Text

Annual Financial Rept 1980
	ML20039C170
Person / Time
Site:	South Texas
Issue date:	02/15/1981
From:	; CENTRAL POWER & LIGHT CO.
To:	;
Shared Package
ML20039C167	List: ML20039C166; ML20039C168; ML20039C169; ML20039C170;
References
	NUDOCS 8112280535
	Download: ML20039C170 (28)
	v • d • e

{{#Wiki_filter:. mmm vwm*w ne z w#k< g m m mp m$"~ygMC V W M W .. c : me w -. ye z c. s e -- ., %n ' U. ; c ,gvf,, 9,>1 ,a bgM^?JuN WW , d ,s t 4/ R M @& J L v Q.n ~ Msm. Q% 0 . 9 c.W. f '. Q 4:. _% s M:o% a A i m' - m r - %g. oj% f ~, gRrN. ' m., y y ~p- .y -cA qw.s ; y*r-2 i >v; R;u m ' (g 3y Q,, m/. - s_,. % g;, p w _. A' y y c %,,- .9,, % ., 4 er z <g.. p ', w e >r9

g& s,, _ s r y3 w

<#m s 7, ,._,q. .p. -m 3 ,.,<o-n m M;.q ' :. e . y3 yp n e w w ay,~ p p - ,s u -..-~-y ,e my; w e <ay' , % ;:.9 . ' ?g -f",4 b; f. '.. -a ~

7e -:s'

.; t.x, " : e

Q -

~ % 4 ~ a v n' m s-- ns 2 ,O n-~ w' gg ,-M d ~ ' y) - -, yc . + j p[:y rs n v r y w-. r 4:j, ' j,g ;._ m.p. l%z ' ', ' ,~2-^4R ag-w Qq s

m a

QWC G; L

r. g 73, %v

,yc, C ,A . y. ,w i .y - ~ m, n; ~; 4 ,,r. ,:o 4. y% -,, ,t r-1.-.x n . n3 -; w.z .,p p s 4 - g W; y, e-v ~f n %m '. .y. W ,H

~

r. g 4 4_p,;

r:

a, _ c <? v .g g> L.4 ~; " n y8r...g ,.g y.^ s s y y,y4p. .y - y n~; _..K p...a n ;- z S., ; ;;y g - m + + u ci Tr? g.: ,7 ? 59's zx%' w:3u. : n_ %, - gw 4 . " ~

n w ~. '.s '

o v > & c ;;.-.q' N;^ * .:sg:q ' hm bp nf s.1 4 fs yg 1 ? L.p. Vf.g 7 t y:p .J ~,'

p Wa: ME%q%y,4. JM. %yb,. p.g;2 x

+ pN 's (W(g w.u m % % 4,"J (m M L,.- M

.g' g:. +: L2?,

M a 'A W f- }e , c.y %%w% p4 , e7 ' 'g' m,$ 4p g^ ;, P.~ , ' W>i ' <,6 e,23'-4 4r l 4 P9$

,&p 7

/j,.> yid ' &y b5 4 gg a Qv

.w. ngy,y &M% wg n. g g g g y p &(

f-29 ' A; jg ~. c s, lt 5 -E c. p f s,g.. -v* &c r sn, x e ,7 s-a .n =

M.-

u r y zdDJ (O.W+. f%,5 ,.. g g $ %g ~%,, + cy~ Q '1 N w. yy k, - 3.N> u p '- p'." '< 4 w L ~>h h ' ip f y

r

Q,,%g m&o W",.Y p

< s Q. N 3%. ;o, w:, -g q ' y". 5, qp,, ,+ gp %, M n e. c*m y;>m%n.:- y S _ os.qn. a m. r vv ph L ;. .sw. c.. i =. 1 N --. r-w n _ m,._ 4 - nw y > w ; m-._: p y y , > - ng nup-n Av.9 &.4 .m. r 7 w ,c ,..-y- .y 2 y yp 7 "s r r , gg g 9g. .j p . j 4',. s 7.. v: y, g q,,, g 9 ,..... ;Q _m,

~ 3.: / :

, yn. >u e +. " $;., L. ., W. y W,3 / A. L,

nT

~ p,' ] - *{ { q;,

4 h

~ t n ..u.. I4, Y' - l-% ', g y_ >. J ~~D s ,4 + ]sa.M QiM +, '2"/ p i t [4 >m j-c a 3 g& ,-9 , x, 1 m, y 3'u s.U&q, r,- n

g <,.-;.,.

-rg'3 _p. sQ ~ *c<o- , 3 n.,,., ,a / 3 - , n,, s '* ~ ; r. V^ ,4 +.-W, ,m + s , s i k.,on 1 .n ~ g ;.

m..v

):,4/.- ,_c..,- - % A ~;%p,qfy g %;h J, /i Tye a, w s ac cr- ~ -.- a 2 3. n . /-.y .m 2 4 7 q% 9m q, m ,tw g.: _ x;;&d%d,uwd%1]$)h,~,Q.fM QNDYWllh. f ~ ??. '~ l$& O' \\ (f ' ~f 5 &.4@4yu.dlh b u & wa&L$yl$qQ L ~ l W, t i&&.uhi&p +. lh.d ni

~t u

fv / %, W -1 w~ - ~ n' n y-sa.. Gm;( < (;&c ;7 w g. ._.c y v v y :' n . *. s q.

y

'a %]Lg 3 ' p.,m O* M.* h -. d' -w. 4 y . ~, 9 .% g ry Q}rp K, Y V . w ,n - 4'%- ~ ~~ n M.h A s :m Y ^ k ys d' f f, .w,.@ avb - ',&. M \\4 b ;,o -} ,y $QQ,, ; = 3, x; < ^ MC ' k_ n -w sn w.m es #,) R *. _... Q< m,Q. &f #, , t %lf,9..4 +: w s. m.t Q ,%,.,. s s L. ..a > s/t q:m - W .. b .. s i $. s s 3-rs -> ..s ,e ^^. NQ Q r* f". g y ,a m. yu s w, m ~ ..,#g.. 'O kg- [m # %s a w -.u - ~d s f,u n. 3 .n ~ f, ?$ # y s . c 3 y sa +)hQ@^ w y'd edtsum.gw Rl f -e +

y.

s r n ~ ~, q 3 p .G - y. w @i... tm s.., w,. # y a. i m u. 9,, m.~4 e sm a n~ wum a ps), n. s.~- 4 ; s,* 4;39_ rm> c_J m%

j W

,y Q L n,

,t.W 4

'3 g$ f ;I%").m 4 4 -,f+] v ~.w g a m 4 . W7 Ms r:, ,1

s, xL %

, W .m %pn - _. _

n&.%m.

p :,n( ,, y 5 %@@d /~- m nm -

g i < y% +.

MMM,M ~ u& + ,3.+.:.; 't.p., a; e g;@.; m:sq Ur M } s %yW; e w,,,'- - s -. / . 4 - e m. w(d ~ em. -w .s r" T (wf Li%-g. x n g'" T 'T 'i +:& f& -L Q^ ' %..e,ig8 v + g 4. C _ -k a ny n Y ty c '.'.h-- ,r. s% 'N N NY [ 5 Y. N' 7 IN . MUM I, [YT%6T@ ?$ % f4

;g* f

)) NWTp4 - I P fy ,.3 m w,.h. _.N., +. w e 4 e.x ~,, -+s-w ss- - - am .u. c m, e, .,e y' e n a: +'m.~ :., gg e c ww mm) x' " ;, t ! .O u - -3.j < _ gy w n w-c Wq-y. f ~ w&w q&x '; %q p a m / - M Q 4 M M.:. [ yg W,ds%.iswg% r j +%p3 C ',"* c

t

_ [ u < y. = + m'.), afgQ i qsj. m% J.g _ g- {p$g", A_gy ~ g M<$..,y mg A. y ggE p gy m m c 3 a#. < n y < m+. s- _ _ go -

ae:u

,y 9 . am ~ _m y d e -- MA

h. u ; M D "%

w l e MP ^ PU",~ cg/ MNO @. y@g $4 M dy~OlN5 % ? =.m . b. 'd d

President's Letter - un s.. 3.- , ff ., y ; f.- _y ., -g4

f. y l

-' 1 q g '( : c.e m. a trend which is ex;v.cted.o ascelerate occurred m the Central and south West ( _' y k.1 - 4 ], a N with the hftmg of price centrois. Dt.r-System \\ efforts to bring about mter-( 4_ ~ ? 4.- -1 ing 1980. MaMW kilowatts of large m-tate transmission ties that would result - l t...:- g ;W.;. f 4 dustrial loao ' vere added to the Com-n considerable savmgs to the System's ,.q y. j

F- ~*

pany's Imts, most of which represents sustomers. Both oi these matters are expanded or neo, pe'rochemical and re-discussed in more detail elsewhere m t - 4 g - y.M troleum rehning facihties. this report D*& The CompanyN revenu.y were also For the fourth ume m 20 vears the m l 1 9 I:. ~. --i@A, aided bv mcreased sk for resale to CompanCs service area was struck by a .r s i y ? }. ' ( _,. 4 y;~ 9'T ~, - Me:aco when drough enditions 3e maior hurncane. On August 10 Hur-riousiv reduced that < ut tr's hvEm-ncane Allen, one of the laruest storms A variety of factors contributed to.i electne power produenon capabilitv. on record, made landfall m the Rio substantial increa e in revenues durme. Fuel supphes were :Jequate m 1980. Grandt Vallet It moved northwesterly. 1980. Principal amu 'g those tactors Becausc curtailments of natural gas bringing ram and high w mds to most of ,I were a retail ree inrease which we it were nerhoible, less than one percent of the 44aM)0 square miles 'erved by the f into effect car!> it the year. increased tbc Company's elec, ac generanon was Com pany. Approximately t h0,000 cus-customer usage durmg an abnormahy pwred with fiu t oil tomers were without electne service be nummer. the pass-through of Ltuber .\\ % r mnestone m the Company's when the storm passed

{

tur, cc ts, and the addinon of a cond biory was mm ked m June when Co-As they have m past emergencies, the eraMe number of new customers. Iero Co ek Pow.e Station began com-Companv\\ employees responded hke G Reudennal LJ mmmercial revenue - met z.C operht It was CPL's first use professionals. Withm a week, service hoth ext.se'3 sensiuve to weather coo-of w d. s a bo ler fuel, and accounted had been restored to virtually all cus-r d.o -ns, w ee up 27"o end 34"o, respec-for nu'.c percer.t of the Compam's een-tomers who could receive it. tn elv. An increar ot 24S in the mJus-e ation m : 40. Ihat percentage is ex-On Januarv 15. 1981, W. P. Sayles. tnal caego-was mam" the result A gcied to nse to 12"o in 198! who had been the Company's chief ex-the ra! inet ve and adamona; cer.ues fui+a ote) J:versificanon will occur ecutive smce March of 1980, died in from fue', cos. reserv. Kilowv-hour m (be mid 140's with th< addnion of Corpus Chnsti. While he was at CPL g sales to usuNai -ustoo crs me cam nu#. car capahhty from two umts of a Mr. Savles vigorously pursued several ^ hy only au m, at Neause o. de pl:nt w hich CPL wdl share with other new programs to benefit our custorners r ressed N sme c ndinanc r.'be pet utih nes. and emplovees. He was particularly m-rocherr e i rjustry, ope.. :.a prob-The Company w n encouraged when terested m improving their understand- ? yms at two Ln Mustna plamts. and he U S Court of Appeah for the Fifth mg of our busmess. His leadership will aamage er weJ oy % e ca. A!!c. i:ircuit u, held CPLN posi-ion and or-be nassed. Exec 9t for the temmars det!;ne :r dered the Interstate Commerce Cam-Again, the emplovets and manage-the pt mckmicais busmess snuitions m.s don to rt/e on the reasonableness of men personnel of the Company han-in ite Company's service area rema:r.e 'ul rates th Comrai.c is bcmg chaged died a trymg situation with profession-t favorable. 00 ;md,s c.splora&n <c-t i mow coal fom to:orado to south alism and maturity. We are moving i ti' My neri ; sed stead @ durmi the yc.w, feu Encouraging developtr' ems also ahead with confidence. t / ~= : -/ I g N~ / f$ M L Borchelt President and Ch:cf E: _utive Ollicer e February 15.1981 M--EE E, I

.m 5 'm y] j.:': ?' ; ' - Highlightsbf 1980 n;v Q r .s s g,' ' ,s.., 4. .g 1 s W L

s

.s a N 4 g, a s ,s. w s.n.3 gN,n - 4 .s Suinmary of Financial and Operating Statistics + . s3 s - Percent FinanciaiStatistics O s 1980 19'79 Increase \\ s w 4 ..., -m ' y.s x s . Oferating Rei'c: ues.. t:.7.'. ..n...'. - $669,596,000 $518,586,000 29.1% '357,204,050 290,207;000 23.1 } Fuel {l.~.. '. T.,.'.. q... % Waget ana Emplo3 ee Benefit i>Eins....... , g6,966,000, 33,989,000 8.8 ' Other dperat[ng Expc5se(asi Tales. 120,466,000% 94,484,000 27.5 55,199.000' 36,794,000 1 '- 50.0 %.3-fe.deral Indome Mes '. x m 1 s .,., Operating Inedme.^..... 99,W,000 ' 6h112,000. - 58.1 s ^ 63,687,000 ' 44.9 Nct Income -......... -. 92,327,000'- s e~ s s h. N N .( ,\\ ' ( Opeisting Stui(6CP

ms ; -

~ p, j s + Kilowatt-)mur Sales.. 13,387,133,000 12,720,126,000 5.2 System Max 2m'e.n Demand (kilo'vatts),.. )...* '2,505,000 2,390,000 4.5 Operating Employees (yeir-endi %.'. 1,841 1,758 4.7 Eldtric Customers (year-end)... Aver, age ITowatt-hcur Sales per Residential Cusmmer. 437,438 422,298 L6 (.., 9,897 9,209 7.5 Average Residential Pate per Kilowatt-hour 5.69e 4.99c 14.0 s*% s

.~

.. ~ ~ ;; ..4, k, r m a. w, Pg j-e \\g 4 -^ w f,. s ~ '.n_r 4 ~ ' m \\ e

tL A

,i ~ "'t N, s Q s Cover Phai,'g aph: Coleto Creeie Power Station l, u,' g 7.'.

h. m

+ s 1 .i-

Review of Operations Revenues Total electric operating revenues x gj]&"- W 31 % - were $669.6 million in 1980, an increase of $151 million or 29.1% over 1979. This additional revenue was primarily 4 M$$[,gggyA ' W m."r~'~~ ~~ . AFG.QM$d %"yr.iih*_. -- derived frora a retail rate increase which f u 7 87 _ _ r;f t i-j became efTective in February, the recov-ery ofincreased fuel costs, an unusually %p E*N ;(gdy m['A, C Wr: ngg, %"M._ # dNe ,f hot summer and an increase in the ~d I number of customers served. Revenue j~ losses resulting from IIurricane Allen _ v a :.M.. ber of customers served at year-end was " A*Mc. ~ "D.G.. m 4g=' . 7 were estimated at S6 million. The num- ~ ~ ~~M 9 437,438, an increase of 15,140, or 3.69o J over the prior year. In the residential class, revenues N~ ~3-were $203.2 million, up 543.5 million P i- . j_ f. b ~ t. - ^* 'T ~ N~. Mi ' $7E or 27.2% over 1979. Residential cus-tomers increased l y 13,239, or 3.7% 9 . x s.. Q -:~' E g i .. MN over 1979. Usage per average residen-q, y M,g -@ tial customer was 9,897 kilowatt-hours, (7 ',. w, .:::fg~g "', up 688 from 1979. This additional _^~ usage is lars v attributable to hotter In 1986 with both units of the South Texas mix is expected to be 71% natural gas, a weather expenenced in the summer of I'roject in operation, the Company's fuel 15% coal and 14% nuclear. 1980. Commercial revenues increased Revenue from sales for resale was creased availability of economy energy. 33.9% to $171 million. Commercial 538.4 million, an increase of $12.7 mil-Other operating and maintenance ex-customers increased by 1,569, or 2.7% lion or 49.5% from 1979. The major penses rose to $66.2 million, an increase over 1979. As in the residential class, reason for this increase was special sales of $8 million or 13.7% over 1979. Part commercial usage per customer was to Mexico. of this increase is attributed to a 23.5% up, averaging 49,826 kilowatt-hours as increase in maintenance expenses. Also, compared with 48,613 in 1979. This in-other production operating expenses in-crease was also due mainly to the ex-creased 21.5%, primarily because of the tremely warm weather experienced in Expenses addition of the Coleto Creek coal plant. the summer of 1980. Operating expenses for 1980 were Employee-related costs totaled S37 mil-Industrial revenues were 5234.9 mil- $569.8 million, an increase of $114.4 Iion in 1980. lion in 1980, up $45.9 million or 24.3% million over 1979. This was a 25.1% Depreciation expense rose in 1980 from 1979. Of this increase,518.3 mil-increase. primarily because of the addition of Co-lion was additional fuel revenue. Most In 1980,5357.2 million was spent for leto Creek Unit One. industrial classifications showed gains fuel, up by $67 million or 23.1% from Taxes totaled $91.4 million in 1980, in revenue from 1979 to 1980, although 1979. Most of this increase resulted an increase of $29.6 million or 48% over revenues from petrochemicals were from a 15.9% increase in the unit cost 1979. Federal income taxes rose by ap-down and revenues from on-large alu-of fuel. The average price per million proximately $18.4 million because of minum plant declined approximately BTU rose from $2.20 in 1979 to $2.55 increased revenues in 1980. Ad valorem $1.1 million. Although kilowatt-hour in 1980, while the amount of fuel used taxes continued to rise because of new sales were down to large industrials, rose by 6.3% property additions, and municipal gross continued industrial growth is antici-Purchased power expense increased receipts taxes werc up 58.6 mi!! ion from pated with a new 23,000 kilowatt load by $7.4 million or 50.3% over 1979. 1979 because the Company bege pay-at a chemical plant near the Port of This was attributable to rising unit ing a 4% municipal gross receipts tax to Brownsville scheduled for full opera-costs and to a 27% increase in energy all municipalities served as compared to tion in late 1981. purchases over last year, reflecting in-a 2% rate paid previously. 2

The average cost of Jiul for producing electricity from coal at the Coleto Creek Power Station was 37c less per million BTU than at the Company's natural gas plants. Use of Electricity \\ '7 L tion to the area's economy. Corpus Chn.sti Petrochemical Company s $600 ' \\ In 1930 the Company cominued to F+ million ethylene plant began operations work with industrial, commercial and in 1980 and construction continued on residential customers to develop high the Vistron Corporation's petrochemi- %, j_- ' load factor and off-peak loads. For resi-j 85 $ cal complex on the Victoria Barge Canal. dential customers this included the pro-k terest irt the Colorado River and Vic- ,T Industrv continued to show strong in-motion of energy etlicient homes and JMtp toria Barge Canal sites. Cities Service high etliciency air conditioning and 9I /.G 1 and Conoco are each expected to begin heating systems. 2 In 1930, 2,161 homes qualified for 4 E, construction on petrochemical piants in s f^(' 'M k the Energy Efficiency Award designa-A

1981, tion, bringing to 11,496 the number of 4

liigher prices for oil and gas stimu. EEA homes built in the service area lated increased exploration in South since 1975 when the Company began Texas, with a 68% increase in the num-the program to encourage the con-tion prcgram explaining how customers struction of homes that meet high en-can use electricity more etliciently and ber of oil wells drilled during 1980. what the Company is doing to assure Although total tonnage through the ergy efficiency standards. An m, dicator continued reliable' service. In addition Port of Corpus Christi, the nation s sev-of the success of this year s EEA pro-gram is that although the number of to individual contacts,1,175 presenta-enth largest port, was down by 12% tions were made in 1980 by CPL em-fr m 1979; t nnage in c tron, steel and new homes constructed was down 13% ~ ther labor mtensive cargos mcreased from 1979, the number of EEA homes ployees to various groups and organiza, completed dechned by only 8% tions throughout the Company's service 15% over the previous year. The overall drop was primarily attributed to de-In coming years, the E'EA program creases in foreign oil imports and grain could help improve the Company's load exports. factor by building off-peak load and re-Economic Outlook Bank deposits showed marked growth ducing peak

n. l requirements. The A diverse economic profile warm during 1980. Banks in Laredo posted a Company's initial studies indicate that weather that attracted increasing num.

5226 million increase, a 33% gain, as during the peak period an EEA home bers of residents and a favorable bus _ their total assets climbed to almost 5885 requires two kilowatts less demand than ness climate that provided a record million. Record deposits were also re-a conventional all-electric home. number of jobs were just some of the ported by many banks in the service Electric heating is another important factors that kept the South Texas econ. rea. Year-end deposits from banks factor in developing off-peak load. The omy healthy in 1980. throughout South Texas showed in-energy efficient heat pump continued to .\\ lost facets of the South Texas econ. creases rangmg from 10% to 33% gain acceptance with South Texas cus-omy improved during the year, with The value of agricultural products tomers in 1980. During the year,1,163 some showing substantial ga' ins. Bank climbed to a record high of $1.95 bil-heat pumps were installed in South deposits, retail sales, agricultural in. lion. Crop losses of 550 million caused Texas homes. Of the 6,670 homes built come and industrial activity increased; by an early season drought and a late in 1980, 4,309 or 64.6% were either and although residential construction season hurricane were otTset by near total electric or equipped with electric was down from the previous year, the average production and good prices for heat. And 3,300 or 91.6% of the multi-total value of all building permits was grain sorghum, increased prices for cot-family units built during the year were up from 1979. ton and sugar cane and the develop-either all electric or electrically heated. A total of 4,730 new jobs is expected ment of high value specialty crops such A 6.3% decrease in the number of to result from the 73 new or planned as white corn. residential water heater installations plant expansions announced in 1980. The drought seriously alTected live-and a 12.8% decline in commercial The projected cost of 5870 million for stock production in the western por-heating systems are mainly attributed to these industrial expansions is almost tions of the service area. Strong prices a slowdown in construction during the two and one-half times greater than the provided beef producers with a good year. previous year, year in areas receiving minimum effects CPL's 1980 consumer service ac-The petrochemical industry con-from drought. tivities were supported by an informa-tinued to make a significant contribu-Ilurricane-related losses to the Rio 3

__ __ _ _..~.__._... 1 Review of Operations .______ _ _ 4 I i l i l l l l i Grande Valley's citrus crop were otTset tory problems. Detailed information The 87-mile line will operate initially at ! by better quality fruit and increased on regulatory matters that affected the 138,000 volts but is constructed with I prices for the remaining fruit. Also, the project in 1980 is covered in another spacing for conversiot to 345,000 volts. I rainfall accompanying the hurricane section of this report. The La Palma to Los Fresnos 69,000 l l greatly benefited South Texas livestock Staior areas of construction at the volt line was modified to double circuit j producers. South Texas Project in 1980 included construction with the second line to op-With good prices projected for maior the completion of the 7,000-acre reser-erate at 138,000 volts and a new i 4,000 l i crops and livestock, agricultural pro-voir. Work continued on the installation volt line was built from Los F esnos to ; l j duction is expected to top the 52 billion of the turbine-generator for Unit One serve Union Carbide near the Port of I levelin 1981. and on many of the plant's common Brownsville. Work was started on con-I Census figures confirm the increasing facilities. verting the La Palma-Port Isabel 69,000 popularity of South Texas as a place to The 2,500,000 kilowatt capacity of volt line to 138,000 volts and construct- ! live. Large numbers of residents have the nuclear plant will be shared by CPL ing a new 138,000 volt line from Port ( been attracted to the area during the past (25.2%), Ilouston Lighting & Power Isabel to provide a two-way feed to the L i l 10 years. Staior cities within the Com-Company (30.8%), the City of San An-23,000 kilowatt load at Union Carbide. l pany's service area have shown healthy tonio (28%), and the City of Austin Other construction activity in the ! i gains in population. Population increases (16%). The current schedule calls for the Valley included uprating a 69,000 volt of 48% in Bay City,32% in Laredo,21% completion of Unit One in 1984 and line between the La Palma Station and in Victoria,32% in Uvalde,21% in Sic-Unit Two in 1986. Ilarlingen switching station to 138,000 l Allen, and 13% in Corpus Christi were Approximately $17 million was spent volts, increasing capacity at the Harlin-i reported by the 1980 census. on improvements to the Company's gen switching station, and building a l l Despite a slowdown in residential transmission system in 1980. new substation between 31ission and building during 1980, the increasing Several projects to handle the grow-Rio Grande City at La Grulla. population is expected to provide a mar-ing load in the Rio Grande Valley were Staior activities in other parts of the ket for new homes. completed during the year. In 51ay, a service area included the uprating of a j j Tourism cont :ues to be an impor-new 138,000 volt line between Kings-69,000 volt line from the Lower Colo-tant factor in the economy of the area ville and Edinburg was put into service. rado River Authority's Glidden substa-with large increases in the numbers of i tourists and winter visitors reported i during 1980. i Additions to the System i l Coleto Creek Power Station, the Com-l pany's first coal-fired plant, went into commercial operation in June. Coleto 't i Creek Unit One has an experienced ca-j pability of 569,000 kilowatts. The unit provided 9% of the kilowatt-hours gen-i erated by the Company during the year, and it is expected to produce 12% of the Company's kilowatt. hour requirements during 1981. ~ Public recreation facilities at the plant's cooling lake also were completed during the year. The lake is admin-istered by the Guadalupe-Blanco River i Authority. 4 Construction activities are almost back to a normal level at the South Drilhng acutity increased in South Texas search for new oil and gas Jerosits. ] Texas Project following a year in which in 1950 as higher prices stimulated the the proNt experienced several regula-i 4 1

tion to the CPL Columbus substation to same month the NRC lifted some of the improve the interconnect capability be-limitations on pipe welding and com-tween the two systems, and the comple-plex concrete pours. tion of a 138,000 volt substation to The scheduled in-service dates of serve additional load at the South-1984 for Unit One and 1986 for Unit 7-g, western Refining Company in Corpus Two do not reflect any delays which Q-K Christi. Work also began on a switching might result from the suspensions of a N-station to serve the new Vistron petro-certain construction activities caring J ", A* chemical plant which is expected to be-1980. The completion dates and esti-gin operating on the Victoria Barge Ca-mated completed cost of $2.7 billion nal in 1982. were adopted in 1979 following a review Approximately 428 miles of 12,000 by the project manager, the contractor C volt distribution construction were and an independent engineering firm. f added to serve growing customer needs. A comprehensive annual engineering gj and financial review, which is expected 3 fore than 15,000 people tourcJ the con-South Texas Proj,ect to be completed m mid-1981, will allow ,,ruc,fon,;,,,,,3, sgu,h Texas Projccr in 11 the participants to determine the ex-After nearly a year of regulatory Octobcr. The two-day opcn hou,e was hdd ~ tent to which the developments in 1980 problems that prompted the project g ,g g w 11 frect the scheduled completion manager to voluntarily stop certain con-de drWrs'W s& dr dates and estimated costs of the project. struction activities, work on the nuclear In order for the STP plant to become plant was almost back to a normal level perational by 1984, it must receive its Energy Corporation, were negligible, at the end cf 1980. peratmg license not later than Septem-and as'a result fuel oil accounted for less Houston Lighting & Power Com-ber 1983, for imtial fuel loading. HL&P pany, the project manager, and the than one percent of the Company's gen-has submitted an application to the NRC eration. As of December 31, the Com- ~ plant's builder, Brown & Root, Inc., and it is anticipated that hearings on the pany had an oil storage capacity of had stopped work on complex concrete pplication will be conducted m early 1,806,000 barrels and an inventorv of pours and all safety-related structural and pipe welding. In April 1980, the 1981. The existing construction permits 569,000 barrels of fuel oil. Future sup-for Units One and Two are scaeduled t plie' of natural gas, the Company's pri-Nuclear Regulatory Commission or-s dered HL&P to show cause why all expire in May 1982, and October 1983. mary boiler fuel, are expected to be ade-safety-related construction should' not It will be necessary to obtain authoriza-quate. In addition to the contract with tion from the NRC to extend these per-be stopped until concerns about the Valero, the Company also has contracts mits in order to complete construction with Houston Pipe i.ine Company and plant's quality assurance program had f the project. Delhi Gas Corporation. been addressed by the project manager. The NRC order followed a six-month The Company has a 25-year contract investigation of the plant's quality as-with the Colowyo Coal Company to surance/ quality control program that re. Fuel Supph.es supply coal for Coleto Creek Power Sta-sulted in a $100,000 fine. HL&P filed a Commercial operation of the Com-tion. Since 1979, deliveries to the plant written response in July, and at a public pany's first coal-fired generating sta-have totaled 1,016,052 tons. Th. 20m-meeting near the plant site in August the tion accounted for 9% of the Com-pany maintains a 90-day supply of coal, NRC acknowledged that substantialim-pany's kilowatt-hour requirements during about 400,000 tons, at the plant site. provements had been made in the plant's 1980. The average cost to the Com-In 1980 the Company took delivery quality control programs. Among other pany of the coal burned at Coleto Creek of 210 new coal cars from the FMC Cor-things, the HL&P plan called for Power Station was $2.20 per million poration. Three 105-car unit trains now improved supervision through the full-BTU as compared to $2.57 per million deliver coal to the plant site each week. time reassignment of key staff to the BTU for natural gas, which provided Substantial progress was made in the project. 91% of the Company's total generating Company's disagreement with the rail-The NRC allowed a limited resump-requirements. roads that deliver coal to the Coleto tion of structural welding in October, Natural gas was in good supply Creek Power Station when the U.S. and in January 1981, removed all lim-throughout the year. Curtailments by Court of Appeals for the Fifth Circuit in itations on structural _ welding. That the Company's major supplier, Valero Daember ruled that the railroads have a 5

Review of Operations The gasification of coal to produce electric-Power Station. If pmen economically ity was achieved for the first time at the feasible, the process could extend the life demonstration unit et CPL's La Palma of natural gas boilers, h W... a Company's coal and the ICC refused to '{ rule on the reasonableness of the rate. f-At that time the ICC said that although s ) 1 \\l it agreed the rate was excessive, it had je S d? no jurisdiction in the matter since the m ~y{ p*" Company had not proved that the rail- / N, 'T p roads dominate the transportation mar-f d;

Y - g;p'*G ket. The Court found, however, that the L

Q J t-railroads clearly dominated the market h" p y at the beginning and end of the coal's Im i T iourney, which means that the ICC will have to rule on the reasonableness of the railroad tariff. The Court also urged w the ICC to give the matter the " highest possible priority."

j The railroads have since asked the Court to reconsider its ruling, and the I

outcome of the case cannot be predicted at this time. However, if the matter is returned to the Commission, refunds monopoly over the transportation of the b.ranium contracts have been negott-on transportation costs, if any, will be l Company,s coal. At issue is the $20.85 ated with Westmghouse Electnc Corp - passed on to the Company's customers. per ton capital incentive rate that the ration and with Chevron Corporation to i rai roads filed with the Interstate Com-provide sufficient fuel for 12 to 15 years Financing merce Commission in 1979. If the of operation at the South Texas Project. In 1980 the Company financed its I Court's decision stands, the ICC will In 1984, at an estimated 44c per million construction program with internally have to rule on the reasonableness of BTU, nuclear fuel is expected to be the generated funds, a sale of first mortgage i this rate. More information on this Company's cheapest fuel source. bonds, a sale of preferred stock, a capi-( matter is included in another section of Central and South West Fuels,Inc. is tal contribution from its parent, Central this report. responsible for new acquisitions of coal, and South West Corporation, and short-New wells drilled as part of the Com-lignite and uranium to meet the fuel term loans. pany's oil and gas exploration program needs of the four operating companies. In January 1980, the Company sold in 1980 brought the Company's total In order to meet future fuel requirc-at competitive bidding $75 million prin-proven reserves at year-end to approx-ments, the fuel subsidiary will acquire cipal amount of First Mortgage Bonds, imately 11.37 billion cubic feet of gas fuel from outside suppliers and coordi-Series Q,12%% at 99.279%, resulting and 270,428 barrels of oil, nate the development and mining of in a cost of money of 12.47% The pro-As part of the 1980 settlement with System-owned properties. ceeds of this sale were used to repay Lo-Vaca Gathering Company, the Com- $46.2 million of short-term loans out-pany and other settling parties have un-ICC Case rtaading, and help finance the 1980 til December 31, 1981, to exercise an In December 1980, the U.S. Court of construction program. option on approximately 25,000 acres of Appeals for the Fifth Circuit ruled in In June 1980, a $10 million capital lignite leases controlled by Valero En-favor of the Company's position that the contribution was received from Central ergy Corporation. These leases are to be railroads have a monopoly over the and South West Corporation, the pro-sold at book value by Valero if the Com-transportation of the Company's coal ceeds of which were used to reduce out-pany decides to exercise its option to and ordered the Interstate Commerce standing short-term debt. bu". Central and South West Fuels, Commission to nile on the reasonable-In August 1980, the Company re-Inc., the Central and South West Sys-ness of rail rates for moving coal from a ceived the proceeds from the sale of tem fuel subsidiary, is working with Colorado mine to the Coleto Creek 400,000 shares of $100 par value, CPL to evaluate the value of these prop-Power Stann. 10.10% preferred stock sold at competi-erties and determine the extent of lig-CPL filed an appeal with the Fifth tive bidding at 99.31% The cost of nite reserves available. CPL's share of Circuit Court after the railroads set a money to the Company was 10.17% the lignite properties would be 29.6% rate of $20.85 a ton for hauling the The proceeds of this sale were also used 6

l to reduce short-term loans outstanding. by the Center for Energy Studies at the on recruiting and training highlighted On November 1,1980, the Company University of Texas. During the year, the Company's employee activities dur-retired at maturity $10 million principal testing continued at an exploratory well ing 1980. amount of 3% First Mortgage Bonds, drilled into geopressured sands in Bra-At year-end. there were 2,379 full-Series C. zoria County. Coastal geopressured heat time employees,59 more than in 1979. During the year funds on deposit with zones also contain large quantities of A significant part of this increase re-a trustee were withdrawn as needed to methane gas that could be used to fuel suited from the completion of stafling at finance pollution control facilities at the existing gas boilers, the Coleto Creek Power Station and the Company's Coleto Creek Power Station. As a member of the Texas Atomic addition of il engineering and l5 power At the beginning of the year the Energy Research Foundation since 1957, plant trainees. Company had $40.4 million in short-CPL has supported a nuclear fusion During 1980 the Company com-term loans outstanding, and periodi-study now being conducted at the Uni-pleted a full recruiting schedule that re-cally additional short-term loans were versity of Texas. Fusion research at the sulted in the addition of a number of obtained during 1980. At year-end the university is expected to accelerate in highly qualif.ed employees, primarily Company had 546.7 million outstand-1981 with the completion of a new ex-engineers, accountants and other pro-ing in short-term loans. perimental fusion reactor. The fusion fessionals whose education and back-In January 1981, S75 million princi-process has little cadioactive waste, no grounds are particularly suited to the pal amount of First Mortgage Bonds, waste heat and no by-products suitable Company's job openings. Series R,14%%, were sold at competi-for the manufacture of weapons. The Two new programs to provide spe-tive bidding at 99.219%, resulting in a process is fueled by deuterium or tri-cialized training for engineers and cost of money of 14.74%. Short-term tium, both of which are abundant in power plant employees were added to loans outstanding in the amount of sea water. the Company's training schedule during S40.8 million were repaid from the pro-The Company also participated in re-the year. New engineering graduates ceeds of the sale. The balance will be search on breeder reactors, solar re-now complete a full year of training used to help finance the 1981 con-powering and ocean thermal conversion during which they rotate assignments to struction program. through its memberships in several in-gain first-hand experience in all of the dustry groups. Company's engineering departments. l The new powu station training pro-Research CPL Employees gram uses the NUS Corporation sys- , For the first time since testing began Improvements in the pension and tem, a combination of classroom 'in-i l m late 1979, coal was gasified at the medical plans and a cominued emphasis struction and on-the-job experience, to demonstration unit at CPL's La Palma Power Station. Pimiuct gas produced 7 by the unit's Chenuc Aly Active Fluid-ized Bed (CAFB# was used to generate 6,000 kilowatts of electricity during the successful three and one-half hour run in mid-December. p In earlier tests, the unit had suc-1W cessfully gasified heavy fuel oil and a eh aNrf combination of lignite and fuel oil. Ad-V $6 f k.$> '. '[ f W ditional funding for the project was ob-tained from the Environmental Protec-0,. tion Agency in October. The grant will 4 be used to test the CAFB pmcess on u castern bituminous coal. ,j Research at the gasification demon-g

pY -

sh 1 V M W b stration unit is a joint effort of Foster ^ Wheeler Corporation, the EPA and the This weather-satehae photograph captured on August 10, cut a wide path across four four operating companies of the Central the circular cloud movement of Hurricane of the Company's six districts, and caused and South West System. Allcn as it moved toward the South Texas an estimated 52.6 million in Jamage to The Company is also partscspatmg nn coa,,7; e. The massive storm made landfall CPL facilitics. a study of geothermal energy conducted 7

m Review of Operations The NUS Corporation multi-media train-ing programs for potter plant employees utilize a combination of classroom instruc-tion and an-the-job experience. The Company continued its commit-Mr. Borchelt has been a CPL em-ment to equal opportunity in the hiring ployee since 1949 and has extensive ex-and promotion of employees. During perience in the Company's management the year, the Affirmative Action goals and engineering functions. Air. Bor-and timetables were revised and the chelt was Executive Vice President and Cornpany actively worked and cooper-Chief Engineering Officer prior to his [/) ated with many groups and governmen-eleGa to the Company's top executive M tal agencies that are seeking to improve poscion. the status of minorities and females. Air. Sayles had come to CPL from West Texas Utilities Company, an aflili-f di~~- litterstate Operation ated company in the Central and South Since June 1974, Central and South West System. He succeeded Durwood West Corporation and its subsidiary Chalker, who became Chairman and compames have been involved m efforts Chief Executive Officer of Central and to operate the Central and South West South West Corporation. Air. Chalker provide skills training for power plant System in interstate commerce on a was elected to replace S. B. Phillips, empi yees. ftillv-coordinated basis. This involves Jr., who retired as CSW's Chairman and In addition to these new programs' conitecting two System companies op-as a CPL Director in Alarch. the Company continued to offer trammg erating in interstate commerce with two In Apri1, Richard H. Bremer was on a vanety of subjects to all employees. 3ystem companies whose operations elected Controller to succeed W. F. A total of 21 subjects were covered in have been confmed solely withm the Ross, who assurel other duties within 108 classes attended by 2,088 emplov- ~ state of Texas. ces. Job-related courses at schools out-the Company. In October, Air. Bremer June, Central and Somh West was elected Vice President. Air. Bremer side the Company were completed by 94 Corporation, Houston Lighting & Power has been with CPL since 1977 and has emp oyees. Company and Texas Utilities Company extensive experience in the areas of ac-A maior improvement in the employ-reached an agreement on the terms that counting and finance. ee benefits program occurred m 1980 would connect the intrastate power pool when the pension plan was changed to a in Texas with the electric systems com-In April, Aar n Autry announced his noncontributory program. Previously, prising the interstate Soutl$ west Power retirement as President and Chief Oper-ating Officer. Mr. Autry resigned as employees who chose to participate poog. President and as a Director, effective contributed 2% of their gross salary t The initial link between these two July 1. During his 24-year career, Mr. the pension plan. Another change in the power pools would be made through Autry had served the Company in man-pension plan liberalized the require-two high-voltage direct current inter-agement, madetmg, mdustrial desel-ments for credited service. connections-one in east Texas and the pment and agr, cultural deselopment. i Beginning January 1981, employees' other in north Texas. The DC inter-He had been President since 1975. medical coverage also improved with connections will permit economy inter-the conversion to a comprehensive changes of power within the ' entral During the year the title of the Com-C medical plan. The new plan is simplcr and South West System. The proposed pany's chief executive was changed and offers a much higher level of pro-mode of interconnection operations has from Chairman and Chief E,xecutive tection in the event of extremely high been submitted to various regulatory Officer to President and Chief Execu-medical bills. The maximum benefits bodies, and approval is anticipated this tive Ollicer. The title change was made increased to $250,000,2h times higher year. For additional information on this to brmg it mto conformity with the 'ubject, please refer to Note 8 on page ther CSW operating compam,es. than under the old plan. s The Company experienced its first fa-18 of the Notes to Financial Statements. In January 1981, Vice President tal accident in more than six years when W. P. Smith, Jr., became the Com-an employee was electrocuted while pany's Chief Engineering Officer and working on storm repairs after Hur-Organization Changes assumed most of the engineering re-ricane Allen. Most of the accidents that On January 20,1981, M. L. Borchelt sponsibilities previously assigned to occurred during the year, however, succeeded W. P. Sayles as President and M. L. Borchelt. Mr. Smith has 40 years were of a nonscrious nature. The fre-Chief Executive Officer. Mr. Sayles, of service with the Company, and has quency rate for automotive accidents who had been the Company's chief been a Vice President since 1972 and a was down in 1980 from the previous executive since March 1980, died in member of the Company's Board of Di-year. Corpus Christi on January 15. rectors since 1974. 8

Facts About the Company Central Power and Light Company and the surrounding areas. The Com-Transmission Lines supplies electric service to a 44,000-pany also supplies, at wholesale, a part 345,000 Volts-233 Miles square mile area which reaches into 44 or all of the electric energy require-counties of South Texas. The Company ments of seven rural electric coopera- - 138,000 Volts-2,059 Miles is a subsidiary of Central and South tives and one municipal electric system. not shown 69,000 Volts-2,173 Miles West Corporation, a registered holding The territory served by the Company Interconnection With +- company. At the end of 1980, Central has a population of over 1.4 million. Other Systems Power and Light Company served Principal executive offices are hwated at a District Offices 437,438 customers in 217 communities 120 N. Chaparral Street, Corpus Christi, Texas. Telephone: (512) 881-5300. A Steam Generating Stations sh Ilydro Generating Station M Coal Plant Mest Trias l'unsics M Nuclear Plant Unde-Construction TEXAS j g tower Culorado Riser Authority (its Pubir sersise Board N ce s. 4.n oi. Hou oa Lishiia: and ro-cr ( - MIDCOA T \\ Y gISTRICT \\ \\ itthis saanen ^' south g ,[,, MEXICO wa~ / WINTER GARDEN DISTRICT .aaa (,,i,n, (,,,6 I "\\ s sinio. / \\ \\ J. \\ GULF COAST s DISTRICT s\\ g 4[ ~ LAREDO to,, c. n,n s,,o,,, ,,,s,,,,,,, DISTRICT ' / CORPUS CHRISTI h& DISTRICT t.reao si.u,,o s ror, w o.,i.sianon .k I e. 72.> s#;!yy ' ~, y* GULF OF MEXICO ' + - ..M w .. ; h? A ww_ M VALLEY c f V' T s o ' V. y-6 \\ ( DISTRICT x d t. e.n. si..io. NwA ot... m..no. "3 \\ s.o...... c _) 9

Directors anc Officers as of February 15,1981 Board of Directors Officers Transfer Agent M. L. Borchelt, \\L L. Borchelt, Illinois Stock Trai.sfer Company President and Chief Executive President and Chief Executive 223 West Jackson Boulevard Officer, Central Power and Light Officer Chicago, Illinois 60006 Company, Corpus Christi Robert L. Range, Durwood Chalker, Executive Vice President and Chief Registrar of Stock Chairman and Chief Executive Financial Ollicer The First National Bank of Chicago One First National Plaza Officer, Central and South West Richard II. Bremer, Chicago, Illinois 60670 Corporation and Central and South Vice President and Controller West Services, Inc., Dallas This report is prepared primarily for .. Demon' the information of security holders, em-Vannie E. Cook, Jr., Vice President, District Operations \\, ice President, Mayfair Minerals, ployees and customers of the Company Inc., McAllen W. C. Price, and is not transmitted in connection Vice President, Corporate Services with the sale of any security or offer to John W. Crutchfield, sell or c:.er to buy any security. President and Owner, John W. W. P. Smith, Jr., Crutchfield & Company, Vice President and Chief

t. pies of this report and the financial statements mcluded therein and the Se-(a diversified company),

Engineering Officer curities and Exchange Commission An-L,orpus Christi W. A. Cockburn, nual Report on Form 10-K are avail-S. B. Denton, Secretary and Treasurer able, generally, to all security holders of Vice President, Central Power and Jerry J. Matula, the Company. A copy will be mailed to Light Company, Corpus Christ Assistant Treasurer any security holder or other interested p rty upon written request to W. A. Lucien Flournoy Cockburn, Secretary, P.O. Box 2121, President, Flournoy Drilling Assistant Secretary Corpus Christi, Texas 78403. Company and Flournoy Production Company, Alice R. W. IIardy, Committees of the Board of Directors Retired Chairman and Chief consist of an Audit Committee and a Executive Officer, Central Power Nominating Committee. Membership and Light Company, Abilene of these committees is composed of the IIerbert C. Petry, Jr., following Directors: Attorney, Carrizo Spring? Vannie E. Cook, Jr. W. C. Price, Jehn W. Crutchfield, Vice President, Central Power and Chairman of the Nominating Light Company, Corpus Christi Committee Robert L. Range, Lucien Flournoy Executive Vice President, Central IIerbert C. Petry, Jr. Power and Light Company, Corpus Christi P.K. Stubblefield, Chairman of the Audit Committee W. P. Sm. h, Jr., it Vice President, Central Power and Light Company, Corpus Christi P.K. Stubblefield, President, Victoria Bankshares, Inc., Victoria NOTE: M. L. Borchelt was elected President and Chief Executive Officer to succeed W. P. Sayles who died on January 15,1981. 10

Financial Review R: port of Management evaluated and tested by the Company's the Audit Committee, composed solely Management is responsible for the internal auditors on a continuing basis. of outside 3 rectors, has general over-preparation, integrity and objectivity of No internal control system can provide sight responsibility for determining that the financial statements of the Company absolute assurance that errors and irreg-management fulfills its responsibilities as well as all other information con-ularities will not occur due to the inher-in the preparation of financial state-tained in this Annual Report. The fi-ent limitations of the effectiveness of in-ments and financial control of the oper-nancial statements have been prepared ternal controls; however, management ations. The Audit Committee is respon-in conformity with generally accepted strives to maintain a balance recogniz-sible for recommending to the Board accounting principles applicable to rate-ing that the cost of such a system should of Directors the independent auditors regulated public utilities applied on a not exceed the benefits derived. subject to stockholder approval. To-consistent basis and, in some cases, re-Arthur Andersen & Co. was engaged gether with the independent auditors, flect amounts based on the best esti-to examine the financial statements of representatives of management and the mates and judgments of management, the Company and issue their report internal auditors, the Committee re-giving due.:onsidera6en to materiality. thereon. Their examination was con-views matters associated with financial Accountin<, rules und m the prepara-ducted in accordance with generally reporting, audit activities and internal tion of the fire ial catements conform accepted auditing standards. Such stan-controls. The independent auditors and to F.e accounog p %es prescribed by dards require a review of internal con-the internal auditors have full and free the Federal and state regulatory com-trol, examination of selected transac-access to meet with the Audit Commit-missions having jurisdiction. Financial tions and other procedures sufficient to tee, without management representa-information contained elsewherc in this provide reasonable assurance that the fi-tives present, to discuss the results of Annual Report is consistent witn dat in nancial statements are neither mislead-their examinations, the adequacy of in-the financial statements. ing nor contain material errors. L ma-ternal controls and the quality of finan-The Company's management has de-terial internal control weaknesses were cial reporting. The Audit Committee of termined that at December 31, 1980, reported to management by the inde-the Company, composed solely of out-adequate systems of internal control ex. pendent auditors Arthur Andersen & side directors, has responsibility to re-uted to provide reasonable assurance Co., during 1980. The Report of Inde-view the proposed scope and nature of that transactions are executed in accor-pendent Public Accountants, which ap-the annual auGt, review and act upon dance with management's authoriza-pears on this page, in no way limits the the results of such annual audit, review tion, financial statements are prepared responsibility of management for infor-the scope and results of the Company's in accordance with generally accepted mation contained in the financial state-internal auditing activities and investi-accounting principles, and that the as-ments and c!sewhere in the Annual gate the adequacy of and compliance sets of the Company are p operly safe. Report. with the Company's system of internal guarded and accounted for. The system The Board of Directors of Central accounting controls. of internal controls is documented, and South West Corporation, through Report ofIndependent Public Accountants 'Ib the Stockholders and Board of Directors, Cemral Power and Light Company: We have examined the balance 3heets period ended December 31,1980. Our and Light Company as of December 31. and statements of capitalization of Cen-examinations were made in accordance 1950 and 1979, and the results ofits op-tral Power and Light Company (a Texas with generally accepted auditing stan-erations and funds provided for gross corporation and wholly owned subsidi-dards and, accordingly, included such additions to electric utility plant for ary of Central and South West Corpora-tests of the accounting records and such each of the three years in the period tion), as of December 31,1980 and 1979, other auditing procedures as we consid-ended December 31,19S0, in confor-and the related statements ofincome and ered necessary in the circumstances. mity with generally accepted account-retained earnings and funds provided In our opinion, the financial state-ing principles applied on a consistent for gross additiens to electric utility ments referred to above present fairly basis plant for each of the three years in the the financial position of Central Power ARTIICR ANDERSEN & CO. Ilouston, Texas February 6,1981 11

Statements of Income Centraii'otver and Light Company and Retained Earnings a, a, na,, una,a o,<,m3,,31,19so,1979, ans 197s 1980 1979 1978 (Thousands) Electric Operating Revenues: 5203,214 5159,701 5150,511 Residential Commercial 171,047 127,743 119,240 Industrial 234,906 189,017 175,764 Sales for Resale 38,376 25,675 26,774 Other 22,053 16,450 15,206 5669,596 5518.586 5487,495 Operating Expenses and Taxes: 5357,204 5290,207 $272,043 Fuel. Power Purchased. 7,767 5,048 5,098 Power Purchased from Affiliate 14,470 9,745 6,114 Other Operating Expenses.. 49,316 44,571 39,828 Maintenance. 16,873 13,665 11,838 Depreciation 32,R11 30,476 29,277 Taxes, other than Federal Income Taxes. 36,195 24,968 23,185 Federal Income Taxes 17,097 (4,311) 7,945 Provision for Deferred Federal Income Taxes (net). 23.810 20,867 11,952 Deferred Investment Tax Credits (net) 14.292 20,238 17,953 5569,835 5455,474 5425,233 Operating Income S 99,761 5 63,112 5 62,262 Other Income and Deductions: Allowance for Equity I'unds Used During Construction 5 23,535 5 20,034 5 13,541 Other (net). 431 127 433 5 23,966 5 20,161 5 13,974 Income Before Interest Charges. S123,727 5 83,273 5 76,236 Interest Charges: Interest on Long-Term Debt S 41,000 $ 32,496 5 27,824 Allowance for Borrowd Funds Used During Construction. (14,153) (15,073) (9,327) Amortization of Debt Issuance Cost 112 90 82 Interest on Short-Term Debt and Other, 4,441 2,073 1,233 5 31,400 $ 19,586 5 19,812 Net Income S 92,327 5 63,687 5 56,424 Retained Earnings, at beginning of year 132,296 108,646 84,665 $224,623 5172,333 $141,089 Deduct-Cash Dividends on Common Stock. S 41,710 5 35,655 $ 29,877 Cash Dividends on Preferred Stock, at stated rates 8,610 4,382 2,566 5 50,320 5 40,037 5 32.443 Retained Earnings, at end of year $174,303 5132,296 S108,616 The accompanying Notes to Fmanaal Statements are an integral part of these oteements. 12

'T/2]f"l,it'j'ig"" Balance Sheets 1980 1979 (Thousands) Assets Electric Utility Plant: $ 634,256 $ 363,452 Production Transmission. 170,066 154,578 Distribution 325,324 304,166 69,709 51,130 General Construction Work in Progress 453,683 566,152 Nuclear Fuel 34,086 22,438 $1,687,124 $1,461,916 Less-Accumulated Depreciation. 301,299 269,212 51,385,825 51,192,704 Construction Funds for Pollution Control Facilities 5 33 5 4,299 Equity in Settlement Trust. 5 22,615 5 17,274 Current Assets: Cash 4,910 5 5,565 Accounts Receivable 38,467 25,999 Federal Income Tax Refund. 6,401 Materials and Supplies, at average cost. 8,825 7,507 Fuel Inventory, at average cost 27,825 8,744 Prepayments 2,086 1,570 S 82,113 5 55,786 Deferred Charges and Other Assets 2.623 1,455 51,493,209 $1,271,518

== Capitalization and Liabilities Capitalization (see statements): Common Stock,525 par value; authorized 12,000,000 shares; outstanding 6,755,535 shares. $ 168,888 $ 168,888 Paid.in Capital. 135,000 125,000 Retained Earnings 174,303 132,296 Total Common Stock Equity 5 478,191 5 426,184 Preferred Stock - Not subject to mandatory redemption 93,115 93,136 Subject to mandatory redemption 39,681 Long-Term Debt 509,024 434,590 Total Capitalization $1,120,011 5 953,910 Current Liabilities: Long-Term Debt Due within Twelve Months S 90 10,084 Advances from Affiliates 46,700 40,400 Accounts Payable 38,769 37,037 Accrued Taxes 32,251 16,876 Accrued Interest 7,497 7,488 Customers' Deposits 5,139 4,547 Preferred Dividends Accrued 1,862 1,154 Other 3,317 4,811 5 135,625 $ 122,397 Deferred Federal Income Taxes. $ 130,061 5 107,332 Deferred Investment Tax Credits S 84,897 5 70.605 Settlement Ilenefits Due to Customers 22,615 17,274 51,493,209 $1,271,518 The accompanying Notes to Financial Statements are an integral part of these statements. ~ 13

Statements of Funds Provided for Gross Central 1%er and Ln,hr Company Additions to Electric Utility Plant ver t*< veor, una<a n<<<ms<r ai.19so,1979. ena 197s 1980 1979_ 1978 (Thousands) Funds Provided from Operations: Net Income S 92.327 5 63,687 S 56,424 Add-Depreciation, including amounts charged to other accounts 36,061 31,750 29,964 Deferred Federal Income Taxes (net) 23.810 20,867 11,952 Deferred Investment Tax Credits (net) 14,292 20,238 17,953 Allowance for Funds Used During Construction. (37.688) (35,107) (22,868) Funds Provided from Operations $128.802 5101,435 5 93,425 Less-Dividends Paid 50,320 40.037 _ 32,443 Reinvested Funds Provided from Operations. S 78,482 5 61,398 5 60,982 Funds Provided by Investors: Sale of First Mortgage Bonds. S 75,000 5 S 75,000 Sale of Preferred Stock 40,000 50,000 Capital Contributions from Parent Company 10,000 25,000 30,000 Change in Funds Held for Pollution Control Facilities, 4,266 7,216 17,555 Retirement of Long-Term Debt. (10:084) (79) (74) Funds Provided by Investors. S119,182 5 82,137 $122,481 Other Funds Provided (Used): Advances to Affiliates 5 S 18,000 S(18,000) Accounts Receivable (12,468) 384 (1,966) Federal Income Tax Refund 6,401 (6,401) Materials, Supplies and Fuel Inventory (20,399) (1,880) 365 Advances from Alliliates. 6,300 40,400 Accounts Payable 1,732 184 1,827 Accrued Taxes 15,375 (2,123) 2,043 Accrued Interest 9 53 2,085 Customers' Deposits 592 678 (279) Other, net (1,0361 694 2,956 S (3.494) S 49,989 S(10,969) Other Funds Provided (Used) Ne' Additions to Electric Utility Plant S194,170 S193,524 $172,494 Add---Allowance for Funds Used During Construction. 37.688 35,107 22,868 Gross Additions to Electric Utility Plant $231,858 5228,631 $195,362 The accompanying %tes to Financial $tatements are an integral part of these statements. 14

Central Pot::a and Lighi Company Staternents of Capitalization nuemby si, i9so ens 1979 1980 1979 (ThousandsT Common Stock Equity: Common Stock; S25 par value; authorized 12,000,000 shares: outstanding 6,755,535 shares 5168,888 5168,888 Paid-in Capital 135,000 125,000 Retained Earnings 174,303 _132,2 % $478,191 5426,184 Preferred Stock: Cumulative,5100 par value, authorized 1,435,000 shares Current Number of Redemption Series Shares Outstanding Price Not subject to mandatory redemption-4.00 % 100,000 $105.75 5 10,000 $ 10,000 4.20 75,000 103.75 7,500 7,500 7.12 260,000 105.50 26,000 26,000 8.72 500,000 108.72 50,000 50.000 Issuance Expense, net (385) (364) S 93,115 S 93,136 Subject to mandatory redemption-- 10.10 % 400,000 $110.10 5 40,000 5 Issuance Expense. (319) ~' ~ Long-Term Debt: First Mortgage bonds-Series D,3%%, due March 1,1982 S 10,000 $ 10,000 Series F,3%96, due April 1,1984 18,000 18,000 Series G,3%%, due February 1,1986. 10,000 10,000 Series II,4"b, due February 1,1988 12,000 12,000 Series I,4%%, due April 1,1989. I1,000 11,000 Series J,6%%, due January 1,1998 28,000 28,000 Series K,8%%, due January 1,2000. 25,000 25,000 Series L,7%, due February 1,2001 36,000 36,000 Series M,8"h, due November 1,2003 46,000 46,000 Series N,9%%, due June 1,2004 40,000 40,000 Series O,8%"L, due Oc*ober 1,2007 75,000 75,000 Series P,8%%, due September 1,2008 75,000 75,000 Series Q,12%%, due January 1,2010 75,000 Installment Sale Agreements, pollution control Nmds-7%%, due June 1,2004 9,825 9,825 6%, due November 1,2007 37,600 37,600 Notes Payable,6%%, due December 8,1995 2,313 2,402 Unamortized Discount on Long-Term Debt (1,714) (1,237) $ 509,024 5434,590 Total Capitalization 51,120,011 5953,910 The accompanying Ltes to Financial Statements are an integral part of thew statements. 15

Notes to Financial Statements (1) Summary of Significant Accounting Policies Central Power and Light Company (the " Company") follows the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission. The Company, as a member of the Central and South West System ("CSW System"), engages in transactions and coordinates its activities and operations with other members of the System. The more signifi-cant accounting policies are summarized below: El:ctrie Utility Plant. Electric utility plant is stated at the original cost of construction which includes the cost of con-tracted services, direct labor and material, overhead items and allowances for the cost of borrowed and equity funds used durim' construction. Allowance for Funds Used During Construction. The allowance for funds used during construction ("AFUDC")is the result of an accounting procedure whereby amounts, based upon the level of construction work in progress, representing the interest on borrowed funds and a return on equity capital used to finance construction, are reflected as credits in the statement of income and charged to construction work in progress. AFUDC does not represent a current source of cash funds. Under established regulatory rate practices, a return on and recovery of such costs is permitted in determining the rates charged for utility services. The gross composite rates used were 11.1% in 1980 and 9.18% in 1979 and 1978. The tax effect applicable to the debt component is recorded as a charge to deferred tax expense. The Company excludes from the calculation of AFUDC that portion of construction work in progress included in its rate base for rate making purposes. Depreciation and Maintenance. For financial reporting purposes, provisions for depreciation of electric utility plant are computed by the Company using the straight-line method, generally at individual rates applied to the various classes of depreciable property. The Company's first coal plant, Coleto Creek Unit No.1, was placed in commercial operation in June 1980 and is being depreciated at a 3% annual rate. Annual composite rates for the total electric utility plant averaged 3.37%,3.71% and 3.66% in 1980,1979 and 1978, respectivelv. Expenditures for maintenance and repairs are charged to maintenance expense accounts. Renewals and betterments of property are accounted for as additions to electric utility plant. The original cost of depreciable property retired is removed from utility plant accounts and charged to accumulated depreciation together with the removal costs less salvage. Under this method, no profit or loss is calculated as to ordinary retirements of depreciable property. El:ctric Revenues and Fuel. Revenues generally are included in income as billed to customers on a cycle billing basis. The Company charges to expense the cost of fuel as it is consumed. Substantially all of the increase in unit fuel costs is passed on to customers through the application of fuel adjustment clauses which are generally based on fuel costs from prior months. Fcderal Income Taxes. The Compar ; together with other members of the CSW System file a consolidated Federal income tax return. The provision for deferrea Federalincome taxes resulted principally from the tax deductions under accelerated methods of depreciation and other write-offs of property costs, as provided by Federal income tax laws, being greater than these expenses for book purposes. Taxes deferred in prior years are credited to income when tmok deductions of those property costs exceed the related tax deductions. Provisions for deferred investment tax credits are recorded for the reduction in Federal income taxes payable arising from the investment tax credit. The credits so deferred are included in income over the lives of the related properties. A portion of the 1979 investment tax credit was carried back to prior years resulting in a Federal income tax refund claim at December 31,1979. The refund was received in 1980. Total Federal income tax expense resulted in an effective tax rate of 37.6% for 1980,36.7% for 1979, and 40.4% for 1978, which is less than the amount comput d by applying the statutory rate of 46% (48% for the year 1978) to income before Federal income taxes. The lower effective tax rate is primarily due to the allowance for equity funds used during con-struction which is excluded from taxable income. (2) Indenture Requirements The Mortgage Indenture, as amended and supplemented, securing first mortgage bonds issued by the Company con-stitutes a direct first mortgage lien on substantially all electric utility plant. Annual Requirements. The annual sinkmg fund requirements are generally 1% of first mortgage bonds outstanding. These requirements may be and have historically been satisfied by the application of net expenditures for bondable prop-erty in an amount equal to 166%% of the annual requirements. At December 31,1980, the annual sinking fund requirements exclusive of maturities and the annual aggregate maturities 16

Central Power and I ight Company including sinking fund requirements are as follows: Annual Sinking Annual Aggregate Fund Requirements Alaturities (Thousands) 1981 $4,610 $ 4,700 1982 4,510 14,606 1983 4,510 4,612 1984 4,330 22,438 1985 4,330 4,446 Limitations on Dividends. The Aiortgage Indenture of the Company contains certain restrictions on the payment of common stock dividends. In accordance with provisions of certain of the Company's supplemental indentures, the Se-curities and Exchange Commission has entered an order permitting the payment of dividends not otherwise permitted under the Company's most restrictive supplemental indentures. The order requires that any dividends paid out of amounts that would otherwise be restricted are limited to net income earned in the twelve months immediately preceding pay-ment of the dividends. At December 31,1980, $132,296,000 of retained earnings was not available for payment of cash dividends. (3) Preferred Stock In August 1980, the Company sold 400,000 shares of its $100 par value preferred stock. The 10.10% series requires a mandatory sinking fund sufficient to retire 12,000 shares of the series in the twelve month period beginning August 1,1985, and in each twelve month period thereafter. The sinking fund redemption price is $100 per share plus accrued dividends. Each series of the preferred stock is redeemable at the option of the Company upon 30 days' notice at the current redemp-tion price per share plus accrued dividends. Redemption prices of the 7.12%,8.72% and 10.10% series decline at specified intervals in future years. The 8.72% series is not redeemable until 1984 and the 10.10% series is not redeemable until 1985. (4) Short-Term Financing The Company together with other members of the CSW System have established a System money pool to coordinate short-term borrowings and to make borrowings outside the money pool through the issuance of commercial paper and from banks. In connection therewith, System bank lines of credit aggregating approximately $236 million, including the Com-pany's lines of credit, have been obtained. These lines of credit generally require compensating balances of from 5% to 10% of the applicable line, an annual fee of from % to % of 1% or a variable fee based on a percentage of the prime lending rate. All fees are calculated on the applicable lines. When short-term cash surpluses are available, the Company transfers these amounts to the money pool and receives interest income in accordance with the money pool arrangement. (5) Pension Pian The Company together with other members of the CSW System have a pension plan covering substantially all their employees, which beginning as of September 1,1980, is noncontributory. Prior to that time, employees were required to contribute to the Plan. Employee contributions made prior to this revision will remain in the pension fund. Pension cost accruals for the years 1980,1979, and 1978 were $2,955,000, $3,805,000, and $2,685,000, respectively, including $845,000, $592,000, and $474,000 charged to construction. The Plan was amended October 1978 to provide additional benefits which resulted in increased annual pension cost accruals. Pension costs decreased in 1980 primarily due to changes in actuarial assumptions. The change made as of September 1,1980, to make the Plan noncontributory will not materially increase annual pension cost accruals in future periods. The Company's policy is to accrue normal cost plus amortization of prior service cost over forty years. The Company's general policy is to fund pension cost annually as it is accrued. As of January 1,1980 and 1979, the Plan's net assets available for benefits were $148,367,000 and $117,836,000, respec-tively. The following actuarialinformation is based on reports by the Plan's actuaries as of January 1,1980 and 1979: 1980 1979 (Thousands) Actuarial present value of vested accumulated Plan benefits $116,392 $117,149 Actuarial present value of nonvested accumulated Plan benefits 28,149 30,688 Total actuarial present value of accumulated Plan benefits $144,541 $147,837 Assumed rate of return used in determining the actuarial present values of Plan benefits 8% 7% 17

Notes to Financial Statements (6) Jointly Owned Electric Plant i The Company is one of four participants in the South Texas Nuclear Project consisting of two 1250 megawatt generating units which are scheduled for operation in 1984 and 1986. Each participant finances its own share of construction expendi-tures under a participation agreement which specifies the acquisition and ownership of the generating units and related facilities as tenants in common in accordance with their participating interests. The Company's participating interest in the generating station is 25.2% and its interest in the related transmission facilities approximates 21% As of December 31, 1980, the Company's share of construction expenditures for the generating station and related transmission facilities is $433,511,000 and $2,217,000, respectively, and is included ia electric utility plant. (7) Settlement Trust In 1979, the Company and other customers of Lo-Vaca Gathering Company ("Lo-Vaca") entered into an agreement with Lo-Vaca and its affiliated companies resolving numerous gas supply contract disputes. Pursuant to the agreement, Lo-Vaca and its parent company were reorganized as Valero Energy Corporation ("Valero") and certain securities of Valero and a prior a!Iiliated company have been placed in a settlement trust. A bank, administering the trust, has valued the securities at $232,700,000 and $177,900,000 in 1980 and 1979, respectively, of which the Company's interest is approvimately 9.7% The trust agreement requires the trustee to sell the securities over the next several years and distribute to the settling customers their pro rata share of the proceeds. As the proceeds are received, the Company will pass such amounts on to its customers through a reduction in fuel costs. An additional aspect of the agreement requires a former Lo-Vaca afliliate to enter into a natural gas search program to develop and sell gas to the settling customers at less than market prices. (8) Litigation and Regulatory Proceedings Since 1974 the Company and its parent, Central and South West Corporation (" Corporation"), have been involved in numerous regulatory and legal proceedings relating to the CSW System's satisfaction of the requirements of operating on an integrated basis as required by the Public Utility Holding Company Act of 1935 and its plans for the regular operation of all the CSW System facilities coordinated in a unified manner in interstate commerce. On June 9,1980, the Corporation and the two largest electric systems in Texas, Texas Utilities Company ("TU") and Houston Lighting & Power Company ("IILP"), which had originally opposed the System's proposals, executed a settle-ment agreement. A formal Offer of Settlement embodying the terms of the settlement agreement was filed with the Federal Energy Regulatory Commission ("FERC") on July 28,1980 and modified on October 8,1980. The Offer of Settlement provides for resolution of all regulatory and legal proceedings relating to the CSW System's interstate operations. The United States Department of Energy and the FERC Staff have filed comments supporting the Offer of Settlement; how-ever, the United States Department of Justice has sought to intervene in the FERC proceedings and oppose the settlement as it relates to the method ofinterconnection. On January 27,1981, the FERC Administrative Law Judge determined that the Ofter of Settlement is contested and therefore cannot be certified to the FERC Commissioners for approval. In his opinion, however, he stated that there is substantial doubt regarding his determination and therefore that question should now be determined by the FERC Commissioners. The System, TU, and HLP are in support of the effort to obtain all necessary regulatory approvals. The System believes that the settlement would provide satisfactory resolution of all prob-lems related to the present mode of the CSW System's operations and believes that the chances for approval of the settlement agreement by the necessary regulatory bodies are favorable. (9) Commitments and Contingent Liabilities It is estimated that the Company will spend approximately $204 million (including allowance for funds used during construction of $33 million) for construction purposes during the year ending December 31,1981. Substantial commit-ments have been made by the Company in connection with this construction program. (10) Subsequent Financing In January 1981, the Company sold $75 million ofits First Mortgage Ilonds, Series R,14%% due January 1,2011. The proceeds from the sale were used to repay short-term borrowings and for permanent financing of the Company's con-struction program. (11) Quarterly Information (Unaudited) The following quarterly information includes, in the Company's opinion, all adjustments (consisting only of normal recur-18

Central Pourr and Light Company ring adjustments) necessary for a fair presentation of such amounts. Electric Operating Operating Net Quarter Ended Revenues Income Income (Thousands) 1980 March 31 $128,867 515,131 517,941 June 30........... 156,018 21,345 18,622 September 30. 200,770 28,727 24,818 Dccember 31 183,941 34,558 30,946 1979 March 31 $116,578 S14,456 514,146 June 30.... 115,069 9,706 8,424 September 30....... 157,463 22,396 23,173 December 31...... 129,476 16,554 17,944 Information for quarterly periods is affected by seasonal variations in sales, rate increases, timing of fuel expense recovery and other factors. (12) Constant Dollar and Current Cost Supplementary Financial Data (Unaudited) The following supplementary presentation is consistent with Statement No. 33, Financial Reporting and Changing Prices, of the Financial Accounting Standards Board and is intended to set forth the effects of changing prices on the Company's operations. This supplementary financial data should be viewed as an estimate of the approximate effect ofinflation, rather than as a precise measure of changing prices. In reading this information, reference should be made to the Company's audited financial statements and related notes, which are prepared and presented on an historical cost basis of accounting as required by generally accepted accounting principles. Statement No. 33 requires the computation of the effects ofinflation by the use of two methods, constant dollar and current cost. The constant dollar computation is based upon general price level changes in the Consumer Price Index for all Urban Consumers (CPI-U) and reflects amounts at a constant or equal dollar unit of measurement. Current cost amounts, as measured by the Handy-Whitman Index of Public Utility Construction Costs, reflect changes in specific prices of plant from the date the plant was acquired to the present. It should be understood that since the plant will not be replaced precisely in kind, current cost does not represent the replacement cost of the Company's productive capability. Current cost differs from constant dollar amounts to the extent that specific prices have increased more or less rapidly than the general rate ofinflation as measured by the CPI.U. Statement of Income Adjusted for Changing Prices For the Year Ended December 31,1980 (In Thousands of Average 1980 Dollars) Constant Current Dollar Cost Net income for common stock, as reported. S 83,717 $ 83,717 Erosion of common stock equity because of changing prices: Cost in excess of the historical cost of plant not recoverable in rates as depreciation-Reportable as an additional provision for depreciation. S 35,721 5 43,711-Reportable as a reduction to net recoverable cost I17,417 120,736 5153,138 S164,447 Excess ofincrease in specific prices (5274,548) over increase in general price levelin the current year (5263,239).. (11,309) Offsetting effect of debt and preferred stock financing. (97,092) (97,092) Net erosion of common stock equity... S 56,046 5 56,046 Net income for common stock, as adjusted 5 27,671 5 27,671 19

4 Notes to Financial Statements Central Power and Light Company j Five Year Comparison of Selected Supplementary Financial Data Adiusted for Effects of Changing Prices (In Thousands of Average 1980 Dollars) 1980 1979 1978 1977 1976 Electric operating revenues..... $669,596 $588,717 $615,731 $600,160 $504,416 Net income for common stock........ 27,671 6,171 Net assets at recoverable amount, at year-end............. 456,724 455,162 Excess ofincrease in specific prices over increase in general price I1,309 (127,826) level. Offsetting effect of debt and preferred stock financing... 97,092 102,612 Average consumer price index 246.8 217.4 195.4 181.5 170.5 Notes to the Suppkmentary Financial Data Fuel inventories were not restated because the regulatory process limits recovery of such costs to historical cost through the application of fuel clause adjustments. Depreciation is determined by applying the Company's depreciation rates to the indexed plant amounts. The same de-preciation methods and rates of depreciation are used as those in the primary financial statements. No adjustments are made to income tax expense for any deferred income taxes that might be deemed to arise because of the differences between income reported on a current cost basis and income reported for tax purposes. Since only historica! costs are deductible for income tax purposes, the income tax expense in the historical cost financial statements is not adjusted. Total historical Federal income tax expense when applied to inflation adjusted income before historical Federal income taxes resulted in an effective tax rate of 60.5% which substantially exceeds the Company's historical cost etTective tax rate and the statutory rate. Under the ratemaking prescribed by the regulatory commissions to which the Company is subject, only the historical cost of plant is recoverable in revenues as depreciation. Therefore, the excess of the cost of plant stated in terms of constant dollars or current cost over the historical cost of plant is not presently recoverable in rates as depreciation. As a result. present and future depreciation provisions are inadequate for purposes of maintaining the purchasing power invested by the common stockholders, and the related cash flows are inadequate for replacing the property. The impact of this rate-making process on the common stockholders is mitigated to the extent that depreciable property is financed with debt and preferred stock which can be repaid with dollars of less purchasing power. A portion of the Five-Year Comparison of Selected Data relating to years ended on or before December 31,1978, is omitted since it is impractical to obtain such information. 20

Selected Financial Data The following selected fmancial data for each of the five years in the period ended December 31,1980, are provided in order to highlight significant trends in the financial condition and results of operations of the Company. 1980 1979 1978 1977 1976 (Thousands of Dollars) Electric Operating Revenues S 669,596 S 518,586 5 487,495 S441,366 S348,472 Net Income 92,327 63.687 56,424 47,814 31,986 Preferred Stock Dividends 8,610 4,382 2,566 2,566 2,566 Net Income for Common Stock. 83,717 59,305 53,858 45,248 29,420 Total Assets 1,493,209 1,271,518 1,075,649 910,904 715,279 Ratio of Earnings to Fixed Charges (SEC method) 4.24 3.90 4.24 5.24 4.03 Capitalization Ratios: Common Stock Equity 42.7 % 44.7 % 43.6 % 43.9 % 45.5 % Preferred Stock I1.9 9.8 5.0 5.9 7.9 Long-Term Debt 45.4 45.5 51.4 50.2 46.6 Long Term Debt S 509,024 5 434,590 $ 444,628 5369,909 $257,935 Preferred Stock Subject to Mandatory Redemption 39,681 21

Management's Discussion and Analysis of Financial Conditions and Results of Operations Reference is made to the Financial transition from gas and oil as boiler creased costs associated with construc-Statements and Related Notes to Finan-fuels. All base load generating units tion delays, the complexity of project cial Statements included on pages 11 to planned for the future will be fueled by design and regulatory requirements. 20 and the Selected Financial Data in-coal, uranium or lignite. It is estimated cluded on page 21. The information that construction expenditures during Financin8 and cap tal i contained therem, should be read m the 1981 through 1983 pcriod will conjunction with and is essential in un-aggregate $690 million (including al-Resources derstanding the following discussion Iowance for funds used during con-The size of the construction program and analysis. struction of $95 million). continues to challenge the Company s In June 198, the Company placed its ability to raise the necessary capital R~ gulatory Matters first coal-fired plant in commercial funds. For the year 1980, the Company The I,ublic Util.ity Commission of operation at a cost of $261 million ($459 btamed 41% of its capital require'- Texas (" Texas Commission") entered a per kw). The Coleto Creek Unit No. I final order, based upon a rate applica-has an experienced capability of 569 tion filed in October 1979, granting the alw and it is estimated that the Com- [* urinthe 1981 1 83 time ri 11 Company an annual retail revenue m-pany will obtain 12% of its kilowatt-be provided from internal sources. Al-crease of $63.1 milhon and revised tar-hour requirements from this coal unit though the ComEany is committed to iffs were placec m effect on February 4, during 1981. The Company has a con-maintaining a strong financial position 1980. The final order allowed a return onJune 30, 1979, common equity. tract for anticipated coal requirements and flexibility in its financing plans, if for the first 25 years of operation. The forces beyond the Company's control 15.5%. It also allowed the complete Company is inulved in a controversy prevent it from raising adequate amounts cost of the Coleto Creek coal plant, with the rail carriers with respect to the of capital in the future, the Company's placed in commercial operation June tariff covering the costs of transporting construction program will have to be 1980,,n rate base and the estimated an-coal from Colorado to the Coleto Creek modified t nual operating costs of th,s plant m the plant. The matter is currently before During 1980, external financing co.i-i Company's cost of service. In addition, the Interstate Commerce Commission sisted of $75 million first mortgage the order allowed approximately 63% o-and refunds on transportation costs, if bonds, a $40 million series of preferred about $168 million of other construc-any, will be passed on to customers. stock and $10 million in capital contri-tion work in progress, primarily the The Company has a 25.2% interest butions from Central and South West South Texas Nuclear Proicct, m the i & SM Nxlear Project Corporation. In January 1981, the Company s rate base. During 1980, the ("STP") which consists of two 1250 Company sold $75 million of first mort-Company was successful m ach,evmg Atw units. Commercial operation dates gage bonds and it anticipates that the i the rate of return and additional reve-for Units Nos. I and 2 are February, remainder of its external financing for nues allowed by the Texas Commission. 1984 and 1986, respectively. Based 1981 will consist of a capital contribu-In order to help finance the Com-upon a total project cost estimate of tion from its parent. p ny,s c ntinuing construction pro- $2.72 billion and including allowance As of December 31,1980, the Com-gram, maintain financial integrity, and for funds used during.onstruction, the pany's embedded cost of long-term debt oiTset mflationary pressures, the Com-Company's share of the costs of Unit and preferred stock was 8.17% and pany expects to file both wholesale and No. I would be $428 million ($1,359 8.36%, respectively. These costs have retail rate increase apphcations m 1981. per kw) and for Unit No. 2, $514 mil-increased in recent years and are ex-lion ($1,632 per kw). The total expendi-pected to continue increasing in the fu-Construction Program tures incurred by the Company through ture. For the year ended December 31, The Company continues to be in-December 31,1980, were $435,728,000. 1980, the Company's Alortgage Inden-volved in an extensive construction pro-The STP has experienced delays in in-ture coverage ratio was 3.17 times as gram. Additional capacity is required to service dates cnd substantial increases compared to coverage ratios ranging meet the demands of new and existing in estimated total expenditures attrib-from 2.59 to 3.53 times during the pre-customers as well as to accomplish a utable to, among other factors, in-ceding four years. 22

Central Par and Ligla Company During 1980 and 1979, the Company in the petrochemical industry. The risen due to overall increases in the borrowed from the CSW System money revenue loss due to Hurricane Allen, costs of labor, materials and supplies as pool on a short-term basis for the in-which streck the Company's service ter-well as increased electric plant in ser-terim fmancing of its construction pro-ritory in August, was estimated at $6 vice with the addition of Coleto Creek. gram. These loans were unsecured million. The increased customer de-The Coleto Creek plant is being de-demand obligations at rates approximat-mand experienced during the summer preciated at an annual rate of 3% The ing the System's commercial paper bor-of 1980 resulted in a new record peak uninsured maintenance and repair ex-rowing costs. Periodically, all of these of 2505 Mw. This peak was 4.8% penses associated with Hurricane Allen short-term loans are repaid with the higher than the 1979 peak of 2390 Mw were charged against the rewrve for ca-proceeds from permanent financing. and 7.9% over the peak of 2321 Mw tastrophe. In 1980, the Company began Under the money pool, the Company's achieved in 1978. The 1980 peak de-paying a 4% municipal gross receipts short-term borrowing limit is $110 mil-mand occurred on June 26, and the tax to all municipalities served as com-lion and borrowings will be made dur-Company's reserve margin at that time pared to a 2% rate paid in previous ing 1931 as required. The weighted was 15% years. The ad valorem taxes have in-average interest rate for borrowings out-cre sed during the past three years pri-Fuel-The Company maintains a 90-standing at December 31,1980 was marily due to new property additions. 18.40% During the years ended Decem-day supply of coal at its Coleto Creek The changes in Federal income taxes ber 31,1980,1979 and 1978, the average station. The average cost of coal con-are generally related to changes in amount of short-term borrowings out-sumed during 1980 eas 52.20 per taxable income and the statutory rate standing was $38,792,000, $23,299,000 31MBTU and coal generated 9% of the applied. and $15,217,000, at a weighted average Lompany's 1980 kilowatt-hour require-annualin erest rate of 12.64 %, 11.03 % ments. During the three years ended Allowance for Funds Used During December 31, 1980, the average price Construction ("AFUDC")-The Com-and 7.32%, respectively. The maximum amount of short-term borrowings out-of natural gas has increased from 52.07 pany requests inclusion of all construc-standing at any month end during 1980, to 52.57 per MMBTU. The increase in tion work in progress ("CWIP")in rate 1979 and 1978 was 564,000.000' fuel expense due to increased customer base when rate increase applications are demand and the rising unit costs of fuel filed. The Company records AFUDC is recovered through the fuel adjust-n the portion of CWIP not allowed in ment clauses. The Company has long_ rate base using the maximum rate al-I wable. Inclusion of CWIP in rate base term coal and natural gas contracts and R:sults of Operations prices are expected to continue to rise in enhances the financial integrity of the El.ctric Operating Revenues-The the future. C mpany since coverage ratios and the revenue increase in 1980 was primarily During 1978, the increase in fuel qu lity of earnings are improved and a due to the 13% retail rate increase ($59 expense resulted principally from in. greater portion of the Company s cash million), recovery of higher fuel costs creased elecuic generation to meet cus-c nstruction requirements is obtained from intern sources. through the fuel adjustment clauses (566 tomer demands. During 1979 and 1980 million), increased sales to nonaffiliated the increase was primarily due to in-EEects ofInflation utilities ($19 million) and increased de. creases in the average unit cost of fuel of Reference is made to Note 12 of the mand due to warm summer tempera. 6% and 16%, respectively. Due to mar-Notes to Financial Statements for infor-tures and customer growth. The kilo. ket appreciation of the securities held in mation concerning the effects of infla-watt-hour usage per residential and the settlement trust, discussed m the tion on the Company's operations. commercial customer in 1980 increased Notes to the I mancial Statements, the as compared to decreased usage per cus. settlement benefits have increased and temer experienced in 1979 for these cat. as the Company begins receiving dis-egories. As compared to the prior two tributions in 1981, they will be re-years, large industrial customers con. funded to customers. sumed fewer kilowatt-hours in 1980 Expenses and Taxes-Increases in op-due to weakened economic conditions erating and maintenance expenses have 23

Comparative Statistical Record 1980 1979 1978 1977 NUA1BER OF CUSTOA1ERS (December 31): Residential.................... 369,525 356,286 342,592 330,458 Commercial............. 58,727 57,158 55,198 51,022 6,157 5,844 5,713 5,507 Industrial All ot her..................... 3,029 3,010 2,944 2,888 Total..... 437,438 422,298 406,447 389,875 SALES-KILOWATT-HOURS (Thousands): 3,574,451 3,202,513 3,108,160 2,908,231 Residential... Commercial........... 2,884,986 2,723,446 2,640,039 2,517,413 5,675,723 5,663,115 5,488,879 5,354,236 Industrial All other 1.251,973 1,131,052 1,210,460 847,157 Total 13.387,133 12,720,126 12,447,538 11,627,037 REVENUES (Thousands): $ 203,214 $ 159,701 $ 150,511 $ 138,446 Residential Commercial................ 171,047 127,743 119,240 109,870 Industrial..... 234,9 % 189,017 175,764 164,649 60,429 42,125 41,9_80 28,401 All other $ 669,596 $ 518,586 $ 487,495 ,$ 441,366 Total... RESIDENTIAL AVERAGES: Kilowatt-hours per customer 9,897 9,209 9,305 9,015 Revenues per customer $ 562.64 $ 459.24 $ 450.57 $ 429.15 5.69e 4.99c 4.84c 4.76e Revenues per kilowatt-hour. SYSTEA1 CAPABILITY (Kilowatts): (At Peak) 2,954,000 2,976,000 2,976,000 3,044,000 CPL stations... 10,000 10,000 10,000 Purchase contracts Total system 2,954,000 2,986,000 2,9E6,000 3,054,000 SYSTEAi MAXIA1UA1 DEA 1AND (Kilowatts) 2,505,000 2,390,000 2,321,000 2,297,000 FUEL EFFICIENCY DATA: Average BTU per net KWH..... 10,374 10,262 10,325 10,372 Cost per million BTU.. 2.55 2.20 2.07 1.96 Cost per KWH generated (mills) 26.43 22.58 21.39 20.33 BALANCE SHEET DATA (Thousands): Electric utility plant..... $1,687,124 $1,461,916 $1,241,935 $1,054,778 Annual construct:d additions. 231,858 228,631 195,362 190,209 Accumulated depreciation.. 301,299 269,212 243,464 221,601 Percentage of accumulated depreciation to original cost 17.86 % 18.42 % 19.60 % 21.01 % CAPITALIZATION (Thousands): Common stock equity... $ 478,191 5 426,184 $ 377,534 $ 323,553 Preferred stock................ 132,796 93,136 43,569 43,569 Long. term debt 509,024 434,590 444,628 369,909 24

i Central Power and Light Company 1976 1975 1974 1973 1972 1971 1970 318,868 307,834 298,274 289,289 280,965 270,403 261,328 49,026 47,102 45,950 45,016 44,546 43,053 41,771 5,363 5,234 5,063 4,942 4,517 4,431 4,317 2,853 2,748 2,659 2,593 2,436 2,363 2,266 376,110 362,918 351,946 341,840 332,464 320,250 309,682 2,612c233 2,572,984 2,511,360 2,523,582 2,393,961 2,091,115 1,784,002 2,321,472 2,233,184 2,099,371 2,076,288 1,942,825 1,752,641 1,547,771 4,128,726 3,729,601 4,596,605 4,476,063 4,233,28: 4,006,929 3,775,918 608,767 548,159 537,235 691,933 565,205 497,332 443,294 9,671,198 9,083,928 9,744,571 9,767,866 _9,135,275 ,8,348,017 7,550,985 $ 115,731 $ 101,715 $ 79,982 5 62,805 5 54,040 $ 47,942 $ 41,812 94,701 80,904 60,317 46,252 39,701 35,936 32,175 121,426 90,661 73,012 43,106 35,052 32,841 30,988 16,614 13,344 10,284 9,138 7,135 6,299 5,708 $ 348,472 $ 286,624 $ 223,595 $ 161,301 $ 135,928 S 123,018 $ 110,683 7 8,371 8,536 8,581 8,881 8,721 7,905 6,993 $ 370.88 $ 337.43 $ 273.30 $ 221.01 196.86 181.23 163.89 4.43e 3.95e 3.18e 2.49e 2.26e 2.29e 2.34e 3,150,000 2,825,000 2,670,000 2,345,000 2,356,000 2,031,000 1,791,000 10,000 10,000 10,000 10,000 52,000 52,000 52,000 3,160,000 2,835,000 2,680,000 2,355,000 2,408,000 2,083,000 1,843,000 2,003,000 1,923,000 1,942,000 1,883,000 1,784,000 1,654,000 1,499,000 10,387 10,367 10,517 10,560 10,501 10,687 10,776 5 1.84 1.44 .86 5 .35 .24 .21 5 .20 19.09 14.97 9.01 3.72 2.47 2.25 2.17 $ 870,268 $ 785,913 $ 719,865 $ 630,867 $ 557,053 $ 511,044 5 464,504 89,106 71,338 95,470 78,680 51,594 52,030 51,752 199,466 177,959 160,043 143,620 129,309 118,374 108,654 22.92 % 22.64 % 22.23 % 22.77 % 23.21 % 23.16 % 23.39 % $ 251,405 $ 221,464 $ 188,071 $ 178,501 $ 150,266 $ 142,662 $ 135,303 43,569 43,569 43,569 43,569 17,538 17,538 17,538 257,935 263,985 264,031 214,837 194,103 194,299 155,708

'sT.b ) k, ~ j-', j,,,, @% mg ;4 y,,3y n. w, -, ~ m,' e :, m~.. OhkDWh.* ? #p:r, ;s.. m;s ' - L F.f h l'fNG ' we. e .t y

,4 W

,1%+~g[am'w,_4& {m=6

ww D

y t Q" ,>.c ~ n${ r N.,{% [ 3, n: E "' C% r N, '. W ~ ,a ml,l m v .n ; n .m. 4 f' [ _. ?i .,4

y

_ys$ T ' g y% s $,M.._ ,..,w. h - -. '. ' \\. _ r.3' . E ~ -n w $ ,~Y ^ O. .px$ m [> %iw ^ % y h ;. s ..,n , $ 5: s 7 O.R 3'd,j % ('t.j h,+ c'h e.w E- .v s 2 v n,h y' (, . ad 4 ~ k .-~ w ' ~ ,g , +

y Q [ ?),

', %g g C f [ y y ' &(.g.g.s ' ,s_.t. y%&[. -q" .~ %g. g * ~.mm ' Gj 2 { @S W,> 'L %. _ j c 2 23,ljQ:% ^l mWjh,. - ' ~ .c Q Q-. &,~ m.xg_. zw;.i t,, m' mang \\ _ x#_ Q f_y* . ~ jfSW : %m W; ~w$kj0~ ; _L. -r* n. 's n. ,n.. C.~ 2 5 L3 [OI m Q b[ 8 ~ 3 n w:' Q ~. w~ qs 4 - s _.o=f bW a s' Qwk - /m e :n ~ 4 s-m, Mk " 1 m -win >S 7 A_ " * =.,- -a. < e s + 9 or r e k:gn%g,.&r,s m,- . wn Q e -., ' - < ^. v.is3., j, 4 '~ D s,

W L

a

=. n MC. whY

+ i, e# - y J y. ; w,, '. '+ _.S i pgy d1 4 3 ' ?hl ~- O' [i.a p%.mL,WJ." p,f ' ' i' m. '.'. ' ' _,, r 3 '5 'b, ' ;M, ,* -V u - _i ? e,M. y .y, _y :19 4 _m., N:.

y...

! cm ( ,g g' y g c yif L c.Q - ,,p ~v 1x -y -s u D.

fq-

.:sy y f. -Rs. x... M an %

W

~~ 7 f.A4l Q_ c @$f'?%e, (fp+M' e..: M ,,r._. 3 ,p w ^ % 54 %~~?fy y e f d v.r. c y; 0" -d '; ' '? = .-Q., Ll: ~ f%. % & ll 'e * % P n+.. Vt f n J ' s cllvp a. ~@ %. 'E 5 b'^h_ $-) & ": $ a-c~ w, ~. A _q C{ ^ ' n 'h &m& ',> - :q>, /

u, mz

$ Q N $ Q h %w. Q~,.. k, %l' ' ' * ~ w T ^ M:; 7 n'nn mi ~ n: s. v . &~ R',* YN W >-A,f,,y t+ .. L. ij y4 ,M %, W 4, r n h.W .n;s.n o z 2 Mr .:m,., : px&w:;4 - ( 4 n.w^, , 4... 5.. ^W z.y n., + *, - 3.'y .a + > qw ;: w. , x, _,f __,w-?. &w h t, q y ;,: ;. ' c.s , ' M .. + O ?, j, cM 7.39 W < %Q<hY "" - y i x+.s ^Y + -c L

r

,,94,, -g' yn.. TQ

g..

w c n a. qq q ' 3mpp e 3 $,} L b m. 4*; g' 2 Q,. " J,. I T.,. _h, d h,? 2 a e ' e '?.".'n. n- > ns MM,,.:. -,. -c o 7' - ;--q 4 > 3,,'p ? / <f N r e,..~q m}hRm_ &g, " a 49 y f< --.a,~ I j lo c : g'., -,;[ 3 f 4y L W. 3,.1 n s;. ,m -4 T .t f* p'( gg p. s J' m, ,k'- ,, g. 3 QQy +,A.W: %vh - M,.% 7.} ,gf+ i .q _7,1 ' _ ~f}'.; Og_'.4' wM , >m %Q 3 ' ;_ g c+ ' gr a v y. t y k. n -s."g 'p, g;g ~_ k**' m a 7c s v r e % : w;+,s, -y M. % r R 4 y$-.f;; S we by

hfqy_ $ '.'

, &,4 ;y p,. (, e m &&g '. 3 %'r 9 a"- - +l v^. S -.:. %yn_ ~. '. 4.J94 ',, a ;. 'm ~ i e" ^l,g.~+ - y r-s v .sg.w ~

1N.^^

, s t., "

-.4 w'

a c n. ^ K g3;.- t g.S ,..w,. Dy% e e., J,.. agg .e ~ r c-m " fy G Q q. 33 q '^, q w A; e;m. sm_<-. 7 ;eg-r,y. r* %1, -.. p d

l,% Q p

(n_', o L w s V ws.m. u,sr; y - m*. y 3,t -. e' n -. e ; Os>~ y, 9 9 g f.,-,,m{,, a p_.- Tr ^'-

x4 &r-

.g e".m;p'.m. n f,.h p,g,,7,~ na g pn',g;6Sa w.T Q i < g c A 1

e. - 'e'R"a l-1:n c

tev . i s >'+ m r;y + g;,- u-u ah;+ps ~ .S 4 e r

n - A & - c,~

^; w s,, zv ^;h~.gs - w q, eg*% &~'&~.\\ i r ~- -s: 3.,3 r e,s = -

4. 4_ '-r~,- M>in',6**/ A ' -

<,, k.p }ff..; '. >~^1 r w. W s q /. x, ',, e. :W ;;%.%. :' -?..# y n.,,.. # -~ % ~Q.

ll;7h n

e g. m.,.. < n g t wW m }jf.- N,g, G <a 4 y,' ;I'- g-.y,.,. - s ,v y, w; y a 3- + .,y x r. #* [p/.& ' qq g ;y. -.,.x:,,s e-- 5,-y

o

.g . 9 ;' ' + v_ 4..j,;,.,g.3 (Qy -d*_1 _ - ff m. w>t: Oc ~.* ; p f 1 u E h~, p:S V

> c/

c -%-x', f,6, %+,'%,+.p's > _.;e;3. pQ. 4%g&' m. s y _ Q. a O * %Wf'- j a . Y,m.. -j$c.? m. r h' , 'km, A8-s.',, s 1 = f 'a.9_ y ,n.,1 g. m_n ~Q. .*.,y._. Q\\g') ,n WY k .f a w h w .v :. 2%

g. - p' Q ke

"-',-{- - '* J-py' Lq' W :q=p" y.',jg ; s&_- n,.6, g, yc g ro. 7, u_: .k M g _'c'J.':^

- 3'._Q.

,p.. '; t.- n!f../ f &a' 'Q Q v. e. ^, y % m.,,., A b y '~ y,. AM p h'.f.h 1 w..n{ ; ? gn fv O h

d u

et.94 ;g -, e y.;h. .. %3

p_

) . 2 m.u . w.g y u : s t W- $ x-g-,[w ygg'h -' y'. i

g _ [k h

.,,.L, c 3,- ~ GU.%, :i , c q. + lk. :4t-A Y %-,% _hh ~y r, t z. - ~ 4 7 %(; w .b . m.; ~, q d,q m. m r. To r y'g= ^ . a:m +M g - - j -o,'-. - 5 Y 'W' ply, my g.. y n : p:v..@y gy , shs Q;m % % Q4, s,n 1 s" - e 4 y l al-* h p .. 2,m t ' y; crw,..p yu. &[ hI .[ $( .m, w n spyy 4, w_..... v < m. q::aa%. cW y, 1% c ,G .g, fa - JQ= u 7' ( n m.o 4 *.* ..e,, s t,p, 'e - 5 g > ~ j w n n.,,,,^ w n :p %;% y&<%'m m ,4 ,G. ', %r -

g gf ' Q g

m c 4., - w ., x :%gy ' a y,p:p,, ml- @g?Mg; m a l m M. n ( a 4 s, l s gm n*r g xQu n%g.2 a ;., s a,. q, > W y m_ s 6.+ a M. .w sW-y - p q

n. 4..w.

, a' f n' A9 s f 4 y.gA. E, ' f x{ 'g, < q, ) j e-a q a., 3:w$- ys, ga f T u e g w* g f~ . R;M9 p.

;, 9,a,.

v %,a;gq~:-M :.x y. Me t e E um 7 ~., w,,+ x..$ % v ', f. n' o r.- n. '^S c .s r g:. Q u.C; j g m.+y p T ): &;? f.ep !%, +, j w"QWS e irQ?; pg:; %_ dt. u. ~,.m* '('j,'? w"m v 3 a ^ ,l' Yrf-' Y'm.%t '3 s* y; -4 *- h'~, '.T' : v' % [ .2 pnu z_, asef 74 yv. m e*C .3m. m h -$ll d.n - -r,s w' g dy {q g -r e-u c 2-'f' 3:. g.. Y my 2 y I'f. W' -Q. j' 3.. f m y l4 0...+g. m4 @M M. 7.., f. y n- ~ r .u ,, ~. ,, %s l'mWf,f, 2M: A Mp w rh~. n, g.- k y 4, %. s f is. ..y gN,. J

4. 3,~

a s ,f:. p++' ~ f g 9;.., T4MyQ T 3j p.pf. g. - _ff . w.

m 6

W, ;. u m, w p f -w - m ,~ m r Mc r b:; .y vw 2 n \\ W " + supw ~c e b fp 3 g c r G G R ;29 Q w # A,..mg ar w z 2 ,u, c + > &? ( y,- u'4jiR. 9 p m6 , r,,%p ...p.~ wm.4 sgc.w% (ml A:hj ' %Eg%,W$ y m 3 NQ s s p.y 3 s j;p;ggyQ:gw; e, cv v m 4 < ~~n<<..,,z?%,- tew b e v.4 e- - >. #n [ < ww ) .n > [m*_[h- .p ~ - ?.(z g' - r y VQ ph.a a um.,m#w.We.$w e,$ 'n?.~%m.rm mmMQ f MMP ,mw..; y n 3 i g q g ps NkQ 3 *z. g.u UY'. g *, QWi%&, E'J: e' ? QQ 9'qq a 5 -s A wMn' ~, m, y.,amm a.x ;1, w , elNW I w Q? ?, ~;(m&R^Q g. be r~ a n .,g mn - g-r 4 !.. n n o,- mwa 4,,,* u .8 g4s 7 g, / * ' n ] w, s-r/g. v[.. y.. .,s v< o- ,7.m. n^ _.p%i :

ypn:b ~ q.

e-w A y 'y ~., ~, <>3.y mQ&,;tw?. y'%,m., ,n'yy:3,m e ~ n : n -u, s 9 p .w' p, p

w" N

' "r.v m w ,Q " ., m, \\ l ;- y, . - s m" y nm' a <m }m w r:x ' - 3m. 3,m 1 t v.g .fym n.*"1.*m~. 7, - < h. s ; ' mW 3 w. m.m- + +u n,. y+ 'b r> m,.' . &, y;~ w' f%- g L + s'. m. m y '...g,',s x + a cfn t' ~%~ - ' ' 'a h' .m. /. v, 4.-?, - nr.s--o, n"' "' -..,. s p

,,mv:'n > < # #

~, w.s.,, p,'h.q u Y m.l:u. -p n ..,],, u;' - a: mM a u7 m&. hp!F.q%w.,y% ygg; 3qv.e w', ,, y < p. a."n' - ,4 ~ - m' p _. n'. c[f j 3 3.. rig ?.H T. ~ s _y , s p :' %.y.. m' 'e n' ( u.n e s 9s U.u' T, . w. i-n.f^r u + MM N ..f N :, 4 e y . n' m ~~' 4 y.b c. .. 47 ;e Nrn_rs. 1 nw. - - 7 -r e %, iW 4MN .9 J - J.:W %mns,v m.sueqym p<,W 't7 n., u

m. ( &a t,~

-3 . S u - - 3 w; J.,;ag w_ ys.: p, -. i ~ .u g

y,

n 1, ,': W,~n %w n e-;:g.n w%yff x W i g o p.y 8 iA @y m:,$,y @", wy,s.p.'+, rmgN[4 f 6

-Y m

A m i" W ~gz s m8 * - 3::c ym n, m y ; M q'.. ~,ay fg~g s*>. %m?E, D A. x Ma o g.. e .m s f , N w.- 9

).

n, WM 1 . m DhbYh l YfD{Q-h,p 3~,, x .GW' u y sp.p~ en sm g.r ' \\p-y 3 c w: m gg ~ , ~_y . y g a 7 ',+ i 7 %.:yM' [r - [. q r r s. n F e,s q v %w%m? m; +s Y .f : ia 1 +g3,,~3 ( . - x < (W$ M /a N-.,!, M' hQ,'g 7, [ M;. .p,., k.. + vg. ~ k~ n.,., 3.,; - ,s MD 6M r .Qs n p$.-> s .w*,*

Q..

~ 4 -3, g- ,e n,.n. 'r ~ g_ : o~-- Y $'ij ,e,y p,g (

4 v.,nfD ? '4,, h I"Y. s%. :,,.

.. " 5',N_,, g a-

p. sc y~[5 n_

z g + %,

JPg

_ a% ,, _ e% c v n 4 v -- g,.;. " *b -t y.m p q.g s,7.k',%,_,_ V :-.. -.'emp' " 4l L ', 3 n y ,N,s_g r ~ Q.h.(m e,m - ,l, 3C s Q: u" f,,..-. .i 1 b) 3 L ? ~ n.; 'm' l 'M 2 w p'4$ J$p: z s i F;.;: p < [',, v ,e,y,,

w %

N- ^ ' ~ ".. s - ' cd C s. .4sy - q P' " : ~.,, :-' .,U L e m.J-m. ~,' 4" a.' ~f^, mr %'e,m, 'h ". ) ; r yy M. '., - &. _ my s x w + N,y. '> y , f -.

W.

?1 .v f. y - 4 ;%:a : - ' L. --D, $ v ' o ['.a"'O s a L a .<t- ' Y.,t5 4_ j U '.' 4y. + t . j v ~, ,.2+,' n <vg%P; e,. y; 4 w -. x ,.,._ M, h, )n"3% g j , 2' ' n 5 ON.f. ^ r wf. -0 w c y Y .h m d ' ) { J a'.. r / ,, ' ~, - - mm 5 s..h,

'# h[y h;

[N-',."e-x,' r " ^ Ep . ', - 7 .. ~ 9+ ) I ,.u. u. - _a,.gf'R [h.yf~ g :;<Sg.'~ s .b E N sU k'W n + s. s .~\\ j r. ,r,,,,,y aw .m, ,. e%. .,, [. ;- p-y n-O m - [h.n.t.%}f 1.,w"\\ - m,.>'~- Y g, .(wp. , % *4_ Qc >o na.. m..c -t ,,._,7 .e y _ x _'*p. 3 o c $ [kkG:" A';Q % g 4 3 m Y}. n % '$- 4. ,qb-p, 3.. .s-*' ./ 5a. J. Q. 2 'p h y" w &,;. . ~ 3' ~J ,'w+- r:.:: r .s' c a -2 y^s %u. m., o. wl ',A '\\. _s-1.. y i q 4 4 y6 'q- ,,- p. : ~ s, s m.. r y c's.,..,'f? j-

g. q g 2.y

.,z.

r. 9

, - nT y, + q ;L, +~

q. _.

y, y c. ^ Y . MC. U.' ,.y'.r>

y,4wF, lp'^5.

.p ^g \\ g r g -,, 'p' r + i m,, 's, - ? gn- .,w n s .c n M, f,, 9 h.j,i : t 3:<j f.'~., w a $ ,1 ) 4 s > ~ , s* 'M* ,, b, ? r; y 6 ,p 9 .l- .R N~ %" F#n' ' ' ; $, % ) i p. _n. ..n c. 3 '. g sn

l(~*

LI ,o i r s 4 s p 9:_ ;,s C yn ,q m.q. p .,arl D 5- ~. / Q, ',3:?jj -il J M6 i i (f A . 3: Jg; ef,p,. * ):f } * ': , ~** < .".M l e $ l;_y ~ Y $', ^ 4 ,-..\\,f'h,1 rf,, h N; ) <N k .s & }4.,3p,;g y y e gg y s 3 n :. 3 n ;. ~w ~.a ~ '-,,' y ', l+Q* ^ >' A i' C' ,. v s . s ~ '-' g h. '..;, f. ;; .:q sa ~, p y ~w .w k '. ', a: s. ..I dj r,' 1Iw ' A'-QI +]^3l*, % Q, s } -p>. -c dgq 'Pt/ Je W y l '~ y t lff , 7, m nV J. ~<5 ~ r', ._;,jf Q y (yll, &, a" z3 r-: n . r u ..,. y. a ,;- 7 +,, --Q nSM ^ ') <-.e x ..,Y Q 3diy,a p - %w/,.,- k' % f.!?;y rn., ,... e,. ~ y Q,jN( Q'Q'?f'(nlf Q.,,,*7__m %.+: k h W;Le-hyWY_,.,, " fg ~~-A.,, s , Mu y. 4: e r. ~; r d + l_ ww%Q 4-c pN P*^ 4}}

ML20039C170

Text

Navigation menu

Search