UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 15, 1998
COMMISSION REGISTRANT, STATE OF INCORPORATION, I.R.S. EMPLOYER
FILE NUMBER ADDRESS AND TELEPHONE NUMBER IDENTIFICATION NO.
1-1443 CENTRAL AND SOUTH WEST CORPORATION 51-0007707
(A Delaware Corporation)
1616 Woodall Rodgers Freeway
Dallas, Texas 75202-1234
(214) 777-1000
1-3146 SOUTHWESTERN ELECTRIC POWER COMPANY 72-0323455
(A Delaware Corporation)
428 Travis Street
Shreveport, Louisiana 71156-0001
(318) 222-2141
<PAGE>
FORWARD LOOKING INFORMATION
This report made by Central and South West Corporation (CSW) and its
subsidiaries contains forward looking statements within the meaning of Section
21E of the Exchange Act. Although CSW and each of its subsidiaries believe that,
in making any such statements, their expectations are based on reasonable
assumptions, any such statements may be influenced by factors that could cause
actual outcomes and results to be materially different from those projected.
Important factors that could cause actual results to differ materially from
those in the forward looking statements include, but are not limited to: the
impact of general economic changes in the U.S. and in countries in which CSW
either currently has made or in the future may make investments; the impact of
deregulation on the U.S. electric utility business; increased competition and
electric utility industry restructuring in the U.S.; the impact of the proposed
American Electric Power Company, Inc. (AEP) merger, other merger and acquisition
activity, or the inability to consummate the AEP merger; federal and state
regulatory developments and changes in law which may have a substantial adverse
impact on the value of CSW system assets; timing and adequacy of rate relief;
adverse changes in electric load and customer growth; climatic changes or
unexpected changes in weather patterns; changing fuel prices, generating plant
and distribution facility performance; decommissioning costs associated with
nuclear generating facilities; uncertainties in foreign operations and foreign
laws affecting CSW's investments in those countries; the effects of retail
competition in the natural gas and electricity distribution and supply
businesses in the United Kingdom; and the timing and success of efforts to
develop domestic and international power projects. In the non-utility area, the
aforementioned factors would also apply, and, in addition, would include, but
are not limited to: the ability to compete effectively in new areas, including
telecommunications, power marketing and brokering, and other energy related
services, as well as evolving federal and state regulatory legislation and
policies that may adversely affect those industries generally or the CSW
system's business in areas in which it operates.
<PAGE>
ITEM 5. OTHER EVENTS
On May 15, 1998 CSW issued a news release, related to a proposed merger
between CSW and AEP, which is attached as an exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99.1 CSW News Release dated May 15, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTRAL AND SOUTH WEST CORPORATION
Date: May 26, 1998
By: /S/ LAWRENCE B. CONNORS
Lawrence B. Connors
Controller
SOUTHWESTERN ELECTRIC POWER COMPANY
Date: May 26, 1998
By: /S/ RUSSELL DAVIS
Russell Davis
Controller
EXHIBIT 99.1
AMERICAN ELECTRIC POWER AND CENTRAL AND SOUTH WEST
JOINTLY FILE FOR MERGER APPROVAL
FROM LOUISIANA PUBLIC SERVICE COMMISSION
Columbus, Ohio, and Dallas, Texas (May 15, 1998) -- American Electric Power
Company, Inc. (NYSE: AEP) and Central and South West Corporation (NYSE: CSR)
today jointly filed a request with the Louisiana Public Service Commission for
approval of their proposed merger and a finding that the merger is in the public
interest.
Testimony submitted in the filing outlines the expected company-wide benefits of
the merger to AEP and CSW customers and shareholders, which include:
* $2 billion in net non-fuel cost savings over 10 years;
* $98 million in net fuel savings over 10 years;
* Improved capital structure and increased financial strength;
* Increased diversity in customer base, generating resources and
service territory;
* Optimization of business practices and continued high-quality
service;
* Support for restructuring of retail electric markets; and
* Support for an independent system operator.
AEP and CSW have proposed a regulatory plan in Louisiana that provides for:
* Approximately $2.6 million in fuel cost savings to Louisiana
customers of CSW's Southwestern Electric Power Company (SWEPCO)
subsidiary during the 10 years following completion of the merger;
* A commitment not to raise base rates above current levels prior to
Jan. 1, 2002, for SWEPCO customers in Louisiana and a plan to share
approximately one-half of the savings created by the merger during
the first 10 years following the merger. Under this plan,
approximately $26 million of these non-fuel merger-related savings
will be used to reduce future costs to SWEPCO's Louisiana customers;
and
* A commitment to continue the current high level of customer service
and to identify opportunities and implement measures to further
improve service quality.
The Louisiana filing provides that there will be minimal job reductions among
employees having direct contact with customers. CSW's work force currently
totals about 7,000 employees, and AEP's work force totals about 18,000
employees. AEP and CSW intend to use a combination of reduced hiring and
attrition to the maximum extent possible to minimize the need for employee
separations.
Today's joint filing marks the third of several regulatory filings that will be
made to obtain approval of the proposed merger. As previously reported, on April
30, CSW and AEP submitted filings to the Public Utility Commission of Texas and
the Federal Energy Regulatory Commission seeking favorable rulings relating to
the proposed merger. CSW and AEP will be seeking approval shortly from the
Oklahoma and Arkansas utility regulatory commissions. The parties plan to make
other required federal filings with the Nuclear Regulatory Commission, the
<PAGE>
Securities and Exchange Commission, the Federal Communications Commission and
the Department of Justice and/or the Federal Trade Commission later this year.
AEP and CSW anticipate obtaining all necessary regulatory approvals and
completing the merger by March 31, 1999. However, there can be no assurance that
AEP and CSW will obtain all necessary regulatory approvals, or when such
approvals will be obtained.
On May 27, AEP shareholders will vote on whether to increase the number of
authorized shares of AEP common stock and whether to approve issuance of the
required number of shares of stock to complete the merger. CSW shareholders on
May 28 will vote on a proposal to approve the merger. A joint proxy statement
describing the specific terms of the proposed merger has been mailed to
shareholders of both companies. Completion of the merger is subject to
satisfaction of several other conditions, and there can be no assurance that
those conditions will be satisfied.
Central and South West Corporation is a global, diversified public utility
holding company based in Dallas. CSW owns four electric operating subsidiaries
serving 1.7 million customers in Texas, Oklahoma, Louisiana and Arkansas; a
regional electricity company in the United Kingdom; other international energy
operations and non-utility subsidiaries involved in energy-related investments,
telecommunications, energy efficiency and financial transactions.
American Electric Power Company, Inc., a global energy company, is one of the
United States' largest investor-owned utilities, providing energy to 3 million
customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West
Virginia. AEP has holdings in the United States, the United Kingdom, China and
Australia. Wholly owned subsidiaries provide power engineering, energy
consulting and energy management services around the world. The company is based
in Columbus, Ohio.
---
News releases and other information about CSW can be found on the World Wide Web
at HTTP://WWW.CSW.COM.
News releases and other information about AEP can be found on the World Wide Web
at HTTP://WWW.AEP.COM.
---
This news release includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements reflect numerous assumptions and involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are: whether or not the proposed merger of AEP and CSW ultimately is
consummated, the timing of consummation and the effects of any conditions
imposed by regulators on the merged companies; electric load and customer
growth; abnormal weather conditions; available sources and cost of fuel and
generating capacity; the speed and degree to which competition enters the power
generation, wholesale and retail sectors of the electric utility industry; state
and federal legislative and regulatory initiatives that, among other things,
increase competition, threaten cost and investment recovery and affect rate
structures; the ability of the combined company to successfully reduce its cost
structure; the degree to which the combined company develops nonregulated
business ventures; the economic climate and growth in the service territories of
the two companies; the amount of savings generated by the merger; the
inflationary trends and interest rates and the other risks detailed from time to
time in the two companies' SEC reports.
