File No. 70-8991
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
AMENDMENT NO. 1
TO
FORM U-1
__________________________________
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
APPALACHIAN POWER COMPANY
40 Franklin Road, Roanoke, Virginia 24022
INDIANA MICHIGAN POWER COMPANY
One Summit Square, Fort Wayne, Indiana 46801
OHIO POWER COMPANY
301 Cleveland Avenue, S.W., Canton, Ohio 44702
(Name of company or companies filing this statement
and addresses of principal executive offices)
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
* * *
G. P. Maloney, Executive Vice President
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
John F. Di Lorenzo, Jr., Associate General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
American Electric Power Company, Inc. ("AEP"), a New York
corporation and a holding company registered under the Public
Utility Holding Company Act of 1935 ("1935 Act"), and Appalachian
Power Company ("APCo"), a Virginia corporation, Indiana Michigan
Power Company ("I&M"), an Indiana corporation, and Ohio Power
Company ("OPCo"), an Ohio corporation (APCo, I&M and OPCo are
sometimes collectively referred to herein as the "Subsidiaries"),
hereby amend their Application or Declaration on Form U-1 in File
No. 70-8991:
1. By amending and restating subparagraphs (i), (ii) and
(iii) of ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION, Part D.
Proposed Transactions: Offer, Section 1. Terms of Offer, as
follows:
"(i) APCo - $69.02 per share, in the case of the 4-
1/2% Series; $103.17 per share, in the case of the 5.90%
Series; $103.20 per share, in the case of the 5.92%
Series; $107.26 per share, in the case of the 6.85%
Series; and $105.50 per share, in the case of the 7.80%
Series (each, an 'APCo Purchase Price').
(ii) I&M - $62.31 per share, in the case of the 4-
1/8% Series; $64.17 per share, in the case of the 4.12%
Series; $69.94 per share, in the case of the 4.56%
Series; $101.83 per share, in the case of the 5.90%
Series; $103.79 per share, in the case of the 6-1/4%
Series; $106.45 per share, in the case of the 6-7/8%
Series; and $103.71 per share, in the case of the 6.30%
Series (each, an 'I&M Purchase Price').
(iii) OPCo - $69.02 per share, in the case of the 4-
1/2% Series; $64.56 per share, in the case of the 4.08%
Series; $66.46 per share, in the case of the 4.20%
Series; $69.62 per share, in the case of the 4.40%
Series; $103.09 per share, in the case of the 5.90%
Series; $103.71 per share, in the case of the 6.02%
Series; and $105.14 per share, in the case of the 6.35%
Series (each, an 'OPCo Purchase Price')."
2. By amending and restating the second paragraph of ITEM 1.
DESCRIPTION OF PROPOSED TRANSACTION, Part D. Proposed
Transactions: Offer, Section 2. Benefits of Offer; Utilization of
AEP rather than the Subsidiaries as Offeror as follows:
"More specifically, assuming only a 50% overall
success rate for the Offers, the estimated cash savings
to the Subsidiaries thereafter amount to between $6.4
million each year (based on purchased shares being
refinanced entirely with short-term debt at prevailing
rates on the date hereof) and $1.8 million each year
(based on purchased Shares being refinanced entirely by
long-term tax-deductible preferred securities), after
taxes and excluding expenses incurred in connection with
the Offers and the Proxy Solicitations. On a cumulative
net present value savings basis, assuming (x) a 50%
overall success rate for the Offers (and that 25% of all
Preferred Stockholders do not tender their Shares
pursuant to the Offer but do vote in favor of the
Proposed Amendments at the Special Meeting), (y)
refinancing of Shares acquired and paid for pursuant to
the Offers with a combination of long-term tax deductible
hybrid securities and short-term debt at prevailing rates
at the date hereof, and (z) a discount rate equal to the
new securities after-tax weighted average cost of
capital, the proposed transactions are anticipated to
yield total after-tax, present value cash savings of
about $28 million over approximately the original
remaining lives of the Series of Preferred, net of cash
expenditures incurred in the Offers and Proxy
Solicitations (i.e., Cash Payments, the applicable
Purchase Prices paid for validly tendered and accepted
Shares, and the other fees and expenses listed in Item
2). A success rate for the Offers higher than the 50%
rate assumed above has the potential to generate even
further cash savings."
3. By amending and restating the first paragraph of ITEM 4.
REGULATORY APPROVAL as follows:
"The sale of APCo Preferred Stock, if any, will be
expressly authorized by the State Corporation Commission
of Virginia and the West Virginia Public Service
Commission. Copies of the applications to such
commissions and the orders of such commissions will be
filed by amendment hereto. No commission other than the
Securities and Exchange Commission and these commissions
has jurisdiction over the proposed transaction."
4. By filing the following exhibits and financial
statements:
(a) Exhibits:
B-1 Offer to Purchase and Proxy Statement for
APCo, dated January 30, 1997, filed as Exhibit
99(a)(1) to AEP's Issuer Tender Offer
Statement on Schedule 13E-4, APCo as Issuer.
B-2 Offer to Purchase and Proxy Statement for I&M,
dated January 30, 1997, filed as Exhibit
99(a)(1) to AEP's Issuer Tender Offer
Statement on Schedule 13E-4, I&M as Issuer.
B-3 Offer to Purchase and Proxy Statement for OPCo
dated January 30, 1997, filed as Exhibit
99(a)(1) to AEP's Issuer Tender Offer
Statement on Schedule 13E-4, OPCo as Issuer.
B-5-1 Proxy card for use at APCo Special Meeting.
B-5-2 Proxy card for use at I&M Special Meeting.
B-5-3 Proxy card for use at OPCo Special Meeting.
F Opinion of Counsel
(b) Financial Statements:
Balance Sheets and Statements of Income per books and pro
forma, as of and for the 12 months ended September 30,
1996, and Retained Earnings per book for the 12 months
ended September 30, 1996, of the Applicants and of AEP
and its subsidiaries consolidated, together with journal
entries reflecting the proposed transaction.
SIGNATURES
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned companies have duly
caused this statement to be signed on its behalf by the undersigned
thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
APPALACHIAN POWER COMPANY
INDIANA MICHIGAN POWER COMPANY
OHIO POWER COMPANY
By /s/ G. P. Maloney
Vice President
Date: February 6, 1997
Exhibit F
614/223-1630
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549
February 6, 1997
Re: American Electric Power Company, Inc. et al.
File No. 70-8991
Gentlemen:
In connection with the transactions proposed and described in the
Application-Declaration on Form U-1 (the "Form U-1") filed with
the Securities and Exchange Commission by American Electric Power
Company, Inc. ("AEP"), Appalachian Power Company ("APCo"),
Indiana Michigan Power Company ("I&M") and Ohio Power Company
("OPCo") (APCo, I&M and OPCo collectively the "Subsidiaries") to
which this opinion is an exhibit, I have examined, among other
things, the Form U-1, the Issuer Tender Offer Statements on
Schedules 13E-4 filed with the SEC by AEP and the exhibits
thereto, the resolutions adopted by the Board of Directors of
AEP, APCo, I&M and OPCo, respectively, authorizing the
transactions described in the Form U-1, and the form of
resolutions to be presented to the shareholders of the respective
Subsidiaries, authorizing certain of the transactions described
in the Form U-1.
In rendering my opinion, I have assumed that appropriate action
is taken by both the Virginia State Corporation Commission and
the West Virginia Public Service Commission as to APCo; the Form
U-1 is permitted to become effective; all of the actions proposed
to be taken by the Boards of Directors of AEP and the
Subsidiaries are taken; all of the actions proposed to be taken
by the Shareholders of the Subsidiaries are taken; and the
transactions are consummated in accordance with the aforesaid
Form U-1.
Based on the foregoing, and subject to the qualifications and
limitations set forth herein, I am of the opinion that:
(a) all state laws applicable to the proposed transaction
will have been complied with;
(b) AEP will lawfully acquire the shares of the
Subsidiaries' preferred stock, if any, which AEP has
offered to purchase;
(c) the purchase of shares of preferred stock by the AEP
will not violate the legal rights of the holders of any
securities issued by AEP or any "associate" company of
AEP, as such term is defined in the Public Utility
Holding Company Act of 1935, as amended (the "Act");
(d) the Subsidiaries will lawfully acquire from AEP the
shares of preferred stock, if any, purchased by AEP;
and
(e) the purchase of shares of preferred stock by the
Subsidiaries will not violate the legal rights of the
holders of any securities issued by APCo, I&M or OPCo,
as the case may be, or any "associate" company of APCo,
I&M or OPCo.
I consent to the use of this opinion as part of the Form U-1.
Very truly yours,
/s/ David C. House
David C. House
Counsel for
American Electric Power Company, Inc.
Appalachian Power Company
Indiana Michigan Power Company
Ohio Power Company
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<NAME> APPALACHIAN POWER COMPANY
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1996 SEP-30-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,889,824 2,889,824
<OTHER-PROPERTY-AND-INVEST> 29,776 29,776
<TOTAL-CURRENT-ASSETS> 337,070 327,245
<TOTAL-DEFERRED-CHARGES> 40,527 41,027
<OTHER-ASSETS> 432,945 432,945
<TOTAL-ASSETS> 3,730,142 3,720,817
<COMMON> 260,458 260,458
<CAPITAL-SURPLUS-PAID-IN> 550,676 546,131
<RETAINED-EARNINGS> 211,865 211,865
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,022,999 1,018,454
165,225 70,225
54,857 39,949
<LONG-TERM-DEBT-NET> 1,365,637 1,415,637
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 20,700 75,828
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
25,007 25,007
<CAPITAL-LEASE-OBLIGATIONS> 35,417 35,417
<LEASES-CURRENT> 14,937 14,937
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,025,363 1,025,363
<TOT-CAPITALIZATION-AND-LIAB> 3,730,142 3,720,817
<GROSS-OPERATING-REVENUE> 1,608,436 1,608,436
<INCOME-TAX-EXPENSE> 76,697 74,142
<OTHER-OPERATING-EXPENSES> 1,279,866 1,279,866
<TOTAL-OPERATING-EXPENSES> 1,356,563 1,354,008
<OPERATING-INCOME-LOSS> 251,873 254,428
<OTHER-INCOME-NET> 251 251
<INCOME-BEFORE-INTEREST-EXPEN> 252,124 254,679
<TOTAL-INTEREST-EXPENSE> 108,656 115,955
<NET-INCOME> 143,468 138,724
16,402 9,654
<EARNINGS-AVAILABLE-FOR-COMM> 127,066 129,070
<COMMON-STOCK-DIVIDENDS> 107,934 107,934
<TOTAL-INTEREST-ON-BONDS> 82,505 82,505
<CASH-FLOW-OPERATIONS> 252,387 254,391
<EPS-PRIMARY> 0<F1> 0<F1>
<EPS-DILUTED> 0<F1> 0<F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<NAME> INDIANA MICHIGAN POWER COMPANY
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1996 SEP-30-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,528,525 2,528,525
<OTHER-PROPERTY-AND-INVEST> 627,671 627,671
<TOTAL-CURRENT-ASSETS> 276,253 268,133
<TOTAL-DEFERRED-CHARGES> 22,181 22,681
<OTHER-ASSETS> 421,381 421,381
<TOTAL-ASSETS> 3,876,011 3,868,391
<COMMON> 56,584 56,584
<CAPITAL-SURPLUS-PAID-IN> 731,214 729,103
<RETAINED-EARNINGS> 256,282 256,282
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,044,080 1,041,969
135,000 67,500
21,977 10,989
<LONG-TERM-DEBT-NET> 1,039,819 1,089,819
<SHORT-TERM-NOTES> 26,475 26,475
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 13,950 36,929
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 113,048 113,048
<LEASES-CURRENT> 33,523 33,523
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,448,139 1,448,139
<TOT-CAPITALIZATION-AND-LIAB> 3,876,011 3,868,391
<GROSS-OPERATING-REVENUE> 1,306,538 1,306,538
<INCOME-TAX-EXPENSE> 74,190 72,254
<OTHER-OPERATING-EXPENSES> 1,024,151 1,024,151
<TOTAL-OPERATING-EXPENSES> 1,098,341 1,096,405
<OPERATING-INCOME-LOSS> 208,197 210,133
<OTHER-INCOME-NET> 4,265 4,265
<INCOME-BEFORE-INTEREST-EXPEN> 212,462 214,398
<TOTAL-INTEREST-EXPENSE> 67,122 72,653
<NET-INCOME> 145,340 141,745
11,212 6,564
<EARNINGS-AVAILABLE-FOR-COMM> 134,128 135,181
<COMMON-STOCK-DIVIDENDS> 112,094 112,094
<TOTAL-INTEREST-ON-BONDS> 42,159 42,159
<CASH-FLOW-OPERATIONS> 291,779 292,832
<EPS-PRIMARY> 0<F1> 0<F1>
<EPS-DILUTED> 0<F1> 0<F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<NAME> OHIO POWER COMPANY
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1996 SEP-30-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,774,555 2,774,555
<OTHER-PROPERTY-AND-INVEST> 106,933 106,933
<TOTAL-CURRENT-ASSETS> 560,603 536,338
<TOTAL-DEFERRED-CHARGES> 70,811 71,311
<OTHER-ASSETS> 543,806 543,806
<TOTAL-ASSETS> 4,056,708 4,032,943
<COMMON> 321,201 321,201
<CAPITAL-SURPLUS-PAID-IN> 460,567 461,018
<RETAINED-EARNINGS> 569,601 569,601
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,351,369 1,351,820
115,000 60,050
38,532 19,266
<LONG-TERM-DEBT-NET> 1,002,495 1,052,495
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 83,337 83,337
<LONG-TERM-DEBT-CURRENT-PORT> 67,294 67,294
0 0
<CAPITAL-LEASE-OBLIGATIONS> 107,008 107,008
<LEASES-CURRENT> 23,917 23,917
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,267,756 1,267,756
<TOT-CAPITALIZATION-AND-LIAB> 4,056,708 4,032,943
<GROSS-OPERATING-REVENUE> 1,900,759 1,900,759
<INCOME-TAX-EXPENSE> 116,819 115,326
<OTHER-OPERATING-EXPENSES> 1,490,878 1,490,878
<TOTAL-OPERATING-EXPENSES> 1,607,697 1,606,204
<OPERATING-INCOME-LOSS> 293,062 294,555
<OTHER-INCOME-NET> 8,545 8,545
<INCOME-BEFORE-INTEREST-EXPEN> 301,607 303,100
<TOTAL-INTEREST-EXPENSE> 89,103 93,370
<NET-INCOME> 212,504 209,730
9,771 5,577
<EARNINGS-AVAILABLE-FOR-COMM> 202,733 204,153
<COMMON-STOCK-DIVIDENDS> 141,999 141,999
<TOTAL-INTEREST-ON-BONDS> 54,685 54,685
<CASH-FLOW-OPERATIONS> 418,973 420,393
<EPS-PRIMARY> 0<F1> 0<F1>
<EPS-DILUTED> 0<F1> 0<F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<NAME> AMERICAN ELECTRIC POWER COMPANY, INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1996 SEP-30-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 11,340,685 11,340,685
<OTHER-PROPERTY-AND-INVEST> 866,659 866,659
<TOTAL-CURRENT-ASSETS> 1,396,812 1,354,602
<TOTAL-DEFERRED-CHARGES> 206,709 208,209
<OTHER-ASSETS> 1,875,724 1,875,724
<TOTAL-ASSETS> 15,686,589 15,645,879
<COMMON> 1,279,427 1,279,427
<CAPITAL-SURPLUS-PAID-IN> 1,702,102 1,695,897
<RETAINED-EARNINGS> 1,528,045 1,528,045
<TOTAL-COMMON-STOCKHOLDERS-EQ> 4,509,574 4,503,369
490,225 272,775
115,365 70,203
<LONG-TERM-DEBT-NET> 4,813,827 4,963,827
<SHORT-TERM-NOTES> 69,364 69,364
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 205,987 284,094
<LONG-TERM-DEBT-CURRENT-PORT> 72,297 72,297
25,007 25,007
<CAPITAL-LEASE-OBLIGATIONS> 330,337 330,337
<LEASES-CURRENT> 93,260 93,260
<OTHER-ITEMS-CAPITAL-AND-LIAB> 4,961,346 4,961,346
<TOT-CAPITALIZATION-AND-LIAB> 15,686,589 15,645,879
<GROSS-OPERATING-REVENUE> 5,828,572 5,828,572
<INCOME-TAX-EXPENSE> 344,780 338,796
<OTHER-OPERATING-EXPENSES> 4,478,142 4,478,142
<TOTAL-OPERATING-EXPENSES> 4,822,922 4,816,938
<OPERATING-INCOME-LOSS> 1,005,650 1,011,634
<OTHER-INCOME-NET> 13,190 13,190
<INCOME-BEFORE-INTEREST-EXPEN> 1,018,840 1,024,824
<TOTAL-INTEREST-EXPENSE> 388,303 405,400
<NET-INCOME> 586,422 590,899
44,115<F1> 28,525<F1>
<EARNINGS-AVAILABLE-FOR-COMM> 586,422 590,899
<COMMON-STOCK-DIVIDENDS> 448,424 448,424
<TOTAL-INTEREST-ON-BONDS> 258,032 258,032
<CASH-FLOW-OPERATIONS> 1,234,670 1,239,147
<EPS-PRIMARY> $3.14 $3.16
<EPS-DILUTED> $3.14 $3.16
<FN>
<F1> Represents preferred stock dividend requirements of subsidiaries;
deducted before computation of net income.
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 1
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . $1,867,474 $1,867,474
Transmission . . . . . . . . . . . . . . . . . 1,048,420 1,048,420
Distribution . . . . . . . . . . . . . . . . . 1,469,249 1,469,249
General. . . . . . . . . . . . . . . . . . . . 186,375 186,375
Construction Work in Progress. . . . . . . . . 81,106 81,106
Total Electric Utility Plant . . . . . 4,652,624 4,652,624
Accumulated Depreciation and Amortization. . . 1,762,800 1,762,800
NET ELECTRIC UTILITY PLANT . . . . . . 2,889,824 2,889,824
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . 29,776 29,776
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . 9,825 $(9,825) -
Accounts Receivable (net). . . . . . . . . . . 154,595 154,595
Allowance for Uncollectible Accounts . . . . . (1,119) (1,119)
Fuel . . . . . . . . . . . . . . . . . . . . . 61,777 61,777
Materials and Supplies . . . . . . . . . . . . 53,821 53,821
Accrued Utility Revenues . . . . . . . . . . . 43,955 43,955
Prepayments. . . . . . . . . . . . . . . . . . 14,216 14,216
TOTAL CURRENT ASSETS . . . . . . . . . 337,070 (9,825) 327,245
REGULATORY ASSETS. . . . . . . . . . . . . . . . 432,945 432,945
DEFERRED CHARGES . . . . . . . . . . . . . . . . 40,527 500 41,027
TOTAL. . . . . . . . . . . . . . . . $3,730,142 $(9,325) $3,720,817
The Pro Forma Adjustments are shown on Page 3 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 2
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 30,000,000 Shares
Outstanding - 13,499,500 Shares. . . . . . . $ 260,458 $ 260,458
Paid-in Capital. . . . . . . . . . . . . . . . 550,676 $ (4,545) 546,131
Retained Earnings. . . . . . . . . . . . . . . 211,865 211,865
Total Common Shareholder's Equity . . . . 1,022,999 (4,545) 1,018,454
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . 54,857 (14,908) 39,949
Subject to Mandatory Redemption. . . . . . . 165,225 (95,000) 70,225
Long-term Debt . . . . . . . . . . . . . . . . 1,365,637 50,000 1,415,637
TOTAL CAPITALIZATION. . . . . . . . . . . 2,608,718 (64,453) 2,544,265
OTHER NONCURRENT LIABILITIES . . . . . . . . . . 98,678 98,678
CURRENT LIABILITIES:
Cumulative Preferred Stock Due Within
One Year . . . . . . . . . . . . . . . . . . 25,007 25,007
Short-term Debt. . . . . . . . . . . . . . . . 20,700 55,128 75,828
Accounts Payable . . . . . . . . . . . . . . . 81,815 81,815
Taxes Accrued. . . . . . . . . . . . . . . . . 35,996 35,996
Customer Deposits. . . . . . . . . . . . . . . 13,800 13,800
Interest Accrued . . . . . . . . . . . . . . . 31,645 31,645
Other. . . . . . . . . . . . . . . . . . . . . 61,325 61,325
TOTAL CURRENT LIABILITIES . . . . . . . . 270,288 55,128 325,416
DEFERRED INCOME TAXES. . . . . . . . . . . . . . 653,486 653,486
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . 85,497 85,497
DEFERRED CREDITS . . . . . . . . . . . . . . . . 13,475 13,475
TOTAL. . . . . . . . . . . . . . . . . $3,730,142 $ (9,325) $3,720,817
The Pro Forma Adjustments are shown on Page 3 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 3
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
Long-term Debt - Junior Subordinated Debentures . . . . . . . $50,000
To record the issuance and sale of $50,000,000 principal
amount of Junior Subordinated Debentures at 100%*.
2) Deferred Charges - Unamortized Debt Expense . . . . . . . . . . $500
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500
To record estimated expense of the debt issuance.
3) Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55,128
Short-term Debt . . . . . . . . . . . . . . . . . . . . . . . $55,128
To record additional short-term debt borrowings.
4) Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . . . . . . . $14,908
Subject to Mandatory Redemption. . . . . . . . . . . . . . . . 95,000
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . 2,072
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $111,980
To record the redemption of the following cumulative
preferred stock, $100 par value:
Per Share Principal Premium Total
Series Number of Shares Price * Amount (Discount) Paid
Not Subject to Mandatory Redemption:
4-1/2% 149,075 $75.50 $14,908 $(3,653) $11,255
Subject to Mandatory Redemption:
5.90% 250,000 $105.50 $25,000 $ 1,375 $ 26,375
5.92% 300,000 105.50 30,000 1,650 31,650
6.85% 150,000 108 15,000 1,200 16,200
7.80% 250,000 106 25,000 1,500 26,500
Total Subject to Mandatory Redemption $95,000 $ 5,725 $100,725
5) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $1,649
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,649
To record estimated costs of the stock reacquisition.
6) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $824
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $824
To record the payment for voting rights consent.
* Price assumed solely for the purpose of these Pro Forma Financial Statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 3A
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Interest on Junior Subordinated Debentures @ 8.5%* = $ 4,250
Amortization of Debt Issuance Expense over 30 years = 17
Interest on Short-term Debt @ 5.5%* = 3,032
Federal Income Taxes @ 35% = (2,555)
Preferred Stock Dividend Requirements @ 4-1/2% = (671)
Preferred Stock Dividend Requirements @ 5.90% = (1,475)
Preferred Stock Dividend Requirements @ 5.92% = (1,776)
Preferred Stock Dividend Requirements @ 6.85% = (1,028)
Preferred Stock Dividend Requirements @ 7.80% = (1,950)
Amortization of Premium on Reacquired
Preferred Stock over 30 years = 152
To reflect the pro forma changes in interest charges
and preferred stock dividend requirements associated
with the proposed transactions and the related federal
income tax effect.
* Rate assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 4
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . $1,608,436 $1,608,436
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . 342,645 342,645
Purchased Power. . . . . . . . . . . . . . 332,733 332,733
Other Operation. . . . . . . . . . . . . . 235,549 235,549
Maintenance. . . . . . . . . . . . . . . . 125,245 125,245
Depreciation and Amortization. . . . . . . 132,527 132,527
Taxes Other Than Federal Income Taxes. . . 118,336 118,336
Federal Income Taxes . . . . . . . . . . . 69,528 $(2,555) 66,973
TOTAL OPERATING EXPENSES . . . . . 1,356,563 (2,555) 1,354,008
OPERATING INCOME . . . . . . . . . . . . . . 251,873 2,555 254,428
NONOPERATING INCOME. . . . . . . . . . . . . 251 251
INCOME BEFORE INTEREST CHARGES . . . . . . . 252,124 2,555 254,679
INTEREST CHARGES . . . . . . . . . . . . . . 108,656 7,299 115,955
NET INCOME . . . . . . . . . . . . . . . . . 143,468 (4,744) 138,724
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . 16,402 (6,748) 9,654
EARNINGS APPLICABLE TO COMMON STOCK. . . . . $ 127,066 $ 2,004 $ 129,070
The common stock of the Company is wholly owned by American Electric Power Company,
Inc.
The Pro Forma Adjustments are shown on Page 3A of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 5
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $192,732
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 143,468
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 107,934
Cumulative Preferred Stock . . . . . . . . . . . . . . . . 15,666
Capital Stock Expense. . . . . . . . . . . . . . . . . . . . 735
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $211,865
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 6
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
ASSETS
<S> <C> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . $2,518,216 $2,518,216
Transmission . . . . . . . . . . . . . . . . . 877,834 877,834
Distribution . . . . . . . . . . . . . . . . . 688,591 688,591
General (including nuclear fuel) . . . . . . . 199,549 199,549
Construction Work in Progress. . . . . . . . . 79,103 79,103
Total Electric Utility Plant . . . . . 4,363,293 4,363,293
Accumulated Depreciation and Amortization. . . 1,834,768 1,834,768
NET ELECTRIC UTILITY PLANT . . . . . . 2,528,525 2,528,525
NUCLEAR DECOMMISSIONING AND SPENT NUCLEAR
FUEL DISPOSAL TRUST FUNDS. . . . . . . . . . . 466,942 466,942
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . 160,729 160,729
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . 8,120 $(8,120) -
Accounts Receivable (net). . . . . . . . . . . 125,853 125,853
Fuel . . . . . . . . . . . . . . . . . . . . . 26,515 26,515
Materials and Supplies . . . . . . . . . . . . 75,488 75,488
Accrued Utility Revenues . . . . . . . . . . . 30,347 30,347
Prepayments. . . . . . . . . . . . . . . . . . 9,930 9,930
TOTAL CURRENT ASSETS . . . . . . . . . 276,253 (8,120) 268,133
REGULATORY ASSETS. . . . . . . . . . . . . . . . 421,381 421,381
DEFERRED CHARGES . . . . . . . . . . . . . . . . 22,181 500 22,681
TOTAL. . . . . . . . . . . . . . . . $3,876,011 $(7,620) $3,868,391
The Pro Forma Adjustments are shown on Page 8 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 7
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 2,500,000 Shares
Outstanding - 1,400,000 Shares . . . . . . . $ 56,584 $ 56,584
Paid-in Capital. . . . . . . . . . . . . . . . 731,214 $ (2,111) 729,103
Retained Earnings. . . . . . . . . . . . . . . 256,282 256,282
Total Common Shareholder's Equity . . . . 1,044,080 (2,111) 1,041,969
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . 21,977 (10,988) 10,989
Subject to Mandatory Redemption. . . . . . . 135,000 (67,500) 67,500
Long-term Debt . . . . . . . . . . . . . . . . 1,039,819 50,000 1,089,819
TOTAL CAPITALIZATION. . . . . . . . . . . 2,240,876 (30,599) 2,210,277
OTHER NONCURRENT LIABILITIES:
Nuclear Decommissioning. . . . . . . . . . . . 295,755 295,755
Other. . . . . . . . . . . . . . . . . . . . . 187,683 187,683
TOTAL OTHER NONCURRENT LIABILITIES. . . . 483,438 483,438
CURRENT LIABILITIES:
Short-term Debt. . . . . . . . . . . . . . . . 40,425 22,979 63,404
Accounts Payable . . . . . . . . . . . . . . . 34,994 34,994
Taxes Accrued. . . . . . . . . . . . . . . . . 64,898 64,898
Interest Accrued . . . . . . . . . . . . . . . 18,608 18,608
Rent Accrued-Rockport Plant Unit 2 . . . . . . 23,427 23,427
Obligations Under Capital Leases . . . . . . . 33,523 33,523
Other. . . . . . . . . . . . . . . . . . . . . 67,500 67,500
TOTAL CURRENT LIABILITIES . . . . . . . . 283,375 22,979 306,354
DEFERRED INCOME TAXES. . . . . . . . . . . . . . 584,638 584,638
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . 149,257 149,257
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . 97,052 97,052
DEFERRED CREDITS . . . . . . . . . . . . . . . . 37,375 37,375
TOTAL. . . . . . . . . . . . . . . . . $3,876,011 $ (7,620) $3,868,391
The Pro Forma Adjustments are shown on Page 8 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 8
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
Long-term Debt - Junior Subordinated Debentures . . . . . . . $50,000
To record the issuance and sale of $50,000,000 principal
amount of Junior Subordinated Debentures at 100%*.
2) Deferred Charges - Unamortized Debt Expense . . . . . . . . . . $500
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500
To record estimated expense of the debt issuance.
3) Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,979
Short-term Debt . . . . . . . . . . . . . . . . . . . . . . . $22,979
To record additional short-term debt borrowings.
4) Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . . . . . . . $10,988
Subject to Mandatory Redemption. . . . . . . . . . . . . . . . 67,500
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . 344
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $78,832
To record the redemption of the following cumulative
preferred stock, $100 par value:
Per Share Principal Premium Total
Series Number of Shares Price * Amount (Discount) Paid
Not Subject to Mandatory Redemption:
4-1/8% 59,884 $67 $ 5,988 $(1,976) $ 4,012
4.56% 30,000 73.50 3,000 (795) 2,205
4.12% 20,000 67 2,000 (660) 1,340
Total Not Subject to Mandatory Redemption $10,988 $(3,431) $ 7,557
Subject to Mandatory Redemption:
5.90% 200,000 $103.50 $20,000 $ 700 $20,700
6-1/4% 150,000 105.50 15,000 825 15,825
6-7/8% 150,000 108 15,000 1,200 16,200
6.30% 175,000 106 17,500 1,050 18,550
Total Subject to Mandatory Redemption $67,500 $ 3,775 $71,275
5) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $1,178
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,178
To record estimated costs of the stock reacqusition.
6) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $589
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $589
To record the payment for voting rights consent.
* Price assumed solely for the purpose of these Pro Forma Financial Statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 8A
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Interest on Junior Subordinated Debentures @ 8.5%* = $ 4,250
Amortization of Debt Issuance Expense over 30 years = 17
Interest on Short-term Debt @ 5.5%* = 1,264
Federal Income Taxes @ 35% = (1,936)
Preferred Stock Dividend Requirements @ 4-1/8% = (247)
Preferred Stock Dividend Requirements @ 4.56% = (137)
Preferred Stock Dividend Requirements @ 4.12% = (82)
Preferred Stock Dividend Requirements @ 5.90% = (1,180)
Preferred Stock Dividend Requirements @ 6-1/4% = (938)
Preferred Stock Dividend Requirements @ 6-7/8% = (1,031)
Preferred Stock Dividend Requirements @ 6.30% = (1,103)
Amortization of Premium on Reacquired
Preferred Stock over 30 years = 70
To reflect the pro forma changes in interest charges
and preferred stock dividend requirements associated
with the proposed transactions and the related federal
income tax effect.
* Rate assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 9
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . $1,306,538 $1,306,538
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . 225,484 225,484
Purchased Power. . . . . . . . . . . . . . 135,460 135,460
Other Operation. . . . . . . . . . . . . . 312,688 312,688
Maintenance. . . . . . . . . . . . . . . . 127,738 127,738
Depreciation and Amortization. . . . . . . 140,102 140,102
Amortization of Rockport Plant Unit 1
Phase-in Plan Deferrals. . . . . . . . . 15,644 15,644
Taxes Other Than Federal Income Taxes. . . 74,888 74,888
Federal Income Taxes . . . . . . . . . . . 66,337 $(1,936) 64,401
TOTAL OPERATING EXPENSES . . . . . 1,098,341 (1,936) 1,096,405
OPERATING INCOME . . . . . . . . . . . . . . 208,197 1,936 210,133
NONOPERATING INCOME. . . . . . . . . . . . . 4,265 4,265
INCOME BEFORE INTEREST CHARGES . . . . . . . 212,462 1,936 214,398
INTEREST CHARGES . . . . . . . . . . . . . . 67,122 5,531 72,653
NET INCOME . . . . . . . . . . . . . . . . . 145,340 (3,595) 141,745
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . 11,212 (4,648) 6,564
EARNINGS APPLICABLE TO COMMON STOCK. . . . . $ 134,128 $ 1,053 $ 135,181
The common stock of the Company is wholly owned by American Electric Power Company,
Inc.
The Pro Forma Adjustments are shown on Page 8A of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 10
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $234,248
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 145,340
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 112,094
Cumulative Preferred Stock . . . . . . . . . . . . . . . . 10,498
Capital Stock Expense. . . . . . . . . . . . . . . . . . . . 714
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $256,282
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 11
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
ASSETS
<S> <C> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . $2,544,263 $2,544,263
Transmission . . . . . . . . . . . . . . . . . 814,041 814,041
Distribution . . . . . . . . . . . . . . . . . 851,689 851,689
General (including mining assets). . . . . . . 681,143 681,143
Construction Work in Progress. . . . . . . . . 71,981 71,981
Total Electric Utility Plant . . . . . 4,963,117 4,963,117
Accumulated Depreciation and Amortization. . . 2,188,562 2,188,562
NET ELECTRIC UTILITY PLANT . . . . . . 2,774,555 2,774,555
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . 106,933 106,933
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . 72,967 $(24,265) 48,702
Accounts Receivable (net). . . . . . . . . . . 212,008 212,008
Fuel . . . . . . . . . . . . . . . . . . . . . 120,157 120,157
Materials and Supplies . . . . . . . . . . . . 78,476 78,476
Accrued Utility Revenues . . . . . . . . . . . 32,522 32,522
Prepayments. . . . . . . . . . . . . . . . . . 44,473 44,473
TOTAL CURRENT ASSETS . . . . . . . . . 560,603 (24,265) 536,338
REGULATORY ASSETS. . . . . . . . . . . . . . . . 543,806 543,806
DEFERRED CHARGES . . . . . . . . . . . . . . . . 70,811 500 71,311
TOTAL. . . . . . . . . . . . . . . . $4,056,708 $(23,765) $4,032,943
The Pro Forma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 12
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 40,000,000 Shares
Outstanding - 27,952,473 Shares. . . . . . . $ 321,201 $ 321,201
Paid-in Capital. . . . . . . . . . . . . . . . 460,567 $ 451 461,018
Retained Earnings. . . . . . . . . . . . . . . 569,601 569,601
Total Common Shareholder's Equity . . . . 1,351,369 451 1,351,820
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . 38,532 (19,266) 19,266
Subject to Mandatory Redemption. . . . . . . 115,000 (54,950) 60,050
Long-term Debt . . . . . . . . . . . . . . . . 1,002,495 50,000 1,052,495
TOTAL CAPITALIZATION. . . . . . . . . . . 2,507,396 (23,765) 2,483,631
OTHER NONCURRENT LIABILITIES . . . . . . . . . . 237,890 237,890
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . 67,294 67,294
Short-term Debt. . . . . . . . . . . . . . . . 83,337 83,337
Accounts Payable . . . . . . . . . . . . . . . 100,676 100,676
Taxes Accrued. . . . . . . . . . . . . . . . . 84,028 84,028
Interest Accrued . . . . . . . . . . . . . . . 26,311 26,311
Obligations Under Capital Leases . . . . . . . 23,917 23,917
Other. . . . . . . . . . . . . . . . . . . . . 77,005 77,005
TOTAL CURRENT LIABILITIES . . . . . . . . 462,568 462,568
DEFERRED INCOME TAXES. . . . . . . . . . . . . . 737,801 737,801
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . 47,318 47,318
DEFERRED CREDITS . . . . . . . . . . . . . . . . 63,735 63,735
TOTAL. . . . . . . . . . . . . . . . . $4,056,708 $(23,765) $4,032,943
The Pro Forma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 13
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
Long-term Debt - Junior Subordinated Debentures . . . . . . . $50,000
To record the issuance and sale of $50,000,000 principal
amount of Junior Subordinated Debentures at 100%*.
2) Deferred Charges - Unamortized Debt Expense . . . . . . . . . . $500
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500
To record estimated expense of the debt issuance.
3) Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . . . . . . . $19,266
Subject to Mandatory Redemption. . . . . . . . . . . . . . . . 54,950
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $72,093
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . 2,123
To record the redemption of the following cumulative
preferred stock, $100 par value:
Per Share Principal Premium Total
Series Number of Shares Price * Amount (Discount) Paid
Not Subject to Mandatory Redemption:
4.08% 21,288 $68.50 $ 2,129 $ (671) $ 1,458
4-1/2% 101,202 73.50 10,120 (2,682) 7,438
4.20% 25,988 70.50 2,599 (767) 1,832
4.40% 44,182 74 4,418 (1,149) 3,269
Total Not Subject to Mandatory Redemption $19,266 $(5,269) $13,997
Subject to Mandatory Redemption:
5.90% 202,000 $105 $20,200 $ 1,010 $21,210
6.02% 197,500 105.50 19,750 1,086 20,836
6.35% 150,000 107 15,000 1,050 16,050
Total Subject to Mandatory Redemption $54,950 $ 3,146 $58,096
4) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $1,115
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,115
To record estimated costs of the stock reacqusition.
5) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $557
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $557
To record the payment for voting rights consent.
* Price assumed solely for the purpose of these Pro Forma Financial Statements
/TABLE
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 13A
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Interest on Junior Subordinated Debentures @ 8.5%* = $ 4,250
Amortization of Debt Issuance Expense over 30 years = 17
Federal Income Taxes @ 35% = (1,493)
Preferred Stock Dividend Requirements @ 4.08% = (87)
Preferred Stock Dividend Requirements @ 4-1/2% = (455)
Preferred Stock Dividend Requirements @ 4.20% = (109)
Preferred Stock Dividend Requirements @ 4.40% = (194)
Preferred Stock Dividend Requirements @ 5.90% = (1,192)
Preferred Stock Dividend Requirements @ 6.02% = (1,189)
Preferred Stock Dividend Requirements @ 6.35% = (953)
Amortization of Premium on Reacquired
Preferred Stock over 30 years = (15)
To reflect the pro forma changes in interest charges
and preferred stock dividend requirements associated
with the proposed transactions and the related federal
income tax effect.
* Rate assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 14
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . $1,900,759 $1,900,759
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . 642,899 642,899
Purchased Power. . . . . . . . . . . . . . 61,153 61,153
Other Operation. . . . . . . . . . . . . . 333,991 333,991
Maintenance. . . . . . . . . . . . . . . . 153,046 153,046
Depreciation and Amortization. . . . . . . 137,256 137,256
Taxes Other Than Federal Income Taxes. . . 164,530 164,530
Federal Income Taxes . . . . . . . . . . . 114,822 $(1,493) 113,329
TOTAL OPERATING EXPENSES . . . . . 1,607,697 (1,493) 1,606,204
OPERATING INCOME . . . . . . . . . . . . . . 293,062 1,493 294,555
NONOPERATING INCOME. . . . . . . . . . . . . 8,545 8,545
INCOME BEFORE INTEREST CHARGES . . . . . . . 301,607 1,493 303,100
INTEREST CHARGES . . . . . . . . . . . . . . 89,103 4,267 93,370
NET INCOME . . . . . . . . . . . . . . . . . 212,504 (2,774) 209,730
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . 9,771 (4,194) 5,577
EARNINGS APPLICABLE TO COMMON STOCK. . . . . $ 202,733 $ 1,420 $ 204,153
The common stock of the Company is wholly owned by American Electric Power Company,
Inc.
The Pro Forma Adjustments are shown on Page 13A of these Financial Statements.
/TABLE
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 15
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTI0N>
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $509,421
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 212,504
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 141,999
Cumulative Preferred Stock . . . . . . . . . . . . . . . . 10,144
Capital Stock Expense. . . . . . . . . . . . . . . . . . . . 181
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $569,601
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 16
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
ASSETS
<S> <C> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . $ 9,278,377 $ 9,278,377
Transmission . . . . . . . . . . . . . . . . . 3,357,849 3,357,849
Distribution . . . . . . . . . . . . . . . . . 4,321,685 4,321,685
General (including mining assets and
nuclear fuel). . . . . . . . . . . . . . . . 1,489,816 1,489,816
Construction Work in Progress. . . . . . . . . 344,492 344,492
Total Electric Utility Plant . . . . . 18,792,219 18,792,219
Accumulated Depreciation and Amortization. . . 7,451,534 7,451,534
NET ELECTRIC UTILITY PLANT . . . . . . 11,340,685 11,340,685
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . 866,659 866,659
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . 112,704 $(42,210) 70,494
Accounts Receivable (net). . . . . . . . . . . 525,564 525,564
Fuel . . . . . . . . . . . . . . . . . . . . . 252,822 252,822
Materials and Supplies . . . . . . . . . . . . 249,518 249,518
Accrued Utility Revenues . . . . . . . . . . . 145,078 145,078
Prepayments and Other. . . . . . . . . . . . . 111,126 111,126
TOTAL CURRENT ASSETS . . . . . . . . . 1,396,812 (42,210) 1,354,602
REGULATORY ASSETS. . . . . . . . . . . . . . . . 1,875,724 1,875,724
DEFERRED CHARGES . . . . . . . . . . . . . . . . 206,709 1,500 208,209
TOTAL. . . . . . . . . . . . . . . . $15,686,589 $(40,710) $15,645,879
The Pro Forma Adjustments are shown on Pages 18 and 18A of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 17
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
CAPITALIZATION:
Common Stock - Par Value $6.50:
Authorized - 300,000,000 Shares
Issued - 196,834,992 Shares
(8,999,992 shares were held in treasury) . . $ 1,279,427 $ 1,279,427
Paid-in Capital. . . . . . . . . . . . . . . . 1,702,102 $ (6,205) 1,695,897
Retained Earnings. . . . . . . . . . . . . . . 1,528,045 1,528,045
Total Common Shareholders' Equity . . . . 4,509,574 (6,205) 4,503,369
Cumulative Preferred Stock of Subsidiaries:
Not Subject to Mandatory Redemption. . . . . 115,365 (45,162) 70,203
Subject to Mandatory Redemption. . . . . . . 490,225 (217,450) 272,775
Long-term Debt . . . . . . . . . . . . . . . . 4,813,827 150,000 4,963,827
TOTAL CAPITALIZATION. . . . . . . . . . . 9,928,991 (118,817) 9,810,174
OTHER NONCURRENT LIABILITIES . . . . . . . . . . 968,175 968,175
CURRENT LIABILITIES:
Preferred Stock and Long-term
Debt Due Within One Year . . . . . . . . . . 97,304 97,304
Short-term Debt. . . . . . . . . . . . . . . . 275,351 78,107 353,458
Accounts Payable . . . . . . . . . . . . . . . 177,779 177,779
Taxes Accrued. . . . . . . . . . . . . . . . . 283,763 283,763
Interest Accrued . . . . . . . . . . . . . . . 112,716 112,716
Obligations Under Capital Leases . . . . . . . 93,260 93,260
Other. . . . . . . . . . . . . . . . . . . . . 311,369 311,369
TOTAL CURRENT LIABILITIES . . . . . . . . 1,351,542 78,107 1,429,649
DEFERRED INCOME TAXES. . . . . . . . . . . . . . 2,616,045 2,616,045
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . 412,262 412,262
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . 242,917 242,917
DEFERRED CREDITS . . . . . . . . . . . . . . . . 166,657 166,657
TOTAL. . . . . . . . . . . . . . . . . $15,686,589 $ (40,710) $15,645,879
The Pro Forma Adjustments are shown on Pages 18 and 18A of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 18
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000
Long-term Debt - Junior Subordinated Debentures . . . . . . . $150,000
To record the issuance and sale of $150,000,000 principal
amount of Junior Subordinated Debentures at 100%* by the
subsidiaries.
2) Deferred Charges - Unamortized Debt Expense . . . . . . . . . . $1,500
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,500
To record estimated expense of the debt issuance.
3) Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $78,107
Short-term Debt . . . . . . . . . . . . . . . . . . . . . . . $78,107
To record additional short-term debt borrowings.
4) Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . . . . . . . $45,162
Subject to Mandatory Redemption. . . . . . . . . . . . . . . . 217,450
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . 293
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $262,905
To record the redemption of the following cumulative
preferred stock, $100 par value by the subsidiaries:
Per Share Principal Premium Total
Series Number of Shares Price * Amount (Discount) Paid
Not Subject to Mandatory Redemption:
Appalachian Power Compay:
4-1/2% 149,075 $75.50 $14,908 $(3,653) $11,255
Indiana Michigan Power Company:
4-1/8% 59,884 67 5,988 (1,976) 4,012
4.56% 30,000 73.50 3,000 (795) 2,205
4.12% 20,000 67 2,000 (660) 1,340
Ohio Power Company:
4.08% 21,288 68.50 2,129 (671) 1,458
4-1/2% 101,202 73.50 10,120 (2,682) 7,438
4.20% 25,988 70.50 2,599 (767) 1,832
4.40% 44,182 74 4,418 (1,149) 3,269
Total Not Subject to Mandatory Redemption $45,162 $(12,353) $ 32,809
/TABLE
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 18A
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Per Share Principal Premium Total
Series Number of Shares Price * Amount (Discount) Paid
<S> <C> <C> <C> <C> <C>
Subject to Mandatory Redemption:
Appalachian Power Company:
5.90% 250,000 $105.50 $25,000 $1,375 $26,375
5.92% 300,000 105.50 30,000 1,650 31,650
6.85% 150,000 108 15,000 1,200 16,200
7.80% 250,000 106 25,000 1,500 26,500
Indiana Michigan Power Company:
5.90% 200,000 103.50 20,000 700 20,700
6-1/4% 150,000 105.50 15,000 825 15,825
6-7/8% 150,000 108 15,000 1,200 16,200
6.30% 175,000 106 17,500 1,050 18,550
Ohio Power Company:
5.90% 202,000 105 20,200 1,010 21,210
6.02% 197,500 105.50 19,750 1,086 20,836
6.35% 150,000 107 15,000 1,050 16,050
Total Subject to Mandatory Redemption $217,450 $12,646 $230,096
Debit Credit
(in thousands)
5) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $3,942
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,942
To record estimated costs of the stock reacqusition.
6) Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . $1,970
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,970
To record the payment for voting rights consent.
* Price assumed solely for the purpose of these Pro Forma Financial Statements
/TABLE
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 18B
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Interest on Junior Subordinated Debentures @ 8.5%* = $12,750
Amortization of Debt Issuance Expense over 30 years = 51
Interest on Short-term Debt @ 5.5%* = 4,296
Federal Income Taxes @ 35% = (5,984)
Preferred Stock Dividend Requirements @ 4-1/2% = (671)
Preferred Stock Dividend Requirements @ 4-1/8% = (247)
Preferred Stock Dividend Requirements @ 4.56% = (137)
Preferred Stock Dividend Requirements @ 4.12% = (82)
Preferred Stock Dividend Requirements @ 4.08% = (87)
Preferred Stock Dividend Requirements @ 4-1/2% = (455)
Preferred Stock Dividend Requirements @ 4.20% = (109)
Preferred Stock Dividend Requirements @ 4.40% = (194)
Preferred Stock Dividend Requirements @ 5.90% = (1,475)
Preferred Stock Dividend Requirements @ 5.92% = (1,776)
Preferred Stock Dividend Requirements @ 6.85% = (1,028)
Preferred Stock Dividend Requirements @ 7.80% = (1,950)
Preferred Stock Dividend Requirements @ 5.90% = (1,180)
Preferred Stock Dividend Requirements @ 6-1/4% = (938)
Preferred Stock Dividend Requirements @ 6-7/8% = (1,031)
Preferred Stock Dividend Requirements @ 6.30% = (1,103)
Preferred Stock Dividend Requirements @ 5.90% = (1,192)
Preferred Stock Dividend Requirements @ 6.02% = (1,189)
/TABLE
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 18C
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Preferred Stock Dividend Requirements @ 6.35% = (953)
Amortization of Premium on Reacquired
Preferred Stock over 30 years = 207
To reflect the pro forma changes in interest charges
and preferred stock dividend requirements associated
with the proposed transactions and the related federal
income tax effect.
* Rate assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 19
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . $5,828,572 $5,828,572
OPERATING EXPENSES:
Fuel and Purchased Power . . . . . . . . . 1,662,354 1,662,354
Other Operation. . . . . . . . . . . . . . 1,219,418 1,219,418
Maintenance. . . . . . . . . . . . . . . . 522,301 522,301
Depreciation and Amortization. . . . . . . 598,512 598,512
Taxes Other Than Federal Income Taxes. . . 494,712 494,712
Federal Income Taxes . . . . . . . . . . . 325,625 $(5,984) 319,641
TOTAL OPERATING EXPENSES . . . . . 4,822,922 (5,984) 4,816,938
OPERATING INCOME . . . . . . . . . . . . . . 1,005,650 5,984 1,011,634
NONOPERATING INCOME. . . . . . . . . . . . . 13,190 13,190
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS . . . . . . . . . . 1,018,840 5,984 1,024,824
INTEREST CHARGES . . . . . . . . . . . . . . 388,303 17,097 405,400
PREFERRED STOCK DIVIDEND REQUIREMENTS
OF SUBSIDIARIES . . . . . . . . . . . . . . 44,115 (15,590) 28,525
NET INCOME . . . . . . . . . . . . . . . . . $ 586,422 $ 4,477 $ 590,899
AVERAGE NUMBER OF SHARES OUTSTANDING . . . . 186,933 186,933
EARNINGS PER SHARE . . . . . . . . . . . . . $3.14 $3.16
CASH DIVIDENDS PAID PER SHARE. . . . . . . . $2.40 $2.40
The Pro Forma Adjustments are shown on Pages 18B and 18C of these Financial
Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 20
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $1,390,007
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 586,422
DEDUCTIONS:
Cash Dividends Declared. . . . . . . . . . . . . . . . . . . 448,424
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . (40)
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $1,528,045
</TABLE>
<PAGE> 1
APPALACHIAN POWER COMPANY
SOLICITED FEES*
Pursuant to the terms of the Offer to Purchase and Proxy Statement dated January
30, 1997, Appalachian Power Company will pay to designated brokers and dealers a
solicitation fee of $.50 per Share for any retail or registered Shares that are
not tendered pursuant to the Offer but which are voted in favor of the Proposed
Amendment. No such fee shall be payable to a broker or dealer with respect to
the vote of Shares by a holder unless the Proxy accompanying the vote
designates such broker or dealer. However, soliciting brokers and dealers will
not be entitled to a solicitation fee for Shares beneficially owned by such
broker or dealer.
The abovesigned represents that the Soliciting Dealer (as defined in the Offer
to Purchase and Proxy Statement) who solicited and obtained this vote in favor
of the proposed amendment is:
Name of Firm: __________________________________________________________________
Please Print
Name of Individual Broker of Financial Consultant: _____________________________
Telephone Number of Broker or Financial Consultant: ____________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
Include Zip Code
The acceptance of compensation by such broker or dealer will constitute a
representation by it that: (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended and the applicable rules
and regulations thereunder, in connection with such solicitation; (b) it is
entitled to such compensation for such solicitation under the terms and
conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting votes
of shares it has used no solicitation materials other than those furnished by
American Electric Power Company; and (d) if it is a foreign broker or dealer
not eligible for membership in the National Association of Securities Dealers,
Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair
Practice in making solicitations.
The payment of compensation to any broker or dealer is dependent on such broker
or dealer returning a Notice of Solicited Tenders to First Chicago Trust
Company of New York, the Depositary.
*SOLICITED FEES APPLY TO THE 4 1/2% SERIES ONLY. THEY DO NOT APPLY TO THE
5.90%, 5.92%, 6.85% OR THE 7.80% SERIES.
-------------
SEE REVERSE
SIDE
------------
<PAGE> 2
PLEASE MARK YOUR 0000
/X/ VOTES AS IN THIS
EXAMPLE.
APPALACHIAN POWER COMPANY PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING
TO BE HELD ON FEBRUARY 28, 1997
The proxy contained herein, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is made, the
proxy will be voted FOR Item 1. An abstention is the equivalent of a vote
AGAINST the proposed amendment.
- -------------------------------------------------------------------------------
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
- -------------------------------------------------------------------------------
ITEM 1. TO REMOVE FROM THE AMENDED ARTICLES OF
INCORPORATION ARTICLE V, CLAUSE 7(B)(b) IN ITS FOR AGAINST ABSTAIN
ENTIRETY, WHICH LIMITS APCO'S ABILITY TO ISSUE / / / / / /
INDEBTEDNESS.
- -------------------------------------------------------------------------------
The undersigned hereby appoints Armando A. Pena, John F. Di Lorenzo, and Bette
Jo Rozsa, or any of them, as proxies for the undersigned, with power of
substitution, and hereby authorizes them to represent and to vote as designated
above, and in their discretion with respect to any other business properly
brought before the Special Meeting, all the Shares of cumulative preferred
stock of Appalachian Power Company which the undersigned is entitled to vote at
the Special Meeting of Shareholders to be held on February 28, 1997, or any
adjournment(s) or postponement(s) thereof.
- -------------------------------------------------------------------------------
Please check box if you plan to attend this Special Meeting.
Beneficial holders must obtain a legal proxy form from their / /
Broker or Bank Nominee.
- -------------------------------------------------------------------------------
ALL HOLDERS OF RECORD SHOULD VOTE THIS PROXY, EVEN IF YOU ARE NOT TENDERING
YOUR SHARES. IF YOU ARE VOTING, BUT NOT TENDERING SHARES, DO NOT SEND
CERTIFICATES WITH THIS PROXY AND YOU MAY IGNORE THE SEPARATE LETTER OF
TRANSMITTAL.
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT
FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT
APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD
HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT, REGARDLESS OF
WHETHER THEY TENDER THEIR SHARES, BY CASTING THEIR VOTE AND SIGNING THIS PROXY,
OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED BY APCO'S SHAREHOLDERS, APCO WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
REMEMBER THAT THE PROXY CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS
CARD.
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
, 1997
- -------------------------------------------------------------------------
, 1997
- -------------------------------------------------------------------------
SIGNATURE(S) DATE
Daytime Area Code and Telephone Number
-----------------------------------------
If the address on this proxy is incorrect, please provide the correct address
here:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 1
INDIANA MICHIGAN POWER COMPANY
SOLICITED FEES*
Pursuant to the terms of the Offer to Purchase and Proxy Statement dated January
30, 1997, Indiana Michigan Power Company will pay to designated brokers and
dealers a solicitation fee of $.50 per Share for any retail or registered Shares
that are not tendered pursuant to the Offer but which are voted in favor of the
Proposed Amendment. No such fee shall be payable to a broker or dealer with
respect to the vote of Shares by a holder unless the Proxy accompanying the vote
designates such broker or dealer. However, soliciting brokers and dealers will
not be entitled to a solicitation fee for Shares beneficially owned by such
broker or dealer.
The abovesigned represents that the Soliciting Dealer (as defined in the Offer
to Purchase and Proxy Statement) who solicited and obtained this vote in favor
of the proposed amendment is:
Name of Firm: _________________________________________________________________
Please Print
Name of Individual Broker or Financial Consultant: ____________________________
Telephone Number of Broker or Financial Consultant:____________________________
Identification Number (if known):______________________________________________
Address:_______________________________________________________________________
Include Zip Code
The acceptance of compensation by such broker or dealer will constitute a
representation by it that: (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules
and regulations thereunder, in connection with such solicitation; (b) it is
entitled to such compensation for such solicitation under the terms and
conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting
votes of shares it has used no solicitation materials other than those
furnished by American Electric Power Company; and (d) if it is a foreign broker
or dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any broker or dealer is dependent on such broker
or dealer returning a Notice of Solicited Tenders to First Chicago Trust
Company of New York, the Depositary.
*SOLICITED FEES APPLY TO THE 4 1/8%, 4.12% AND 4.56% SERIES ONLY. THEY DO NOT
APPLY TO THE 5.90%, 6 1/4%, 6.30% OR THE 6 7/8% SERIES.
SEE REVERSE SIDE
<PAGE> 2
PLEASE MARK YOUR
/ X / VOTES AS IN THIS INDIANA MICHIGAN POWER COMPANY PROXY
EXAMPLE. SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
SPECIAL MEETING TO BE HELD ON FEBRUARY 28, 1997
The proxy contained herein, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is made, the
proxy will be voted FOR Item 1. An abstention is the equivalent of a vote
AGAINST the proposed amendment.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Indicate your vote by an (X). The Board of Directors recommend voting FOR Item 1.
- ----------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
ITEM 1. TO REMOVE FROM THE AMENDED ARTICLES OF ACCEPTANCE
ARTICLE 6A, SUBPARAGRAPH 7(B)(c) IN ITS ENTIRETY, WHICH / / / / / /
LIMITS I&M'S ABILITY TO ISSUE UNSECURED INDEBTEDNESS.
- ----------------------------------------------------------------------------------------
</TABLE>
The undersigned hereby appoints Armando A. Pena, John F. Di Lorenzo, and Bette
Jo Rozsa, or any of them, as proxies for the undersigned, with power of
substitution, and hereby authorizes them to represent and to vote as
designated above, and in their discretion with respect to any other business
properly brought before the Special Meeting, all the Shares of cumulative
preferred stock of Indiana Michigan Power Company which the undersigned is
entitled to vote at the Special Meeting of Shareholders to be held on February
28, 1997, or any adjournment(s) or postponement(s) thereof.
- -------------------------------------------------------------------------------
Please check box if you plan to attend this Special Meeting. / /
Beneficial holders must obtain a legal proxy form from their
Broker or Bank Nominee.
- -------------------------------------------------------------------------------
ALL HOLDERS OF RECORD SHOULD VOTE THIS PROXY, EVEN IF YOU ARE NOT TENDERING
YOUR SHARES. IF YOU ARE VOTING, BUT NOT TENDERING SHARES, DO NOT SEND
CERTIFICATES WITH THIS PROXY AND YOU MAY IGNORE THE SEPARATE LETTER OF
TRANSMITTAL.
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT
FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT
APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD
HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT, REGARDLESS OF
WHETHER THEY TENDER THEIR SHARES, BY CASTING THEIR VOTE AND SIGNING THIS PROXY,
OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
REMEMBER THAT THE PROXY CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS
CARD.
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- -------------------------------------------------------------------------, 1997
- -------------------------------------------------------------------------, 1997
SIGNATURE(S) DATE
Daytime Area Code and Telephone Number
-----------------------------------------
If the address on this proxy is incorrect, please provide the correct address
here:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 1
OHIO POWER COMPANY
SOLICITED FEES*
Pursuant to the terms of the Offer to Purchase and Proxy Statement dated
January 30, 1997, Ohio Power Company will pay to designated brokers and dealers
a solicitation fee of $.50 per Share for any retail or registered Shares that
are not tendered pursuant to the Offer but which are voted in favor of the
Proposed Amendment. No such fee shall be payable to a broker or dealer with
respect to the vote of Shares by a holder unless the Proxy accompanying the
vote designates such broker or dealer. However, soliciting brokers and dealers
will not be entitled to a solicitation fee for Shares beneficially owned by
such broker or dealer.
The abovesigned represents that the Soliciting Dealer (as defined in the Offer
to Purchase and Proxy Statement) who solicited and obtained this vote in favor
of the proposed amendment is:
Name of Firm: _________________________________________________________________
Please Print
Name of Individual Broker or Financial Consultant: ____________________________
Telephone Number of Broker or Financial Consultant:____________________________
Identification Number (if known):______________________________________________
Address:_______________________________________________________________________
(Include Zip Code)
The acceptance of compensation by such broker or dealer will constitute a
representation by it that: (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules
and regulations thereunder, in connection with such solicitation; (b) it is
entitled to such compensation for such solicitation under the terms and
conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting
votes of shares it has used no solicitation materials other than those
furnished by American Electric Power Company; and (d) if it is a foreign broker
or dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any broker or dealer is dependent on such broker
or dealer returning a Notice of Solicited Tenders to First Chicago Trust
Company of New York, the Depositary.
*SOLICITED FEES APPLY TO THE 4.08%, 4.20%, 4.40% AND THE 4-1/2% SERIES ONLY.
THEY DO NOT APPLY TO THE 5.90%, 6.02%, OR THE 6.35% SERIES.
SEE REVERSE SIDE
<PAGE> 2
0000
/X/ PLEASE MARK YOUR OHIO POWER COMPANY PROXY
VOTES AS IN THIS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
EXAMPLE. FOR THE SPECIAL MEETING TO BE HELD ON
FEBRUARY 28, 1997
The proxy contained herein, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is made, the
proxy will be voted FOR Item 1 and Item 2. An abstention is the equivalent of a
vote AGAINST the proposed amendment.
Indicate your vote by an (X). The Board of Directors recommends voting FOR Item
1 and Item 2.
FOR AGAINST ABSTAIN
ITEM 1. TO REMOVE FROM THE AMENDED ARTICLES
OF INCORPORATION ARTICLE FOURTH, CLAUSE
7(B)(b) IN ITS ENTIRETY, WHICH LIMITS
OPCO'S ABILITY TO ISSUE UNSECURED
INDEBTEDNESS. _____ _____ _____
ITEM 2. TO ADD A PARAGRAPH TO THE END OF
ARTICLE FOURTH, CLAUSE 3, CLARIFYING THE
AUTHORITY OF THE BOARD OF DIRECTORS TO
PURCHASE OR OTHERWISE ACQUIRE SHARES. _____ _____ _____
The undersigned hereby appoints Armando A. Pena, John F. Di Lorenzo, and Bette
Jo Rozsa, or any of them, as proxies for the undersigned, with power of
substitution, and hereby authorizes them to represent and to vote as
designated above, and in their discretion with respect to any other business
properly brought before the Special Meeting, all the Shares of cumulative
preferred stock of Ohio Power Company which the undersigned is entitled to vote
at the Special Meeting of Shareholders to be held on February 28, 1997, or any
adjournment(s) or postponement(s) thereof.
Please check box if you plan to attend this Special Meeting.
Beneficial holders must obtain a legal proxy form from
their Broker or Bank Nominee. ________
ALL HOLDERS OF RECORD SHOULD VOTE THIS PROXY, EVEN IF YOU ARE NOT TENDERING
YOUR SHARES. IF YOU ARE VOTING, BUT NOT TENDERING SHARES, DO NOT SEND
CERTIFICATES WITH THIS PROXY AND YOU MAY IGNORE THE SEPARATE LETTER OF
TRANSMITTAL.
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT
FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT
APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD
HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT, REGARDLESS OF
WHETHER THEY TENDER THEIR SHARES, BY CASTING THEIR VOTE AND SIGNING THIS PROXY,
OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED BY OPCO'S SHAREHOLDERS, OPCO WILL MAKE A SPECIAL CASH
PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED
AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
REMEMBER THAT THE PROXY CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS
CARD.
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
, 1997
- -------------------------------------------------------------------------
, 1997
- -------------------------------------------------------------------------
SIGNATURE(S) DATE
Daytime Area Code and Telephone Number
-----------------------------------------
If the address on this proxy is incorrect, please provide the correct address
here:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
