UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
- ----------------------------------------------
In the matter of
Central and South West Corporation REPORT FOR PERIOD
CSW International, Inc. April 1, 1998 to
CSW Energy, Inc. June 30, 1998
Dallas, Texas 75266 PURSUANT TO RULE 24
File No. 070-8423
This report is filed under Rule 24 of the Public Utility Holding Company
Act of 1935 by Central and South West Corporation ("CSW") and CSW International,
Inc. ("CSW International"), a wholly owned subsidiary of CSW.
Under HCAR 35-26383, CSW International is authorized to participate in foreign
utility companies ("FUCOs") and exempt wholesale generators ("EWGs") and to
provide consulting services with respect to the same.
Under HCAR 35-26653, CSW is authorized to invest the proceeds from the issuance
and sale of common stock and debt in EWGs and FUCOs, and to guarantee the
obligations of such entities, as defined.
Attached is the information required pursuant to HCAR 35-26383 and HCAR
35-26653.
(1) Information on each investment made by CSWI, directly or indirectly, since
the previous quarter, in any other project parent, indicating the amount
and type of such investment and identifying the facility with respect to
which such project parent was organized. See Exhibit A.
(2) Information about the amount, type, and terms of securities (including
interest rate, maturity, and the basis for inflation adjustment in the
case of non-recourse indebtedness denominated in any currency other than
U.S. dollars) issued by any project parent to a third person. See
Exhibit B.
(3) A balance sheet as of the relevant report date. See Exhibit C.
(4) An income statement for the quarter ended. See Exhibit D.
(5) Information on intercompany transactions with CSW International related to
CSW International's consulting services, including (a) the name of each
associate company providing services, (b) a listing of services provided,
(c) the total dollar amount of services provided, broken down by associate
company, and (d) the aggregate outstanding amount, as of the relevant
quarterly reporting date, of all guarantees issued by or for the account
of CSW, CSWI, or any project parent pursuant to this application
declaration. See Exhibit E.
(6) A computation in accordance with rule 53(a) (as modified by the
Commission's order) of CSW's aggregate investment in Exempt Entities. See
Exhibit F.
(7) A statement of such aggregate investment as a percentage of the following
as of the end of such quarter:
Total capitalization 12%
Net Utility Plant 11%
Total Consolidated Assets 7%
Market Value of Common Equity 16%
(8) Consolidated capitalization ratios as of the end of such quarter, with
consolidated debt, to include all short-term debt and non-recourse debt of
Exempt Entities to the extent normally consolidated under applicable
financial reporting rules.
See Exhibit G.
(9) The market-to-book ratio of CSW's common stock at the end of such
quarter. 161%
(10) An analysis of the growth in consolidated retained earnings which
segregates total earnings growth attributable to Exempt Entities from that
attributable to other subsidiaries of CSW. See Exhibit H.
(11) A statement of revenues and net income of each Exempt Entity for the
twelve months ended as of the end of such quarter. SEEBOARD and Newgulf
Power Venture are the only entities that are not development stage
enterprises. See Exhibit I for the Income Statement of CSW International,
Inc. and I-1 for the Income Statement of Newgulf Power Venture.
<PAGE>
S I G N A T U R E
As requested by order of this Commission pursuant to the Public Utility
Holding Company Act of 1935, CSW International, Inc. has duly caused this report
to be signed on its behalf on this 27th day of August, 1998.
CSW International, Inc.
/s/ Sandra S. Bennett
Sandra S. Bennett
Controller
EXHIBIT A
CSW International, Inc.
Investments in Project Parents
For the Quarter Ended June 30, 1998
(thousands)
<TABLE>
<CAPTION>
Project Wholly Owned
Facility Parent Subsidiary Of Description Investment
- ----------------------------------- ------------------ ------------------- ------------------ ----------
<S> <C> <C> <C> <C>
Excluded Under Rule 104 CSW International,Inc. Central and South West Corp. Acquisition of Stock $ 1
Empresa de Electricidade Vale de CSW Vale, LLC CSW International,Inc. Investment/Development Costs -
Paranapanema S.A. (Cayman)
Enertek, S.A. de C.V. CSW International,Inc. Central and South West Corp. Construction Loan/Development
Costs $ 698
</TABLE>
EXHIBIT B
CSW Energy, Inc./CSW International, Inc.
Non-recourse Indebtedness
June 30, 1998
(thousands)
Initial Inflation
Type Term Rate Maturity Adjustment Amount
- --------------- -------- -------- -------- --------- ----------
Eurobond 10 years 8.500% 2005 None 100,000 pounds
Eurobond 10 years 8.875% 2006 None 100,000 pounds
Yankee Bond 5 years 7.980% 2001 None 129,116 pounds
Yankee Bond 10 years 8.750% 2006 None 129,116 pounds
Fixed Rate Loan 7 years 8.250% 2003 None 154,521 pounds
Loan Notes 7 years 6.563% 2002 None 25,723 pounds
Revolver 5 years 7.780% 2001 None 67,000 pounds
Senior Notes 5 years 6.875% 2001 None $ 200,000
EXHIBIT C
CSW International, Inc.
Consolidated Balance Sheet
June 30, 1998
(Unaudited)
ASSETS
Fixed Assets
Electric distribution plant $ 1,504,512
General plant 280,354
------------
Total Electric Plant 1,784,866
Less - Accumulated depreciation 646,382
------------
Total Fixed Assets 1,138,484
Current Assets
Cash and cash equivalents 153,647
Short-term investments 33,576
Accounts receivable 151,697
Advances to affiliates 15,502
Inventories 23,932
Other current assets 12,160
------------
Total Current Assets 390,514
Other Assets
Goodwill 1,428,348
Prepaid benefit costs 60,045
Equity investments and other 204,242
------------
Total Other Assets 1,692,635
Total Assets $ 3,221,633
============
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock $ 1
Paid-in capital 829,000
Retained earnings 93,527
Foreign currency translation and other 20,794
------------
943,322
Long-term debt 1,118,473
Current Liabilities
Accounts payable 222,744
Advances from affiliates 306,464
Accrued interest payable 44,605
Loan notes 42,992
Accrued taxes payable 140,880
Customer prepayments 14,834
Other 17,036
------------
789,555
Deferred Credits
Deferred tax liability 271,976
Other 98,307
------------
Total Deferred Credits 370,283
============
Total Capitalization and Liabilities $ 3,221,633
============
EXHIBIT D
CSW International, Inc.
Statement of Income
For the Quarter Ended June 30, 1998
(Unaudited)
(thousands)
Operating Revenues
Electric revenues $ 350,479
Other diversified 56,328
----------
406,807
----------
Operating Expenses
Cost of electric sales 230,032
General and administrative 63,878
Depreciation and amortization 23,570
Other diversified 39,594
----------
357,074
----------
Operating Income 49,733
----------
Other Income and (Deductions)
Investment income 7,194
Interest income 3,198
Interest expense (34,572)
----------
(24,180)
----------
Income Before Income Taxes 25,553
----------
Provision for Income Taxes 5,365
----------
Net Income $ 20,188
==========
CSW International, Inc.
Intercompany Service Transactions
For the Quarter Ended June 30, 1998
(Unaudited)
Name Type of Service Amount
- ---------------- ----------------- ----------
Services provided by Central and South West Services, Inc. (Item 1.) represent
all services provided by CSW Corporation. No services of "Operating Companies"
is included in this category.
1.Central and South West Services, Inc. Salaries, overheads, and $ 633,354
(Wholly owned subsidiary of travel in support of CSW
Central and South West Corporation) International, Inc. projects.
Services provided by CSW Energy, Inc. (Item 2.) are provided by an "associate
company" which, as noted, is also a subsidiary of Central and South West
Corporation. No services from "Operating Companies" is included in this
category.
2.CSW Energy, Inc. Salaries and overheads $ 1,836,781
(Wholly owned subsidiary of in support of CSW
Central and South West Corporation) International,Inc. projects.
3.Services provided by Operating Companies to Energy-Related Companies $ 0
during the Quarter.
4.Guarantees issued by CSWI, for the account of:
Enertek project 1,500,000
CSW Energy - 6.875% Senior Notes, due 2001 * 200,000,000
* Approximately $184,294,478 of the proceeds have been spent through June 30,
1998. The remainder of the funds were invested in July 1998. (This is a
correction of the amount reported at March 31, 1998 in this footnote.)
EXHIBIT F
CENTRAL AND SOUTH WEST CORPORATION
AGGREGATE INVESTMENT IN EXEMPT ENTITIES
As of June 30, 1998
(UNAUDITED)
(millions)
KVA $ 5.4
Frontera 23.0
Newgulf 19.5
SEEBOARD* 829.0
Shoreham 1.0
Altamira 38.9
Guna 0.4
=======
$ 917.2
=======
* SEEBOARD plc is an indirect wholly owned subsidiary of CSW International
Two, Inc.
EXHIBIT G
CENTRAL AND SOUTH WEST CORPORATION
CAPITALIZATION
As of June 30, 1998
(UNAUDITED)
(000's)
Common stock $ 3,537
Preferred stock 176
---------
Total equity 3,713 38.33%
---------
Subsidiary obligated, mandatorily redeemable,
trust preferred securities 335 3.46%
---------
Long-term debt 3,783
Long-term debt and preferred stock due
within twelve month 94
Short-term debt 890
Short-term debt - CSW Credit, Inc. 814
Loan Notes 58
---------
Total debt 5,639 58.21%
Total capitalization $ 9,687
=========
CENTRAL AND SOUTH WEST CORPORATION
CONSOLIDATED RETAINED EARNINGS
As of June 30, 1998
(UNAUDITED)
(millions)
Retained Earnings at Beginning of Year $1,750
Net income
CSW International Two, Inc. 53
Energia International de CSW de SA de CV 1
Newgulf Power Venture (1)
Non-exempt entities 118
Deduct: Common stock dividends (185)
Preferred stock dividends and
other adjustments (4)
=========
Retained Earnings at June 30, 1998 $1,732
=========
EXHIBIT I
CSW International Two, Inc.*
Statement of Income
For the Twelve Months Ended June 30, 1998
(Unaudited)
(millions)
Operating Revenues
Electric revenues $ 1,663
Other diversified 219
------------
1,882
Operating Expenses
Cost of electric sales 1,137
General and administrative 237
Depreciation and amortization 92
Other diversified 158
------------
1,624
Operating Income 258
------------
Other Income and (Deductions)
Interest income 20
Interest expense (122)
------------
(102)
------------
Income Before Income Taxes 156
Provision for Income Taxes 25
------------
Income Before Extraordinary Item 131
------------
Extraordinary Item
Loss from United Kingdom windfall profits tax (176)
------------
Net Income $ (45)
============
* SEEBOARD plc is an indirect wholly owned subsidiary of CSW International
Two, Inc.
EXHIBIT I-1
NEWGULF POWER VENTURE
For the Twelve Months Ended June 30, 1998
Statement of Income
(Unaudited)
Operating Revenues
Electric revenues $ 1,671,881
------------
Operating Expenses 1,454,820
General & Administrative 294,190
Other Expenses 282,186
Depreciation & Amortization 541,087
Interest Expense 360,738
------------
Total Expenses 2,933,021
------------
Income Before Income Taxes $ (1,261,140)
Provision for Income Taxes (552,112)
------------
Net Income (Loss) $ (709,028)
============
EXHIBIT J
Energia International de CSW de SA de CV
Statement of Income
For Twelve Months Ended June 30, 1998
(Unaudited)
($000's)
Equity Earnings in Altamira Project $ 932
Total Expenses -
Net Income Before Tax 932
Income Tax Expense 363
------
Net Income $ 569
======
