-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RxJ0V9kKNIP/ohXViwxUE14RNsfsDav0BV/xCC4Iv57FrnPg97fWRvc2InOsqn8e kDT7UWYxi32F5JPbyIyzfA== 0000018540-98-000047.txt : 19980504 0000018540-98-000047.hdr.sgml : 19980504 ACCESSION NUMBER: 0000018540-98-000047 CONFORMED SUBMISSION TYPE: U5S PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980501 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL & SOUTH WEST CORP CENTRAL INDEX KEY: 0000018540 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 510007707 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U5S SEC ACT: SEC FILE NUMBER: 012-00029 FILM NUMBER: 98607685 BUSINESS ADDRESS: STREET 1: 1616 WOODALL RODGERS FRWY CITY: DALLAS STATE: TX ZIP: 75202 BUSINESS PHONE: 2147541000 U5S 1 U5S SECURITIES AN EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM U5S ANNUAL REPORT For the Year Ended December 31, 1997 Filed pursuant to the Public Utility Holding Company Act of 1935 by CENTRAL AND SOUTH WEST CORPORATION 1616 Woodall Rodger Freeway, Dallas, Texas 75202-1234 and SOUTHWESTERN ELECTRIC POWER COMPANY 428 Travis Street, Shreveport, Louisiana 71156-0001 (Name and address of each registered holding company in the system) TABLE OF CONTENTS PAGE ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997 2 - 13 ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS 14 ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES 14 ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES 14 ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES 15 - 18 ITEM 6. OFFICERS AND DIRECTORS Part I. Name, principal business address and positions held as of December 31, 1997 19 - 46 Part II. Financial connections as of December 31, 1997 47 Part III. Compensation and other related information 48 ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS 49 ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS Part I. Intercompany sales and service 50 Part II. Contracts to purchase services or goods between any System company and any affiliate 50 Part III. Employment of any person by any System company for the performance on a continuing basis of management services 50 - 51 ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES 52 - 57 ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS Index to Financial Statements 58 - 59 Reports of Independent Public Accountants 60 - 61 Financial Statements 62 - 77 Exhibits 78 - 85 SIGNATURES 86 - 87 ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997.
NUMBER OF COMMON % OF ISSUER OWNER'S SHARES VOTING BOOK BOOK NAME OF COMPANY OWNED POWER VALUE (1) VALUE (1) BUSINESS TYPE (thousands) (thousands) - -------------------------------------- ---------- ---------- ----------- ---------- ------------------------ CENTRAL AND SOUTH WEST CORPORATION (CSW OR Holding Company THE CORPORATION) CENTRAL POWER AND LIGHT COMPANY 6,755,535 100 $1,407,170 $1,407,170 Electric Utility (CPL) PUBLIC SERVICE COMPANY OF OKLAHOMA 9,013,000 100 474,226 474,225 Electric Utility (PSO) Ash Creek Mining Company 383,904 100 45 45 Coal Mining SOUTHWESTERN ELECTRIC POWER COMPANY 7,536,640 100 704,709 704,709 Electric Utility (SWEPCO) The Arklahoma Corporation 238 47.6 360 135 Electric Transmission Southwest Arkansas Utilities 100 100 10 10 Inactive Corporation WEST TEXAS UTILITIES COMPANY (WTU) 5,488,560 100 258,929 258,929 Electric Utility CENTRAL AND SOUTH WEST SERVICES, 10,000 100 100 100 Service Company INC. (CSWS) CSW LEASING, INC. (CSWL) 800 80 15,781 12,625 Lease Trans.Equip. CSW CREDIT, INC. (CREDIT) 247 100 54,174 54,174 Factor Accounts Rec CSW COMMUNICATIONS, INC. (COMM) 1,000 100 (13, 475) (13,475) Communication Services (Effective March 11, 1998, the name was changed to C3 Communications, Inc.) CSWC Southwest Holdings, Inc. (2) 100 100 4,745 4,745 Communication Services CSWC TeleChoice Management, 100 100 48 48 Communication Services Inc. (3) CSW/ICG ChoiceCom Management, See (4) 50 48 48 Communication Services L.L.C. (4) CSWC TeleChoice, Inc. (5) 100 100 4,896 4,896 Communication Services CSW/ICG ChoiceCom, L.P. (6) See (6) 50 4,743 4,743 Communication Services CSW ENERGY, INC. (CSWE) 1,000 100 85,749 85,749 Independent Power CSW Development-I, Inc. (CSWD-I) 1,000 100 47,005 47,005 Independent Power Polk Power GP II, Inc. (7) 500 50 151 75 Independent Power Polk Power GP, Inc. (8) 500 50 111 55 Independent Power
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997.
NUMBER OF COMMON % OF ISSUER OWNER'S SHARES VOTING BOOK BOOK NAME OF COMPANY OWNED POWER VALUE (1) VALUE (1) BUSINESS TYPE (thousands) (thousands) - -------------------------------------- ---------- ---------- ----------- ---------- ------------------------ Orange Cogeneration GP II, Inc.(9) 500 50 70 35 Independent Power Orange Cogeneration G.P., 500 50 16 8 Independent Power Inc. (10) CSW Mulberry II, Inc. (11) 1,000 100 23,988 23,988 Independent Power CSW Mulberry, Inc. (12) 1,000 100 26,766 26,766 Independent Power Polk Power Partners, LP (13) See (13) See (13) 55,049 25,735 Independent Power Noah I Power GP, Inc. (14) 1,000 100 (16) (16) Independent Power Noah I Power Partners, LP (15) See (15) See (15) 16,779 16,024 Independent Power Brush Cogeneration Partners (16) See (16) See (16) 33,356 16,678 Independent Power CSW Orange II, Inc. (17) 1,000 100 1 1 Independent Power CSW Orange, Inc. (18) 1,000 100 4,163 4,163 Independent Power Orange Cogeneration Limited See (19) See (19) 1,513 764 Independent Power Partnership (19) Orange Cogen Funding Corp. (20) 1,000 100 1 1 Independent Power CSW Development-II, Inc. (CSWD-II) 1,000 100 (3,999) (3,999) Dormant CSW Ft. Lupton, Inc. (CSWFL) 1,000 100 109,022 109,022 Independent Power Thermo Cogeneration Partnership, See (21) See (21) (6,692) (3,346) Independent Power L.P. (21) Newgulf Power Venture, Inc. 1,000 100 9,997 9,997 Independent Power (NEWGULF) (22) CSW Sweeny GP I, Inc. (SWEENY) (23) 1,000 100 1,500 1,500 Independent Power CSW Sweeny GP II, Inc. (24) 1,000 100 300 300 Independent Power CSW Sweeny LP I, Inc. (SWEENY)(25) 1,000 100 1,470 1,470 Independent Power CSW Sweeny LP II, Inc. (26) 1,000 100 14,700 14,700 Independent Power Sweeny Cogeneration Limited See (27) See (27) 30,000 30,000 Independent Power Partnership (27) CSW Development-3, Inc. (CSWD3)(28) See (28) See (28) See (28) See (28) Dormant CSW Northwest GP, Inc. (29) See (29) See (29) See (29) See (29) Dormant CSW Northwest LP, Inc. (30) See (30) See (30) See (30) See (30) Dormant CSW Power Marketing, Inc. (31) See (31) See (31) See (31) See (31) Dormant CSW Nevada, Inc. (32) See (32) See (32) See (32) See (32) Dormant CSW Services International, Inc.(33) See (33) See (33) See (33) See (33) Non-regulated Services Diversified Energy Contractors See (34) See (34) Nominal Nominal Non-regulated Services Company, LLC (34) DECCO II LLC (35) See (35) See (35) See (35) See (35) Non-regulated Services Diversified Energy Contractors, See (36) See (36) See (36) See (36) Non-regulated Services L.P. (36)
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997.
NUMBER OF COMMON % OF ISSUER OWNER'S SHARES VOTING BOOK BOOK NAME OF COMPANY OWNED POWER VALUE (1) VALUE (1) BUSINESS TYPE (thousands) (thousands) - -------------------------------------- ---------- ---------- ----------- ---------- ------------------------ CSW INTERNATIONAL, INC. (CSWI) (37) 1,000 100 810,296 810,296 International Activities CSW International Two, Inc. (CSWI2) 1,000 100 913,562 913,562 Investment Company CSW UK Finance Company (Finco)(38)427,275,002 90 802,319 722,087 Investment Company CSW Investments (39) 699,750,001 93 1,241,700 1,154,782 Investment Company SEEBOARD Group plc (40) 50,001 100 4,147 4,147 Holding Company Seeboard (Generation) Limited (41) 1,000 100 605 605 Holding Company Medway Power Limited 3,750 37.5 0 0 Generation Seeboard Natural Gas Limited (42) 2 100 (375) (375) Holding Company Beacon Gas Limited 3,000,000 50 (7,028) (3,514) Gas supply SEEBOARD plc (43) 250,493,703 100 616,592 616,592 Foreign Utility Appliance Protect Limited 2 100 0 0 Dormant Direct Power Limited 2 100 0 0 Dormant Directricity Limited 2 100 0 0 Dormant Electricity (UK) Limited 2 100 0 0 Dormant Electricity 2000 Limited 2 100 0 0 Dormant Energy Express Limited 2 100 0 0 Dormant First Electricity Limited 2 100 0 0 Dormant First Gas Limited 2 100 0 0 Dormant Gas 2000 Limited 2 100 0 0 Dormant Home Electricity Company Limited 2 100 0 0 Dormant Home Energy Company Limited 2 100 0 0 Dormant Home Gas Company Limited 2 100 0 0 Dormant Home Power Company Limited 2 100 0 0 Dormant Horizon Natural Gas Limited 2 100 0 0 Dormant Light & Power (UK) Limited 2 100 0 0 Dormant Longfield Insurance Company 500,000 100 968 968 Insurance Limited Powercare Limited 2 100 0 0 Dormant Premier Electricity Limited 2 100 0 0 Dormant Premier Utilities Limited 2 100 0 0 Dormant Seeb Limited 10,000 100 22 22 Investment Company
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997.
NUMBER OF COMMON % OF ISSUER OWNER'S SHARES VOTING BOOK BOOK NAME OF COMPANY OWNED POWER VALUE (1) VALUE (1) BUSINESS TYPE (thousands) (thousands) - -------------------------------------- ---------- ---------- ----------- ---------- ------------------------ Seeboard (Consulting)Limited 2 100 0 0 Dormant Seeboard (Distribution)Limited (44) 2 100 0 0 Dormant Seeboard Employment 2 100 56 56 Employment Agency Services Limited (45) Seeboard Insurance Company 1,000,000 100 13,177 13,177 Insurance Limited Seeboard Final Salary Pension Plan Trustee Company Limited 2 100 0 0 Trustee Company Seeboard International Limited 500,000 100 705 705 Overseas Consultancy SEEBOARD Pension Investment Plan Trustee Company Limited 2 100 0 0 Trustee Company SEEBOARD Powerlink Limited 2 100 0 0 Dormant Seeboard Share Scheme Trustees 2 100 0 0 Trustee Company Limited SEEBOARD Trading Limited 10,000,000 100 18,670 18,670 Retail and Contracting Seepower Limited 10,000 100 (5,373) (5,373) Investment Company Selectricity Limited 2 100 0 0 Dormant South Coast Power Limited 2 50 0 0 Dormant South Eastern Electricity 2 100 0 0 Dormant Board Limited South Eastern Electricity Limited 2 100 0 0 Dormant South Eastern Services Limited 2 100 0 0 Dormant South Eastern Utilities Limited 2 100 0 0 Dormant Southern Gas Limited 500,000 100 (12,705) (12,705) Gas Supply Torch Natural Gas Limited 2 100 0 0 Dormant UK Data Collection Services 155,000 8.4 254,990 254,990 Data Collection Service Limited UK Electricity Limited 2 100 0 0 Dormant UK Light and Power Limited 2 100 0 0 Dormant CSW International Three, Inc.(CSWI3)(46) 1,000 100 Nominal Nominal Investment Company CSW International (U.K), Inc. (47) See (47) See (47) See (47) See (47) Dormant Energia Internacional de CSW, S.A. 50,000 100 120 120 Investment Company de C.V. (48) Aceltek, S. de R.L. de C.V. (49) See (49) 49.99 218 109 Holding Company Enertek, S.A. de C.V. (50) 4,910 99.89 144 144 Mexican Cogen Facility
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997.
NUMBER OF COMMON % OF ISSUER OWNER'S SHARES VOTING BOOK BOOK NAME OF COMPANY OWNED POWER VALUE (1) VALUE (1) BUSINESS TYPE (thousands) (thousands) - -------------------------------------- ---------- ---------- ----------- ---------- ------------------------ Cinergy, S. de R.L. de C.V.(51) See (51) 99.99 39 39 Service Company Servicios Corporativos Industriales del Noreste, S.A. de C.V.(SCIN) (52) 8,380 94.38 150 142 Service Company Servicios Industriales y Administrativos del Noreste, S. de R.L. de C.V. (SIAN) (53) See(53) 51.12 3,339 1,707 Gas Pipeline Company CSW International, Inc. (Cayman) (54) 1,000 100 80,050 80,050 International Activities CSW Vale L.L.C. (Cayman) (55) 1,000 99 83,960 83,960 International Activities Empresa de Electricidade Vale de Paranapanema S.A. (56) 21,498,447 21.42 319,725 117,211 Brazilian Utility Co. CSW Power do Brasil Ltda. (57) See (57) See (57) See (57) See (57) International Activities S.C.E.L. Empreendimentos e Participacoes Ltda. (58) See (58) See (58) See (58) See (58) International Activities CSW Coelba L.L.C. (Cayman) (59) See (59) See (59) See (59) See (59) International Activities Coelba Funding Company L.L.C. (Cayman) (60) See (60) See (60) See (60) See (60) International Activities Latin American Energy Holdings, Inc.(61) See (61) See (61) Nominal Nominal International Activities Chile Energy Holdings L.L.C.(Cayman)(62) See (62) See (62) 526 526 International Activities Sol Energia Holdings I, Limitada(63) See (63) See (63) See (63) See (63) International Activities Sol Energia Holdings II,Limitada (64) See (64) See (64) See (64) See (64) International Activities Sol Energia, Limitada (65) See (65) See (65) See (65) See (65) International Activities CSW International Energy Development Ltd. (66) See (66) See (66) Nominal Nominal International Activities Tenaska CSW International Ltd.(67) See (67) See (67) See (67) See (67) International Activities ENERSHOP INC. (ENERSHOP) 1,000 100 (4,339) (4,339) Energy Services CSW ENERGY SERVICES, INC. (ESI)(68) 1,000 100 (964) (964) Energy Services
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS. (CONTINUED) (1) Table reflects investment in common stock or other equity securities only. CSW has established a money pool to coordinate short-term borrowings for certain subsidiaries and also incurs borrowings outside the money pool for other subsidiaries through the issuance of its commercial paper as authorized by SEC Order. Money pool balances are reflected as advances to or from affiliates, which are included as cash and temporary cash investments and short-term debt, respectively, on the balance sheets of System companies. (2) CSWC Southwest Holdings, Inc., a Delaware corporation, was organized on December 6, 1996 and holds 100% of the outstanding shares of CSWC TeleChoice Management, Inc. and 100% of CSWC TeleChoice, Inc. CSW Communications, Inc. holds 100% of the outstanding shares of CSWC Southwest Holdings, Inc. (3) CSWC TeleChoice Management, Inc., a Delaware corporation, was organized on December 6, 1996 and holds 100% of the membership units of CSW/ICG ChoiceCom Management, L.L.C. CSWC Southwest Holdings, Inc. holds 100% of the outstanding shares of CSWC TeleChoice Management, Inc. (4) CSW/ICG ChoiceCom Management, L.L.C., a Delaware limited liability company, was organized on December 13, 1996 and holds a 1% general partnership interest in CSW/ICG ChoiceCom, L.P. CSWC TeleChoice Management, Inc. holds 100% of the membership units of CSW/ICG ChoiceCom Management, L.L.C. (5) CSWC TeleChoice, Inc., a Delaware corporation, was organized on December 6, 1996 and holds a 99% limited partership interest in CSW/ICG ChoiceCom, L.P. CSWC Southwest Holdings, Inc. holds 100% of the outstanding shares of CSWC TeleChoice, Inc. (6) CSW/ICG ChoiceCom, L.P., a Delaware limited partnership, was organized on December 13, 1996 to provide telephone and other communication services, initially to Austin, Texas, Corpus Christi, Texas and Tulsa, Oklahoma. CSWC TeleChoice, Inc. holds a 99% limited partnership interest and CSW/ICG ChoiceCom Management, L.L.C., holds a 1% general partnership interest in CSW/ICG ChoiceCom, L.P. (7) Polk Power GP II, Inc., a Delaware corporation, was organized on March 20, 1995 and holds 100% of the outstanding shares of Polk Power GP, Inc. CSW Development-I, Inc. holds 50% of the outstanding shares of Polk Power GP II, Inc. (8) Polk Power GP, Inc., a Delaware corporation, was organized on September 18, 1991 and holds a 1% general partnership interest in Polk Power Partners, L. P. Polk Power GP II, Inc. holds 100% of the outstanding shares of Polk Power GP, Inc. (9) Orange Cogeneration GP II, Inc., a Delaware corporation, was organized on March 16, 1995 and holds 100% of the outstanding shares of Orange Cogeneration G.P., Inc. CSW Development-I, Inc. holds 50% of the outstanding shares of Orange Cogeneration GP II, Inc. ITEM 1. SYSTEM COMPANIES AND INVESTMENTS. (CONTINUED) (10)Orange Cogeneration GP, Inc., a Delaware corporation, was organized on February 5, 1993 and holds a 1% general partnership interest in Orange Cogeneration Limited Partnership. Orange Cogeneration GP II, Inc., holds 100% of the outstanding shares of Orange Cogeneration G.P., Inc. (11)CSW Mulberry II, Inc., a Delaware corporation, was organized on March 21, 1995 and holds 100% of the outstanding shares of CSW Mulberry, Inc. CSW Development-I, Inc. holds 100% of the outstanding shares of CSW Mulberry II, Inc. (12)CSW Mulberry, Inc., a Delaware corporation, was organized on February 3, 1994 and holds a 45.75% limited partnership interest in Polk Power Partners, L. P. CSW Mulberry II, Inc. holds 100% of the outstanding shares of CSW Mulberry, Inc. (13)Polk Power Partners, L. P., a Delaware limited partnership, was organized on February 20, 1992 to own and operate the Mulberry cogeneration project. CSW Mulberry, Inc. holds a 45.75% limited partnership interest and Polk Power GP, Inc. holds a 1% general partnership interest in Polk Power Partners, L. P. Under the Limited Partnership Agreement for Polk Power Partners, L. P., Polk Power GP, Inc. generally has the power and authority to manage the affairs of Polk Power Partners, L. P. and CSW Mulberry, Inc. has such rights and powers as are customary for a limited partner, including but not limited to the right (in proportion to its interest) to consent to major transactions. (14)Noah I Power GP, Inc., a Delaware corporation, was organized on May 14, 1991 and holds a 1% general partner interest in Noah I Power Partners, L. P. CSW Development-I, Inc. holds 100% of the outstanding shares of Noah I Power GP, Inc. (15)Noah I Power Partners, L. P., a Delaware limited partnership, was organized on May 16, 1991 to own and/or operate cogeneration projects or interests therein. CSW Development-I, Inc. holds a 94.5% limited partnership interest and Noah I Power GP, Inc. holds a 1% general partnership interest in Noah I Power Partners, L. P. Under the Limited Partnership Agreement for Noah I Power Partners, L. P., Noah I Power GP, Inc. generally has the power and authority to manage the affairs of Noah I Power Partners, L. P., and CSW Development-I, Inc. has such rights and powers as are customary for a limited partner, including but not limited to the right (in proportion to its interest) to consent to certain major transactions. (16)Brush Cogeneration Partners is a Delaware general partnership organized on November 1, 1991. Noah I Power Partners, L. P. holds a 50% general partnership interest in Brush Cogeneration Partners. Brush Cogeneration Partners was formed to invest in certain cogeneration projects, including the Brush II project authorized by SEC Order Rel. No. 35-25399. Brush Cogeneration Partners is managed by a management committee, with Noah I Power Partners, L. P. having the power and authority to manage the affairs of Brush Cogeneration Partners. (17)CSW Orange II, Inc., a Delaware corporation, was organized on March 16, 1995 and holds 100% of the outstanding shares of CSW Orange, Inc. CSW Development-I, Inc. holds 100% of the outstanding shares of CSW Orange II, Inc. ITEM 1. SYSTEM COMPANIES AND INVESTMENTS. (CONTINUED) (18)CSW Orange, Inc., a Delaware corporation, was organized on April 21, 1993 to be a limited partner in Orange Cogeneration Limited Partnership. CSW Orange, Inc. holds a 49.5% limited partnership interest in Orange Cogeneration Limited Partnership. CSW Orange II, Inc. holds 100% of the outstanding shares of CSW Orange, Inc. (19)Orange Cogeneration Limited Partnership, a Delaware limited partnership, was organized on February 5, 1993 to own and operate the Orange Cogeneration project. CSW Orange, Inc. holds a 49.5% limited partnership interest and Orange Cogeneration G.P., Inc. holds a 1% general partnership interest in Orange Cogeneration Limited Partnership. Under the Limited Partnership Agreement for Orange Cogeneration Limited Partnership, Orange Cogeneration G.P., Inc. generally has the power and authority to manage the affairs of Orange Cogeneration Limited Partnership and CSW Orange, Inc. has such rights and powers as are customary for a limited partner, including but not limited to the right (in proportion to its interest) to consent to major transactions. (20)Orange Cogen Funding Corp., a Delaware corporation, was organized on December 23, 1996 to raise funds from the sale of bonds and loan the proceeds to the Orange Cogeneration Limited Partnership while obtaining liens on the partnership assets for the benefit of the bond Trustee. Orange Cogeneration Limited Partnership holds 100% of the outstanding shares of Orange Cogen Funding Corp. (21)Thermo Cogeneration Partnership, L.P., a Delaware limited partnership, was organized April 7, 1993 to own and operate the Ft. Lupton cogeneration project. CSW Ft. Lupton, Inc. holds a 49% limited partnership interest and a 1% general partnership interest. (22)Newgulf Power Venture, Inc., a Delaware corporation, was organized on October 13, 1994 to own the Texas Gulf project. Newgulf Power Venture, Inc. holds 100% of the Texas Gulf project. CSW Energy, Inc. holds 100% of the outstanding shares of Newgulf Power Venture, Inc. (23)CSW Sweeny GP I, Inc., a Delaware corporation, was organized on September 6, 1995 to hold a 100% interest in CSW Sweeny GP II, Inc. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Sweeny GP I, Inc. (24)CSW Sweeny GP II, Inc., a Delaware corporation, was organized on September 6, 1995 and holds a 1% general partnership interest in Sweeny Cogeneration Limited Partnership. CSW Sweeny GP I, Inc. holds 100% of the outstanding shares of CSW Sweeny GP II, Inc. (25)CSW Sweeny LP I, Inc., a Delaware corporation, was organized on September 6, 1995 and holds 100% of the outstanding stock of CSW Sweeny LP II, Inc. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Sweeny LP I, Inc. (26)CSW Sweeny LP II, Inc., a Delaware corporation, was organized on September 6, 1995 and holds a 49% limited partnership interest in Sweeny Cogeneration Limited Partnership. CSW Sweeny LP I, Inc. holds 100% of the outstanding shares of CSW Sweeny LP II, Inc. (27)Sweeny Cogeneration Limited Partnership, a Delaware limited partnership, was organized on September 15, 1995 to own and construct the Sweeny project. CSW Sweeny LP II, Inc. holds a 49% limited partnership interest and CSW Sweeny GP II, Inc. holds a 1% general partnership interest in Sweeny Cogeneration Limited Partnership. ITEM 1. SYSTEM COMPANIES AND INVESTMENTS. (CONTINUED) (28)CSW Development-3, Inc., a Delaware corporation, was organized on October 25, 1995. There were no assets or activity for CSW Development-3, Inc., during 1997. On December 15, 1995, CSW Development-3, Inc. was granted EWG status. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Development-3, Inc. (29)CSW Northwest GP, Inc., a Delaware corporation, was organized on June 29, 1995. There were no assets or activity for CSW Northwest GP, Inc. in 1997. On October 3, 1996, CSW Northwest GP, Inc. was granted EWG status. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Northwest GP, Inc. (30)CSW Northwest LP, Inc., a Delaware corporation, was organized on June 29, 1995. There were no assets or activity for CSW Northwest LP, Inc. in 1997. On October 3, 1995, CSW Northwest LP, Inc. was granted EWG status. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Northwest LP, Inc. (31)CSW Power Marketing, Inc., a Delaware corporation, was organized on March 8, 1996. There were no assets or activity for CSW Power Marketing, Inc. in 1997. On May 1, 1996 CSW Power Marketing, Inc. was granted EWG status. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Power Marketing, Inc. (32)CSW Nevada, Inc., a Delaware corporation, was organized on June 29, 1993. There were no assets or activity for CSW Nevada, Inc. in 1997. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Nevada, Inc. (33)CSW Services International, Inc. , a Delaware corporation, was organized on March 19,1997. CSW Services International, Inc. provides non-regulated services to power producers. CSW Energy, Inc. holds 100% of the outstanding shares of CSW Services, International, Inc. (34)Diversified Energy Contractors Company, LLC, a Delaware limited liability company, was organized on July 3, 1997. CSW Energy, Inc. holds a 90% interest and is the managing member of Diversified Energy Contractors Company, LLC. (35)DECCO II LLC, a Delaware limited liability company, was organized on August 8, 1997. Diversified Energy Contractors Company, LLC holds 100% of the outstanding shares of DECCO II LLC. (36)Diversified Energy Contractors, L.P., a Delaware limited partnership, was organized on August 8, 1997. Diversified Energy Contractors Company, LLC holds a 1% general partnership interest and a 98.00% limited partnership interest and DECCO II LLC holds a 1% limited partnership interest.in Diversified Energy Contractors, L.P. (37)CSW International, Inc., a Delaware corporation, was organized on November 9, 1994. CSW International, Inc., was organized to pursue power generation, transmission, and distribution projects outside of the United States. CSW holds 100% of the outstanding shares of CSW International, Inc. ITEM 1. SYSTEM COMPANIES AND INVESTMENTS. (CONTINUED) (38)CSW UK Finance Company, a private unlimited company having share capital, with its registered office situated in the United Kingdom, was incorporated on December 17, 1996. As of December 31, 1997, CSW UK Finance Company held 93% of CSW Investments. CSW International Two, Inc. holds a 90% interest and CSW International Three holds a 10% interest in CSW UK Finance Company. (39)CSW Investments, a private unlimited company having share capital, was formed on November 3, 1995, and held 100% of CSW (UK) plc and holds 100% of SEEBOARD Group plc. CSW Investments, a UK organized entity, was formed to carry on business as a holding and investment company. As of December 31, 1997, CSW UK Finance Company held a 93% interest and CSW International Three, Inc. held a 7% interest in CSW Investments. (40)SEEBOARD Group plc, a public company limited by shares, was incorporated on April 18, 1996, with its registered office situated in the United Kingdom. SEEBOARD Group plc owns 100% of SEEBOARD plc, a UK utility company. CSW Investments holds 100% of the shares of SEEBOARD Group plc. (41)SEEBOARD plc's interest in SEEBOARD (Generation) Limited was transferred to SEEBOARD Group plc effective January 1, 1997. (42)SEEBOARD plc's interest in SEEBOARD Natural Gas Limited was transferred to SEEBOARD Group, plc effective January 1, 1997. (43)SEEBOARD plc, which is registered in Crawley, West Sussex, England, is a public company limited by shares and came into existence as a result of the restructuring and subsequent privatization of the United Kingdom electricity industry in 1990. SEEBOARD plc's primary regulated businesses are the distribution and supply of electricity within its southeast England service area. SEEBOARD plc is also involved in other activities, including electricity generation, electrical contracting and retailing. SEEBOARD Group plc holds 100% of the shares of SEEBOARD plc. (44)SEEBOARD (Distribution) Limited changed its name to Meterpoint Limited on February 16, 1998. (45)SEEBOARD (Property Development) Limited changed its name to SEEBOARD Employment Services on April 2, 1997. (46)CSW International Three, Inc., a Delaware corporation, was formed on November 3, 1995 and holds a 10% ownership interest in CSW UK Finance Company and a 7% ownership interest in CSW Investments. CSW International, Inc. holds 100% of the shares of CSW International Three, Inc. (47)CSW International (U.K.), Inc., a Delaware corporation, was formed on September 14, 1995. CSW International, Inc. holds 100% of the outstanding shares of CSW International (U.K.), Inc. ITEM 1. SYSTEM COMPANIES AND INVESTMENTS. (CONTINUED) (48)Energia Internacional de CSW, S.A. de C.V., a Mexican variable capital corporation, was organized on April 10, 1996 to acquire or participate in the capital stock or patrimony of other civil or commercial operations. CSW International, Inc. holds 99.99% of the outstanding shares of Energia Internacional de CSW, S.A. de C.V. (49)Aceltek, S. de R.L. de C.V., a Mexican limited liability partnership, was organized in 1995 to act as a holding company for partnership interests. Energia Internacional de CSW, S.A. de C.V. owns 49.99% of Aceltek, S. de R.L. de C.V. (50)Enertek, S.A. de C.V. , a Mexican variable capital corporation, was organized in 1995. Aceltek, S. de R.L. de C.V. owns 99.89% of Enertek, S.A. de C.V. with Energia Internacional de CSW, S.A. de C.V. holding an additional 0.06% direct interest in Enertek, S.A. de C.V. (51)Cinergy, S. de R.L. de C.V., a Mexican limited liability partnership, was organized to act as a service company. Enertek, S.A. de C.V. owns 99.99% of Cinergy, S. de R.L. de C.V. (52)Servicios Corporativos Industriales del Noreste, S.A. de C.V., a Mexican variable capital corporation, was organized to act as a service company. Enertek, S.A. de C.V. owns 94.38% of Servicios Corporativos Industriales del Noreste, S.A. de C.V., with Aceltek, S. de R.L. de C.V. holding an additional small direct interest in Servicios Corporativos Industriales del Noreste, S.A. de C.V. (53)Servicios Industriales y Administrativos del Noreste, S. de R.L. de C.V., a Mexican limited liability partnership, was organized to own and operate a gas pipeline. Enertek, S.A. de C.V. owns 51.12% of Servicios Industriales y Administrativos del Noreste, S. de R.L. de C.V. (54)CSW International, Inc. (Cayman), a Cayman Islands exempted company, was duly organized under the laws of the Cayman Islands on July 7, 1995. CSW International, Inc. holds 100% of the outstanding shares of CSW International, Inc. (Cayman). (55)CSW Vale L.L.C., a Cayman Islands exempted company, was duly organized under the laws of the Cayman Islands on October 21, 1996. CSW International, Inc. (Cayman) holds approximately 99% of the outstanding shares of CSW Vale L.L.C., with CSW International, Inc. holding the remaining 1%. (56)Empresa de Eletricidade Vale Paranapanema S.A. is a Brazilian distribution utility company. CSW Vale L.L.C. holds 21.42% of the outstanding shares of Vale's common stock and 100% of Vale's Series "B" preferred stock. (57)CSW Power do Brasil Ltda., a Brazilian limited liability company, was organized on July 22, 1997. CSW Vale L.L.C. holds approximately 99.9% of CSW Power do Brazil Ltda. with CSW International, Inc. (Cayman) holding the remaining 0.1%. (58)S.C.E.L. Empreendimentos e Participacoes Ltda. , a Brazilian limited liability company, was acquired on November 3, 1997. CSW Vale L.L.C. holds approximately 98.8% of S.C.E.L.. Empreendimentos e Participacoes Ltda. with CSW International, Inc. (Cayman) holding the remaining 1.2%. ITEM 1. SYSTEM COMPANIES AND INVESTMENTS. (CONTINUED) (59)CSW Coelba L.L.C. , a Cayman Islands exempted company, was duly organized under the laws of the Cayman Islands on July 11, 1997. CSW International, Inc. holds 100% of the outstanding shares of CSW Coelba L.L.C. (60)Coelba Funding Company L.L.C. , a Cayman Islands exempted company, was duly organized under the laws of the Cayman Islands on August 5, 1997. CSW Coelba L.L.C. holds 50% of the outstanding shares of Coelba Funding Company L.L.C. and Empresa de Eletricidade Vale Paranapanema S.A. holds the remaining 50%. (61)Latin American Energy Holdings, Inc., a Delaware corporation, was organized on August 22, 1997. There were no assets or activity for Latin American Energy Holdings, Inc. for 1997. CSW International, Inc. holds 100% of all outstanding shares of Latin American Energy Holdings, Inc. (62)Chile Energy Holdings L.L.C., a Cayman Islands exempted company, was organized on August 22, 1997. CSW International, Inc. holds 90% of all outstanding shares of Chile Energy Holdings L.L.C. and Latin American Energy Holdings, Inc. holds the remaining 10%. (63)Sol Energia Holdings I, Limitada, a Chile exempted company, was organized on August 29, 1997. There were no assets or activity for Sol Energia Holdings I, Limitada in 1997. Chile Energy Holdings L.L.C. holds 99.99% of all outstanding shares of Sol Energia Holdings I, Limitada and Latin American Energy Holdings, Inc. holds the remaining 0.01%. (64)Sol Energia Holdings II, Limitada, a Chile exempted company, was organized on September 23, 1997. There were no assets or activity for Sol Energia Holdings II, Limitada in 1997. Sol Energia Holdings I, Limitada holds 99.99% of all outstanding shares of Sol Energia Holdings II, Limitada and Latin American Energy Holdings, Inc. holds the remaining 0.01%. (65)Sol Energia, Limitada, a Chile exempted company, was organized on October 8, 1997. There were no assets or activity for Sol Energia, Limitada in 1997. Sol Energia Holdings II, Limitada holds 99.99% of all outstanding shares of Sol Energia, Limitada and Latin American Energy Holdings, Inc. holds the remaining 0.01%. (66)CSW International Energy Development Ltd., a private company limited by shares, was incorporated on April 3, 1997 with its registered office situated in Port Louis, Mauritius. CSW International, Inc. holds 100% of all outstanding shares of CSW International Energy Development Ltd. (67)Tenaska CSW International Ltd., a private company limited by shares, was incorporated on April 3, 1997 with its registered office situated in Port Louis , Mauritius. CSW International Energy Development Ltd. holds 50% of the outstanding shares of Tenaska CSW International Ltd. (68)CSW Energy Services, Inc. (ESI), a Delaware Corporation, was organized on September 24, 1997. ESI seeks to secure electricity supply business in states which soon will permit retail competition. CSW Corporation owns 100% of the outstanding shares of ESI. ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS. During 1997, all acquisitions or sales of utility assets were reported in a certificate filed pursuant to Rule 24. ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES. During 1997 all System securities issued, sold, pledged, guaranteed or assumed by any System company, were reported in a certificate filed pursuant to Rule 24. ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES. The following System securities were acquired, redeemed or retired by System companies during 1997. EXTINGUISHED (E) COMMISSION OR HELD FOR AUTHORIZATION NAME OF ISSUER AND CONSIDERATION FURTHER OR TITLE OF ISSUE (thousands) DISPOSITION(D) EXEMPTION - -------------------------------------------------------------------------------- CPL First Mortgage Bonds Series BB, 6.0%,due 1997 $200 E No authorization required (Retired at maturity) Preferred Stock 4.00% 3,992 E Rule 42 4.02% 4,431 E Rule 42 7.12% 25,867 E Rule 42 8.72% 50,454 E Rule 42 PSO Preferred Stock 4.00% 3,525 E Rule 42 and Oklahoma Corp Commission 4.24% 6,804 E Rule 42 and Oklahoma Corp Commission SWEPCO First Mortgage Bonds Series 1976A, 6.2%, due 2006 145 E Rule 42 Preferred Stock 5.00% 3,049 E Rule 42 4.65% 1,839 E Rule 42 4.28% 3,961 E Rule 42 6.95% Subject to mandatory redemption 7,194 E Rule 42 WTU Preferred Stock 4.40% 3,632 E Rule 42 ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES. (1). Aggregate number of investments in persons operating in the retail service areas. CARRYING GENERAL DESCRIPTION AGGREGATE VALUE OF TYPE OF "PERSONS INCLUDED" NUMBER (thousands) - --------------------------------------------------------- NONE (2). For securities not included in (1) above, provide the following: % OF OWNERS DESCRIPTION NUMBER VOTING BOOK NAME OF ISSUER OF SECURITY OF POWER VALUE NATURE OF ISSUER'S SHARES (THOUSANDS) BUSINESS - ----------------------------------------------------------------------------- PSO THE RIKA COMPANIES RIKA Management Membership The RIKA Companies Company,L.L.C. Units 50 4% $2,246 are engaged in the development and commercialization of computer automation Universal Power Membership technology for the Products Company, Units 48 4% $(127) electric power L.L.C. industry. Automated Membership Substation Units 71 4% $(61) Development Co., L.L.C. RC Training, Membership L.L.C. Units 48 4% $0 ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES. (CONTINUED) (2). For securities not included in (1) above, provide the following: OWNERS DESCRIPTION NUMBER % OF BOOK NAME OF ISSUER OF OF VOTING VALUE NATURE OF ISSUER'S SECURITY SHARES POWER (THOUSANDS) BUSINESS - -------------------------------------------------------------------------------- PSO (CONTINUED) Excel Energy Class A, Excel Energy Technologies, Inc. voting, 4 0.0% $0 Technologies is common engaged in stock research, development and installation Class B, of proprietary, nonvoting, micro-processor common 648 NA $0 based energy stock control technology. Preferred, Series C, 590 3.3% $0 voting Preferred, Series E, nonvoting 12,459 NA $0 Preferred, Series F, nonvoting 1,749 NA $0 Nuvest, L.L.C. Membership Nuvest L.L.C. Units 700 4.9% $3,641 provides staffing services for electric utility power plants. ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES. (CONTINUED) (2). For securities not included in (1) above, provide the following: OWNERS DESCRIPTION NUMBER % OF BOOK NAME OF ISSUER OF OF VOTING VALUE NATURE OF ISSUER'S SECURITY SHARES POWER (THOUSANDS) BUSINESS - -------------------------------------------------------------------------------- PSO (CONTINUED) Scientech, Inc. Class A, Services, systems, voting 70,000 3.5% $3,307 and instruments, common which describe, stock regulate, monitor, and Class B, enhance the safety non-voting and reliability of common 436,000 N/A $0 electric utility stock power plant operations and and their environmental impacts Powerware Preferred Municipal water, Solutions, Inc. Series A, 18,333 4.0% $1,325 electric voting optimization software company Nonvoting 168,214 N/A $0 Utility Data Convertible Provides utility Resources, Inc. Preferred outsourcing of Stock 7,500 N/A $2,703 large customer nonvoting time differentiated meter reading and billing Common Stock 17,500 4.5% $0 voting Nonvoting 252,500 N/A $0 AEMT, Inc. Preferred Manufactures and Stock sells residential Series 1, surge protectors Class A 250,000 N/A $250 and power quality nonvoting devices for industrial customers ITEM 5. INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES. (CONTINUED) (2). For securities not included in (1) above, provide the following: OWNERS DESCRIPTION NUMBER % OF BOOK NAME OF ISSUER OF OF VOTING VALUE NATURE OF ISSUER'S SECURITY SHARES POWER (THOUSANDS) BUSINESS - -------------------------------------------------------------------------------- PSO (CONTINUED) AEMT, Inc. Preferred Manufactures and Stock sells residential Series 1 surge protectors Class B 781,250 N/A $1,250 and power quality nonvoting devices for industrial customers SEEBOARD PLC ` Electricity Common 20,000 4.9% $32,902 Trustee Company Pensions Trustee Stock Limited ESN Holdings Common 104 4.9% $171 Trustee Company Limited Stock Preference 50,000 N/A $82,255 Shares EA Technology Preference 362,500 N/A $569,349 Research Limited Shares COMM Brooks Fiber Common 121,200 N/A $3,090,600 Local Properties, Stock telecommunication Inc. services Infinitec Conv. 420,001 N/A $500,000 Local Communications Pref. telecommunication Series A services ITEM 6. OFFICERS AND DIRECTORS - PART I. The positions of officers and directors of all System companies as of December 31, 1997 were as follows. NAME AND ADDRESS POSITION CENTRAL AND SOUTH WEST CORPORATION Glenn Biggs (1) San Antonio, TX D Molly Shi Boren Norman, OK D E. R. Brooks Dallas, TX D,CM,&CEO Donald M. Carlton Austin, TX D Lawrence B. Connors Dallas, TX C T. J. Ellis Crawley, West D Sussex, UK Glenn Files (2) Dallas, TX D&EVP Joe H. Foy Kerrville, TX D T. M. Hagan Dallas, TX SVP Wendy G. Hargus Dallas, TX T William R. Howell Dallas, TX D Robert W. Lawless Tulsa, OK D Venita McCellon-Allen Dallas, TX SVP&AS Stephen J. McDonnell Dallas, TX VP Ferd. C. Meyer, Jr. Dallas, TX SVP&GC James L. Powell Fort McKavett, TX D Kenneth C. Raney, Jr. Dallas, TX VP,AGC&S Glenn D. Rosilier Dallas, TX SVP&CFO Richard L. Sandor Chicago, IL D Thomas V. Shockley, III Dallas, TX D,P,&COO Lloyd D. Ward (3) Newton, Iowa D (1) Mr. Biggs resigned from the CSW Board of Directors on March 18, 1998. (2) Mr. Files resigned from the CSW Board of Directors on January 21, 1998. (3) Mr. Ward resigned from the CSW Board of Directors on January 1, 1998. CENTRAL POWER AND LIGHT COMPANY John F. Brimberry Victoria, TX D E. R. Brooks Dallas, TX D Alice G. Crisp Corpus Christi, TX AS R. Russell Davis Tulsa, OK C M. Bruce Evans (1) Corpus Christi, TX D&P Glenn Files Dallas, TX D Ruben M. Garcia Laredo, TX D Wendy G. Hargus Dallas, TX T Nancy C. Johnson Corpus Christi, TX AS Robert A. McAllen Weslaco, TX D Pete J. Morales, Jr. Devine, TX D H. Lee Richards Harlingen, TX D J. Gonzalo Sandoval (2) Corpus Christi, TX D&GM Brenda J. Snider Corpus Christi, TX S Jana P. Soward Tulsa, OK AT Gerald E. Vaughn Corpus Christi, TX D (1) Mr. Evans resigned from the CPL Board of Directors and as President of CPL, February 1998. (2) Mr. Sandoval became General Manager/President of CPL, February 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION PUBLIC SERVICE COMPANY OF OKLAHOMA E. R. Brooks Dallas, TX D Billye R. Beach Tulsa, OK AS T. D. Churchwell Tulsa, OK D&P Harry A. Clarke Afton, OK D R. Russell Davis Tulsa, OK C Glenn Files Dallas, TX D Wendy G. Hargus Dallas, TX T Lina P. Holm Tulsa, OK S Paul K. Lackey, Jr. Oklahoma City, OK D Paula Marshall-Chapman Tulsa, OK D William R. McKamey Tulsa, OK D&GM Jana P. Soward Tulsa, OK AT Robert B. Taylor, Jr. Okmulgee, OK D ASH CREEK MINING COMPANY T. D. Churchwell Tulsa, OK D Kit Hill Tulsa, OK S&T Lina P. Holm Tulsa, OK AS&AT William R. McKamey Tulsa, OK D E. Michael Williams Tulsa, OK P&D Lori A. Wright Tulsa, OK CMPT Robert L. Zemanek Tulsa, OK D,CM&CEO Waldo J. Zerger, Jr. Tulsa, OK D SOUTHWESTERN ELECTRIC POWER COMPANY E. R. Brooks Dallas, TX D Judith W. Culver Shreveport, LA AS R. Russell Davis Tulsa, OK C James E. Davison Ruston, LA D Glenn Files Dallas, TX D Wendy G. Hargus Dallas, TX T Dr. Fredrick E. Joyce Texarkana, TX D Marilyn S. Kirkland Shreveport, LA S John M. Lewis Fayetteville, AR D Karen C. Martin Shreveport, LA D&GM William C. Peatross Shreveport, LA D Maxine P. Sarpy Shreveport, LA D Michael D. Smith (1) Shreveport, LA D&P Jana P. Soward Tulsa, OK AT (1) Mr. Smith resigned from the SWEPCO Board of Directors and as President of SWEPCO, April 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION THE ARKLAHOMA CORPORATION John W. Harbour, Jr. Oklahoma City, OK D&P E. Bennie Daigle, Jr. New Orleans, LA D&VP Preston Kissman Tulsa, OK D D. J. Rich Oklahoma City, OK D,S&T SOUTHWEST ARKANSAS UTILITIES COMPANY Charles E. Clinehens, Jr. Fayetteville, AR D,S&T Thomas H. DeWeese Fayetteville, AR D&P Elizabeth D. Stephens Texarkana, TX D&VP WEST TEXAS UTILITIES COMPANY Jeff C. Broad Abilene, TX AS E. R. Brooks Dallas, TX D Paul J. Brower (1) Abilene, TX D&GM R. Russell Davis Tulsa, OK C Glenn Files Dallas, TX D Wendy G. Hargus Dallas, TX T Tommy Morris Abilene, TX D Martha Murray Abilene, TX S Floyd W. Nickerson (2) Abilene, TX D&P Dian G. Owen Abilene, TX D James M. Parker Abilene, TX D Jana P. Soward Tulsa, OK AT F. L. Stephens San Angelo, TX D (1) Mr. Brower became General Manager/President of WTU, January 1998. (2) Mr. Nickerson resigned from the WTU Board of Directors and as President of WTU, January 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CENTRAL AND SOUTH WEST SERVICES, INC. Richard H. Bremer (1) Dallas, TX P E. R. Brooks Dallas, TX D,CH&CEO T. D. Churchwell Tulsa, OK D R. Russell Davis Tulsa, OK C Leslie E. Dillahunty Dallas, TX VP M. Bruce Evans Corpus Christi, TX D Glenn Files Dallas, TX D A. Dean Fuller Dallas, TX VP T. M. Hagan Dallas, TX D&SVP Wendy G. Hargus Dallas, TX T Lana Hillebrand Dallas, TX VP Preston Kissman Tulsa, OK VP Venita McCellon-Allen Dallas, TX D,SVP&AS Ferd. C. Meyer, Jr. Dallas, TX D Floyd W. Nickerson Abilene, TX D Kenneth C. Raney, Jr. Dallas, TX S Mark Roberson Dallas, TX VP Glenn D. Rosilier Dallas, TX D John Saenz (2) Tulsa, OK VP Thomas V. Shockley, III Dallas, TX D Michael D. Smith Shreveport, LA D Jana P. Soward Tulsa, OK AT Gerald E. Vaughn Corpus Christi, TX VP Richard P. Verret (3) Dallas, TX P E. Michael Williams Dallas, TX VP Lori A. Wright Tulsa, OK AC Waldo Zerger Tulsa, OK VP Robert L. Zemanek (4) Dallas, TX P (1) Mr. Bremer is President of Central and South West Services, Inc. -- Energy Services. (2) Mr. Saenz left the company in February, 1998. (3) Mr. Verret is President of Central and South West Services, Inc. -- Power Generation. (4) Mr. Zemanek is President of Central and South West Services, Inc. -- Energy Delivery. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW LEASING, INC. E. R. Brooks Dallas, TX D&CH Kenneth I. Brown New York, NY SVP Lawrence B. Connors Dallas, TX C Glenn Files Dallas, TX VP Ira Finkelson New York, NY AS Barbara Galaini New York, NY AC Wendy G. Hargus Dallas, TX T C. Jeffrey Knittle New York, NY SVP Ferd. C. Meyer, Jr. Dallas, TX D,VP Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D&P Leo Sheer New York, NY AS Thomas V. Shockley, III Dallas, TX D,VP Jean B. Stein New York, NY SVP Nikita Zdanow New York, NY D CSW CREDIT, INC. E. R. Brooks Dallas, TX D&CH Lawrence B. Connors Dallas, TX C Glenn Files Dallas, TX D T. M. Hagan Dallas, TX D Wendy G. Hargus Dallas, TX VP Venita McCellon-Allen Dallas, TX D&AS Ferd. C. Meyer, Jr. Dallas, TX D Stacy Newman Corrie Dallas, TX AT Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D&P Thomas V. Shockley, III Dallas, TX D Stephen D. Wise Dallas, TX T ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW COMMUNICATIONS, INC. (1) Michael L. Babin Austin, TX GM Richard H. Bremer Dallas, TX D E. R. Brooks Dallas, TX D Lawrence B. Connors Dallas, TX C Glenn Files Dallas, TX D T. M. Hagan Dallas, TX D Wendy G. Hargus Dallas, TX T Venita McCellon-Allen Dallas, TX D Ferd. C. Meyer, Jr. Dallas, TX D Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D Donald A. Shahan (2) Austin, TX D&P Thomas V. Shockley, III Dallas, TX D Jana P. Soward Tulsa, OK AT (1) Effective March 11, 1998, CSW Communications, Inc. was renamed C3 Communictions, Inc. (2) Donald A. Shahan resigned in February, 1998. CSWC SOUTHWEST HOLDINGS, INC. Michael L. Babin Austin, TX VP&S Donald A. Shahan (1) Austin, TX D&P (1) Donald A. Shahan resigned in February, 1998. CSWC TELECHOICE MANAGEMENT, INC. Michael L. Babin Austin, TX VP&S Donald A. Shahan (1) Austin, TX D&P (1) Donald A. Shahan resigned in February, 1998. CSW/ICG CHOICECOM MANAGEMENT, L.L.C. Michael L. Babin Austin, TX D Carey M. Balzer Austin, TX P Henry R. Carabelli Englewood, CO D John R. Gilliland Austin, TX VP Wendy G. Hargus Dallas, TX T Nancy R. Hayes Austin, TX VP&CFO&S Sheldon S. Ohringer Englewood, CA D Terrell Poth Austin, TX VP&AS Donald A. Shahan (1) Austin, TX D (1) Donald A. Shahan resigned in February, 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSWC TELECHOICE, INC. Michael L. Babin Austin, TX VP&S Donald A. Shahan (1) Austin, TX D&P (1) Donald A. Shahan resigned in February, 1998. CSW ENERGY, INC. Lee D. Atkins Dallas, TX VP Sandra S. Bennett Dallas, TX C E. R. Brooks Dallas, TX D&CM Stacy Newman Corrie Dallas, TX AT Terry D. Dennis Dallas, TX D,P&CEO Glenn Files Dallas, TX D Paul E. Graf Dallas, TX VP T. M. Hagan Dallas, TX D Wendy G. Hargus Dallas, TX T Alphonso R. Jackson (1) Dallas, TX VP Venita McCellon-Allen Dallas, TX D Ferd. C. Meyer, Jr. Dallas, TX D Michael T. Moran Dallas, TX VP Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&VCM Stephen D. Wise Dallas, TX AT (1) Mr. Jackson accepted a position with CSW Corporation and resigned from CSW Energy. CSW DEVELOPMENT-I, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D,P & CEO Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Eddie D. Peebles Dallas, TX C Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION POLK POWER GP II, INC. Lee D. Atkins Dallas, TX D J. S. Brown Houston, TX CFO J.R. Cunningham Dallas, TX D&CEO W. S. Garrett Houston, TX D Michael T. Moran Dallas, TX D&P Philip T. Schnorbach Dallas, TX S D.L. Siddall Houston, TX AS A. Wade Smith Lakeland, FL GM POLK POWER GP, INC. Lee D. Atkins Dallas, TX D J. S. Brown Houston, TX CFO J.R. Cunningham Houston, TX D&CEO W. S. Garrett Houston, TX D Michael T. Moran Dallas, TX D&P Philip T. Schnorbach Dallas, TX S D.L. Siddall Houston, TX AS A. Wade Smith Lakeland, FL GM ORANGE COGENERATION GP II, INC. Lee D. Atkins Dallas, TX D J. S. Brown Houston, TX CFO J.R. Cunningham Houston, TX D&P W. S. Garrett Houston, TX D Michael T. Moran Dallas, TX D & CEO Philip T. Schnorbach Dallas, TX AS D.L. Siddall Houston, TX S A. Wade Smith Lakeland, FL GM ORANGE COGENERATION G.P., INC. Lee D. Atkins Dallas, TX D J. S. Brown Houston, TX CFO J.R. Cunningham Houston, TX D&P W. S. Garrett Houston, TX D Michael T. Moran Dallas, TX D&CEO Philip T. Schnorbach Dallas, TX AS D.L. Siddall Houston, TX S A. Wade Smith Lakeland, FL GM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW MULBERRY II, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS CSW MULBERRY, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS NOAH I POWER GP, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS CSW ORANGE II, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW ORANGE, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS ORANGE COGEN FUNDING CORP. Lee D. Atkins Dallas, TX D J.S. Brown Houston, TX CFO J.R. Cunningham Houston, TX D & P W.S. Garrett Houston, TX D Michael T. Moran Dallas, TX D & CEO Philip T. Schnorbach Dallas, TX S D.L. Siddall Houston, TX AS A. Wade Smith Lakeland, FL GM CSW DEVELOPMENT-II, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D,P&CEO Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Eddie D. Peebles Dallas, TX C Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM CSW FT. LUPTON, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION NEWGULF POWER VENTURE, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM CSW SWEENY GP I, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM CSW SWEENY GP II, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS CSW SWEENY LP I, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW SWEENY LP II, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS CSW DEVELOPMENT-3, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D,P&CEO Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Eddie D. Peebles Dallas,TX C Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM CSW NORTHWEST GP, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D,P&CEO Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM CSW NORTHWEST LP, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D,P&CEO Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&CM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW POWER MARKETING, INC. Terry D. Dennis Dallas, TX D,P&CEO Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX VP Kenneth C. Raney, Jr. Dallas, TX S Thomas V. Shockley, III Dallas, TX D&CM CSW NEVADA, INC. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D,P&CEO Paul E. Graf Dallas, TX D&VP Wendy G. Hargus Dallas, TX T Michael T. Moran Dallas, TX D&VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D CSW SERVICES INTERNATIONAL, INC. Lee D. Atkins Dallas, TX D & VP Sandra S. Bennett Dallas, TX C Terry D. Dennis Dallas, TX D,P & CEO Paul E. Graf Dallas, TX D & VP Wendy G. Hargus Dallas, TX T Alphonso R. Jackson Dallas, TX D & VP Michael T. Moran Dallas, TX D & VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D & CM DIVERSIFIED ENERGY CONTRACTORS COMPANY, LLC Lee D. Atkins Dallas, TX VP Sandra S. Bennett Dallas, TX T D.L. Butynski Dallas, TX P Terry D. Dennis Dallas, TX CEO Paul E. Graf Dallas, TX VP Alphonso R. Jackson Dallas, TX VP Michael T. Moran Dallas, TX VP Philip T. Schnorbach Dallas, TX S ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION DECCO II LLC Lee D. Atkins Dallas, TX VP Sandra S. Bennett Dallas, TX VP D.L. Butynski Dallas, TX P Terry D. Dennis Dallas, Tx CEO Paul E. Graf Dallas, TX VP Alphonso R. Jackson Dallas, TX VP Michael T. Moran Dallas, TX VP Philip T. Schnorbach Dallas, TX VP CSW INTERNATIONAL, INC. Lee D. Atkins Dallas, TX VP Sandra S. Bennett Dallas, TX C E. R. Brooks Dallas, TX D&CM Stacy Newman Corrie Dallas, TX AT Terry D. Dennis Dallas, TX D,P&CEO Glenn Files Dallas, TX D Paul E. Graf Dallas, TX VP T. M. Hagan Dallas, TX D Wendy G. Hargus Dallas, TX T Alphonso R. Jackson (1) Dallas, TX VP Venita McCellon-Allen Dallas, TX D Steve McDonnell Dallas, TX VP Ferd. C. Meyer, Jr. Dallas, TX D Michael T. Moran Dallas, TX VP Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&VCM Steve D. Wise Dallas, TX AT (1) Mr. Jackson accepted a position with CSW Corporation and resigned from CSW International, Inc. CSW INTERNATIONAL TWO, INC. Lee D. Atkins Dallas, TX VP Sandra S. Bennett Dallas, TX C E. R. Brooks Dallas, TX CM Terry D. Dennis Dallas, TX P&CEO Paul E. Graf Dallas, TX VP Wendy G. Hargus Dallas, TX T Ferd. C. Meyer, Jr. Dallas, TX VP&GC Michael T. Moran Dallas, TX VP Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX VP Thomas V. Shockley, III Dallas, TX VCM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW UK FINANCE COMPANY T. J. Ellis Crawley, West D Sussex, UK M. A. Nagle Crawley, West S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK G. D. Rosilier Dallas, TX D Thomas V. Shockley, III Dallas, TX D&CM CSW INVESTMENTS T. J. Ellis Crawley, West D Sussex, UK M. A. Nagle Crawley, West S Sussex, UK M. J. Pavia Crawley, West CFO Sussex, UK G. D. Rosilier Dallas, TX D Thomas V. Shockley, III Dallas, TX D&CM SEEBOARD GROUP PLC E. R. Brooks Dallas, TX D T. J. Ellis Crawley, West D&CM Sussex, UK M. H. Madison Crawley, West D Sussex, UK M. A. Nagle Crawley, West S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK Thomas V. Shockley, III Dallas, TX D A. R. Smith (1) Crawley, West D Sussex, UK J. Weight Crawley, West D Sussex, UK (1) A.R. Smith resigned in January 1998. SEEBOARD (GENERATION) LIMITED T. J. Ellis Crawley, West CM Sussex, UK M. A. Nagle Crawley, West S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK A. R. Smith (1) Crawley, West D Sussex, UK J. Weight Crawley, West D Sussex, UK (1) A.R. Smith resigned in January 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION MEDWAY POWER LIMITED C. J. Daniels Crawley, West D Sussex, UK M. Fitzpatrick Richmond, Surrey, D UK J. Hart Maidenhead, D Berkshire, UK S. Matthews Maidenhead, D Berkshire, UK R. A. Page (1) Hove, East Sussex, D UK R. C. Sansom (1) Crawley, West D Sussex, UK B. Smith Maidenhead, D Berkshire, UK P. Stinson Isle of Grain, D Kent, UK S. Vassileou Isle of Grain, S Kent, UK (1) R. A. Page and R.C. Sansom resigned in February 1998 when H.C. Cadoux-Hudson and J.E. Tame were appointed. SEEBOARD NATURAL GAS LIMITED T. J. Ellis Crawley, West D Sussex, UK S. Gutteridge Crawley, West D Sussex, UK M. A. Nagle Crawley, West D&S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK A. R. Smith (1) Crawley, West D Sussex, UK J. Weight Crawley, West D Sussex, UK (1) A.R. Smith resigned in January 1998. BEACON GAS LIMITED M. J. Ambrose London, UK D R. Johnston London, UK D M. A. Nagle Crawley, West S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK SEEBOARD PLC H. Cadoux-Hudson Crawley, West C Sussex, UK T. J. Ellis Crawley, West D,CM & CEO Sussex, UK M. A. Nagle Crawley, West S&GC Sussex, UK M. J. Pavia Crawley, West D&CFO Sussex, UK P. J. Privett Crawley, West DCS Sussex, UK A. R. Smith (1) Crawley, West MD Sussex, UK J. Weight Crawley, West MD&COO Sussex, UK (1) A.R. Smith resigned in January 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION APPLIANCE PROTECT LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK DIRECT POWER LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK DIRECTRICITY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK ELECTRICITY (UK) LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK ELECTRICITY 2000 LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK ENERGY EXPRESS LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK FIRST ELECTRICITY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK FIRST GAS LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK GAS 2000 LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION HOME ELECTRICITY COMPANY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK HOME ENERGY COMPANY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK HOME GAS COMPANY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK HOME POWER COMPANY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK HORIZON NATURAL GAS LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK LIGHT & POWER (UK) LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK LONGFIELD INSURANCE COMPANY LIMITED H. C. Arnold Douglas, Isle of D Man, UK R. J. Jackson Crawley, West D Sussex, UK M. A. G. Linck Douglas, Isle of CM Man, UK M. J. Pavia Crawley, West D Sussex, UK G. Stuart Douglas, Isle of D Man, UK POWERCARE LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION PREMIER ELECTRICITY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK PREMIER UTILITIES LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SEEB LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SEEBOARD (CONSULTING) LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SEEBOARD (DISTRIBUTION) LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SEEBOARD EMPLOYMENT SERVICES LIMITED (1) T. J. Ellis Crawley, West D&CM Sussex, UK M. J. Pavia Crawley, West D Sussex, UK A. R. Smith (2) Crawley, West D Sussex, UK J. Weight Crawley, West D Sussex, UK (1) SEEBOARD Employment Services Limited changed its name from SEEBOARD (Property Development) Limited on 2 April 1998. (2) A.R. Smith resigned in January 1998. SEEBOARD INSURANCE COMPANY LIMITED H. C. Arnold Douglas, Isle of D Man, UK M. A. G. Linck Douglas, Isle of CM Man, UK M. A. Nagle Crawley, West D Sussex, UK M. J. Pavia Crawley, West D Sussex, UK G. Stuart Douglas, Isle of D Man, UK ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION SEEBOARD FINAL SALARY PENSION PLAN TRUSTEE COMPANY LIMITED M. J. Pavia Crawley, West D Sussex, UK A. R. Smith (1) Crawley, West CM Sussex, UK A. M. Watts Crawley, West D&S Sussex, UK (1) A.R. Smith resigned in January 1998. SEEBOARD INTERNATIONAL LIMITED J. Croxford Crawley, West D Sussex, UK A. J. K. Goodwin Crawley, West D Sussex, UK P. S. Hofman Crawley, West D Sussex, UK M. A. Nagle Crawley, West S Sussex, UK J. Weight Crawley, West CM Sussex, UK SEEBOARD PENSION INVESTMENT PLAN TRUSTEE COMPANY LIMITED M. J. Pavia Crawley, West D Sussex, UK A. R. Smith (1) Crawley, West CM Sussex, UK A. M. Watts Crawley, West D&S Sussex, UK (1) A.R. Smith resigned in January 1998. SEEBOARD POWERLINK LIMITED P. S. Hofman (2) Crawley, West D Sussex, UK M. A. Nagle (1) Crawley, West S Sussex, UK J. Weight (2) Crawley, West D Sussex, UK (1) M. A. Nagle resigned as Director in July 1997 when he was appointed Company Secretary. (2) P.S. Hofman and J. Weight were appointed Directors in July 1997. SEEBOARD SHARE SCHEME TRUSTEES LIMITED M. A. Nagle Crawley, West D&S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK SEEBOARD TRADING LIMITED T. J. Ellis Crawley, West D&CM Sussex, UK M. A. Nagle Crawley, West S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK A. R. Smith (1) Crawley, West D Sussex, UK J. Weight Crawley, West D Sussex, UK (1) A.R. Smith resigned in January 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION SEEPOWER LIMITED M. A. Nagle (1) Crawley, West S Sussex, UK M. J. Pavia (2) Crawley, West D Sussex, UK J. Weight (2) Crawley, West D Sussex, UK (1) M. A. Nagle resigned as Director and was appointed Secretary in February 1997. (2) M. J. Pavia and J. Weight were appointed Directors in February 1997. SELECTRICITY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SOUTH COAST POWER LIMITED P. E. Graf (1) Dallas, Texas D E. Kolodziej Jr. (1) Dallas, Texas D S. J. Lawrie (2) Glasgow, UK S M. J. Ruston (3) Glasgow, UK D K. L. Vowles (3) Glasgow, UK D (1) P. E. Graf and E. Kolodziej Jnr were appointed Directors in August 1997. (2) S. J. Lawrie was appointed Company Secretary in May 1997. (3) M. J. Ruston and K. L. Vowles were appointed Directors in June 1997 SOUTH EASTERN ELECTRICITY BOARD LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SOUTH EASTERN ELECTRICITY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SOUTH EASTERN SERVICES LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK SOUTH EASTERN UTILITIES LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION SOUTHERN GAS LIMITED R. A. Danes (1) Crawley, West D Sussex, UK M. A. Nagle Crawley, West S Sussex, UK M. J. Pavia Crawley, West D Sussex, UK (1) R. A. Danes was appointed Director in October 1997 and resigned in February 1998. TORCH NATURAL GAS LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK UK DATA COLLECTION SERVICES LIMITED M. N. Eggleton Milton Keynes, D&CM Buckinghamshire, UK J. C. W. O'Reilly Milton Keynes, D Buckinghamshire, UK M. Booth Milton Keynes, D Buckinghamshire, UK J. Stanton Milton Keynes, D Buckinghamshire, UK UK ELECTRICITY LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK UK LIGHT AND POWER LIMITED M. A. Nagle Crawley, West D Sussex, UK S. G. Tormey Crawley, West D&S Sussex, UK CSW INTERNATIONAL THREE, INC. Lee D. Atkins Dallas, TX VP Sandra S. Bennett Dallas, TX C E. R. Brooks Dallas, TX CM Terry D. Dennis Dallas, TX P&CEO Paul E. Graf Dallas, TX VP Wendy G. Hargus Dallas, TX T Ferd. C. Meyer, Jr. Dallas, TX VP&GC Michael T. Moran Dallas, TX VP Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX VP Thomas V. Shockley, III Dallas, TX VCM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW INTERNATIONAL (U.K), INC. Lee D. Atkins Dallas, TX VP Sandra S. Bennett Dallas, TX C E. R. Brooks Dallas, TX D&CM Terry D. Dennis Dallas, TX D,P&CEO Paul E. Graf Dallas, TX VP Wendy G. Hargus Dallas, TX T Ferd. C. Meyer, Jr. Dallas, TX D,VP&GC Michael T. Moran Dallas, TX VP Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D&VP Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&VCM ENERGIA INTERNACIONAL DE CSW, S.A. DE C.V. Terry D. Dennis Dallas, TX D&S Paul E. Graf Dallas, TX D&T Michael T. Moran Dallas, TX D Thomas V. Shockley, III Dallas, TX D&P ACELTEK, S. DE R.L. DE C.V. PAUL E. GRAF Dallas, TX D Alternate: Shariar Dallas, TX Alternate D Shabba MICHAEL T. MORAN Dallas, TX D Alternate: J. Emberger Dallas, TX Alternate D ALEJANDRO MORENO Monterrey, Mexico D Alternate: Sergio Olaiz Monterrey, Mexico Alternate D RAFAEL OJEDA Monterrey, Mexico D&S Alternate: Arturo Monterrey, Mexico Alternate:D&S Gutierrez JUAN LUIS SAN JOSE Monterrey, Mexico D Alternate: Ramiro Garcia Monterrey, Mexico Alternate D JOSE DE JESUS VALDEZ Monterrey, Mexico D Alternate: Nelson Monterrey, Mexico Alternate D Arizmendi ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION ENERTEK, S.A. DE C.V. PAUL E. GRAF Dallas, TX D Alternate: Shariar Dallas, TX Alternate D Shabba MICHAEL T. MORAN Dallas, TX D Alternate: J. Emberger Dallas, TX Alternate D ALEJANDRO MORENO Monterrey, Mexico D Alternate: Sergio Olaiz Monterrey, Mexico Alternate D RAFAEL OJEDA Monterrey, Mexico D&S Alternate: Arturo Monterrey, Mexico Alternate:D&S Gutierrez JUAN LUIS SAN JOSE Monterrey, Mexico D Alternate: Ramiro Garcia Monterrey, Mexico Alternate D JOSE DE JESUS VALDEZ Monterrey, Mexico D Alternate: Nelson Monterrey, Mexico Alternate D Arizmendi CINERGY, S. DE R.L. DE C.V. Officers and directors unavailable. SERVICIOS CORPORATIVOS INDUSTRIALES DEL NORESTE, S.A. DE C.V. Officers and directors unavailable. SERVICIOS INDUSTRIALES Y ADMINISTRATIVOS DEL NORESTE, S. DE R.L. DE C.V. Officers and directors unavailable. CSW INTERNATIONAL, INC. (CAYMAN) Lee D. Atkins Dallas, TX VP E. R. Brooks Dallas, TX D&CM Terry D. Dennis Dallas, TX D,P&CEO Paul E. Graf Dallas, TX VP Wendy G. Hargus Dallas, TX T Ferd. C. Meyer, Jr. Dallas, TX D,VP&GC Michael T. Moran Dallas, TX VP Eddie D. Peebles Dallas, TX C Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D&VP Philip T. Schnorbach Dallas, TX AS Thomas V. Shockley, III Dallas, TX D&VCM ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION CSW VALE L.L.C. Lee D. Atkins Dallas, TX D&VP Terry D. Dennis Dallas, TX D&P Paul E. Graf Dallas, TX D&VP Alphonso R. Jackson Dallas, TX D&VP Michael T. Moran Dallas, TX D&VP Eddie D. Peebles Dallas, TX T Philip T. Schnorbach Dallas, TX S EMPRESA DE ELECTRICIDADE VALE DE PARANAPANEMA S.A. Alberto Jose Rodrigues Alves Sao Paulo, Brazil D Sebastiao Bimbati Sao Paulo, Brazil T Jose Theodoro Alves De Araujo Sao Paulo, Brazil D Fernando Artigas Girogi Sao Paulo, Brazil D Jose Alberto Artigas Giorgi Sao Paulo, Brazil D Jose Giorgi Junior Sao Paulo, Brazil D&CM Natal Mauri Sao Paulo, Brazil D Carlos Padovan Sao Paulo, Brazil D Laudo Vota Brancato Sao Paulo, Brazil D CSW POWER DO BRAZIL LTDA. CSW Vale, LLC , Grand Cayman Cayman Islands, British Managing Partner West Indies Camila da Motta P Alves de Sao Paulo, Brazil Delegate Manager Aroujo S.C.E.L. EMPREENDIMENTOS PARTICIPACOES LTDA. CSW Vale, LLC, Grand Cayman Cayman Islands, British Managing Partner West Indies Camila da Motta P Alves de Sao Paulo, Brazil Delegate Manager Arujo CSW COELBA L.L.C. Lee D. Atkins Dallas, TX D & VP Sandra S. Bennett Dallas, TX T Terry D. Dennis Dallas, TX D & P Paul E. Graf Dallas, TX D & VP Alphonso R. Jackson Dallas, TX D & VP Michael T. Moran Dallas, TX D & VP Philip T. Schnorbach Dallas, TX S ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION COELBA FUNDING COMPANY L.L.C. Alberto .J.R. Alves Sao Paulo, Brazil D & VP Sandra S. Bennett Dallas, TX T Terry D. Dennis Dallas, TX D & P Paul E. Graf Dallas, TX D & VP J.Q. de Moraes, Jr. Sao Paulo, Brazil D & VP Philip T. Schnorbach Dallas, TX S LATIN AMERICAN ENERGY HOLDINGS, INC. Lee D. Atkins Dallas, TX D & VP Sandra S. Bennett Dallas, TX C Terry D. Dennis Dallas, TX D,P & CEO Paul E. Graf Dallas, TX D & VP Wendy G. Hargus Dallas, TX T Alphonso R. Jackson Dallas, TX D & VP Michael T. Moran Dallas, TX D & VP Kenneth C. Raney, Jr. Dallas, TX S Philip T. Schnorbach Dallas, TX AS CHILE ENERGY HOLDINGS L.L.C. Lee D. Atkins Dallas, TX D & VP Sandra S. Bennett Dallas, TX C Terry D. Dennis Dallas, TX D & P Paul E. Graf Dallas, TX D & VP Wendy G. Hargus Dallas, TX T Alphonso R. Jackson Dallas, TX D & VP Michael T. Moran Dallas, TX D & VP Philip T. Schnorbach Dallas, TX S CSW INTERNATIONAL ENERGY DEVELOPMENT, LTD. P. Dinan Port Louis, D Mauritius Paul E. Graf Dallas, TX D U.K. Gujadhur Port Louis, D Mauritius T.K. Light Dallas, TX D Michael T. Moran Dallas, TX D TENASKA CSW INTERNATIONAL, LTD. P. Dinan Port Louis, Mauritius D Paul E. Graf Dallas, TX D U.K. Gujadhur Port Louis, Mauritius D Michael T. Moran Dallas, TX D P.G. Smith Omaha, NE D R.R. Tanner Omaha, NE D ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NAME AND ADDRESS POSITION ENERSHOP INC. Richard H. Bremer Dallas, TX D&P E. R. Brooks Dallas, TX D Lawrence B. Connors Dallas, TX C Glenn Files Dallas, TX D T. M. Hagan Dallas, TX D Wendy G. Hargus Dallas, TX T Venita McCellon-Allen Dallas, TX D Ferd. C. Meyer, Jr. Dallas, TX D Mike Montgomery Dallas, TX MD David J. Pickles Dallas, TX AS Kenneth C. Raney, Jr. Dallas, TX S Glenn D. Rosilier Dallas, TX D Thomas V. Shockley, III Dallas, TX D Jana P. Soward Tulsa, OK AT CSW ENERGY SERVICES, INC. Richard H. Bremer Dallas, TX D,P Shirley Briones Tulsa, OK AS Glenn Files Dallas, TX D Wendy G. Hargus Dallas, TX T Kenneth C. Raney, Jr. Dallas, Tx S John Saenz (1) Tulsa, OK D,VP Thomas V. Shockley, III Dallas, TX D Jana P. Soward Tulsa, OK AT (1) Mr. Saenz left the company in February 1998. ITEM 6. OFFICERS AND DIRECTORS - PART I. (CONTINUED) NOTE: Other System companies are entities not having officers and directors. Positions are indicated above by the following symbols: AC -- Assistant Controller AGC -- Assistant General Counsel AS -- Assistant Secretary AT -- Assistant Treasurer C -- Controller CEO -- Chief Executive Officer CFO -- Chief Financial Officer CM -- Chairman CMPT -- Comptroller COO -- Chief Operating Officer D -- Director DCS -- Director, Customer Services EVP -- Executive Vice President GC -- General Counsel GM -- General Manager MD -- Managing Director P -- President S -- Secretary SVP -- Senior Vice President T -- Treasurer VP -- Vice President VCM -- Vice Chairman ITEM 6. OFFICERS AND DIRECTORS - PART II. Financial Connections - The following is a list, as of December 31, 1997, of all officers and directors of each System company who have financial connections within the provisions of Section 17(c) of the Public Utility Holding Company Act of 1935. Position Held in Applicable Name of Financial Exemption Officer or Director Name and Location of Financial Institution Rules Institution (1) (2) (3) (4) - --------------------------------------------------------------------- CENTRAL AND SOUTH WEST CORPORATION Robert W. Salomon Brothers Fund, New Director Rule 70(b) Lawless York, NY Salomon Brothers Capital Fund, Director Rule 70(b) New York, NY Salomon Brothers Investors Director Rule 70(b) Fund, New York, NY James L. Southwest Bancorp of Sanderson, Director Rule 70(a) Powell Sanderson, TX First National Bank, Mertzon, TX Advisory Rule 70(a) Director CENTRAL POWER AND LIGHT COMPANY Pete Morales, The Bank of Texas, Devine, TX Director Rule 70(c) Jr. PUBLIC SERVICE COMPANY OF OKLAHOMA Paul K. Nations Bank - Tulsa, Tulsa, OK Advisory Rule 70(c) Lackey, Jr. Director SOUTHWESTERN ELECTRIC POWER COMPANY Dr. Frederick First State National Bank, Director Rule 70(c) E. Joyce Texarkana, TX Director State First Financial Rule 70(c) Corporation, Texarkana, TX First Commercial Corporation, Director Rule 70(c) Little Rock, AR John M. Lewis The Bank of Fayetteville, Director Rule 70(c) Fayetteville, AR William C. Deposit Guaranty Bank, Director Rule 70(c) Peatross Shreveport, LA WEST TEXAS UTILITIES COMPANY Dian G. Owen First Financial Bankshares, Director Rule 70(c) Inc., Abilene, TX First National Bank of Abilene, Director Rule 70(c) Abilene, TX James M. First Financial Bankshares, Director Rule 70(c) Parker Inc., Abilene, TX; First National Bank of Abilene, Director Rule 70(c) Abilene, TX F. L. Stephens Norwest Texas, Lubbock, TX Director Rule 70(c) ITEM 6. OFFICERS AND DIRECTORS - PART III. (A) AND (B) DIRECTORS' AND EXECUTIVE OFFICERS' COMPENSATION AND SECURITY INTERESTS. Information concerning compensation and interests in system securities is set forth on Exhibit F-1 to this Form U5S and is incorporated herein by reference. (C) DIRECTORS' AND EXECUTIVE OFFICERS' CONTRACTS AND TRANSACTIONS WITH SYSTEM COMPANIES. During 1997, CSW retained Mr. Glenn Biggs, a current member of the CSW Board, under an agreement to pursue special business development activities in Mexico on behalf of CSW. For the year ended December 31, 1997, CSW paid Mr. Biggs $120,000 pursuant to this agreement. Effective March 18, 1998, Mr. Biggs resigned his position as a director of CSW. Mr. Biggs had not previously been nominated for reelection to the CSW Board. In connection with his resignation, Mr. Biggs' consulting arrangement was terminated. CSW and Mr. Biggs entered into an agreement pursuant to which Mr. Biggs was paid, a lump sum for, among other things, his benefit under certain compensation plans and to pay his director and CSW Board committee fees through May 1998 and his consulting fees through March 1998. Pursuant to that agreement, Mr. Biggs and his spouse are also entitled to continued medical and dental coverage under the CSW Medical Plan for Outside Directors and CSW has agreed to maintain the memorial gift program for Mr. Biggs. (D) INDEBTEDNESS OF DIRECTORS OR EXECUTIVE OFFICERS TO SYSTEM COMPANIES. None. (E) DIRECTORS' AND EXECUTIVE OFFICERS' PARTICIPATION IN BONUS AND PROFIT-SHARING ARRANGEMENTS AND OTHER BENEFITS. See Exhibit F-1 for a description of the participation of directors and executive officers of System companies in bonus and profit-sharing arrangements and other benefits. (F) DIRECTORS' AND EXECUTIVE OFFICERS' RIGHTS TO INDEMNITY. The state laws under which each of the companies is incorporated provide broadly for indemnification of directors and officers against claims and liabilities against them in their capacities as such. Each of the companies' charters or by-laws also provides for indemnification of directors and officers. In addition, directors and executive officers of Central and South West Corporation and all subsidiary companies are insured under directors' and officers' liability policies issued to Central and South West Corporation by Federal Insurance Company, Warren, New Jersey; Associated Electric & Gas Insurance Services, Ltd. Hamilton, Bermuda; Energy Insurance Mutual, Ltd.,Tampa, Florida; A.C.E. Insurance Company, Ltd., Hamilton, Bermuda; Starr Excess Liability Insurance Company, Ltd., Hamilton, Bermuda; and X. L. Insurance Company, Ltd., Hamilton, Bermuda. All policies are for the period April 27, 1997 to April 27, 1998. The Corporation has entered into a standard form of indemnity agreement with each of its directors and officers. ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS. (1) CSW and several of its subsidiaries have established political action committees and have incurred, in accordance with the provisions of the Federal Election Campaign Act, certain costs for the administration of such committees. (2) Expenditures, disbursements, or payments, in money, goods or services, directly or indirectly to or for the account of any citizens group, or public relations counsel were as follows for 1997:
NAME OF COMPANY NAME OF RECIPIENT OF BENEFICIARY PURPOSE ACCOUNT CHARGED AMOUNT - -------------------------------------------------------------------------------------------------- CPL Less than $10,000- 32 Beneficiaries Area Development Inc Ded: A & G. Expense $44,324 PSO Less than $10,000- 4 Beneficiaries Area Development Inc Ded, Dist; Cust 7,200 Svc; A&G Exp Less than $10,000- 93 Beneficiaries Civic Activities Inc Ded, Dist; Cust 85,296 Svc; A&G Exp Downtown Tulsa Unlimited, Area Development Inc Ded, Dist; Cust 33,233 Inc. Svc; A&G Exp Metropolitan Tulsa Chamber of Commerce Civic Activity Inc Ded, Dist; Cust 72,450 Svc; A&G Exp Oklahoma State Chamber of Commmerce Civic Activity Inc Ded, Dist; Cust 46,364 Svc; A&G Exp Lawton Chamber of Commerce Civic Activity Inc Ded, Dist; Cust 12,381 Svc; A&G Exp SWEPCO Less than $10,000 - 54 Beneficiaries Civic Activity Inc Ded, Dist; Cust 42,562 Svc; A&G Exp Shreveport Chamber of Commerce Civic Activity Inc Ded; Cust Svc; A&G Exp 38,260 Texarkana Chamber of Commerce Civic Activity Inc Ded; Cust Svc; 11,092 A&G Expense Springdale Chamber of Commerce Civic Activity Inc Ded; Dist, Cust 10,298 Svc; A&G Exp WTU Less than $10,000 - 59 Beneficiaries Area Development Inc Ded; Dist, Cust 30,938 Svc; A&G Exp
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS. Part I. Except those specifically excluded per reporting instructions, there were no contracts for services, including engineering or construction services, or goods supplied or sold by a System company to another System company for 1997. The electric subsidiary companies have contracts with CSW Credit, Inc. for the sale of accounts receivable which were in effect at year-end 1997. SERVING RECEIVING DATE OF COMPANY COMPANY COMPENSATION CONTRACTS CPL CREDIT $12,549,392 1/02/91 PSO CREDIT 7,786,577 1/02/91 SWEPCO CREDIT 9,704,642 1/02/91 WTU CREDIT 3,875,757 1/02/91 ----------- $33,916,368 ----------- Part II. The System companies had no contracts to purchase services or goods during 1997 from any affiliate (other than a System company) or from a company, in which any officer or director of the receiving company is a partner or owns 5 percent or more of any class of equity securities, except as reported in Item 6. Part III. The following System companies employ those listed below for the performance on a continuing basis of management, supervisory or financial advisory services. System companies participating in an insurance trust, the Risk Management Trust ("RMT"), administered by M. Wilson and Associates, Inc., under the direction of six Trustees, and the net amounts paid for services and for protection against property and casualty losses for 1997 were as follows: CPL $7,810,519 PSO 6,431,772 SWEPCO 5,279,700 WTU 2,759,729 CENTRAL AND SOUTH WEST SERVICES,INC. 54,597 ---------- $22,436,317 ---------- ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS. (CONTINUED) As of December 31, 1997, Trustees of the RMT were: TRUSTEE POSITION COMPANY Allan F. Director: Risk Central and South West McGilbra Management Services, Inc. Department Public Service Company of Oklahoma Central Power and Light Company Southwestern Electric Power Company West Texas Utilities Company John P. Wilson Manager: Central and South West Claims & Services, Inc. Litigation, Public Service Company of Risk Oklahoma Management Central Power and Light Department Company Southwestern Electric Power Company West Texas Utilities Company William N. Treasurer & Kentucky Utilities Company English Assistant Secretary James A. Manager: Kentucky Utilities Company Brackney Risk Management Department Harold E. Manager: Wisconsin Power & Light Gustrowsky Risk Company Management Department Loren A. Farrey Risk Wisconsin Power & Light Management Company Associate: Risk Management Department NOTE: On April 21, 1998, the participants of the RMT agreed to dissolve the RMT. A date for dissolution has not been set. ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES. PART I - FOREIGN UTILITY COMPANY SEEBOARD PLC (a) COMPANY, LOCATION, BUSINESS ADDRESS SEEBOARD plc Forest Gate, Brighton Road Crawley, West Sussex RH11 9BH During 1996, CSW (UK) plc, an indirect wholly owned subsidiary of CSW acquired 100% control of the outstanding share capital of SEEBOARD, a regional electricity company in the United Kingdom, for an aggregate adjusted purchase price of approximately $2.1 billion. On September 3, 1996, CSW (UK) plc's interest in SEEBOARD was transferred to SEEBOARD Group plc. SEEBOARD's primary regulated businesses are the distribution and supply of electricity within its southeast England service area that covers approximately 3,000 square miles and through which it serves approximately 2 million customers. In addition to the distribution and supply of electricity, SEEBOARD is involved in gas supply, electricity generation, electrical contracting and retailing. The distribution of electricity is the core business of SEEBOARD. Electricity is transported from generating plants across the United Kingdom, via the National Grid, to points within SEEBOARD's geographical area, and then transformed to enter SEEBOARD's distribution system. At December 31, 1997, SEEBOARD's distribution system contained approximately 7,650 miles of overhead lines and approximately 19,900 miles of underground cables. The bulk of SEEBOARD's tangible fixed assets are currently employed in the distribution business. SEEBOARD's supply business consists of the bulk purchase of electricity and its sale to customers. The majority of electricity sold by SEEBOARD in its supply business is purchased through a pool created in 1990 for the bulk trading of electricity. The physical delivery of electricity via SEEBOARD's distribution network results in a cost to the supply business and income to the distribution business. (b) IDENTIFY TYPE AND AMOUNT OF CAPITAL INVESTED: IDENTIFY ANY DEBT OR FINANCIAL OBLIGATION WITH RECOURSE TO CSW OR SUBS: IDENTIFY ANY GUARANTEE OF A SECURITY OF THE EWG OR FUCO BY CSW: IDENTIFY ANY TRANSFER OF ASSETS, FMV OF ASSET AT TIME OF TRANSFER, BOOK VALUE AND SALES PRICE OF TRANSFERRED ASSET: As of December 31, 1997, CSW had contributed approximately $829 million of the purchase price for the acquisition of SEEBOARD shares. Those funds, which were initially obtained through borrowings under the CSW Credit Agreement, have since been repaid by using the $398 million net proceeds from CSW's February 1996 common stock offering and $431 million of the proceeds from the sale of Transok. ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES. (CONTINUED) PART I - FOREIGN UTILITY COMPANY (CONT.) Additional acquisition funds were obtained from capital contributions and loans made to CSW (UK) plc (which has been replaced by SEEBOARD Group plc) by its sole shareholder, CSW Investments, which arranged the CSW Investments Credit Facility for that purpose. During the second half of 1996, borrowings under the CSW Investments Credit Facility were refinanced through several different transactions. As of December 31, 1997, the amount of debt outstanding related to the purchase of SEEBOARD shares was approximately $1.1 billion. Neither CSW nor CSWI, the indirect parent of CSW Investments and SEEBOARD Group plc, has guaranteed or is otherwise subject to recourse for such amounts borrowed. (c) RATIO OF DEBT TO COMMON EQUITY AND EARNINGS OF THE COMPANY AT END OF REPORTING PERIOD: The following reported items are for the consolidated SEEBOARD Group (SEEBOARD plc, SEEBOARD Group plc, CSW Investments, CSW Finance Company, CSW International Two and CSW International Three). December 31, 1997 (millions) Ratio 1.19:1 Debt $ 1,087 Equity $ 914 1997 consolidated loss from the SEEBOARD Group (as defined above) was $58,993,987. (d) IDENTIFY ANY SERVICE, SALES OR CONSTRUCTION CONTRACTS WITH CSW OR SUBS: None. ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES. (CONTINUED) PART I - FOREIGN UTILITY COMPANY EMPRESA DE ELETRICIDADE VALE PARANAPANEMA S. A. (a) COMPANY, LOCATION, BUSINESS ADDRESS: Empresa de Eletricidade Vale Paranapanema S.A. Avenida Paulista, No. 2439, 5th floor Sao Paulo, Sao Paulo Brazil (b) IDENTIFY TYPE AND AMOUNT OF CAPITAL INVESTED: IDENTIFY ANY DEBT OR FINANCIAL OBLIGATION WITH RECOURSE TO CSW OR SUBS: IDENTIFY ANY GUARANTEE OF A SECURITY OF THE EWG OR FUCO BY CSW: IDENTIFY ANY TRANSFER OF ASSETS, FMV OF ASSET AT TIME OF TRANSFER, BOOK VALUE AND SALES PRICE OF TRANSFERRED ASSET: In October, 1997, CSW Vale L.L.C. purchased an additional 6,302,352 shares of the common stock and 18,726,220 shares of the Series "B" preferred stock of Empresa de Eletricidade Vale Paranapanema S.A. for a combined purchase price of $40,000,000. These funds were obtained through intercompany borrowings from CSW Energy, Inc. The combined holdings now total 21,498,447 shares (21.42%) of the common stock and 28,669,149 shares (100%) of the Series "B" preferred stock for a total investment of $80,050,515. (c) RATIO OF DEBT TO COMMON EQUITY AND EARNINGS OF THE COMPANY AT END OF REPORTING PERIOD: The following reported items are for CSW International, Inc. consolidated (CSW International, Inc., CSW International, Inc. (Cayman) and CSW Vale L.L.C. as it relates to the Vale acquisition. December 31, 1997 Ratio 12:1 Debt $80,050,515 Equity $6,808,490 1997 equity earnings from Empresa de Electricidade Vale Paranapanema S. A. were $6,808,490. (d) IDENTIFY ANY SERVICE, SALES OR CONSTRUCTION CONTRACTS WITH CSW OR SUBS: None ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES. (CONTINUED) PART I - FOREIGN UTILITY COMPANY (CONT.) ENERTEK, S. A. DE C.V. (a) COMPANY, LOCATION, BUSINESS ADDRESS: Enertek, S. A. de C. V. Avenida Gomez Morin IIII-C Garza Garcia, Nuevo Leon CP 66254 Mexico (b) IDENTIFY TYPE AND AMOUNT OF CAPITAL INVESTED: IDENTIFY ANY DEBT OR FINANCIAL OBLIGATION WITH RECOURSE TO CSW OR SUBS: IDENTIFY ANY GUARANTEE OF A SECURITY OF THE EWG OR FUCO BY CSW: IDENTIFY ANY TRANSFER OF ASSETS, FMV OF ASSET AT TIME OF TRANSFER, BOOK VALUE AND SALES PRICE OF TRANSFERRED ASSET: Enertek is a special purpose company formed to own a natural gas fired co-generation plant to be located near the city of Altamira, Tamaulipas, Mexico. As of December 31, 1997, CSW International, Inc. had made construction loans of $65,820,125 to Enertek, S.A. de C.V. (c) RATIO OF DEBT TO COMMON EQUITY AND EARNINGS OF THE COMPANY AT END OF REPORTING PERIOD: December 31, 1997 Ratio NA Debt $65,820,125 Equity $0 Enertek, S. A. de C. V. had no earnings in 1997. (d) IDENTIFY ANY SERVICE, SALES OR CONSTRUCTION CONTRACTS WITH CSW OR SUBS: None ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES. (CONTINUED) PART I - EXEMPT WHOLESALE GENERATORS (a) COMPANY, LOCATION, BUSINESS ADDRESS: CSW Development-3, Inc. 1616 Woodall Rodgers Freeway Dallas, Texas 75202 CSW Northwest GP, Inc. 1616 Woodall Rodgers Freeway Dallas, Texas 75202 CSW Northwest LP, Inc. 1616 Woodall Rodgers Freeway Dallas, Texas 75202 Newgulf Power Venture, Inc. 1616 Woodall Rodgers Freeway Dallas, Texas 75202 (b) IDENTIFY TYPE AND AMOUNT OF CAPITAL INVESTED: IDENTIFY ANY DEBT OR FINANCIAL OBLIGATION WITH RECOURSE TO CSW OR SUBS: IDENTIFY ANY GUARANTEE OF A SECURITY OF THE EWG OR FUCO BY CSW: IDENTIFY ANY TRANSFER OF ASSETS, FMV OF ASSET AT TIME OF TRANSFER, BOOK VALUE AND SALES PRICE OF TRANSFERRED ASSET: Each of the CSW Northwest EWGs and CSW Development-3, Inc. are inactive at this time and no capital has been invested in them. It is anticipated that these entities will participate in joint development of energy projects in the Pacific Northwest. CSWE, the ultimate parent company of the aforementioned EWGs, has loaned funds to a nonaffiliated party for development of EWG projects. At December 31, 1997, such loans totaled approximately $5 million. Newgulf Power Venture, Inc. was organized on October 13, 1994 to own the Texas Gulf energy project. At December 31, 1997, the capital invested in this EWG, including funds used for the modification, maintenance and repair required for recommissioning the plant, totaled approximately $17.9 million. ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES. (CONTINUED) PART I - EXEMPT WHOLESALE GENERATORS (c) RATIO OF DEBT TO COMMON EQUITY AND EARNINGS OF THE COMPANY AT END OF REPORTING PERIOD: NEWGULF POWER VENTURE, INC. December 31, 1997 Ratio .70:1 Debt $7,408,973 Equity $10,532,180 In 1997 the Texas Gulf plant was in the process of being refurbished and recommisioned. It is anticipated that the plant will commence commercial operations in the first quarter of 1998. (d) IDENTIFY ANY SERVICE, SALES OR CONSTRUCTION CONTRACTS WITH CSW OR SUBS: None. PART II ORGANIZATIONAL CHART Foreign Utility Company - see Exhibit H. Exempt Wholesale Generators - See Exhibit H. PART III CSW'S AGGREGATE INVESTMENT IN EWG'S AND FUCO'S RESPECTIVELY: THE RATIO OF CSW'S AGGREGATE INVESTMENT IN EWGS AND FUCOS TO THE AGGREGATE CAPITAL INVESTMENT OF CSW'S DOMESTIC PUBLIC-UTILITY SUBS: Foreign Utility Companies: the aggregate investment in FUCOs as of December 31, 1997 was approximately $896 million. Exempt Wholesale Generators: the aggregate investments (including loans to nonaffiliated party) as of December 31, 1997 was approximately $27 million. Ratio of Aggregate Investment to Aggregate Capital Investment* at December 31, 1997: 49%. * Defined as the average of CSW's reported consolidated retained earnings for each of the most recent four quarters as of December 31, 1997. ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 1997 PAGE REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS 60 - 61 CONSOLIDATING FINANCIAL STATEMENTS CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES Consolidating Statement of Income for the year ended December 31, 1997 62 Consolidating Balance Sheet as of December 31, 1997 63 - 64 Consolidating Statement of Cash Flows for the year ended December 31, 1997 65 Consolidating Statement of Retained Earnings for the year ended December 31, 1997 66 Pursuant to Exhibit A, the combined annual report on Form 10-K for the year ended December 31, 1997, for CSW, CPL, PSO, SWEPCO and WTU is incorporated herein by reference. ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. (CONTINUED) CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 1997 PAGE CSW ENERGY, INC. AND SUBSIDIARY COMPANIES (UNAUDITED) Consolidating Statement of Income for the year ended December 31, 1997 67 Consolidating Balance Sheet as of December 31, 1997 68 - 69 Statement of Cash Flows for the year ended December 31, 1997 70 Consolidating Statement of Retained Earnings for the year ended December 31, 1997 71 CSW INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES (UNAUDITED) Consolidating Statement of Income for the year ended December 31, 1997 72 Consolidating Balance Sheet as of December 31, 1997 73 - 74 Consolidating Statement of Cash Flows for the year ended December 31, 1997 75 Consolidating Statement of Retained Earnings for the year ended December 31, 1997 76 Detailed financial statements not available for some CSWI companies 77 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Central and South West Corporation: We have audited the consolidated balance sheets of Central and South West Corporation (a Delaware corporation) and subsidiary companies as of December 31, 1997 and 1996, and the related consolidated statements of income, stockholders' equity and cash flows, for each of the three years ended December 31, 1997, incorporated by reference herein. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of CSW UK Finance Company (1997 - which includes CSW Investments) and CSW Investments (1996), which statements reflect total assets and total revenues of 22 percent and 35 percent in 1997 and 23 percent and 36 percent in 1996, respectively, of the consolidated totals. Those statements were audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for those entities, is based solely on the reports of the other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Central and South West Corporation and subsidiary companies as of December 31, 1997 and 1996, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The consolidating schedules of Central and South West Corporation and subsidiaries listed in Item 10 are presented for purposes of complying with the Securities and Exchange Commission's rules and regulations under the Public Utility Holding Company Act of 1935 and are not a required part of the basic consolidated financial statements. These consolidating schedules have been subjected to the auditing procedures applied in our audits of the basic consolidated financial statements and, in our opinion, based on our audits and the report of other auditors, are fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole. Arthur Andersen LLP Dallas, Texas February 16, 1998 AUDITOR'S REPORT TO THE MEMBERS OF CSW UK FINANCE COMPANY We have audited the consolidated balance sheets of CSW UK Finance Company and subsidiaries as of 31 December 1997 and the related consolidated statement of earnings, statements of cash flows and statement of retained earnings for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements base on our audit. We conducted our audit in accordance with generally accepted auditing standards in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used in and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CSW UK Finance Company and subsidiaries at 31 December 1997 and the results of their operations and cash flows for the year then ended in conformity with generally accepted accounting principles in the United Kingdom. Generally accepted accounting principles in the United Kingdom vary in certain significant respects from generally accepted accounting principles in the United States. Application of generally accepted accounting principles in the United States would have affected results of operations and shareholders' equity as of and for the year ended 31 December 1997 to the extent summarised in the notes to the consolidated financial statements. Our audit was made for the purpose of forming an opinion on the basic consolidated financial statements of CSW UK Finance Company and subsidiaries taken as a whole. The consolidating schedules of CSW UK Finance Company and subsidiaries under the column headed SEEBOARD in Item 10 are presented under US generally accepted accounting for purposes of complying with the US Securities and Exchange Commission's rules and regulations under the Public Utility Holding Company Act of 1935 and are not a required part of the basic consolidated financial statements. The column headed SEEBOARD in the consolidating schedules has been subjected to the auditing procedures applied in our audit of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated statements taken as a whole. KPMG Audit Plc London Chartered Accountants 27 January 1998 Registered Auditor
CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARIES CONSOLIDATING STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS, EXCEPT PER SHARE AMOUNTS) ELIM, RCLSS CSW CON CPL PSO SWEPCO WTU CORP CSWS COMM CSWL CREDIT CSWE* CSWI* ENERSHOP ESI & RND OPERATING REVENUES 5,268 1,376 713 940 398 0 0 5 1 79 16 1,878 3 0 (141) OPERATING EXPENSES AND TAXES Fuel and purchased power 1,266 453 331 408 170 0 2 0 0 0 0 0 0 0 (98) UK cost of sales 1,291 0 0 0 0 0 0 0 0 0 0 1,291 0 0 0 Other operating expense 981 284 135 158 93 71 182 23 0 24 1 242 7 2 (241) Maintenance 152 60 34 44 14 0 4 0 0 0 0 0 0 0 (4) Depreciation and amortization 497 171 81 95 42 1 9 1 0 0 4 93 0 0 0 Taxes, other than income 195 83 29 56 25 2 8 0 0 (1) 1 0 0 0 (8) Income taxes 151 74 21 40 9 (25) 1 (7) 0 6 5 30 (2) (1) 0 TOTAL OPERATING EXPENSES AND TAXES 4,533 1,125 631 801 353 49 206 17 0 29 11 1,656 5 1 (351) OPERATING INCOME 735 251 82 139 45 (49) (206) (12) 1 50 5 222 (2) (1) 210 OTHER INCOME AND (DEDUCTIONS) 30 1 5 4 2 244 212 0 0 0 12 16 (1) 0 (465) INCOME BEFORE INTEREST AND OTHER CHARGES 765 252 87 143 47 195 6 (12) 1 50 17 238 (3) (1) (255) INTEREST AND OTHER CHARGES Interest on long-term debt 333 105 30 40 20 0 4 0 0 0 15 119 0 0 0 Preferred dividend requirements of subs 12 10 0 2 0 0 0 0 0 0 0 0 0 0 0 Gain on reacquired preferred stock (10) (2) (4) (2) (1) 0 0 0 0 0 0 0 0 0 (1) Interest on short-term debt and other 101 18 11 11 6 42 2 2 0 39 (5) 7 0 0 (32) TOTAL INTEREST CHARGES 436 131 37 51 25 42 6 2 0 39 10 126 0 0 (33) INCOME BEFORE EXTRAORDINARY ITEM 329 121 50 92 22 153 0 (14) 1 11 7 112 (3) (1) (222) Extraordinary Item - UK windfall profits tax (176) 0 0 0 0 0 0 0 0 0 0 (176) 0 0 0 NET INCOME FOR COMMON STOCK 153 121 50 92 22 153 0 (14) 1 11 7 (64) (3) (1) (222) EARNINGS PER SHARE OF CSW COMMON STOCK $0.72 AVERAGE CSW COMMON SHARES OUTSTANDING 212.1 * See Pages 67-71 for additional detail for CSWE and Pages 72-77 for additional detail for CSWI. The notes to financial statements (herein incorporated by reference as part of Exhibit A-1) are an integral part of this statement.
CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 1997 (MILLIONS) ELIM, RCLSS CSW CON CPL PSO SWEPCO WTU CORP CSWS COMM CSWL CREDIT CSWE* CSWI* ENERSHOP ESI & RND ASSETS FIXED ASSETS Electric Production 5,824 3,107 908 1,392 418 0 0 0 0 0 0 0 0 0 (1) Transmission 1,558 518 375 456 209 0 0 0 0 0 0 0 0 0 0 Distribution 4,453 1,022 819 871 364 0 0 0 0 0 0 1,378 0 0 (1) General 1,380 296 197 311 104 1 119 0 0 0 0 352 0 0 0 Construction work in progress 184 77 41 52 14 0 0 0 0 0 0 0 0 0 0 Nuclear fuel 196 196 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Electric 13,595 5,216 2,340 3,082 1,109 1 119 0 0 0 0 1,730 0 0 (2) Other diversified 252 0 0 0 0 0 1 43 0 0 199 9 1 0 (1) 13,847 5,216 2,340 3,082 1,109 1 120 43 0 0 199 1,739 1 0 (3) Less - accumulated depreciation 5,219 1,846 1,031 1,226 441 1 34 1 0 0 1 639 0 0 (1) 8,628 3,370 1,309 1,856 668 0 86 42 0 0 198 1,100 1 0 (2) INVESTMENTS IN SUBSIDIARIES 0 0 0 0 0 3,874 0 0 0 0 0 0 0 0 (3,874) CURRENT ASSETS Cash and temporary cash investments 75 0 2 2 21 188 5 2 5 0 3 46 0 0 (199) Accounts receivable 916 61 20 82 11 248 34 1 0 706 198 316 1 1 (763) Under-recovered fuel costs 84 43 15 13 12 0 0 0 0 0 0 0 0 0 1 Material and supplies, at average cost 172 65 32 25 14 0 0 0 0 0 0 35 0 0 1 Electric utility fuel inventory, substantially at average cost 65 15 11 26 12 0 0 0 0 0 0 0 0 0 1 Prepayments and other 78 3 4 13 4 5 16 1 0 3 0 37 1 0 (9) 1,390 187 84 161 74 441 55 4 5 709 201 434 2 1 (968) DEFERRED CHARGES AND OTHER ASSETS Mirror CWIP asset 285 285 0 0 0 0 0 0 0 0 0 0 0 0 0 Deferred plant costs 503 484 0 0 19 0 0 0 0 0 0 0 0 0 0 Equity and other investments 424 2 18 6 1 0 0 7 60 0 113 217 0 0 0 Prepaid benefit cost 156 32 23 25 17 0 0 0 0 0 2 59 0 0 (2) Income tax related regulatory assets, net 329 390 0 0 0 0 0 0 0 0 0 0 0 0 (61) Goodwill 1,428 0 0 0 0 0 0 0 0 0 0 1,428 0 0 0 Deferred charges and other assets 308 63 14 47 23 17 4 (1) 0 0 74 64 1 0 2 3,433 1,256 55 78 60 17 4 6 60 0 189 1,768 1 0 (61) 13,451 4,813 1,448 2,095 802 4,332 145 52 65 709 588 3,302 4 1 (4,905) * See Pages 67-71 for additional detail for CSWE and Pages 72-77 for additional detail for CSWI. The notes to financial statements (herein incorporated by reference as part of Exhibit A-1) are an integral part of this statement.
CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 1997 (MILLIONS) ELIM, RCLSS CSW CON CPL PSO SWEPCO WTU CORP CSWS COMM CSWL CREDIT CSWE* CSWI* ENERSHOP ESI & RND CAPITALIZATION AND LIABILITIES CAPITALIZATION Common Stock Common stock 743 169 157 136 137 743 0 0 0 0 0 0 0 0 (599) Paid-in-capital 1,039 405 180 245 2 1,039 0 0 13 54 108 829 0 0 (1,836) Retained earnings 1,746 833 137 324 120 1,746 0 6 3 0 1 43 (4) (1) (1,462) Foreign currency translation and other 28 0 0 0 0 6 0 (19) 0 0 0 23 0 0 18 3,556 1,407 474 705 259 3,534 0 (13) 16 54 109 895 (4) (1) (3,879) Preferred Stock Not subject to mandatory redemption 176 163 5 5 2 0 0 0 0 0 0 0 0 0 1 Subject to mandatory redemption 26 0 0 26 0 0 0 0 0 0 0 0 0 0 0 Trust Preferred Securities 335 150 75 110 0 0 0 0 0 0 0 0 0 0 Long-term debt 3,898 1,302 422 547 279 0 60 0 0 0 200 1,087 0 0 1 7,991 3,022 976 1,393 540 3,534 60 (13) 16 54 309 1,982 (4) (1) (3,877) CURRENT LIABILITIES Long-term debt and preferred stock due within twelve months 32 28 0 4 0 0 0 0 0 0 0 0 0 0 0 Loan notes 56 0 0 0 0 0 0 10 0 0 0 46 0 0 0 Short-term debt 721 143 5 25 0 721 26 0 0 0 0 0 0 0 (199) Short-term debt-- CSW Credit 637 0 0 0 0 0 0 0 0 636 0 0 0 0 1 Accounts payable 558 84 85 138 37 15 32 54 0 3 152 706 8 2 (758) Accrued taxes 171 14 (1) 13 11 6 2 (1) 0 (1) (1) 130 0 0 (1) Accrued interest 87 28 9 13 5 1 1 0 0 0 4 28 0 0 (2) Other 237 99 26 28 4 0 0 2 0 20 29 35 0 0 (6) 2,499 396 124 221 57 743 61 65 0 658 184 945 8 2 (965) DEFERRED CREDITS Accumulated deferred income taxes 2,431 1,238 259 396 149 21 14 0 43 (3) 48 267 0 0 (1) Investment tax credits 278 142 41 67 28 0 0 0 0 0 0 0 0 0 0 Income tax related regulatory liabilities, net 0 0 42 10 10 0 0 0 0 0 0 0 0 0 (62) Other 252 15 6 8 18 34 10 0 6 0 47 108 0 0 0 2,961 1,395 348 481 205 55 24 0 49 (3) 95 375 0 0 (63) 13,451 4,813 1,448 2,095 802 4,332 145 52 65 709 588 3,302 4 1 (4,905) * See Pages 67-71 for additional detail for CSWE and Pages 72-77 for additional detail for CSWI. The notes to financial statements (herein incorporated by reference as part of Exhibit A-1) are an integral part of this statement.
CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARIES CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) ELIM, RCLSS CSW CON CPL PSO SWEPCO WTU CORP CSWS COMM CSWL CREDIT CSWE* CSWI* ENERSHOP ESI & RND OPERATING ACTIVITIES Net income 153 121 50 92 22 153 0 (14) 1 11 7 (64) (3) (1) (222) Non-cash items included in net income Depreciation and amortization 529 193 85 100 43 0 9 1 0 0 4 93 0 0 1 Deferred income taxes and investment tax credits 110 30 6 (7) (2) 50 0 1 (5) (1) 13 25 0 0 0 Preferred stock dividends 12 10 0 2 0 0 0 0 0 0 0 0 0 0 0 Gain on reacquired preferred stock (10) (2) (4) (2) (1) 0 0 0 0 0 0 0 0 0 (1) Charges for investments and assets 53 20 10 18 5 0 0 0 0 0 0 0 0 0 0 Changes in assets and liabilities Accounts receivable (140) (8) (24) (13) 14 (99) 7 (1) 0 (91) 5 (87) (1) 0 158 Accounts payable 45 14 13 19 4 (93) 4 30 0 2 (5) 153 6 2 (104) Accrued taxes (155) (51) (13) (12) (2) (180) 1 (1) 0 (2) 0 106 0 (1) 0 Fuel recovery (37) (17) (13) (4) (3) 0 0 0 0 0 0 0 0 0 0 Undistributed earnings 0 0 0 0 0 119 0 0 0 0 0 0 0 0 (119) Other 166 30 11 7 15 (10) 1 2 8 3 85 23 0 0 (9) 726 340 121 200 95 (60) 22 18 4 (78) 109 249 2 0 (296) INVESTING ACTIVITIES Construction expenditures (507) (127) (80) (108) (31) 0 (9) (23) 0 0 0 (126) (2) 0 (1) Acquisition expenditures 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Equity investments in subsidiaries 0 0 0 0 0 (58) 0 (3) 0 0 0 0 0 0 61 CSWE/CSWI non-SEEBOARD projects (382) 0 0 0 0 0 0 0 0 0 (189) (193) 0 0 0 Sale of National Grid assets 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cash proceeds from sale of subsidiary 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other (15) 1 (6) (5) 0 0 5 0 0 0 0 (9) 0 0 (1) (904) (126) (86) (113) (31) (58) (4) (26) 0 0 (189) (328) (2) 0 59 FINANCING ACTIVITIES Common stock sold 20 0 0 0 0 20 0 0 (2) 22 0 0 0 0 (20) Capital contributions 0 0 0 0 0 0 0 0 0 0 37 0 0 0 (37) Proceeds from issuance of long-term debt 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 SEEBOARD acquisition financing 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Trust preferred securities sold 323 145 72 106 0 0 0 0 0 0 0 0 0 0 0 Redemption of preferred stock (114) (85) (10) (16) (3) 0 0 0 0 0 0 0 0 0 0 Reacquisition/Retirement of long-term debt (253) (200) 0 (53) 0 0 0 0 0 0 0 0 0 0 0 Other financing activities (3) 0 0 0 0 0 0 10 0 0 0 (13) 0 0 0 Change in short-term debt 414 91 (37) (31) (15) 356 (14) 0 0 57 46 0 0 0 (39) Payment of dividends (383) (168) (60) (93) (26) (369) 0 0 0 (10) 0 0 0 0 343 4 (217) (35) (87) (44) 7 (14) 10 (2) 69 83 (13) 0 0 247 Effect of exchange rate changes on cash and cash equivalents (5) 0 0 0 0 0 0 0 0 0 0 (5) 0 0 0 Net change in cash and cash equivalents (179) (3) 0 0 20 (111) 4 2 2 (9) 3 (97) 0 0 10 Cash and cash equivalents at beginning of year 254 3 2 2 1 299 1 0 3 9 0 143 0 0 (209) Cash and cash equivalents at end of year 75 0 2 2 21 188 5 2 5 0 3 46 0 0 (199) SUPPLEMENTAL INFORMATION Interest paid less amounts capitalized 413 117 36 50 21 50 6 2 0 40 7 117 0 0 (33) Income taxes paid 316 62 34 58 16 148 0 (5) 7 8 (9) 2 (1) 0 (4) * See Pages 67-71 for additional detail for CSWE and Pages 72-77 for additional detail for CSWI. The notes to financial statements (herein incorporated by reference as part of Exhibit A-1) are an integral part of this statement.
CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARIES CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) ELIM, RCLSS CSW CON CPL PSO SWEPCO WTU CORP CSWS COMM CSWL CREDIT CSWE* CSWI* ENERSHOP ESI & RND Retained earnings at beginning of year 1,963 869 146 322 123 1,963 0 (5) 2 0 (6) 108 (2) 0 (1,557) Net income for common stock 153 121 50 92 22 153 0 (14) 1 11 7 (64) (3) (1) (222) Common stock dividends and other (370) (157) (59) (90) (25) (370) 0 25 0 (11) 0 (1) 1 0 317 Retained earnings at end of year 1,746 833 137 324 120 1,746 0 6 3 0 1 43 (4) (1) (1,462) * See Pages 67-71 for additional detail for CSWE and Pages 72-77 for additional detail for CSWI. The notes to financial statements (herein incorporated by reference as part of Exhibit A-1) are an integral part of this statement.
CSW ENERGY, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31,1997 (MILLIONS) CSWE CSWE CSWD-I CSWD-II CSWFL NEWGULF SWEENY ELIM, CON RCLSS & RND TOTAL OPERATING REVENUES 16 0 3 0 12 1 0 0 OPERATING EXPENSES AND TAXES Fuel and purchased power 0 0 0 0 0 1 0 (1) UK cost of sales 0 0 0 0 0 0 0 0 Other operating expense 1 1 2 0 0 0 0 (2) Maintenance 0 0 0 0 0 0 0 0 Depreciation and amortization 4 0 0 0 3 0 0 1 Taxes other than income 1 0 0 0 0 0 0 1 Income taxes 5 (1) 1 0 5 0 0 0 TOTAL OPERATING EXPENSES 11 0 3 0 8 1 0 (1) OPERATING INCOME 5 0 0 0 4 0 0 1 OTHER INCOME AND DEDUCTIONS 12 12 0 0 0 0 0 0 INCOME BEFORE INTEREST AND OTHER CHARGES 17 12 0 0 4 0 0 1 INTEREST AND OTHER CHARGES Interest on long-term debt 15 14 0 0 0 0 0 1 Preferred dividend requirements of subs 0 0 0 0 0 0 0 0 Gain on reacquired preferred stock 0 0 0 0 0 0 0 0 Interest on short-term debt and other (5) 0 (2) 0 (3) 0 0 0 TOTAL INTEREST CHARGES 10 14 0 0 (3) 0 0 (1) INCOME BEFORE EXTRAORDINARY ITEM 7 (2) 2 0 7 0 0 0 Extraordinary Item- 0 0 0 0 0 0 0 0 NET INCOME FOR COMMON STOCK 7 (2) 2 0 7 0 0 0
CSW ENERGY, INC. AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 1997 (MILLIONS) CSWE CSWE CSWD-I CSWD-II CSWFL NEWGULF SWEENY ELIM, CON RCLSS & RND ASSETS FIXED ASSETS Electric Production 0 0 0 0 0 0 0 0 Transmission 0 0 0 0 0 0 0 0 Distribution 0 0 0 0 0 0 0 0 General 0 0 0 0 0 0 0 0 Construction work in progress 0 0 0 0 0 0 0 0 Nuclear fuel 0 0 0 0 0 0 0 0 Total electric 0 0 0 0 0 0 0 0 Other Diversified 199 3 0 0 0 18 178 0 Total Plant 199 3 0 0 0 18 178 0 Less - accumulated depreciation 1 0 0 0 0 0 0 1 NET PLANT 198 3 0 0 0 18 178 (1) INVESTMENT IN SUBSIDIARIES 0 0 0 0 0 0 0 0 CURRENT ASSETS Cash and temporary cash investments 3 0 0 0 0 0 3 0 Accounts Receivable 198 349 0 0 0 0 0 (151) Unrecovered fuel costs 0 0 0 0 0 0 0 0 Material and supplies, at average cost 0 0 0 0 0 0 0 0 Electric utility fuel inventory, substantially at average cost 0 0 0 0 0 0 0 0 Prepayments and other 0 0 0 0 0 0 0 0 TOTAL CURRENT ASSETS 201 349 0 0 0 0 3 (151) DEFERRED CHARGES AND OTHER ASSETS Mirror CWIP asset 0 0 0 0 0 0 0 0 Deferred plant costs 0 0 0 0 0 0 0 0 Other non-utility investments 113 140 44 0 69 0 0 (140) Prepaid benefit cost 2 2 0 0 0 0 0 0 Income tax related regulatory assets, net 0 0 0 0 0 0 0 0 Goodwill 0 0 0 0 0 0 0 0 Deferred charges and other assets 74 38 0 0 45 0 0 (9) TOTAL DEFERRED CHARGES AND OTHER ASSETS 189 180 44 0 114 0 0 (149) TOTAL ASSETS 588 532 44 0 114 18 181 (301)
CSW ENERGY, INC. AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31,1997 (MILLIONS) CSWE CSWE CSWD-I CSWD-II CSWFL NEWGULF SWEENY ELIM, CON RCLSS & RND CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock Common stock 0 0 0 0 0 0 0 0 Paid-in-capital 108 111 43 0 83 11 2 (142) Retained Earnings 1 (25) 4 (4) 26 0 0 0 Foreign currency translation and other 0 0 0 0 0 0 0 0 109 86 47 (4) 109 11 2 (142) Preferred stock Not subject to mandatory redemption 0 0 0 0 0 0 0 0 Subject to mandatory redemption 0 0 0 0 0 0 0 0 Trust Preferred Securities 0 0 0 0 0 0 0 0 Long-term debt 200 200 0 0 0 0 0 0 309 286 47 (4) 109 11 2 (142) CURRENT LIABILITIES Long-term debt and preferred stock due within twelve months 0 0 0 0 0 0 0 0 Loan notes 0 0 0 0 0 0 0 0 Short-term debt 0 0 0 0 0 0 0 0 Short-term debt-CSW Credit 0 0 0 0 0 0 0 0 Accounts Payable 152 188 (23) 4 (17) 7 152 (159) Accrued taxes (1) (2) (2) 0 3 (1) 0 1 Accrued interest 4 4 0 0 0 0 0 0 Other 29 2 0 0 0 0 27 0 Total Current Liabilities 184 192 (25) 4 (14) 6 179 (158) DEFERRED CREDITS Accumulared deferred income taxes 48 9 22 0 16 1 0 0 Investment tax credits 0 0 0 0 0 0 0 0 Income tax related regulatory liabilities, new 0 0 0 0 0 0 0 0 Other 47 45 0 0 3 0 0 (1) Total Deferred Credits 95 54 22 0 19 1 0 (1) TOTAL CAPITALIZATION AND LIABILITIES 588 532 44 0 114 18 181 (301)
CSW ENERGY, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) CSWE does not prepare a consolidating statement of cash flows. Instead, a consolidated statement of cash flows is prepared which is presented as part of the Central and South West Corporation and Subsidiaries Consolidating Statement of Cash Flows on Page 65.
CSW ENERGY, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) CSWE CSWE CSWD-I CSWD-II CSWFL NEWGULF SWEENY ELIM, CON RCLSS & RND Retained earnings at beginning of year (6) (23) 2 (4) 19 0 0 0 Net income for common stock 7 (2) 2 0 7 0 0 0 Common stock dividends and other 0 0 0 0 0 0 0 0 Retained earnings at end of year 1 (25) 4 (4) 26 0 0 0
CSW INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) ELIM. CSWI CSWI CSW CHILE LATIN CSWI RCLSS & CON CSWI (CAYMAN) VALE LLC ENERGY AMERICAN ENERGY CSWI CSWI Capital SEEBOARD* RND HOLDINGS ENERGY DEVELOP. 2 3 Trust -------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 1,878 0 0 7 1 0 0 0 0 0 1,870 0 OPERATING EXPENSES AND TAXES Fuel and purchased power 0 0 0 0 0 0 0 0 0 0 0 0 UK cost of sales 1,291 0 0 0 0 0 0 0 0 0 1,291 0 Other operating expense 242 11 0 0 0 0 0 6 0 0 225 0 Maintenance 0 0 0 0 0 0 0 0 0 0 0 0 Depreciation & acquisition amortization 93 0 0 0 0 0 0 0 0 0 92 1 Taxes other than income 0 0 0 0 0 0 0 0 0 0 0 0 Income taxes 30 (5) 0 3 1 0 0 (6) 0 0 38 (1) TOTAL OPERATING EXPENSES AND TAXES 1,656 6 0 3 1 0 0 0 0 0 1,646 0 OPERATING INCOME 222 (6) 0 4 0 0 0 0 0 0 224 0 OTHER INCOME AND (DEDUCTIONS) 16 8 0 0 0 0 0 1 0 0 10 (3) INCOME BEFORE INTEREST AND OTHER CHARGES 238 2 0 4 0 0 0 1 0 0 234 (3) INTEREST AND OTHER CHARGES Interest on long-term debt 119 0 0 0 0 0 0 0 0 (32) 147 4 Preferred dividend requirements of subs 0 0 0 0 0 0 0 0 0 0 0 0 Gain on reacquired preferred stock 0 0 0 0 0 0 0 0 0 0 0 0 Interest on short-term debt and other 7 12 0 0 0 0 0 3 0 0 0 (8) TOTAL INTEREST CHARGES 126 12 0 0 0 0 0 3 0 (32) 147 (4) INCOME BEFORE EXTRAORDINARY ITEM 112 (10) 0 4 0 0 0 (2) 0 32 87 1 Extraordinary Item - UK windfall profits tax (176) 0 0 0 0 0 0 0 0 0 (176) 0 NET INCOME FOR COMMON STOCK (64) (10) 0 4 0 0 0 (2) 0 32 (89) 1 * SEEBOARD consists of SEEBOARD plc, SEEBOARD Group plc, CSW Investments, and CSW (UK) FINCO.
CSW INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 1997 (MILLIONS) ELIM. CSWI CSWI CSW CHILE LATIN CSWI RCLSS & CON CSWI (CAYMAN) VALE LLC ENERGY AMERICAN ENERGY CSWI CSWI Capital SEEBOARD* RND HOLDINGS ENERGY DEVELOP. 2 3 Trust -------------------------------------------------------------------------------------------------- ASSETS FIXED ASSETS Electric Production Transmission Distribution 1,378 0 0 0 0 0 0 0 0 0 1,378 0 General 352 6 0 3 0 0 0 0 0 0 304 39 Acquisition Step up 0 0 0 0 0 0 0 0 0 0 48 (48) Nuclear fuel 0 0 0 0 0 0 0 0 0 0 0 0 Total electric 1,730 6 0 3 0 0 0 0 0 0 1,730 (9) Other Diversified 9 0 0 0 0 0 0 0 0 0 0 9 1,739 6 0 3 0 0 0 0 0 0 1,730 0 Less - accumulated depreciation 639 0 0 0 0 0 0 1 0 0 639 (1) 1,100 6 0 3 0 0 0 (1) 0 0 1,091 1 CURRENT ASSETS Cash and temporary cash investments 46 0 0 2 0 0 0 0 0 0 44 0 Accounts Receivable 316 2 3 0 0 11 1 80 0 0 126 93 Unrecovered fuel costs 0 0 0 0 0 0 0 0 0 0 0 0 Material and supplies, at average cost 35 0 0 0 0 0 0 0 0 0 35 0 Electric utility fuel inventory, substantially at average cost 0 0 0 0 0 0 0 0 0 0 0 0 Prepayments and other 37 0 0 0 0 0 0 0 0 0 36 1 434 2 3 2 0 11 1 80 0 0 241 94 DEFERRED CHARGES AND OTHER ASSETS Equity and other investments 217 910 80 83 112 0 0 428 0 0 34 (1,430) Prepaid Benefit Costs 59 0 0 0 0 0 0 0 0 0 59 0 Goodwill 1,428 0 0 0 0 0 0 0 0 0 1,429 (1) Intercompany Notes Receivable 0 288 0 0 0 0 0 0 0 404 0 (692) Deferred charges and other assets 64 0 0 0 0 0 0 3 0 0 0 61 1,768 1,198 80 83 112 0 0 431 0 404 1,522 (2,062) TOTAL ASSETS 3,302 1,206 83 88 112 11 1 510 0 404 2,854 (1,967) *SEEBOARD consists of SEEBOARD plc, SEEBOARD Group plc, CSW Investments, and CSW (UK) FINCO
CSW INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 1997 (MILLIONS) ELIM. CSWI CSWI CSW CHILE LATIN CSWI RCLSS & CON CSWI (CAYMAN) VALE LLC ENERGY AMERICAN ENERGY CSWI CSWI Capital SEEBOARD* RND HOLDINGS ENERGY DEVELOP. 2 3 Trust -------------------------------------------------------------------------------------------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stock Common stock 0 0 0 0 0 0 0 0 0 0 0 0 Paid-in-capital 829 829 80 80 0 0 0 836 0 372 793 (2,161) Retained earnings 43 (15) 0 4 0 0 0 (362) 0 32 (387) 771 Foreign currency translation and other 23 0 0 0 0 0 0 0 0 0 0 23 895 814 80 84 0 0 0 474 0 404 406 (1,367) Preferred stock Not subject to mandatory redemption 0 0 0 0 0 0 0 0 0 0 0 0 Subject to mandatory redemption 0 0 0 0 0 0 0 0 0 0 0 0 Long-term debt 1,087 0 0 0 0 0 0 0 0 0 1,500 (413) 1,982 814 80 84 0 0 0 474 0 404 1,906 (1,780) CURRENT LIABILITIES Long-term debt and preferred stock due within twelve months 0 0 0 0 0 0 0 0 0 0 0 0 Loan notes 46 0 0 0 0 0 0 0 0 0 46 0 Short-term debt 0 0 0 0 0 0 0 0 0 0 0 Short-term debt --CSW Credit 0 0 0 0 0 0 0 0 0 0 0 0 Accounts payable 706 391 3 3 111 11 1 30 0 0 284 (128) Accrued taxes 130 (3) 0 1 1 0 0 5 0 0 126 0 Accrued interest 28 0 0 0 0 0 0 1 0 0 27 0 Other 35 2 0 0 0 0 0 0 0 0 35 (2) 945 390 3 4 112 11 1 36 0 0 518 (130) DEFERRED CREDITS Accumulated deferred income taxes 267 0 0 0 0 0 0 0 0 0 271 (4) Investment tax credits 0 0 0 0 0 0 0 0 0 0 0 0 Provisions 0 0 0 0 0 0 0 0 0 0 52 (52) Income tax related regulatory liabilities, net 0 0 0 0 0 0 0 0 0 0 0 0 Other 108 2 0 0 0 0 0 0 0 0 107 (1) 375 2 0 0 0 0 0 0 0 0 430 (57) TOTAL CAPITALIZATION AND LIABILITIES 3,302 1,206 83 88 112 11 1 510 0 404 2,854 (1,967) * SEEBOARD consists of SEEBOARD plc, SEEBOARD Group plc, CSW Investments, and CSW (UK) FINCO.
CSW INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) ELIM. CSWI CSWI CSW CHILE LATIN CSWI RCLSS & CON CSWI (CAYMAN) VALE LLC ENERGY AMERICAN ENERGY CSWI CSWI Capital SEEBOARD* RND HOLDINGS ENERGY DEVELOP. 2 3 Trust -------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net Income (64) (10) 0 4 0 0 0 (2) 0 32 (89) 1 Non-cash items included in net income Depreciation and amortization 93 0 0 0 0 0 0 0 0 0 92 1 Deferred income taxes and investment tax credits 25 0 0 0 0 0 0 0 0 0 20 5 Preferred stock dividends 0 0 0 0 0 0 0 0 0 0 0 0 Gain on reacquired preferred stock 0 0 0 0 0 0 0 0 0 0 0 0 Charges for investments and assets 0 0 0 0 0 0 0 0 0 0 0 0 Change in Assets and Liabilities Accounts receivable (87) 159 (1) 0 0 (11) (1) (50) 0 0 (3) (180) Accounts payable 153 176 1 1 111 11 1 (12) 0 0 (43) (93) Accrued taxes 106 0 0 1 1 0 0 8 0 0 100 (4) Fuel recovery 0 0 0 0 0 0 0 0 0 0 0 0 Undistributed earnings 0 0 0 0 0 0 0 0 0 0 0 0 Other 23 1 0 2 0 0 0 0 0 0 21 (1) 249 326 0 8 112 0 0 (56) 0 32 98 (271) INVESTING ACTIVITIES Construction expenditures (126) 0 0 (3) 0 0 0 0 0 0 (126) 3 Acquisition expenditures 0 0 0 0 0 0 0 0 0 0 0 0 Equity investments in subsidiaries 0 0 0 0 0 0 0 0 0 0 1 (1) CSWE/CSWI non-SEEBOARD projects (193) (40) (40) (43) (112) 0 0 0 0 0 0 42 Sale of National Grid asset shares 0 0 0 0 0 0 0 0 0 0 0 0 Cash proceeds from sale of subsidiary 0 0 0 0 0 0 0 0 0 0 0 0 Other (9) 100 0 0 0 0 0 0 0 0 (11) (98) (328) 60 (40) (46) (112) 0 0 0 0 0 (136) (54) FINANCING ACTIVITIES Common stock sold 0 0 0 0 0 0 0 0 0 0 0 0 Capital contributions 0 (393) 40 40 0 0 0 0 0 0 0 313 Proceeds from issuance of long-term debt 0 0 0 0 0 0 0 0 0 0 26 (26) SEEBOARD acquisition financing 0 0 0 0 0 0 0 0 0 0 0 0 Trust preferred securities sold 0 0 0 0 0 0 0 0 0 0 0 0 Redemption of preferred stock 0 0 0 0 0 0 0 0 0 0 0 0 Re-acquisition/Retirement of long-term debt 0 0 0 0 0 0 0 0 0 0 0 0 Other financing activities (13) 0 0 0 0 0 0 0 0 (32) (27) 46 Change in short-term debt 0 0 0 0 0 0 0 0 0 0 0 0 Payment of dividends 0 0 0 0 0 0 0 0 0 0 (47) 47 (13) (393) 40 40 0 0 0 0 0 (32) (48) 380 Effect of exchange rate changes on cash and cash equivalents (5) 0 0 0 0 0 0 0 0 0 (5) 0 Net change in cash and cash equivalents (97) (7) 0 2 0 0 0 (56) 0 0 (91) 55 Cash and cash equivalents at beginning or year 143 7 0 0 0 0 0 1 0 0 135 0 Cash and cash equivalents at end of year 46 0 0 2 0 0 0 (55) 0 0 44 55 * SEEBOARD consists of SEEBOARD plc, SEEBOARD Group plc, CSW Investments, and CSW (UK) FINCO.
CSW INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) ELIM. CSWI CSWI CSW CHILE LATIN CSWI RCLSS & CON CSWI (CAYMAN) VALE LLC ENERGY AMERICAN ENERGY CSWI CSWI Capital SEEBOARD* RND HOLDINGS ENERGY DEVELOP. 2 3 Trust -------------------------------------------------------------------------------------------------- Retained earnings at beginning of year 108 (5) 0 0 0 0 0 (271) 0 0 (251) 635 Net income for common stock (64) (10) 0 4 0 0 0 (91) 0 32 (89) 90 Common stock dividends and other (1) 0 0 0 0 0 0 0 0 0 (47) 46 Retained earnings at end of year 43 (15) 0 4 0 0 0 (362) 0 32 (387) 771 * SEEBOARD consists of SEEBOARD plc, SEEBOARD Group plc, CSW Investments, and CSW (UK) FINCO.
CSW INTERNATIONAL, INC. AND SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 1997 (MILLIONS) Detailed financial statements for certain subsidiaries of CSW International, Inc. are not available. ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. (CONTINUED) EXHIBITS EXHIBIT A ANNUAL REPORTS INCORPORATED BY REFERENCE The annual reports for CSW (File No. 1-1443), CPL (File No. 0-346), PSO (File No. 0-343), SWEPCO (File No. 1-3146), and WTU (File No. 0-340) are incorporated herein by reference to their combined annual report on Form 10-K ("Combined Form 10-K") for the year ended December 31, 1997. EXHIBIT B CSW B-1.1 Second Restated Certificate of Incorporation of the Corporation (incorporated herein by reference to Exhibit 3(a) to the 1990 CSW annual report on Form 10-K File No. 1-1443). B-1.2 Certificate of Amendment to Second Restated Certificate of Incorporation of the Corporation (incorporated herein by reference to Item 10, Exhibit B-1.2 to the 1993 CSW annual report on Form U5S). B-1.3 Bylaws of CSW, as amended, (incorporated herein by reference to Exhibit 3(b) to CSW's 1990 Form 10-K, File No. 1-1443). B-1.4 Rights Agreement dated as of December 22, 1997 between CSW and Central and South West Services, Inc., as Rights Agent (incorporated herein by reference to Exhibit 1 to CSW Form 8-A/A dated March 19, 1998, File No. 1-1443). CPL B-2.1 Restated Articles of Incorporation Without Amendment, Articles of Correction to Restated Articles of Incorporation Without Amendment, Articles of Amendment to Restated Articles of Incorporation, Statements of Registered Office and/or Agent (3), and Articles of Amendment to the Articles of Incorporation (incorporated herein by reference to Exhibit 3.1 to CPL's Form 10-Q for the quarterly period ended March 31, 1997). B-2.2 Bylaws of CPL, as amended (incorporated herein by reference to Exhibit 3.1 to CPL's Form 10-Q dated September 30, 1996, File No. 0-346). PSO B-3.1 Restated Certificate of Incorporation of PSO (incorporated herein by reference to Exhibit B-3.1 of CSW's 1996 Form U5S, File No. 1-1443). B-3.2 Bylaws of PSO, as amended (incorporated herein by reference to Exhibit B-3.2 of CSW's 1996 Form U5S, File No. 1-1443). ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. (CONTINUED) SWEPCO B-4.1 Restated Certificate of Incorporation, as amended through May 6, 1997, including Certificate of Amendment of Restated Certificate of Incorporation (both incorporated herein by reference to Exhibit 3.4 to SWEPCO's Form 10-Q dated March 31, 1997, File No 1-3146). B-4.2 Bylaws of SWEPCO, as amended (incorporated herein by reference to Exhibit 3.3 to SWEPCO's Form 10-Q dated September 30, 1996, File No. 1-3146). WTU B-5.1 Restated Articles of Incorporation, as amended, and Articles of Amendment to the Articles of Incorporation (both incorporated herein by reference to Exhibit 3.5 to WTU's March 31, 1997 Form 10-Q, File No. 0-340). B-5.2 Bylaws of WTU, as amended (incorporated herein by reference to Exhibit 3.4 to WTU's Form 10-Q dated September 30, 1996, File No. 0-340). CSWS B-7.1 Articles of Amendment to the Articles of Incorporation (incorporated herein by reference to Item 9, Exhibit B-7.1 of the 1987 Central and South West Corporation annual report on Form U5S). B-7.2 By-laws, as amended of CSWS (incorporated herein by reference to Item 10, Exhibit B-7.2 of the 1993 Central and South West Corporation annual report on Form U5S). CSWE B-8.1 Articles of Amendment to the Articles of Incorporation (incorporated herein by reference to Item 9, Exhibit B-9.1 of the 1987 Central and South West Corporation annual report on Form U5S). B-8.2 By-laws (incorporated herein by reference to Item 9, Exhibit B-9.2 of the 1987 Central and South West Corporation annual report on Form U5S). CSWL B-9.1 Articles of Incorporation (incorporated herein by reference to Item 9, Part VI of the 1984 Central and South West Corporation annual report on Form U5S). B-9.2 By-laws (incorporated herein by reference to Item 9, Part VI of the 1983 Central and South West Corporation annual report on Form U5S). ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. (CONTINUED) CREDIT B-10.1 Articles of Incorporation (incorporated herein by reference to Item 9, Part VI of the 1985 Central and South West Corporation annual report on Form U5S). B-10.2 By-laws (incorporated herein by reference to Item 9, Exhibit B-11.2 of the 1987 Central and South West Corporation annual report on Form U5S). COMM B-11.1 Certificate of Incorporation, (incorporated herein by reference to Item 10, Exhibit B-11.1 of the 1994 Central and South West Corporation annual report on Form U5S). B-11.2 By-laws, (incorporated herein by reference to Item 10, Exhibit B-11.2 of the 1994 Central and South West Corporation annual report on Form U5S). CSWI B-12.1 Certificate of Incorporation, (incorporated herein by reference to Item 10, Exhibit B-12.1 of the 1994 Central and South West Corporation annual report on Form U5S). B-12.2 By-laws, (incorporated herein by reference to Item 10, Exhibit B-12.2 of the 1994 Central and South West Corporation annual report on Form U5S). ENERSHOP B-13.1 Certificate of Incorporation, (incorporated herein by reference to Item 10, Exhibit B-13.1 of the 1995 Central and South West Corporation annual report on Form U5S). B-13.2 By-laws, (incorporated herein by reference to Item 10, Exhibit B-13.2 of the 1995 Central and South West Corporation annual report on Form U5S). SEEBOARD PLC B-14.1 Articles of Association, (attached hereto as Exhibit B-14.1). B-14.2 Memorandum of Association, (attached hereto as Exhibit B-14.2). ESI B-15.1 Certificate of Incorporation, (incorporated herein by reference to Item 10, Exhibit B-15.1 of the 1997 Central and South West Corporation annual report on Form U5S). B-15.2 By-laws, (incorporated herein by reference to Item 10, Exhibit B-15.2 of the 1997 Central and South West Corporation annual report on Form U5S). ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. (CONTINUED) EXHIBIT C CPL C-1.1 (a) Indenture of mortgage or deed of trust date November 1, 1943, executed by CPL to the First National Bank of Chicago and Robert L. Grinnell as trustee, as amended through October 1, 1977, (incorporated herein by reference to Exhibit 5.01 in File No. 2-60712). (b) Supplemental Indentures to the First Mortgage Indenture: DATED FILE REFERENCE EXHIBIT September 1, 1978 2-62271 2.02 December 15, 1984 Form U-1, No. 70-7003 17 July 1, 1985 2-98944 4 (b) May 1, 1986 Form U-1, No. 70-7236 4 November 1, 1987 Form U-1, No. 70-7249 4 June 1, 1988 Form U-1, No. 70-7520 2 December 1, 1989 Form U-1, No. 70-7721 3 March 1, 1990 Form U-1, No. 70-7725 10 October 1, 1992 Form U-1, No. 70-8053 10 (a) December 1, 1992 Form U-1, No. 70-8053 10 (b) February 1, 1993 Form U-1, No. 70-8053 10 (c) April 1, 1993 Form U-1, No. 70-8053 10 (d) May 1, 1994 Form U-1, No. 70-8053 10 (e) July 1, 1995 Form U-1, No. 70-8053 10 (f) (c) CPL-obligated, mandatorily redeemable preferred securities of subsidiary trust holding solely Junior Subordinated Debentures of CPL: (c.1) Indenture, dated as of May 1, 1997, between CPL and the Bank of New York, as Trustee (incorporated herein by reference to Exhibit 4.1 of CPL's March 31, 1997 Form 10-Q, File No. 0-346). (c.2) First Supplemental Indenture, dated as of May 1, 1997, between CPL and the Bank of New York, as Trustee (incorporated herein by reference to Exhibit 4.2 of CPL's March 31, 1997 Form 10-Q, File No. 0-346). (c.3) Amended and Restated Trust Agreement of CPL Capital I, dated as of May 1, 1997, among CPL, as Depositor; the Bank of New York, as Property Trustee; the Bank of New York (Delaware), as Delaware Trustee; and the Administrative Trustee (incorporated herein by reference to Exhibit 4.3 of CPL's March 31, 1997 Form 10-Q, File No. 0-346). (c.4) Guarantee Agreement, dated as of May 1, 1997, delivered by CPL for the benefit of the holders of CPL Capital I's Preferred Securities (incorporated herein by reference to Exhibit 4.4 of CPL's March 31, 1997 Form 10-Q, File No. 0-346). (c.5) Agreement as to Expenses and Liabilities, dated as of May 1, 1997, between CPL and CPL Capital I (incorporated herein by reference to Exhibit 4.5 of CPL's March 31, 1997 Form 10-Q, File No. 0-346). PSO C-2.1 (a) Indenture dated July 1, 1945, as amended, of PSO (incorporated herein by reference to Exhibit 5.03 in Registration No. 2-60712). (b) Supplemental Indentures to the First Mortgage Indenture: DATED FILE REFERENCE EXHIBIT June 1, 1979 2-64432 2.02 December 1, 1979 2-65871 2.02 March 1, 1983 Form U-1, No. 70-6822 2 May 1, 1986 Form U-1, No. 70-7234 3 July 1, 1992 Form S-3, No. 33-48650 4 (b) December 1, 1992 Form S-3, No. 33-49143 4 (c) April 1, 1993 Form S-3, No. 33-49575 4 (b) June 1, 1993 Form 10-K, No. 0-343 4 (b) February 1, 1996 Form 8-K, March 4, 1996, 4.01 No. 0-343 February 1, 1996 Form 8-K, March 4, 1996, 4.02 No. 0-343 February 1, 1996 Form 8-K, March 4, 1996, 4.03 No. 0-343 (c) PSO-obligated, mandatorily redeemable preferred securities of subsidiary trust holding solely Junior Subordinated Debentures of PSO. (c.1) Indenture, dated as of May 1, 1997, between PSO and the Bank of New York, as Trustee (incorporated herein by reference to Exhibit 4.6 of PSO's March 31, 1997 Form 10-Q, File No. 0-343). (c.2) First Supplemental Indenture, dated as of May 1, 1997, between PSO and the Bank of New York, as Trustee (incorporated herein by reference to Exhibit 4.7 of PSO's March 31, 1997 Form 10-Q, File No. 0-343). (c.3) Amended and Restated Trust Agreement of PSO Capital I, dated as of May 1,1997, among PSO, as Depositor; the Bank of New York, as Property Trustee; the Bank of New York (Delaware), as Delaware Trustee; and the Administrative Trustee (incorporated herein by reference to Exhibit 4.8 of PSO's March 31, 1997 Form 10-Q, File No. 0-343). (c.4) Guarantee Agreement, dated as of May 1, 1997, delivered by PSO for the benefit of the holders of PSO Capital I's Preferred Securities (incorporated herein by reference to Exhibit 4.9 of PSO's March 31, 1997 Form 10-Q, File No. 0-343). (c.5) Agreement as to Expenses and Liabilities, dated as of May 1, 1997, between PSO and PSO Capital I (incorporated herein by reference to Exhibit 4.10 of PSO's March 31, 1997 Form 10-Q, File No. 0-343). ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. (CONTINUED) SWEPCO C-3.1 (a) Indenture dated February 1, 1940, as amended through November 1, 1976, of SWEPCO (incorporated herein by reference to Exhibit 5.04 in Registration No. 2-60712). (b) Supplemental Indentures to the First Mortgage Indenture: DATED FILE REFERENCE EXHIBIT August 1, 1978 2-61943 2.02 January 1, 1980 2-66033 2.02 April 1, 1981 2-71126 2.02 May 1, 1982 2-77165 2.02 August 1, 1985 Form U-1, No. 70-7121 4 May 1, 1986 Form U-1, No. 70-7233 3 November 1, 1989 Form U-1, No. 70-7676 3 June 1, 1992 Form U-1, No. 70-7934 10 September 1, 1992 Form U-1, No. 72-8041 10 (b) July 1, 1993 Form U-1, No. 70-8041 10 (c) October 1, 1993 Form U-1, No. 70-8239 10 (a) (c) SWEPCO-obligated, mandatorily redeemable preferred securities of subsidiary trust holding solely Junior Subordinated Debentures of SWEPCO. (c.1) Indenture, dated as of May 1, 1997, between SWEPCO and the Bank of New York, as Trustee (incorporated herein by reference to Exhibit 4.11 of SWEPCO's March 31, 1997 Form 10-Q, File No. 1-3146). (c.2) First Supplemental Indenture, dated as of May 1, 1997, between SWEPCO and the Bank of New York, as Trustee (incorporated herein by reference to Exhibit 4.12 of SWEPCO's March 31, 1997 Form 10-Q, File No. 1-3146). (c.3) Amended and Restated Trust Agreement of SWEPCO Capital I, dated as of May 1, 1997, among SWEPCO, as Depositor; the Bank of New York, as Property Trustee; the Bank of New York (Delaware), as Delaware Trustee; and the Administrative Trustee (incorporated herein by reference to Exhibit 4.13 of SWEPCO's March 31, 1997 Form 10-Q, File No. 1-3146). (c.4) Guarantee Agreement, dated as of May 1, 1997, delivered by SWEPCO for the benefit of the holders of SWEPCO Capital I's Preferred Securities (incorporated herein by reference to Exhibit 4.14 of SWEPCO's March 31, 1997 Form 10-Q, File No. 1-3146). (c.5) Agreement as to Expenses and Liabilities, dated as of May 1, 1997 between SWEPCO and SWEPCO Capital I (incorporated herein by reference to Exhibit 4.15 of SWEPCO's March 31, 1997 Form 10-Q, File No. 1-3146). WTU C-4.1 (a) Indenture dated August 1, 1943, as amended through July 1, 1973, of WTU, incorporated herein by reference to Exhibit 5.05 in File No. 2-60712. (b) Supplemental Indentures to the First Mortgage Indenture: DATED FILE REFERENCE EXHIBIT May 1, 1979 2-63931 2.02 November 15, 1981 2-74408 4.02 November 1, 198 Form U-1, No. 70-6820 12 April 15, 1985 Form U-1, No. 70-6925 13 August 1, 1985 2-98843 4 (b) May 1, 1986 Form U-1, No. 70-7237 4 December 1, 1989 Form U-1, No. 70-7719 3 June 1, 1992 Form U-1, No. 70-7936 10 October 1, 1992 Form U-1, No. 72-8057 10 February 1, 1994 Form U-1, No. 70-8265 10 March 1, 1995 Form U-1, No. 70-8057 10 (b) October 1, 1995 Form U-1, No. 70-8057 10 (c) ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS. (CONTINUED) EXHIBIT D D-1 Tax allocation agreement - filed herewith. EXHIBIT E E-1 SWEPCO Statement of Environmental Laboratory Services for the year ended December 31,1997 - filed herewith. EXHIBIT F F-1 Item 6. Part III. (a) and (b) - Compensation and Other Related Information for the Officers and Directors of CSW, CPL, PSO, SWEPCO, and WTU - filed herewith. F-2 Detailed financial statements for certain subsidiaries of CSW Energy, Inc. for the year ended December 31, 1997 - filed pursuant to Section 22(b). F-3 Detailed financial statements for SEEBOARD plc and subsidiaries for the year ended December 31, 1997 - filed pursuant to Section 22(b). F-4 Financial statements of Ash Creek Mining Company for the year ended December 31, 1997 - filed herewith. F-5 Financial statements of the Arklahoma Corporation for the fiscal year ended December 31, 1997 - filed herewith. EXHIBIT G Financial Data Schedules - filed herewith. EXHIBIT H ORGANIZATIONAL CHARTS H-1 Organizational charts for investment in foreign utility company - filed herewith. H-2 Organizational charts for investments in exempt wholesale generators - filed herewith. EXHIBIT I Audited Financial Statements of SEEBOARD plc for the fiscal year ended December 31, 1997. Please refer to CSW International, Inc. consolidating statements filed herewith. S I G N A T U R E Central and South West Corporation has duly caused this annual report for the year ended December 31, 1997, to be signed on its behalf by the undersigned thereunto duly authorized pursuant to the requirements of the Public Utility Holding Company Act of 1935. CENTRAL AND SOUTH WEST CORPORATION Date: April 30, 1998 By Lawrence B. Connors Controller S I G N A T U R E Southwestern Electric Power Company has duly caused this annual report for the year ended December 31, 1997, to be signed on its behalf by the undersigned thereunto duly authorized pursuant to the requirements of the Public Utility Holding Company Act of 1935. SOUTHWESTERN ELECTRIC POWER COMPANY Date: April 30, 1998 By R. Russell Davis Controller EX-99.B15.1 2 EXHIBIT B15.1 CERTIFICATE OF INCORPORATION OF CSW ENERGY SERVICES, INC. The undersigned, for the purpose of organizing a corporation under the General Corporation Law of the State of Delaware, certifies: FIRST: The name of the corporation is CSW Energy Services, Inc. (hereinafter referred to as the "Corporation"). SECOND: The address of the Corporation's registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (hereinafter referred to as the "GCL"). FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is one thousand (1000) shares of common stock, each without par value. Each holder of Common Stock shall have one vote in respect of each share of Common Stock held by such holder of record on the books of the Corporation for the election of directors and on all other matters on which stockholders of the Corporation are entitled to vote. The holders of shares of Common Stock shall be entitled to receive, when and if declared by the Board of Directors, out of the assets of the Corporation which are by law available therefor, dividends payable either in cash, in stock or otherwise. FIFTH: The directors shall have power to adopt, amend or repeal By-Laws of the Corporation, except as may otherwise be provided in the By-Laws of the Corporation. SIXTH: Election of directors need not be by written ballot, except as may otherwise be provided in the By-Laws of the Corporation. SEVENTH: The name and mailing address of the incorporator is Guilford W. Gaylord, Milbank, Tweed, Hadley and McCloy, One Chase Manhattan Plaza, New York, New York 10005-1413. WITNESS my signature this 24th day of September 1997. Guilford W. Gaylord Sole Incorporator EX-99.B15.2 3 EXHBIT B15.2 BYLAWS OF CSW ENERGY SERVICES, INC. BYLAWS OF CSW ENERGY SERVICES, INC. ARTICLE I OFFICE AND RECORDS SECTION 1.1 DELAWARE OFFICE.The principal office of the Corporation in the State of Delaware shall be located in the City of Wilmington, County of New Castle, and the name and address of its registered agent is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware. SECTION 1.2 OTHER OFFICES. The Corporation may have such other offices, either within or without the State of Delaware, as the Board of Directors may designate or as the business of the Corporation may from time to time require. SECTION 1.3 BOOKS AND RECORDS. The books and records of the Corporation may be kept at the Corporation's principal executive offices in Dallas, Texas or at such other locations outside the State of Delaware as may from time to time be designated by the Board of Directors. ARTICLE II STOCKHOLDERS SECTION 2.1 ANNUAL MEETING. Except as otherwise provided in Section 2.8 of these Bylaws, an annual meeting of stockholders of the Corporation shall be held at such time and date in each year as the Board of Directors, the Chairman of the Board, if any, or the President may from time to time determine. The annual meeting in each year shall be held at such place within or without the State of Delaware as may be fixed by the Board of Directors, or if not so fixed, at 10 A.M., local time, at the principal executive offices of the Corporation. SECTION 2.2 SPECIAL MEETINGS. A special meeting of the holders of stock of the Corporation entitled to vote on any business to be considered at any such meeting may be called only by the Chairman of the Board, if any, or the President or any Vice President, and shall be called by the Chairman of the Board, if any, or the President or the Secretary when directed to do so by resolution of the Board of Directors or at the written request of directors representing a majority of the total number of directors which the Corporation would at the time have if there were no vacancies (the "Whole Board"). Any such request shall state the purpose or purposes of the proposed meeting. The Board of Directors may designate the place of meeting for any special meeting of stockholders, and if no such designation is made, the place of meeting shall be the principal executive offices of the Corporation. SECTION 2.3 NOTICE OF MEETINGS. Whenever stockholders are required or permitted to take any action at a meeting, unless notice is waived as provided in Section 8.1 of these Bylaws, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, and except as to any stockholder duly waiving notice, the written notice of any meeting shall be given personally or by mail, not less than ten nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, notice shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If, however, the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. SECTION 2.4 QUORUM. Except as otherwise provided by law or by the Certificate of Incorporation or by these Bylaws, at any meeting of stockholders the holders of a majority of the outstanding stock entitled to vote thereat, either present or represented by proxy, shall constitute a quorum for the transaction of any business, but the stockholders present, although less than a quorum, may adjourn the meeting to another time or place and, except as provided in the last paragraph of Section 2.3 of these Bylaws, notice need not be given of the adjourned meeting. SECTION 2.5 VOTING. Whenever directors are to be elected at a meeting, they shall be elected by a plurality of the votes cast at the meeting by the holders of stock entitled to vote. Whenever any corporate action, other than the election of directors, is to be taken by vote of stockholders at a meeting, it shall, except as otherwise required by law or by the Certificate of Incorporation or by these Bylaws, be authorized by a majority of the votes cast with respect thereto at the meeting (including abstentions) by the holders of stock entitled to vote thereon. Except as otherwise provided by law, or by the Certificate of Incorporation, each holder of record of stock of the Corporation entitled to vote on any matter at any meeting of stockholders shall be entitled to one vote for each share of such stock standing in the name of such holder on the stock ledger of the Corporation on the record date for the determination of the stockholders entitled to vote at the meeting. Upon the demand of any stockholder entitled to vote, the vote for directors or the vote on any other matter at a meeting shall be by written ballot, but otherwise the method of voting and the manner in which votes are counted shall be discretionary with the presiding officer at the meeting. SECTION 2.6 PROXIES. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Every proxy shall be signed by the stockholder or by his duly authorized attorney. SECTION 2.7 LIST OF STOCKHOLDERS. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this Section or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders. SECTION 2.8 WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Any action required by the General Corporation Law of the State of Delaware (the "GCL") to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt written notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any such written consent may be given by one or any number of substantially concurrent written instruments of substantially similar tenor signed by such stockholders, in person or by attorney or proxy duly appointed in writing, and filed with the Secretary or an Assistant Secretary of the Corporation. Any such written consent shall be effective as of the effective date thereof as specified therein, provided that such date is not more than sixty (60) days prior to the date such written consent is filed as aforesaid, or, if no such date is so specified, on the date such written consent is filed as aforesaid. ARTICLE III DIRECTORS SECTION 3.1 NUMBER OF DIRECTORS. The Board of Directors shall consist of three directors until changed as provided in this Section. The number of directors may be changed at any time and from time to time by vote at a meeting or by written consent of the holders of stock entitled to vote on the election of directors, or by a resolution of the Board of Directors passed by a majority of the Whole Board, except that no decrease shall shorten the term of any incumbent director unless such director is specifically removed pursuant to Section 3.5 of these Bylaws at the time of such decrease. SECTION 3.2 ELECTION AND TERM OF DIRECTORS. Director shall be elected annually, by election at the annual meeting of stockholders or by written consent of the holders of stock entitled to vote thereon in lieu of such meeting. If the annual election of directors is not held on the date designated therefor, the directors shall cause such election to be held as soon thereafter as convenient. Each director shall hold office from the time of his or her election and qualification until his successor is elected and qualified or until his or her earlier resignation, or removal. SECTION 3.3 VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by election at a meeting of stockholders or by written consent of the holders of stock entitled to vote thereon in lieu of a meeting. Except as otherwise provided by law, vacancies and such newly created directorships may also be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. SECTION 3.4 RESIGNATION. Any director may resign at any time upon written notice to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective. SECTION 3.5 REMOVAL. Any or all of the directors may be removed at any time, with or without cause, by vote at a meeting or by written consent of the holders of stock entitled to vote on the election of directors. SECTION 3.6 MEETINGS. Meetings of the Board of Directors, regular or special, may be held at any place within or without the State of Delaware. Members of the Board of Directors, or of any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. An annual meeting of the Board of Directors shall be held after each annual election of directors. If such election occurs at an annual meeting of stockholders, the annual meeting of the Board of Directors shall be held at the same place and immediately following such meeting of stockholders, and no further notice thereof need be given other than this Bylaw. If an annual election of directors occurs by written consent in lieu of the annual meeting of stockholders, the annual meeting of the Board of Directors shall take place as soon after such written consent is duly filed with the Corporation as is practicable, either at the next regular meeting of the Board of Directors or at a special meeting. The Board of Directors may fix times and places for additional regular meetings of the Board of Directors and no notice of such meetings need be given. A special meeting of the Board of Directors shall be held whenever called by the Chairman of the Board, if any, or by the President or by at least one-third of the directors for the time being in office, at such time and place as shall be specified in the notice or waiver thereof. Notice of each special meeting shall be given by the Secretary or by a person calling the meeting to each director by mailing the same, postage prepaid, not later than the second day before the meeting, or personally or by telegraphing or telephoning the same not later than the day before the meeting. SECTION 3.7 QUORUM AND VOTING. A whole number of directors equal to at least a majority of the Whole Board shall constitute a quorum for the transaction of business, but if there be less than a quorum at any meeting of the Board of Directors, a majority of the directors present may adjourn the meeting from time to time, and no further notice thereof need be given other than announcement at the meeting which shall be so adjourned. Except as otherwise provided by law, by the Certificate of Incorporation, or by these Bylaws, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. SECTION 3.8 WRITTEN CONSENT OF DIRECTORS IN LIEU OF A MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or such committee. SECTION 3.9 COMPENSATION. Directors may receive compensation for services to the Corporation in their capacities as directors or otherwise in such manner and in such amounts as may be fixed from time to time by the Board of Directors. SECTION 3.10 COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors may from time to time, by resolution passed by majority of the Whole Board, designate one or more committees, each committee to consist of one or more directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. The resolution of the Board of Directors may, in addition or alternatively, provide that in the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it, except as otherwise provided by law. Unless the resolution of the Board of Directors expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Any such committee may adopt rules governing the method of calling and time and place of holding its meetings. Unless otherwise provided by the Board of Directors, a majority of any such committee (or the member thereof, if only one) shall constitute a quorum for the transaction of business, and the vote of a majority of the members of such committee present at a meeting at which a quorum is present shall be the act of such committee. Each such committee shall keep a record of its acts and proceedings and shall report thereon to the Board of Directors whenever requested so to do. Any or all members of any such committee may be removed, with or without cause, by resolution of the Board of Directors, passed by a majority of the whole Board. ARTICLE IV OFFICERS, AGENTS AND EMPLOYEES SECTION 4.1 APPOINTMENT AND TERM OF OFFICE. The officers of the Corporation may include a President, a Secretary and a Treasurer, and may also include a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers. All such officers shall be appointed by the Board of Directors or by a duly authorized committee thereof, and shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article IV, together with such other powers and duties as from time to time may be conferred by the Board of Directors or any committee thereof. Any number of such offices may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity. Except as may be prescribed otherwise by the Board of Directors or a committee thereof in a particular case, all such officers shall hold their offices at the pleasure of the Board of Directors for an unlimited term and need not be reappointed annually or at any other periodic interval. The Board of Directors may appoint, and may delegate power to appoint, such other officers, agents and employees as it may deem necessary or proper, who shall hold their offices or positions for such terms, have such authority and perform such duties as may from time to time be determined by or pursuant to authorization of the Board of Directors. SECTION 4.2 RESIGNATION AND REMOVAL. Any officer may resign at any time upon written notice to the Corporation. Any officer, agent or employee of the Corporation may be removed by the Board of Directors, or by a duly authorized committee thereof, with or without cause at any time. The Board of Directors or such a committee thereof may delegate such power of removal as to officers, agents and employees not appointed by the Board of Directors or such a committee. Such removal shall be without prejudice to a person's contract rights, if any, but the appointment of any person as an officer, agent or employee of the Corporation shall not of itself create contract rights. SECTION 4.3 COMPENSATION AND BOND. The compensation of the officers of the Corporation shall be fixed by the Board of Directors, but this power may be delegated to any officer in respect of other officers under his or her control. The Corporation may secure the fidelity of any or all of its officers, agents or employees by bond or otherwise. SECTION 4.4 CHAIRMAN OF THE BOARD. The Chairman of the Board, if there be one, shall preside at all meetings of stockholders and of the Board of Directors, and shall have such other powers and duties as may be delegated to him or her by the Board of Directors. SECTION 4.5 PRESIDENT. The President shall be the chief executive officer of the Corporation. In the absence of the Chairman of the Board (or if there be none), he or she shall preside at all meetings of the stockholders and of the Board of Directors. He or she shall have general charge of the business affairs of the Corporation. He or she may employ and discharge employees and agents of the Corporation, except such as shall be appointed by the Board of Directors, and he or she may delegate these powers. The President may vote the stock or other securities of any other domestic or foreign corporation of any type or kind which may at any time be owned by the Corporation, may execute any stockholders' or other consents in respect thereof and may in his or her discretion delegate such powers by executing proxies, or otherwise, on behalf of the Corporation. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons. SECTION 4.6 VICE PRESIDENTS. Each Vice President shall have such powers and perform such duties as the Board of Directors or the President may from time to time prescribe. In the absence or inability to act of the President, unless the Board of Directors shall otherwise provide, the Vice President who has served in that capacity for the longest time and who shall be present and able to act, shall perform all the duties and may exercise any of the powers of the President. SECTION 4.7 TREASURER. The Treasurer shall have charge of all funds and securities of the Corporation, shall endorse the same for deposit or collection when necessary and deposit the same to the credit of the Corporation in such banks or depositaries as the Board of Directors may authorize. He or she may endorse all commercial documents requiring endorsements for or on behalf of the Corporation and may sign all receipts and vouchers for payments made to the Corporation. He or she shall have all such further powers and duties as generally are incident to the position of Treasurer or as may be assigned to him or her by the President or the Board of Directors. SECTION 4.8 SECRETARY. The Secretary shall record all the proceedings of the meetings of the stockholders and directors in a book to be kept for that purpose and shall also record therein all action taken by written consent of the stockholders or directors in lieu of a meeting. He or she shall attend to the giving and serving of all notices of the Corporation. He or she shall have custody of the seal of the Corporation and shall attest the same by his or her signature whenever required. He or she shall have charge of the stock ledger and such other books and papers as the Board of Directors may direct, but he or she may delegate responsibility for maintaining the stock ledger to any transfer agent appointed by the Board of Directors. He or she shall have all such further powers and duties as generally are incident to the position of Secretary or as may be assigned to him or her by the President or the Board of Directors. SECTION 4.9 ASSISTANT TREASURERS. In the absence or inability to act of the Treasurer, any Assistant Treasurer may perform all the duties and exercise all the powers of the Treasurer. An Assistant Treasurer shall also perform such other duties as the Treasurer or the Board of Directors may assign to him or her. SECTION 4.10 ASSISTANT SECRETARIES. In the absence or inability to act of the Secretary, any Assistant Secretary may perform all the duties and exercise all the powers of the Secretary. An Assistant Secretary shall also perform such other duties as the Secretary or the Board of Directors may assign to him or her. SECTION 4.11 DELEGATION OF DUTIES. In case of the absence of any officer of the Corporation, or for any other reason that the Board of Directors may deem sufficient, the Board of Directors may confer for the time being the powers or duties, or any of them, of such officer upon any other officer or upon any director. ARTICLE V INDEMNIFICATION AND INSURANCE SECTION 5.1 RIGHT TO INDEMNIFICATION Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to any employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the GCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred by such indemnitee in connection therewith; PROVIDED, HOWEVER, that except as provided in Section 5.3 with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors. SECTION 5.2 RIGHT TO ADVANCEMENT OF EXPENSES. The right to indemnification conferred in Section 5.1 shall include the right to be paid by the Corporation the expenses (including attorneys' fees) incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); PROVIDED, HOWEVER, that, if the GCL requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section 5.2 or otherwise. SECTION 5.3 RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section 5.1 or Section 5.2 is not paid in full by the Corporation within thirty (30) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right of an advancement of expenses) it shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the GCL. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the GCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article V or otherwise shall be on the Corporation. SECTION 5.4 NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the advancement of expenses conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, provision of these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. SECTION 5.5 INSURANCE. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the GCL. SECTION 5.6 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to the advancement of expenses, to any employee or agent of the Corporation to the fullest extent of the provisions of this Article V with respect to the indemnification and advancement of expenses of directors and officers of the Corporation. SECTION 5.7 CONTRACT RIGHTS. The rights to indemnification and to the advancement of expenses conferred in Section 5.1 and Section 5.2 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators. ARTICLE VI COMMON STOCK SECTION 6.1 CERTIFICATES. Certificates for stock of the Corporation shall be in such form as shall be approved by the Board of Directors and shall be signed in the name of the Corporation by the Chairman of the Board, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary. Such certificates may be sealed with the seal of the Corporation or a facsimile thereof. Any of or all the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. SECTION 6.2 TRANSFERS OF STOCK. Transfers of stock shall be made only upon the books of the Corporation by the holder, in person or by duly authorized attorney, and on the surrender of the certificate or certificates for the same number of shares, properly endorsed. The Board of Directors shall have the power to make all such rules and regulations, not inconsistent with the Certificate of Incorporation and these Bylaws and the GCL, as the Board of Directors may deem appropriate concerning the issue, transfer and registration of certificates for stock of the Corporation. The Board of Directors may appoint one or more transfer agents or registrars of transfers, or both, and may require all stock certificates to bear the signature of either or both. SECTION 6.3 LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation may issue a new stock certificate in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate or his or her legal representative to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate. The Board of Directors may require such owner to satisfy other reasonable requirements as it deems appropriate under the circumstances. SECTION 6.4 STOCKHOLDER RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which shall not be more than sixty nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed by the Board of Directors, (l) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the date on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be at the close of business on the day on which the first written consent is expressed by the filing thereof with the Corporation as provided in Section 2.8 of these Bylaws, and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; PROVIDED, HOWEVER, that the Board of Directors may fix a new record date for the adjourned meeting. Only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to notice of, and to vote at, such meeting and any adjournment thereof, or to give such consent, or to receive payment of such dividend or other distribution, or to exercise such rights in respect of any such change, conversion or exchange of stock, or to participate in such action, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any record date so fixed. ARTICLE VII SEAL SECTION 7.1 SEAL. The seal of the Corporation shall be circular in form and shall bear, in addition to any other emblem or device approved by the Board of Directors, the name of the Corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. ARTICLE VIII WAIVER OF NOTICE SECTION 8.1 WAIVER OF NOTICE. Whenever notice is required to be given to any stockholder or director of the Corporation under any provision of the GCL or the Certificate of Incorporation or these Bylaws, a written waiver thereof, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. In the case of a stockholder, such waiver of notice may be signed by such stockholder's attorney or proxy duly appointed in writing. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice. ARTICLE IX CHECKS, NOTES, DRAFTS, ETC. SECTION 9.1 CHECKS, NOTES, DRAFTS, ETC. Checks, notes, drafts, acceptances, bills of exchange and other orders or obligations for the payment of money shall be signed by such officer or officers or person or persons as the Board of Directors or a duly authorized committee thereof may from time to time designate. ARTICLE X AMENDMENTS SECTION 10.1 AMENDMENTS. These Bylaws or any of them may be altered or repealed, and new Bylaws may be adopted, by the stockholders by vote at a meeting or by written consent without a meeting. The Board of Directors shall also have power, by a majority vote of the Whole Board, to alter or repeal any of these Bylaws, and to adopt new Bylaws. EX-99.D 4 EXHIBIT D EXHIBIT D FROM TAX DEPARTMENT CENTRAL AND SOUTH WEST CORPORATION AND SUBSIDIARY COMPANIES AGREEMENT FOR FILING CONSOLIDATED FEDERAL INCOME TAX RETURN AND FOR ALLOCATION OF CONSOLIDATED FEDERAL INCOME TAX LIABILITIES AND BENEFITS DATED APRIL 30, 1998 Central and South West Corporation, a registered public utility holding company, and its Subsidiaries (collectively referred to as "the Parties") hereby agree to annually join in the filing of a consolidated Federal income tax return and to allocate the consolidated Federal income tax liabilities and benefits among the members of the consolidated group in accordance with the provisions of this Agreement. 1. PARTIES TO THE AGREEMENT Federal Employer Company and Address Identification Number ------------------------------------------------------------------------- Central and South West Corporation 51-0007707 Dallas, Texas Central Power and Light Company 74-0550600 Corpus Christi, Texas Public Service Company of Oklahoma 73-0410895 Tulsa, Oklahoma Southwestern Electric Power Company 72-0323455 Shreveport, Louisiana West Texas Utilities Company 75-0646790 Abilene, Texas Central and South West Services, Inc. 75-1296566 Dallas, Texas CSW Leasing, Inc. 75-2013749 Dallas, Texas CSW Credit, Inc. 75-2055555 Dallas, Texas CSW Energy, Inc. 75-1901710 Dallas, Texas CSW Power Marketing, Inc. 75-2696741 Dallas, Texas Ash Creek Mining Company 73-1008093 Tulsa, Oklahoma Southwest Arkansas Utilities Corp. 71-6052763 DeQueen, Arkansas CSW Development-I, Inc. 75-2370921 Dallas, Texas CSW Development-II, Inc. 75-2439272 Dallas, Texas CSW Ft. Lupton, Inc. 75-2474488 Dallas, Texas Noah I Power G.P., Inc. 33-0489753 Dallas, Texas CSW Orange, Inc. 75-2505862 Dallas, Texas CSW Communications, Inc. 75-2548781 Dallas, Texas CSWC Southwest Holding, Inc. 74-2803758 Dallas, Texas CSWC TeleChoice Management, Inc. 74-2803759 Dallas, Texas CSWC TeleChoice, Inc. 74-2803760 Dallas, Texas CSW International, Inc. 75-2569322 Dallas, Texas CSW Mulberry, Inc. 75-2523281 Dallas, Texas Newgulf Power Venture, Inc. 75-2562614 Dallas, Texas CSW Nevada, Inc. 75-2562610 Dallas, Texas Enershop, Inc. 75-2613053 Dallas, Texas Envirothem 75-1797088 Dallas, Texas CSW International (U.K.), Inc. 75-2638928 Dallas, Texas CSW International Two, Inc. 75-2638929 Dallas, Texas CSW International Three, Inc. 75-2638930 Dallas, Texas CSW Mulberry II, Inc. 75-2562612 Dallas, Texas CSW Orange II, Inc. 75-2562609 Dallas, Texas CSW Development-3, Inc. 75-2638922 Dallas, Texas CSW Northwest GP, Inc. 75-2638926 Dallas, Texas CSW Northwest LP, Inc. 75-2638925 Dallas, Texas CSW Sweeny GP I, Inc. 75-2627173 Dallas, Texas CSW Sweeny GP II, Inc. 75-2627175 Dallas, Texas CSW Sweeny LP I, Inc. 75-2627176 Dallas, Texas CSW Sweeny LP II, Inc. 75-2627177 Dallas, Texas CSW Energy Services, Inc. 75-2730186 Dallas, Texas CSW Services International, Inc. 75-2747384 Dallas, Texas Latin American Energy Holding, Inc. 75-2731945 Dallas, Texas 2. DEFINITIONS "CONSOLIDATED TAX" is the aggregate current Federal income tax liability for a tax year, being the tax shown on the consolidated Federal income tax return and any adjustments thereto. "CORPORATE TAXABLE INCOME" is the taxable income of a subsidiary company for a tax year, computed as though such company had filed a separate return on the same basis as used in the consolidated return, except that dividend income from subsidiary companies shall be disregarded, and other intercompany transactions, eliminated in consolidation, shall be given appropriate effect. "CORPORATE TAXABLE LOSS" is the taxable loss of a subsidiary company for a tax year, computed as though such company had filed a separate return on the same basis as used in the consolidated return, except that dividend income from subsidiary companies shall be disregarded, and other intercompany transactions, eliminated in consolidation, shall be given appropriate effect. These definitions shall apply, as appropriate, in the context of the Alternative Minimum Tax ("AMT"). 3. TAX ALLOCATION PROCEDURES The consolidated tax shall be allocated among the members of the group consistent with Rule 45(c) of the Public Utility Holding Company Act of 1935, utilizing the "separate return corporate taxable income" method, in the following manner: (a) Intercompany transactions eliminated by consolidation entries which affect the consolidated taxable income will be restored to the appropriate member for the purpose of computing separate return corporate taxable income or loss. (b) The consolidated regular tax, exclusive of the AMT & Foreign Tax Credit ("FTC") and calculated prior to the reduction for any credits including the AMT & FTC credit, will be allocated among the members of the group based on the ratio of each member's separate return corporate taxable income to the total separate return corporate taxable income. (c) The consolidated AMT and the Environmental Tax will be allocated among the members of the group based on the ratio of each member's separate return corporate Alternative Minimum Taxable Income ("AMTI") to the total separate corporate return AMTI. (d) With the exception of the parent corporation, each member of the group having a separate return corporate taxable loss will be included in the allocation of the regular consolidated tax. Such loss members will receive current payment for the reduction in the regular consolidated tax liability resulting from the inclusion of the losses of such members in the consolidated return. Any regular tax savings in consolidation will be allocated to the members of the group having separate return corporate taxable income as provided in sub-section (b). If the aggregate of the member's separate return corporate taxable losses are not entirely utilized on the current year's consolidated return, the consolidated carry-back to the applicable prior tax year(s) will be allocated in accordance with section 6. (e) The tax allocated to any member of the group shall not exceed the separate return tax of such member. (f) General business credits, other tax credits and capital losses shall be equitably allocated to those members whose investments or contributions generated the credit or capital loss. If the credit or capital loss can not be entirely utilized to offset consolidated tax, the credit or capital loss carryover shall be equitably allocated on a separate return basis to those members whose investments or contributions generated the credit or capital loss. (g) In the event a portion of the consolidated AMT is not allocable to members because of the limitation in sub-section (e), the parent corporation will pay the unallocated AMT. Such unallocated AMT will be carried forward, and, if appropriate, allocated to applicable members in subsequent taxable years to the extent allowed under sub-section (e). If any remaining unallocated AMT is recovered on a consolidated basis in a subsequent year by the reduction of the consolidated regular tax by the AMT credit, the parent corporation will receive the entire tax benefit of such recovery until the unallocated AMT is eliminated. 4. EXCLUDED SUBSIDIARY COMPANIES Prior to the 1991 tax year, CSW Leasing, Inc. and CSW Energy, Inc. were excluded from the tax allocation pursuant to Rule 45(c)(4) and the tax benefits attributable to such companies' losses and credits were allocated to the parent corporation. These excluded companies retain separate return carryover rights for the losses and credits availed of by the parent corporation through the consolidated return. On future consolidated tax allocations, the parent corporation shall pay such companies for the previously allocated tax benefits to the extent the companies are able to offset separate return corporate taxable income with such carryovers. 5. PARENT CORPORATION LOSS Any regular tax savings in consolidation from the parent corporation, excluding the effects of extraordinary items, shall be allocated to those members which have separate return corporate taxable income in the same manner as the consolidated tax is allocated. Members having a separate return corporate taxable loss will not participate in the allocation of the parent company loss. 6. TAX ADJUSTMENTS In the event the consolidated tax liability is subsequently revised by Internal Revenue Service audit adjustments, amended returns, claims for refund, or otherwise, such changes shall be allocated in the same manner as though the adjustments on which they are based had formed part of the original consolidated return. 7. EFFECTIVE DATE This Agreement is effective for the allocation of the current Federal income tax liabilities of the Parties for the tax year 1997 and all subsequent years until this Agreement is revised in writing. 8. APPROVAL This Agreement is subject to the approval of the Securities and Exchange Commission. A copy of this Agreement will be filed as an exhibit to the Form U5S Annual Report to the Securities and Exchange Commission by Central and South West Corporation for the year ended December 31, 1997. Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned, duly authorized, have signed this Agreement on behalf of the Parties indicated. Central and South West Corporation By /s/ Lawrence B. Connors ---------------------------------------------- Lawrence B. Connors, Controller Central and South West Services, Inc. By /s/ E.R. Brooks ---------------------------------------------- Chairman and Chief Executive Officer Central Power and Light Company By /s/ M. Bruce Evans ---------------------------------------------- President Public Service Company of Oklahoma By /s/ T.D. Churchwell ---------------------------------------------- President Southwestern Electric Power Company By /s/ Michael D. Smith ---------------------------------------------- President West Texas Utilities Company By /s/ Floyd W. Nickerson ---------------------------------------------- President CSW Mulberry, Inc. CSW Mulberry II, Inc. Newgulf Power Venture, Inc. CSW Nevada, Inc. CSW Energy, Inc. CSW Development-I, Inc. CSW Development-II, Inc. CSW Development-3, Inc. CSW Ft. Lupton, Inc. Noah I Power G.P., Inc. CSW Orange, Inc. CSW Orange II, Inc. CSW Northwest GP, Inc. CSW Northwest LP, Inc. CSW Sweeny GP I, Inc. CSW Sweeny GP II, Inc. CSW Sweeny LP I, Inc. CSW Sweeny LP II, Inc. By /s/ Terry D. Dennis ---------------------------------------------- President and Chief Executive Officer CSW Credit, Inc. By /s/ Glenn D. Rosilier ---------------------------------------------- President CSW Leasing, Inc. By /s/ Glenn D. Rosilier ---------------------------------------------- President CSW Energy Services, Inc. Enershop, Inc. Envirothem By /s/ Richard H. Bremer ---------------------------------------------- President Ash Creek Mining Company By /s/ E. Michael Williams ---------------------------------------------- President Southwest Arkansas Utilities Corporation By /s/ Thomas H. DeWeese ---------------------------------------------- President CSW Communications, Inc. CSWC Southwest Holding, Inc. CSWC TeleChoice Management, Inc. CSWC TeleChoice, Inc. By /s/ Donald A. Shahan ---------------------------------------------- President CSW Services International, Inc. CSW International, Inc. CSW International (U.K.), Inc. CSW International Two, Inc. CSW International Three, Inc. Latin American Energy Holdings, Inc. By /s/ Terry D. Dennis ---------------------------------------------- President CSW Power Marketing, Inc. By /s/ Terry D. Dennis ---------------------------------------------- President EX-99.E1 5 EXHIBIT E-1 ENVIRONMENTAL LABORATORY ANALYSIS 1997 Dolet Hills Mining Venture $35,442 Sabine Mining Company 32,810 General Electric Company 1,820 PMI, Inc., Environmental Services 1,475 Miscellaneous (less than $500) 665 ------ $72,212 ====== EX-99.F1 6 EXHIBIT F-1 CSW EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION COMMITTEE REPORT CSW's executive compensation program has as its foundation the following objectives: - Maintaining a total compensation program consisting of base salary, performance incentives and benefits designed to support the corporate goal of providing superior value to CSW stockholders and customers; - Providing comprehensive programs which serve to facilitate the recruitment, retention and motivation of qualified executives; and - Rewarding key executives for achieving financial, operating and individual objectives that produce a corresponding and direct return to CSW's stockholders in both the long-term and the short-term. The Executive Compensation Committee which consists of six independent outside directors, has designed CSW's executive compensation programs around a strong pay-for-performance philosophy. The Executive Compensation Committee strives to maintain competitive levels of total compensation as compared to peers in the utility industry. Each year, the Executive Compensation Committee conducts a comprehensive review of CSW's executive compensation programs. The Executive Compensation Committee is assisted in these efforts by an independent consultant and by CSW's internal staff, who provide the Executive Compensation Committee with relevant information and recommendations regarding the compensation policies, programs and specific compensation practices. This review is designated to ensure that the programs are in place to enable CSW to achieve its strategic and operating objectives and provide superior value to its stockholders and customers, and to document CSW's relative competitive position. The Executive Compensation Committee reviews a comparison of CSW's compensation programs with those offered by comparable companies within the utility industry. For each component of compensation, as well as total compensation, the Executive Compensation Committee seeks to ensure that CSW's level of compensation for CSW's expected level of performance approximates the average or mean for executive officers in similar positions at comparable companies. In most years, this means that the level of total compensation for expected performance will be near the average for comparable companies. Performance above or below expected levels is reflected in a corresponding increase or reduction in the incentive portion of the compensation program. The amounts of each of the primary components of executive compensation--salary, annual incentive plan awards and long-term incentive plan awards--will fluctuate according to individual, business unit, and/or corporate performance. Corporate performance for these purposes is measured against a peer group of selected companies in the utility industry (the "Utility Peer Group"). The Utility Peer Group consists of the companies listed in the S&P Electric Utility index as well as large regional competitors. The Executive Compensation Committee believes that using the S&P Electric Utility index provides an objective measure to compare performance benchmarks appropriate for compensation purposes. CSW's executive compensation program includes several components serving long and short-term objectives. CSW provides its senior executive officers with benefits under the SERP and all executive officers with certain executives perquisites (as noted elsewhere in this Joint Proxy Statement/Prospectus.) In addition, CSW maintains for each of its executive officers a package of benefits under its pension and welfare benefit plans that are generally provided to all employees, including group health, life, disability and accident insurance plans, tax-advantaged reimbursement accounts, a defined benefit pension plan and the 401(k) savings plan. The following describes the relationship of compensation to performance for the principal components of executive officer compensation: BASE SALARY: Each executive officer's corporate position is matched to a comparable position within the utility Industry and is valued at the 50th percentile market level. In some cases, these positions are common in both the utility industry as well as general industry. In these cases, comparisons are made to both markets. Once these market values are determined, the position is then evaluated based on the position's overall contribution to corporate goals. This internal weighting is combined with the value the market places on the associated job responsibilities and a salary is assigned to that position. Each year the assigned values are reviewed against market conditions, including compensation practices in the Utility Peer Group, inflation, and supply and demand in the labor markets. If these conditions change significantly there may be an adjustment to base salary. Finally, the results of the executive officers' performance over the past year becomes part of the basis of the Executive Compensation Committee's decision to approve, at its discretion, base salaries of executive officers. After a review of the data and other factors influencing corporate results, the salaries of the Chairman and his direct reports were not adjusted during 1997. INCENTIVE PROGRAMS--GENERAL: The executive incentive programs are designed to strike an appropriate balance between short-term accomplishments and CSW's need to effectively plan for and perform over the long-term. INCENTIVE PROGRAMS--ANNUAL INCENTIVE PLAN: The Central and South West Corporation Annual Incentive Plan (the "AIP") is a short-term bonus plan rewarding annual performance. AIP awards are determined under a formula that directly ties the amount of the award with levels of achievement for specific individual, business unit and corporate performance. The amount of an executive officer's AIP award equals the sum of the corporate and business unit results times their individuals rating times their target award. In addition, the executive's award calculation is weighted 80 percent on corporate results and 20 percent on business unit results. The award can vary from 0 to a maximum of 150 percent of target. The corporate performance is currently determined by two equally weighted measures--earnings per share and cash flow. Threshold, target and exceptional levels of performance are set by the Executive Compensation Committee in the first quarter of each year. The Executive Compensation Committee considers both historic performance and budgeted or expected levels of performance in setting these targets. Performance for a given business unit represents the weighted average of performance indices that measure the achievement of specific financial and/or operational goals that are set and weighted at the beginning of the year for that business unit. The individual performance represents the average of results achieved on several individual goals and a subjective evaluation of overall job performance. Although individual performance goals do not repeat corporate performance measures, these goals are constructed to support departmental, work team or business unit performance which links to corporate performance goals or initiative. If an individual fails to achieve a minimum threshold performance level on individual performance goals, that individual does not earn an AIP award for that year. Target awards for executive officers have been fixed at 50 percent of salary for the chief executive officer, 45 percent of salary for senior vice presidents, and business unit presidents and 35 percent of salary for other officers. The corresponding maximum AIP award that can be earned by the executive based on position is 1.5 times the target award. These targets are established by a review of competitive practice among the Utility Peer Group. Performance under the AIP is measured or reviewed by each executive officer's superior officer, or in the case of the chief executive officer by the Executive Compensation Committee, with the assistance of internal staff. The results are reviewed and are subject to approval by the Executive Compensation Committee. Under the terms of the AIP, the Executive Compensation Committee in the exercise of its discretion, may vary corporate or company performance measures in the form of payment for AIP awards from year-to-year prior to establishing the awards, including payment in cash or restricted stock, as determined by the Executive Compensation Committee. In 1997, AIP awards were determined based on the corporate performance index, the business unit company performance index and the individual performance index. As permitted by the AIP, the Executive Compensation Committee granted a limited number of awards to recognize key individuals who provided vision and strategic leadership. INCENTIVE PROGRAMS--LONG-TERM INCENTIVE PLAN: Amounts realized by CSW's executive officers under awards made pursuant to the CSW Incentive Plan depend entirely upon corporate performance. The Executive Compensation Committee selects the form and amount of CSW Incentive Plan awards based upon its evaluation of which vehicles are best positioned to serve as effective incentives for long-term performance. Since 1992, the Executive Compensation Committee has established CSW Incentive Plan awards in the form of performance shares. These awards provide incentives both for exceptional corporate performance and retention. Each year, the Compensation Committee has set a target award of a specified dollar amount for each awardee based on a percentage of salary. The dollar amount corresponding to the target award is divided by the per share market price of CSW's common stock on the date the award is established to derive the number of shares of such stock that will be issued if target performance is achieved by CSW. The payout of such an CSW Incentive Plan award is based upon a comparison of CSW's total stockholder return over a three-year period, or "cycle," against total stockholder returns of utilities in the Utility Peer Group over the same three-year period. Total stockholder return is calculated by dividing (i) the sum of (A) the cumulative amount of dividends per share for the three-year period, assuming full dividend reinvestment, and (B) the change in share price over the three-year period, by (ii) the share price at the beginning of the three-year period. If CSW's total stockholder return for a cycle falls in one of the top three quartiles of similarly calculated total stockholder returns achieved at companies in the Utility Peer Group, CSW will make a payout to participants for the three-year cycle then ending. First, second and third quartile performance will result in payouts of 150 percent, 100 percent and 50 percent of target, respectively. Performance in the fourth quartile yields no payout under the CSW Incentive Plan. Each year since the inception of the CSW Incentive Plan, a new three-year performance cycle has been established. In January 1997, the Executive Compensation Committee evaluated the 1994-1996 cycle performance under the CSW Incentive Plan and because results were below the threshold for a payout, no awards were granted. In January 1998, the Committee reviewed total stockholder return results for the period covering 1995-1997, and because performance was in the third quartile, granted restricted stock awards at 50 percent of target. CSW from time to time has also granted stock options and restricted stock under the CSW Incentive Plan. Stock options and restricted stock are granted at the discretion of the Executive Compensation Committee. Stock options, once vested, allow grantees to buy specified numbers of shares of CSW common stock at a specified stock price, which to date has been the market price on the date of grant. In determining grants to date, the Executive Compensation Committee has considered both the number and value of options granted by companies in the Utility Peer Group with respect to both the number and value of options awarded by CSW, and the relative amounts of other long-term incentive awards at CSW and such peers. The executive officers' realization of any value on the options depends upon stock appreciation. In May 1997, a stock option grant was approved at the market price of $20.75 per share to provide the opportunity for more equity ownership and to provide immediate focus to our executives on CSW strategic initiatives. No executive officer owns in excess of one percent of CSW's common stock. Further, the amounts of CSW Incentive Plan awards are measured against similar practices of other companies in the Utility Peer Group. TAX CONSIDERATIONS: Section 162(m) of the Code generally limits CSW's federal income tax deduction for compensation paid in any taxable year to any one of the five highest paid executive officers named in CSW's proxy statement to $1 million. The limit does not apply to specified types of payments, including, most significantly, payments that are not includible in the employee's gross income, payments made to or from a tax-qualified plan, and compensation that meets the Code's definition of performance-based compensation. Under the Code, the amount of a performance-based incentive award must be based entirely on an objective formula, without any subjective consideration of individual performance, to be considered performance-based. The Executive Compensation Committee has carefully considered the impact of this law. At this time, the Executive Compensation Committee believes it is in CSW's and stockholder's best interests to retain the subjective determination of individual performance under the AIP. Consequently, payments under the AIP, if any, to the named executive officers may be subject to the limitation imposed by section 162(m) of the Code. In 1997, stockholders approved a restatement and requalification of the CSW Incentive Plan for purposes of satisfying Section 162(m). RATIONALE FOR CEO COMPENSATION In 1997, Mr. Brooks' compensation was determined as described above for all of CSW's executive officers. Mr. Brooks' annual salary is currently $700,000. The Executive Compensation Committee reviewed Mr. Brooks' salary as a part of its overall annual review of executive compensation. His salary is based on market information for similar positions as well as salaries of chief executive officers at comparable regional utilities (not limited to the Utility Peer Group). Mr. Brooks' target AIP award for 1997 was 50 percent of his salary. As permitted by the AIP, for 1997, the Executive Compensation Committee approved an award in the amount of $450,000 to recognize Mr. Brooks' significant vision and strategic leadership. After a review of the results of the 1995-1997 cycle of the CSW Incentive Plan, the Executive Compensation Committee approved an award in the amount of 8,157 shares of restricted stock recognizing total shareholder return performance in the third quartile, or fifty percent of target, which vest fifty percent in January 1999 and fifty percent in January 2000. In 1997 the Executive Compensation Committee established Mr. Brooks' target award for the CSW Incentive Plan for the 1997-1999 cycle of $490,000 to be paid in shares of restricted stock in 1999 if performance measures are met. Mr Brooks' target amount was derived by reference to the number and value of grants to chief executive officers at comparable companies. EXECUTIVE COMPENSATION COMMITTEE Joe H. Foy, Chairman Molly Shi Boren William R. Howell Robert W. Lawless Richard L. Sandor Lloyd D. Ward CASH AND OTHER FORMS OF COMPENSATION. The following table sets forth the aggregate cash and other compensation for services rendered for the fiscal years of 1997, 1996, and 1995 paid or awarded by CSW to its chief executive officer and each of the four most highly compensated executive officers ( the "Named Executive Officers"). SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION ----------------------------------------------------------------------------------------- AWARDS OTHER -------------------------- PAYOUTS ANNUAL RESTRICTED SECURITIES ----------------- COMPEN- STOCK UNDERLYING CSW INCENTIVE NAME AND SALARY BONUS SATION AWARD(S) OPTIONS/ PLAN PAYOUTS PRINCIPAL POSITION YEAR ($) ($)(1) ($) ($)(1)(2) SARS(#) ($) - - -------------------------------- --------- --------- --------- ----------- ----------- ------------------------------ E.R. Brooks..................... 1997 699,999 375,200 14,723 -- 65,000 -- Chairman and Chief Executive 1996 657,692 374,354 22,267 417,688 -- -- Officer 1995 628,847 162,739 25,149 -- -- -- T.V. Shockley, III.............. 1997 490,000 215,662 4,325 -- 41,000 -- President and Chief Operating 1996 435,212 242,565 10,746 248,563 -- -- Officer 1995 406,870 105,448 8,441 -- -- -- Glenn Files..................... 1997 374,999 143,099 8,534 -- 31,000 -- Senior Vice President, 1996 331,135 44,860 66,415 153,750 -- -- Electric Operations 1995 266,223 85,048 19,144 -- -- -- Ferd. C. Meyer, Jr.............. 1997 345,051 157,157 3,950 -- 29,000 -- Executive Vice President and 1996 345,051 209,898 8,910 194,750 -- -- General Counsel 1995 336,547 86,444 12,354 -- -- -- Glenn D. Rosilier............... 1997 334,751 161,055 3,594 -- 28,000 -- Executive Vice President and 1996 334,751 209,898 10,331 194,750 -- -- Chief Financial Officer 1995 326,500 86,444 6,706 -- -- -- ALL OTHER COMPEN- NAME AND SATION PRINCIPAL POSITION ($)(3) - - -------------------------------- ----------- E.R. Brooks..................... 23,757 Chairman and Chief Executive 23,992 Officer 23,956 T.V. Shockley, III.............. 23,757 President and Chief Operating 21,742 Officer 21,706 Glenn Files..................... 23,757 Senior Vice President, 23,992 Electric Operations 23,117 Ferd. C. Meyer, Jr.............. 21,307 Executive Vice President and 21,742 General Counsel 21,706 Glenn D. Rosilier............... 23,757 Executive Vice President and 23,992 Chief Financial Officer 23,019
- - ------------------------ (1) Amounts in these columns are paid or awarded in a calendar year for performance in a preceding year. (2) Grants of restricted stock are administered by the Executive Compensation Committee of the CSW Board of Directors, which has the authority to determine the individuals to whom and the terms upon which restricted stock grants, including the number of underlying shares, shall be made. The awards reflected in this column all have four-year vesting periods with 25% vesting on the first, second, third and fourth anniversary dates of the award. Upon vesting, CSW Shares are re-issued without restrictions. The individual receives dividends and may vote shares of restricted stock, even before they are vested. The amount reported in the table represents the market value of the shares at the date of grant. As of December 31, 1997, the aggregate restricted stock holdings of each of the Named Executive Officers were:
RESTRICTED STOCK HELD MARKET VALUE AT AT DECEMBER 31, 1997 DECEMBER 31, 1997 --------------------- ----------------- E. R. Brooks.............. 12,225 $ 330,839 T. V. Shockley............ 7,275 $ 196,880 Glenn Files............... 4,500 $ 121,781 Ferd. C. Meyer, Jr........ 5,700 $ 154,256 Glenn Rosilier............ 5,700 $ 154,256
(3) Amounts shown in this column consist of (i) the annual employer matching payments to CSW's Retirement Savings Plan, (ii) premiums paid per participant for personal liability insurance and (iii) average amounts of premiums paid per participant in those years under CSW's memorial gift program. See "--Meetings and Compensation of the CSW Board of Directors" for a description of CSW's memorial gift program. OPTION/SAR GRANTS. Shown below is information on grants of stock options made in 1997 pursuant to the CSW Incentive Plan to the Named Executive Officers. No stock appreciation rights were granted in 1997. CSW OPTION/SAR GRANTS IN 1997(1)
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF CSW STOCK PRICE APPRECIATION FOR INDIVIDUAL GRANTS OPTION TERMS(3) ----------------- --------------------- NUMBER OF CSW % OF TOTAL SECURITIES OPTIONS/SARS UNDERLYING GRANTED TO EXERCISE OR OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION NAME GRANTED(#)(2) FISCAL YEAR ($/SH) DATE 5%($) 10%($) - - --------------------- ----------------- ----------------- ----------- ----------- --------- ---------- E. R. Brooks......... 65,000 9.4 20.750 5/23/2007 849,713 2,144,513 T. V. Shockley, III.. 41,000 6.0 20.750 5/23/2007 535,973 1,352,693 Glenn Files.......... 31,000 4.5 20.750 5/23/2007 405,248 1,022,768 Ferd. C. Meyer, Jr... 29,000 4.2 20.750 5/23/2007 379,103 956,753 Glenn D. Rosilier.... 28,000 4.1 20.750 5/23/2007 366,030 923,790
- - ------------------------ (1) The stock option plans are administered by the Executive Compensation Committee of the CSW Board of Directors, which has the authority to determine the individuals to whom and the terms upon which option and SAR grants shall be made. (2) All options were granted on May 23, 1997, and are first exercisable 12 months after the grant date, with one-third of the shares becoming exercisable at that time and with an additional one third of the aggregate becoming exercisable on each of the next two anniversary dates. (3) The annual rates of appreciation of 5% and 10% are specifically required by SEC disclosure rules and in no way guarantee that such annual rates of appreciation will be achieved by CSW nor should this be construed in any way to constitute any representation by CSW that such growth will be achieved. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE. Shown below is information regarding option/SAR exercises during 1997 and unexercised options/SARs at December 31, 1997 for the Named Executive Officers. AGGREGATED OPTION/SAR EXERCISES IN 1997 AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNDERLYING UNEXERCISED IN-THE-MONEY VALUE OPTIONS/SARS AT YEAR-END OPTIONS/SARS AT YEAR-END SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/ NAME ON EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE(1) - - --------------------- ------------------- ----------- ------------------------ ------------------------ E. R. Brooks......... -- -- 65,175/65,000 9,007/410,313 T. V. Shockley, III.. -- -- 42,231/41,000 5,837/258,813 Glenn Files.......... -- -- 23,653/31,000 5,593/195,688 Ferd. C. Meyer, Jr... -- -- 32,889/29,000 4,547/183,063 Glenn D. Rosilier.... -- -- 32,889/28,000 4,547/176,750
- - ------------------------ (1) Calculated based upon the difference between the closing price of CSW's Shares on the NYSE on December 31, 1997 ($27.0625 per share) and the exercise price per share of the outstanding unexercisable and exercisable options ($20.750, $24.813 and $29.625, as applicable). LONG-TERM INCENTIVE PLAN AWARDS IN 1997. The following table shows information concerning awards made to the Named Executive Officers during 1997 under the CSW Incentive Plan:
ESTIMATED FUTURE PAYOUTS UNDER PERFORMANCE OR NON-STOCK PRICE BASED PLANS NUMBER OF OTHER PERIOD ------------------------------------- SHARES, UNITS OR UNTIL MATURATION THRESHOLD TARGET MAXIMUM NAME OTHER RIGHTS OR PAYOUT ($) ($) ($) - - --------------------- ------------------- ---------------- ------------- --------- ----------- E. R. Brooks......... -- 2 years -- 490,000 735,000 T. V. Shockley, III.. -- 2 years -- 294,000 441,000 Glenn Files.......... -- 2 years -- 225,000 337,500 Ferd. C. Meyer, Jr... -- 2 years -- 207,030 310,545 Glenn D. Rosilier.... -- 2 years -- 200,850 301,275
Payouts of the awards are contingent upon CSW's achieving a specified level of total stockholder return, relative to the S&P Electric Index, for a three-year period, or cycle, and exceeding a certain defined minimum threshold. If the Named Executive Officer's employment is terminated during the performance period for any reason other than death, total and permanent disability or retirement, then the award is canceled. The CSW Incentive Plan contains a provision accelerating awards upon a change in control of CSW. Except as provided in the next sentence, if a change in control of CSW occurs, all options become fully exercisable and all restrictions, terms and conditions applicable to all restricted stock are deemed lapsed and satisfied and all performance units are deemed to have been fully earned, as of the date of the change in control. Awards which have been outstanding for less than six months prior to the date the change in control occurs are not subject to acceleration upon the occurrence of a change in control. The CSW Incentive Plan also contains provisions designed to prevent circumvention of the above acceleration provisions through coerced termination of an employee prior to a change in control. See "Executive Compensation Committee Report" for a more thorough discussion of the terms of the CSW Incentive Plan. RETIREMENT PLAN. CSW maintains the tax-qualified CSW Cash Balance Plan for eligible employees. In addition, CSW maintains the SERP, a non-qualified ERISA excess plan, that primarily provides benefits that cannot be payable under the CSW Cash Balance Plan because of maximum limitations imposed on such plans by the Code. Through June 30, 1997, the CSW Cash Balance Plan was structured as a traditional, defined benefit final average pay plan. Effective July 1, 1997, the present value of accrued benefits under the Retirement Plan was converted to a cash balance. Under the cash balance formula, each participant has an account, for recordkeeping purposes only, to which credits are allocated annually based on a percentage of the participant's pay. As of July 1, 1997, the definition of pay for the CSW Cash Balance Plan was expanded to include not only base pay but also bonuses, overtime, and commissions. The applicable percentage is determined by the age and years of vesting service the participant has with CSW and its affiliates as of December 31 of each year (or as of the participant's termination date, if earlier). The following table shows the applicable percentage used to determine credits at the age and years of service indicated:
SUM OF AGE PLUS YEARS OF SERVICE APPLICABLE PERCENTAGE - - -------------- --------------------- less than 30 3.0% 30-39 3.5% 40-49 4.5% 50-59 5.5% 60-69 7.0% 70 or more 8.5%
As of December 31, 1997, the sum of age plus years of service of the Named Executive Officers for the cash balance formula are as follows: Mr. Brooks, 96; Mr. Shockley, 73; Mr. Files, 76; Mr. Meyer, 74; and Mr. Rosilier, 71. All balances in the accounts of participants earn a fixed rate of interest which is also credited annually. The interest rate for a particular year is the average rate of return of the 30-year Treasury Rate for November of the prior year. For 1997, the interest rate was 6.48%. For 1998, the interest rate is 6.11%. Interest continues to be credited as long as the participant's balance remains in the plan. At retirement or other termination of employment, an amount equal to the vested balance (including qualified and SERP benefit) then credited to the account is payable to the participant in the form of an immediate or deferred lump-sum or annuity. Benefits (both from the CSW Cash Balance Plan and the SERP) under the cash balance formula are not subject to reduction for Social Security benefits or other offset amounts. The estimated annual benefit payable to each of the Named Executive Officers as a single life annuity at age 65 under the CSW Cash Balance Plan and the SERP is; Mr. Brooks, $464,599; Mr. Shockley, $230,384; Mr. Meyer, $144,432; Mr. Rosilier, $250,142; Mr. Files, $272,378. These projections are based on the following assumptions: (1) participant remains employed until age 65; (2) salary used is base pay paid for calendar year 1997 assuming no future increases plus bonus at 1997 target level; (3) interest credit at 6.11% for 1998 and future years; (4) the conversion of the lump-sum cash balance to a single life annuity at normal retirement age, based on an interest rate of 6.11% and the 1983 Group Annuity Mortality Table, which sets forth generally accepted life expectancies. In addition, certain employees who were 50 or over and had completed at least 10 years of service as of July 1, 1997, also continue to earn a benefit using the prior pension formula. At commencement of benefits, the following Named Executive Officers have a choice of their accrued benefit using the cash balance formula or their accrued benefit using the prior pension formula: Mr. Brooks, Mr. Shockley, and Mr. Meyer. Once the participant selects either the earned benefit under the cash balance formula or the earned benefit under the prior pension formula, the other earned benefit is no longer available. The table below shows the estimated combined benefits payable from both the prior pension formula and the SERP based on retirement age of 65, the average compensation shown, the years of credited service shown, continued existence of the prior pension formula without substantial change and payment in the form of a single life annuity.
ANNUAL BENEFITS AFTER SPECIFIED YEARS OF CREDITED SERVICE ----------------------------------------------- AVERAGE COMPENSATION 15 20 25 30 OR MORE - - -------------------- ---------- ---------- ---------- ----------- $ 250,000 $ 62,625 $ 83,333 $ 104,167 $ 125,000 $ 350,000 $ 87,675 $ 116,667 $ 145,833 $ 175,000 $ 450,000 $ 112,725 $ 150,000 $ 187,500 $ 225,000 $ 550,000 $ 137,775 $ 183,333 $ 229,167 $ 275,000 $ 650,000 $ 162,825 $ 216,667 $ 270,833 $ 325,000 $ 750,000 $ 187,875 $ 250,000 $ 312,500 $ 375,000 $ 850,000 $ 212,500 $ 283,333 $ 357,000 $ 425,000
Benefits payable under the prior pension formula are based upon the participant's years of credited service, age at retirement, and covered compensation earned by the participant. The annual normal retirement benefit payable under the prior pension formula and the SERP are based on 1.67 percent of "Average Compensation" times the number of years of credited service (reduced by no more than 50 percent of a participant's age 62 or later Social Security benefit). "Average compensation" is covered compensation for the prior pension formula and equals the average annual compensation, reported as salary in the Summary Compensation Table, during the 36 consecutive months of highest pay during the 120 months prior to retirement. Respective years of credited service and ages, as of December 31, 1997, for the three Named Executive Officers who continue to earn a benefit under the prior pension formula are: Mr. Brooks, 30 and 60; Mr. Shockley, 14 and 52; and Mr. Meyer, 16 and 58. In addition, Mr. Shockley and Mr. Meyer have arrangements with CSW under which they will receive a total of 30 years of credited service using the prior pension formula (paid through the SERP) if they remain employed by CSW through age 60. In 1992, Mr. Meyer completed five consecutive years of employment which entitled him to receive five additional years of credited service (through the SERP) as included in his years of service for the cash balance formula and the prior pension formula as set forth above. MEETINGS AND COMPENSATION OF THE CSW BOARD The CSW Board held 6 regular meetings and 8 special meetings during 1997. Directors who are not also officers and employees of CSW receive annual cash directors' fees of $12,000 for serving on the CSW Board and a fee of $1,250 per day plus expenses for each meeting of the CSW Board or committee attended. In addition, under the CSW Directors' Plan each non-employee director receives an annual award of 600 phantom stock shares on the fourth Wednesday of January during their term of office. Such phantom stock shares vest at such time as a director ceases to be a member of the CSW Board and are then converted into CSW Shares on a one-for-one basis. The CSW Board has standing Policy, Audit, Executive Compensation, Nominating and Corporate Strategy Review Committees. Chairmen of the Audit, Corporate Strategy Review, Executive Compensation, and Nominating Committees receive annual fees of $6,000, $6,000, $3,500 and $3,500, respectively, to be paid in cash in addition to regular directors' and meeting fees. Committee chairmen and committee members who are also officers and employees of CSW receive no annual director's, chairman's or meeting fees. CSW maintains a memorial gift program for all of its current directors, directors who have retired since 1992 and certain executive officers. There are 14 current directors and executive officers and 13 retired directors and officers eligible for the memorial gift program. Under this program, CSW will make donations in a director's or executive officer's name to up to three charitable organizations in an aggregate of $500,000, payable by CSW upon such person's death. CSW maintains corporate-owned life insurance policies to fund the program. The annual premiums paid by CSW are based on pooled risks and averaged $15,803 per participant for 1997, $16,402 per participant for 1996, and $16,367 per participant for 1995. Non-employee directors are provided the opportunity to enroll in a medical and dental program offered by CSW. This program is identical to the employee plan and directors who elect coverage pay the same premium as active employee participants in the plan. If a non-employee director terminates his service on the board with ten or more years of service and is over seventy years of age, that director is eligible to receive retiree medical and dental benefits coverage from CSW. Non-employee directors are provided the opportunity to participate in the Central and South West Deferred Compensation Plan for Directors. The plan allows participants to defer up to $20,000 of board and committee fees. Participants receive a ten-year annuity, based on the amount deferred, beginning at the participants normal retirement date from the Board. During 1997, CSW retained Mr. Glenn Biggs, a current member of the CSW Board, under an agreement to pursue special business development activities in Mexico on behalf of CSW. For the year ended December 31, 1997, CSW paid Mr. Biggs $120,000 pursuant to this agreement. Effective March 18, 1998, Mr. Biggs resigned his position as a director of CSW. Mr. Biggs had not previously been nominated for reelection to the CSW Board. In connection with his resignation, Mr. Biggs' consulting arrangement was terminated. CSW and Mr. Biggs entered into an agreement pursuant to which Mr. Biggs was paid, a lump sum for, among other things, his benefit under certain compensation plans and to pay his director and CSW Board committee fees through May 1998 and his consulting fees through March 1998. Pursuant to that agreement, Mr. Biggs and his spouse are also entitled to continued medical and dental coverage under the CSW Medical Plan for Outside Directors and CSW has agreed to maintain the memorial gift program for Mr. Biggs. All current directors attended more than 75 percent of the total number of meetings held by the Board and each committee on which such directors served in 1997, except for Mr. Ward who attended 57 percent of the total meetings. Security Ownership of Management The following table shows securities beneficially owned as of December 31, 1997 by each director and nominee, certain executive officers and all directors and executive officers as a group. Share amounts shown in this table include options exercisable within 60 days after December 31, 1997, restricted stock, CSW Shares credited to thrift plus accounts and all other CSW Shares beneficially owned by the listed persons.
NAME CSW SHARES(1)(2) - - --------------------------------------------------- ----------------- Glenn Biggs........................................ 19,211 Molly Shi Boren.................................... 3,119 E.R. Brooks........................................ 131,529 Donald M. Carlton.................................. 8,230 T. J. Ellis........................................ 7,694 Glenn Files........................................ 42,269 Joe H. Foy......................................... 10,717 T.M. Hagan......................................... 13,625 William R. Howell.................................. 1,000 Robert W. Lawless.................................. 3,074 Venita McCellon-Allen.............................. 6,528 Ferd. C. Meyer, Jr................................. 46,480 James L. Powell.................................... 4,211 Glenn D. Rosilier.................................. 68,071 Richard L. Sandor.................................. -- Thomas V. Shockley, III............................ 68,329 Lloyd D. Ward...................................... 2,157 All of the above and other officers as a group (CSW directors and officers).......................... 486,165
- - ------------------------ (1) Shares for Ms. McCellon-Allen, Messrs. Brooks, Files, Hagan, Meyer, Rosilier, Shockley, and CSW directors and officers include 1,125, 12,225, 4,500, 1,125, 5,700, 5,700, 7,275, and 42,150 shares of restricted stock, respectively. These individuals currently have voting power, but not investment power, with respect to these shares. The above shares also include 1,934, 65,175, 23,653, 8,484, 32,889, 32,889, 42,231, and 239,258 CSW Shares underlying immediately exercisable options held by Ms. McCellon-Allen, Messrs. Brooks, Files, Hagan, Meyer, Rosilier, Shockley, and CSW directors and officers, respectively. (2) All of the share amounts represent less than one percent of the outstanding CSW Shares. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS Set forth below are the only persons or groups known to CSW as of December 31, 1997, with beneficial ownership of 5 percent or more of CSW's Shares.
CSW SHARES ------------------------------ AMOUNT OF NAME, ADDRESS OF BENEFICIAL PERCENT OF BENEFICIAL OWNERS OWNERSHIP CLASS - - ------------------------------------------- ---------------------------- Mellon Bank Corporation and subsidiaries... 12,196,127(1) 6% One Mellon Bank Center Pittsburgh, PA 15258
- - ------------------------ (1) Mellon Bank Corporation and its subsidiaries, including Mellon Bank, N.A., which acts as trustee of an employee benefit plan of CSW, reported that they exercise sole voting power as to 11,022,435 shares and shared voting power as to 11,022,435 shares. CPL, PSO, SWEPCO AND WTU EXECUTIVE COMPENSATION The following table sets forth the aggregate cash and other compensation for services rendered for the fiscal years of 1997, 1996 and 1995 for the President of each of the U.S. Electric Operating Companies and the Named Executive Officers as defined below. Because of the functional restructuring undertaken by CSW during 1996, certain of the Executive Officers of the U.S. Electric Operating Companies, Messrs. Files, Bremer, Zemanek and Verret, are not actually employed by any of the U.S. Electric Operating Companies. Instead, they are employed by CSW Services and manage CSW business units and perform policy-making functions that are integral to the U.S. Electric Operating Companies. Therefore, these individuals are included in the Summary Compensation Table as Named Executive Officers due to the functional perspective regarding the management of the companies. For additional information regarding the restructuring, see PART II-MD&A. U.S. ELECTRIC OPERATING COMPANIES
SUMMARY COMPENSATION TABLE LONG TERM COMPENSATION --------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS --------------------------------- ------------------------ ------- CSW Other CSW Securities Annual Restricted Underlying All Other Name and Compen- Stock Options/ LTIP Compen- Principal Position Salary Bonus sation Award(s) SARs Payouts sation At Registrant YEAR ($) ($)(1) ($)(2) ($)(1)(3) (#) ($) ($)(4) - - ------------------------------------------------------------------------------------------------------------- Glenn Files, Senior 1997 374,999 143,099 8,534 -- 31,000 -- 23,757 Vice President of CSW 1996 331,135 44,860 66,415 153,750 -- -- 23,992 Electric Operations (2,5) 1995 266,223 85,048 19,144 -- -- -- 23,117 Richard H. Bremer, 1997 307,462 99,993 4,648 -- 26,000 -- 21,357 President of CSW Energy 1996 305,910 144,404 73,711 153,750 -- -- 21,742 Services business unit 1995 298,372 89,358 14,691 -- -- -- 21,706 (2,5) Robert L. Zemanek, 1997 283,250 89,279 10,272 -- 24,000 -- 23,757 President of CSW Energy 1996 283,250 176,863 6,500 153,750 -- -- 23,992 Delivery business unit (5) 1995 276,270 91,436 9,192 -- -- -- 23,117 Richard P. Verret, 1997 251,230 83,390 2,083 -- 21,000 -- 7,953 President of CSW 1996 236,154 84,788 6,055 89,688 -- -- 7,590 Production (5) M. Bruce Evans 1997 208,000 65,780 882 -- 14,000 -- 5,520 President of CPL (2,5) 1996 208,000 91,376 70,783 89,688 -- -- 4,500 T. D. Churchwell, 1997 192,500 53,672 2,167 -- 13,000 -- 6,398 President of PSO (2,5) 1996 192,500 24,097 79,730 38,438 -- -- 5,340 1995 180,400 40,388 9,206 -- -- -- 4,500 Michael D. Smith, 1997 190,923 64,306 945 -- 13,000 -- 6,419 President of SWEPCO (2,5) 1996 184,269 64,050 115,322 38,438 -- -- 5,340 Floyd W. Nickerson, 1997 160,769 40,293 1,806 -- 11,000 -- 6,661 President of WTU (2,5) 1996 147,692 36,384 69,665 38,438 -- -- 5,270 (1) Amounts in this column are paid or awarded in a calendar year for performance in a preceding year. (2) The following are the perquisites and other personal benefits required to be identified in respect of each Named Executive Officer. 1996 Relocation Reimbursements - - -------------------------------------------------------------- Glenn Files $25,662 Richard H. Bremer 34,117 M. Bruce Evans 32,537 T.D. Churchwell 38,955 Michael D. Smith 63,818 Floyd W. Nickerson 37,416 (3) Grants of restricted stock are administered by the Executive Compensation Committee of the CSW Board of Directors, which has the authority to determine the individuals to whom and the terms upon which restricted stock grants, including the number of underlying shares, shall be made. The awards reflected in this column all have four-year vesting periods with 25% vesting on the first, second, third and fourth anniversary dates of the award. Upon vesting, CSW Shares are re-issued without restrictions. The individuals receive dividends and may vote shares of restricted stock, even before they are vested. The amount reported in the table represents the market value of the shares at the date of grant. As of December 31, 1997, the aggregate restricted stock holdings of each of the Named Executive Officers are presented in the following table. Restricted Stock Held Market Value at Name at December 31, 1997 December 31, 1997 - - -------------------------------------------------------------------- Glenn Files 4,500 $121,781 Richard H. Bremer 4,500 121,781 Robert L. Zemanek 4,500 121,781 Richard P. Verret 2,625 71,039 M. Bruce Evans 2,625 71,039 T. D. Churchwell 1,125 30,445 Michael D. Smith 1,125 30,445 Floyd W. Nickerson 1,125 30,445 (4) Amounts shown in this column consist of: (i) the annual employer matching payments to CSW's Retirement Savings Plan, (ii) premiums paid per participant for personal liability insurance and (iii) average amounts of premiums paid per participant in those years under CSW's memorial gift program. Under this program, for certain executive officers, directors and retired directors from the CSW System, CSW will make a donation in a participant's name to up to three charitable organizations in an aggregate of $500,000, payable by CSW upon such person's death. CSW maintains corporate-owned life insurance policies to fund the program. The annual premiums paid by CSW are based on pooled risks and averaged $15,803 per participant for 1997, $16,402 for 1996 and $16,367 for 1995. In 1997, 1996 and 1995, Messrs. Bremer, Files and Zemanek participated. (5) System Affiliations. In the first quarter of 1998, the positions of President and General Manager at both CPL and WTU were combined into one. These position's were assumed by J. Gonzalo Sandoval for CPL and Paul J. Brower for WTU. Messrs. Evans and Nickerson assumed other positions within the CSW System. Messrs. Files, Bremer, Zemanek and Verret assumed policy making functions for each of the U.S. Electric Operating Companies in 1996. Messrs. Evans, Smith and Nickerson assumed policy-making positions at the U.S. Electric Operating Companies in 1996. Messrs. Verret, Evans, Smith and Nickerson received no compensation from any of the U.S. Electric Operating Companies in 1995.
OPTION/SAR GRANTS Shown below is information on grants of stock options made in 1997 pursuant to the CSW stock option plan to the Named Executive Officers. No stock appreciation rights were granted in 1997.
CSW OPTION/SAR GRANTS IN 1997(1) Potential Realizable Value at Assumed Annual Rates of CSW Stock Price Appreciation for Individual Grants Option Terms(3) - - ---------------------------------------------------------------------------- ------------------ Number of CSW % of Total Securities Options/SARs Underlying Granted to Exercise or Options/SARs Employees In Base Price Expiration Name Granted(#)(2) Fiscal Year ($/Sh) Date 5%($) 10%($) - - ---- ------------- ----------- ------------ ------------ ------- --------- Glenn Files 31,000 4.5 20.750 5/23/2007 405,248 1,022,768 Richard H. Bremer 26,000 3.8 20.750 5/23/2007 339,885 857,805 Robert L. Zemanek 24,000 3.5 20.750 5/23/2007 313,740 791,820 Richard P. Verret 21,000 3.0 20.750 5/23/2007 274,523 692,843 M. Bruce Evans 14,000 2.0 20.750 5/23/2007 183,015 461,895 T. D. Churchwell 13,000 1.9 20.750 5/23/2007 169,943 428,903 Michael D. Smith 13,000 1.9 20.750 5/23/2007 169,943 428,903 Floyd W. Nickerson 11,000 1.6 20.750 5/23/2007 143,798 362,918 (1) The stock option plans are administered by the Executive Compensation Committee of the Board, which has the authority to determine the individuals to whom and the terms upon which option and SAR grants shall be made. (2) All options were granted on May 23, 1997, and are first exercisable 12 months after the grant date, with one-third of the shares becoming exercisable at that time and with an additional one third of the aggregate becoming exercisable on each of the next two anniversary dates. (3) The annual rates of appreciation of 5% and 10% are specifically required by SEC disclosure rules and in no way guarantee that such annual rates of appreciation will be achieved by CSW nor should this be construed in any way to constitute any representation by CSW that such growth will be achieved.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE Shown below is information regarding option/SAR exercises during 1997 and unexercised options/SARs at December 31, 1997 for the Named Executive Officers. AGGREGATED OPTION/SAR EXERCISES IN 1997 AND FISCAL YEAR-END OPTION/SAR VALUES Number of CSW Securities Value of Underlying Unexercised In-the-Money Shares Options/SARs at Options/SARs Name Acquired Value Year-End at Year-End on Exercise Realized Exercisable/ Exercisable/ (#) ($) Unexercisable Unexercisable (1) - - ------------------------------------------------------------------------------ Glenn Files -- -- 23,653/31,000 5,593/195,688 Richard H. Bremer -- -- 28,332/26,000 3,915/164,125 Robert L. Zemanek -- -- 25,430/24,000 6,015/151,500 Richard P. Verret 100 1,081 13,325/21,000 14,889/132,563 M. Bruce Evans -- -- 8,928/14,000 9,810/88,375 T. D. Churchwell -- -- 9,268/13,000 5,763/82,063 Michael D. Smith -- -- 7,779/13,000 2,413/82,063 Floyd W. Nickerson -- -- 4,867/11,000 675/69,438 (1) Calculated based upon the difference between the closing price of CSW's Shares on the New York Stock Exchange on December 31, 1997 ($27.0625 per share) and the exercise price per share of the outstanding unexercisable and exercisable options ($16.250, $20.750, $24.813 and $29.625, as applicable). LONG-TERM INCENTIVE PLAN-AWARDS IN 1997 The following table shows information concerning awards made to the Named Executive Officers during 1997 under the CSW stock option plan. Estimated Future Payouts under Number of Performance or Non-stock Price Based Plans Shares, Units Other Period ---------------------------- or Other Until Maturation Threshold Target Maximum Name Rights or Payout ($) ($) ($) - - ------------------------------------------------------------------------------ Glenn Files -- 2 years -- 225,000 337,500 Richard H. Bremer -- 2 years -- 183,546 275,319 Robert L. Zemanek -- 2 years -- 169,950 254,925 Richard P. Verret -- 2 years -- 150,000 225,000 M. Bruce Evans -- 2 years -- 90,667 136,001 T. D. Churchwell -- 2 years -- 63,258 94,887 Michael D. Smith -- 2 years -- 54,740 82,110 Floyd W. Nickerson -- 2 years -- 47,369 71,054 Payouts of these awards are contingent upon CSW's achieving a specified level of total stockholder return, relative to the S&P Electric Index, for a three-year period, or cycle, and exceeding a certain defined minimum threshold. If the Named Executive Officer's employment is terminated during the performance period for any reason other than death, total and permanent disability or retirement, then the award is canceled. The CSW stock option plan contains a provision accelerating awards upon a change in control of CSW. Except as provided in the next sentence, if a change in control of CSW occurs, all options become fully exercisable and all restrictions, terms and conditions applicable to all restricted stock are deemed lapsed and satisfied and all performance-based units are deemed to have been fully earned, as of the date of the change in control. Awards which have been outstanding for less than six months prior to the date the change in control occurs are not subject to acceleration upon the occurrence of a change of control. The CSW stock option plan also contains provisions designed to prevent circumvention of the above acceleration provisions through coerced termination of an employee prior to a change in control. RETIREMENT PLAN CSW maintains the Retirement Plan for eligible employees, in addition, CSW maintains the SERP, a non-qualified ERISA excess plan, that primarily provides benefits that cannot be payable under the qualified Retirement Plan because of maximum limitations imposed on such plans by the Internal Revenue Code. Through June 30, 1997, the Retirement Plan was structured as a traditional, defined benefit final average pay plan. Effective, July 1, 1997, the present value of accrued benefits under the Retirement Plan was converted to a cash balance. Under the cash balance formula, each participant has an account, for recordkeeping purposes only, to which pay credits are allocated annually based on a percentage of the participant's pay. As of July 1, 1997, the definition of pay for the CSW Cash Balance Plan was expanded to include not only base pay but also bonuses, overtime, and commissions. The applicable percentage is determined by the age and years of vesting service the participant has with CSW and its affiliates as of December 31 of each year (or termination date, if earlier). The following table shows the Applicable Percentage used to determine credits at the age and years of service indicated. Sum of Age plus YEARS OF SERVICE APPLICABLE PERCENTAGE < 30 3.0% 30-39 3.5% 40-49 4.5% 50-59 5.5% 60-69 7.0% 70 or more 8.5% As of December 31, 1997, the sum of age plus years of service of the Named Executive Officers for the cash balance formula are as follows: Mr. Files, 76; Mr. Bremer, 69; Mr. Zemanek, 73; Mr. Verret, 76; Mr. Evans, 60; Mr. Churchwell, 72; Mr. Smith, 53; Mr. Nickerson, 58. All balances in the accounts of participants earn a fixed rate of interest which is also credited annually. The interest rate for a particular year is the average rate of return of the 30-year Treasury Rate for November of the prior year. For 1997, the interest rate was 6.48%. For 1998, the interest rate is 6.11%. Interest continues to be credited as long as the participant's balance remains in the plan. At retirement or other termination of employment, an amount equal to the vested balance (including qualified and SERP benefit) then credited to the account is payable to the participant in the form of an immediate or deferred lump-sum or annuity. Benefits (both from the CSW Cash Balance Plan and the SERP) under the cash balance formula are not subject to reduction for Social Security benefits or other offset amounts. The estimated annual benefit payable to each of the Named Officers as a single life annuity at age 65 under the Retirement Plan and the SERP is: Mr. Files, $272,378; Mr. Bremer, $213,333; Mr. Zemanek, $243,305; Mr. Verret, $173,626; Mr. Evans, $185,905; Mr. Churchwell; $109,329; Mr. Smith, $91,560; Mr. Nickerson, $139,609. These projections are based on the following assumptions: (1) participant remains employed until age 65; (2) salary used is base pay paid for calendar year 1997 assuming no future increases plus bonus at 1997 target level; (3) interest credit at 6.11% for 1998 and future years; (4) the conversion of the lump-sum cash balance to a single life annuity at normal retirement age is based on an interest rate of 6.11% and the 1983 Group Annuity Mortality Table, which sets forth generally accepted life expectancies. In addition, certain employees who were 50 or over and had completed at least 10 years of service as of July 1, 1997, also continue to earn a benefit using the prior pension formula. At commencement of benefits, the following Named Officers have a choice of their accrued benefit using the cash balance formula or their accrued benefit using the prior pension formula: Mr. Verret and Mr. Churchwell. Once the participant selects either the earned benefit under the cash balance formula or the earned benefit under the prior pension formula, the other earned benefit is no longer available. The table below shows the estimated combined benefits payable from both the prior pension formula and the SERP based on retirement age of 65, the average compensation shown, the years of credited service shown , continued existence of the prior pension formula without substantial change and payment in the form of a single life annuity. ANNUAL BENEFITS AFTER SPECIFIED YEARS OF CREDITED SERVICE Average Compensation 15 20 25 30 or More ----------------------------------------------------------------------- $100,000 $ 25,050 $ 33,333 $ 41,667 $ 50,000 150,000 37,575 50,000 62,500 75,000 200,000 50,100 66,667 83,333 100,000 250,000 62,625 83,333 104,167 125,000 300,000 75,150 100,000 125,000 150,000 350,000 87,675 116,667 145,833 175,000 450,000 112,725 150,000 187,500 225,000 550,000 137,775 183,333 229,167 275,000 650,000 162,825 216,667 270,833 325,000 750,000 187,875 250,000 312,500 375,000 850,000 212,500 283,333 357,000 425,000 Benefits payable under the prior pension formula are based upon the participant's years of credited service, age at retirement, and covered compensation earned by the participant. The annual normal retirement benefit payable under the prior pension formula and the SERP are based on 1.67 percent of "Average Compensation" times the number of years of credited service (reduced by no more than 50 percent of a participant's age 62 or later Social Security benefit). "Average compensation" is covered compensation for the prior pension formula and equals the average annual compensation, reported as salary in the Summary Compensation Table, during the 36 consecutive months highest pay during the 120 months prior to retirement. Respective years of credited service and ages, as of December 31, 1997, for the following officers who continue to earn a benefit under the prior pension formula are: Mr. Verret, 25 and 51, Mr. Churchwell, 19 and 53. The registrants have entered into change in control agreements with certain individuals named in the Summary Compensation Table. The purpose of the agreements is to assure the objective judgment, and to retain the loyalties of these key individuals in the event CSW is faced with a potential change in control. Consummation of the proposed AEP Merger will constitute a change in control under these agreements, information related to the change in control agreements is incorporated by reference herein from THE MERGER - CSW LONG-TERM INCENTIVE PLAN and CHANGE IN CONTROL AGREEMENTS of the Joint Proxy Statement. MEETINGS AND COMPENSATION Those directors who are not also officers of CPL, PSO, SWEPCO and WTU receive annual directors' fees and a fee of $300 plus expenses for each board or committee meeting attended, as described below. They are also eligible to participate in a deferred compensation plan. Under this plan such directors may elect to defer payment of annual directors' and meeting fees until they retire from the board or as they otherwise direct. The number of board meetings and annual directors' fees are presented in the following table. CPL PSO SWEPCO WTU ---------------------------------------- Number of regular board meetings 4 4 4 4 Annual directors' fees $6,000 $6,000 $6,600 $6,000 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION No person serving during 1997 as a member of the Executive Compensation Committee of the Board of Directors of CSW served as an officer or employee of any registrant during or prior to 1997. No person serving during 1997 as an executive officer of the U.S. Electric Operating Companies serves or has served on the compensation committee or as a director of another company whose executive officers serve or has served as a member of the Executive Compensation Committee of CSW or as a director of one of the U.S. Electric Operating Companies. SECURITY OWNERSHIP OF MANAGEMENT The following tables show securities beneficially owned as of December 31, 1997, by each director, the President and Executive Officers of each of the U.S. Electric Operating Companies. Share amounts shown in this table include options exercisable within 60 days after December 31, 1997, restricted stock, CSW Shares credited to thrift plus accounts and all other CSW Shares beneficially owned by the listed persons. Each of the U.S. Electric Operating Companies has one or more series of preferred stock outstanding. As of December 31, 1997, none of the individuals listed in the following tables owned any shares of preferred stock of any U.S. Electric Operating Company. BENEFICIAL OWNERSHIP AS OF DECEMBER 31, 1997 CSW Common CPL Underlying CSW Restricted Immediately Name Common (1) Stock (2) (3) Exercisable Options (3) - - ------------------------------------------------------------------------------ John F. Brimberry 765 -- -- E. R. Brooks 131,529 12,225 65,175 M. Bruce Evans 12,574 2,625 8,928 Glenn Files 42,269 4,500 23,653 Ruben M. Garcia -- -- -- Robert A. McAllen 1,500 -- -- Pete Morales, Jr. -- -- -- H. Lee Richards 1,400 -- -- J. Gonzalo Sandoval 16,850 1,125 6,926 Gerald E. Vaughn 6,023 1,125 1,337 All of the above and other officers as a group 223,958 22,725 112,742 PSO E. R. Brooks 131,529 12,225 65,175 T. D. Churchwell 12,597 1,125 9,268 Harry A. Clarke -- -- -- Glenn Files 42,269 4,500 23,653 Paul K. Lackey, Jr. -- -- -- Paula Marshall-Chapman -- -- -- William R. McKamey 13,554 1,125 3,323 Dr. Robert B. Taylor, Jr. -- -- -- All of the above and other officers as a group 210,428 20,100 108,142 SWEPCO E. R. Brooks 131,529 12,225 65,175 James E. Davison -- -- -- Glenn Files 42,269 4,500 23,653 Dr. Frederick E. Joyce -- -- -- John M. Lewis -- -- -- Karen C. Martin 3,741 -- 2,005 William C. Peatross -- -- -- Maxine P. Sarpy 100 -- -- Michael D. Smith 10,176 1,125 7,779 All of the above and other officers as a group 198,867 18,975 105,335 WTU E. R. Brooks 131,529 12,225 65,175 Paul J. Brower 10,911 1,125 7,145 Glenn Files 42,269 4,500 23,653 Tommy Morris 2,000 -- -- Floyd W. Nickerson 6,403 1,125 4,867 Dian G. Owen 100 -- -- James M. Parker 5,000 -- -- F. L. Stephens 2,800 -- -- All of the above and other officers as a group 214,142 20,100 107,563 (1) Beneficial ownership percentages are all less than one percent and therefore are omitted. (2) These individuals currently have voting power, but not investment power, with respect to these shares. (3) These shares are included in the CSW Common column. EX-99.F4 7 EXHIBIT F-4 ASH CREEK MINING COMPANY INCOME STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1997 OPERATING REVENUE Sale Of Coal Miscellaneous Operating Revenue $2,534 ----------- TOTAL OPERATING REVENUE 2,534 ----------- OPERATING EXPENSES Provision for Reclamation Expense Reclamation Expense - Actual 56,310 Reclamation Accrual Reversal - Credit General Mine Operation General Mine Maintenance Environmental Sampling Royalties Depreciation Administrative and General (A) 25,002 Federal Income Taxes (75,738) Deferred Income Taxes Other Taxes ----------- TOTAL OPERATING EXPENSES (5,574) ----------- NET OPERATING INCOME (3,040) ----------- OTHER DEDUCTIONS Interest Expense to PSO 230,716 Interest Expense Other Miscellaneous Other Deduction - Property Write Down Interest Income and Other Gain on Sales of Assets (93,100) ----------- TOTAL OTHER DEDUCTIONS 137,616 ----------- NET INCOME (LOSS) ($140,656) =========== ASH CREEK MINING COMPANY BALANCE SHEET AS OF DECEMBER 31, 1996 ASSETS PLANT Ash Creek Mining Company Buildings & Service Facilities Equipment Land & Land Rights ----------- TOTAL PLANT Less: Reserve For Depreciation-Buildings Reserve For Depreciation-Equipment Reserve For Property Valuation Retirement Work in Progress ----------- TOTAL RESERVE ----------- NET PLANT ----------- CURRENT & ACCRUED ASSETS Cash $25,728 Working Funds Temporary Cash Investments Accounts Receivable-PSO Accounts Receivable 1,863 Coal Inventory Materials & Supplies Prepayments ----------- TOTAL CURRENT & ACCRUED ASSETS 27,591 DEFERRED DEBITS Development Cost Capitalized Less: Reserve For Valuation Acct Other Deferred Debits TOTAL DEFERRED DEBITS ----------- TOTAL ASSETS $27,591 =========== CAPITALIZATION & LIABILITIES CAPITALIZATION Common Stock $3,839,040 Paid In Capital 6,484,384 Unappropriated Retained Earnings (10,278,213) Bonds Unamortized Discount On Bonds ----------- TOTAL CAPITALIZATION 45,211 CURRENT & ACCRUED LIABILITIES Notes Payable-PSO 26 Notes Payable-Other 776 Accounts Payable-PSO Accounts Payable-Other Taxes Accrued (18,422) Accrued Interest Payable-PSO Accrued Interest Payable-Other Misc. Current & Accrued Liabilities ----------- TOTAL CURRENT & ACCRUED LIABILITIES (17,620) OTHER DEFERRED CREDITS Deferred Investment Tax Credit Deferred Taxes On Income Reserve For Mine Closing ----------- TOTAL CAPITALIZATION & LIABILITIES $27,591 =========== EX-99.F5 8 EXHIBIT F-5 THE ARKLAHOMA CORPORATION FINANCIAL STATEMENTS AS OF NOVEMBER 30, 1997 AND 1996 TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of The Arklahoma Corporation: We have audited the accompanying balance sheets of The Arklahoma Corporation (an Arkansas corporation) as of November 30, 1997 and 1996, and the related statements of income and retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signficant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Arklahoma Corporation as of November 30, 1997 and 1996, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Arthur Andersen LLP Oklahoma City, Oklahomam, December 19, 1997 THE ARKLAHOMA CORPORATION BALANCE SHEETS NOVEMBER 30, 1997 AND 1996 ASSETS 1997 1996 ---------- ---------- UTILITY PLANT: Electric plant in service, at cost $2,561,863 $2,561,863 Less - Accumulated depreciation 2,249,240 2,249,240 --------- --------- Total utility plant 312,623 312,623 CURRENT ASSETS: Cash and cash equivalents 121,095 155,943 Accounts receivable 500 - Accounts receivable from affiliated companies - 29,751 --------- --------- Total current assets 121,595 185,694 Total assets $ 434,218 $ 498,317 ========= ========= CAPITALIZATION AND LIABILITIES CAPITALIZATION: Common stock, par value $100 per shares authorized, 500 shares outstanding $ 50,000 $ 50,000 Retained earnings 308,616 305,867 --------- --------- Total capitalization 358,616 355,867 CURRENT LIABILITIES: Accounts payable 5,787 82,158 Accounts payable to affiliated companies 9,523 - --------- --------- Total current liabilities 15,310 82,158 --------- --------- DEFERRED CREDITS: Deferred income taxes 60,292 60,292 Total liabilities 75,602 142,450 Total capitalization and liabilities $ 434,218 $ 498,317 ========= ========= The accompanying notes are an integral part of the balance sheets. THE ARKLAHOMA CORPORATION STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE YEARS ENDED NOVEMBER 30, 1997 AND 1996 REVENUES: 1997 1996 ---------- ---------- Interest Income $ 10,303 $ 8,994 Other 500 - --------- --------- 10,803 8,994 --------- --------- EXPENSES: Administrative and General 7,078 6,757 Other 478 808 --------- --------- Total Expenses 7,556 7,565 --------- --------- Income before federal and state income taxes 3,247 1,429 FEDERAL AND STATE INCOME TAXES 498 260 --------- --------- NET INCOME 2,749 1,169 RETAINED EARNINGS, beginning of year 305,867 304,698 Less- Dividends declared - - --------- --------- RETAINED EARNINGS, end of year $308,616 $305,867 ========= ========= The accompanying notes are an integral part of these financial statements. THE ARKLAHOMA CORPORATION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED NOVEMBER 30, 1997 AND 1996 1997 1996 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 2,749 $ 1,169 Change In Certain Assets and Liabilities Accounts Receivable 29,251 66,898 Accounts Payable (66,848) 74,193 Dividends Payable - (290,000) --------- --------- Net cash used in operating activities (38,848) (147,740) --------- --------- NET DECREASE IN CASH AND CASH EQUIVALENTS (34,848) (147,740) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 155,943 303,683 --------- --------- CASH AND CASH EQUIVALENTS, END OF YEAR $121,095 $155,943 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Net Cash Paid During The Year For Income Taxes $ 217 $ 2,867 ========= ========= The accompanying notes are an integral part of these financial statements. THE ARKLAHOMA CORPORATION NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1997 AND 1996 1. OPERATIONS: The Arklahoma Corporation's (the "Company") utility plant consists principally of transmission facilities which are being leased to its three stockholder companies from year to year. Pursuant to the terms of the lease agreement, the lessees have agreed to pay all operating costs, including maintenance, repairs, insurance and taxes assessed upon the properties. Such amounts totaled approximately $1,100,000 and $637,000 in fiscal years 1997 and 1996, respectively. Under the terms of the current lease agreement, annual rentals have been discontinued but can be reinstated upon the agreement of the Company and the lessees. During fiscal year 1996, OG&E sold 146 shares of Arklahoma common stock to Entergy (AP&L), (68 shares) and SWEPCO, (78 shares) respectively. As a result of the transaction, Entergy and SWEPCO own 238 shares (47.6%) each and OG&E owns 24 shares (4.8%). 2. CASH AND CASH EQUIVALENTS: For purposes of these financial statements, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. These investments are carried at cost, which approximates market. 3. UTILITY PLANT: Through fiscal year 1980, depreciation was provided using a straight-line rate based on the electric plant's estimated composite service life of 33 years with a salvage value of 10%. The utility plant became fully depreciated for financial reporting purposes in fiscal year 1980, and no depreciation was provided in fiscal years 1981, 1982 or 1983. In 1984, the Company acquired additional property, which was depreciated over the remaining term of the lease. For income tax reporting purposes, depreciation was calculated using a straight-line rate with no estimated salvage value and an estimated useful life extended to December 1988. All property was fully depreciated as of December 31, 1988. 4. INCOME TAXES: Income taxes are accounted for in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." This statement requires the liability method of accounting for income taxes. Under the liability method, the deferred tax liability, or asset, is determined based on the difference between the tax reporting and financial reporting bases of assets and liabilities. The effect on deferred taxes of a change in tax rates will be recognized in income in the period of the enactment of the rate change. Deferred income taxes resulted from temporary differences in financial versus tax bases of fixed assets. The net liability is reflected as a deferred income tax liability in the accompanying balance sheets. The Company has an Oklahoma state net operating loss carryforward available to reduce future Oklahoma state income taxes payable. The carryforward as of November 30, 1997, is approximately $16,883 for book purposes and approximately $22,263 for tax return purposes and begins to expire in 2002. The Company has an Arkansas state net operating loss carryforward available to reduce future Arkansas state income taxes payable. The carryforward as of November 30, 1997, is approximately $1,039 for book and tax return purposes and begins to expire in 1998. 5. CONTINGENCY: The Company and each of its three stockholder companies were party to an action concerning an aircraft colliding into the Company's transmission line. In 1996, the case was settled in the amount of $30,000. The three stockholder companies were billed by the Company for reimbursement. Management received payment from the stockholder companies in early 1997. EX-27.1 9 EXHIBIT 27.1
opur1 0000018540 CENTRAL AND SOUTH WEST CORPORTION 1,000,000 12-MOS Dec-31-1997 Dec-31-1997 PER-BOOK 8,378 250 1,390 503 2,930 13,451 743 1,039 1,774 3,556 26 176 4,187 0 40 1,357 29 1 6 2 4,071 13,451 5,268 151 4,382 4,533 735 32 767 436 153 12 153 369 220 726 0.72 0.72
EX-27.2 10
opur1 003 CENTRAL POWER AND LIGHT COMPANY 1,000 12-MOS DEC-31-1997 DEC-31-1997 PER-BOOK 3,370,019 7,044 187,241 6,180 1,242,826 4,813,310 168,888 405,000 833,282 1,407,170 0 163,204 1,452,266 0 0 0 28,000 0 0 0 1,762,670 4,813,310 1,376,282 74,044 1,050,871 1,124,915 251,367 8,277 259,644 131,173 128,471 9,523 121,350 157,000 105,081 339,640 0.00 0.00
EX-27.3 11 EXHIBIT 27.3
opur1 004 PUBLIC SERVICE COMPANY OF OKLAHOMA 1,000 12-MOS DEC-31-1997 DEC-31-1997 PER-BOOK 1,308,586 20,764 84,149 2,755 31,427 1,447,681 157,230 180,000 136,996 474,226 0 5,287 456,821 4,874 40,000 0 0 0 0 0 466,473 1,447,681 712,690 20,763 610,151 630,914 81,776 1,649 83,425 37,219 46,206 364 50,053 59,000 28,044 121,654 0.00 0.00
EX-27.4 12
opur1 005 SOUTHWESTERN ELECTRIC POWER COMPANY 1,000 12-MOS DEC-31-1997 DEC-31-1997 PER-BOOK 1,855,578 5,839 161,434 13,729 58,166 2,094,746 135,660 245,000 324,050 704,710 25,930 4,709 652,202 25,175 0 0 145 1,200 5,549 2,210 672,916 2,094,746 939,869 39,712 760,748 800,460 139,409 4,029 143,438 50,536 92,902 2,467 92,254 90,000 39,242 200,488 0.00 0.00
EX-27.5 13 EXHIBIT 27.5
opur1 006 WEST TEXAS UTILITIES COMPANY 1,000 12-MOS DEC-31-1997 DEC-31-1997 PER-BOOK 667,564 1,167 73,874 15,628 43,915 802,148 137,214 2,236 119,479 258,929 0 2,483 278,640 0 0 0 0 0 0 0 262,096 802,148 397,778 9,490 343,721 353,211 44,567 1,464 46,031 24,570 21,461 144 22,402 26,000 20,352 95,246 0.00 0.00
EX-99.H1 14 EXHIBIT H-1 Exhibit H-1 ORGANIZATIONAL CHART Investment in Foreign Utility Company -------------------------- | Central and South West | | Corporation | -------------------------- | | | -------------------------- | CSW International, INC. | -------------------------- | ----------------------------------------------------------- | | | | ----------------- ----------------- ------------------ ---------------- |CSW International| |CSW International| |CSW International,| | Energia | | Two, Inc. | | Three, Inc. | | Inc. (Cayman) | |Internacional de| ----------------- ----------------- ------------------ | CSW de S.A. de | | | | | | C.V. | -------------------- | | ---------------- | | ----------------- | ------------------- | | CSW Vale L.L.C. | | |CSW Finance Company| | | (Cayman) | ------------------ ------------------- | ----------------- | Enertek, S.A. de | | ------ | | C.V. | | | | ------------------ ------------------- -------------------------- | CSW Investments | | Empresa de Electricidade | ------------------- | Vale de Paranapanema S.A.| | -------------------------- | | | -------------------- | SEEBOARD Group plc | -------------------- | -------------- | SEEBOARD plc | -------------- EX-99.H2 15 Exhibit H-2 ORGANIZATIONAL CHART Investments in Exempt Wholesale Generators -------------------------- | Central and South West | | Corporation | -------------------------- | | | -------------------------- | CSW Energy, Inc. | -------------------------- | | | ---------------- | | -------------------------- ----------- | CSW Development - 3 | | Newgulf | | Inc | | Power | -------------------------- | Venture | | ----------- | | --------------------| | | | | | | ---------------- ----------------- | CSW Northwest | | CSW Northwest | | GP, Inc. | | LP, Inc. | ---------------- ----------------- -----END PRIVACY-ENHANCED MESSAGE-----