EXHIBIT 12.3
Southwestern Electric Power Company
Ratio of Earnings to Fixed Charges
For Years Ended December 31,
1996 1995 1994 1993(2) 1992
--------- --------- --------- -------- --------
(thousands, except ratios)
Operating income $138,083 $162,776 $145,922 $118,057 $145,727
Adjustments:
Income taxes 32,931 41,131 20,623 37,108 31,478
Provision for deferred
income taxes 2,849 6,287 22,248 (648) 10,258
Deferred investment tax credits (4,730) (4,786) (4,278) (5,193) (6,864)
Reserve for utility plant costs, (21,815) -- -- -- --
net of tax
Other income and deductions 312 178 4,656 3,658 537
Allowance for borrowed and equity
funds used during construction 2,423 9,334 6,097 2,580 182
Interest portion of financing
leases 1,514 1,896 2,562 2,534 2,783
========= ========= ========= ========= =========
Earnings $151,567 $216,816 $197,830 $158,096 $184,101
========= ========= ========= ========= =========
Fixed charges:
Interest on long-term debt $44,066 $44,468 $43,395 $40,958 $47,490
Interest on short-term debt
and other 8,381 10,706 7,568 4,866 4,073
Interest portion of financing
leases 1,514 1,896 2,562 2,534 2,783
========= ========= ========= ========= =========
Fixed charges $53,961 $57,070 $53,525 $48,358 $54,346
========= ========= ========= ========= =========
Ratio of earnings to fixed charges 2.81 (1) 3.80 3.70 3.27 (3) 3.39
(1) Earnings in 1996 reflect a $21.8 million one-time charge, net of tax,
associated with certain investments for plant sites, engineering studies
and lignite reserves.
(2) Earnings in 1993 were significantly affected by restructuring charges, the
$3 million cumulative effect of changes in accounting principles and the
establishment of reserves for fuel properties.
(3) The ratio of earnings to fixed charges for 1993 was calculated before
cumulative effect of change in accounting principles.