper, certificate of deposit, and
repurchase agreements, are considered to be the equivalent of cash.
<PAGE>
C-1
INDIANA-KENTUCKY ELECTRIC CORPORATION
BALANCE SHEET--DECEMBER 31, 1993
UNAUDITED
(000's)
Assets
Electric plant - at original cost, including $42,074,000
construction work in progress 346 228
Less - Accumulated provisions for depreciation and
amortization 302 696
43 532
Current assets:
Cash and cash equivalents 782
Accounts receivable 4 056
Coal in storage, at average cost 7 405
Materials and supplies, at average cost 8 235
Interest receivable 378
Prepaid expenses and other 366
21 222
Deferred charges 3
TOTAL ASSETS 64 757
Capitalization:
Common stock, without par value, stated at $200
per share -
Authorized - 100,000 shares
Outstanding - 17,000 shares 3 400
Current liabilities:
Accounts payable 9 767
Accrued taxes 2 260
Accrued interest and other 86
12 113
Deferred credits:
Customer advances for construction 4 022
Subsidiary advances 42 627
Net antitrust settlement 2 595
49 244
TOTAL CAPITALIZATION AND LIABILITIES 64 757
<PAGE>
C-2
INDIANA-KENTUCKY ELECTRIC CORPORATION
STATEMENT OF INCOME
FOR YEAR ENDED DECEMBER 31, 1993
UNAUDITED
(000's)
Operating revenues:
Sale of electric energy 134 710
Other operating revenues 67
Total operating revenues 134 777
Operating expenses:
Fuel consumed in operation 96 509
Other operation 15 285
Maintenance 19 883
Taxes, other than federal income taxes 3 508
Federal income taxes (245)
Total operating expenses 134 940
Operating loss (163)
Interest income and other 167
Income before interest charges 4
Interest charges 4
Net income -
<PAGE>
C-3
INDIANA-KENTUCKY ELECTRIC CORPORATION
STATEMENT OF CASH FLOWS
FOR YEAR ENDED DECEMBER 31, 1993
UNAUDITED
(000's)
Cash From Operations:
Net Income -
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Changes in assets and liabilities:
Accounts receivable (10 653)
Interest receivable 90
Coal in storage 7 283
Materials and supplies (118)
Prepaid expenses and other 9
Accounts payable 1 771
Accrued taxes 589
Accrued interest and other (83)
Other (540)
Net cash used by operating activities (1 652)
Investing Activities:
Reimbursement for plant replacements and
additional facilities 4 063
Net electric plant additions (32 350)
Advances from parent 42 628
Net cash provided by investing activities 14 341
Financing Activities:
Coal purchase obligation (12 038)
Net cash used by financing activities (12 038)
Net increase in cash and cash equivalents 651
Cash and cash equivalents, beginning of year 131
Cash and cash equivalents, end of year 782
Supplemental Disclosures
Interest paid (net of amounts capitalized) 375
Federal income taxes paid -
For purposes of this statement, the company considers temporary cash investments
to be cash equivalents since they are readily convertible into cash and have
maturities of less than three months.
<PAGE>
OHIO VALLEY ELECTRIC CORPORATION C-4
BALANCE SHEET--DECEMBER 31, 1993
UNAUDITED
(000's)
Assets
Electric plant - at original cost, including $3,794,000
construction work in progress 267 090
Less - Accumulated provisions for depreciation and
amortization 259 605
7 485
Investments and other:
Investment in subsidiary company 3 400
Advances to subsidiary 42 627
46 027
Current assets:
Cash and cash equivalents 6 898
Special funds held by trustees 47 603
Accounts receivable 10 963
Coal in storage, at average cost 9 777
Materials and supplies, at average cost 11 166
Property taxes applicable to subsequent years 4 300
Refundable federal income taxes 1 229
Prepaid expenses and other 300
92 236
Deferred charges:
Debt expense, being amortized 492
Future Federal income tax benefits 711
Unrecognized pension expense 10 103
Other 2 261
13 567
TOTAL ASSETS 159 315
Capitalization:
Common stock, $100 per value -
Authorized - 300,000 shares
Outstanding - 100,000 shares 10 000
Senior secured notes 80 000
Retained earnings 665
90 665
Current liabilities:
Line-of-credit borrowings 10 000
Note payable maturing in one year 10 000
Accounts payable 10 678
Coal purchase obligation 2 960
Accrued taxes 8 752
Accrued interest and other 425
42 815
Deferred credits:
Investment tax credits 10 610
Accrued pension liability 10 103
Customer advances for construction 3 605
Net antitrust settlement 1 517
25 835
TOTAL CAPITALIZATION AND LIABILITIES 159 315
<PAGE>
C-5
OHIO VALLEY ELECTRIC CORPORATION
STATEMENT OF INCOME
FOR YEAR ENDED DECEMBER 31, 1993
UNAUDITED
(000's)
Operating revenues:
Sale of electric energy 270 617
Other operating revenues 452
Total operating revenues 271 069
Operating expenses:
Fuel consumed in operation 86 169
Purchased power 134 767
Other operation 17 597
Maintenance 18 804
Taxes, other than Federal income taxes 5 553
Federal income taxes 4 124
Total operating expenses 267 014
Operating income 4 055
Interest income and other 502
Income before interest charges 4 557
Interest charges 2 480
Net income 2 077
Retained earnings, beginning of year 58
Cash dividends on common stock 1 470
Retained earnings, end of year 665
<PAGE>
C-6
OHIO VALLEY ELECTRIC CORPORATION
STATEMENT OF CASH FLOWS
FOR YEAR ENDED DECEMBER 31, 1993
UNAUDITED
(000's)
Cash From Operations:
Net Income 2 077
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Future federal income tax benefits 3 965
Changes in assets and liabilities:
Accounts receivable (794)
Coal in storage 15 266
Materials and supplies 1 498
Property taxes applicable to subsequent years (400)
Accounts payable 8 615
Accrued taxes 1 767
Accrued interest and other 36
Other (3 338)
Net cash provided by operating activities 28 692
Investing Activities:
Reimbursement for plant replacements and
additional facilities 4 919
Net electric plant additions (3 711)
Advances in subsidiary (42 627)
Net cash used by investing activities (41 419)
Financing Activities:
Special funds held by Trustees (47 603)
Installment purchase contracts,
pollution control facilities 80 000
Coal purchase obligation (10 000)
Note payable (line of credit) (6 000)
Dividends - common stock (1 470)
Net cash provided by financing activities 14 927
Net increase in cash and cash equivalents 2 200
Cash and cash equivalents, beginning of year 4 698
Cash and cash equivalents, end of year 6 898
Supplemental Disclosures
Interest paid (net of amounts capitalized) 3 124
Federal income taxes paid 371
For purposes of this statement, the company considers temporary cash investments
to be cash equivalents since they are readily convertible into cash and have
maturities of less than three months.
<PAGE>
APPENDIX 2
EXHIBITS - PAGES F-1 THROUGH F-4
<PAGE>
F-1
ITEM 9 - EXHIBIT B (continued)
CONSTITUENT INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS
OF EQUITY SECURITIES OF SYSTEM COMPANIES.
INCORPORATED BY REFERENCE
ALLEGHENY POWER SYSTEM, INC.:
Charter, as amended Form 10-Q, September 1993, exh.(3)(a)
By-laws, as amended Form 10-Q, June 1990, exh.(a)(3)
ALLEGHENY POWER SERVICE CORPORATION:
Charter, effective November 22, 1963 Form U5S, 1964, exh.B-2
By-laws, as amended Form U5S, 1983, exh.B-1
Form U5S, 1990, exh.B-2
MONONGAHELA POWER COMPANY:
Charter, as amended Form S-3, Registration No. 33-51301
exh. 4(a)
Code of Regulations, as amended Form 10-Q, September 1993, exh.(a)(3)
THE POTOMAC EDISON COMPANY:
Charter, as amended Form 10-Q, September 1993, exh.(a)(3)
By-laws, as amended Form 10-Q, June 1990, exh. (a)(3)
WEST PENN POWER COMPANY:
Charter, as amended Form S-3, Registration No.33-51303,
exh. 4(a)
By-laws, as amended Form 8-K, June 1993, exh.(a)(3)
ALLEGHENY PITTSBURGH COAL COMPANY:
Charter, effective October 1, 1918 Form U5B, File 30-75, exh. B-2
Amendment to Charter, effective
October 5, 1918 Form U5B, File 30-75, exh. B-2
January 21, 1956 Form U5S, 1964, exh. B-7
By-laws, as amended Form U5S, 1983, exh. B-2
Form U5S, 1987, exh. B-1
Form U5S, 1991, exh. B-1
ALLEGHENY GENERATING COMPANY:
Charter, effective May 26, 1981 Form 10, 1986, exh. 3(1)
Amendment, effective July 14, 1989 Form 10-Q, June 1989, exh. (a)
By-laws, as amended Form 10, 1986, exh. 3(2)
Form U5S, 1992, exh. B
WEST VIRGINIA POWER & TRANSMISSION COMPANY:
Charter, effective April 3, 1912 and
Amendments to March 22, 1934 Form U5B, File 30-75, exh. B-38
Amendments to Charter, effective
January 28, 1956 Form U5S, 1964, exh. B-10
February 7, 1961 Form U5S, 1964, exh. B-11
By-laws, as amended Form U5S, 1983, exh. B-5
Form U5S, 1988, exh. B-1
<PAGE>
ITEM 9 - EXHIBIT B (continued) F-2
WEST PENN WEST VIRGINIA WATER POWER COMPANY:
Charter, effective January 25, 1924 Form U5B, File 30-75, exh. B-39
Amendment to Charter, effective
January 21, 1956 Form U5S, 1964, exh. B-12
By-laws, as amended Form U5S, 1983, exh. B-6
Form U5S, 1987, exh. B-2
F-3
ITEM 9 - Exhibit C
CONSTITUENT INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS
OF DEBT SECURITIES OF SYSTEM COMPANIES
Monongahela Power Company Incorporation
Documents by Reference
4 Indenture, dated as of S 2-5819, exh. 7(f)
August 1, 1945, and S 2-8782, exh. 7(f) (1)
certain Supplemental S 2-8881, exh. 7(b)
Indentures of the S 2-9355, exh. 4(h) (1)
Company defining rights S 2-9979, exh. 4(h) (1)
of security holders.* S 2-10548, exh. 4(b)
S 2-14763, exh. 2(b) (i)
S 2-24404, exh. 2(c);
S 2-26806, exh. 4(d);
Forms 8-K of the Company (1-268-2)
dated August 8, 1989, November 21,
1991, June 4, 1992, July 15, 1992,
September 1, 1992 and April 29, 1993
The Potomac Edison Company Incorporation
Documents by Reference
4 Indenture, dated as of S 2-5473, exh. 7(b); Form
October 1, 1944, and S-3, 33-51305, exh. 4(d)
certain Supplemental Forms 8-K of the Company (1-3376-2)
Indentures of the dated June 14, 1989, June 25, 1990,
Company defining rights August 21, 1991, December 11, 1991,
of Security holders.* December 15, 1992, February 17, 1993
and March 30, 1993
* There are omitted the Supplemental Indentures which do no more than
subject property to the lien of the above Indentures since
they are not considered constituent instruments defining
the rights of the holders of the securities. The Company agrees to
furnish the Commission on its request with copies of
such Supplemental Indentures.
<PAGE>
ITEM 9 - EXHIBIT C (continued) F-4
West Penn Power Company Incorporation
Documents by Reference
4 Indenture, dated as of S-3, 33-51303, exh. 4(d)
March 1, 1916, and certain S 2-1835, exh. B(1), B(6)
Supplemental Indentures of S 2-4099, exh. B(6), B(7)
the Company defining rights S 2-4322, exh. B(5)
of security holders.* S 2-5362, exh. B(2), B(5)
S 2-7422, exh. 7(c), 7(i)
S 2-7840, exh. 7(d), 7(k)
S 2-8782, exh. 7(e) (1)
S 2-9477, exh. 4(c), 4(d)
S 2-10802, exh. 4(b), 4(c)
S 2-13400, exh. 2(c), 2(d)
Form 10-Q of the Company
(1-255-2), June 1980, exh. D
Forms 8-K of the Company
(1-255-2) dated June 1989,
February 1991, December 1991,
August 13, 1993, September 15,
1992, June 9, 1993 and June 1993
* There are omitted the Supplemental Indentures which do no more than
subject property to the lien of the above Indentures since they
are not considered constituent instruments defining the rights
of the holders of the securities. The Company agrees
to furnish the Commission on its request with copies of such
Supplemental Indentures.
Allegheny Generating Company
Documents
3.1(a) Charter of the Company, as amended.*
3.1(b) Certificate of Amendment to Charter, effective July 14, 1989.**
3.2 By-laws of the Company, as amended.*
4 Indenture, dated as of December 1, 1986, and Supplemental
Indenture, dated as of December 15, 1988, of the Company
defining rights of security holders.***
* Incorporated by reference to the designated exhibit to AGC's
registration statement on Form 10, File No. 0-14688.
** Incorporated by reference to Form 10-Q of the Company (0-14688) for
June 1989, exh. (a).
*** Incorporated by reference to Forms 8-K of the Company (0-14688) for
December 1986, exh. 4(A), and December 1988, exh. 4.1.
<PAGE>
Exhibit D
TAX ALLOCATION AGREEMENT
By and Between
ALLEGHENY POWER SYSTEM, INC.
and its Subsidiaries
Dated as of November 3, 1993
AGREEMENT dated as of November 3, 1993, among ALLEGHENY POWER SYSTEM, INC.
(hereinafter called the "Parent Company") and the other undersigned companies
(hereinafter called the "Subsidiary Companies").
WHEREAS, the parties hereto and their corporate predecessors are parties to an
agreement dated June 13, 1963 concerning the allocation of Federal income tax
liabilities among them; and
WHEREAS, changes have since been made in the Public Utility Holding Company Act
of 1935 which affect the content of that agreement; and
WHEREAS, the Securities and Exchange Commission upon audit requested that the
agreement be revised to reflect said changes in the law; and
WHEREAS, the audit found that the parties hereto had acted in compliance with
present law although the changes in the law occurred after the agreement was
executed; and
WHEREAS, the parties hereto do not intend to change the methods currently used
for allocation of federal tax liabilities, but merely wish to reflect those
changes in the law in their agreement,
NOW, THEREFORE, the parties hereto hereby mutually agree that:
1. The Parent Company shall continue to make and file on behalf of itself and
the Subsidiary Companies a consolidated Federal income tax return for each year
for which such a return is required by law to be filed.
2. The consolidated Federal income tax liability of the parties hereto for
each year for which such a return is so filed shall be allocated among such
parties as follows:
A. The amount of such liability before giving effect to any investment credit
which had been provided for in Section 38, as amended, of the Internal Revenue
Code of 1954 or any similar provision hereafter enacted shall be allocated in
accordance with the method of allocation prescribed in subparagraph (a)(1) of
Section 1552 of the Internal Revenue Code of 1986; provided, however, that
(a) the amount allocated to any Subsidiary Company shall not exceed the
Federal income tax liability of such company for such year based upon a separate
return and computed before giving effect to any such investment credit and as if
such company had always filed its tax returns on a separate return basis; and
<PAGE>
(b) any amount that would be allocated to a Subsidiary Company but for clause
(a) of this Subsection shall be allocated among the other parties in direct
proportion to the difference between (i) their respective Federal income tax
liabilities for such year computed on a separate return basis and before giving
effect to any such investment credit and (ii) the respective amounts allocated
to them under this Subsection.
B. Appropriate and equitable adjustment of the allocation specified in
Subsection A of this section shall be made if the sum of the separate return
taxes of all the parties hereto in any taxable year differs from the
consolidated taxable income or tax because of intercompany transactions
excluded from the consolidated return. Appropriate and equitable adjustment
of the allocation specified in Subsection A of this section shall be made
to the extent that the consolidated return tax and separate return tax
for any year include material items taxed at different rates or involving
other special benefits or limitations.
C. Those parties hereto with a positive allocation in any tax year to which
this agreement applies will pay the amount allocated and those Subsidiary
Companies with a negative allocation will receive current payment of their
corporate tax credits. If the consolidated loss is too large to be used in full
in any such tax year, such payments shall be apportioned, and uncompensated
benefits shall be carried over, by the Subsidiary Companies in accordance with
Subsection A of this section.
D. The amount allocated to each party pursuant to Subsection A of this Section
shall be decreased or increased by an amount equal to the portion, if any,
generated by such party of any investment credit or negative investment credit
used in computing the consolidated Federal income tax liability of the parties
for such year. In the event that the portion generated by such party of any
such investment credit exceeds the amount so allocated to such party, the
excess shall be paid to such party out of the excess of the amounts so
allocated to the other parties over such consolidated Federal income tax
liability.
E. Allocation of the consolidated federal income tax liability of the parties
hereto shall conform in all pertinent respects with Section 12(b) of the Public
Utility Holding Company Act of 1935 and regulations promulgated thereunder,
including particularly Reg. Section 250.45(c) thereof.
3. This Agreement supersedes as of the date hereof the Agreement among the
parties hereto dated June 13, 1963.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed.
ALLEGHENY GENERATING COMPANY
By KLAUS BERGMAN
President
ALLEGHENY PITTSBURGH COAL
COMPANY
By KLAUS BERGMAN
President
ALLEGHENY POWER SERVICE
CORPORATION
By KLAUS BERGMAN
President
ALLEGHENY POWER SYSTEM, INC.
By KLAUS BERGMAN
President
MONONGAHELA POWER COMPANY
By B. H. HAYES
President
POTOMAC EDISON COMPANY
By A. J. NOIA
President
WEST PENN POWER COMPANY
By J. S. PIFER
President
WEST PENN WEST VIRGINIA WATER
POWER COMPANY
By J. S. PIFER
President
WEST VIRGINIA POWER AND
TRANSMISSION COMPANY
By J. S. PIFER
President
