Item 1. BUSINESS - --------------------------------------------------------------------------------
General
AEP was incorporated under the laws of the State of New York in 1906 and reorganized in 1925. It is a public utility holding company which owns, directly or indirectly, all of the outstanding common stock of its domestic electric utility subsidiaries and varying percentages of other subsidiaries. Substantially all of the operating revenues of AEP and its subsidiaries are derived from the furnishing of electric service. In addition, in recent years AEP has been pursuing various unregulated business opportunities worldwide as discussed in New Business Development.
The service area of AEP's electric utility subsidiaries covers portions of the states of Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. The generating and transmission facilities of AEP's subsidiaries are physically interconnected, and their operations are coordinated, as a single integrated electric utility system. Transmission networks are interconnected with extensive distribution facilities in the territories served. The electric utility subsidiaries of AEP have traditionally provided electric service, consisting of generation, transmission and distribution, on an integrated basis to their retail customers. As a result of the changing nature of the electric business (see Competition and Business Change), effective January 1, 1996, AEP's subsidiaries realigned into four functional business units: Power Generation; Nuclear Generation; Energy Delivery; and Corporate Development. In addition, the electric utility subsidiaries began to do business as "American Electric Power." The legal and financial structure of AEP and its subsidiaries, however, did not change.
At December 31, 1998, the subsidiaries of AEP had a total of 17,943 employees. AEP, as such, has no employees. The operating subsidiaries of AEP are:
APCo (organized in Virginia in 1926) is engaged in the generation, sale, purchase, transmission and distribution of electric power to approximately 888,000 retail customers in the southwestern portion of Virginia and southern West Virginia, and in supplying electric power at wholesale to other electric utility companies and municipalities in those states and in Tennessee. At December 31, 1998, APCo and its wholly owned subsidiaries had 3,577 employees. Among the principal industries served by APCo are coal mining, primary metals, chemicals and textile mill products. In addition to its AEP System interconnections, APCo also is interconnected with the following unaffiliated utility companies: Carolina Power & Light Company, Duke Energy Corporation and VEPCo. A comparatively small part of the properties and business of APCo is located in the northeastern end of the Tennessee Valley. APCo has several points of interconnection with TVA and has entered into agreements with TVA under which APCo and TVA interchange and transfer electric power over portions of their respective systems.
CSPCo (organized in Ohio in 1937, the earliest direct predecessor company having been organized in 1883) is engaged in the generation, sale, purchase, transmission and distribution of electric power to approximately 640,000 customers in Ohio, and in supplying electric power at wholesale to other electric utilities and to municipally owned distribution systems within its service area. At December 31, 1998, CSPCo had 1,528 employees. CSPCo's service area is comprised of two areas in Ohio, which include portions of twenty-five counties. One area includes the City of Columbus and the other is a predominantly rural area in south central Ohio. Approximately 80% of CSPCo's retail revenues are derived from the Columbus area. Among the principal industries served are food processing, chemicals, primary metals, electronic machinery and paper products. In addition to its AEP System interconnections, CSPCo also is interconnected with the following unaffiliated utility companies: CG&E, DP&L and Ohio Edison Company.
I&M (organized in Indiana in 1925) is engaged in the generation, sale, purchase, transmission and distribution of electric power to approximately 554,000 customers in northern and eastern Indiana and southwestern Michigan, and in supplying electric power at wholesale to other electric utility
companies, rural electric cooperatives and municipalities. At December 31, 1998, I&M had 3,074 employees. Among the principal industries served are primary metals, transportation equipment, electrical and electronic machinery, fabricated metal products, rubber and miscellaneous plastic products and chemicals and allied products. Since 1975, I&M has leased and operated the assets of the municipal system of the City of Fort Wayne, Indiana. In addition to its AEP System interconnections, I&M also is interconnected with the following unaffiliated utility companies: Central Illinois Public Service Company, CG&E, Commonwealth Edison Company, Consumers Energy Company, Illinois Power Company, Indianapolis Power & Light Company, Louisville Gas and Electric Company, Northern Indiana Public Service Company, PSI Energy Inc. and Richmond Power & Light Company.
KEPCo (organized in Kentucky in 1919) is engaged in the generation, sale, purchase, transmission and distribution of electric power to approximately 170,000 customers in an area in eastern Kentucky, and in supplying electric power at wholesale to other utilities and municipalities in Kentucky. At December 31, 1998, KEPCo had 541 employees. In addition to its AEP System interconnections, KEPCo also is interconnected with the following unaffiliated utility companies: Kentucky Utilities Company and East Kentucky Power Cooperative Inc. KEPCo is also interconnected with TVA.
Kingsport Power Company (organized in Virginia in 1917) provides electric service to approximately 44,000 customers in Kingsport and eight neighboring communities in northeastern Tennessee. Kingsport Power Company has no generating facilities of its own. It purchases electric power distributed to its customers from APCo. At December 31, 1998, Kingsport Power Company had 65 employees.
OPCo (organized in Ohio in 1907 and re-incorporated in 1924) is engaged in the generation, sale, purchase, transmission and distribution of electric power to approximately 685,000 customers in the northwestern, east central, eastern and southern sections of Ohio, and in supplying electric power at wholesale to other electric utility companies and municipalities. At December 31, 1998, OPCo and its wholly owned subsidiaries had 4,170 employees. Among the principal industries served by OPCo are primary metals, rubber and plastic products, stone, clay, glass and concrete products, petroleum refining and chemicals. In addition to its AEP System interconnections, OPCo also is interconnected with the following unaffiliated utility companies: CG&E, The Cleveland Electric Illuminating Company, DP&L, Duquesne Light Company, Kentucky Utilities Company, Monongahela Power Company, Ohio Edison Company, The Toledo Edison Company and West Penn Power Company.
Wheeling Power Company (organized in West Virginia in 1883 and reincorporated in 1911) provides electric service to approximately 42,000 customers in northern West Virginia. Wheeling Power Company has no generating facilities of its own. It purchases electric power distributed to its customers from OPCo. At December 31, 1998, Wheeling Power Company had 80 employees.
Another principal electric utility subsidiary of AEP is AEGCo, which was organized in Ohio in 1982 as an electric generating company. AEGCo sells power at wholesale to I&M, KEPCo and VEPCo. AEGCo has no employees.
See Item 2
Item 2. PROPERTIES - --------------------------------------------------------------------------------
At December 31, 1998, subsidiaries of AEP owned (or leased where indicated) generating plants with the net power capabilities (winter rating) shown in the following table:
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(a) Unit 1 of the Rockport Plant is owned one-half by AEGCo and one-half by I&M. Unit 2 of the Rockport Plant is leased one-half by AEGCo and one-half by I&M. The leases terminate in 2022 unless extended.
(b) Unit 3 of the John E. Amos Plant is owned one-third by APCo and two-thirds by OPCo.
(c) Represents CSPCo's ownership interest in generating units owned in common with CG&E and DP&L.
(d) Leased from the City of Fort Wayne, Indiana. Since 1975, I&M has leased and operated the assets of the municipal system of the City of Fort Wayne, Indiana under a 35-year lease with a provision for an additional 15-year extension at the election of I&M.
(e) The scrubber facilities at the Gavin Plant are leased. The lease terminates in 2010 unless extended.
See Item 1 under Fuel Supply, for information concerning coal reserves owned or controlled by subsidiaries of AEP.
The following table sets forth the total overhead circuit miles of transmission and distribution lines of the AEP System, APCo, CSPCo, I&M, KEPCo and OPCo and that portion of the total representing 765,000-volt lines:
TOTAL OVERHEAD CIRCUIT MILES OF TRANSMISSION CIRCUIT MILES AND OF DISTRIBUTION 765,000-VOLT LINES LINES ----- -----
AEP System (a).............. 128,983(b) 2,022 APCo..................... 49,793 641 CSPCo (a)................ 15,578 -- I&M...................... 20,899 614 KEPCo.................... 10,223 258 OPCo .................... 29,406 509
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(a) Includes 766 miles of 345,000-volt jointly owned lines.
(b) Includes lines of other AEP System companies not shown.
TITLES
The AEP System's electric generating stations are generally located on lands owned in fee simple. The greater portion of the transmission and distribution lines of the System has been constructed over lands of private owners pursuant to easements or along public highways and streets pursuant to appropriate statutory authority. The rights of the System in the realty on which its facilities are located are considered by it to be adequate for its use in the conduct of its business. Minor defects and irregularities customarily found in title to properties of like size and character may exist, but such defects and irregularities do not materially impair the use of the properties affected thereby. System companies generally have the right of eminent domain whereby they may, if necessary, acquire, perfect or secure titles to or easements on privately-held lands used or to be used in their utility operations.
Substantially all the physical properties of APCo, CSPCo, I&M, KEPCo and OPCo are subject to the lien of the mortgage and deed of trust securing the first mortgage bonds of each such company.
SYSTEM TRANSMISSION LINES AND FACILITY SITING
Legislation in the states of Indiana, Kentucky, Michigan, Ohio, Virginia, and West Virginia requires prior approval of sites of generating facilities and/or routes of high-voltage transmission lines. Delays and additional costs in constructing facilities have been experienced as a result of proceedings conducted pursuant to such statutes, as well as in proceedings in which operating companies have sought to acquire rights-of-way through condemnation, and such proceedings may result in additional delays and costs in future years.
PEAK DEMAND
The AEP System is interconnected through 121 high-voltage transmission interconnections with 25 neighboring electric utility systems. The all-time and 1998 one-hour peak System demands were 25,940,000 and 23,192,000 kilowatts, respectively (which included 7,314,000 and 3,732,000 kilowatts, respectively, of scheduled deliveries to unaffiliated systems which the System might, on appropriate notice, have elected not to schedule for delivery) and occurred on June 17, 1994 and June 22, 1998, respectively. The net dependable capacity to serve the System load on such date, including power available under contractual obligations, was 23,457,000 and 23,761,000 kilowatts, respectively. The all-time and 1998 one-hour internal peak demands were 19,557,000 and 19,414,000 kilowatts, respectively, and occurred on February 5, 1996 and July 21, 1998, respectively. The net dependable capacity to serve the System load on such date, including power dedicated under contractual arrangements, was 23,765,000 and 23,749,000 kilowatts, respectively. The all-time one-hour integrated and internal net system peak demands and 1998 peak demands for AEP's generating subsidiaries are shown in the following tabulation:
ALL-TIME ONE-HOUR INTEGRATED 1998 ONE-HOUR INTEGRATED NET SYSTEM PEAK DEMAND NET SYSTEM PEAK DEMAND - ------------------------------ -------------------------- (IN THOUSANDS) NUMBER OF NUMBER OF KILOWATTS DATE KILOWATTS DATE ----------- ------ ----------- ------- APCo....... 8,303 January 17, 1997 6,739 March 12, 1998 CSPCo...... 4,172 June 17, 1994 4,027 July 21, 1998 I&M........ 5,027 June 17, 1994 4,778 July 14, 1998 KEPCo...... 1,711 January 17, 1997 1,444 August 25, 1998 OPCo....... 7,291 June 17, 1994 6,642 August 28, 1998
ALL-TIME ONE-HOUR INTEGRATED 1998 ONE-HOUR INTEGRATED NET INTERNAL PEAK DEMAND NET INTERNAL PEAK DEMAND - ------------------------------ -------------------------- (IN THOUSANDS) NUMBER OF NUMBER OF KILOWATTS DATE KILOWATTS DATE ----------- ------ ----------- ------- APCo ...... 6,908 February 5, 1996 6,135 March 13, 1998 CSPCo...... 3,551 July 21, 1998 3,551 July 21, 1998 I&M........ 3,926 July 14, 1997 3,870 July 21, 1998 KEPCo..... 1,418 February 5, 1996 1,299 March 13, 1998 OPCo....... 5,641 August 14, 1995 5,588 June 25, 1998
HYDROELECTRIC PLANTS
AEP has 17 facilities, of which 16 are licensed through FERC. The license for the hydroelectric plant at Elkhart, Indiana expires in 2000. In 1995, a notice of intent to relicense the Elkhart project was filed. The application was filed in 1998. The license for the Mottville hydroelectric plant in Michigan expires in 2003. A notice of intent to relicense was filed in 1998.
COOK NUCLEAR PLANT
Unit 1 of the Cook Plant, which was placed in commercial operation in 1975, has a nominal net electric rating of 1,020,000 kilowatts. Unit 1's availability factor was -0-% during 1998 and 52.6% during 1997. Unit 2, of slightly different design, has a nominal net electrical rating of 1,090,000 kilowatts and was placed in commercial operation in 1978. Unit 2's availability factor was -0-% during 1998 and 65.1% during 1997. The Cook Plant was shut down in September 1997 to respond to issues raised regarding the operability of certain safety systems. See Cook Plant Shutdown.
Units 1 and 2 are licensed by the NRC to operate at 100% of rated thermal power to October 25, 2014 and December 23, 2017, respectively.
Costs associated with the operation, maintenance and retirement of nuclear plants continue to be of greater significance and less predictable than costs associated with other sources of generation, in large part due to changing
regulatory requirements and safety standards, availability of nuclear waste disposal facilities and experience gained in the construction and operation of nuclear facilities. I&M may also incur costs and experience reduced output at its Cook Plant because of the design criteria prevailing at the time of construction and the age of the plant's systems and equipment. Nuclear industry-wide and Cook Plant initiatives have contributed to slowing the growth of operating and maintenance costs. However, the ability of I&M to obtain adequate and timely recovery of costs associated with the Cook Plant, including replacement power, any unamortized investment at the end of the Cook Plant's useful life (whether scheduled or premature), the carrying costs of that investment and retirement costs, is not assured.
Cook Plant Shutdown
On September 9 and 10, 1997, during a NRC architect engineer design inspection, questions regarding the operability of certain safety systems caused AEP operations personnel to shut down Units 1 and 2 of the Cook Plant. On September 19, 1997, the NRC issued a Confirmatory Action Letter requiring AEP to address the issues identified in the letter. AEP is working with the NRC to resolve the remaining open issue in the letter.
In April 1998 the NRC notified I&M that it had convened a Restart Panel for Cook Plant. In July 1998 the NRC provided a list of the required restart activities and in October the NRC expanded the list. In order to identify and resolve the issues necessary to restart the Cook units, AEP is meeting with the Panel on a regular basis until the units are returned to service.
In January 1999 AEP announced that it will conduct additional engineering reviews at the Cook Plant that will delay restart of the units. Previously, the units were scheduled to return to service at the end of the first and second quarters of 1999. The decision to delay restart resulted from internal assessments that indicated a need to conduct expanded system readiness reviews. A new restart schedule will be developed based on the results of the expanded reviews and should be available in June 1999. When maintenance and other activities required for restart are complete, AEP will seek concurrence from the NRC to return the Cook Plant to service. Until these additional reviews are completed, management is unable to determine when the units will be returned to service. Unless the costs of the extended outage and restart efforts are recovered from customers, there would be a material adverse effect on results of operations, cash flows and possibly financial condition.
In July 1998 AEP received an "adverse trend letter" from the NRC indicating that NRC senior managers determined that there had been a slow decline in performance at the Cook Plant during the 18-month period preceding the letter. The letter indicated that the NRC will closely monitor efforts to address issues at Cook Plant through additional inspection activities.
In October 1998 the NRC issued AEP a Notice of Violation and proposed a $500,000 civil penalty for alleged violations at the Cook Plant discovered during five inspections conducted between August 1997 and April 1998. AEP paid the penalty.
The cost of electricity supplied to certain retail customers rose due to the outage of the Cook Plant because higher cost coal-fired generation and coal-based purchased power were substituted for lower cost nuclear generation. AEP's Indiana and Michigan retail jurisdictional fuel cost recovery mechanisms permit the recovery, subject to regulatory commission review and approval, of changes in fuel costs. This includes the fuel component of purchased power in the Indiana jurisdiction and changes in replacement power in the Michigan jurisdiction. Under these fuel cost recovery mechanisms, retail rates contain a fuel cost adjustment factor that reflects estimated fuel costs for the period during which the factor will be in effect subject to reconciliation to actual fuel costs in a future proceeding. When actual fuel costs exceed the estimated costs reflected in the billing factor a regulatory asset is recorded and revenues are accrued. Consequently, AEP has recorded a regulatory asset and accrued revenues in anticipation of the future reconciliation and billing, under the fuel cost recovery mechanisms, of the higher fuel costs to replace Cook energy during the extended outage. At December 31, 1998, the regulatory asset was $65,000,000.
The IURC approved, subject to future reconciliation or refund, agreements authorizing AEP, during the billing months of July 1998 through March 1999, to include in rates a fuel cost adjustment factor less than that requested by AEP.
On March 16, 1999, a settlement agreement was filed with the IURC resolving all matters related to the recovery of replacement energy costs due to the extended Cook Plant outage. The settlement agreement, which is subject to IURC approval, provides for, among other things:
o A credit of $55,000,000 to Indiana retail customers to be refunded through customer bills during the months of July, August and September 1999. The credit returns to customers Cook replacement fuel costs previously recovered.
o Authorization to defer any unrecovered fuel revenues accrued between September 9, 1997 and December 31, 1999, including the $55,000,000 credited to customers.
o Authorization to defer up to $150,000,000 in incremental operation and maintenance restart costs for the Cook Plant above the base rate level incurred during 1999.
o Amortization of the fuel recoveries and restart cost deferrals over a five-year period ending December 31, 2003.
o Subject to certain force majeure provisions, a freeze in base rates through December 31, 2003 and a cap on fuel recovery charges through March 1, 2004.
o Incremental nuclear decommissioning trust fund deposits of $2,500,000 annually over a five-year period ending December 31, 2003.
If the IURC does not approve this settlement, the recovery of Cook Plant replacement energy costs would then become subject to regulatory hearings.
Nuclear Incident Liability
The Price-Anderson Act limits public liability for a nuclear incident at any licensed reactor in the United States to $9 billion. I&M has insurance coverage for liability from a nuclear incident at its Cook Plant. Such coverage is provided through a combination of private liability insurance, with the maximum amount available of $200,000,000, and mandatory participation for the remainder of the $9 billion liability, in an industry retrospective deferred premium plan which would, in case of a nuclear incident, assess all licensees of nuclear plants in the U.S. Under the deferred premium plan, I&M could be assessed up to $176,000,000 payable in annual installments of $20,000,000 in the event of a nuclear incident at Cook or any other nuclear plant in the U.S. There is no limit on the number of incidents for which I&M could be assessed these sums.
I&M also has property damage, decontamination and decommissioning insurance for loss resulting from damage to the Cook Plant facilities in the amount of $3.0 billion. Coverage is provided by Energy Insurance Bermuda (EIB) and Nuclear Electric Insurance Limited (NEIL). If EIB's and NEIL's losses exceed their available resources, I&M would be subject to a total retrospective premium assessment of up to $16,792,035. NRC regulations require that, in the event of an accident, whenever the estimated costs of reactor stabilization and site decontamination exceed $100,000,000, the insurance proceeds must be used, first, to return the reactor to, and maintain it in, a safe and stable condition and, second, to decontaminate the reactor and reactor station site in accordance with a plan approved by the NRC. The insurers then would indemnify I&M for decommissioning costs in excess of funds already collected for decommissioning and for property damage up to $3.0 billion less any amounts used for stabilization and decontamination. See Fuel Supply -- Nuclear Waste.
The NEIL extra-expense programs provide insurance to cover extra costs resulting from a prolonged accidental outage of a nuclear unit. I&M's policy insures against such increased costs up to approximately $3,500,000 per week (starting 17 weeks after the outage) for one year, $2,800,000 per week for the second and third years, or 80% of those amounts per unit if both units are down for the same reason. If NEIL's losses exceed its available resources, I&M would be subject to a total retrospective premium assessment of up to $6,405,535.
POTENTIAL UNINSURED LOSSES
Some potential losses or liabilities may not be insurable or the amount of insurance carried may not be sufficient to meet potential losses and liabilities, including liabilities relating to damage to
the Cook Plant and costs of replacement power in the event of a nuclear incident at the Cook Plant. Future losses or liabilities which are not completely insured, unless allowed to be recovered through rates, could have a material adverse effect on results of operations and the financial condition of AEP, I&M and other AEP System companies.
Item 3.
Item 3. LEGAL PROCEEDINGS - --------------------------------------------------------------------------------
On February 28, 1994, Ormet Corporation filed a complaint in the U.S. District Court, Northern District of West Virginia, against AEP, OPCo, the Service Corporation and two of its employees, Federal EPA and the Administrator of Federal EPA. Ormet is the operator of a major aluminum reduction plant in Ohio and is a customer of OPCo. See Certain Industrial Customers. Pursuant to the Clean Air Act Amendments of 1990, OPCo received SO2 Allowances for its Kammer Plant. See Environmental and Other Matters. Ormet's complaint sought a declaration that it is the owner of approximately 89% of the Phase I and Phase II SO2 allowances issued for use by the Kammer Plant. On March 31, 1995, the District Court issued an opinion and order dismissing Ormet's claims based on a lack of jurisdiction. On April 11, 1995, Ormet appealed the District Court's decision to the U.S. Court of Appeals for the Fourth Circuit with respect to the Service Corporation and OPCo only. On October 23, 1996, the Court of Appeals issued an opinion reversing the District Court. In January 1997 OPCo and the Service Corporation filed an answer and counterclaims in the District Court and in February 1998 they filed a motion for summary judgment. On March 1, 1999, the District Court issued an opinion and order granting OPCo and the Service Corporation's motion for summary judgment and dismissing the case.
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The Internal Revenue Service (IRS) agents auditing the AEP System's consolidated federal income tax returns requested a ruling from their National Office that certain interest deductions claimed by AEP relating to its corporate owned life insurance (COLI) program should not be allowed. As a result of a suit filed in U.S. District Court (discussed below) this request for ruling was withdrawn by the IRS agents. Adjustments have been or will be proposed by the IRS disallowing COLI interest deductions for taxable years 1991-96. A disallowance of the COLI interest deductions through December 31, 1998 would reduce earnings (including interest) as follows:
(in millions) ------------- AEP System..................................... $316 APCo........................................ 79 CSPCo....................................... 43 I&M......................................... 66 KEPCo....................................... 8 OPCo........................................ 117
AEP System companies have made no provision for any possible adverse earnings impact from this matter.
In 1998 AEP made payments of taxes and interest attributable to COLI interest deductions for taxable years 1991-97 to avoid the potential assessment by the IRS of any additional above- market rate interest on the contested amount. The payments to the IRS are included on the balance sheet in other property and investments pending the resolution of this matter. AEP will seek refund, either administratively or through litigation, of all amounts paid plus interest. In order to resolve this issue without further delay, on March 24, 1998, AEP filed suit against the U.S. in the U.S. District Court for the Southern District of Ohio. Management believes that it has a meritorious position and will vigorously pursue this lawsuit. In the event the resolution of this matter is unfavorable, it will have a material adverse impact on results of operations and cash flows.
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See Item 1 for a discussion of certain environmental and rate matters.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - --------------------------------------------------------------------------------
AEP, APCO, I&M AND OPCO. None.
AEGCO, CSPCO AND KEPCO. Omitted pursuant to Instruction I(2)(c).
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EXECUTIVE OFFICERS OF THE REGISTRANTS
AEP. The following persons are, or may be deemed, executive officers of AEP. Their ages are given as of March 1, 1999.
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(a) All of the executive officers listed above have been employed by the Service Corporation or System companies in various capacities (AEP, as such, has no employees) during the past five years, except for Mr. Clements. Prior to joining the Service Corporation in 1994 as Senior Vice President-Corporate Development, Mr. Clements was Senior Vice President of External Affairs of Gulf States Utilities Company (1993-1994). All of the above officers are appointed annually for a one-year term by the board of directors of AEP, the board of directors of the Service Corporation, or both, as the case may be.
APCO. The names of the executive officers of APCo, the positions they hold with APCo, their ages as of March 1, 1999, and a brief account of their business experience during the past five years appears below. The directors and executive officers of APCo are elected annually to serve a one-year term.
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(a) Positions are with APCo unless otherwise indicated.
OPCO. The names of the executive officers of OPCo, the positions they hold with OPCo, their ages as of March 1, 1999, and a brief account of their business experience during the past five years appear below. The directors and executive officers of OPCo are elected annually to serve a one-year term.
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(a) Positions are with OPCo unless otherwise indicated.
PART II ------------------------------------------------------------------------
Item 5.
Item 5. MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - --------------------------------------------------------------------------------
AEP. AEP Common Stock is traded principally on the New York Stock Exchange. The following table sets forth for the calendar periods indicated the high and low sales prices for the Common Stock as reported on the New York Stock Exchange Composite Tape and the amount of cash dividends paid per share of Common Stock.
PER SHARE MARKET PRICE ------------------------ QUARTER ENDED HIGH LOW DIVIDEND - ------------- ---- --- -------- March 1997........................... 43-3/16 40 .60 June 1997............................ 42-1/2 39-1/8 .60 September 1997....................... 46-5/8 41-1/2 .60 December 1997........................ 52 45-1/4 .60 March 1998........................... 51-11/16 47-13/16 .60 June 1998............................ 50-3/4 44-11/16 .60 September 1998....................... 48 13/16 42 1/16 .60 December 1998........................ 53 5/16 45 5/16 .60
At December 31, 1998, AEP had approximately 134,000 shareholders of record.
AEGCO, APCO, CSPCO, I&M, KEPCO AND OPCO. The information required by this item is not applicable as the common stock of all these companies is held solely by AEP.
Item 6.
Item 6. SELECTED FINANCIAL DATA - --------------------------------------------------------------------------------
AEGCO. Omitted pursuant to Instruction I(2)(a).
AEP. The information required by this item is incorporated herein by reference to the material under Selected Consolidated Financial Data in the AEP 1998 Annual Report (for the fiscal year ended December 31, 1998).
APCO. The information required by this item is incorporated herein by reference to the material under Selected Consolidated Financial Data in the APCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
CSPCO. Omitted pursuant to Instruction I(2)(a).
I&M. The information required by this item is incorporated herein by reference to the material under Selected Consolidated Financial Data in the I&M 1998 Annual Report (for the fiscal year ended December 31, 1998).
KEPCO. Omitted pursuant to Instruction I(2)(a).
OPCO. The information required by this item is incorporated herein by reference to the material under Selected Consolidated Financial Data in the OPCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION - --------------------------------------------------------------------------------
AEGCO. Omitted pursuant to Instruction I(2)(a). Management's narrative analysis of the results of operations and other information required by Instruction I(2)(a) is incorporated herein by reference to the material under Management's Narrative Analysis of Results of Operations in the AEGCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
AEP. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the AEP 1998 Annual Report (for the fiscal year ended December 31, 1998).
APCO. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the APCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
CSPCO. Omitted pursuant to Instruction I(2)(a). Management's narrative analysis of the results of operations and other information required by Instruction I(2)(a) is incorporated herein by reference to the material under Management's Narrative Analysis of Results of Operations in the CSPCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
I&M. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the I&M 1998 Annual Report (for the fiscal year ended December 31, 1998).
KEPCO. Omitted pursuant to Instruction I(2)(a). Management's narrative analysis of the results of operations and other information required by Instruction I(2)(a) is incorporated herein by reference to the material under Management's Narrative Analysis of Results of Operations in the KEPCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
OPCO. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the OPCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
Item 7A.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - --------------------------------------------------------------------------------
AEGCO. The information required by this item is incorporated herein by reference to the material under Management's Narrative Analysis of Results of Operations in the AEGCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
AEP. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the AEP 1998 Annual Report (for the fiscal year ended December 31, 1998).
APCO. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the APCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
CSPCO. The information required by this item is incorporated herein by reference to the material under Management's Narrative Analysis of Results of Operations in the CSPCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
I&M. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the I&M 1998 Annual Report (for the fiscal year ended December 31, 1998).
KEPCO. The information required by this item is incorporated herein by reference to the material under Management's Narrative Analysis of Results of Operations in the KEPCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
OPCO. The information required by this item is incorporated herein by reference to the material under Management's Discussion and Analysis of Results of Operations and Financial Condition in the OPCo 1998 Annual Report (for the fiscal year ended December 31, 1998).
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - --------------------------------------------------------------------------------
AEGCO, AEP, APCO, CSPCO, I&M, KEPCO, AND OPCO. The information required by this item is incorporated herein by reference to the financial statements and supplementary data described under Item 14 herein.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE - --------------------------------------------------------------------------------
AEGCO, AEP, APCO, CSPCO, I&M, KEPCO AND OPCO. None.
PART III -----------------------------------------------------------------------
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS - --------------------------------------------------------------------------------
AEGCO. Omitted pursuant to Instruction I(2)(c).
AEP. The information required by this item is incorporated herein by reference to the material under Nominees for Director and Section 16(a) Beneficial Ownership Reporting Compliance of the definitive proxy statement of AEP for the 1999 annual meeting of shareholders, to be filed within 120 days after December 31, 1998. Reference also is made to the information under the caption Executive Officers of the Registrants in Part I of this report.
APCO. The information required by this item is incorporated herein by reference to the material under Election of Directors of the definitive information statement of APCo for the 1999 annual meeting of stockholders, to be filed within 120 days after December 31, 1998. Reference also is made to the information under the caption Executive Officers of the Registrants in Part I of this report.
CSPCO. Omitted pursuant to Instruction I(2)(c).
I&M. The names of the directors and executive officers of I&M, the positions they hold with I&M, their ages as of March 1, 1999, and a brief account of their business experience during the past five years appear below. The directors and executive officers of I&M are elected annually to serve a one-year term.
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(a) Positions are with I&M unless otherwise indicated.
(b) Dr. Draper is a director of BCP Management, Inc., which is the general partner of Borden Chemicals and Plastics L.P., and CellNet Data Systems, Inc. and Mr. Lhota is a director of Huntington Bancshares Incorporated and State Auto Financial Corporation.
(c) Drs. Draper and Markowsky and Messrs. Fayne, Lhota and Pena are directors of AEGCo, APCo, CSPCo, KEPCo and OPCo. Dr. Draper is also a director of AEP. Mr. Vipperman is a director of APCo, CSPCo, KEPCo and OPCo.
KEPCO. Omitted pursuant to Instruction I(2)(c).
OPCO. The information required by this item is incorporated herein by reference to the material under the heading Election of Directors of the definitive information statement of OPCo for the 1999 annual meeting of shareholders, to be filed within 120 days after December 31, 1998. Reference also is made to the information under the caption Executive Officers of the Registrants in Part I of this report.
Item 11.
Item 11. EXECUTIVE COMPENSATION - --------------------------------------------------------------------------------
AEGCO. Omitted pursuant to Instruction I(2)(c).
AEP. The information required by this item is incorporated herein by reference to the material under Directors Compensation and Stock Ownership Guidelines, Executive Compensation and the performance graph of the definitive proxy statement of AEP for the 1999 annual meeting of shareholders to be filed within 120 days after December 31, 1998.
APCO. The information required by this item is incorporated herein by reference to the material under Executive Compensation of the definitive information statement of APCo for the 1999 annual meeting of stockholders, to be filed within 120 days after December 31, 1998.
CSPCO. Omitted pursuant to Instruction I(2)(c).
KEPCO. Omitted pursuant to Instruction I(2)(c).
OPCO. The information required by this item is incorporated herein by reference to the material under Executive Compensation of the definitive information statement of OPCo for the 1999 annual meeting of shareholders, to be filed within 120 days after December 31, 1998.
I&M. Certain executive officers of I&M are employees of the Service Corporation. The salaries of these executive officers are paid by the Service Corporation and a portion of their salaries has been allocated and charged to I&M. The following table shows for 1998, 1997 and 1996 the compensation earned from all AEP System companies by the chief executive officer and four other most highly compensated executive officers (as defined by regulations of the SEC) of I&M at December 31, 1998.
Summary Compensation Table
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(1) Amounts in the Bonus column reflect awards under the Senior Officer Annual Incentive Compensation Plan (and predecessor Management Incentive Compensation Plan). Payments were made in March of the succeeding fiscal year for performance in the year indicated. Amounts for 1998 are estimates but should not change significantly.
Amounts in the Long Term Compensation column reflect performance share unit targets earned under the Performance Share Incentive Plan for three-year performance periods.
See below under Long Term Incentive Plans - Awards in 1998 for additional information.
(2) Amounts in the All Other Compensation column include (i) AEP's matching contributions under the AEP Employees Savings Plan and the AEP Supplemental Savings Plan, a non-qualified plan designed to supplement the AEP Savings Plan, and (ii) subsidiary companies director fees. For 1998, the amounts also include split-dollar insurance. Split-dollar insurance represents the present value of the interest projected to accrue for the employee's benefit on the current year's insurance premium paid by AEP. Cumulative net life insurance premiums paid are recovered by AEP at the later of retirement or 15 years. Detail of the 1998 amounts in the All Other Compensation column is shown below.
(3) No 1996 or 1997 compensation information is reported for Messrs. Vipperman and Fayne because they were not executive officers in these years.
Long-Term Incentive Plans -- Awards In 1998
Each of the awards set forth below establishes performance share unit targets, which represent units equivalent to shares of Common Stock, pursuant to the Company's Performance Share Incentive Plan. Since it is not possible to predict future dividends and the price of AEP Common Stock, credits of performance share units in amounts equal to the dividends that would have been paid if the performance share unit targets were established in the form of shares of Common Stock are not included in the table.
The ability to earn performance share unit targets is tied to achieving specified levels of total shareholder return ("TSR") relative to the S&P Electric Utility Index. Notwithstanding AEP's TSR ranking, no performance share unit targets are earned unless AEP shareholders realize a positive TSR over the relevant three performance period. The Human Resources Committee may, at its discretion, reduce the number of performance share unit targets otherwise earned. In accordance with the performance goals established for the periods set forth below, the threshold, target and maximum awards are equal to 25%, 100% and 200%, respectively, of the performance share unit targets. No payment will be made for performance below the threshold.
Payments of earned awards are deferred in the form of restricted stock units (equivalent to shares of AEP Common Stock) until the officer has met the equivalent stock ownership target discussed in the Human Resources Committee Report. Once officers meet and maintain their respective targets, they may elect either to continue to defer or to receive further earned awards in cash and/or Common Stock.
Retirement Benefits
The American Electric Power System Retirement Plan provides pensions for all employees of AEP System companies (except for employees covered by certain collective bargaining agreements), including the executive officers of the Company. The Retirement Plan is a noncontributory defined benefit plan.
The following table shows the approximate annual annuities under the Retirement Plan that would be payable to employees in certain higher salary classifications, assuming retirement at age 65 after various periods of service.
Pension Plan Table
The amounts shown in the table are the straight life annuities payable under the Retirement Plan without reduction for the joint and survivor annuity. Retirement benefits listed in the table are not subject to any deduction for Social Security or other offset amounts. The retirement annuity is reduced 3% per year in the case of retirement between ages 55 and 62. If an employee retires after age 62, there is no reduction in the retirement annuity.
The Company maintains a supplemental retirement plan which provides for the payment of benefits that are not payable under the Retirement Plan due primarily to limitations imposed by Federal tax law on benefits paid by qualified plans. The table includes supplemental retirement benefits.
Compensation upon which retirement benefits are based, for the executive officers named in the Summary Compensation Table above, consists of the average of the 36 consecutive months of the officer's highest aggregate salary and Senior Officer Annual Incentive Compensation Plan (and predecessor Management Incentive Compensation Plan) awards, shown in the "Salary" and "Bonus" columns, respectively, of the Summary Compensation Table, out of the officer's most recent 10 years of service. As of December 31, 1998, the number of full years of service applicable for retirement benefit calculation purposes for such officers were as follows: Dr. Draper, six years; Mr. Lhota, 34 years; Dr. Markowsky, 27 years; Mr. Vipperman, 35 years; and Mr. Fayne, 23 years.
Dr. Draper has a contract with the Company and AEP Service Corporation which provides him with a supplemental retirement annuity that credits him with 24 years of service in addition to his years of service credited under the Retirement Plan less his actual pension entitlement under the Retirement Plan and any pension entitlement from the Gulf States Utilities Company Trusteed Retirement Plan, a plan sponsored by his prior employer.
Ten AEP System employees (including Messrs. Fayne, Lhota and Vipperman and Dr. Markowsky) whose pensions may be adversely affected by amendments to the Retirement Plan made as a result of the Tax Reform Act of 1986 are eligible for certain supplemental retirement benefits. Such payments, if any, will be equal to any reduction occurring because of such amendments. Assuming retirement in 1999 of the executive officers named in the Summary Compensation Table, none of them would receive any supplemental benefits.
AEP made available a voluntary deferred-compensation program in 1982 and 1986, which permitted certain members of AEP System management to defer receipt of a portion of their salaries. Under this program, a participant was able to defer up to 10% or 15% annually (depending on the terms of the program offered), over a four-year period, of his or her salary, and receive supplemental retirement or survivor benefit payments over a 15-year period. The amount of supplemental retirement payments received is dependent upon the amount deferred, age at the time the deferral election was made, and number of years until the participant retires. The following table sets forth, for the executive officers named in the Summary Compensation Table, the amounts of annual deferrals and, assuming retirement at age 65, annual supplemental retirement payments under the 1982 and 1986 programs.
Severance Plan
In connection with the proposed merger with Central and South West Corporation, AEP's Board of Directors adopted a severance plan on February 24, 1999, effective March 1, 1999, that includes Dr. Markowsky and Messrs. Lhota, Vipperman and Fayne. The severance plan provides for payments and other benefits if, within two years after the merger is completed, the officer's employment is terminated by AEP without "cause" or by the officer because of a detrimental change in responsibilities or a reduction in salary or benefits. Under the severance plan, the officer will receive:
o A lump sum payment equal to three times the officer's annual base salary plus target annual incentive under the Senior Officer Annual Incentive Compensation Plan.
o Maintenance for a period of three additional years of all medical and dental insurance benefits substantially similar to those benefits to which the officer was entitled immediately prior to termination, reduced to the extent comparable benefits are otherwise received.
o Outplacement services not to exceed a cost of $30,000 or use of an office and secretarial services for up to one year.
AEP's obligation for the payments and benefits under the severance plan is subject to the waiver by the officer of any other severance benefits that may be provided by AEP. In addition, the officer agrees to refrain from the disclosure of confidential information relating to AEP.
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Directors of I&M receive a fee of $100 for each meeting of the Board of Directors attended in addition to their salaries.
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The AEP System is an integrated electric utility system and, as a result, the member companies of the AEP System have contractual, financial and other business relationships with the other member companies, such as participation in the AEP System savings and retirement plans and tax returns, sales of electricity, transportation and handling of fuel, sales or rentals of property and interest or dividend payments on the securities held by the companies' respective parents.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - --------------------------------------------------------------------------------
AEGCO. Omitted pursuant to Instruction I(2)(c).
AEP. The information required by this item is incorporated herein by reference to the material under Share Ownership of Directors and Executive Officers of the definitive proxy statement of AEP for the 1999 annual meeting of shareholders to be filed within 120 days after December 31, 1998.
APCO. The information required by this item is incorporated herein by reference to the material under Share Ownership of Directors and Executive Officers in the definitive information statement of APCo for the 1999 annual meeting of stockholders, to be filed within 120 days after December 31, 1998.
CSPCO. Omitted pursuant to Instruction I(2)(c).
I&M. All 1,400,000 outstanding shares of Common Stock, no par value, of I&M are directly and beneficially held by AEP. Holders of the Cumulative Preferred Stock of I&M generally have no voting rights, except with respect to certain corporate actions and in the event of certain defaults in the payment of dividends on such shares.
The table below shows the number of shares of AEP Common Stock and stock-based units that were beneficially owned, directly or indirectly, as of January 1, 1999, by each director and nominee of I&M and each of the executive officers of I&M named in the summary compensation table, and by all directors and executive officers of I&M as a group. It is based on information provided to I&M by such persons. No such person owns any shares of any series of the Cumulative Preferred Stock of I&M. Unless otherwise noted, each person has sole voting power and investment power over the number of shares of AEP Common Stock and stock-based units set forth opposite his name. Fractions of shares and units have been rounded to the nearest whole number.
STOCK NAME SHARES(a) UNITS(b) TOTAL - ---- --------- -------- ----- Karl G. Boyd ......................... 1,679 158 1,837 Coulter R. Boyle, III ................ 4,000 662 4,662 Gregory A. Clark ..................... 16 -- 16 E. Linn Draper, Jr ................... 7,934(c) 77,612 85,546 Henry W. Fayne ....................... 4,649 10,135 14,784 James A. Kobyra ...................... 3,454(c) 415 3,869 William J. Lhota ..................... 16,042(c)(d) 14,902 30,944 James J. Markowsky ................... 3,942(e) 13,062 17,004 Armando A. Pena ...................... 4,886 5,213 10,099 David B. Synowiec .................... 74 366 440 Joseph H. Vipperman .................. 10,734(c)(d) 4,718 15,452 William E. Walters ................... 6,118 316 6,434 Earl H. Wittkamper ................... 3,231(c) 307 3,538 All Directors and Executive Officers.. 151,990(d)(f) 127,866 279,856
(a) Includes share equivalents held in the AEP Employees Savings Plan in the amounts listed below:
With respect to the share equivalents held in the AEP Employees Savings Plan, such persons have sole voting power, but the investment/disposition power is subject to the terms of the Plan.
(b) This column includes amounts deferred in stock units and held under AEP's officer benefit plans.
(c) Includes the following numbers of shares held in joint tenancy with a family member: Dr. Draper, 4,901; Mr. Kobyra, 850; Mr. Lhota, 2,180; Mr. Vipperman, 67; and Mr. Wittkamper, 1,422.
(d) Does not include, for Messrs. Lhota and Vipperman, 85,231 shares in the American Electric Power System Educational Trust Fund over which Messrs. Lhota and Vipperman share voting and investment power as trustees (they disclaim beneficial ownership). The amount of shares shown for all directors and executive officers as a group includes these shares.
(e) Includes 20 shares held by family members of Dr. Markowsky over which beneficial ownership is disclaimed.
(f) Represents less than 1% of the total number of shares outstanding
KEPCO. Omitted pursuant to Instruction I(2)(c).
OPCO. The information required by this item is incorporated herein by reference to the material under Share Ownership of Directors and Executive Officers in the definitive information statement of OPCo for the 1999 annual meeting of shareholders, to be filed within 120 days after December 31, 1998.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - --------------------------------------------------------------------------------
AEP, APCO, I&M AND OPCO. None.
AEGCO, CSPCO, AND KEPCO. Omitted pursuant to Instruction I(2)(c).
PART IV ------------------------------------------------------------------------
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K - --------------------------------------------------------------------------------
(a) The following documents are filed as a part of this report:
1. FINANCIAL STATEMENTS:
The following financial statements have been incorporated herein by reference pursuant to Item 8.
(b) No Reports on Form 8-K were filed during the quarter ended December 31, 1998.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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 SIGNATURE OF THE UNDERSIGNED COMPANY SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO SUCH COMPANY AND ANY SUBSIDIARIES THEREOF.
AEP GENERATING COMPANY
BY: /s/ A. A. PENA -------------------------------------- (A. A. PENA, VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER)
Date: March 19, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. THE SIGNATURE OF EACH OF THE UNDERSIGNED SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO THE ABOVE-NAMED COMPANY AND ANY SUBSIDIARIES THEREOF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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.
BY: /s/ H. W. FAYNE -------------------------------- (H. W. FAYNE, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER)
Date: March 19, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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 SIGNATURE OF THE UNDERSIGNED COMPANY SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO SUCH COMPANY AND ANY SUBSIDIARIES THEREOF.
APPALACHIAN POWER COMPANY
BY: /s/ A. A. PENA -------------------------------------- (A. A. PENA, VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER)
Date: March 19, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. THE SIGNATURE OF EACH OF THE UNDERSIGNED SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO THE ABOVE-NAMED COMPANY AND ANY SUBSIDIARIES THEREOF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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 SIGNATURE OF THE UNDERSIGNED COMPANY SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO SUCH COMPANY AND ANY SUBSIDIARIES THEREOF.
COLUMBUS SOUTHERN POWER COMPANY
BY: /s/ A. A. PENA -------------------------------------- (A. A. PENA, VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER)
Date: March 19, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. THE SIGNATURE OF EACH OF THE UNDERSIGNED SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO THE ABOVE-NAMED COMPANY AND ANY SUBSIDIARIES THEREOF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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 SIGNATURE OF THE UNDERSIGNED COMPANY SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO SUCH COMPANY AND ANY SUBSIDIARIES THEREOF.
INDIANA MICHIGAN POWER COMPANY
BY: /s/ A. A. PENA -------------------------------------- (A. A. PENA, VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER)
Date: March 19, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. THE SIGNATURE OF EACH OF THE UNDERSIGNED SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO THE ABOVE-NAMED COMPANY AND ANY SUBSIDIARIES THEREOF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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 SIGNATURE OF THE UNDERSIGNED COMPANY SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO SUCH COMPANY AND ANY SUBSIDIARIES THEREOF.
KENTUCKY POWER COMPANY
BY: /s/ A. A. PENA -------------------------------------- (A. A. PENA, VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER)
Date: March 19, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. THE SIGNATURE OF EACH OF THE UNDERSIGNED SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO THE ABOVE-NAMED COMPANY AND ANY SUBSIDIARIES THEREOF.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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 SIGNATURE OF THE UNDERSIGNED COMPANY SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO SUCH COMPANY AND ANY SUBSIDIARIES THEREOF.
OHIO POWER COMPANY
BY: /s/ A. A. PENA -------------------------------------- (A. A. PENA, VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER)
Date: March 19, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. THE SIGNATURE OF EACH OF THE UNDERSIGNED SHALL BE DEEMED TO RELATE ONLY TO MATTERS HAVING REFERENCE TO THE ABOVE-NAMED COMPANY AND ANY SUBSIDIARIES THEREOF.
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INDEPENDENT AUDITORS' REPORT
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES:
We have audited the consolidated financial statements of American Electric Power Company, Inc. and its subsidiaries and the financial statements of certain of its subsidiaries, listed in Item 14 herein, as of December 31, 1998 and 1997, and for each of the three years in the period ended December 31, 1998, and have issued our reports thereon dated February 23, 1999; such financial statements and reports are included in your respective 1998 Annual Report and are incorporated herein by reference. Our audits also included the financial statement schedules of American Electric Power Company, Inc. and its subsidiaries and of certain of its subsidiaries, listed in Item 14. These financial statement schedules are the responsibility of the respective Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedules, when considered in relation to the corresponding basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP Columbus, Ohio February 23, 1999
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EXHIBIT INDEX
Certain of the following exhibits, designated with an asterisk(*), are filed herewith. The exhibits not so designated have heretofore been filed with the Commission and, pursuant to 17 C.F.R. 229.10(d) and 240.12b-32, are incorporated herein by reference to the documents indicated in brackets following the descriptions of such exhibits. Exhibits, designated with a dagger (+), are management contracts or compensatory plans or arrangements required to be filed as an exhibit to this form pursuant to Item 14(c) of this report.
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** Certain instruments defining the rights of holders of long-term debt of the registrants included in the financial statements of registrants filed herewith have been omitted because the total amount of securities authorized thereunder does not exceed 10% of the total assets of registrants. The registrants hereby agree to furnish a copy of any such omitted instrument to the SEC upon request.
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