SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 15, 2000
(Date of earliest event reported)
Commission Registrant;
State of Incorporation I.R.S. Employer
File Number Address; and Telephone Number Identification No.
1-3525 AMERICAN ELECTRIC POWER COMPANY, INC. 13-4922640
(A New York Corporation)
1 Riverside Plaza
Columbus, Ohio 43215
Telephone (614) 223-1000
PORTIONS AMENDED:
The registrant hereby amends Item 7 of its Current Report on Form 8-K filed on
June 16, 2000 to include financial statements of businesses acquired and pro
forma financial information in accordance with Item 7(a) (4) within 60 days
after the due date of the initial filing. Except as set forth in Item 7 below,
no other changes are made to the Current Report on Form 8-K filed on June 16,
2000.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements of Business Acquired:
The following documents, previously filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
are hereby incorporated by reference:
1. Central and South West Corporation's Annual Report on Form 10-K for the
year ended December 31, 1999.
(File No. 1-1443)
2. Central and South West Corporation's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2000.
(File No. 1-1443)
Unaudited Pro Forma Combined Financial Information:
The unaudited pro forma combined financial information included as
Exhibit 99.1 combines the historical consolidated balance sheets and statements
of income of the registrant and Central and South West Corporation, including
their respective subsidiaries, after giving effect to the Merger as a pooling of
interests. The unaudited pro forma combined balance sheet at March 31, 2000,
gives effect to the Merger under the pooling of interests accounting method as
if the Merger had occurred on the balance sheet date. The unaudited pro forma
combined statements of income for the three months ended March 31, 2000 and 1999
and for the years ended December 31, 1999, 1998 and 1997 give effect to the
Merger under the pooling of interests accounting method as if it had occurred as
of January 1, 1997. These statements are prepared on the basis of accounting for
the Merger as a pooling of interests and are based on the assumptions set forth
in the notes thereto. Certain historical income statement and balance sheet
items were reclassified to conform with the presentation expected to be used by
AEP.
The unaudited pro forma combined financial statements included as
Exhibit 99.1 are not necessarily indicative of the results of operations that
might have occurred had the merger actually taken place on January 1, 1997 or
the actual financial position that might have resulted had the merger been
consummated on March 31, 2000 or of the future results of operations or
financial position of AEP. The unaudited pro forma combined financial statements
have been prepared from, and should be read in conjunction with the historical
financial statements and related notes thereto of AEP and CSW, incorporated by
reference herein.
EXHIBITS
Exhibit No. Exhibit
23.1 Consent of Arthur Andersen LLP
99.1 Unaudited Pro Forma Combined Financial Statements
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.
American Electric Power Company, Inc.
/s/ L. V. Assante
L.V. Assante
Deputy Controller
July 31, 2000
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
23.1 Consent of Arthur Andersen LLP
99.1 Unaudited Pro Forma Combined Financial Statements
The following unaudited pro forma combined and
reclassifying financial information of American
Electric Power Company, Inc. is set forth in this
Form 8-K:
Combined Statement of Income for the Three Months
Ended March 31, 2000 Combined Statement of Income for
the Three Months Ended March 31, 1999 Combined
Statement of Income for the Year Ended December 31,
1999 Combined Statement of Income for the Year Ended
December 31, 1998 Combined Statement of Income for
the Year Ended December 31, 1997 Combined Balance
Sheet as of March 31, 2000 Reclassifying Balance
Sheet as of March 31, 2000
The following unaudited financial information of
Central and South West Corporation is set forth in
this Form 8-K:
Reclassifying Statement of Income for the Three
Months Ended March 31, 2000 Reclassifying Statement
of Income for the Three Months Ended March 31, 1999
Reclassifying Statement of Income for the Year Ended
December 31, 1999 Reclassifying Statement of Income
for the Year Ended December 31, 1998 Reclassifying
Statement of Income for the Year Ended December 31,
1997 Reclassifying Balance Sheet as of March 31, 2000
EXHIBIT 23.1
EXHIBIT 23.1 - CONSENT OF ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Current Report on Form 8-K/A of American Electric Power
Company, Inc. of our report dated February 25, 2000 on the consolidated
financial statements of Central and South West Corporation as of December 31,
1999 and 1998, and for each of the years in the three year period ended
December 31, 1999, appearing in the Annual Report on Form 10-K of
Central and South West Corporation for the year ended December 31, 1999.
/S/ ARTHUR ANDERSEN LLP
DALLAS, TEXAS
JULY 31, 2000
EXHIBIT 99.1
AMERICAN ELECTRIC POWER COMPANY, INC.
UNAUDITED PROFORMA COMBINED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED 03/31/2000
(in millions)
AEP CSW Proforma Proforma
REPORTING LINES (As Reported) (Reclassified) Adjustments Combined
REVENUES:
Domestic Regulated Electric
Utility Operations $1,546 $ 764 $2,310
Worldwide Electric and
Gas Operations 200 535 735
------ ------- ------
TOTAL 1,746 1,299 3,045
------ ------- ------
OPERATING EXPENSES:
Fuel and Purchased Power 511 319 830
Maintenance and Other Operation 489 197 $ 3 (1) 689
Depreciation and Amortization 154 118 272
Taxes Other Than Income Taxes 125 40 165
Worldwide Electric and
Gas Operations 164 471 635
------ ------- ---- -------
TOTAL EXPENSES 1,443 1,145 3 2,591
------ ------- ---- -------
OPERATING INCOME 303 154 (3) 454
OTHER INCOME (net) 3 13 16
------ ------- ---- -------
INCOME BEFORE INTEREST,
PREFERRED DIVIDENDS AND
INCOME TAXES 306 167 (3) 470
INTEREST AND
PREFERRED DIVIDENDS 139 114 253
------ ------- ---- -------
INCOME BEFORE INCOME TAXES 167 53 (3) 217
INCOME TAXES 63 15 (1) (1) 77
------ ------- ---- -------
NET INCOME $ 104 $ 38 $ (2) $ 140
====== ======= ==== =======
AVERAGE NUMBER OF SHARES
OUTSTANDING 194 213 (85) 322
=== === ==== ===
EARNINGS PER SHARE:
Net Income $ 0.53 $ 0.18 $0.43
====== ====== =====
See Notes to Unaudited Pro Forma Combined Financial Statements.
CENTRAL AND SOUTH WEST CORPORATION
UNAUDITED RECLASSIFYING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED 03/31/2000
(in millions)
CSW CSW CSW
REPORTING LINES (As Reported) (Reclasses) (Reclassified)
Operating Revenues
U.S. Electric $ 764 $ 764
United Kingdom 485 $(485)(A) -
Worldwide Electric and
Gas Operations 50 485 (A) 535
------- ----- -------
1,299 - 1,299
------- ----- -------
Operating Expenses and Taxes
U.S. Electric Fuel 279 (279)(B) -
U.S. Electric Purchased Power 40 (40)(B) -
Fuel and Purchased Power - 319 (B) 319
United Kingdom Cost of Sales 324 (324)(D) -
Other Operating 268 (268)(C) -
Maintenance 44 (44)(C) -
Maintenance and Other Operation - 197 (C)(D)(E) 197
Depreciation and Amortization 149 (31)(D)(E) 118
Taxes, Other Than Income 41 (1)(E) 40
Income Taxes 11 (11)(F) -
Worldwide Electric and
Gas Operations - 471 (D)(E) 471
------- ----- -------
Total Operating Expenses 1,156 (11) 1,145
------- ----- -------
Operating Income 143 11 154
------- ----- -------
Other Income and Deductions
Other 13 13
Non-Operating Income Taxes (4) 4 (F) -
------- ----- -------
Other Income (net) 9 4 13
------- ----- -------
Income Before Interest,
Preferred Dividends and
Income Taxes 152 15 167
------- ----- -------
Interest and Preferred Stock
Dividends - 114 (G) 114
------- ----- -------
Interest and Other Charges
Interest on Long-term Debt 76 (76)(G) -
Distributions on Trust
Preferred Securities 7 (7)(G) -
Interest on Short-term Debt
and Other 31 (31)(G) -
------- ----- -------
Total Interest and
Other Charges 114 (114) -
------- ------ -------
Income Before Income Taxes 38 15 53
------- ------ -------
Income Taxes - 15 (F) 15
------- ------ -------
Net Income for Common Stock $ 38 $ - $ 38
======= ====== =======
Average Common Shares
Outstanding 212.7 212.7
===== =====
Basic and Diluted EPS $ 0.18 $ 0.18
====== ======
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC.
UNAUDITED PROFORMA COMBINED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED 03/31/1999
(in millions)
AEP CSW Proforma Proforma
REPORTING LINES (As Reported) (Reclassified) Adjustments Combined
REVENUES:
Domestic Regulated Electric
Utility Operations $1,550 $ 697 $2,247
Worldwide Electric and
Gas Operations 144 528 672
------ ------- ------
TOTAL 1,694 1,225 2,919
------ ------- ------
OPERATING EXPENSES:
Fuel and Purchased Power 491 258 749
Maintenance and Other Operation 427 178 $ 3 (1) 608
Depreciation and Amortization 148 101 249
Taxes Other Than Income Taxes 124 53 177
Worldwide Electric and
Gas Operations 127 468 595
------ ------- ---- ------
TOTAL EXPENSES 1,317 1,058 3 2,378
------ ------- ---- ------
OPERATING INCOME 377 167 (3) 541
OTHER INCOME (LOSS) (net) (1) 13 12
------ ------- ---- ------
INCOME BEFORE INTEREST,
PREFERRED DIVIDENDS AND
INCOME TAXES 376 180 (3) 553
INTEREST AND
PREFERRED DIVIDENDS 132 111 243
------ ------- ---- ------
INCOME BEFORE INCOME TAXES 244 69 (3) 310
INCOME TAXES 93 24 (1) (1) 116
------ ------- ---- ------
NET INCOME $ 151 $ 45 $ (2) $ 194
====== ======= ==== ======
AVERAGE NUMBER OF SHARES
OUTSTANDING 192 213 (85) 320
=== === ==== ===
EARNINGS PER SHARE:
Net Income $0.79 $0.21 $0.61
===== ===== =====
See Notes to Unaudited Pro Forma Combined Financial Statements.
CENTRAL AND SOUTH WEST CORPORATION
UNAUDITED RECLASSIFYING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED 03/31/1999
(in millions)
CSW CSW CSW
REPORTING LINES (As Reported) (Reclasses) (Reclassified)
Operating Revenues
U.S. Electric $ 697 $ 697
United Kingdom 476 $(476)(A) -
Worldwide Electric and
Gas Operations 52 476 (A) 528
------- ----- -------
1,225 - 1,225
------- ----- -------
Operating Expenses and Taxes
U.S. Electric Fuel 229 (229)(B) -
U.S. Electric Purchased Power 29 (29)(B) -
Fuel and Purchased Power - 258 (B) 258
United Kingdom Cost of Sales 322 (322)(D) -
Other Operating 251 (251)(C) -
Maintenance 41 (41)(C) -
Maintenance and Other Operation - 178 (C)(D)(E) 178
Depreciation and Amortization 132 (31)(D)(E) 101
Taxes, Other Than Income 54 (1)(E) 53
Income Taxes 20 (20)(F) -
Worldwide Electric and
Gas Operations - 468 (D)(E) 468
------- ----- -------
Total Operating Expenses 1,078 (20) 1,058
------- ----- -------
Operating Income 147 20 167
------- ----- -------
Other Income and Deductions
Other 13 - 13
Non-Operating Income Taxes (4) 4 (F) -
------- ----- -------
Other Income (net) 9 4 13
------- ----- -------
Income Before Interest,
Preferred Dividends and
Income Taxes 156 24 180
------- ----- -------
Interest and Preferred
Stock Dividends - 111 (G) 111
------- ----- -------
Interest and Other Charges
Interest on Long-term Debt 78 (78)(G) -
Distributions on Trust
Preferred Securities 7 (7)(G) -
Interest on Short-term Debt
and Other 24 (24)(G) -
Preferred Dividend Requirements
of Subsidiaries 2 (2)(G) -
------- ----- -------
Total Interest and
Other Charges 111 (111) -
------- ----- -------
Income Before Income Taxes 45 24 69
------- ----- -------
Income Taxes - 24 (F) 24
------- ----- -------
Net Income for Common Stock $ 45 $ - $ 45
======= ===== =======
Average Common Shares Outstanding 212.6 212.6
===== =====
Basic and Diluted EPS $0.21 $0.21
===== =====
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC.
UNAUDITED PROFORMA COMBINED STATEMENT OF INCOME
YEAR ENDED 12/31/1999
(in millions)
AEP CSW Proforma Proforma
REPORTING LINES (As Reported) (Reclassified) Adjustments Combined
REVENUES:
Domestic Regulated Electric
Utility Operations $6,315 $3,524 $ 9,839
Worldwide Electric and
Gas Operations 601 2,013 2,614
------ ------ -------
TOTAL 6,916 5,537 12,453
------ ------ -------
OPERATING EXPENSES:
Fuel and Purchased Power 2,116 1,333 3,449
Maintenance and Other Operation 1,868 803 $ 4 (1) 2,675
Depreciation and Amortization 600 411 1,011
Taxes Other Than Income Taxes 476 188 664
Worldwide Electric and
Gas Operations 551 1,732 2,283
------ ------ ---- -------
TOTAL EXPENSES 5,611 4,467 4 10,082
------ ------ ---- -------
OPERATING INCOME 1,305 1,070 (4) 2,371
----
OTHER INCOME (net) 15 64 79
------ ------ ---- -------
INCOME BEFORE INTEREST,
PREFERRED DIVIDENDS AND
INCOME TAXES 1,320 1,134 (4) 2,450
INTEREST AND
PREFERRED DIVIDENDS 540 456 996
------ ------ ---- -------
INCOME BEFORE INCOME TAXES 780 678 (4) 1,454
INCOME TAXES 260 223 (1) (1) 482
------ ------ ---- -------
NET INCOME $ 520 $ 455 $ (3) $ 972
====== ====== ==== =======
AVERAGE NUMBER OF SHARES
OUTSTANDING 193 213 (85) 321
=== === ==== ===
EARNINGS PER SHARE: $2.69 $ 2.14 $ 3.03
===== ====== ======
See Notes to Unaudited Pro Forma Combined Financial Statements.
CENTRAL AND SOUTH WEST CORPORATION
UNAUDITED RECLASSIFYING STATEMENT OF INCOME
YEAR ENDED 12/31/1999
(in millions)
CSW CSW CSW
REPORTING LINES (As Reported) (Reclasses) (Reclassified)
Operating Revenues
U.S. Electric $3,524 $3,524
United Kingdom 1,705 $(1,705)(A) -
Worldwide Electric and
Gas Operations 308 1,705 (A) 2,013
------ ------- ------
5,537 - 5,537
------ ------- ------
Operating Expenses and Taxes
U.S. Electric Fuel 1,176 (1,176)(B) -
U.S. Electric Purchased Power 157 (157)(B) -
Fuel and Purchased Power - 1,333 (B) 1,333
United Kingdom Cost of Sales 1,133 (1,133)(D) -
Other Operating 1,056 (1,056)(C) -
Maintenance 200 (200)(C) -
Maintenance and Other Operation - 803 (C)(D)(E) 803
Depreciation and Amortization 552 (141)(D)(E) 411
Taxes, Other Than Income 193 (5)(E) 188
Income Taxes 204 (204)(F) -
Worldwide Electric and
Gas Operations - 1,732 (D)(E) 1,732
------ ------- ------
Total Operating Expenses 4,671 (204) 4,467
------ ------- ------
Operating Income 866 204 1,070
------ ------- ------
Other Income and Deductions
Other 78 (14)(H) 64
Non-Operating Income Taxes (19) 19 (F) -
------ ------- ------
Other Income (net) 59 5 64
------ ------- ------
Income Before Interest,
Preferred Dividends and
Income Taxes 925 209 1,134
------ ------- ------
Interest and Preferred Stock
Dividends - 456 (G) 456
------ ------- ------
Interest and Other Charges
Interest on Long-term Debt 300 (300)(G) -
Distributions on Trust
Preferred Securities 27 (27)(G) -
Interest on Short-term Debt
and Other 119 (119)(G) -
Preferred Dividend Requirements
of Subsidiaries 7 (7)(G) -
Gain (Loss) on Reacquired
Preferred Stock 3 (3)(G) -
------ ------- ------
Total Interest and
Other Charges 456 (456) -
------ ------- ------
Income Before Income Taxes
and Extraordinary Items 469 209 678
------ ------- ------
Income Taxes - 223 (F) 223
------ ------- ------
Income Before Extraordinary Items 469 (14) 455
------ ------- ------
Extraordinary Loss - Discontinuance of
SFAS No. 71 (net of tax of $5) (8) 8 (H) -
Extraordinary Loss - Loss on Reacquired
Debt (net of tax of $3) (6) 6 (H) -
------ ------- ------
Net Income for Common Stock $ 455 $ - $ 455
====== ======= ======
Average Common Shares Outstanding 212.6 212.6 212.6
===== ===== =====
Basic and Diluted EPS Before
Extraordinary Items $ 2.21 $(0.07) $2.14
Basic and Diluted EPS From
Extraordinary Items (0.07) 0.07 -
------ ------ -----
Basic and Diluted EPS $ 2.14 $ - $2.14
====== ====== =====
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC.
UNAUDITED PROFORMA COMBINED STATEMENT OF INCOME
YEAR ENDED 12/31/1998
(in millions)
AEP CSW Proforma Proforma
REPORTING LINES (As Reported) (Reclassified) Adjustments Combined
REVENUES:
Domestic Regulated Electric
Utility Operations $6,346 $3,488 $ 9,834
Worldwide Electric and
Gas Operations 51 1,994 2,045
------ ------ -------
TOTAL 6,397 5,482 11,879
------ ------ -------
OPERATING EXPENSES:
Fuel and Purchased Power 2,154 1,301 3,455
Maintenance and Other Operation 1,846 747 $ 1 (1) 2,594
Depreciation and Amortization 580 409 989
Taxes Other Than Income Taxes 475 184 659
Worldwide Electric and
Gas Operations 95 1,772 1,867
------ ------ ---- -------
TOTAL EXPENSES 5,150 4,413 1 9,564
------ ------ ---- -------
OPERATING INCOME 1,247 1,069 (1) 2,315
OTHER INCOME (net) - 60 60
------ ------ ---- -------
INCOME BEFORE INTEREST,
PREFERRED DIVIDENDS AND
INCOME TAXES 1,247 1,129 (1) 2,375
INTEREST AND
PREFERRED DIVIDENDS 430 468 898
------ ------ ---- -------
INCOME BEFORE INCOME TAXES 817 661 (1) 1,477
INCOME TAXES 281 221 502
------ ------ ---- -------
NET INCOME $ 536 $ 440 $ (1) $ 975
====== ====== ==== =======
AVERAGE NUMBER OF SHARES
OUTSTANDING 191 212 (85) 318
=== === === ===
EARNINGS PER SHARE $2.81 $2.07 $3.07
===== ===== =====
See Notes to Unaudited Pro Forma Combined Financial Statements.
CENTRAL AND SOUTH WEST CORPORATION
UNAUDITED RECLASSIFYING STATEMENT OF INCOME
YEAR ENDED 12/31/1998
(in millions)
CSW CSW CSW
REPORTING LINES (As Reported) (Reclasses) (Reclassified)
Operating Revenues
U.S. Electric $3,488 $3,488
United Kingdom 1,769 $(1,769)(A) -
Worldwide Electric and
Gas Operations 225 1,769 (A) 1,994
------ ------- ------
5,482 - 5,482
------ ------- ------
Operating Expenses and Taxes
U.S. Electric Fuel 1,190 (1,190)(B) -
U.S. Electric Purchased Power 111 (111)(B) -
Fuel and Purchased Power - 1,301 (B) 1,301
United Kingdom Cost of Sales 1,204 (1,204)(D) -
Other Operating 1,029 (1,029)(C) -
Maintenance 169 (169)(C) -
Maintenance and Other Operation - 747 (C)(D)(E) 747
Depreciation and Amortization 521 (112)(D)(E) 409
Taxes, Other Than Income 189 (5)(E) 184
Income Taxes 203 (203)(F) -
Worldwide Electric and
Gas Operations - 1,772 (D)(E) 1,772
------ ------- ------
Total Operating Expenses 4,616 (203) 4,413
------ ------- ------
Operating Income 866 203 1,069
------ ------- ------
Other Income and Deductions
Other 60 60
Non-Operating Income Taxes (18) 18 (F)
------ ------- ------
Other Income (net) 42 18 60
------ ------- ------
Income Before Interest, Preferred
Dividends and Income Taxes 908 221 1,129
------ ------- ------
Interest and Preferred
Stock Dividends - 468 (G) 468
------ ------- ------
Interest and Other Charges
Interest on Long-term Debt 311 (311)(G) -
Distributions on Trust
Preferred Securities 27 (27)(G) -
Interest on Short-term Debt
and Other 121 (121)(G) -
Preferred Dividend Requirements
of Subsidiaries 8 (8)(G) -
Gain (Loss) on Reacquired
Preferred Stock 1 (1)(G) -
------ ------- ------
Total Interest and Other Charges 468 (468) -
------ ------- ------
Income Before Income Taxes 440 221 661
------ ------- ------
Income Taxes - 221 (F) 221
------ ------- ------
Net Income for Common Stock $ 440 $ - $ 440
====== ======= ======
Average Common Shares
Outstanding 212.4 212.4
===== =====
Earnings Per Share $2.07 $2.07
===== =====
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY
UNAUDITED PROFORMA COMBINED STATEMENT OF INCOME
YEAR ENDED 12/31/1997
(in millions)
AEP CSW Proforma Proforma
REPORTING LINES (As Reported) (Reclassified) Adjustments Combined
REVENUES:
Domestic Regulated Electric
Utility Operations $5,880 $3,321 $ 9,201
Worldwide Electric and
Gas Operations 48 1,947 1,995
------ ------ -------
TOTAL 5,928 5,268 11,196
------ ------ -------
OPERATING EXPENSES:
Fuel and Purchased Power 1,762 1,266 3,028
Maintenance and Other Operation 1,711 833 2,544
Depreciation and Amortization 591 399 990
Taxes Other Than Income Taxes 469 195 664
Worldwide Electric and
Gas Operations 49 1,689 1,738
------ ------ -------
TOTAL EXPENSES 4,582 4,382 8,964
------ ------ -------
OPERATING INCOME 1,346 886 2,232
OTHER INCOME (net) 18 26 44
------ ------ -------
INCOME BEFORE INTEREST,
PREFERRED DIVIDENDS AND
INCOME TAXES 1,364 912 2,276
INTEREST AND
PREFERRED DIVIDENDS 424 438 862
------ ------ -------
INCOME BEFORE INCOME TAXES 940 474 1,414
INCOME TAXES 320 145 465
------ ------ -------
INCOME BEFORE EXTRAORDINARY ITEM 620 329 949
EXTRAORDINARY ITEM -
U.K. WINDFALL TAX (109) (176) (285)
------ ------ -------
NET INCOME $ 511 $ 153 $ 664
====== ====== =======
AVERAGE NUMBER OF SHARES
OUTSTANDING 189 212 (85) 316
=== === ==== ===
EARNINGS PER SHARE:
Before Extraordinary Item $ 3.28 $ 1.55 $ 3.00
Extraordinary Item -
U.K. Windfall Tax (0.58) (0.83) (0.90)
------ ------ ------
Net Income $ 2.70 $ 0.72 $ 2.10
====== ====== ======
See Notes to Unaudited Pro Forma Combined Financial Statements.
CENTRAL AND SOUTH WEST CORPORATION
UNAUDITED RECLASSIFYING STATEMENT OF INCOME
YEAR ENDED 12/31/1997
(in millions)
CSW CSW CSW
REPORTING LINES (As Reported) (Reclasses) (Reclassified)
Operating Revenues
U.S. Electric $3,321 $3,321
United Kingdom 1,870 $(1,870)(A) -
Worldwide Electric and
Gas Operations 77 1,870 (A) 1,947
------ ------- ------
5,268 - 5,268
------ ------- ------
Operating Expenses and Taxes
U.S. Electric Fuel 1,177 (1,177)(B) -
U.S. Electric Purchased Power 89 (89)(B) -
Fuel and Purchased Power - 1,266 (B) 1,266
United Kingdom Cost of Sales 1,291 (1,291)(D) -
Other Operating 981 (981)(C) -
Maintenance 152 (152)(C) -
Maintenance and Other Operation - 833 (C)(D)(E) 833
Depreciation and Amortization 497 (98)(D)(E) 399
Taxes, Other Than Income 195 - 195
Income Taxes 151 (151)(F) -
Worldwide Electric and
Gas Operations - 1,689 (D)(E) 1,689
------ ------- ------
Total Operating Expenses 4,533 (151) 4,382
------ ------- ------
Operating Income 735 151 886
------ ------- ------
Other Income and Deductions
Other 26 - 26
Non-Operating Income Taxes 6 (6)(F) -
------ ------- ------
Other Income (net) 32 (6) 26
------ ------- ------
Income Before Interest, Preferred
Dividends and Income Taxes 767 145 912
------ ------- ------
Interest and Preferred
Stock Dividends - 438 (G) 438
------ ------- ------
Interest and Other Charges
Interest on Long-term Debt 333 (333)(G) -
Distributions on Trust
Preferred Securities 17 (17)(G) -
Interest on Short-term Debt
and Other 86 (86)(G) -
Preferred Dividend Requirements
of Subsidiaries 12 (12)(G) -
Gain (Loss) on Reacquired
Preferred Stock (10) 10 (G) -
------ ------- ------
Total Interest and
Other Charges 438 (438) -
------ ------- ------
Income Before Income Taxes
And Extraordinary Items 329 145 474
------ ------- ------
Income Taxes - 145 (F) 145
------ ------- ------
Income Before Extraordinary
Items 329 - 329
------ ------- ------
Extraordinary Item -
U.K. Windfall Tax (176) - (176)
------ ------- ------
Net Income for Common Stock $ 153 $ - $ 153
====== ======= ======
Average Common Shares
Outstanding 212.1 212.1
===== =====
Basic and Diluted EPS Before
Extraordinary Items $ 1.55 $ 1.55
U.K. Windfall Tax (0.83) (0.83)
------ ------
Basic and Diluted EPS $ 0.72 $ 0.72
====== ======
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
March 31, 2000
(in millions)
AEP CSW Proforma Proforma
ASSETS (As Reclassified) (As Reclassified) Adjustments Combined
CURRENT ASSETS:
Cash and Cash Equivalents $ 364 $ 138 $ 502
Accounts Receivable (net) 993 1,002 1,995
Fuel 260 126 386
Materials and Supplies 311 150 461
Accrued Utility Revenues 204 71 275
Energy Trading Contracts 1,327 - 1,327
Prepayments and Other 116 57 173
------- ------- -------
TOTAL CURRENT ASSETS 3,575 1,544 5,119
------ ------- -------
PROPERTY, PLANT AND EQUIPMENT:
Electric:
Production 9,984 5,922 15,906
Transmission 3,831 1,666 5,497
Distribution 5,536 4,923 10,459
Other (including
communications, gas and
coal mining assets and
nuclear fuel) 2,364 1,684 4,048
Construction Work
in Progress 558 577 1,135
------- ------- -------
Total Property,
Plant and Equipment 22,273 14,772 37,045
Accumulated Depreciation
and Amortization 9,254 5,912 15,166
------- ------- -------
NET PROPERTY, PLANT
AND EQUIPMENT 13,019 8,860 21,879
------- ------- -------
REGULATORY ASSETS 2,202 240 2,442
------- ------- -------
REGULATORY ASSETS DESIGNATED
FOR SECURITIZATION - 953 953
------- ------- -------
INVESTMENTS IN POWER AND
COMMUNICATION PROJECTS 473 415 888
------- ------- -------
GOODWILL (net of amortization) 197 1,299 1,496
------- ------- -------
OTHER ASSETS 2,436 589 3,025
------- ------- -------
TOTAL $21,902 $13,900 $ - $35,802
======= ======= ========= =======
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
March 31, 2000
(in millions)
AEP CSW Proforma Proforma
(As Reclassified) (As Reclassified) Adjustments Combined
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts Payable $ 729 $ 547 $ 1,276
Short-term Debt 1,118 1,682 2,800
Long-term Debt Due
Within One Year 978 216 1,194
Taxes Accrued 416 162 578
Interest Accrued 114 105 219
Obligations Under
Capital Leases 127 - 127
Energy Trading Contracts 1,203 - 1,203
Other 445 190 30 (2) 665
------- -------- ---- -------
TOTAL CURRENT LIABILITIES 5,130 2,902 30 8,062
------- -------- ---- -------
LONG-TERM DEBT 6,239 4,088 10,327
------- -------- -------
SUBSIDIARY OBLIGATED, MANDATORILY
REDEEMABLE, TRUST PREFERRED
SECURITIES - 335 335
------- -------- -------
DEFERRED INCOME TAXES 2,664 2,397 (11) (2) 5,050
------- -------- ---- -------
DEFERRED INVESTMENT TAX CREDITS 321 251 572
------ -------- -------
DEFERRED GAIN ON SALE AND
LEASEBACK -
ROCKPORT PLANT UNIT 2 210 - 210
------- -------- -------
DEFERRED CREDITS AND
REGULATORY LIABILITIES 716 176 892
------- -------- -------
OTHER NONCURRENT LIABILITIES 1,487 123 1,610
------- -------- -------
CUMULATIVE PREFERRED STOCKS
OF SUBSIDIARIES 163 18 181
------- -------- -------
COMMON SHAREHOLDERS' EQUITY
Common Stock 1,320 744 $ 85 (1) 2,149
Paid-in Capital 1,932 1,052 (85)(1) 2,899
Accumulated Other
Comprehensive
Income (Loss) (8) (38) (46)
Retained Earnings 1,728 1,852 (19)(2) 3,561
------- ------- ---- -------
TOTAL COMMON SHAREHOLDERS'
EQUITY 4,972 3,610 (19) 8,563
------- ------- ---- -------
TOTAL $21,902 $13,900 $ - $35,802
======= ======= ==== =======
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
March 31, 2000
(in millions)
AEP AEP AEP
(As Reported) (Reclassifying Entries) (As Reclassified)
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $ 364 $ 364
Accounts Receivable (net) 993 993
Fuel 260 260
Materials and Supplies 311 311
Accrued Utility Revenues 204 204
Energy Trading Contracts 1,327 1,327
Prepayments and Other 116 116
------- -------
TOTAL CURRENT ASSETS 3,575 3,575
------- -------
PROPERTY, PLANT AND EQUIPMENT:
Electric:
Production 9,984 9,984
Transmission 3,831 3,831
Distribution 5,536 5,536
Other (including
communications, gas and
coal mining assets and
nuclear fuel) 2,364 2,364
Construction Work
in Progress 558 558
------- -------
Total Property,
Plant and Equipment 22,273 22,273
Accumulated Depreciation
and Amortization 9,254 9,254
------- -------
NET PROPERTY, PLANT
AND EQUIPMENT 13,019 13,019
------- -------
REGULATORY ASSETS 2,202 2,202
------- -------
REGULATORY ASSETS DESIGNATED
FOR SECURITIZATION - -
------- -------
INVESTMENTS IN POWER AND
COMMUNICATION PROJECTS - 473 (1) 473
------- ------- -------
GOODWILL (net of amortization) - 197 (2) 197
------- ------- -------
OTHER ASSETS 3,106 (670)(1,2) 2,436
------- ------- -------
TOTAL $21,902 $ - $21,902
======= ======= =======
See Notes to Unaudited Pro Forma Combined Financial Statements.
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
March 31, 2000
(in millions)
AEP AEP AEP
(As Reported) (Reclassifying Entries) (As Reclassified)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 729 $ 729
Short-term Debt 1,118 1,118
Long-term Debt Due
Within One Year 978 978
Taxes Accrued 416 416
Interest Accrued 114 114
Obligations Under
Capital Leases 127 127
Energy Trading Contracts 1,203 1,203
Other 445 445
------- -------
TOTAL CURRENT
LIABILITIES 5,130 5,130
------- -------
LONG-TERM DEBT 6,239 6,239
------- -------
SUBSIDIARY OBLIGATED,
MANDATORILY REDEEMABLE,
TRUST PREFERRED SECURITIES - -
------- -------
DEFERRED INCOME TAXES 2,664 2,664
------- -------
DEFERRED INVESTMENT TAX
CREDITS 321 321
------- -------
DEFERRED GAIN ON SALE AND
LEASEBACK - ROCKPORT
PLANT UNIT 2 210 210
------- -------
DEFERRED CREDITS AND
REGULATORY LIABILITIES 716 716
------- -------
OTHER NONCURRENT LIABILITIES 1,487 1,487
------- -------
CUMULATIVE PREFERRED STOCKS
OF SUBSIDIARIES 163 163
------- -------
COMMON SHAREHOLDERS' EQUITY
Common Stock 1,320 1,320
Paid-in Capital 1,932 1,932
Accumulated Other
Comprehensive
Income (Loss) (8) (8)
Retained Earnings 1,728 1,728
------- -------
TOTAL COMMON SHAREHOLDERS'
EQUITY 4,972 4,972
------- -------
TOTAL $21,902 $21,902
======= =======
See Notes to Unaudited Pro Forma Combined Financial Statements.
CENTRAL AND SOUTH WEST CORPORATION
UNAUDITED RECLASSIFYING CONSOLIDATED BALANCE SHEET
March 31, 2000
(in millions)
CSW
CSW (Reclassifying CSW
(As Reported) Entries) (As Reclassified)
------------- -------------- -----------------
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
FIXED ASSETS:
Electric
Production $ 5,903 $ 19 (B) $ 5,922
Transmission 1,666 1,666
Distribution 4,923 4,923
General 1,341 (1,341) (B) -
Construction Work in Progress 279 298 (B) 577
Nuclear Fuel 227 (227) (A) -
Other - 1,684 (A,B,D) 1,684
------- ------- -------
Total Electric 14,339 433 14,772
Other Diversified 382 (382) (B) -
------- ------- -------
Total Fixed Assets 14,721 51 14,772
Accumulated Depreciation and
Amortization 6,002 (90) (C,D) 5,912
------- ------- -------
NET FIXED ASSETS 8,719 141 8,860
------- ------- -------
CURRENT ASSETS:
Cash and Cash Equivalents 138 138
Accounts Receivable 1,018 (16) (E,F) 1,002
Fuel 126 126
Materials and Supplies 150 150
Accrued Utility Revenues - 71 (E) 71
Under-Recovered Fuel Costs 39 (39) (G) -
Notes Receivable 55 (55) (F) -
Prepayments and Other 80 (23) (H) 57
------- ------- -------
TOTAL CURRENT ASSETS 1,606 (62) 1,544
------- ------- -------
DEFERRED CHARGES AND OTHER ASSETS:
Regulatory Assets 201 39 (G) 240
Regulatory Assets Designated for
Securitization 953 953
Investments in Power and
Communication Projects - 415 (D) 415
Other Non-utility Investments 444 (444) (D) -
Securities Available for Sale 56 (56) (D) -
Benefit Costs 204 (204) (G) -
Goodwill 1,299 1,299
Other Deferred Charges 350 (350) (K) -
Other Assets - 589 (D,G,K) 589
------- ------- -------
TOTAL DEFERRED CHARGES AND
OTHER ASSETS 3,507 (11) 3,496
------- ------- -------
TOTAL $13,832 $ 68 $13,900
======= ======= =======
See Notes to Unaudited Pro Forma Combined Financial Statements.
Exh
CENTRAL AND SOUTH WEST CORPORATION
UNAUDITED RECLASSIFYING CONSOLIDATED BALANCE SHEET
March 31, 2000
(in millions)
CSW
CSW (Reclassifying CSW
(As Reported) Entries) (As Reclassified)
------------- -------------- -----------------
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock $ 744 $ 744
Paid-in Capital 1,052 1,052
Retained Earnings 1,852 1,852
Accumulated Other
Comprehensive Income (38) (38)
------- -------
Total Common
Shareholders' Equity 3,610 3,610
Cumulative Preferred Stocks
of Subsidiaries 18 18
Subsidiary Obligated,
Mandatorily Redeemable,
Trust Preferred Securities 335 335
Long-term Debt 4,088 4,088
------- -------
TOTAL CAPITALIZATION 8,051 8,051
------- -------
OTHER NONCURRENT LIABILITIES - $ 123 (C,I) 123
------- -------- -------
CURRENT LIABILITIES:
Long-term Debt Due Within
One Year 216 216
Short-term Debt 1,104 578 (J) 1,682
Short-term Debt - CSW Credit, Inc. 556 (556)(J) -
Loan Notes 22 (22)(J) -
Accounts Payable 547 547
Taxes Accrued 162 162
Interest Accrued 105 105
Other 196 (6)(G) 190
------- --------- -------
TOTAL CURRENT LIABILITIES 2,908 (6) 2,902
------- -------- -------
DEFERRED INCOME TAXES 2,420 (23)(H) 2,397
------- -------- -------
DEFERRED INVESTMENT TAX CREDITS 251 251
------- -------
DEFERRED CREDITS 202 (26)(G,I) 176
------- --------- -------
TOTAL $13,832 $ 68 $13,900
======= ======== =======
See Notes to Unaudited Pro Forma Combined Financial Statements.
Notes to Unaudited Pro Forma Combined
Financial Statements
1. There were no material intercompany transactions between AEP,
including its subsidiaries, and CSW, including its
subsidiaries, during the periods presented.
2. The unaudited pro forma combined financial statements reflect the
conversion of each outstanding CSW Share into 0.60 of an AEP Share, as
provided in the Merger Agreement. The unaudited pro forma combined
financial statements are presented as if the companies were combined
during all periods included therein.
3. The principal accounting policies for both companies' regulated operations
are to follow the methods used by their respective regulatory commissions
in establishing rates. The consummation of the Merger is not expected to
result in any changes in the way regulators treat allowable costs for
rate-making purposes.
4. The pro forma average number of outstanding AEP Shares was calculated by
multiplying the average number of outstanding CSW Shares during the year
by the exchange ratio of 0.60 of an AEP Share and adding the result to the
average number of outstanding AEP Shares during the year.
5. The pro forma adjustment to common stock and paid-in capital represents
the effects of recording the Merger of AEP and CSW as of the consummation
date using the pooling of interests method of accounting whereby the
common stock and paid-in capital amounts are adjusted to reflect the
difference in par value ($6.50 per AEP Share compared with $3.50 per CSW
Share) and the exchange ratio of 0.60 of an AEP Share for each CSW Share.
Income Statement Proforma Entries - March 31, 2000
Debit Credit
(in millions)
(1) Maintenance and Other Operation $3
Income Taxes $1
Retained Earnings 2
To record an adjustment to conform CSW's accounting for vacation pay
accruals with AEP's accounting policy.
Income Statement Proforma Entries - March 31, 1999
Debit Credit
(in millions)
(1) Maintenance and Other Operation $3
Income Taxes $1
Retained Earnings 2
To record an adjustment to conform CSW's accounting for vacation pay
accruals with AEP's accounting policy.
Income Statement Proforma Entries - December 31, 1999
Debit Credit
(in millions)
(1) Maintenance and Other Operation $4
Income Taxes $1
Retained Earnings 3
To record an adjustment to conform CSW's accounting for vacation pay
accruals with AEP's accounting policy.
Income Statement Proforma Entries - December 31, 1998
Debit Credit
(in millions)
(1) Maintenance and Other Operation $1
Retained Earnings 1
To record an adjustment to conform CSW's accounting
for vacation pay accruals with AEP's accounting policy.
Income Statement Proforma Entries - December 31, 1997
None.
RECLASSIFYING ENTRIES
The CSW unaudited reclassifying consolidated income statement reflects the
reclassifying entries necessary to adjust CSW's consolidated income statement
presentation to be consistent with the presentation expected to be used by AEP
after the Merger is completed. The following describes such reclassifying
entries:
Income Statement Reclassifying Entries - March 31, 2000
Debit Credit
(in millions)
(A) Operating Revenues - United Kingdom $485
Operating Revenues -
Worldwide Electric and Gas Operations $485
To reclassify operating revenues.
(B) Fuel and Purchased Power $319
U.S. Electric Fuel $279
U.S. Electric Purchased Power 40
To reclassify certain operating expenses.
(C) Maintenance and Other Operations $312
Other Operating $268
Maintenance 44
To reclassify certain operating expenses.
(D) Worldwide Electric and Gas Operations $423
United Kingdom Cost of Sales $324
Maintenance and Other Operation 70
Depreciation and Amortization 29
To reposition Seeboard to Worldwide expenses.
(E) Worldwide Electric and Gas Operations $50
Maintenance and Other Operations $45
Depreciation and Amortization 2
Taxes Other Than Income 3
To reposition the noncore company expenses to Worldwide Electric and Gas
Operations.
Debit Credit
(in millions)
(F) Income Tax Expenses $15
Operating Expenses - Income Taxes $11
Non-Operating Income Taxes 4
To reposition income taxes above-the-line and below-the-line to a single
line item.
(G) Interest and Preferred Stock Dividends $114
Interest on Long-term Debt $76
Distribution on Trust Preferred Securities 7
Interest on Short-term Debt and Other 31
To reclassify various interest charges and preferred dividends into one
line item.
Income Statement Reclassifying Entries - March 31, 1999
Debit Credit
(in millions)
(A) Operating Revenues - United Kingdom $476
Operating Revenues -
Worldwide Electric and Gas Operations $476
To reclassify operating revenues.
(B) Fuel and Purchased Power $258
U.S. Electric Fuel $229
U.S. Electric Purchased Power 29
To reclassify certain operating expenses.
(C) Maintenance and Other Operations $292
Other Operating $251
Maintenance 41
To reclassify certain operating expenses.
(D) Worldwide Electric and Gas Operations $420
United Kingdom Cost of Sales $322
Maintenance and Other Operation 71
Depreciation and Amortization 27
To reposition Seeboard to Worldwide expenses.
(E) Worldwide Electric and Gas Operations $48
Maintenance and Other Operations $43
Depreciation and Amortization 4
Taxes Other Than Income 1
To reposition the noncore company expenses to Worldwide Electric and Gas
Operations.
(F) Income Tax Expenses $24
Operating Expenses - Income Taxes $20
Non-Operating Income Taxes 4
To reposition income taxes above-the-line and below-the-line to a single
line item.
Debit Credit
(in millions)
(G) Interest and Preferred Stock Dividends $111
Interest on Long-term Debt $78
Distribution on Trust Preferred Securities 7
Interest on Short-term Debt and Other 24
Preferred Dividend Requirements of Subsidiaries 2
To reclassify various interest charges and preferred
Dividends into one line item.
Income Statement Reclassifying Entries - December 31, 1999
Debit Credit
(in millions)
(A) Operating Revenues - United Kingdom $1,705
Operating Revenues -
Worldwide Electric and Gas Operations $1,705
To reclassify operating revenues.
(B) Fuel and Purchased Power $1,333
U.S. Electric Fuel $1,176
U.S. Electric Purchased Power 157
To reclassify certain operating expenses.
(C) Maintenance and Other Operations $1,256
Other Operating $1,056
Maintenance 200
To reclassify certain operating expenses.
(D) Worldwide Electric and Gas Operations $1,511
United Kingdom Cost of Sales $1,133
Maintenance and Other Operation 251
Depreciation and Amortization 127
To reposition Seeboard to Worldwide expenses.
(E) Worldwide Electric and Gas Operations $221
Maintenance and Other Operations $202
Depreciation and Amortization 14
Taxes Other Than Income 5
To reposition the noncore company expenses to Worldwide Electric and Gas
Operations.
(F) Income Tax Expenses $223
Operating Expenses - Income Taxes $204
Non-Operating Income Taxes 19
To reposition income taxes above-the-line and below-the-line to a single
line item.
(G) Interest and Preferred Stock Dividends $456
Interest on Long-term Debt $300
Distribution on Trust Preferred Securities 27
Interest on Short-term Debt and Other 119
Preferred Dividend Requirements of Subsidiaries 7
Gain (Loss) on Required Preferred Stock 3
To reclassify various interest charges and preferred dividends into one
line item.
Debit Credit
(in millions)
(H) Other Income and Deductions $14
Extraordinary Loss - Discontinuance of SFAS No. 71
(net of tax $5) $8
Extraordinary Loss - Loss on Reacquired Debt
(net of tax of $3) 6
To reclassify extraordinary items.
Income Statement Reclassifying Entries - December 31, 1998
Debit Credit
(in millions)
(A) Operating Revenues - United Kingdom $1,769
Operating Revenues -
Worldwide Electric and Gas Operations $1,769
To reclassify operating revenues.
(B) Fuel and Purchased Power $1,301
U.S. Electric Fuel $1,190
U.S. Electric Purchased Power 111
To reclassify certain operating expenses.
(C) Maintenance and Other Operations $1,198
Other Operating $1,029
Maintenance 169
To reclassify certain operating expenses.
(D) Worldwide Electric and Gas Operations $1,554
United Kingdom Cost of Sales $1,204
Maintenance and Other Operation 255
Depreciation and Amortization 95
To reposition Seeboard to Worldwide expenses.
(E) Worldwide Electric and Gas Operations $218
Maintenance and Other Operations $196
Depreciation and Amortization 17
Taxes Other Than Income 5
To reposition the noncore company expenses to Worldwide Electric and Gas
Operations.
(F) Income Tax Expenses $221
Operating Expenses - Income Taxes $203
Non-Operating Income Taxes 18
To reposition income taxes above-the-line and below-the-line to a single
line item.
Debit Credit
(in millions)
(G) Interest and Preferred Stock Dividends $468
Interest on Long-term Debt $311
Distribution on Trust Preferred Securities 27
Interest on Short-term Debt and Other 121
Preferred Dividend Requirements of Subsidiaries 8
Gain (Loss) on Required Preferred Stock 1
To reclassify various interest charges and preferred dividends into one
line item.
Income Statement Reclassifying Entries - December 31, 1997
Debit Credit
(in millions)
(A) Operating Revenues - United Kingdom $1,870
Operating Revenues -
Worldwide Electric and Gas Operations $1,870
To reclassify operating revenues.
(B) Fuel and Purchased Power $1,266
U.S. Electric Fuel $1,177
U.S. Electric Purchased Power 89
To reclassify certain operating expenses.
(C) Maintenance and Other Operations $1,133
Other Operating $981
Maintenance 152
To reclassify certain operating expenses.
(D) Worldwide Electric and Gas Operations $1,615
United Kingdom Cost of Sales $1,291
Maintenance and Other Operation 232
Depreciation and Amortization 92
To reposition Seeboard to Worldwide expenses.
(E) Worldwide Electric and Gas Operations $74
Maintenance and Other Operations $68
Depreciation and Amortization 6
To reposition the noncore company expenses to Worldwide Electric and Gas
Operations.
(F) Income Tax Expenses $145
Non-Operating Income Taxes 6
Operating Expenses - Income Taxes $151
To reposition income taxes above-the-line and below-the-line to a single line
item.
Debit Credit
(in millions)
(G) Interest and Preferred Stock Dividends $438
Gain (Loss) on Required Preferred Stock 10
Interest on Long-term Debt $333
Distribution on Trust Preferred Securities 17
Interest on Short-term Debt and Other 86
Preferred Dividend Requirements of Subsidiaries 12
To reclassify various interest charges and preferred Dividends into one
line item.
BALANCE SHEET PRO FORMA ENTRIES - March 31, 2000
Debit Credit
(in millions)
(1) To adjust Common Stock to reflect 330,694,837 shares of $6.50 par value
which includes the issuance of AEP stock for CSW outstanding shares.
Paid-in Capital 85
Common Stock 85
(2) To record an adjustment to conform CSW's accounting for vacation pay accruals with AEP's accounting policy.
Retained Earnings 19
Deferred Income Taxes 11
Other Current Liabilities 30
RECLASSIFYING ENTRIES
The AEP unaudited reclassifying consolidated balance sheet reflects the
reclassifying entries necessary to adjust AEP's consolidated balance
sheet presentation to be consistent with the presentation expected to
be used by AEP after the Merger is completed. The following describes
such reclassifying entries:
AEP Balance Sheets Reclassifying Entries - March 31, 2000
Debit Credit
(in millions)
(1) Investments in Power and
Communications Projects $473
Other Assets $473
To reclassify investments in Power and Communication Projects.
(2) Goodwill 197
Other Assets 197
To reclassify Goodwill.
The CSW unaudited reclassifying condensed consolidated balance sheet reflects
the reclassifying entries necessary to adjust CSW's consolidated balance sheet
presentation to be consistent with the presentation expected to be used by AEP
after the Merger is completed. The following describes such reclassifying
entries:
CSW Balance Sheets Reclassifying Entries - March 31, 2000
Debit Credit
(in millions)
(A) To reclassify nuclear fuel.
Property, Plant & Equipment - Other $ 227
Electric Plant - Nuclear Fuel $ 227
(B) To reclassify General and Other Diversified Plant.
Property, Plant and Equipment -
- Electric - Production 19
- Other 1,406
- Construction Work in Progress 298
Electric Plant - General 1,341
Other Diversified 382
(C) To reclassify nuclear decommissioning obligations.
Accumulated Depreciation 91
Other Noncurrent Liabilities 91
(D) To reclassify other non-utility investments and securities available
for sale.
Property, Plant and Equipment - Other 51
Investments in Power and Communications Projects 415
Other Assets 35
Accumulated Depreciation and Amortization 1
Other Non-Utility Investments 444
Securities Available for Sale 56
(E) To reclassify accrued utility revenues.
Accrued Utility Revenues 71
Accounts Receivable 71
(F) To reclassify notes receivable.
Accounts Receivable 55
Notes Receivable 55
(G) To reclassify regulatory assets and deferred charges.
Regulatory Assets 39
Other Assets 204
Other Current & Accrued Liab -
Over-recovery of Fuel 6
Under-Recovered Fuel 39
Benefit Costs 204
Deferred Credits 6
(H) To reclassify current deferred income tax.
Deferred Income Taxes 23
Prepayment and Other 23
Balance Sheets Reclassifying Entries - March 31, 2000
Debit Credit
(in millions)
(I) To reclassify operating reserves.
Deferred Credits $ 32
Other Noncurrent Liabilities $ 32
(J) To reclassify short-term debt.
Short-term Debt - CSW Credit, Inc. 556
Loan Notes 22
Short-term Debt 578
(K) To reclassify other deferred charges.
Other Assets 350
Other Deferred Charges 350