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. October 1, 1998 to
CSW Energy, Inc. December 31, 1998
Dallas, Texas 75266 PURSUANT TO RULE 24
File No. 070-8423
File No. 070-8809
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.
<PAGE>
(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, CSWE, 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 9%
Net Utility Plant 10%
Total Consolidated Assets 7%
Market Value of Common Equity 15%
(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. CSW International Two,
Inc. (SEEBOARD,) Newgulf Power Venture, and Energia International are the
only entities that are not development stage enterprises. For the Income
Statement of CSW International Two, Inc., refer to Exhibit I; for Newgulf
Power Venture, refer to Exhibit I-1, and for Energia International, refer
to Exhibit J.
<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 26th day of February, 1999.
CSW International, Inc.
/s/ Sandra S. Bennett
Sandra S. Bennett
Controller
EXHIBIT A
CSW International, Inc.
Investments in Project Parents
For the Quarter Ended December 31, 1998
(thousands)
<TABLE>
Project Wholly Owned
Facility Parent Subsidiary Of Description Investment
- --------------------------------- ------------------------ ---------------------------- ---------------------- -----------
<S> <C> <C> <C> <C>
Energia Internacional de CSW de S.A. CSW International, Inc. Central and South West Corp Early Adoption of $ (2,733)
SOP 98-5
Empresa de Electricidade Vale de CSW Vale, LLC CSW International, Inc. Amortization of (78)
Paranapenema S.A. Development Costs
South Coast Power Limited CSWI Europe CSW International, Inc. Investment / Devel- 4,082
opment Costs
</TABLE>
EXHIBIT B
CSW Energy, Inc./CSW International, Inc.
Non-recourse Indebtedness
December 31, 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 134,534 pounds
Loan Notes 7 years 6.130% 2002 None 19,199 pounds
Revolver 5 years 6.550% 2001 None 55,500 pounds
Senior Notes 5 years 6.875% 2001 None $ 200,000
EXHIBIT C
CSW International, Inc.
Consolidated Balance Sheet
December 31, 1998
(Unaudited)
($000's)
ASSETS
Fixed Assets
Electric distribution plant $ 1,478,707
General plant 284,456
-----------
Total Electric Plant 1,763,163
Less - Accumulated depreciation (656,232)
-----------
Total Fixed Assets 1,106,931
Current Assets
Cash and cash equivalents 77,103
Short-term investments 26,984
Accounts receivable 356,367
Advances to affiliates 398
Inventories 57,803
Other current assets (34,361)
-----------
Total Current Assets 484,294
Other Assets
Goodwill 1,402,416
Prepaid benefit costs 59,760
Equity investments and other 102,885
-----------
Total Other Assets 1,565,061
Total Assets $ 3,156,286
===========
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock $ 1
Paid-in capital 829,000
Retained earnings 59,131
Minority interests 566
Foreign currency translation and other 13,995
-----------
902,693
Long-term debt 1,132,540
Current Liabilities
Accounts payable 322,917
Advances from affiliates 248,603
Accrued interest payable 28,785
Loan notes 31,959
Accrued taxes payable 50,666
Customer prepayments 34,170
Other 23,711
-----------
740,811
Deferred Credits
Deferred tax liability 282,867
Other 97,375
-----------
Total Deferred Credits 380,242
===========
Total Capitalization and Liabilities $ 3,156,286
===========
EXHIBIT D
CSW International, Inc.
Statement of Income
For the Quarter Ended December 31, 1998
(Unaudited)
(thousands)
Operating Revenues
Electric revenues $434,682
Other diversified 48,327
----------
483,009
----------
Operating Expenses
Cost of electric sales 295,979
General and administrative 81,271
Depreciation and amortization 25,814
Other diversified 29,023
----------
432,087
----------
Operating Income 50,922
----------
Other Income and (Deductions)
Investment income 4,173
Interest income 15,513
Interest expense (38,404)
----------
(18,718)
----------
Income Before Income Taxes 32,204
----------
Provision for Income Taxes (2,218)
----------
Net Income $ 34,422
==========
EXHIBIT E
CSW International, Inc.
Intercompany Service Transactions
For the Quarter Ended December 31, 1998
(Unaudited)
1. Services provided by Central and South West Services, Inc., the
administrative arm of the parent company, represent services provided
by the parent, Central and Southwest Corporation. No services provided
by Operating Companies are included in this category.
Salaries and wages of personnel providing services to
CSW International, Inc. $ 38,500
2. Services provided by CSW Energy, Inc., a subsidiary of Central and
Southwest Corporation, represent services provided by an Associate
Company. No services provided by Operating Companies are included
in this category.
Salaries and wages of personnel providing services to
CSW International, Inc. $574,600
3. Services provided by Central and Southwest Operating Companies to
Central and Southwest Energy-Related Companies during the Quarter:
NONE
4. Guarantees issued by CSW, CSWE or CSWI for Exempt Entity projects:
Turkey Bid Bond $ 520,000
Enertek Project $ 1,500,000
CSW Energy - 6.875% Senior Notes due 2001 $ 200,000,000
EXHIBIT F
CENTRAL AND SOUTH WEST CORPORATION
AGGREGATE INVESTMENT IN EXEMPT ENTITIES
As of December 31, 1998
(UNAUDITED)
(millions)
Frontera (A) $ 42.5
KVA (A) 3.3
Newgulf 18.8
Guna (A) 0.4
South Coast (A) 5.8
SEEBOARD (B) 829.0
----------
$ 899.8
==========
(A) Project not yet operational.
(B) SEEBOARD plc is an indirect wholly owned subsidiary of CSW International
Two, Inc.
EXHIBIT G
CENTRAL AND SOUTH WEST CORPORATION
CAPITALIZATION
As of December 31, 1998
(UNAUDITED)
(millions)
Common stock $ 1,793
Preferred stock 176
Retained Earnings 1,831
---------
Total equity 3,800 39.25%
---------
Subsidiary obligated, mandatorily redeemable,
Trust preferred securities 335 3.46%
---------
Long-term debt 3,785
Long-term debt and preferred stock due within twelve months 169
Short-term debt 811
Short-term debt - CSW Credit, Inc. 749
Loan Notes 32
---------
Total debt 5,546 57.29%
Total capitalization $ 9,681
=========
EXHIBIT H
CENTRAL AND SOUTH WEST CORPORATION
CONSOLIDATED RETAINED EARNINGS
As of December 31, 1998
(UNAUDITED)
(millions)
Retained Earnings at Beginning of Year $1,751
Net income
CSW International Two, Inc. 117
Energia International de CSW de SA de CV 1
Newgulf Power Venture (1)
Non-exempt entities 325
Deduct: Dividends paid (370)
=========
Retained Earnings at December 31, 1998 $1,823
=========
EXHIBIT I
CSW International Two, Inc.*
Statement of Income
For the Twelve Months Ended December 31, 1998
(Unaudited)
(millions)
Operating Revenues
Electric revenues $ 1,586
Other diversified 183
------------
1,769
Operating Expenses
Cost of electric sales 1,078
General and administrative 255
Depreciation and amortization 94
Other diversified 126
------------
1,553
Operating Income 216
------------
Other Income and (Deductions)
Interest income 21
Interest expense (116)
------------
(95)
------------
Income Before Income Taxes 121
Provision for Income Taxes 4
------------
Net Income $ 117
============
* SEEBOARD plc is an indirect wholly owned subsidiary of CSW International
Two, Inc.
EXHIBIT I-1
NEWGULF POWER VENTURE
For the Twelve Months Ended December 31, 1998
Statement of Income
(Unaudited)
($000's)
Operating Revenues
Electric revenues $ 2,642
------------
Operating Expenses 2,380
General & Administrative 145
Other Expenses 296
Depreciation & Amortization 562
Interest Expense 457
------------
Total Expenses 3,840
Income Before Income Taxes (1,198)
Provision for Income Taxes (419)
------------
Net Income (Loss) $ (779)
============
EXHIBIT J
Energia International de CSW de SA de CV
Statement of Income
For Twelve Months Ended December 31, 1998
(Unaudited)
($000's)
Equity Earnings in Altamira Project $ 1,290
Total Expenses -
--------
Net Income Before Tax 1,290
Income Tax Expense 485
--------
Net Income $ 805
========
