<PAGE> File No. 70-8377
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
AMENDMENT NO. 2
TO
FORM U-1
_______________________________
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
APPALACHIAN POWER COMPANY
40 Franklin Road, Roanoke, Virginia 24022
COLUMBUS SOUTHERN POWER COMPANY
215 North Front Street, Columbus, Ohio 43215
INDIANA MICHIGAN POWER COMPANY
One Summit Square, P.O. Box 60, Fort Wayne, Indiana 46801
KENTUCKY POWER COMPANY
1701 Central Avenue, P.O. Box 1428, Ashland, Kentucky 41101
OHIO POWER COMPANY
301 Cleveland Avenue, S.W., Canton, Ohio 44702
(Name of 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
A. Joseph Dowd, General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
Appalachian Power Company ("APCo"), Columbus Southern Power
Company ("CSPCo"), Indiana Michigan Power Company ("I&M"),
Kentucky Power Company ("KPCo") and Ohio Power Company ("OPCo")
(sometimes individually referred to herein as "Company" and
collectively as "Companies"), hereby amend their Application or
Declaration in File No. 70-8377 by filing Balance Sheets as of
December 31, 1993, and Statements of Income and Retained
Earnings, per books and pro forma, for the 12 months ended
December 31, 1993, of each of the Companies and of AEP and its
subsidiaries consolidated, together with journal entries
reflecting the proposed transaction.
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned companies have duly
caused this statement to be signed on their behalf by the under-
signed thereunto duly authorized.
APPALACHIAN POWER COMPANY
COLUMBUS SOUTHERN POWER COMPANY
INDIANA MICHIGAN POWER COMPANY
KENTUCKY POWER COMPANY
OHIO POWER COMPANY
By_/s/ G. P. Maloney_____
Vice President
Dated: May 10, 1994
finance\70-8377.#2
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 1
AMERICAN ELECTRIC POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Electric Utility Plant:
Production. . . . . . . . . . . . . . . . . . $9,079,130 $9,079,130
Transmission. . . . . . . . . . . . . . . . . 3,169,347 3,169,347
Distribution. . . . . . . . . . . . . . . . . 3,743,047 3,743,047
General . . . . . . . . . . . . . . . . . . . 1,406,159 1,406,159
Construction Work In Progress . . . . . . . . 314,489 314,489
Total Electric Utility Plant. . . . . 17,712,172 17,712,172
Accumulated Depreciation
and Amortization. . . . . . . . . . . . . . (6,612,131) (6,612,131)
Net Electric Utility Plant. . . . . . 11,100,041 11,100,041
Other Property and Investments. . . . . . . . . 724,373 724,373
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . 42,561 ($17,908) 24,653
Accounts Receivable:
Customers . . . . . . . . . . . . . . . . . 377,299 377,299
Miscellaneous . . . . . . . . . . . . . . . 90,514 90,514
Allowance for Uncollectible Accounts. . . . (4,048) (4,048)
Fuel - at average cost. . . . . . . . . . . . 314,441 314,441
Materials and Supplies - at average cost. . . 207,373 207,373
Accrued Utility Revenues. . . . . . . . . . . 169,905 169,905
Prepayments and Other . . . . . . . . . . . . 98,958 98,958
Total Current Assets. . . . . . . . . 1,297,003 (17,908) 1,279,095
Regulatory Assets:
Amounts Due From Customers for Future
Federal Income Taxes. . . . . . . . . . . . 1,363,802 1,363,802
Other . . . . . . . . . . . . . . . . . . . . 856,182 111,725 967,907
Total Regulatory Assets . . . . . . . 2,219,984 111,725 2,331,709
Total . . . . . . . . . . . . . . .$15,341,401 $93,817 $15,435,218
The ProForma Adjustments are shown on Pages 3 and 3A of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 2
AMERICAN ELECTRIC POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock. . . . . . . . . . . . . . . . . $1,257,977 $1,257,977
Paid-in Capital . . . . . . . . . . . . . . . 1,625,068 ($750) 1,624,318
Retained Earnings . . . . . . . . . . . . . . 1,269,283 1,269,283
Total Common Shareowners' Equity. . . 4,152,328 (750) 4,151,578
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption . . . . 268,240 268,240
Subject to Mandatory Redemption . . . . . . 500,450 - 500,450
Long-term Debt. . . . . . . . . . . . . . . . 4,964,060 - 4,964,060
Total Capitalization. . . . . . . . . 9,885,078 (750) 9,884,328
Other Noncurrent Liabilities. . . . . . . . . . 509,317 509,317
Current Liabilities:
Long-term Debt Due Within One Year. . . . . . 31,141 31,141
Short-term Debt . . . . . . . . . . . . . . . 278,976 94,567 373,543
Accounts Payable. . . . . . . . . . . . . . . 259,145 259,145
Taxes Accrued . . . . . . . . . . . . . . . . 409,198 409,198
Interest Accrued. . . . . . . . . . . . . . . 91,161 91,161
Obligations Under Capital Leases. . . . . . . 62,215 62,215
Other . . . . . . . . . . . . . . . . . . . . 338,988 338,988
Total Current Liabilities . . . . . . 1,470,824 94,567 1,565,391
Deferred Federal Income Taxes . . . . . . . . . 2,468,015 2,468,015
Deferred Investment Tax Credits . . . . . . . . 487,501 487,501
Deferred Gain on Sale and Leaseback -
Rockport Plant Unit 2 . . . . . . . . . . . . 430,091 430,091
Deferred Credits. . . . . . . . . . . . . . . . 90,575 90,575
Total . . . . . . . . . . . . . . .$15,341,401 $93,817 $15,435,218
The ProForma Adjustments are shown on Pages 3 and 3A of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 3
AMERICAN ELECTRIC POWER COMPANY
BALANCE SHEET
December 31, 1993
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash $938,025
Other Regulatory Assets - Unamortized Debt Expense 9,475
Long-term Debt - First Mortgage Bonds $947,500
To record the issuance and sale of first mortgage bonds
at 100%* and record the estimated expense of the debt
issuance.
2) Long-term Debt - First Mortgage Bonds 947,500
Other Regulatory Assets - Loss on Reacquired Debt 94,750
Cash 955,933
Short-term Debt 86,317
To record the purchase and redemption of the first
mortgage bonds listed below at a 10%* premium using
cash and short-term debt.
</TABLE>
APCo
9-1/8% Series due 11/1/2019 $ 47,500,000
9-7/8% Series due 12/1/2020 48,000,000
9.35% Series due 8/1/2021 50,000,000
8.75% Series due 2/1/2022 50,000,000
8.70% Series due 5/22/2022 40,000,000
8.50% Series due 12/1/2022 70,000,000
CSP
8.95% Series due 12/20/95 $ 30,000,000
9.15% Series due 2/2/98 57,000,000
9.625% Series due 6/1/2021 50,000,000
9.31% Series due 8/1/2001 30,000,000
8.70% Series due 7/1/2022 35,000,000
8.55% Series due 8/1/2022 15,000,000
I&M
9.50% Series due 5/1/2021 $ 40,000,000
8.75% Series due 5/1/2022 50,000,000
8.50% Series due 12/15/2022 75,000,000
KYPCo
8.95% Series due 5/10/2001 $ 20,000,000
8.90% Series due 5/21/2001 40,000,000
OPCo
9-7/8% Series due 8/1/2020 $ 50,000,000
9.625% Series due 6/1/2021 50,000,000
8.80% Series due 2/10/2022 50,000,000
8.75% Series due 6/1/2022 50,000,000
TOTAL 947,500,000
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 3A
AMERICAN ELECTRIC POWER COMPANY
BALANCE SHEET
December 31, 1993
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
3) Cash 74,250
Paid-in Capital 750
Cumulative Preferred Stock 75,000
To record the issuance and sale of preferred stock
by Columbus Southern Power Company at 100%* and
record the estimated expense of issuance.
4) Cumulative Preferred Stock 75,000
Other Regulatory Assets - Unamortized Premium on
Reacquired Preferred Stock 7,500
Cash 74,250
Short-term Debt 8,250
To record the purchase and redemption of the 9.50% Series
$100 par value Cumulative Preferred Stock by Columbus
Southern Power Company at a 10%* premium using cash and
short-term debt and to defer the premium.
These entries do not reflect any possible cash flow
effect from the current tax benefit of debt reacquisition
costs.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 3B
AMERICAN ELECTRIC POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
PRO FORMA ADJUSTMENTS
Increase
(Decrease)
(in thousands)
Interest on new first mortgage bonds @ 8%* $75,800
Amortization of Debt Issuance Expense over 30 years. 316
Interest on new Short-term Debt @ 4%* 3,783
Interest on retired first mortgage bonds:
APCo
9-1/8% Series due 11/1/2019 $ 47,500,000 (4,334)
9-7/8% Series due 12/1/2020 48,000,000 (4,740)
9.35% Series due 8/1/2021 50,000,000 (4,675)
8.75% Series due 2/1/2022 50,000,000 (4,375)
8.70% Series due 5/22/2022 40,000,000 (3,480)
8.50% Series due 12/1/2022 70,000,000 (5,950)
CSP
8.95% Series due 12/20/95 $ 30,000,000 (2,685)
9.15% Series due 2/2/98 57,000,000 (5,216)
9.625% Series due 6/1/2021 50,000,000 (4,813)
9.31% Series due 8/1/2001 30,000,000 (2,793)
8.70% Series due 7/1/2022 35,000,000 (3,045)
8.55% Series due 8/1/2022 15,000,000 (1,283)
I&M
9.50% Series due 5/1/2021 $ 40,000,000 (3,800)
8.75% Series due 5/1/2022 50,000,000 (4,375)
8.50% Series due 12/15/2022 75,000,000 (6,375)
KYPCo
8.95% Series due 5/10/2001 $ 20,000,000 (1,790)
8.90% Series due 5/21/2001 40,000,000 (3,560)
OPCo
9-7/8% Series due 8/1/2020 $ 50,000,000 (4,938)
9.625% Series due 6/1/2021 50,000,000 (4,813)
8.80% Series due 2/10/2022 50,000,000 (4,400)
8.75% Series due 6/1/2022 50,000,000 (4,375)
Subtotal Interest - (85,815)
Amortization of Redemption Premiums over 30 years. 3,158
Federal Income Taxes @ 35% 965
To reflect the pro forma changes in interest charges
associated with the proposed transactions and the
related federal income tax effect.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 4
AMERICAN ELECTRIC POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues. . . . . . . . . . . . . . . $5,268,842 $5,268,842
Operating Expenses:
Fuel and Purchased Power. . . . . . . . . . . 1,647,573 1,647,573
Other Operation . . . . . . . . . . . . . . . 965,329 965,329
Maintenance . . . . . . . . . . . . . . . . . 523,062 523,062
Depreciation and Amortization . . . . . . . . 530,731 530,731
Taxes Other Than Federal Income Taxes . . . . 470,346 470,346
Federal Income Taxes. . . . . . . . . . . . . 203,431 $965 204,396
Total Operating Expenses. . . . . . . . . 4,340,472 965 4,341,437
Operating Income . . . . . . . . . . . . . . . 928,370 (965) 927,405
Nonoperating Income:
Deferred Zimmer Plant Carrying
Charges (net of tax). . . . . . . . . . . . 25,343 25,343
Other . . . . . . . . . . . . . . . . . . . . 21,229 21,229
Total Nonoperating Income . . . . . . . . 46,572 0 46,572
Loss From Zimmer Plant Disallowance:
Disallowed Cost . . . . . . . . . . . . . . . 159,067 159,067
Related Income Taxes. . . . . . . . . . . . . (14,534) (14,534)
Net Zimmer Loss . . . . . . . . . . . . . 144,533 144,533
Income Before Interest Charges. . . . . . . . . 830,409 (965) 829,444
Interest Charges. . . . . . . . . . . . . . . . 417,822 (2,758) 415,064
Preferred Stock Dividend
Requirements of Subsidiaries. . . . . . . . . 58,818 (1,625) 57,193
Earnings Applicable to Common Stock . . . . . . $353,769 $3,418 $357,187
Average Number of Shares Outstanding. . . . . . 184,535 184,535
Earnings Per Share . . . . . . . . . . . . . . $1.92 $1.94
The ProForma Adjustments are shown on Page 3B of these Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 5
AMERICAN ELECTRIC POWER COMPANY
STATEMENT OF RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1993
(in thousands)
Retained Earnings January 1 . . . . . . . . . $1,358,800
Net Income. . . . . . . . . . . . . . . . . . 353,769
Deductions:
Cash Dividends Declared on Common Stock . . 442,891
Other . . . . . . . . . . . . . . . . . . . 395
Retained Earnings December 31 . . . . . . . . $1,269,283
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 6
APPALACHIAN POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Electric Utility Plant:
Production. . . . . . . . . . . . . . . . . . $1,767,759 $1,767,759
Transmission. . . . . . . . . . . . . . . . . 985,775 985,775
Distribution. . . . . . . . . . . . . . . . . 1,225,436 1,225,436
General . . . . . . . . . . . . . . . . . . . 140,932 140,932
Construction Work In Progress . . . . . . . . 59,166 59,166
Total Electric Utility Plant. . . . . 4,179,068 4,179,068
Accumulated Depreciation
and Amortization. . . . . . . . . . . . . . (1,546,196) (1,546,196)
Net Electric Utility Plant. . . . . . 2,632,872 2,632,872
Other Property and Investments. . . . . . . . . 59,073 59,073
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . 2,765 ($2,765) 0
Accounts Receivable:
Customers . . . . . . . . . . . . . . . . . 118,523 118,523
Affiliated Companies. . . . . . . . . . . . 9,597 9,597
Miscellaneous . . . . . . . . . . . . . . . 3,424 3,424
Allowance for Uncollectible Accounts. . . . (1,344) (1,344)
Fuel - at average cost. . . . . . . . . . . . 46,881 46,881
Materials and Supplies - at average cost. . . 43,184 43,184
Accrued Utility Revenues. . . . . . . . . . . 58,294 58,294
Prepayments . . . . . . . . . . . . . . . . . 7,030 7,030
Total Current Assets. . . . . . . . . 288,354 (2,765) 285,589
Regulatory Assets:
Amounts Due From Customers for Future
Federal Income Taxes. . . . . . . . . . . . 314,744 314,744
Other . . . . . . . . . . . . . . . . . . . . 119,425 33,605 153,030
Total Regulatory Assets . . . . . . . 434,169 33,605 467,774
Total . . . . . . . . . . . . . . . $3,414,468 $30,840 $3,445,308
* Includes investments in Subsidiaries of $28,959,000.
The ProForma Adjustments are shown on Page 8 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 7
APPALACHIAN POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock. . . . . . . . . . . . . . . . . $260,458 $260,458
Paid-in Capital . . . . . . . . . . . . . . . 494,834 494,834
Retained Earnings . . . . . . . . . . . . . . 227,816 227,816
Total Common Shareowners' Equity. . . 983,108 983,108
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption . . . . 55,000 55,000
Subject to Mandatory Redemption . . . . . . 160,450 160,450
Long-term Debt. . . . . . . . . . . . . . . . 1,215,124 $ - 1,215,124
Total Capitalization. . . . . . . . . 2,413,682 0 2,413,682
Other Noncurrent Liabilities. . . . . . . . . . 54,229 54,229
Current Liabilities:
Cumulative Preferred Stock
Due Within One Year . . . . . . . . . . . . 87 87
Long-term Debt Due Within One Year. . . . . . 44 44
Short-term Debt . . . . . . . . . . . . . . . 36,100 30,840 66,940
Accounts Payable:
General. . . . . . . . . . . . . . . . . . 33,481 33,481
Affiliated Companies . . . . . . . . . . . 37,100 37,100
Taxes Accrued . . . . . . . . . . . . . . . . 50,790 50,790
Customer Deposits . . . . . . . . . . . . . . 13,670 13,670
Interest Accrued. . . . . . . . . . . . . . . 18,189 18,189
Other . . . . . . . . . . . . . . . . . . . . 69,115 69,115
Total Current Liabilities . . . . . . 258,576 30,840 289,416
Deferred Federal Income Taxes . . . . . . . . . 573,375 573,375
Deferred Investment Tax Credits . . . . . . . . 82,968 82,968
Regulatory Liabilities and Deferred Credits . . 31,638 31,638
Total . . . . . . . . . . . . . . . $3,414,468 $30,840 $3,445,308
The ProForma Adjustments are shown on Page 8 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 8
APPALACHIAN POWER COMPANY
BALANCE SHEET
December 31, 1993
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash $302,445
Other Regulatory Assets - Unamortized Debt Expense 3,055
Long-term Debt - First Mortgage Bonds $305,500
To record the issuance and sale of first mortgage bonds
at 100%* and record the estimated expense of the debt
issuance.
2) Long-term Debt - First Mortgage Bonds 305,500
Other Regulatory Assets - Loss on Reacquired Debt 30,550
Cash 305,210
Short-term Debt 30,840
To record the purchase and redemption of the first
mortgage bonds listed below at a 10%* premium using
cash and short-term debt.
9-1/8% Series due 11/1/2019 $ 47,500,000
9-7/8% Series due 12/1/2020 48,000,000
9.35% Series due 8/1/2021 50,000,000
8.75% Series due 2/1/2022 50,000,000
8.70% Series due 5/22/2022 40,000,000
8.50% Series due 12/1/2022 70,000,000
These entries do not reflect any possible cash flow
effect from the current tax benefit of debt reacquisition
costs.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 8A
APPALACHIAN POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
PRO FORMA ADJUSTMENTS
Increase
(Decrease)
(in thousands)
Interest on new first mortgage bonds @ 8%* $24,440
Amortization of Debt Issuance Expense over 30 years. 102
Interest on new Short-term Debt @ 4%* 1,234
Interest on retired first mortgage bonds:
9-1/8% Series due 11/1/2019 $ 47,500,000 (4,334)
9-7/8% Series due 12/1/2020 48,000,000 (4,740)
9.35% Series due 8/1/2021 50,000,000 (4,675)
8.75% Series due 2/1/2022 50,000,000 (4,375)
8.70% Series due 5/22/2022 40,000,000 (3,480)
8.50% Series due 12/1/2022 70,000,000 (5,950)
Amortization of Redemption Premiums over 30 years. 1,018
Federal Income Taxes @ 35% 266
To reflect the pro forma changes in interest charges
associated with the proposed transactions and the
related federal income tax effect.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 9
APPALACHIAN POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues. . . . . . . . . . . . . . . $1,519,118 $1,519,118
Operating Expenses:
Fuel and Purchased Power. . . . . . . . . . . 697,019 697,019
Other Operation . . . . . . . . . . . . . . . 185,412 185,412
Maintenance . . . . . . . . . . . . . . . . . 119,265 119,265
Depreciation and Amortization . . . . . . . . 123,066 123,066
Taxes Other Than Federal Income Taxes . . . . 111,892 111,892
Federal Income Taxes. . . . . . . . . . . . . 54,077 $266 54,343
Total Operating Expenses. . . . . . . . . 1,290,731 266 1,290,997
Operating Income . . . . . . . . . . . . . . . 228,387 (266) 228,121
Nonoperating Income:
Equity in Earnings of Subsidiary Companies. . 469 469
Other . . . . . . . . . . . . . . . . . . . . (3,004) (3,004)
Total Nonoperating Income (Loss). . . . . (2,535) 0 (2,535)
Income Before Interest Charges. . . . . . . . . 225,852 (266) 225,586
Interest Charges. . . . . . . . . . . . . . . . 100,720 (760) 99,960
Preferred Stock Dividend Requirements . . . . . 16,540 16,540
Earnings Applicable to Common Stock . . . . . . $108,592 $494 $109,086
The ProForma Adjustments are shown on Page 8A of these Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 10
APPALACHIAN POWER COMPANY
STATEMENT OF RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1993
(in thousands)
Retained Earnings January 1 . . . . . . . . . $229,920
Net Income. . . . . . . . . . . . . . . . . . 125,132
Deductions:
Cash Dividends Declared on Common Stock . . 110,696
Cash Dividends Declared on Cumulative
Preferred Stock . . . . . . . . . . . . . 16,011
Other . . . . . . . . . . . . . . . . . . . 529
Retained Earnings December 31 . . . . . . . . $227,816
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 11
COLUMBUS SOUTHERN POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Electric Utility Plant:
Production. . . . . . . . . . . . . . . . . . $1,443,506 $1,443,506
Transmission. . . . . . . . . . . . . . . . . 295,539 295,539
Distribution. . . . . . . . . . . . . . . . . 755,342 755,342
General . . . . . . . . . . . . . . . . . . . 94,678 94,678
Construction Work In Progress . . . . . . . . 52,794 52,794
Total Electric Utility Plant. . . . . 2,641,859 2,641,859
Accumulated Depreciation
and Amortization. . . . . . . . . . . . . . (810,167) (810,167)
Net Electric Utility Plant. . . . . . 1,831,692 1,831,692
Other Property and Investments* . . . . . . . . 36,588 36,588
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . 6,123 $(6,123) 0
Accounts Receivable:
Customers . . . . . . . . . . . . . . . . . 42,906 42,906
Affiliated Companies. . . . . . . . . . . . 1,084 1,084
Miscellaneous . . . . . . . . . . . . . . . 8,094 8,094
Allowance for Uncollectible Accounts. . . . (991) (991)
Fuel - at average cost. . . . . . . . . . . . 32,257 32,257
Materials and Supplies - at average cost. . . 24,872 24,872
Accrued Utility Revenues. . . . . . . . . . . 28,889 28,889
Prepayments and Other . . . . . . . . . . . . 30,178 30,178
Total Current Assets. . . . . . . . . 173,412 (6,123) 167,289
Regulatory Assets:
Amounts Due From Customers for Future
Federal Income Taxes. . . . . . . . . . . . 290,295 290,295
Other . . . . . . . . . . . . . . . . . . . . 249,387 31,370 280,757
Total Regulatory Assets . . . . . . . 539,682 31,370 571,052
Total . . . . . . . . . . . . . . . $2,581,374 $25,247 $2,606,621
* Includes investments in Subsidiaries of $5,005,000.
The ProForma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 12
COLUMBUS SOUTHERN POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock. . . . . . . . . . . . . . . . . $41,026 $41,026
Paid-in Capital . . . . . . . . . . . . . . . 566,046 $(750) 565,296
Retained Earnings . . . . . . . . . . . . . . 18,288 18,288
Total Common Shareowners' Equity. . . 625,360 (750) 624,610
Cumulative Preferred Stock:
Subject to Mandatory Redemption . . . . . . 125,000 - 125,000
Long-term Debt. . . . . . . . . . . . . . . . 997,013 - 997,013
Total Capitalization. . . . . . . . . 1,747,373 (750) 1,746,623
Other Noncurrent Liabilities. . . . . . . . . . 16,846 16,846
Current Liabilities:
Long-term Debt Due Within One Year. . . . . . 20,700 20,700
Short-term Debt . . . . . . . . . . . . . . . 25,225 25,997 51,222
Accounts Payable:
General. . . . . . . . . . . . . . . . . . 36,871 36,871
Affiliated Companies . . . . . . . . . . . 15,917 15,917
Taxes Accrued . . . . . . . . . . . . . . . . 114,149 114,149
Interest Accrued. . . . . . . . . . . . . . . 23,245 23,245
Other . . . . . . . . . . . . . . . . . . . . 20,727 20,727
Total Current Liabilities . . . . . . 256,834 25,997 282,831
Deferred Federal Income Taxes . . . . . . . . . 474,744 474,744
Deferred Investment Tax Credits . . . . . . . . 68,473 68,473
Deferred Credits. . . . . . . . . . . . . . . . 17,104 17,104
Total . . . . . . . . . . . . . . . $2,581,374 $25,247 $2,606,621
The ProForma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 13
COLUMBUS SOUTHERN POWER COMPANY
BALANCE SHEET
December 31, 1993
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash $214,830
Other Regulatory Assets - Unamortized Debt Expense 2,170
Long-term Debt - First Mortgage Bonds $217,000
To record the issuance and sale of first mortgage bonds
at 100%* and record the estimated expense of the debt
issuance.
2) Long-term Debt - First Mortgage Bonds 217,000
Other Regulatory Assets - Loss on Reacquired Debt 21,700
Cash 220,953
Short-term Debt 17,747
To record the purchase and redemption of the first
mortgage bonds listed below at a 10%* premium using
cash and short-term debt.
8.95% Series due 12/20/95 $ 30,000,000
9.15% Series due 2/2/98 57,000,000
9.625% Series due 6/1/2021 50,000,000
9.31% Series due 8/1/2001 30,000,000
8.70% Series due 7/1/2022 35,000,000
8.55% Series due 8/1/2022 15,000,000
3) Cash 74,250
Paid-in Capital 750
Cumulative Preferred Stock 75,000
To record the issuance and sale of preferred stock
at 100%* and record the estimated expense of issuance.
4) Cumulative Preferred Stock 75,000
Other Regulatory Assets - Unamortized Premium on
Reacquired Preferred Stock 7,500
Cash 74,250
Short-term Debt 8,250
To record the purchase and redemption of the 9.50% Series
$100 par value Cumulative Preferred Stock at a 10%* premium
using cash and short-term debt and to defer the premium.
These entries do not reflect any possible cash flow
effect from the current tax benefit of debt reacquisition
costs.
* Rate assumed solely for the purpose of these
Prio Forms Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 13A
COLUMBUS SOUTHERN POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
PRO FORMA ADJUSTMENTS
Increase
(Decrease)
(in thousands)
Interest on new first mortgage bonds @ 8%* $17,360
Amortization of Debt Issuance Expense over 30 years. 72
Interest on new Short-term Debt @ 4%* 1,040
Interest on retired first mortgage bonds:
8.95% Series due 12/20/95 $ 30,000,000 (2,685)
9.15% Series due 2/2/98 57,000,000 (5,216)
9.625% Series due 6/1/2021 50,000,000 (4,813)
9.31% Series due 8/1/2001 30,000,000 (2,793)
8.70% Series due 7/1/2022 35,000,000 (3,045)
8.55% Series due 8/1/2022 15,000,000 (1,283)
Amortization of Redemption Premiums over 30 years. 723
Federal Income Taxes @ 35% 223
To reflect the pro forma changes in interest charges
associated with the proposed transactions and the
related federal income tax effect.
_________________________________________________________
Preferred Stock Dividend Requirements on New Stock @ 7%* 5,250
Preferred Stock Dividend Requirements on 9.50% Series (7,125)
Amortization of Redemption Premium on Cumulative Preferred
Stock over 30 years. 250
To reflect the pro forma changes in Preferred Stock Dividend
Requirements associated with the proposed transactions and the
amortization of deferred premiums.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 14
COLUMBUS SOUTHERN POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues. . . . . . . . . . . . . . . $953,652 $953,652
Operating Expenses:
Fuel and Purchased Power. . . . . . . . . . . 347,160 347,160
Other Operation . . . . . . . . . . . . . . . 170,397 170,397
Maintenance . . . . . . . . . . . . . . . . . 71,537 71,537
Depreciation . . . . . . . . . . . . . . . . 84,883 84,883
Deferral of Zimmer Plant Phase-in Costs . . . (8,913) (8,913)
Taxes Other Than Federal Income Taxes . . . . 99,348 99,348
Federal Income Taxes. . . . . . . . . . . . . 39,317 $223 39,540
Total Operating Expenses. . . . . . . . . 803,729 223 803,952
Operating Income . . . . . . . . . . . . . . . 149,923 (223) 149,700
Nonoperating Income:
Deferred Zimmer Plant Carrying
Charges (net of tax). . . . . . . . . . . . 25,343 25,343
Equity in Earnings of Subsidiary Companies. . 356 356
Other . . . . . . . . . . . . . . . . . . . . 1,937 1,937
Total Nonoperating Income . . . . . . . . 27,636 0 27,636
Loss From Zimmer Plant Disallowance:
Disallowed Cost . . . . . . . . . . . . . . . 159,067 159,067
Related Income Taxes. . . . . . . . . . . . . (14,534) (14,534)
Net Zimmer Loss . . . . . . . . . . . . . 144,533 144,533
Income Before Interest Charges. . . . . . . . . 33,026 (223) 32,803
Interest Charges. . . . . . . . . . . . . . . . 88,924 (640) 88,284
Preferred Stock Dividend Requirements . . . . . 11,062 (1,625) 9,437
Earnings Applicable to Common Stock . . . . . . ($66,960) $2,042 $(64,918)
The ProForma Adjustments are shown on Page 13A of these Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 15
COLUMBUS SOUTHERN POWER COMPANY
STATEMENT OF RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1993
(in thousands)
Retained Earnings January 1 . . . . . . . . . $127,562
Net Income. . . . . . . . . . . . . . . . . . (55,898)
Deductions:
Cash Dividends Declared on Common Stock . . 42,175
Cash Dividends Declared on Cumulative
Preferred Stock . . . . . . . . . . . . . 11,062
Other . . . . . . . . . . . . . . . . . . . 139
Retained Earnings December 31 . . . . . . . . $18,288
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 16
INDIANA MICHIGAN POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Electric Utility Plant:
Production. . . . . . . . . . . . . . . . . . $2,602,527 $2,602,527
Transmission. . . . . . . . . . . . . . . . . 839,198 839,198
Distribution. . . . . . . . . . . . . . . . . 608,752 608,752
General (including nuclear fuel). . . . . . . 152,470 152,470
Construction Work In Progress . . . . . . . . 88,010 88,010
Total Electric Utility Plant. . . . . 4,290,957 4,290,957
Accumulated Depreciation
and Amortization. . . . . . . . . . . . . . (1,714,829) (1,714,829)
Net Electric Utility Plant. . . . . . 2,576,128 2,576,128
Other Property and Investments* . . . . . . . . 439,995 439,995
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . 3,727 ($3,727) 0
Accounts Receivable:
Customers . . . . . . . . . . . . . . . . . 67,246 67,246
Affiliated Companies. . . . . . . . . . . . 24,507 24,507
Miscellaneous . . . . . . . . . . . . . . . 15,290 15,290
Allowance for Uncollectible Accounts. . . . (504) (504)
Fuel - at average cost. . . . . . . . . . . . 34,476 34,476
Materials and Supplies - at average cost. . . 57,800 57,800
Accrued Utility Revenues. . . . . . . . . . . 34,642 34,642
Prepayments and Other . . . . . . . . . . . . 11,998 11,998
Total Current Assets. . . . . . . . . 249,182 (3,727) 245,455
Regulatory Assets:
Amounts Due From Customers for Future
Federal Income Taxes. . . . . . . . . . . . 271,036 18,150 289,186
Other . . . . . . . . . . . . . . . . . . . . 205,874 205,874
Total Regulatory Assets . . . . . . . 476,910 18,150 495,060
Total . . . . . . . . . . . . . . . $3,742,215 $14,423 $3,756,638
* Includes investments in Subsidiaries of $101,426,000.
The ProForma Adjustments are shown on Page 18 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 17
INDIANA MICHIGAN POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock. . . . . . . . . . . . . . . . . $56,584 $56,584
Paid-in Capital . . . . . . . . . . . . . . . 734,933 734,933
Retained Earnings . . . . . . . . . . . . . . 177,638 177,638
Total Common Shareowners' Equity. . . 969,155 969,155
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption . . . . 87,000 87,000
Subject to Mandatory Redemption . . . . . . 100,000 100,000
Long-term Debt. . . . . . . . . . . . . . . . 1,073,154 $ - 1,073,154
Total Capitalization. . . . . . . . . 2,229,309 - 2,229,309
Other Noncurrent Liabilities. . . . . . . . . . 288,197 288,197
Current Liabilities:
Short-term Debt . . . . . . . . . . . . . . . 50,075 14,423 64,498
Accounts Payable:
General. . . . . . . . . . . . . . . . . . 40,437 40,437
Affiliated Companies . . . . . . . . . . . 20,156 20,156
Taxes Accrued . . . . . . . . . . . . . . . . 54,154 54,154
Interest Accrued. . . . . . . . . . . . . . . 18,894 18,894
Obligations Under Capital Leases. . . . . . . 20,585 20,585
Other . . . . . . . . . . . . . . . . . . . . 79,247 79,247
Total Current Liabilities . . . . . . 283,548 14,423 297,971
Deferred Federal Income Taxes . . . . . . . . . 531,157 531,157
Deferred Investment Tax Credits . . . . . . . . 186,032 186,032
Deferred Gain on Sale and Leaseback -
Rockport Plant Unit 2 . . . . . . . . . . . . 211,446 211,446
Deferred Credits. . . . . . . . . . . . . . . . 12,526 12,526
Total . . . . . . . . . . . . . . . $3,742,215 $14,423 $3,756,638
The ProForma Adjustments are shown on Page 18 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 18
INDIANA MICHIGAN POWER COMPANY
BALANCE SHEET
December 31, 1993
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash $163,350
Other Regulatory Assets - Unamortized Debt Expense 1,650
Long-term Debt - First Mortgage Bonds $165,000
To record the issuance and sale of first mortgage bonds
at 100%* and record the estimated expense of the debt
issuance.
2) Long-term Debt - First Mortgage Bonds 165,000
Other Regulatory Assets - Loss on Reacquired Debt 16,500
Cash 167,077
Short-term Debt 14,423
To record the purchase and redemption of the first
mortgage bonds listed below at a 10%* premium using
cash and short-term debt.
9.50% Series due 5/1/2021 $ 40,000,000
8.75% Series due 5/1/2022 50,000,000
8.50% Series due 12/15/2022 75,000,000
These entries do not reflect any possible
cash flow effect from the current tax
benefit of debt reacquisition costs.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 18A
INDIANA MICHIGAN POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
PRO FORMA ADJUSTMENTS
Increase
(Decrease)
(in thousands)
Interest on new first mortgage bonds @ 8%* $13,200
Amortization of Debt Issuance Expense over 30 years. 55
Interest on new Short-term Debt @ 4%* 577
Interest on retired first mortgage bonds:
9.50% Series due 5/1/2021 $ 40,000,000 (3,800)
8.75% Series due 5/1/2022 50,000,000 (4,375)
8.50% Series due 12/15/2022 75,000,000 (6,375)
Amortization of Redemption Premiums over 30 years. 550
Federal Income Taxes @ 35% 59
To reflect the pro forma changes in interest charges
associated with the proposed transactions and the
related federal income tax effect.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 19
INDIANA MICHIGAN POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues. . . . . . . . . . . . . . . $1,202,643 $1,202,643
Operating Expenses:
Fuel and Purchased Power. . . . . . . . . . . 328,480 328,480
Other Operation . . . . . . . . . . . . . . . 264,543 264,543
Maintenance . . . . . . . . . . . . . . . . . 142,637 142,637
Depreciation and Amortization . . . . . . . . 138,794 138,794
Amortization of Rockport Plant Unit 1
Phase-in Plan Deferrals . . . . . . . . . . 15,644 15,644
Taxes Other Than Federal Income Taxes . . . . 67,918 67,918
Federal Income Taxes. . . . . . . . . . . . . 34,707 $59 34,766
Total Operating Expenses. . . . . . . . . 992,723 59 992,782
Operating Income . . . . . . . . . . . . . . . 209,920 (59) 209,861
Nonoperating Income:
Equity in Earnings of Subsidiary Companies. . (311) (311)
Other . . . . . . . . . . . . . . . . . . . . 77 77
Total Nonoperating Income (Loss). . . . . (234) 0 (234)
Income Before Interest Charges. . . . . . . . . 209,686 (59) 209,627
Interest Charges. . . . . . . . . . . . . . . . 80,373 (168) 80,205
Preferred Stock Dividend Requirements . . . . . 14,225 14,225
Earnings Applicable to Common Stock . . . . . . $115,088 $109 $115,197
The ProForma Adjustments are shown on Page 18A of these Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 20
INDIANA MICHIGAN POWER COMPANY
STATEMENT OF RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1993
(in thousands)
Retained Earnings January 1 . . . . . . . . . $171,309
Net Income. . . . . . . . . . . . . . . . . . 129,313
Deductions:
Cash Dividends Declared on Common Stock . . 108,696
Cash Dividends Declared on Cumulative
Preferred Stock . . . . . . . . . . . . . 14,225
Other . . . . . . . . . . . . . . . . . . . 63
Retained Earnings December 31 . . . . . . . . $177,638
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 21
KENTUCKY POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Electric Utility Plant:
Production. . . . . . . . . . . . . . . . . . $211,617 $211,617
Transmission. . . . . . . . . . . . . . . . . 249,966 249,966
Distribution. . . . . . . . . . . . . . . . . 281,834 281,834
General . . . . . . . . . . . . . . . . . . . 54,637 54,637
Construction Work In Progress . . . . . . . . 9,374 9,374
Total Electric Utility Plant. . . . . 807,428 807,428
Accumulated Depreciation
and Amortization. . . . . . . . . . . . . . (248,673) (248,673)
Net Electric Utility Plant. . . . . . 558,755 558,755
Other Property and Investments. . . . . . . . . 6,763 6,763
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . 858 ($858) 0
Accounts Receivable:
Customers . . . . . . . . . . . . . . . . . 18,385 18,385
Affiliated Companies. . . . . . . . . . . . 4,183 4,183
Miscellaneous . . . . . . . . . . . . . . . 1,778 1,778
Allowance for Uncollectible Accounts. . . . (208) (208)
Fuel - at average cost. . . . . . . . . . . . 8,405 8,405
Materials and Supplies - at average cost. . . 8,804 8,804
Accrued Utility Revenues. . . . . . . . . . . 10,476 10,476
Prepayments . . . . . . . . . . . . . . . . . 1,367 1,367
Total Current Assets. . . . . . . . . 54,048 (858) 53,190
Regulatory Assets:
Amounts Due From Customers for Future
Federal Income Taxes. . . . . . . . . . . . 37,910 37,910
Other . . . . . . . . . . . . . . . . . . . . 12,903 6,600 19,503
Total Regulatory Assets . . . . . . . 50,813 6,600 57,413
Total . . . . . . . . . . . . . . . $670,379 $5,742 $676,121
The ProForma Adjustments are shown on Page 23 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 22
KENTUCKY POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock. . . . . . . . . . . . . . . . . $50,450 $50,450
Paid-in Capital . . . . . . . . . . . . . . . 58,750 58,750
Retained Earnings . . . . . . . . . . . . . . 85,296 85,296
Total Common Shareowners' Equity. . . 194,496 194,496
Long-term Debt. . . . . . . . . . . . . . . . 253,495 $ - 253,495
Total Capitalization. . . . . . . . . 447,991 - 447,991
Other Noncurrent Liabilities. . . . . . . . . . 7,678 7,678
Current Liabilities:
Short-term Debt . . . . . . . . . . . . . . . 38,150 5,742 43,892
Accounts Payable:
General. . . . . . . . . . . . . . . . . . 10,392 10,392
Affiliated Companies . . . . . . . . . . . 8,064 8,064
Customer Deposits . . . . . . . . . . . . . . 4,621 4,621
Taxes Accrued . . . . . . . . . . . . . . . . 6,767 6,767
Interest Accrued. . . . . . . . . . . . . . . 5,905 5,905
Other . . . . . . . . . . . . . . . . . . . . 8,186 8,186
Total Current Liabilities . . . . . . 82,085 5,742 87,827
Deferred Federal Income Taxes . . . . . . . . . 108,966 108,966
Deferred Investment Tax Credits . . . . . . . . 16,454 16,454
Deferred Credits. . . . . . . . . . . . . . . . 7,205 7,205
Total . . . . . . . . . . . . . . . $670,379 $5,742 $676,121
The ProForma Adjustments are shown on Page 23 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 23
KENTUCKY POWER COMPANY
BALANCE SHEET
December 31, 1993
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash $59,400
Other Regulatory Assets - Unamortized Debt Expense 600
Long-term Debt - First Mortgage Bonds $60,000
To record the issuance and sale of first mortgage bonds
at 100%* and record the estimated expense of the debt
issuance.
2) Long-term Debt - First Mortgage Bonds 60,000
Other Regulatory Assets - Loss on Reacquired Debt 6,000
Cash 60,258
Short-term Debt 5,742
To record the purchase and redemption of the first
mortgage bonds listed below at a 10%* premium using
cash and short-term debt.
8.95% Series due 5/10/2001 $ 20,000,000
8.90% Series due 5/21/2001 40,000,000
These entries do not reflect any possible
cash flow effect from the current tax
benefit of debt reacquisition costs.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 23A
KENTUCKY POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
PRO FORMA ADJUSTMENTS
Increase
(Decrease)
(in thousands)
Interest on new first mortgage bonds @ 8%* $4,800
Amortization of Debt Issuance Expense over 30 years. 20
Interest on new Short-term Debt @ 4%* 230
Interest on retired first mortgage bonds:
8.95% Series due 5/10/2001 $ 20,000,000 (1,790)
8.90% Series due 5/21/2001 40,000,000 (3,560)
Amortization of Redemption Premiums over 30 years. 200
Federal Income Taxes @ 35% 35
To reflect the pro forma changes in interest charges
associated with the proposed transactions and the
related federal income tax effect.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 24
KENTUCKY POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues. . . . . . . . . . . . . . . $294,252 $294,252
Operating Expenses:
Fuel and Purchased Power. . . . . . . . . . . 156,912 156,912
Other Operation . . . . . . . . . . . . . . . 38,688 38,688
Maintenance . . . . . . . . . . . . . . . . . 28,687 28,687
Depreciation and Amortization . . . . . . . . 22,275 22,275
Taxes Other Than Federal Income Taxes . . . . 7,504 7,504
Federal Income Taxes. . . . . . . . . . . . . 1,450 $35 1,485
Total Operating Expenses. . . . . . . . . 255,516 35 255,551
Operating Income . . . . . . . . . . . . . . . 38,736 (35) 38,701
Nonoperating Income . . . . . . . . . . . . . . 59 59
Income Before Interest Charges. . . . . . . . . 38,795 (35) 38,760
Interest Charges. . . . . . . . . . . . . . . . 20,764 (100) 20,664
Earnings Applicable to Common Stock . . . . . . $18,031 $65 $18,096
The ProForma Adjustments are shown on Page 23A of these Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 25
KENTUCKY POWER COMPANY
STATEMENT OF RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1993
(in thousands)
Retained Earnings January 1 . . . . . . . . . $89,957
Net Income. . . . . . . . . . . . . . . . . . 18,031
Cash Dividends Declared . . . . . . . . . . . 22,692
Retained Earnings December 31 . . . . . . . . $85,296
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 26
OHIO POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Electric Utility Plant:
Production. . . . . . . . . . . . . . . . . . $2,412,973 $2,412,973
Transmission. . . . . . . . . . . . . . . . . 767,548 767,548
Distribution. . . . . . . . . . . . . . . . . 766,639 766,639
General (including mining assets) . . . . . . 194,913 194,913
Construction Work In Progress . . . . . . . . 94,538 94,538
Total Electric Utility Plant. . . . . 4,236,611 4,236,611
Accumulated Depreciation
and Amortization. . . . . . . . . . . . . . (1,728,828) (1,728,828)
Net Electric Utility Plant. . . . . . 2,507,783 2,507,783
Other Property and Investments* . . . . . . . . 252,365 252,365
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . 4,435 $(4,435) 0
Accounts Receivable:
Customers . . . . . . . . . . . . . . . . . 118,133 118,133
Affiliated Companies. . . . . . . . . . . . 24,912 24,912
Miscellaneous . . . . . . . . . . . . . . . 14,368 14,368
Allowance for Uncollectible Accounts. . . . (960) (960)
Fuel - at average cost. . . . . . . . . . . . 175,801 175,801
Materials and Supplies - at average cost. . . 41,208 41,208
Accrued Utility Revenues. . . . . . . . . . . 32,234 32,234
Prepayments and Other . . . . . . . . . . . . 40,846 40,846
Total Current Assets. . . . . . . . . 450,977 (4,435) 446,542
Regulatory Assets:
Amounts Due From Customers for Future
Federal Income Taxes. . . . . . . . . . . . 372,890 372,890
Other . . . . . . . . . . . . . . . . . . . . 206,464 22,000 228,464
Total Regulatory Assets . . . . . . . 579,354 22,000 601,354
Total . . . . . . . . . . . . . . . $3,790,479 $17,565 $3,808,044
* Includes investments in Subsidiaries of $183,656,000.
The ProForma Adjustments are shown on Page 28 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 27
OHIO POWER COMPANY
BALANCE SHEET
December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock. . . . . . . . . . . . . . . . . $321,201 $321,201
Paid-in Capital . . . . . . . . . . . . . . . 463,100 463,100
Retained Earnings . . . . . . . . . . . . . . 474,500 474,500
Total Common Shareowners' Equity. . . 1,258,801 1,258,801
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption . . . . 126,240 126,240
Subject to Mandatory Redemption . . . . . . 115,000 115,000
Long-term Debt. . . . . . . . . . . . . . . . 1,092,968 $ - 1,092,968
Total Capitalization. . . . . . . . . 2,593,009 - 2,593,009
Other Noncurrent Liabilities. . . . . . . . . . 40,821 40,821
Current Liabilities:
Short-term Debt . . . . . . . . . . . . . . . 38,000 17,565 55,565
Accounts Payable:
General. . . . . . . . . . . . . . . . . . 106,105 106,105
Affiliated Companies . . . . . . . . . . . 27,746 27,746
Taxes Accrued . . . . . . . . . . . . . . . . 166,115 166,115
Interest Accrued. . . . . . . . . . . . . . . 18,850 18,850
Obligations Under Capital Leases. . . . . . . 5,124 5,124
Other . . . . . . . . . . . . . . . . . . . . 60,410 60,410
Total Current Liabilities . . . . . . 422,350 17,565 439,915
Deferred Federal Income Taxes . . . . . . . . . 648,901 648,901
Deferred Investment Tax Credits . . . . . . . . 45,795 45,795
Regulatory Liabilities and Deferred Credits . . 39,603 39,603
Total . . . . . . . . . . . . . . . $3,790,479 $17,565 $3,808,044
The ProForma Adjustments are shown on Page 28 of these Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 28
OHIO POWER COMPANY
BALANCE SHEET
December 31, 1993
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Cash $198,000
Other Regulatory Assets - Unamortized Debt Expense 2,000
Long-term Debt - First Mortgage Bonds $200,000
To record the issuance and sale of first mortgage bonds
at 100%* and record the estimated expense of the debt
issuance.
2) Long-term Debt - First Mortgage Bonds 200,000
Other Regulatory Assets - Loss on Reacquired Debt 20,000
Cash 202,435
Short-term Debt 17,565
To record the purchase and redemption of the first
mortgage bonds listed below at a 10%* premium using
cash and short-term debt.
9-7/8% Series due 8/1/2020 $ 50,000,000
9.625% Series due 6/1/2021 50,000,000
8.80% Series due 2/10/2022 50,000,000
8.75% Series due 6/1/2022 50,000,000
These entries do not reflect any possible
cash flow effect from the current tax
benefit of debt reacquisition costs.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 28A
OHIO POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
PRO FORMA ADJUSTMENTS
Increase
(Decrease)
(in thousands)
Interest on new first mortgage bonds @ 8%* $16,000
Amortization of Debt Issuance Expense over 30 years. 67
Interest on new Short-term Debt @ 4%* 703
Interest on retired first mortgage bonds:
9-7/8% Series due 8/1/2020 $ 50,000,000 (4,938)
9.625% Series due 6/1/2021 50,000,000 (4,813)
8.80% Series due 2/10/2022 50,000,000 (4,400)
8.75% Series due 6/1/2022 50,000,000 (4,375)
Amortization of Redemption Premiums over 30 years. 667
Federal Income Taxes @ 35% 381
To reflect the pro forma changes in interest charges
associated with the proposed transactions and the
related federal income tax effect.
* Price assumed solely for the purpose of these
Pro Forma Financial Statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS PAGE 29
OHIO POWER COMPANY
STATEMENT OF INCOME
Year Ended December 31, 1993
(in thousands)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
<S> <C> <C> <C>
Operating Revenues. . . . . . . . . . . . . . . $1,718,346 $1,718,346
Operating Expenses:
Fuel and Purchased Power. . . . . . . . . . . 749,074 749,074
Other Operation . . . . . . . . . . . . . . . 218,793 218,793
Maintenance . . . . . . . . . . . . . . . . . 140,756 140,756
Depreciation and Amortization . . . . . . . . 128,668 128,668
Taxes Other Than Federal Income Taxes . . . . 168,772 168,772
Federal Income Taxes. . . . . . . . . . . . . 64,169 $381 64,550
Total Operating Expenses. . . . . . . . . 1,470,232 381 1,470,613
Operating Income . . . . . . . . . . . . . . . 248,114 (381) 247,733
Nonoperating Income:
Equity in Earnings of Subsidiary Companies. . 14,387 14,387
Other . . . . . . . . . . . . . . . . . . . . 16,468 16,468
Total Nonoperating Income (Loss). . . . . 30,855 0 30,855
Income Before Interest Charges. . . . . . . . . 278,969 (381) 278,588
Interest Charges. . . . . . . . . . . . . . . . 93,199 (1,089) 92,110
Preferred Stock Dividend Requirements . . . . . 16,990 16,990
Earnings Applicable to Common Stock . . . . . . $168,780 $708 $169,488
The ProForma Adjustments are shown on Page 28A of these Financial Statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS PAGE 30
OHIO POWER COMPANY
STATEMENT OF RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1993
(in thousands)
Retained Earnings January 1 . . . . . . . . . $445,955
Net Income. . . . . . . . . . . . . . . . . . 185,770
Deductions:
Cash Dividends Declared on Common Stock . . 140,042
Cash Dividends Declared on Cumulative
Preferred Stock . . . . . . . . . . . . . 17,141
Other . . . . . . . . . . . . . . . . . . . 42
Retained Earnings December 31 . . . . . . . . $474,500
