THE CONSOLIDATED 10-Q FOR AMERICAN ELECTRIC POWER CO., INC, AND
SUSIDIATIES IS REQUESTED TO INCLUDED AS PART OF THE FILING.
<PAGE>
<PAGE>
<TABLE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period from to
<CAPTION>
Commission Registrant; State of Incorporation; I. R. S. Employer
File Number Address; and Telephone Number Identification No.
<C> <S> <C>
1-3525 AMERICAN ELECTRIC POWER COMPANY, INC. 13-4922640
(A New York Corporation)
1 Riverside Plaza, Columbus, Ohio 43215
Telephone (614) 223-1000
0-18135 AEP GENERATING COMPANY (An Ohio Corporation) 31-1033833
1 Riverside Plaza, Columbus, Ohio 43215
Telephone (614) 223-1000
1-3457 APPALACHIAN POWER COMPANY (A Virginia Corporation) 54-0124790
40 Franklin Road, Roanoke, Virginia 24011
Telephone (703) 985-2300
1-2680 COLUMBUS SOUTHERN POWER COMPANY (An Ohio Corporation) 31-4154203
215 North Front Street, Columbus, Ohio 43215
Telephone (614) 464-7700
1-3570 INDIANA MICHIGAN POWER COMPANY (An Indiana Corporation) 35-0410455
One Summit Square
P.O. Box 60, Fort Wayne, Indiana 46801
Telephone (219) 425-2111
1-6858 KENTUCKY POWER COMPANY (A Kentucky Corporation) 61-0247775
1701 Central Avenue, Ashland, Kentucky 41101
Telephone (606) 327-1111
1-6543 OHIO POWER COMPANY (An Ohio Corporation) 31-4271000
301 Cleveland Avenue S.W., Canton, Ohio 44702
Telephone (216) 456-8173
AEP Generating Company, Columbus Southern Power Company and Kentucky Power Company meet the
conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore
filing this Form 10-Q with the reduced disclosure format specified in General Instruction
H(2) to Form 10-Q.
Indicate by check mark whether the registrants (1) have filed all reports required to be
filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrants were required to file such reports),
and (2) have been subject to such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of American Electric Power Company, Inc. Common Stock, par
value $6.50, at April 30, 1995 was 185,585,000.
</TABLE>
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<TABLE>
<CAPTION>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
FORM 10-Q
For The Quarter Ended March 31, 1995
INDEX
Page
Part I. FINANCIAL INFORMATION
<S> <C>
American Electric Power Company, Inc. and Subsidiary Companies:
Consolidated Statements of Income. . . . . . . . . . . . . . . A-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . A-2 - A-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . . A-4
Consolidated Statements of Retained Earnings . . . . . . . . . A-5
Notes to Consolidated Financial Statements . . . . . . . . . . A-6
Management's Discussion and Analysis of Results of Operations
and Financial Condition. . . . . . . . . . . . . . . . . . . A-7 - A-8
AEP Generating Company:
Statements of Income and Statements of Retained Earnings . . . B-1
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . B-2 - B-3
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . B-4
Notes to Financial Statements. . . . . . . . . . . . . . . . . B-5
Management's Narrative Analysis of Results of Operations . . . B-5
Appalachian Power Company and Subsidiaries:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . . C-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . C-2 - C-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . . C-4
Notes to Consolidated Financial Statements . . . . . . . . . . C-5
Management's Discussion and Analysis of Results of Operations
and Financial Condition. . . . . . . . . . . . . . . . . . . C-6 - C-7
Columbus Southern Power Company and Subsidiaries:
Consolidated Statements of Income. . . . . . . . . . . . . . . D-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . D-2 - D-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . . D-4
Consolidated Statements of Retained Earnings . . . . . . . . . D-5
Notes to Consolidated Financial Statements . . . . . . . . . . D-6
Management's Narrative Analysis of Results of Operations . . . D-7 - D-8
Indiana Michigan Power Company and Subsidiaries:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . . E-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . E-2 - E-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . . E-4
Notes to Consolidated Financial Statements . . . . . . . . . . E-5
Management's Discussion and Analysis of Results of Operations
and Financial Condition. . . . . . . . . . . . . . . . . . . E-6 - E-7
Kentucky Power Company:
Statements of Income and Statements of Retained Earnings . . . F-1
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . F-2 - F-3
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . F-4
Notes to Financial Statements. . . . . . . . . . . . . . . . . F-5
Management's Narrative Analysis of Results of Operations . . . F-6 - F-7
Ohio Power Company and Subsidiaries:
Consolidated Statements of Income and
Consolidated Statements of Retained Earnings . . . . . . . . G-1
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . G-2 - G-3
Consolidated Statements of Cash Flows. . . . . . . . . . . . . G-4
Notes to Consolidated Financial Statements . . . . . . . . . . G-5
Management's Discussion and Analysis of Results of Operations
and Financial Condition. . . . . . . . . . . . . . . . . . . G-6 - G-7
<PAGE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
FORM 10-Q
For The Quarter Ended March 31, 1995
INDEX
Page
Part II. OTHER INFORMATION
Item 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Item 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1 - II-3
Item 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5
This combined Form 10-Q is separately filed by American Electric Power Company, Inc.,
AEP Generating Company, Appalachian Power Company, Columbus Southern Power Company, Indiana
Michigan Power Company, Kentucky Power Company and Ohio Power Company. Information contained
herein relating to any individual registrant is filed by such registrant on its own behalf.
Each registrant makes no representation as to information relating to the other registrants.
</TABLE>
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<TABLE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per-share amounts)
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . . . . $1,416,169 $1,488,185
OPERATING EXPENSES:
Fuel and Purchased Power . . . . . . . . . . . . . . . . 411,987 501,569
Other Operation. . . . . . . . . . . . . . . . . . . . . 260,556 246,334
Maintenance. . . . . . . . . . . . . . . . . . . . . . . 130,608 143,362
Depreciation and Amortization. . . . . . . . . . . . . . 147,177 138,831
Taxes Other Than Federal Income Taxes. . . . . . . . . . 129,985 128,220
Federal Income Taxes . . . . . . . . . . . . . . . . . . 78,369 72,421
TOTAL OPERATING EXPENSES. . . . . . . . . . . . . 1,158,682 1,230,737
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . 257,487 257,448
NONOPERATING INCOME. . . . . . . . . . . . . . . . . . . . 4,798 7,240
INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS . . 262,285 264,688
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . 100,413 98,571
PREFERRED STOCK DIVIDEND REQUIREMENTS OF SUBSIDIARIES. . . 14,022 13,163
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . $ 147,850 $ 152,954
AVERAGE NUMBER OF SHARES OUTSTANDING . . . . . . . . . . . 185,318 184,535
EARNINGS PER SHARE . . . . . . . . . . . . . . . . . . . . $0.80 $0.83
CASH DIVIDENDS PAID PER SHARE. . . . . . . . . . . . . . . $0.60 $0.60
See Notes to Consolidated Financial Statements.
/TABLE
<PAGE>
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<TABLE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
ASSETS
<S> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $ 9,194,321 $ 9,172,766
Transmission . . . . . . . . . . . . . . . . . . . . 3,267,739 3,247,280
Distribution . . . . . . . . . . . . . . . . . . . . 4,004,232 3,966,442
General (including mining assets and nuclear fuel) . 1,476,408 1,529,436
Construction Work in Progress. . . . . . . . . . . . 274,611 258,700
Total Electric Utility Plant . . . . . . . . 18,217,311 18,174,624
Accumulated Depreciation and Amortization. . . . . . 6,876,038 6,826,514
NET ELECTRIC UTILITY PLANT . . . . . . . . . 11,341,273 11,348,110
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 760,144 735,042
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 87,498 62,866
Accounts Receivable. . . . . . . . . . . . . . . . . 443,048 436,915
Allowance for Uncollectible Accounts . . . . . . . . (6,126) (4,056)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 317,658 306,700
Materials and Supplies . . . . . . . . . . . . . . . 220,011 216,741
Accrued Utility Revenues . . . . . . . . . . . . . . 139,936 167,486
Prepayments and Other. . . . . . . . . . . . . . . . 147,418 94,786
TOTAL CURRENT ASSETS . . . . . . . . . . . . 1,349,443 1,281,438
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 1,951,442 1,949,852
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 363,938 398,257
TOTAL. . . . . . . . . . . . . . . . . . . $15,766,240 $15,712,699
See Notes to Consolidated Financial Statements.
</TABLE>
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<TABLE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
CAPITALIZATION:
Common Stock-Par Value $6.50:
1995 1994
Shares Authorized . . . .300,000,000 300,000,000
Shares Issued . . . . . .194,584,992 194,234,992
(8,999,992 shares were held in treasury) . . . . . $ 1,264,802 $ 1,262,527
Paid-in Capital. . . . . . . . . . . . . . . . . . . 1,650,647 1,641,522
Retained Earnings. . . . . . . . . . . . . . . . . . 1,362,170 1,325,581
Total Common Shareowners' Equity . . . . . . 4,277,619 4,229,630
Cumulative Preferred Stocks of Subsidiaries:
Not Subject to Mandatory Redemption. . . . . . . . 233,240 233,240
Subject to Mandatory Redemption. . . . . . . . . . 590,300 590,300
Long-term Debt . . . . . . . . . . . . . . . . . . . 4,579,207 4,686,648
TOTAL CAPITALIZATION . . . . . . . . . . . . 9,680,366 9,739,818
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . 768,593 735,689
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 452,373 293,671
Short-term Debt. . . . . . . . . . . . . . . . . . . 187,575 316,985
Accounts Payable . . . . . . . . . . . . . . . . . . 196,115 251,186
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 420,322 382,677
Interest Accrued . . . . . . . . . . . . . . . . . . 127,042 88,916
Obligations Under Capital Leases . . . . . . . . . . 90,979 93,252
Other. . . . . . . . . . . . . . . . . . . . . . . . 356,767 339,998
TOTAL CURRENT LIABILITIES. . . . . . . . . . 1,831,173 1,766,685
DEFERRED FEDERAL INCOME TAXES. . . . . . . . . . . . . 2,459,557 2,473,539
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 450,052 456,043
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . . . . 411,510 415,226
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 164,989 125,699
CONTINGENCIES (Note 4)
TOTAL. . . . . . . . . . . . . . . . . . . $15,766,240 $15,712,699
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
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<TABLE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 147,850 $ 152,954
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . . . . . 142,564 139,892
Deferred Federal Income Taxes. . . . . . . . . . . . . . (5,373) 552
Deferred Investment Tax Credits. . . . . . . . . . . . . (5,945) (10,273)
Amortization (Deferral) of Operating Expenses and
Carrying Charges (net) . . . . . . . . . . . . . . . . 19,083 (5,602)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . (4,063) (42,581)
Fuel, Materials and Supplies . . . . . . . . . . . . . . (14,228) 100,997
Accrued Utility Revenues . . . . . . . . . . . . . . . . 27,550 37,563
Prepayments and Other Current Assets . . . . . . . . . . (52,632) (40,358)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (55,071) (37,060)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . 37,645 8,985
Interest Accrued . . . . . . . . . . . . . . . . . . . . 38,126 27,415
Rent Accrued - Rockport Plant Unit 2 . . . . . . . . . . 37,076 36,928
Other (net). . . . . . . . . . . . . . . . . . . . . . . . 22,255 (18,706)
Net Cash Flows From Operating Activities . . . . . . 334,837 350,706
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (132,092) (110,948)
Proceeds from Sale of Property and Other . . . . . . . . . 2,821 36,728
Net Cash Flows Used For Investing Activities . . . . (129,271) (74,220)
FINANCING ACTIVITIES:
Issuance of Common Stock . . . . . . . . . . . . . . . . . 11,301 -
Issuance of Cumulative Preferred Stock . . . . . . . . . . - 34,618
Issuance of Long-term Debt . . . . . . . . . . . . . . . . 49,653 292,847
Change in Short-term Debt (net). . . . . . . . . . . . . . (129,410) 10,887
Retirement of Cumulative Preferred Stock . . . . . . . . . - (35,798)
Retirement of Long-term Debt . . . . . . . . . . . . . . . (1,335) (435,985)
Dividends Paid on Common Stock . . . . . . . . . . . . . . (111,143) (110,723)
Net Cash Flows Used For Financing Activities . . . . (180,934) (244,154)
Net Increase in Cash and Cash Equivalents. . . . . . . . . . 24,632 32,332
Cash and Cash Equivalents at Beginning of Period . . . . . . 62,866 42,561
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 87,498 $ 74,893
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $59,189,000 and $68,174,000 and
for income taxes was $4,498,000 and $24,271,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $24,725,000 and $73,848,000 in 1995 and
1994, respectively.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $1,325,581 $1,269,283
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 147,850 152,954
DEDUCTIONS:
Cash Dividends Declared. . . . . . . . . . . . . . . . . . . 111,143 110,723
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 113
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $1,362,170 $1,311,401
See Notes to Consolidated Financial Statements.
</TABLE>
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<PAGE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial statements should
be read in conjunction with the 1994 Annual Report as incorporated in and
filed with the Form 10-K. Certain prior-period amounts have been
reclassified to conform to current-period presentation.
2. RATE ACTIVITY
On March 23, 1995, the Public Utilities Commission of Ohio approved
Ohio Power Company's (OPCo) February 1995 Settlement Agreement that
resolved the current base rate case and electric fuel component
proceeding as described in Note 2 in the 1994 Annual Report. The
increase in OPCo's base rates was effective March 23, 1995.
3. FINANCING AND RELATED ACTIVITIES
In March 1995, a subsidiary issued $50 million of 8% Series First
Mortgage Bonds due in 2005. The proceeds were used to refund long-term
debt and repay short-term debt. In April 1995, subsidiaries issued $40
million of 8.72% Junior Subordinated Deferrable Interest Debentures
Series A due in 2025 and redeemed the $46.5 million outstanding balance
of 9-1/8% Series First Mortgage Bonds due in 2019.
4. CONTINGENCIES
The Company continues to be involved in certain matters discussed in
the 1994 Annual Report.
<PAGE>
<PAGE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
FIRST QUARTER 1995 vs. FIRST QUARTER 1994
RESULTS OF OPERATIONS
Net income decreased 3% or $5.1 million predominantly due to a 5%
decrease in energy sales as a result of mild winter weather in 1995.
Income statement lines which changed significantly were:
Increase (Decrease)
(in millions) %
Revenues. . . . . . . . . . . . . . . . . . . . . . $(72.0) (5)
Fuel and Purchased Power Expense. . . . . . . . . . (89.6) (18)
Other Operation Expense . . . . . . . . . . . . . . 14.2 6
Maintenance Expense . . . . . . . . . . . . . . . . (12.8) (9)
Depreciation and Amortization Expense . . . . . . . 8.3 6
Federal Income Taxes. . . . . . . . . . . . . . . . 5.9 8
The decrease in operating revenues reflects decreased energy sales to
residential and wholesale customers, due primarily to mild weather in 1995
compared with the severe winter weather in January 1994, and decreased fuel
clause recoveries due to a decline in the fuel cost component of revenues.
Although energy sales to weather-sensitive residential customers decreased 5%,
total retail energy sales were virtually unchanged due to an increase in
industrial sales resulting from an increased number of customers and increased
usage. Wholesale energy sales declined 22% mainly resulting from the mild
weather and increased availability of unaffiliated generating units in 1995
compared with 1994.
The substantial decline in fuel and purchased power expense was primarily
due to decreased generation and decreased energy purchases from unaffiliated
utilities for pass-through sales to other unaffiliated utilities as a result
of the weather-related decline in energy demand. Also contributing to the
decline in fuel expense was a reduced average cost of fossil fuel and
increased utilization of low-cost nuclear generation during the current period
reflecting increased availability in 1995 of the Company's two nuclear
generating units.
Other operation expense increased mainly due to regulatory-approved
increases in the amortization, concurrent with rate recovery, of certain low-
income residential customers' payment programs, an increase in membership fees
for industry organizations, and the non-Ohio jurisdictional share of rent
expense for the newly installed two-unit Gavin Plant flue gas desulfurization
<PAGE>
systems (scrubbers). The Ohio jurisdictional share of the Gavin Plant's
scrubber rent and other operating expenses were deferred and in March 1995 the
Public Utilities Commission of Ohio approved recovery of the scrubber rent
including amortization of previously deferred amounts.
The decrease in maintenance expense was caused by reduced generating
plant maintenance and a reduction in distribution line maintenance expenses.
Distribution maintenance was unusually high in 1994 due to damage caused by a
series of severe winter storms.
Depreciation and amortization expense increased primarily due to a court-
ordered discontinuance of the Zimmer Plant phase-in plan deferrals effective
in February 1994 and the subsequent amortization of such costs commensurate
with their recovery in rates.
The increase in federal income tax expense attributable to operations was
primarily due to changes in certain book/tax differences accounted for on a
flow-through basis and an increase in pre-tax operating income.
FINANCIAL CONDITION
Total plant and property additions including capital leases for the
current period were $157 million.
During the quarter subsidiaries issued $50 million principal amount of
long-term debt at 8%, and decreased short-term debt by $129 million. In April
1995, subsidiaries issued $40 million of 8.72% Junior Subordinated Deferrable
Interest Debentures Series A due in 2025 and redeemed the $46.5 million
outstanding balance of 9-1/8% Series First Mortgage Bonds due in 2019.
<PAGE>
<PAGE>
<TABLE>
AEP GENERATING COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . . . . . . $60,175 $59,901
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,562 26,030
Rent - Rockport Plant Unit 2 . . . . . . . . . . . . . . . . 16,649 16,578
Other Operation. . . . . . . . . . . . . . . . . . . . . . . 2,672 2,603
Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . 2,883 2,785
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . 5,417 5,408
Taxes Other Than Federal Income Taxes. . . . . . . . . . . . 1,213 1,089
Federal Income Taxes . . . . . . . . . . . . . . . . . . . . 1,088 1,309
TOTAL OPERATING EXPENSES . . . . . . . . . . . . . . 56,484 55,802
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . . 3,691 4,099
NONOPERATING INCOME. . . . . . . . . . . . . . . . . . . . . . 829 817
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . . . . . 4,520 4,916
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . . . 2,401 2,425
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,119 $ 2,491
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<PAGE>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $4,268 $1,339
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 2,119 2,491
CASH DIVIDENDS DECLARED. . . . . . . . . . . . . . . . . . . . 2,000 2,561
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $4,387 $1,269
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
AEP GENERATING COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
ASSETS
<S> <C> <C>
ELECTRIC UTILITY PLANT:
Production. . . . . . . . . . . . . . . . . . . . . . . . $627,970 $627,429
General . . . . . . . . . . . . . . . . . . . . . . . . . 2,678 2,658
Construction Work in Progress . . . . . . . . . . . . . . 1,640 1,441
Total Electric Utility Plant. . . . . . . . . . . 632,288 631,528
Accumulated Depreciation. . . . . . . . . . . . . . . . . 204,534 199,264
NET ELECTRIC UTILITY PLANT. . . . . . . . . . . . 427,754 432,264
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . . . . . . 9,029 7
Accounts Receivable . . . . . . . . . . . . . . . . . . . 19,605 19,868
Fuel. . . . . . . . . . . . . . . . . . . . . . . . . . . 17,542 18,368
Materials and Supplies. . . . . . . . . . . . . . . . . . 4,160 4,167
Prepayments . . . . . . . . . . . . . . . . . . . . . . . 426 452
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . 50,762 42,862
DEFERRED CHARGES. . . . . . . . . . . . . . . . . . . . . . 31,357 29,288
TOTAL . . . . . . . . . . . . . . . . . . . . . $509,873 $504,414
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
AEP GENERATING COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
CAPITALIZATION:
Common Stock - Par Value $1,000:
Authorized and Outstanding - 1,000 Shares . . . . . . . $ 1,000 $ 1,000
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . 47,735 47,735
Retained Earnings . . . . . . . . . . . . . . . . . . . . 4,387 4,268
Total Common Shareowner's Equity. . . . . . . . . 53,122 53,003
Long-term Debt. . . . . . . . . . . . . . . . . . . . . . 53,378 53,340
TOTAL CAPITALIZATION. . . . . . . . . . . . . . . 106,500 106,343
OTHER NONCURRENT LIABILITIES. . . . . . . . . . . . . . . . 1,929 2,019
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . . . . . . 55,000 55,000
Short-term Debt - Notes Payable . . . . . . . . . . . . . - 7,200
Accounts Payable. . . . . . . . . . . . . . . . . . . . . 6,031 9,506
Taxes Accrued . . . . . . . . . . . . . . . . . . . . . . 6,238 3,648
Interest Accrued. . . . . . . . . . . . . . . . . . . . . 738 2,955
Rent Accrued - Rockport Plant Unit 2. . . . . . . . . . . 25,028 6,490
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 2,566 4,579
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . 95,601 89,378
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2 . . . . . . . . . . . . . . . . . . 209,200 211,089
REGULATORY LIABILITIES:
Deferred Investment Tax Credits . . . . . . . . . . . . . 79,625 80,471
Amounts Due to Customers for Federal Income Taxes . . . . 9,585 9,649
TOTAL REGULATORY LIABILITIES. . . . . . . . . . . 89,210 90,120
DEFERRED FEDERAL INCOME TAXES . . . . . . . . . . . . . . . 6,987 5,465
DEFERRED CREDITS. . . . . . . . . . . . . . . . . . . . . . 446 -
TOTAL . . . . . . . . . . . . . . . . . . . . . $509,873 $504,414
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
AEP GENERATING COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 2,119 $ 2,491
Adjustments for Noncash Items:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 5,417 5,408
Deferred Federal Income Taxes. . . . . . . . . . . . . . 1,458 1,481
Deferred Investment Tax Credits. . . . . . . . . . . . . (846) (846)
Amortization of Deferred Gain on Sale and Leaseback -
Rockport Plant Unit 2. . . . . . . . . . . . . . . . . (1,889) (1,890)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable. . . . . . . . . . . . . . . . . . . 263 (861)
Fuel, Materials and Supplies . . . . . . . . . . . . . . 833 90
Accounts Payable . . . . . . . . . . . . . . . . . . . . (3,475) (3,613)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . 2,590 3,413
Interest Accrued . . . . . . . . . . . . . . . . . . . . (2,217) (2,218)
Rent Accrued - Rockport Plant Unit 2 . . . . . . . . . . 18,538 18,464
Other (net). . . . . . . . . . . . . . . . . . . . . . . . (3,503) (160)
Net Cash Flows From Operating Activities . . . . . . 19,288 21,759
INVESTING ACTIVITIES - Construction Expenditures . . . . . . (1,066) (1,118)
FINANCING ACTIVITIES:
Capital Contributions Returned to Parent Company . . . . . - (1,000)
Change in Short-term Debt (net). . . . . . . . . . . . . . (7,200) (15,250)
Dividends Paid . . . . . . . . . . . . . . . . . . . . . . (2,000) (2,561)
Net Cash Flows Used For Financing Activities . . . . (9,200) (18,811)
Net Increase in Cash and Cash Equivalents. . . . . . . . . . 9,022 1,830
Cash and Cash Equivalents at Beginning of Period . . . . . . 7 3
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 9,029 $ 1,833
Supplemental Disclosure:
Cash paid (received) for interest net of capitalized amounts was $4,538,000 and
$4,560,000 and for income taxes was $175,000 and $(528,000) in 1995 and 1994,
respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
AEP GENERATING COMPANY
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
The accompanying unaudited financial statements should be read in
conjunction with the 1994 Annual Report as incorporated in and filed with the
Form 10-K.
AEP GENERATING COMPANY
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
FIRST QUARTER 1995 vs. FIRST QUARTER 1994
Operating revenues are derived from the sale of Rockport Plant energy and
capacity to two affiliated companies and one unaffiliated utility pursuant to
Federal Energy Regulatory Commission (FERC) approved long-term unit power
agreements. The unit power agreements provide for recovery of costs including
a FERC approved rate of return on common equity and a return on other capital
net of temporary cash investments. Net income declined $0.4 million or 14.9%
reflecting a reduction in common equity on which a return is earned and a
decreased return on other capital due to an increase in temporary cash
investments during 1995. The reduction in common equity resulted from the
return of $5.7 million of capital to the parent company during the second and
third quarters of 1994.
Income statement items which changed significantly were as follows:
Increase (Decrease)
(in millions) %
Fuel Expense . . . . . . . . . . . . . . . . . . . . . . $ 0.5 2.0
Taxes Other Than Federal Income Taxes. . . . . . . . . . 0.1 11.4
Federal Income Taxes . . . . . . . . . . . . . . . . . . (0.2) (16.9)
Fuel expense increased due to a 5.6% increase in generation partially
offset by a lower average fuel cost. Taxes other than federal income taxes
increased as a result of the effect of favorable prior period accrual
adjustments for Indiana property taxes recorded in the first quarter of 1994.
Federal income tax expense attributable to operations decreased due to a
decrease in pre-tax operating income.
<PAGE>
<PAGE>
<TABLE>
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . . . . $407,516 $438,095
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . 99,893 111,538
Purchased Power. . . . . . . . . . . . . . . . . . . . . 63,958 94,863
Other Operation. . . . . . . . . . . . . . . . . . . . . 49,973 48,592
Maintenance. . . . . . . . . . . . . . . . . . . . . . . 36,464 40,577
Depreciation and Amortization. . . . . . . . . . . . . . 33,090 31,512
Taxes Other Than Federal Income Taxes. . . . . . . . . . 31,729 33,049
Federal Income Taxes . . . . . . . . . . . . . . . . . . 23,265 18,022
TOTAL OPERATING EXPENSES . . . . . . . . . . . . 338,372 378,153
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . 69,144 59,942
NONOPERATING LOSS. . . . . . . . . . . . . . . . . . . . . (835) (2,690)
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . . . 68,309 57,252
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . 26,372 24,720
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . 41,937 32,532
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . . . . . . . . 4,104 3,592
EARNINGS APPLICABLE TO COMMON STOCK. . . . . . . . . . . . $ 37,833 $ 28,940
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . $206,361 $227,816
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . 41,937 32,532
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . 26,709 27,035
Cumulative Preferred Stock . . . . . . . . . . . . . . 3,919 3,407
Capital Stock Expense. . . . . . . . . . . . . . . . . . 185 185
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . $217,485 $229,721
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
ASSETS
<S> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $1,848,861 $1,848,263
Transmission . . . . . . . . . . . . . . . . . . . . 1,022,460 1,010,344
Distribution . . . . . . . . . . . . . . . . . . . . 1,338,101 1,315,915
General. . . . . . . . . . . . . . . . . . . . . . . 163,122 160,752
Construction Work in Progress. . . . . . . . . . . . 58,095 63,453
Total Electric Utility Plant . . . . . . . . 4,430,639 4,398,727
Accumulated Depreciation and Amortization. . . . . . 1,644,712 1,627,852
NET ELECTRIC UTILITY PLANT . . . . . . . . . 2,785,927 2,770,875
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 48,687 48,928
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 5,632 5,297
Accounts Receivable. . . . . . . . . . . . . . . . . 131,023 124,092
Allowance for Uncollectible Accounts . . . . . . . . (1,365) (830)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 67,061 65,581
Materials and Supplies . . . . . . . . . . . . . . . 50,557 49,451
Accrued Utility Revenues . . . . . . . . . . . . . . 40,651 51,686
Prepayments. . . . . . . . . . . . . . . . . . . . . 20,059 6,487
TOTAL CURRENT ASSETS . . . . . . . . . . . . 313,618 301,764
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 388,843 403,906
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 61,857 59,015
TOTAL. . . . . . . . . . . . . . . . . . . $3,598,932 $3,584,488
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 30,000,000 Shares
Outstanding - 13,499,500 Shares. . . . . . . . . $ 260,458 $ 260,458
Paid-in Capital. . . . . . . . . . . . . . . . . . 519,408 504,408
Retained Earnings. . . . . . . . . . . . . . . . . 217,485 206,361
Total Common Shareowner's Equity . . . . . 997,351 971,227
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . 55,000 55,000
Subject to Mandatory Redemption. . . . . . . . . 190,300 190,300
Long-term Debt . . . . . . . . . . . . . . . . . . 1,223,748 1,228,911
TOTAL CAPITALIZATION . . . . . . . . . . . 2,466,399 2,445,438
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . 76,568 68,515
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . 53,892 -
Short-term Debt. . . . . . . . . . . . . . . . . . 39,725 122,825
Accounts Payable . . . . . . . . . . . . . . . . . 79,833 93,712
Taxes Accrued. . . . . . . . . . . . . . . . . . . 61,795 34,623
Customer Deposits. . . . . . . . . . . . . . . . . 14,304 14,362
Interest Accrued . . . . . . . . . . . . . . . . . 35,139 17,347
Other. . . . . . . . . . . . . . . . . . . . . . . 64,442 74,877
TOTAL CURRENT LIABILITIES. . . . . . . . . 349,130 357,746
DEFERRED FEDERAL INCOME TAXES. . . . . . . . . . . . 590,654 595,353
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . 76,739 77,862
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . 39,442 39,574
CONTINGENCIES (Note 3)
TOTAL. . . . . . . . . . . . . . . . . . $3,598,932 $3,584,488
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . $ 41,937 $ 32,532
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . . . . 33,506 32,147
Deferred Federal Income Taxes. . . . . . . . . . . . . (1,823) 2,322
Deferred Investment Tax Credits. . . . . . . . . . . . (1,215) (1,224)
Provision for Rate Refunds . . . . . . . . . . . . . . 4,722 7,403
Storm Damage Expense Deferrals . . . . . . . . . . . . 9,926 (14,246)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . (6,396) (9,569)
Fuel, Materials and Supplies . . . . . . . . . . . . . (2,586) 12,244
Accrued Utility Revenues . . . . . . . . . . . . . . . 11,035 14,906
Prepayments. . . . . . . . . . . . . . . . . . . . . . (13,572) (8,273)
Accounts Payable . . . . . . . . . . . . . . . . . . . (13,879) 15,551
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . 27,172 10,796
Interest Accrued . . . . . . . . . . . . . . . . . . . 17,792 14,221
Other (net). . . . . . . . . . . . . . . . . . . . . . . (11,566) (1,982)
Net Cash Flows From Operating Activities . . . . . 95,053 106,828
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . (45,212) (35,831)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 760 80
Net Cash Flows Used For Investing Activities . . . (44,452) (35,751)
FINANCING ACTIVITIES:
Capital Contributions From Parent Company. . . . . . . . 15,000 -
Issuance of Long-term Debt . . . . . . . . . . . . . . . 49,564 -
Change in Short-term Debt (net). . . . . . . . . . . . . (83,100) 19,625
Retirement of Long-term Debt . . . . . . . . . . . . . . (1,102) (58,219)
Dividends Paid on Common Stock . . . . . . . . . . . . . (26,709) (27,035)
Dividends Paid on Cumulative Preferred Stock . . . . . . (3,919) (3,560)
Net Cash Flows Used For Financing Activities . . . (50,266) (69,189)
Net Increase in Cash and Cash Equivalents. . . . . . . . . 335 1,888
Cash and Cash Equivalents at Beginning of Period . . . . . 5,297 4,626
Cash and Cash Equivalents at End of Period . . . . . . . . $ 5,632 $ 6,514
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $7,977,000 and $9,919,000
and for income taxes was $562,000 and $5,882,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $4,572,000 and $1,994,000 in 1995
and 1994, respectively.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial statements should be
read in conjunction with the 1994 Annual Report as incorporated in and
filed with the Form 10-K. Certain prior-period amounts have been
reclassified to conform to current-period presentation.
2. FINANCING ACTIVITIES:
In March 1995, the Company received a $15 million cash capital
contribution from its parent which was credited to paid-in capital. Also
in March 1995, the Company issued $50 million of 8.00% Series First
Mortgage Bonds due in 2005. The proceeds were used to refund long-term
debt and repay short-term debt. In April 1995, the Company redeemed the
remaining $46.5 million outstanding balance of its 9 1/8% Series First
Mortgage Bonds due in 2019.
3. CONTINGENCIES
The Company continues to be involved in certain matters discussed in
its 1994 Annual Report.
<PAGE>
<PAGE>
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
FIRST QUARTER 1995 vs. FIRST QUARTER 1994
RESULTS OF OPERATIONS
Although operating revenues decreased $30.6 million or 7%, operating
expenses decreased $39.8 million or 11% resulting in a net income increase of
$9.4 million or 29%. The reduction in operating revenues resulted primarily
from decreased energy demand by residential and wholesale customers, primarily
due to mild winter weather in 1995 compared with the severe weather in 1994,
and a decrease in the fuel component of Virginia retail rates. Although
energy sales to weather sensitive residential customers decreased 5%, total
retail energy sales were virtually unchanged due to a 4% increase in sales to
industrial customers.
Wholesale energy sales decreased 25% mainly due to decreased energy sales
to unaffiliated utilities by the AEP System Power Pool (Power Pool) resulting
from the mild weather and increased availability of unaffiliated generating
units in 1995. Additionally, the Company's share of Power Pool sales
decreased as a result of a reduction in the relative peak demand allocation
ratio which is used to allocate wholesale revenues to the Company.
Operating expense line items which changed significantly were as follows:
Increase (Decrease)
(in millions) %
Fuel Expense. . . . . . . . . . . . . . . . . . . $(11.6) (10)
Purchased Power Expense . . . . . . . . . . . . . (30.9) (33)
Maintenance Expense . . . . . . . . . . . . . . . (4.1) (10)
Federal Income Taxes. . . . . . . . . . . . . . . 5.2 29
The decline in fuel expense was due to a reduction in the average cost of
fuel consumed and a 4% reduction in coal-fired generation reflecting the
decreased demand for energy.
Purchased power expense decreased as a result of a reduction in energy
purchased from the Power Pool, reduced energy purchases from unaffiliated
utilities for pass-through sales and a reduction in Power Pool capacity
charges. The reductions in energy purchases were also attributable to the
weather-related reduced demand for energy. The decrease in Power Pool
capacity charges resulted from a reduction in the Company's prior twelve-month
peak demand relative to the total peak demand of all Power Pool members.
Power Pool members whose internal demand exceeds their capacity are allocated
capacity costs based on their relative peak demands.
<PAGE>
The decrease in maintenance expense was caused by reduced steam plant
maintenance and a reduction in distribution line maintenance expenses in 1995
compared with 1994 due to damage caused by a series of severe winter storms in
1994.
Federal income taxes attributable to operations increased primarily due
to an increase in pre-tax operating income.
The reduction in nonoperating loss resulted from the negative effect in
1994 of the adoption of SFAS 112, Employers' Accounting for Postemployment
Benefits, by the Company's subsidiaries, which were formerly engaged in
coal-mining.
Interest expense rose primarily as a result of increased short-term debt
borrowings.
FINANCIAL CONDITION
Total plant and property additions including capital leases for the first
three months of 1995 were $50 million.
In March 1995, the Company received a $15 million cash capital
contribution from its parent which was credited to paid-in capital. Also in
March 1995, the Company issued $50 million of 8.00% Series First Mortgage
Bonds due in 2005. The proceeds were used to refund long-term debt and repay
short-term debt. In April 1995, the Company redeemed the remaining $46.5
million outstanding balance of its 9 1/8% Series First Mortgage Bonds due in
2019.
<PAGE>
<PAGE>
<TABLE>
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . . . . $257,005 $255,829
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . 51,306 53,632
Purchased Power. . . . . . . . . . . . . . . . . . . . . 31,919 39,396
Other Operation. . . . . . . . . . . . . . . . . . . . . 45,062 42,544
Maintenance. . . . . . . . . . . . . . . . . . . . . . . 15,403 15,828
Depreciation . . . . . . . . . . . . . . . . . . . . . . 21,147 20,590
Amortization of Zimmer Plant Phase-in Costs. . . . . . . 8,051 3,385
Taxes Other Than Federal Income Taxes. . . . . . . . . . 27,031 25,296
Federal Income Taxes . . . . . . . . . . . . . . . . . . 12,649 11,690
TOTAL OPERATING EXPENSES. . . . . . . . . . . . . 212,568 212,361
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . 44,437 43,468
NONOPERATING INCOME:
Deferred Zimmer Plant Carrying Charges (net of tax). . . 904 2,419
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 462 681
TOTAL NONOPERATING INCOME . . . . . . . . . . . . 1,366 3,100
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . . . 45,803 46,568
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . 20,278 21,916
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . 25,525 24,652
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . . . . . . . . 3,203 2,766
EARNINGS APPLICABLE TO COMMON STOCK. . . . . . . . . . . . $ 22,322 $ 21,886
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
ASSETS
<S> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $1,468,403 $1,461,484
Transmission . . . . . . . . . . . . . . . . . . . . 307,468 306,744
Distribution . . . . . . . . . . . . . . . . . . . . 809,408 797,570
General. . . . . . . . . . . . . . . . . . . . . . . 112,730 111,623
Construction Work in Progress. . . . . . . . . . . . 52,657 52,156
Total Electric Utility Plant . . . . . . . . 2,750,666 2,729,577
Accumulated Depreciation . . . . . . . . . . . . . . 903,816 884,237
NET ELECTRIC UTILITY PLANT . . . . . . . . . 1,846,850 1,845,340
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 34,193 26,744
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 37,943 14,065
Accounts Receivable. . . . . . . . . . . . . . . . . 52,676 55,705
Allowance for Uncollectible Accounts . . . . . . . . (3,029) (1,768)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 25,892 28,060
Materials and Supplies . . . . . . . . . . . . . . . 21,571 24,923
Accrued Utility Revenues . . . . . . . . . . . . . . 29,505 31,595
Prepayments and Other. . . . . . . . . . . . . . . . 33,149 31,241
TOTAL CURRENT ASSETS . . . . . . . . . . . . 197,707 183,821
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 465,851 475,019
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 50,856 63,418
TOTAL. . . . . . . . . . . . . . . . . . . $2,595,457 $2,594,342
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
CAPITALIZATION:
Common Stock - No Par Value:
Authorized - 24,000,000 Shares
Outstanding - 16,410,426 Shares. . . . . . . . . . $ 41,026 $ 41,026
Paid-in Capital. . . . . . . . . . . . . . . . . . . 565,741 565,642
Retained Earnings. . . . . . . . . . . . . . . . . . 51,288 46,976
Total Common Shareowner's Equity . . . . . . 658,055 653,644
Cumulative Preferred Stock - Subject to
Mandatory Redemption . . . . . . . . . . . . . . . 150,000 150,000
Long-term Debt . . . . . . . . . . . . . . . . . . . 917,722 917,608
TOTAL CAPITALIZATION . . . . . . . . . . . . 1,725,777 1,721,252
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . 40,222 38,072
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 80,000 80,000
Accounts Payable . . . . . . . . . . . . . . . . . . 42,540 48,991
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 103,265 113,362
Interest Accrued . . . . . . . . . . . . . . . . . . 30,451 18,923
Other. . . . . . . . . . . . . . . . . . . . . . . . 26,004 25,310
TOTAL CURRENT LIABILITIES. . . . . . . . . . 282,260 286,586
DEFERRED FEDERAL INCOME TAXES. . . . . . . . . . . . . 463,404 467,593
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 63,678 64,597
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 20,116 16,242
CONTINGENCIES (Note 2)
TOTAL. . . . . . . . . . . . . . . . . . . $2,595,457 $2,594,342
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 25,525 $ 24,652
Adjustments for Noncash Items:
Depreciation . . . . . . . . . . . . . . . . . . . . . . 21,052 20,648
Deferred Federal Income Taxes. . . . . . . . . . . . . . (3,064) 5,090
Deferred Fuel Costs (net). . . . . . . . . . . . . . . . 3,539 (5,701)
Amortization (Deferral) of Zimmer Plant Operating
Expenses and Carrying Charges (net). . . . . . . . . . 6,819 (179)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . 4,290 (2,520)
Fuel, Materials and Supplies . . . . . . . . . . . . . . 5,520 11,260
Accrued Utility Revenues . . . . . . . . . . . . . . . . 2,090 5,234
Prepayments and Other. . . . . . . . . . . . . . . . . . (1,908) (7,109)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (6,451) (9,611)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . (10,097) (17,342)
Interest Accrued . . . . . . . . . . . . . . . . . . . . 11,528 3,101
Other (net). . . . . . . . . . . . . . . . . . . . . . . . 6,498 7,321
Net Cash Flows From Operating Activities . . . . . . 65,341 34,844
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (21,251) (14,222)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 966 365
Net Cash Flows Used For Investing Activities . . . . (20,285) (13,857)
FINANCING ACTIVITIES:
Issuance of Long-term Debt . . . . . . . . . . . . . . . . - 198,298
Change in Short-term Debt (net). . . . . . . . . . . . . . - 28,275
Retirement of Long-term Debt . . . . . . . . . . . . . . . - (225,834)
Dividends Paid on Common Stock . . . . . . . . . . . . . . (17,975) (17,197)
Dividends Paid on Cumulative Preferred Stock . . . . . . . (3,203) (2,766)
Net Cash Flows Used For Financing Activities . . . . (21,178) (19,224)
Net Increase in Cash and Cash Equivalents. . . . . . . . . . 23,878 1,763
Cash and Cash Equivalents at Beginning of Period . . . . . . 14,065 6,633
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 37,943 $ 8,396
Supplemental Disclosure:
Cash paid (received) for interest net of capitalized amounts was $7,688,000 and
$17,863,000 and for income taxes was $61,000 and $(81,000) in 1995 and 1994,
respectively. Noncash acquisitions under capital leases were $2,013,000 and
$1,360,000 in 1995 and 1994, respectively.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . $46,976 $18,288
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 25,525 24,652
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 17,975 17,197
Cumulative Preferred Stock . . . . . . . . . . . . . . . . 3,203 2,766
Capital Stock Expense. . . . . . . . . . . . . . . . . . . . 35 35
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . $51,288 $22,942
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial
statements should be read in conjunction with the 1994 Annual
Report as incorporated in and filed with the Form 10-K.
Certain prior-period amounts were reclassified to conform
with current-period presentation.
2. CONTINGENCIES
The Company continues to be involved in certain matters
discussed in its 1994 Annual Report.
<PAGE>
<PAGE>
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
FIRST QUARTER 1995 vs. FIRST QUARTER 1994
Net income increased 4% due to a reduction in interest
charges as a result of the refinancing of debt at lower interest
rates and the retirement of debt.
Operating revenues increased $1.2 million primarily as a
result of a retail rate increase that went into effect on
February 1, 1994. The favorable effect of the rate increase was
largely offset by a decrease in wholesale energy sales to
unaffiliated utilities due to mild winter weather. The Public
Utilities Commission of Ohio (PUCO) granted a 7.11% increase in
rates effective February 1, 1994. The rate increase had no
effect on net income since it is offset by the amortization of
prior year Zimmer phase-in plan deferrals and the cessation of
deferred carrying charges on the plant investment which would
have occurred had the phase-in plan continued in effect.
Other income statement lines which changed significantly were
as follows:
Increase (Decrease)
(in millions) %
Fuel Expense . . . . . . . . . . . . . . . . $(2.3) (4)
Purchased Power Expense. . . . . . . . . . . (7.5) (19)
Other Operation Expense. . . . . . . . . . . 2.5 6
Taxes Other Than Federal Income Taxes. . . . 1.7 7
Fuel expense declined primarily due to decreased generation
and a decrease in the cost of fuel consumed offset in part by the
operation of the fuel clause adjustment mechanism which resulted
in an increase in the amortization of previously deferred fuel
costs. Under the fuel clause adjustment mechanism the Company
defers fuel expense to the extent it varies from the allowed
electric fuel component rate until such deferrals are amortized
to expense commensurate with their inclusion in fuel rates in
later months.
The decrease in purchased power expense was due to the
reduction in wholesale energy demand caused by the mild winter
weather in the first quarter of 1995.<PAGE>
<PAGE>
Other operation expense increased due to increased
uncollectible accounts expense, resulting from a PUCO-approved
increase in amortization, concurrent with rate recovery, of the
cost of an assistance program for certain low-income residential
customers, and increased customer accounts expenses.
Taxes other than federal income taxes rose due to an increase
in gross receipts tax on the increased retail revenues.
<PAGE>
<PAGE>
<TABLE>
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . . . . $327,177 $337,921
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . 62,754 53,058
Purchased Power. . . . . . . . . . . . . . . . . . . . . 27,629 44,906
Other Operation. . . . . . . . . . . . . . . . . . . . . 72,733 74,178
Maintenance. . . . . . . . . . . . . . . . . . . . . . . 32,472 36,931
Depreciation and Amortization. . . . . . . . . . . . . . 34,431 34,445
Amortization of Rockport Plant Unit 1
Phase-in Plan Deferrals. . . . . . . . . . . . . . . . 3,911 3,911
Taxes Other Than Federal Income Taxes. . . . . . . . . . 19,878 19,461
Federal Income Taxes . . . . . . . . . . . . . . . . . . 17,118 12,216
TOTAL OPERATING EXPENSES . . . . . . . . . . . . 270,926 279,106
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . 56,251 58,815
NONOPERATING INCOME. . . . . . . . . . . . . . . . . . . . 101 4,435
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . . . 56,352 63,250
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . 17,972 18,282
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . 38,380 44,968
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . . . . . . . . 2,890 2,980
EARNINGS APPLICABLE TO COMMON STOCK. . . . . . . . . . . . $ 35,490 $ 41,988
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . $216,658 $177,638
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . 38,380 44,968
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . 27,713 26,652
Cumulative Preferred Stock . . . . . . . . . . . . . . 2,890 2,980
Capital Stock Expense. . . . . . . . . . . . . . . . . . 50 45
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . $224,385 $192,929
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
ASSETS
<S> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $2,499,792 $2,494,834
Transmission . . . . . . . . . . . . . . . . . . . . 855,745 849,920
Distribution . . . . . . . . . . . . . . . . . . . . 649,543 644,720
General (including nuclear fuel) . . . . . . . . . . 198,657 204,909
Construction Work in Progress. . . . . . . . . . . . 81,368 74,923
Total Electric Utility Plant . . . . . . . . 4,285,105 4,269,306
Accumulated Depreciation and Amortization. . . . . . 1,691,839 1,659,940
NET ELECTRIC UTILITY PLANT . . . . . . . . . 2,593,266 2,609,366
NUCLEAR DECOMMISSIONING AND SPENT NUCLEAR FUEL
DISPOSAL TRUST FUNDS . . . . . . . . . . . . . . . . 371,885 341,089
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 124,500 127,424
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 5,583 9,907
Accounts Receivable (net). . . . . . . . . . . . . . 122,544 131,932
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 31,113 35,802
Materials and Supplies . . . . . . . . . . . . . . . 61,487 59,897
Accrued Utility Revenues . . . . . . . . . . . . . . 36,999 40,582
Prepayments. . . . . . . . . . . . . . . . . . . . . 17,525 8,414
TOTAL CURRENT ASSETS . . . . . . . . . . . . 275,251 286,534
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 469,169 481,212
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 83,790 70,104
TOTAL. . . . . . . . . . . . . . . . . . . $3,917,861 $3,915,729
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <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. . . . . . . . . . . . . . . . . . . 734,511 734,511
Retained Earnings. . . . . . . . . . . . . . . . . . 224,385 216,658
Total Common Shareowner's Equity . . . . . . 1,015,480 1,007,753
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . 52,000 52,000
Subject to Mandatory Redemption. . . . . . . . . . 135,000 135,000
Long-term Debt . . . . . . . . . . . . . . . . . . . 932,305 929,887
TOTAL CAPITALIZATION . . . . . . . . . . . . 2,134,785 2,124,640
OTHER NONCURRENT LIABILITIES:
Nuclear Decommissioning. . . . . . . . . . . . . . . 232,147 211,963
Other. . . . . . . . . . . . . . . . . . . . . . . . 175,940 179,013
TOTAL OTHER NONCURRENT LIABILITIES . . . . . 408,087 390,976
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 140,000 140,000
Short-term Debt - Commercial Paper . . . . . . . . . 5,125 50,600
Accounts Payable . . . . . . . . . . . . . . . . . . 36,865 63,137
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 98,005 63,621
Interest Accrued . . . . . . . . . . . . . . . . . . 21,773 19,436
Rent Accrued - Rockport Plant Unit 2 . . . . . . . . 25,028 6,490
Obligations Under Capital Leases . . . . . . . . . . 34,249 39,003
Other. . . . . . . . . . . . . . . . . . . . . . . . 77,844 72,664
TOTAL CURRENT LIABILITIES. . . . . . . . . . 438,889 454,951
DEFERRED FEDERAL INCOME TAXES. . . . . . . . . . . . . 556,082 563,654
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 169,574 171,688
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . . . . 202,311 204,138
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 8,133 5,682
CONTINGENCIES (Note 2)
TOTAL. . . . . . . . . . . . . . . . . . . $3,917,861 $3,915,729
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 38,380 $ 44,968
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . . . . . 36,878 37,840
Amortization (Deferral) of Incremental Nuclear
Refueling Outage Expenses (net). . . . . . . . . . . . 8,353 (9,334)
Deferred Federal Income Taxes. . . . . . . . . . . . . . (6,152) 3,115
Deferred Investment Tax Credits. . . . . . . . . . . . . (1,997) (6,160)
Deferred Property Taxes. . . . . . . . . . . . . . . . . (12,440) (16,996)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . 9,388 1,310
Fuel, Materials and Supplies . . . . . . . . . . . . . . 3,099 10,997
Accrued Utility Revenues . . . . . . . . . . . . . . . . 3,583 3,448
Prepayments. . . . . . . . . . . . . . . . . . . . . . . (9,111) (3,473)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (26,272) (6,513)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . 34,384 13,503
Rent Accrued - Rockport Plant Unit 2 . . . . . . . . . . 18,538 18,464
Other (net). . . . . . . . . . . . . . . . . . . . . . . . 1,020 1,645
Net Cash Flows From Operating Activities . . . . . . 97,651 92,814
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (26,406) (23,854)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 509 -
Net Cash Flows Used For Investing Activities . . . . (25,897) (23,854)
FINANCING ACTIVITIES:
Issuance of Cumulative Preferred Stock . . . . . . . . . . - 34,618
Issuance of Long-term Debt . . . . . . . . . . . . . . . . - 49,548
Retirement of Cumulative Preferred Stock . . . . . . . . . - (35,798)
Retirement of Long-term Debt . . . . . . . . . . . . . . . - (101,833)
Change in Short-term Debt (net). . . . . . . . . . . . . . (45,475) 16,650
Dividends Paid on Common Stock . . . . . . . . . . . . . . (27,713) (26,652)
Dividends Paid on Cumulative Preferred Stock . . . . . . . (2,890) (2,811)
Net Cash Flows Used For Financing Activities . . . . (76,078) (66,278)
Net Increase (Decrease) in Cash and Cash Equivalents . . . . (4,324) 2,682
Cash and Cash Equivalents at Beginning of Period . . . . . . 9,907 3,752
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 5,583 $ 6,434
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $15,006,000 and $15,861,000
and for income taxes was $1,362,000 and $12,501,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $5,256,000 and $38,731,000 in 1995
and 1994, respectively.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial statements should be
read in conjunction with the 1994 Annual Report as incorporated in and
filed with the Form 10-K. Certain prior-period amounts have been
reclassified to conform to current-period presentation.
2. CONTINGENCIES
On March 27, 1995, the Court of Appeals of Indiana ruled in the
Company's favor by affirming the DeKalb County Circuit Court's 1992
dismissal of a local distribution utility's lawsuit which sought $29
million in damages from the Company. The damages were sought under a
provision of Indiana law that allows a local distribution utility to seek
damages equal to the gross revenues received by a Company for service
rendered in the local distribution utility's designated service territory.
The suit followed a Supreme Court of Indiana decision which overruled an
appeals court and voided an Indiana Utility Regulatory Commission order
which had assigned a major industrial customer to the Company. The local
distribution utility has filed a petition to have the suit transferred to
the Supreme Court of Indiana.
The Company continues to be involved in certain other matters
discussed in its 1994 Annual Report.
<PAGE>
<PAGE>
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
FIRST QUARTER 1995 vs. FIRST QUARTER 1994
RESULTS OF OPERATIONS
Net income decreased 15% or $6.6 million due primarily to the negative
impact on sales to residential customers and unaffiliated utilities of the
mild winter weather in 1995, and to the favorable federal income tax effect of
the retirement of the Breed Plant in 1994.
Operating revenues decreased $10.7 million or 3% mainly due to reduced
fuel and power supply cost recoveries from retail customers and decreased
energy sales to residential and unaffiliated wholesale customers reflecting
the mild weather. These decreases were offset in part by a substantial
increase in energy supplied to the AEP System Power Pool (Power Pool). The
reductions in fuel and power supply revenue did not affect net income because
fuel costs are matched with revenues in accordance with rate commission
orders. Although residential energy sales decreased 6%, retail energy sales
were virtually unchanged due to a 5% increase in industrial sales resulting
from an increased number of customers and increased usage. The substantial
increase in energy deliveries to the Power Pool resulted from the increased
availability of the Company's nuclear plant (Cook Plant) which had been
unavailable during part of the first quarter of 1994 as a result of scheduled
refueling and unscheduled maintenance outages. The increase in energy
deliveries to the Power Pool did not affect net income since Power Pool
members are compensated for their out-of-pocket costs.
Other income statement line items which changed significantly were:
Increase
(Decrease)
(in millions) %
Fuel Expense. . . . . . . . . . . . . . . . . . . . . . $ 9.7 18
Purchased Power Expense . . . . . . . . . . . . . . . . (17.3) (38)
Maintenance Expense . . . . . . . . . . . . . . . . . . (4.5) (12)
Federal Income Taxes. . . . . . . . . . . . . . . . . . 4.9 40
Nonoperating Income . . . . . . . . . . . . . . . . . . (4.3) (98)
The increase in fuel expense was due to a 57% increase in generation as a
result of the increased availability in 1995 of the two Cook Plant nuclear
units. In 1994 one of the Cook Plant units was out of service for refueling
from mid-February through the end of May and the other unit experienced
unscheduled maintenance outages.
<PAGE>
<PAGE>
The decline in purchased power expense reflects the increased availability
of the Cook Plant's generating capacity and the mild winter weather in 1995.
The reduction in maintenance expense reflects the decrease in maintenance
at the Cook Plant and reduced fossil plant maintenance due to the retirement
of the Breed Plant in 1994.
Federal income taxes attributable to operations increased due to changes
in certain book/tax differences accounted for on a flow-through basis and
increased pre-tax operating income.
Nonoperating income declined reflecting the favorable tax effect of the
retirement of the Breed Plant in 1994.
FINANCIAL CONDITION
Total plant and property additions including capital leases for the
current period were $31.9 million. During the first three months of 1995
outstanding short-term debt declined $45.5 million.
<PAGE>
<PAGE>
<TABLE>
KENTUCKY POWER COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . $85,302 $86,457
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . . 21,361 20,189
Purchased Power. . . . . . . . . . . . . . . . . . 22,290 24,247
Other Operation. . . . . . . . . . . . . . . . . . 10,293 9,011
Maintenance. . . . . . . . . . . . . . . . . . . . 7,151 9,817
Depreciation and Amortization. . . . . . . . . . . 6,032 5,715
Taxes Other Than Federal Income Taxes. . . . . . . 2,494 2,405
Federal Income Taxes . . . . . . . . . . . . . . . 2,038 2,093
TOTAL OPERATING EXPENSES . . . . . . . . . 71,659 73,477
OPERATING INCOME . . . . . . . . . . . . . . . . . . 13,643 12,980
NONOPERATING LOSS. . . . . . . . . . . . . . . . . . (68) (35)
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . 13,575 12,945
INTEREST CHARGES . . . . . . . . . . . . . . . . . . 5,760 5,142
NET INCOME . . . . . . . . . . . . . . . . . . . . . $ 7,815 $ 7,803
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . $89,173 $85,296
NET INCOME . . . . . . . . . . . . . . . . . . . . . 7,815 7,803
CASH DIVIDENDS DECLARED. . . . . . . . . . . . . . . 5,730 5,349
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . $91,258 $87,750
The common stock of the Company is wholly owned by
American Electric Power Company, Inc.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
KENTUCKY POWER COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
ASSETS
<S> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . $225,801 $224,365
Transmission . . . . . . . . . . . . . . . . 260,285 258,178
Distribution . . . . . . . . . . . . . . . . 299,834 297,754
General. . . . . . . . . . . . . . . . . . . 57,021 56,613
Construction Work in Progress. . . . . . . . 12,594 15,002
Total Electric Utility Plant . . . . 855,535 851,912
Accumulated Depreciation and Amortization. . 261,478 259,984
NET ELECTRIC UTILITY PLANT . . . . . 594,057 591,928
OTHER PROPERTY AND INVESTMENTS . . . . . . . . 6,528 6,533
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . 1,056 879
Accounts Receivable. . . . . . . . . . . . . 26,874 21,706
Allowance for Uncollectible Accounts . . . . (305) (260)
Fuel . . . . . . . . . . . . . . . . . . . . 12,844 11,735
Materials and Supplies . . . . . . . . . . . 10,325 9,615
Accrued Utility Revenues . . . . . . . . . . 4,806 9,128
Prepayments. . . . . . . . . . . . . . . . . 1,080 1,476
TOTAL CURRENT ASSETS . . . . . . . . 56,680 54,279
REGULATORY ASSETS. . . . . . . . . . . . . . . 52,107 50,519
DEFERRED CHARGES . . . . . . . . . . . . . . . 10,267 11,049
TOTAL. . . . . . . . . . . . . . . $719,639 $714,308
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
KENTUCKY POWER COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
CAPITALIZATION:
Common Stock - Par Value $50:
Authorized - 2,000,000 Shares
Outstanding - 1,009,000 Shares . . . . . . $ 50,450 $ 50,450
Paid-in Capital. . . . . . . . . . . . . . . 68,750 68,750
Retained Earnings. . . . . . . . . . . . . . 91,258 89,173
Total Common Shareowner's Equity . . 210,458 208,373
Long-term Debt . . . . . . . . . . . . . . . 264,169 253,583
TOTAL CAPITALIZATION . . . . . . . . 474,627 461,956
OTHER NONCURRENT LIABILITIES . . . . . . . . . 12,018 11,449
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . 29,436 -
Short-term Debt. . . . . . . . . . . . . . . 18,850 55,150
Accounts Payable . . . . . . . . . . . . . . 16,372 19,420
Customer Deposits. . . . . . . . . . . . . . 4,121 4,297
Taxes Accrued. . . . . . . . . . . . . . . . 9,058 6,256
Interest Accrued . . . . . . . . . . . . . . 5,379 5,794
Other. . . . . . . . . . . . . . . . . . . . 11,374 14,467
TOTAL CURRENT LIABILITIES. . . . . . 94,590 105,384
DEFERRED FEDERAL INCOME TAXES. . . . . . . . . 115,642 115,003
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . 15,045 15,288
DEFERRED CREDITS . . . . . . . . . . . . . . . 7,717 5,228
CONTINGENCIES (Note 2)
TOTAL. . . . . . . . . . . . . . . $719,639 $714,308
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
KENTUCKY POWER COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . $ 7,815 $ 7,803
Adjustments for Noncash Items:
Depreciation and Amortization. . . . . . . . . . 6,051 5,732
Deferred Federal Income Taxes. . . . . . . . . . (997) (551)
Deferred Investment Tax Credits. . . . . . . . . (314) (317)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . (5,123) (3,167)
Fuel, Materials and Supplies . . . . . . . . . . (1,819) 2,183
Accrued Utility Revenues . . . . . . . . . . . . 4,322 4,790
Accounts Payable . . . . . . . . . . . . . . . . (3,048) (2,295)
Taxes Accrued. . . . . . . . . . . . . . . . . . 2,802 3,523
Other (net). . . . . . . . . . . . . . . . . . . . 155 2,748
Net Cash Flows From Operating Activities . . 9,844 20,449
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . (7,637) (7,119)
Proceeds from Sales of Property. . . . . . . . . . - 715
Net Cash Flows Used For Investing Activities (7,637) (6,404)
FINANCING ACTIVITIES:
Change in Short-term Debt (net). . . . . . . . . . 3,700 (8,750)
Dividends Paid . . . . . . . . . . . . . . . . . . (5,730) (5,349)
Net Cash Flows Used For Financing Activities (2,030) (14,099)
Net Increase (Decrease) in Cash and Cash Equivalents 177 (54)
Cash and Cash Equivalents at Beginning of Period . . 879 858
Cash and Cash Equivalents at End of Period . . . . . $ 1,056 $ 804
Supplemental Disclosure:
Cash paid (received) for interest net of capitalized amounts was $6,119,000
and $5,596,000 and for income taxes was $(108,000) and $(781,000) in 1995
and 1994, respectively. Noncash acquisitions under capital leases were
$1,034,000 and $318,000 in 1995 and 1994, respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
KENTUCKY POWER COMPANY
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited financial statements should be read in
conjunction with the 1994 Annual Report as incorporated in and filed with
the Form 10-K. Certain prior-period amounts were reclassified to conform
with current-period presentation.
2. CONTINGENCIES
The Company continues to be involved in certain matters discussed in
its 1994 Annual Report.
3. SUBSEQUENT EVENTS
In April 1995 the Company issued $40 million of 8.72% Junior
Subordinated Deferrable Interest Debentures Series A, Due 2025 and used
the proceeds to reduce short-term debt. Therefore, as of March 31, 1995
$40 million of short-term debt was reclassified to long-term debt.
<PAGE>
<PAGE>
KENTUCKY POWER COMPANY
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
FIRST QUARTER 1995 vs. FIRST QUARTER 1994
Net income remained unchanged from the prior period. An increase of $0.7
million in operating income was offset by an increase in interest expense on
short-term debt due to additional borrowing and an increase in short-term
interest rates.
Income statement lines which changed significantly were:
Increase (Decrease)
(in millions) %
Operating Revenues. . . . . . . . . . . . . . . . . $(1.2) (1.3)
Fuel Expense. . . . . . . . . . . . . . . . . . . . 1.2 5.8
Purchased Power Expense . . . . . . . . . . . . . . (2.0) (8.1)
Other Operation . . . . . . . . . . . . . . . . . . 1.3 14.2
Maintenance Expense . . . . . . . . . . . . . . . . (2.7) (27.2)
The decrease in operating revenues was due to decreased wholesale energy
sales to unaffiliated utilities by the AEP System Power Pool reflecting the
effects of mild winter weather on energy demand and the ability of those
utilities to meet their demand with their own generation. Although operating
revenues declined due to the reduction in wholesale energy sales, retail
revenues increased reflecting a 3% rise in retail energy sales and increased
fuel clause revenues. Energy sales to industrial customers rose 11%
reflecting higher levels of industrial output, while milder winter weather
reduced residential sales by 4%.
Fuel expense increased due to the operation of a fuel clause adjustment
mechanism whereby previously deferred fuel costs are subsequently included in
billings to customers. Under the fuel clause adjustment mechanism the Company
defers fuel expense to the extent it varies from the allowed electric fuel
rate.
The decrease in purchased power expense resulted from decreased energy
purchases from unaffiliated utilities for pass-through sales and a reduction
in the cost of energy purchases from the Power Pool due to mild winter
weather, partly offset by an increase in the Company's share of AEP Power Pool
capacity charges. As a Power Pool member whose internal demand exceeds its
capacity, the Company pays capacity charges allocated to Power Pool members
based on their relative peak demands. An increase in the Company's prior
twelve month peak demand relative to the total peak demand of all Power Pool
members caused the increase in Power Pool capacity charges.<PAGE>
<PAGE>
Other operation expense increased mainly due to increased administrative
expenses and higher accruals for uncollectible accounts.
The decrease in maintenance expense resulted from the effect of
significant distribution line maintenance expenditures to repair damage from
severe winter storms in 1994.
<PAGE>
<PAGE>
<TABLE>
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . . . . . . . $416,827 $487,041
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,678 200,629
Purchased Power. . . . . . . . . . . . . . . . . . . . . . . . 20,242 20,510
Other Operation. . . . . . . . . . . . . . . . . . . . . . . . 59,700 49,903
Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . 34,898 36,145
Depreciation and Amortization. . . . . . . . . . . . . . . . . 33,890 32,730
Taxes Other Than Federal Income Taxes. . . . . . . . . . . . . 45,337 44,492
Federal Income Taxes . . . . . . . . . . . . . . . . . . . . . 23,753 27,772
TOTAL OPERATING EXPENSES . . . . . . . . . . . . . . . 349,498 412,181
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . . . 67,329 74,860
NONOPERATING INCOME. . . . . . . . . . . . . . . . . . . . . . . 3,707 1,641
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . . . . . . 71,036 76,501
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . . . . 23,294 22,266
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,742 54,235
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . . . . . . . . . . . 3,825 3,825
EARNINGS APPLICABLE TO COMMON STOCK. . . . . . . . . . . . . . . $ 43,917 $ 50,410
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . $483,222 $474,500
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,742 54,235
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 34,857 34,617
Cumulative Preferred Stock . . . . . . . . . . . . . . . . . 3,825 3,825
Capital Stock Expense. . . . . . . . . . . . . . . . . . . . . 34 34
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . $492,248 $490,259
The common stock of the Company is wholly owned by American Electric Power Company, Inc.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
ASSETS
<S> <C> <C>
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . . $2,523,493 $2,516,390
Transmission . . . . . . . . . . . . . . . . . . . . 790,079 790,736
Distribution . . . . . . . . . . . . . . . . . . . . 794,065 798,387
General (including mining assets). . . . . . . . . . 731,102 782,719
Construction Work in Progress. . . . . . . . . . . . 66,051 49,889
Total Electric Utility Plant . . . . . . . . 4,904,790 4,938,121
Accumulated Depreciation and Amortization. . . . . . 2,049,284 2,077,626
NET ELECTRIC UTILITY PLANT . . . . . . . . . 2,855,506 2,860,495
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . 110,877 120,856
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 24,373 30,700
Accounts Receivable. . . . . . . . . . . . . . . . . 154,291 158,681
Allowance for Uncollectible Accounts . . . . . . . . (1,309) (1,019)
Fuel . . . . . . . . . . . . . . . . . . . . . . . . 163,207 147,152
Materials and Supplies . . . . . . . . . . . . . . . 70,782 67,719
Accrued Utility Revenues . . . . . . . . . . . . . . 23,513 28,775
Prepayments. . . . . . . . . . . . . . . . . . . . . 65,664 43,894
TOTAL CURRENT ASSETS . . . . . . . . . . . . 500,521 475,902
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . . 552,178 521,855
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . 116,128 154,501
TOTAL. . . . . . . . . . . . . . . . . . . $4,135,210 $4,133,609
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, December 31,
1995 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <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. . . . . . . . . . . . . . . . . . . 463,100 463,100
Retained Earnings. . . . . . . . . . . . . . . . . . 492,248 483,222
Total Common Shareowner's Equity . . . . . . 1,276,549 1,267,523
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . . 126,240 126,240
Subject to Mandatory Redemption. . . . . . . . . . 115,000 115,000
Long-term Debt . . . . . . . . . . . . . . . . . . . 1,132,884 1,188,319
TOTAL CAPITALIZATION . . . . . . . . . . . . 2,650,673 2,697,082
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . . 186,380 181,446
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . . 56,045 670
Short-term Debt. . . . . . . . . . . . . . . . . . . 18,375 17,235
Accounts Payable . . . . . . . . . . . . . . . . . . 96,476 122,432
Taxes Accrued. . . . . . . . . . . . . . . . . . . . 139,109 156,525
Interest Accrued . . . . . . . . . . . . . . . . . . 30,721 22,681
Obligations Under Capital Leases . . . . . . . . . . 26,490 25,314
Other. . . . . . . . . . . . . . . . . . . . . . . . 87,739 95,218
TOTAL CURRENT LIABILITIES. . . . . . . . . . 454,955 440,075
DEFERRED FEDERAL INCOME TAXES. . . . . . . . . . . . . 696,111 695,115
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . . 42,161 42,828
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . . 104,930 77,063
CONTINGENCIES (Note 3)
TOTAL. . . . . . . . . . . . . . . . . . . $4,135,210 $4,133,609
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
OHIO POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31,
1995 1994
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . $ 47,742 $ 54,235
Adjustments for Noncash Items:
Depreciation, Depletion and Amortization . . . . . . . . 37,448 35,975
Deferred Federal Income Taxes. . . . . . . . . . . . . . 5,620 (10,526)
Deferred Fuel Costs (net). . . . . . . . . . . . . . . . (2,871) (3,186)
Changes in Certain Current Assets and Liabilities:
Accounts Receivable (net). . . . . . . . . . . . . . . . 4,680 (33,555)
Fuel, Materials and Supplies . . . . . . . . . . . . . . (19,118) 64,341
Accrued Utility Revenues . . . . . . . . . . . . . . . . 5,262 7,634
Prepayments. . . . . . . . . . . . . . . . . . . . . . . (21,770) (17,387)
Accounts Payable . . . . . . . . . . . . . . . . . . . . (25,956) (38,371)
Taxes Accrued. . . . . . . . . . . . . . . . . . . . . . (17,416) (800)
Interest Accrued . . . . . . . . . . . . . . . . . . . . 8,040 8,986
Other (net). . . . . . . . . . . . . . . . . . . . . . . . 37,074 16,575
Net Cash Flows From Operating Activities . . . . . . 58,735 83,921
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . . . . . (28,825) (27,575)
Proceeds from Sale of Property and Other . . . . . . . . . 1,305 35,395
Net Cash Flows From (Used For) Investing Activities. (27,520) 7,820
FINANCING ACTIVITIES:
Issuance of Long-term Debt . . . . . . . . . . . . . . . . - 45,000
Change in Short-term Debt (net). . . . . . . . . . . . . . 1,140 (26,962)
Retirement of Long-term Debt . . . . . . . . . . . . . . . - (50,099)
Dividends Paid on Common Stock . . . . . . . . . . . . . . (34,857) (34,617)
Dividends Paid on Cumulative Preferred Stock . . . . . . . (3,825) (3,825)
Net Cash Flows Used For Financing Activities . . . . (37,542) (70,503)
Net Increase (Decrease) in Cash and Cash Equivalents . . . . (6,327) 21,238
Cash and Cash Equivalents at Beginning of Period . . . . . . 30,700 20,803
Cash and Cash Equivalents at End of Period . . . . . . . . . $ 24,373 $ 42,041
Supplemental Disclosure:
Cash paid for interest net of capitalized amounts was $14,585,000 and $12,608,000
and for income taxes was $985,000 and $3,199,000 in 1995 and 1994, respectively.
Noncash acquisitions under capital leases were $8,990,000 and $14,048,000 in
1995 and 1994, respectively.
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
OHIO POWER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
1. GENERAL
The accompanying unaudited consolidated financial statements should be
read in conjunction with the 1994 Annual Report as incorporated in and
filed with the Form 10-K.
2. RATE ACTIVITY
On March 23, 1995, the Public Utilities Commission of Ohio approved
the Company's February 1995 Settlement Agreement that resolved the current
base rate case and electric fuel component proceeding as described in Note
3 in the 1994 Annual Report. The increase in the Company's base rates was
effective March 23, 1995.
3. CONTINGENCIES
The Company continues to be involved in certain other matters
discussed in the 1994 Annual Report.
<PAGE>
<PAGE>
OHIO POWER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
FIRST QUARTER 1995 vs. FIRST QUARTER 1994
RESULTS OF OPERATIONS
Net income decreased 12% or $6.5 million primarily due to a 22% decrease
in energy sales as a result of milder winter weather in 1995.
Income statement lines which changed significantly were:
Increase (Decrease)
(in millions) %
Operating Revenues. . . . . . . . . . . . . . . . $(70.2) (14)
Fuel Expense. . . . . . . . . . . . . . . . . . . (69.0) (34)
Other Operation Expense . . . . . . . . . . . . . 9.8 20
Federal Income Taxes. . . . . . . . . . . . . . . (4.0) (14)
The significant decrease in operating revenues reflects decreased energy
sales to residential and wholesale customers, primarily due to milder weather
in 1995 compared with the severe weather in January 1994, and decreased fuel
clause recoveries due to a decline in the fuel cost component of revenues.
Although energy sales to weather sensitive residential customers decreased 5%,
total retail energy sales increased slightly due to a 3% increase in energy
sales to industrial customers. Energy sales to commercial customers remained
constant.
Wholesale energy sales declined 57% mainly due to decreased energy sales
to unaffiliated utilities by the AEP System Power Pool (Power Pool), resulting
from the mild weather and increased availability of unaffiliated generating
units in 1995, and a reduction in energy sales to the Power Pool. A decline
in the Power Pool's energy requirements reflecting the milder weather;
maintenance and repair outages at several of the Company's generating units in
1995; and the availability during the current period of an affiliate's two
nuclear generating units which had been out of service during 1994 resulted in
the reduction of energy supplied to the Power Pool.
The substantial decrease in fuel expense was due to decreased generation
resulting from the decline in energy demand and the generating unit outages,
and a reduced average cost of fuel consumed.
Other operation expense rose due to regulatory-approved increases in
amortization, concurrent with rate recovery, of certain low-income residential
customers' payment programs, increased membership fees for industry
organizations, and the non-Ohio jurisdictional share of rent expense for the
newly installed two-unit Gavin Plant flue gas desulfurization systems<PAGE>
<PAGE>
(scrubbers). The Public Utilities Commission of Ohio (PUCO) jurisdictional
share of the Gavin Plant's scrubber rent expense was deferred, beginning in
December 1994, pending PUCO approval for recovery. In March 1995, the PUCO
approved recovery of current and deferred rent expense and authorized the
amortization of the previously deferred Gavin expenses beginning on March 23,
1995 over 4 years.
The decrease in federal income tax expense attributable to operations was
primarily due to a decrease in pre-tax operating income.
FINANCIAL CONDITION
Total plant and property additions including capital leases for the
current period were $38 million.
There were no issuances or retirements of long-term debt and preferred
stock in the first quarter of 1995.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
American Electric Power Company, Inc. ("AEP") and Ohio Power
Company ("OPCo")
Reference is made to page 34 of the Annual Report on Form 10-K
for the year ended December 31, 1994 ("1994 10-K") for a discussion
of a lawsuit filed by Ormet Corporation seeking a declaration that
it is the owner of certain emission allowances. On March 31, 1995,
the U.S. District Court for the Northern District of West Virginia
granted the defendants' motions to dismiss Ormet's complaint, each
of which was filed on May 2, 1994. Ormet has appealed the District
Court's decision to the U.S. Court of Appeals for the Fourth
Circuit only with respect to defendants AEP Service Corporation and
OPCo.
Reference is made to page 34 of the 1994 10-K for a discussion
of litigation regarding the Meigs 31 mine. Southern Ohio Coal
Company ("SOCCo") and the West Virginia Division of Environmental
Protection ("West Virginia DEP") have entered into a Settlement
Agreement dated May 8, 1995, under which the West Virginia DEP has
released SOCCo from any claims which it may have had and SOCCo has
made a donation of $260,000 to the Water Quality Management Fund of
the West Virginia DEP. SOCCo has also agreed that it will not
enter into a settlement agreement with the U.S. government regard-
ing the Meigs mine dewatering which does not include an agreement
that the West Virginia DEP will be entitled to direct the expendi-
ture of $100,000 from any fund established as part of a consent
decree for work in the Ohio River for the benefit of Leading Creek.
Item 5. Other Information.
AEP, AEP Generating Company ("AEGCo"), Appalachian Power Company
("APCo"), Columbus Southern Power Company ("CSPCo"), Indiana Michi-
gan Power Company ("I&M"), Kentucky Power Company ("KEPCo") and
OPCo
Reference is made to pages 5, 6, 8 and 9 of the 1994 10-K for a
discussion of AEP's transmission access filing, the increasing
competition in the electric utility industry, the transmission
access provisions of the Energy Policy Act of 1992, and a proposed
Federal Energy Regulatory Commission ("FERC") rulemaking. On March
29, 1995, the FERC issued Notices of Proposed Rulemaking addressing
open transmission access and recovery of stranded costs. Under the
proposed rules, utilities under FERC jurisdiction would be required
to file non-discriminatory open access transmission tariffs, avail-
able to all wholesale sellers and buyers of electricity. In addi-
tion, the utilities would be required to take service under the
tariffs for their own wholesale sales and possibly purchases of
electric energy. In a separate procedural order, parties in 17
pending cases involving open access transmission services, includ-
ing AEP, were directed to proceed with their cases, taking into
account the FERC's current views as described in the open access
proposal. The FERC's stated goals in offering the open access rule
are (i) to facilitate the development of a competitive generation
market by ensuring that wholesale buyers and sellers can reach each
other, and (ii) to eliminate anti-competitive and discriminatory
practices in transmission services.
With respect to stranded costs, the FERC seeks additional
comments limited to the new matters being proposed. The FERC
stated that the approach proposed in the June 29, 1994 proposed
rulemaking "should adequately cover most, if not all, costs that
could be stranded in an environment where transmission access is
more widely available, including the access environment that the
[FERC] expects if the provisions of the open access [proposed
rulemaking] are adopted." The FERC delineated a number of prelimi-
nary determinations which were reached as a result of the June 29
rulemaking proposal including:
o The FERC made a preliminary determination that "recovery of
legitimate and verifiable stranded costs should be allowed,
and that direct assignment of stranded costs to departing
customers, as proposed in the [June 29 proposed rulemaking],
is the appropriate method for recovery."
o The FERC made a preliminary determination that "it is appro-
priate to leave it to state regulatory authorities to assume
responsibility for any stranded costs occasioned by retail
wheeling, except in the narrow circumstance in which the
state regulatory authority does not have authority under
state law, at the time retail wheeling is required, to
address recovery of such costs."
Reference is made to page 23 of the 1994 10-K for a discussion
of regulations governing nitrogen oxides emissions. On March 31,
1995, the U.S. Environmental Protection Agency issued a revised
final rule replacing the one remanded by the U.S. Court of Appeals
for the District of Columbia Circuit on November 29, 1994. This
final rule was issued as a result of a settlement among the parties
to the litigation.
I&M
Effective April 28, 1995, Indiana enacted into law legislation
relating to utility regulation with the following provisions:
o The earnings test period was extended from one year to five
years, allowing utilities an increased opportunity to oper-
ate at or near the rate of return approved by the Indiana
Utility Regulatory Commission ("IURC") and possibly delaying
the frequency of rate increases.
o The IURC may decline to exercise, in whole or in part, its
jurisdiction over either a utility or the retail energy
service of a utility, or both, if the public interest so
requires.
o A utility may propose, and the IURC may approve, alternative
regulatory plans which could include setting customer rates
based on market or average prices, price caps, index-based
prices and prices based on performance and efficiency.
Reference is made to page 9 of the 1994 10-K for a discussion
of a proposed rulemaking for integrated resource planning ("IRP")
in Indiana. On April 5, 1995, the IURC promulgated the final rules
on integrated resource planning and demand-side management ("DSM").
The IURC promulgated the rules pursuant to Indiana statutes requir-
ing that a utility assess demand-side and supply-side resources to
meet cost-effectively and reliably customer electricity service
needs. The DSM rule provides a method of cost recovery for demand-
side management programs. The IRP rule requires electric utilities
to submit to the IURC on a biennial basis, beginning on or before
November 1, 1995, an integrated resource plan.
Reference is made to page 21 of the 1994 10-K for a discussion
of nuclear waste disposal. The U.S. Department of Energy has
indicated in its "Final Interpretation of Nuclear Waste Acceptance
Issues" published in the May 3, 1995 Federal Register that it has
no statutory or contractual obligation to accept high level waste
and spent nuclear fuel beginning in 1998 in the absence of a
repository or interim storage facility.
CSPCo
Reference is made to page 10 of the 1994 10-K for a discussion
of new business development. CSPCo has submitted a proposal to
acquire the City of Columbus' trash burning power plant and its
electric system. Under the bid submitted to the City of Columbus
and the Solid Waste Authority of Central Ohio ("SWACO"), the plant
would be idled until possible repowering with gas-fired combustion
turbines. Under the proposed bid, CSPCo would, among other things:
o Idle the 90-megawatt waste-to-energy facility. CSPCo would
study repowering the plant in the future with gas-fired
combustion turbines, but did not expect to use waste as a
fuel.
o Purchase the City's electric distribution and transmission
system.
The City's electric system has about 11,000 electric customers,
including 8,000 residential, 2,000 commercial and 1,000 industrial
customers.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
APCo, CSPCo, I&M, KEPCo and OPCo
Exhibit 12 - Statement re: Computation of Ratios.
AEP, AEGCo, APCo, CSPCo, I&M, KEPCo and OPCo
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K:
AEP, AEGCo, APCo, CSPCo, I&M, KEPCo and OPCo
No reports on Form 8-K were filed during the quarter
ended March 31, 1995.
<PAGE>
<PAGE>
In the opinion of the companies, the financial statements contained herein
reflect all adjustments (consisting of only normal recurring accruals) which
are necessary to a fair presentation of the results of operations for the
interim periods.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. The signatures for each undersigned
company shall be deemed to relate only to matters having reference to
such company and any subsidiaries thereof.
AMERICAN ELECTRIC POWER COMPANY, INC.
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Treasurer
and Secretary
AEP GENERATING COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
APPALACHIAN POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
COLUMBUS SOUTHERN POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
INDIANA MICHIGAN POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
KENTUCKY POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
OHIO POWER COMPANY
G.P. Maloney P.J. DeMaria
G.P. Maloney, Vice President P.J. DeMaria, Vice President
and Treasurer
Date: May 10, 1995
II-5<PAGE>
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