Page 1 of 14
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1996
Commission File Number 1-267
ALLEGHENY POWER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Maryland 13-5531602
(State of Incorporation) (I.R.S. Employer Identification No.)
10435 Downsville Pike, Hagerstown, Maryland 21740-1766
Telephone Number - 301-790-3400
The registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements
for the past 90 days.
At August 13, 1996, 121,280,080 shares of the Common Stock ($1.25
par value) of the registrant were outstanding.
<PAGE>
- 2 -
ALLEGHENY POWER SYSTEM, INC.
Form 10-Q for Quarter Ended June 30, 1996
Index
Page
No.
PART I--FINANCIAL INFORMATION:
Consolidated statement of income -
Three and six months ended June 30, 1996 and 1995 3
Consolidated balance sheet - June 30, 1996
and December 31, 1995 4
Consolidated statement of cash flows -
Six months ended June 30, 1996 and 1995 5
Notes to consolidated financial statements 6-7
Management's discussion and analysis of financial
condition and results of operations 8-12
PART II--OTHER INFORMATION 13-14
<PAGE>
<TABLE>
<CAPTION>
- 3 -
ALLEGHENY POWER SYSTEM, INC.
Statement of Income
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996** 1995
(Thousands of Dollars)
ELECTRIC OPERATING REVENUES:
<S> <C> <C> <C> <C>
Residential $ 205,254 194,896 $ 493,664 $ 459,014
Commercial 115,813 113,278 245,001 239,162
Industrial 188,193 191,444 380,327 385,438
Wholesale and other* 17,785 15,089 38,117 31,691
Bulk power transactions, net* 23,900 14,328 41,854 29,534
Total Operating Revenues 550,945 529,035 1,198,963 1,144,839
OPERATING EXPENSES:
Operation:
Fuel 126,401 113,236 262,748 248,281
Purchased power and exchanges* 44,875 49,502 94,673 95,953
Deferred power costs, net 5,788 8,912 22,218 27,847
Other 68,813 72,043 204,950 142,107
Maintenance 57,268 59,090 121,281 121,173
Depreciation 66,584 65,399 132,543 130,096
Taxes other than income taxes 46,299 44,119 94,795 91,490
Federal and state income taxes 34,026 27,121 67,272 76,040
Total Operating Expenses 450,054 439,422 1,000,480 932,987
Operating Income 100,891 89,613 198,483 211,852
OTHER INCOME AND DEDUCTIONS:
Allowance for other than borrowed funds
used during construction 351 890 658 2,412
Other (expense) income, net (242) 2,397 487 2,849
Total Other Income and Deductions 109 3,287 1,145 5,261
Income Before Interest Charges and
Preferred Dividends 101,000 92,900 199,628 217,113
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest on long-term debt 41,134 42,364 82,763 82,728
Other interest 4,528 3,768 8,186 7,250
Allowance for borrowed funds used during
construction (753) (1,105) (1,155) (2,276)
Dividends on preferred stock of subsidiaries 2,305 5,180 4,630 10,589
Total Interest Charges and
Preferred Dividends 47,214 50,207 94,424 98,291
CONSOLIDATED NET INCOME $ 53,786 $ 42,693 $ 105,204 $ 118,822
COMMON STOCK SHARES OUTSTANDING (average) 120,999,400 119,681,808 120,854,868 119,490,581
EARNINGS PER AVERAGE SHARE $0.44 $0.36 $0.87 $0.99
* Prior period amounts have been reclassified for comparative purposes to reflect a change in 1996 in reporting
certain bulk power transmission transactions with nonaffiliated utilities. See Note 3 on page 6.
**The six month 1996 period includes restructuring charges and an asset write-off of $64.2 million ($.32 per share).
See Note 4 on page 6 for additional information on the restructuring charges.
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- 4 -
ALLEGHENY POWER SYSTEM, INC.
Consolidated Balance Sheet
June 30, December 31,
1996 1995
(Thousands of Dollars)
ASSETS:
Property, Plant, and Equipment:
At original cost, including $139,455,000
<S> <C> <C>
and $147,467,000 under construction $ 7,880,554 $ 7,812,670
Accumulated depreciation (2,811,278) (2,700,077)
5,069,276 5,112,593
Investments and Other Assets:
Subsidiaries consolidated--excess of cost
over book equity at acquisition 15,077 15,077
Benefit plan's investments 48,199 47,545
Other 5,068 2,981
68,344 65,603
Current assets:
Cash and temporary cash investments 6,699 3,867
Accounts receivable:
Electric service, net of $13,310,000 and
$13,047,000 uncollectible allowance 268,815 305,988
Other 14,147 15,924
Materials and supplies--at average cost:
Operating and construction 84,914 86,421
Fuel 54,595 71,898
Prepaid taxes 47,116 45,404
Deferred income taxes 41,727 28,655
Other 15,137 13,164
533,150 571,321
Deferred Charges:
Regulatory assets 599,155 602,360
Unamortized loss on reacquired debt 55,329 57,255
Other 37,724 38,183
692,208 697,798
Total Assets $ 6,362,978 $ 6,447,315
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock $ 151,600 $ 150,876
Other paid-in capital 1,012,145 995,701
Retained earnings 987,034 983,340
2,150,779 2,129,917
Preferred stock 170,086 170,086
Long-term debt and QUIDS 2,263,449 2,273,226
4,584,314 4,573,229
Current Liabilities:
Short-term debt 107,513 200,418
Long-term debt due within one year 5,900 43,575
Accounts payable 103,672 145,422
Taxes accrued:
Federal and state income 27,200 15,599
Other 31,521 54,116
Interest accrued 41,828 39,752
Deferred power costs 44,648 26,735
Restructuring liabilities 33,365 14,435
Other 66,560 56,477
462,207 596,529
Deferred Credits and Other Liabilities:
Unamortized investment credit 145,639 149,759
Deferred income taxes 987,003 985,804
Regulatory liabilities 95,604 97,970
Restructuring liabilities 15,600 -
Other 72,611 44,024
1,316,457 1,277,557
Total Capitalization and Liabilities $ 6,362,978 $ 6,447,315
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- 5 -
ALLEGHENY POWER SYSTEM, INC.
Consolidated Statement of Cash Flows
Six Months Ended
June 30
1996 1995
(Thousands of Dollars)
CASH FLOWS FROM OPERATIONS:
<S> <C> <C>
Consolidated net income $ 105,204 $ 118,822
Depreciation 132,543 130,096
Deferred investment credit and income taxes, net (17,901) 14,596
Deferred power costs, net 22,218 27,847
Allowance for other than borrowed funds used
during construction (658) (2,412)
Restructuring charges 45,724 -
Asset write-off 10,762 -
Changes in certain current assets and
liabilities:
Accounts receivable, net 38,950 3,758
Materials and supplies 18,810 (5,964)
Accounts payable (41,750) (63,734)
Taxes accrued (10,994) (11,465)
Interest accrued 2,076 (744)
Other current liabilities 10,553 7661
Other deferred charges/credits 11,204 (3,934)
Other, net 8,859 (3,159)
335,600 211,368
CASH FLOWS FROM INVESTING:
Construction expenditures (106,551) (152,958)
Nonutility investment (1,482) (197)
Allowance for other than borrowed funds used
during construction 658 2,412
(107,375) (150,743)
CASH FLOWS FROM FINANCING:
Sale of common stock 17,168 17,376
Retirement of preferred stock - (910)
Issuance of long-term debt - 482,857
Retirement of long-term debt (48,146) (385,381)
Short-term debt, net (92,905) (37,005)
Cash dividends on common stock (101,510) (97,978)
(225,393) (21,041)
NET CHANGE IN CASH AND TEMPORARY CASH INVESTMENTS 2,832 39,584
Cash and Temporary Cash Investments at January 1 3,867 2,765
Cash and Temporary Cash Investments at June 30 $ 6,699 $ 42,349
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $82,543 $87,316
Income taxes 74,555 51,357
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
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ALLEGHENY POWER SYSTEM, INC.
Notes to Consolidated Financial Statements
1. The Company's Notes to Consolidated Financial Statements in the
Allegheny Power System companies' combined Annual Report on
Form 10-K for the year ended December 31, 1995, should be read
with the accompanying financial statements and the following
notes. With the exception of the December 31, 1995,
consolidated balance sheet in the aforementioned annual report
on Form 10-K, the accompanying consolidated financial
statements appearing on pages 3 through 5 and these notes to
consolidated financial statements are unaudited. In the
opinion of the Company, such consolidated financial statements
together with these notes thereto contain all adjustments
(which consist only of normal recurring adjustments) necessary
to present fairly the Company's financial position as of June
30, 1996, the results of operations for the three and six
months ended June 30, 1996 and 1995, and cash flows for the six
months ended June 30, 1996 and 1995.
2. The Consolidated Statement of Income reflects the results of
past operations and is not intended as any representation as to
future results. For purposes of the Consolidated Balance Sheet
and Consolidated Statement of Cash Flows, 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.
3. Effective in 1996 the Company's subsidiaries changed their
method of reporting certain bulk power transmission
transactions with nonaffiliated utilities, and reclassified
prior year's bulk power revenues and operation expenses to
achieve a consistent presentation. In prior years, some use of
the subsidiaries' transmission system was recorded as purchased
power from selling utilities and as sales of power to buying
utilities. The benefit to the subsidiaries was the difference
between the two. Because of new Federal Energy Regulatory
Commission requirements, the subsidiaries predominantly do not
"buy" and "sell" such energy, but rather a transmission fee is
charged.
Under the new reporting method all such transactions are
recorded on a net revenue basis. The effect of the
reclassification was to reduce amounts reported for bulk power
transaction revenues and operation expenses by $74.1 million
and $158.2 million for the three and six months ended June
1995, respectively, with no change in operating income or
consolidated net income.
4. As previously announced, the System is undergoing a
reorganization and reengineering process (restructuring) to
simplify its management structure and to increase efficiency.
In March 1996, the subsidiaries announced additional
restructuring plans which included consolidating operating
divisions, and centralizing and changing many accounting,
customer services, and other functions. Effective July 1996,
the subsidiaries reduced their work force by about 570
employees. The reductions were
<PAGE>
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accomplished through an enhanced separation plan, attrition,
and layoffs. An additional reduction of about 500 employees
during the next two or three years will occur primarily through
attrition and, in the union workforce, pursuant to appropriate
contract terms.
Restructuring charges previously recorded were adjusted in the
second quarter to reflect current estimates. Restructuring
charges reflect estimated liabilities for severance, employee
termination costs, and other restructuring costs. Estimated
additional restructuring charges of about $35 million will be
recorded as the liabilities are incurred. A summary of
restructuring liabilities is provided below:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 1996 June 1996
(Millions of Dollars)
Restructuring liability (before tax):
<S> <C> <C>
Balance at beginning of period $ 63.9 $ 14.4
Accruals/adjustments (11.4) 53.5
Benefit plans curtailment
liabilities/adjustments* .6 (11.2)
Less payments (4.1) (7.7)
Balance at end of period $ 49.0 $ 49.0
*Primarily recorded in other deferred credits.
</TABLE>
5. Other paid-in capital increased $16,444,000 in the six months
ended June 30, 1996, representing the excess of amounts
received over par value, less related expenses, from the
issuance of 579,271 shares of common stock pursuant to the
Company's Dividend Reinvestment and Stock Purchase Plan and
Employee Stock Ownership and Savings Plan.
6. Common stock dividends per share declared during the periods
for which income statements are included are as follows:
<TABLE>
<CAPTION>
1996 1995
1st 2nd 1st 2nd
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
Number of Shares 120,700,809 120,989,831 119,292,954 119,677,751
Amount per Share $.42 $.42 $.41 $.41
</TABLE>
<PAGE>
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ALLEGHENY POWER SYSTEM, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
COMPARISON OF SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 1996
WITH SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 1995
Review of Utility Operations
EARNINGS
Consolidated net income for the second quarter of 1996
was $53.8 million or $.44 per average share, compared with $42.7 million
or $.36 per average share for the corresponding 1995 period. For the
first six months of 1996, consolidated net income was $105.2 million or
$.87 per average share, compared with $118.8 million or $.99 per average
share for the corresponding 1995 period. The six month period ended June
1996 includes restructuring charges and asset write-offs of $64.2 million
($38.7 million net of taxes or $.32 per average share). Restructuring
activities reported in the first quarter continued in the second quarter
with adjustments to the restructuring charges previously recorded (see
Note 4 to the Consolidated Financial Statements). The increase in
earnings for the second quarter and first six months of 1996, excluding
the restructuring charges, resulted primarily from increased sales to
retail customers.
SALES AND REVENUES
Retail kilowatt-hour (kWh) sales to residential,
commercial, and industrial customers in the second quarter increased 7%,
5%, and 1%, and in the first six months increased 10%, 6%, and 2%,
respectively. Growth in the number of customers and increased weather-
related sales combined to cause the increase in residential and commercial
sales. The increase in kWh sales to industrial customers in the second
quarter and first six months of 1996 resulted primarily from increased
sales to primary and fabricated metals and wood and paper products
customers. Revenues from sales to industrial customers decreased in both
the second quarter and six months ended June 1996 due primarily to a
decrease in the fuel and energy cost component. The increase in revenues
from retail customers resulted from the following:
<TABLE>
<CAPTION>
Change from Prior Periods
Quarter Six Months
(Millions of Dollars)
<S> <C> <C>
Increased kWh sales $13.0 $44.4
Fuel and energy cost adjustment clauses* (4.8) (8.2)
Rate changes 1.9 2.9
Other (.5) (3.7)
$ 9.6 $35.4
*Changes in revenues from fuel and energy cost adjustment
clauses have little effect on consolidated net income.
</TABLE>
<PAGE>
- 9 -
The increase in wholesale and other revenues reflects
increased revenues from wholesale customers due to a rate increase for
Potomac Edison customers effective in June 1995, increased weather-related
sales, and load additions to the wholesale customers' systems.
KWh deliveries to and revenues from bulk power
transactions are comprised of the following items:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995* 1996 1995*
KWh deliveries (in billions):
<S> <C> <C> <C> <C>
From transmission services 3.8 3.0 8.9 6.4
From sale of subsidiaries'
generation .5 .1 .6 .3
4.3 3.1 9.5 6.7
Revenues (in millions):
From transmission services $13.7 $11.1 $28.3 $22.1
From sale of subsidiaries'
generation 10.2 3.2 13.6 7.4
$23.9 $14.3 $41.9 $29.5
</TABLE>
Increased transmission services and sales of
subsidiaries' generation resulted primarily from increased activity from
power marketers. About 95% of the aggregate benefits from bulk power
transactions are passed on to retail customers and have little effect on
consolidated net income.
OPERATING EXPENSES
Fuel expenses for the second quarter and the first six
months of 1996 increased 12% and 6%, respectively. The increase in fuel
expenses in both periods was due primarily to an increase in kWh
generated. Fuel expenses are primarily subject to deferred power cost
accounting procedures with the result that changes in fuel expenses have
little effect on consolidated net income.
"Purchased power and exchanges" represents power
purchases from and exchanges with other utilities and purchases from
qualified facilities under the Public Utility Regulatory Policies Act of
1978 (PURPA), and is comprised of the following items:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995* 1996 1995*
(Millions of Dollars)
Purchased power:
<S> <C> <C> <C> <C>
From PURPA generation $33.4 $35.3 $65.6 $68.7
Other 11.7 15.3 25.8 25.8
Total power purchased 45.1 50.6 91.4 94.5
Power exchanges (.2) (1.1) 3.3 1.5
$44.9 $49.5 $94.7 $96.0
</TABLE>
*Prior period amounts have been reclassified for comparative purposes to
reflect a change in the method of reporting certain bulk power
transmission transactions with nonaffiliated utilities. See Note 3 to
the Consolidated Financial Statements for further information.
<PAGE>
- 10 -
The cost of purchased power and exchanges, including
power from PURPA generation, is mostly recovered from customers currently
through the regular fuel and energy cost recovery procedures followed by
the subsidiaries' regulatory commissions and is primarily subject to
deferred power cost procedures with the result that changes in such costs
have little effect on consolidated net income.
The increase in other operation expense for the six
months ended June 1996 resulted primarily from restructuring charges
discussed in Note 4 to the Consolidated Financial Statements and a $10.8
million write-off of accumulated land-related costs on a previously
proposed transmission line. The proposed line is not in the System's
future plans and, in the industry's more competitive environment, it is no
longer reasonable to assume future recovery of these costs in rates.
Maintenance expenses represent costs incurred to
maintain the power stations, the transmission and distribution (T&D)
system, and general plant, and reflect routine maintenance of equipment
and rights-of-way as well as planned major repairs and unplanned
expenditures, primarily from forced outages at the power stations and
periodic storm damage on the T&D system. Variations in maintenance
expense result primarily from unplanned events and planned major projects,
which vary in timing and magnitude depending upon the length of time
equipment has been in service without a major overhaul and the amount of
work found necessary when the equipment is dismantled.
The net changes in federal and state income taxes for
the second quarter and first six month periods resulted primarily from
variances in income before income taxes.
The combined decrease of $2.9 million in allowance for
funds used during construction for the six months ended June 1996,
reflects a decrease in capital expenditures.
The decrease in other income, net for the second
quarter and first six month periods was due primarily to a write-off of a
deferred return on West Virginia expenditures related to the Clean Air Act
Amendments of 1990 and increased interest income in the second quarter of
1995 earned on funds available as a result of the timing of the debt and
preferred stock refinancings.
Dividends on preferred stock of subsidiaries decreased
$2.9 million and $6.0 million in the second quarter and first six months
of 1996, respectively, due primarily to redemption of preferred stock
issues refinanced with Quarterly Income Debt Securities (QUIDS) during
1995. The increase in interest on long-term debt associated with the
QUIDS was offset by decreased interest on first mortgage bonds due
primarily to refinancings to lower rate securities during the second
quarter of 1995.
Financial Condition and Requirements
The Company's discussion on Financial Condition and
Requirements and Changes in the Electric Utility Industry in the Allegheny
Power System companies' combined Annual Report on Form 10-K for the year
ended December 31, 1995, should be read with the following information.
<PAGE>
- 11 -
In the normal course of business, the subsidiaries are
subject to various contingencies and uncertainties relating to their
operations and construction programs, including cost recovery in the
regulatory process, laws, regulations and uncertainties related to
environmental matters, and legal actions.
In July 1996, the Company presented an offer to buy the
Hagerstown, Maryland municipal electric distribution system. The offer
includes a $20 million cash payment, a five-year freeze on current
electric rates, technical upgrades and improvements to the electrical
system, and other benefits. The offer came as a result of discussions
with a municipal Study Committee which has recommended a public referendum
on the November 1996 ballot to let voters decide the issue.
In May 1996, the Pennsylvania Public Utility Commission
(PUC) approved West Penn's petition seeking permission to recover from
customers through the Energy Cost Rate (ECR) the $31 million buyout cost
of the Shannopin PURPA project. West Penn will recover the cost over
three years including recovery of $24 million in the current ECR year
ending March 31, 1997. This increase in customer rates will be offset by
a $27 million refund of overcollections from the past ECR year. The
buyout will save West Penn's customers approximately $665 million over the
next 30 years by eliminating the need to buy the overpriced power.
The Company has joined with six other electric
utilities to form the Partnership for Customer Choice (PCC). The group is
urging immediate enactment of federal legislation to provide real retail
competition to electric customers by the turn of the century. Other
members of the partnership are Cinergy, PacifiCorp, Pennsylvania Power &
Light, UtiliCorp United, Wisconsin Energy Corporation, and Wisconsin Power
and Light. The PCC strongly advocates continued state regulation of local
electric distribution, regulation of the transmission and distribution
systems to enhance, rather than impede, market efficiency, and a method of
dealing with costs that a utility may not recover in the competitive
markets (stranded costs) that does not unduly impede the transition to
full competition.
The subsidiaries and three other electric utilities,
whose service areas extend from Lake Erie to North Carolina, have formed
an alliance to jointly manage and coordinate the operation of their
interconnected transmission systems. Alliance operation of the systems
will increase transmission reliability for the companies' nearly 5.5
million retail customers in six states by scheduling and coordinating bulk
power transactions. The alliance will also establish fair compensation
for use of the transmission systems by alliance members and by power
wholesalers.
Nonutility Business
The PUC and the Federal Energy Regulatory Commission
(FERC) approved AYP Capital Inc.'s request to become a hybrid exempt
wholesale generator. AYP Capital intends to market power from its
ownership in Fort Martin Power Station Unit No. 1, which is being
purchased from Duquesne Light Company. Financial closing on the $170
million purchase is expected in October 1996. AYP Energy, Inc., the AYP
Capital subsidiary created to sell the Fort Martin energy, is awaiting
approval from the FERC to sell at market rates before it can begin
aggressively pursuing new customers for this power.
<PAGE>
- 12 -
The Federal Communications Commission has granted to
another AYP Capital subsidiary, Allegheny Communications Connect, Inc.
(ACC), Exempt Telecommunication Company status. Although ACC has no
immediate plans to enter into the telecommunications industry, the
approval gives it the structure to become an active participant in this
area in the future.
<PAGE>
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ALLEGHENY POWER SYSTEM, INC.
Part II - Other Information to Form 10-Q
for Quarter Ended June 30, 1996
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
(a) Date and kind of meeting:
At the annual meeting of stockholders held on May 9,
1996, votes were taken for the election of directors to serve until the
next annual meeting of stockholders, for the approval of the appointment
of Price Waterhouse LLP as independent accountants, and for a shareholder
proposal to refrain from providing pensions or other retirement benefits
to non-employee or outside directors unless approved by shareholders. The
total number of votes cast was 96,643,846 with the following results:
<TABLE>
<CAPTION>
Nominees for Director Votes For Votes Withheld Broker Non-Votes
<S> <C> <C> <S>
Eleanor Baum 95,253,993 1,389,853 None
William L. Bennett 95,262,517 1,381,329 "
Klaus Bergman 95,267,216 1,376,630 "
Wendell F. Holland 95,161,215 1,482,631 "
Phillip E. Lint 95,193,602 1,450,244 "
Edward H. Malone 95,113,063 1,530,783 "
Frank A. Metz, Jr. 95,253,841 1,390,005 "
Alan J. Noia 95,271,593 1,372,253 "
Steven H. Rice 95,255,573 1,388,273 "
Gunnar E. Sarsten 95,270,812 1,373,034 "
Peter L. Shea 95,281,970 1,361,876 "
Broker
Votes For Votes Against Abstentions Non-Votes
Approval of Independent
Accountants 95,283,362 726,193 634,291 None
Proposal for Board to
refrain from providing
pension/retirement
benefits to Board
unless approved by
shareholders 32,272,667 48,741,841 2,795,619 12,833,719
</TABLE>
The stockholders did not approve the shareholder
proposal that in the future the Board refrain from providing pensions or
other retirement benefits to non-employee or outside directors unless such
benefits are submitted to the shareholders for approval.
<PAGE>
- 14 -
ITEM 5. OTHER INFORMATION
In June 1996, the Company moved its corporate
headquarters from New York City to Hagerstown, Maryland (Washington
County). Corporate headquarters for the first time will be located in the
service area and will bring senior management closer to both employees and
customers.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) (27) Financial Data Schedule
(b) As reported in the first quarter 1996 10-Q, on April
11, 1996, the Company filed a Form 8-K containing a
Form of Change in Control Employment Contract.
Signature
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ALLEGHENY POWER SYSTEM, INC.
K. M. JONES
K. M. Jones, Vice President
(Chief Accounting Officer)
August 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 5,669
<SECURITIES> 1,030
<RECEIVABLES> 296,272
<ALLOWANCES> 13,310
<INVENTORY> 139,509
<CURRENT-ASSETS> 533,150
<PP&E> 7,880,554
<DEPRECIATION> 2,811,278
<TOTAL-ASSETS> 6,362,978
<CURRENT-LIABILITIES> 462,207
<BONDS> 2,263,449
0
170,086
<COMMON> 151,600
<OTHER-SE> 1,999,179
<TOTAL-LIABILITY-AND-EQUITY> 6,362,978
<SALES> 1,198,963
<TOTAL-REVENUES> 1,198,963
<CGS> 705,870
<TOTAL-COSTS> 933,208
<OTHER-EXPENSES> 4,630
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 89,794
<INCOME-PRETAX> 172,476
<INCOME-TAX> 67,272
<INCOME-CONTINUING> 105,204
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 105,204
<EPS-PRIMARY> 0.87
<EPS-DILUTED> 0.87
</TABLE>
