ML20126H214

Annual Financial Rept 1980

ML20126H214
Person / Time
Site:	Zimmer
Issue date:	02/06/1981
From:	COLUMBUS & SOUTHERN OHIO ELECTRIC CO.
To:
Shared Package
ML20126H208	List: ML20126H203 ML20126H209 ML20126H214 ML20126H218
References
NUDOCS 8104070349
Download: ML20126H214 (31)

Text

% ' . .s.

. Columbus and Southern Ohio Electric Company ANNUAL REPORT 1980 AMERICAN ELECTRIC POWER SYSTEM

-m------------______._.._ _ _ _ , _ . _ _ _ _ _

l l

l - .

i i d

I J i

i I

s 1

h i

l e

h e

. COLlJSIBUS AND SOUTHERN OHIO ELECTRIC COSfPANY 213 North Front Street, Columbus, Ohio 43215 f

Contents llackground of the Company .. . .... ...... ...... .. . .... . 4 Selected Financial Data . . .. ....... ........ ..... .. .. 5 Management's Discussion and Analysis of Financial Condition and Results of Operations ..... ... . .. 6-7 Auditors' Opinion . . . . . . . . . . . . .... . .. . ..... ....... .. 8 Consolidated Statements of income . . . . . . . .. ... . . .... . 9 Consolidated 13alance Sheets . . .. ... ...... . ..... . . . 10- 1 l Consolidated Statements of Source and Application of Funds . .. ... . .. . . ..... 12 Consolidated Statements of Retained Earnings . .. .... . .. . .. 13 Notes to Consolidated Financial Statements ... . ..... .. ... 14 25 Operating Statistics ..... ... .. .. . ..... . . . . . 26 27 Price Range of Common, Cumulative Preference and Cumulative Preferred Stock . .. . . .. . .. . .28-29 Directors and Officers of the Company .... . . .... ..... . 30 1

4 3

COLUAfBUS AND SOUTHERN OHIO ELECTRIC COSIPANY 215 North Front Street, Columbus Ohio 43215 Background of the Company CoLUMPUS AND Sol.rfnLRN Onio ELr.cTaic COMPANY (the Company)is a subsidiary of American Electric Po wer Company Inc. (AEP) and is engaged in the generation, purchase, transmission and distribution of electric power. The Company was organized under the laws of Ohio in 1906 and became part of the AEP System in 1980. The Company's principal executive offices are in Colum-bus, Ohio.

The Company has two wholly owned subsidiaries, Simco inc. and Colomet, Inc. Simco inc. is engaged in leasing coal mining equipment and related mining operations. Colomet, Inc. is engaged in real estate activities.

The Company serves 66 communities and approximately 461,000 customers in a 6.200 square mile area of central and southern Ohio with an estimated population of 1,129,150. Approximately 80% of the Company's revenues are derived f om the Columbus metropolitan area which is a political, educational, wholesale and retail dist ibution center with a wide disersity of industries.

Among the principal industries served are mrnufacturers of plastic tape and coating, beverages, aircraft and missiles, indu strial machinery and equipment, paper products and containers, telephone equipment, electric appliances, metal and metal pans, cement products, industrial abrasives, electronic components, food processing and research. The Company also supplies wholesale electric power to other electric utilities and to municipally owned distribution systems within the service area.

The Company's generating plants and important load centers are interconnected by a highi voltage transmission network. This network in turn is interconnected either directly or indirectly with the following other AEP System companies to form a single integrated power system: Appala-chian Power Company, Indiana & Michigan Electric Company, Kentucky Power Company, Kings-port Power Company, Michigan Power Company, Ohio Power Company and Wheeling Electric Company. The Company is also interconnected with the following other utilities: The Cincinnati Gas & Electric Company, The Dayton Power and Light Company, Ohio Edison Company and Ohio Valley Electric Corporation.

4

COLUMBUS AND SOUTIIERN 01110 ELECTRIC COMPANY AND SUBSIDIARIES Selected Financial Data-Year Ended December 31.

1980 1979 1978- 1977J 1976

. (In Thousands)

INCOME STATEMENTS DATA:

OPERATING REVENUES- EEtCTRIC . . . . . .. . ..$ 501,093(a) $432,842 $ '376.926 $ 323,968 $ 280,0% -

TOTAL OPLRATING EXPENSES . . . . .. . . . . . . . . .. 393,549- 342,770 - jlo.544 247,942 213,123 opt RATINO INCOME .,,. ......... ........., 107,544 90,072 66.382 76.026 ~ 66,973-TOTat. OTHER INCOME AND DEDUCr!ONS , . . . . . 19,725 20,963 15.338 11,154 ' 27,697 INCOME 13 Er ORE INTERE.ST CH ARGES . . .. . . .. .. 127,269 111,035 _81,720 87,180' 94,670 NET INTEREST CHARGES ' . . . . . . . . . . . . . . . . . . .. 64,774 51,058 41.893 32.846 40,368 CONSOLIDATED NET INCOME- before hon .

recurring cumulative efTect Of accounting change ...... .............. 62,495 59,977 39,827 54,334 54,302 NONRI. CURRING CUMULATIVE ErFECT OF ACCOUNTING CH ANGE , , . . . . . . . . . . . .. 6,457 - - - -

CONSOLIDATED NET INCOME - befOre preferred and preference stock dividend requirements ....... ... . . . . . .. 68,952 59.977 39.827 54.334 54.302 PREr ERRED AN1? PREFERENCE.gSTOCK DIVIDEND REQUIREMENTS .......... ... ... . . . . . .. 14,723 13,890 12.021 10.090 7.925 j EARNINGS APPLICAREE TO COMMON STOCK . . ..$ 54,229 5 46,087 5 27,806 $ 44,244 5 46.377 '

ilALANCE SHEETS DATA: -

EtxCTRiC UnuTY Pl. ANT ,.. ........ .. . 4 . $1,637,356 $ 1,582,543 $1,476,436 $1,353,974 $1,196,996 ACCUMULATED PROVISION FOR DEPRECIATION , 324,976 294,349 ' 26M36 231.438 205 439 NET EEECTRiC UIILITY PLANT . . . . . . . . . . . 1,312,380 1,288,194 1,212,500 .1,122,536 - 991.557 TOTat ASSETS AND OrHER DEarTs . . .. . . . . . . .. 1,555,272 1,448.666 1,360,826 1,254.851 1.121,014 COMMON S ROCK. PREMlUMS ON CAPfrAL STOCK AND OTHER PAID-IN CAPrrAL , . . . . . . .. 463,744 430.865 414,866 . 421,5C . 356,453

( UMULATIVE PREFERRED STOCK:

NOT SUtuECT TO M ANDATORY REDEMmON , , .. 8,304 98,354 98,354 98.354 98,354 SoluLCTTO MANDATORY REDEMPilON . . . . . ., 91,780 60.000 60.000 20,000 20,000 CUMULA flVE PREFERENCE STOCK . . . . . . . . .. 54,834 - - -

LONG TERM DEBT tB> . ..... . .... . . . . .. 669,587 649,828 592,321 548.862 507,365 j

(a) includes $1.9E.'XK)of unbilled revenues - See Note 2 of Notes to Consolidated Financial Statements.

(b) including portion due within one year.

i 5

. 5 i

t-M-Y - A- ---

r_ y ,,_____e __ _ . _ , _ . _ _ _ _ _ _ _ . _ _ _ _ _ ___m_ _ . _ _ _ _ _ _ _ _ _ _ _

Management's Discussion and' Analysis of Financial Condition and Results of Operations The following are some of the more significant factors Construction and Financing Program ,

affecting the financial condition 'of the Cogpany as Expenditures for the Company's construction pro-reflected in the consolidated results of operations. This gram over the three-year period 1981-1983 are esti-discussion refers to the consolidated financial state-mated to be approximately $350,863.000. Substantial ments appearing on the following pages. '

additional expenditures may be required if existing generating plants have to be modified or require addi-Operating Revenues and Expenses tional facilities to comply with present and future en-Operating revenues increased l5% in 1979 and l6% in nmental quamy standards. In recent years, the Company's construction program has been affected by 1980 compared to increases in energy sales of 7% and ,

2%, respectively. The greater increases in revenues are ".ubstantial increases in construction costs and difficul--

ties m obtammg financmg for the program due to high primarily the result of rate increases implemented dur-_

ing the period 1978-1980 and the recovery of higher fuel costs of capital and dividend or interest coverage re-costs through fuel adjustment provisions.1980 rev- 4" #*#"

• E" '#"""""

mviewed condnuously and revisedime from t." E7"*

to time in .

enues also increased due to an accounting change, ,

• • E "*# to revised projections of load growth and adopted in 1980. to record unbilled revenues. .

Approximately 90% of the Company's revenues are angs m Me mt and avaHaWty papM in neent -

collected from retail customers (residential, commer- Y"*'. these reviews have resulted m extending con-cial and industrial). In 1979, revenues attributable to '"uctyn schedules of a number of projects with the obj.ective of reduemg the level of annual construction retail customers rose 14% on a 4W increase in kilowatt-expenditures. However, deferrals of construction proj-hour sales while 1980 retail revenues and sales were up ects may have an adverse effect on the quality of service 16% and 4%, respectively, provided to customers m the future, and any resultmg Wholesale revenues increased 24% in 1979 on a 23%

increase in kilowatthour sales and increased 5% in 1980 u ns in unnt conmuetmn cWs may, m p I ng run, at kast padauy offwt h canceHatmn despite an i1% decline in sales. On January 1,1981, following the May 1980 acquisition of the Company by argo and gmyal inHannaq nenk In aMmn, when the completion date of a project under construc-American Electric Power Company, Inc. (AEP), the Company became a participant in the AEP System tyn is substantially delayed, it becomes more expen-sive, both because of the foregoing factors and because power pool. As a participant, the Company is now able of certain costs such as real property taxes, allowance to take advantage of AEP's generating capability and for funds used during construction ( A FUDC) and other tramsmission system wbich is expected to increase wholesale transactions between the Company and o a w con nue to amue und tk bcGy n .

placed in commercial operation.

other utilities * ,

. It is estimated that approumately 33% of the Com-Operat.mg e xpenses increased 10% in 1979 and 15% .in pany's projected construction expenditures for 1981-1980 primarily due to fuel for electric generation which 1983 will be financed with internally generated funds.

increased 12% m 1979 and 10% m 1980. Future fuel The additional amounts needed will have to be raised expenses may be affected by impending contract externally through sales of securities and investments negotiations between the coalindustry and the United in the Company's common equity by AEP. The Com-Mme Workers as well as the possibihty of more strin-pany initially finances current construction expendi-gent environmental restrictions on burning certain tures in excess of available internally generated funds types of coal. Whether or not continued increases in by issuing unsecured short-term debt. Short-term debt fuel costs will adversely affect earnings will depend on is then periodically reduced with the proceeds of sub-the Company's ability to recover those costs promptly sequent sales oflong-term debt securities and preferred m the face of efforts by consumer groups and others to stock. Prior to the acquisition of the Company by AEP, delay or reduce rate increases and to eliminate or re-proceeds from the sale of common stock were also used duce the e xtent of coverage of fuel adjustment clauses.

to reduce short-term debt. Additional funds are now obtained through cash capital contributions from the parent company which are ultimately financed through the sale of AEP's common stock.

6

COLUMBUS ANii SOUTHERN OHIO ELECTRIC COMPANY AND SUBSIDIARIES The amount of short-term debt which the Company Net Income may issue is primarily limited by regulatory restrictions Consolidated net income before preferred and pref-under the Public Utility Holding Company Act of 1935. .

At December 31, 1980, the Company was permitted "k """"Maena b opuadng mh."

m ugn cant under these restrictions to issue a total of approxi-tions compared to 1978 when various extraordinary mately $200,000,000 of short-term debt. On the same mnts, induchng Ow pmlonged coal strike, resulted in a date, Ihe Company had outstanding unused short-term bank lines of credit, many of which are shared with nHne n earn nn t inconw for m inucaw(1 15%, how ever, over 84% of the increase was attributa-other AEP companies, of approximately $187,000,000.

ble to adoptmg the unbilled method of recording rev-llank lines of credit may be withdrawn by the banks enue e na ws n net inconw wue axompanm(I extending them at any time and, in most cases, require by a decrease m the total AFUDC reflected m net the maintenance of compensating balance deposits or income. from 51% in 1978 to 31.5% in 1979 and 25.8% in 1980. The decreases were the result of the completion of in der fo th n p in t is additional long-term debt and preferred stock, it is necessary to comply " *"Y #Y*.c n pmjnt w% wlas tradured to I with earnings coverage requirements contained in Nant m sum in an th inclusmn in rate baw M mortgage and debenture indentures and in the charter. part M th congcuon opennujes related to the Zimmer nuclear umt in the Company s most recent rate The issuance of additional long-term debt (except to case. AFUDC does not represent cash income or a refund maturing long-term debt) requires pre-tax carn-reduction m actual interest expense, but is an account-ings equal to at least twice the annual interest charges . ,

ing c nvention, required by regulatory systems of ac-  !

on long-term debt, giving effect to the issuance of the new debt, for a period of 12 consecutive months within c unts. He net cost of borrowed funds used for con-stmetbn and a masonable rate of return on other funds the 15 months immediately preceding the date of the when so used ,is capitahzed as a cost of construction new issue. To issue additional preferred stock, the pmjects with a concurrent credit to the Consolidated Company must have after-tax gross income at least Statement of Income. The amount capitahzed is gener-equal to one and one-half times annualinterest charges ally included in the plant investment base for setting and preferred and preference dividends. giving effect ro mtes and recovered through depreciation charges in-the issuance of the new preferred stock, for the same dudea m the rates after the pmject is placed in com-period. At December 31,1980, the long-term debt and preferred stock coverages of the Company were 2.32 *"""I""""*

and 1,40, respectively.  !

In view of these restrictions on the issuance of addi- Effects of Inflation l I

tional debt securities and preferred stock, it is evident The Ngh rates ofinflation have had a severe effect on that it will be possible to meet the capital requirements the Company's revenues, expenses and net income the of the Company's construction program only if rate is not readily evident in conventional financial state-  !

increases over the next several years are sufficient to ments. For additionai information on the effects of in-maintain the earnings levels required to issue the neces- flation, refer to Note 16 of Notes to Consolidated Fi-sary amounts oflong-term debt and preferred stock and nancial Statements which presents a statement of in-to provide an appropriate return on new equity invest- come for 1980, adjusted for the effects ofinflation, and a '

ment. comparison of selected supplementary data, similarly adjusted.

7 1

Auditors' Opinion To The Shareowners and the Board of Directors of  :

Columbus and Southern Ohio Electric Company:

We have examined the consolidated balance sheets of COLUMBUS AN D SOUTH ERN OHIO

• ELECTRIC COM PAN Y (an Ohio Corporation) and subsidiary companies as of December 31,1980 and 1979, and the related consolidated statements of income, retained earnings and source and application of funds for each of the three years in the period ended December 31,1980. Our examinations were made in accordance with generally accepted auditing standards and, accord-ingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the financial statements referred to above present fairly the financial position of Columbus and Southern Ohio Electric Company and subsidiary companies as of December 31,1980 and 1979, and the results of their operations and their source and application of funds for each of the three years in the period ended December 31,1980,in conformity with generally accepted account-ing principles which, except for the change in 1980(with which we concur)to the unbilled method of recognizing revenues described in Note 2, were applied on a consistent basis.

ARTHUR ANDERSEN & CO.

Columbus, Ohio.

February 6.1981.

i

~ _

COLUMBUS AND SOUTHERN OHIO ELECTRIC COAfPANY AND SUBSIDIARIES Consolidated Statements of Income Year Ended December 31, 1980 1979 1978 (in Thousands)

OPERATING REVENUES - ELECTRIC . ......... . ..... .... $501,093 $432.842 $376,926 OPERATING EXPENSES:

Operation:

Fuel for Electric Generation . . . . . . . . . . . . . . . . . . . . . . . . 151,018 137,078 - 122,584 Purchased and Interchange Power (Net) ........ .... .. (147) (1,785) 18,760 Other . .... ............... . .... ..... .... . ... 82,400 69.345 - 65,854 Maintenance .. ......... ... ....... .. ........ ..... 49,516 ' 37,776 33,668 Depreciation .. ... .. ....... ...... . ......... .... 41,705 39.843 35,754 Taxes Other Than Federal Income Taxes .. ........... 40,799 38.193 32,763 Federal Income Taxes ... ........ ...... ....... . ... 28,258 22,320 1,161 Total Operating Expenses ....... . ..... .... 393,549 342.770 310.544 OP! R ATING INCOME , , .... .... . ......... ....... .. 107,544 90,072 66.382 OTHER INCOME AND DLDUCTIONS:

Allowance for Other Funds Used During Construction . ... 8,854 9,825 11,270 liquity in Earnings of Subsidiary Companies . ........... 2,136 1,727 341 Miscellaneous Nonoperating income Less Deductions . .... 8,735 9,411 3,727 Total Other income and Deductions . ........... , 19,725 20,963 15.338 INCOMf; 13ErORE INTEREST CH ARGES ........ . . ........ ... 127,269 111,035 81,720 INTI: REST CH ARGES:

Interest on Long-term Debt . ... ..... . .. .. ... . . 57,243 50.719 46,746 i interest on Short-term Debt ............. .. .... .... . 15,975 8.993 3,753 Miscellaneous Interest Charges ,,......... ... . .... 474 422 450  ;

Total Interest Charges ...... .. .. .... . ... 73,692 60,134 50,949 Allowance for Horrowed Funds Used During i Construction (Credit) ' . . ... ... ....... ..... .. (8,918) (9.076) (9,056)

Net Interest Charges ... . .......... ........ 64,774 51,058 41.893  !

CONSOUDATED NET INCOME UU ORE NONRECURRING CUMULATtVE ErrLCT Or ACCOUNTING CHANGE . ...... ...., .. .. ... 62,495 59,977 39.827 NONRrCURR!NG CUMULATIVE EFrLCT Or ACCOUNTING CH ANGE (NtT Or $5301,000 APPUCABLE taxes . . . .. .. 6,457 - -

CONSOL.fDATED NrT INCOML AMI R NONRI:CURRlNG CUMULATIVE Errl CT Or ACCOUNTING CH ANGE - before preferrCd and preference stock dividend requirements . ... .. . . 68,952 59.977 39.827 j PRrrLRRi D AND PRt.)T.RENCE STOcx DIVIDEND NLQUIRI. MEN 1S ... 14,723 13.890 12.021 l EARNINGS APPLiC AnLL 10 COMMON STOCK ,. ......... . .. $ 54,229 $ ' 46,087-- $ 27.806 1

Pro forma amounts assuming the new method of recording unbilled revenues is applied retroactively:

Earnings Applicable to Common Stock .... .... ...... $ 47,772 $ 45.815 $ 28,857 See Wres to Camwlidated Financial Statements. t 9  !

- - _ - - _-_____ __ ___ - __________ __ _______ w

l 1

Consolidated Balance Sheets l

4 I

December 31, 1980 _ 1979 ,

(in Thousands) -- l ASSETS AND OTHER DEBITS ELifTRic UTn.rry PLANT:

$ 655,087 $ 653,218 Production .. .. ..... .. ... ......... .. ........ ..

244,570 '230,835 -l Transmission ................. . ... . ..... . ....... i 391,716 360,179 Distribution . . . . . . . . . . . . . . . . . . . ............ ......

56,859 42,935 General an<! Miscellaneous .... ............ ...........

f -Construction Work in Progress ............ ............ 289,124' 295,3767 Total Electric Utility' Plant ..... .......... ..... .1,637,356 1,582,543 j Less Accumulated Provision for Depreciation ... ........ 324,976 294.349 l Electric Utility Plant Less Provision . . . . . . . . . . . . 1,312,330 1,288,1941

.l 28,021 29,243 OTurR PRoPFRTY AND INVESTMENTS ..,..... . ..............

CURRENT AsscTs:

5,937 5,636 Cash . ... .... ............................ .......

8,540 5,611 Special Deposits and Working Funds ............... ....

Accounts Receivable:

36,618 28,130 Customers . . . . . . ..... ..... ................ .

Associated Companies ......... ....... . ........ . 101 965 Miscellaneous . .. ....... ............ .... ........ 3,938 7.254 Accumulated Provision for Uncollectible Accounts ..... (680)- l(635)

Materials and Supplies (at average cost):

53,342 - 31,145 Fuel . ...... .... .. .......................... .

Construction and Operation Materials and Supplies . .... 17,855 15,820 Accrued Utility Revenues .. ............. . ............ 13,891 -

7,349 6,550 Prepayments and Other Current Assets ...................

146,891 100,476 -

Total Current Assets .. .. ....................

DerrRRto Dt uits: _

Unamortized Debt Expense ... .. ............ ... ..... 3,178 2,747-Property Taxes . . ........ .... ... ..... ........ . 23,220 21,980 Other Work in Progress .... .. ... ....... ............. 36,655 2.103

- 4,927 3,923 Other Deferred Debits ......................... .. .....

Total Deferred Debits . . . . ......... .. .. 67,980 30.753

$1,555,272 $ 1.448,666 To t al . . . . . . . . . . . . . . ...... . .. ...... . .

See Notes to Cornalidated FinancialStatements.

10 ~

COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY AND SUBSIDIARIES December 31, 1980 1979

. (In Thousands)

LIABILITIES AND OTHER CREDITS CAPITAllZATloN:

Common Stock - No Par Value Shares Authorized: 24.000,000 Shares Outstanding: 1980-16.410,426': 1979-16.345,951 .. . .-$ 41,026 $ . 40,865 Premiums on Capital Stock . . . . . . . . . . . . . . . . . . . .  : 249,616 249.149

' Other Paid-in Capital .. . .... .. .., ... ,........... 30,000 .-

Retained Earnings . . . . ... ... .. ... .. .... ..... .. 143,102 140.851 Total Common Shareowner's Equity ......... . .. . 463,744 430.865_ t Cumulative Preferred Stock:

Not Subject to Mandatory Redemption .. . ... . . .. 8,304 98.354 1 l Subject to Mandatory Redemption . .. ... . ..... . . 91,7fio 60,000 - I Cumulative Preference Stock ......... .......... .... 4 54,834 -

Long-term Debt (less portion due within one year) . .... .. 654,722 589,774.

Total Capitalization (less long-term debt due i

c'ithin one year) .. . ... .. ........ . . . . . . 1,273,384 1 178,993 CURRENT LiAnil. Tits:

ll Long-term r,ebt Due Within One Year ... ... ...... .. 14,865 60,054 ~

Short-term Debt:

Notes Payable to Banks . ....... ..... ... . .. . 48,032 30.663 Notes Payable to Other Financial Institutions . . .. .... 30,000 20,000 Accounts Payable:

G e ne ral . . . . . . . . . . . . . . . . .... .. ......... ..., 30,045 28.025 Associated Companies .. ......... .................. 538 -

l Customer Deposits . . . . 1,800 1,514 Taxes Acerued . . . . . . , ........... . ... . ......, 50,038 50,477 l Interest Accrued .. . . . . . . . . . ... . .. ..... . 17,184 14.064 Other Current Liabilities . ............... .... .. ... 9,883 9,654 Total Current Liabilities . ...... .. .. . .... .. 202,385 214.451 CouulrMLNTS AND CoNTINGENCits (See Note 12) i DI IIRRED CREDITS AND OPER ATINo RtstRves:

Deferred Income Taxes . .... . .. . .... .. ,. .... 34,165- 25.790 Deferred investment Tax Credits ....... ... . ..... . 42,728 26,466 Other Deferred Credits and Operating Reserves .. .. .. . 2,610 2.966 Total Deferred Credits and Operating Reserves . . 79,503 55.222 Total .... .. ...... .. ... . . . . .. $1,555,272 $ 1,448,666 i

l -

l' il

Consolidated Statements of Source and Application of Funds Year Ended December 31, 1980 1979- 1978 (in Thousands)

Sounci: or FUNDS:

FUNos rnou OPERATIONS:

Consolidated Net income ... .. ... . ... . ... .. $ 68,952 $ 59,977 $ 39,827 Principal Non-fund Charges (Credits) to income:

Depreciation ... .... .......... . .. ... . 41,705 39.843 . 35,754 Provision for Deferred Income Taxes (Net) ... ..... . 8,376 4,509 2.248 Deferred Investment Tax Credits (Net) .... .. . ... 14,629 5,768 - (6.253)

Allowance for Other Funds Used During Construction . (8,854) (9,825) (11,270)

Equity in Undistributed Earnings of Subsidiaries . ... 1,450 1.824 2,228 t.

Other (Net) . .. .... ... . ... . . .. ... 1,176 831 2.311 Total Funds from Operations ... . .... .. .. _127 434 102.927 64.845 FUNDS FHoM FIN ANCINGS:

issuances and Contributions:

Common Stock . . ... .. .. ... ... .... . 1,311 4,528 3.522 Capital Contribution from Parent Company . .. ..... 30,000. - -

Cumulative Preference Stock. . .. .. . ..... . . 54,667 - -

Cumulative Preferred Stock . . . . ... .. . ... 49,415 - 39,520 Long-term Debt . ... . .. ........ . . ,, .. 79,200 79,775 52,936 Short-term Debt (Net) .. ... . . ......... _27,369 (2.769) 20.588 Total Funds from Financings .... .. . ... .... 241, % 2 81,534 116.566 Total Source of Funds . .. ...... . ..., . $369,3% $184.461 $181.411 ArrucATioN OF FUNDS:

Gross Additions to Utility Plant . ., .. .. . . ... $101,904 $114.921 $125,809 Gross Other Additions ... ...., . . . .. . .. 1,515 1,636 1,616 Total Gross Additions ... ..... .. . .. .. . . 103,419 116.557 127,425-Allowance for Other Funds Used During Construction .

_L8854) 3 (9.825) (11.270)

Net Additions to Utility Plant . ... . ..... ....... 94,565 106.732 116.155 Retirements of Long-term Debt and Cumulative Preferred Stocks .... . . .. ... .. .. .. .. ....... 182,082 22,532 9,685 Dividends on Common Stock . . . . . . . . . . . . . . . . ... 38,041 34.606 37,334 '

Dividends on Cumalative Preferred and Preference Stock . . 14,713 13,890 12,021 Other items (Net) .. . ., . . .. .. . ..... (6',6) 4,005 3.973 increase in Working Capital (a) ... . .. . . . . . . 40.66i 2,696 2,243 Total Application of Fuuds ..... . .... $369,3% $184,461 $181,411 (a) Excludes Long-term Debt Due Within One Year and Short-term Debt and is represented by increase (decrease) as follows:

Cash and Cash items .. .. . . $ 3,230 $ 1,402 $. 534 Accounts Receivable .. . . . . .. .. 4,265 469 8.285 ,

Materials and Supplies ...... .... ... . ... . 24,231 6,206 4.205 Accrued Utility Revenues ... . . . . .. . .. 13,891 -

Accounts Payable . ....... . (2,559) (2.624) (3,048)

Dividends Declared . . . . . . . . ....... ,, . - 9,366 (81)

Taxes Accrued . . . .. .... . . ........ 439 (10,484) (3,354)

Other (Net) . . . .. ... . ..... .. .. .. (2,836) ' (1.639) (4.298)

$ 40,661 $ 2.696 $ 2.243 See Notn to Conwlidated Financial Statements.

12

COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY AND SUBSIDIARIES Consolidated Statements.of Retained Earnings Year Ended December 31, 1980 1979 1978 (In Thousands)  ;

11alance at Ileginning of Year .. ........ . .. ... ....... $140,851. '5129,370 ' $138,898  ;

Consolidated Net income after Nonrecurring Cumulative Effect of Accounting Change . ... ..... .. . ....... 68,952 59.977 39.827 Tot al . . . . . . . . . . ... .. ......... . ... _209,803 189.347 178.725 ,

Deductions:

Cash Dividends Declared:

Common Stock .. . .... . . . . . ... . 38,041 34,606 37,334 Cumulative Preferred Stock:

4M % Series .. .. .... .. .. . .. .. ... . . 169 440 440 4.65 7c Serie s . . . . . . . . . . . . . . . . . . . . . . .... . 154 419 419 10% Series .. ... . .. ...... .. ..... .. ..... 740 1.800 1,800 7.52% Series . . ... . .... .. ... . ..... ... 443 1,203 1.203 ,

8.52% Series . . . . ..... ... . .. . . . . .. . 621 1,704 1,704 10.52% Series ..... .... ....... ......... . ..... 826 2,104 2,104

$2.42 Series .... . . . ... .. .. . ... ... ... 1,011 2.420 2,420 9.50% Series . . . . . . . . ..... .... ... ... ...... 3,800 3.800 1,931

$3.45 Series .. . ... ..... ......... .. ..... . 1,570 - -

Cumulative Preference Stock - $15.25 Series .. .... 5,389 - -

Total Cash Dividends Declared ........ . .. .... 52,764 48.496 49.355 Premium and Expenses on Retirement of Cumulative IYeferred Stock .... . ......... . . .. . .. . 13,016 - -

Capital Stock Expense .. . . . . . .... . ..... .. 921 - -

Total Deductions ..... . . .... . .. ..... 66,701 48.496 49.355 Italance at End of Year ..... .. . .. ... . .... .. .. $143,102 $140.851 $129,370 See Notes to Consolidated Financial Statements.

13

Notes to Consolidated Financial Statements

1. Significant Accounting Policies: Operating expenses are charged with the costs of The common stock of the Company is u holly ow ned labor. mate rials, su pervision and other costs incurred in by American Electric Power Company, Inc. (AEP). maint ining the properties. Property accounts are The consolidated financial statements melude the ac, charged with the costs of betterments and major re-counts of the Company and two wholly owned sub, placements of property and the accumulated provision sidiaries, Simco inc. (Simco) and Colomet, Inc. Simco f r depreciation is charged with retirements, together is engaged in leasing coal-mining equipment and related with removal costs less salvage.

mining operations. Colomet. Inc. is engaged in real Other property and investments are generally stated estate activities. The Company accounts for its invest- ^I CO$l-ment in such subsidiaries by use of the equity method. Revenue and fuel SigniGeant intercompany items have been eliminated in Prior to 1980, revenues were recorded as billed to consolidation.

customers on a monthly cycle basis. In 1980, the Com-The accounting and rates of the Company are sub--

pany began to record unbilled utility revenues (see Note ject in certain respects to the requirements of The Pub- .,

~ )'

lic Utilities Commission of Ohio (PUCO) and to the On January 7,1981, the PUCO ordered the Com-requirements of the Federal Energy Regulatory Com-pany to refund approximately $1,378 000 vf revenue mission ( FERC). The consolidated financial statements collected through the application of an emergency sur-have been prepared on the ba. sis of the accounts w hich charge placed in effect March 1,1979. Operating rev-are maintamed for FERC purposes. Certain reclassifi-enues for 1980 hase not been reduced to renect the cations base been made to conform to the 1980 presen-pending refund which will be made in the first quarter of tation. ;9g Electric Utility Plant, Oil er Property and investments The Company charges to expense the cost of fuel as and Depreciation it is consumed. Substantially all of the Company's Electric utility plant is stated at original cost Gener. tariffs include fuel adjustment clauses under which ally, the plant of the Company is subject to first changes in fues expense are renected in customers' bills mortgage liens. m the second month following such changes. On July 2, The Company capitalizes, as a construction cost, an 1980. Ohio officially abolished the automatic fuel ad-allowance for funds used during construction. an item justment clause. However, the PUCO has not yet not representing cash income, w hich is defined in the finalized a method for implementing the new fuel regu-applicable regulatory sy stems of accounts as the net lation. Therefore, no change in the existing fuel clause cost of borrowed funds used for construction purposes has been made. Under the new statute. the Company and a reasonable rate on other funds w hen so used. The will submit fuel statistics for the most recent six month composite rate used by the Company was changed, period to be used for estimating fuel charges for the effectise May 12. 1978, from an 8.507 gross rate to a subsequent six month period.

7.25G net of tax rate and was increased to 8.537 effec. Ohio law and regulations require refunds of amounts tis e January 1.1980. Since 1977, the allow ance has been collected through the fuel clause mechanism found by compounded on a semi-annual basis. the PUCO, after audit and hearing, not to bejustified.

The Company provides for depreciation on a Hearings to date have not required any significant re-straight-line basis over the estimated usefullives of the funds.

property. Prosisions for depreciation. stated as a per-centage of the average balance of related electric prop-erties, approximated 3.299 for 1980, 3.28% for 1979 and 3.30G for 1978.

14

COLUnilHJS AND SOUTHERN OHIO ELECTRIC COhfPANY AND SUBSIDIARIES Income Taxes over various periods not to exceed 40 years. The in-Deferred Federal income taxes, reduced where creases in pension costs have resulted from normal applicable by investment tax credits, are provided by growth and experience, changes in actuarial assump-the Company generally to the extent that such amounts tions and plan improvements.1980 pension costs also are allowed for rate-making purposes. Deferred income increased due to a supplemental early retirement pro-taxes have been provided since 1975 for operations gram.

At January 1,1980, the date of the latest actuarial regulated by FERC. Effective May 12,1978, the Com-pany began providing deferred taxes on the additional valuation, the actuarial present value of vested accrued benefits was $79,679,200 and the actuar'ial present value depreciation resulting from the difference between of nonvested accrued benefits was $2,973,800. The straight-line and accelerated tax depreciation for prop-value of net assets, using market value for marketable erty placed in service after January 1,1977 pursuant to a securities, available for benefits at January 1,1980 was rate order of the PUCO. Coincident with the PUCo rate

$70.721,300. The assumed rate of return used in deter-order and the adoption of a net-of-tax allowanee for funds raf c, the Company began recording the tax bene.

mining the actuarial present value of accrued benefits fits associated with borrowed funds used to finance *"S 7 WA-

2. Change in Accounting Method:

const ruction in Other income rather than as a reduction in Federal income taxes, The Company changed its method of accounting in The Company practices deferral accounting for the 1980 to accrue utility revenues for services rendered but effect of tax reductions resulting from the application of not billed at month-end. Prior to the change, revenues l

investment tax credits to provisions for current and were recorded as billed to customers on a monthly cycle certain deferred Federal income taxes. The deferred basis. The new method was adopted to permit a better investment tax credit applicable to current Federal in- matching of costs and revenues and to allow the Com-come taxes payable is amortized over the composite life pany's results to be more comparable with other cperat-of the related property. ing companies within the AEP System.

The change (net of applicable taxes) increased 1980 Pensm.n Plan income before the cumulative effect of the accounting The Company has a non-contributory retirement in- change by $1,043,447. The nonrecurring cumulative ef-come plan which covers substantially all of its feet of the accounting change applicable to years prior employees The plan conforms to the Employee Re- to January 1,1980 is shown separately in the Consoli-tirement income Security Act of 1974. dated Statement ofincome for 1980. Pro forma amounts l Pension costs for the years ended December 31. are shown in the Consolidated Statements ofIncome to

! 1980,1979 and 1978 were approximately $13.020.000, disclose the amount of earnings applicable to common

$10.655,000 and $9,285,000 respectively. These stock that would have been reported for 1980,1979 and amounts cover the costs of currently accruing benefits 1978 if the new method of accounting for revenues had together with principal and interest on unfunded prior- been in effect in prior years.

service costs. The unfunded prior-service costs, ap-prosimately $72,328,500 at January 1,1980, the date of l the most recent actuarial study, are being amortized 15 l

NOTES TO CONSOLIDATED STATEMENTS (Continued)

3. Federal Income Taxes:

The details of Federal income taxes are as follows:

Year Ended December 31, 1980 1979 1978 (In Thousands)

Charged (Credited) to Operating Expenses:

Current Federal income Tases (Net) , , , ,

$10.754 512,043 ; 5 5.166 Deferred l ederal lneome Tases (Net) , , ,, 2.875 4,509 2,248 tkferred Investment Tas Credits (Net) 14.629 5,768 (6.253)

Total , 4 .. . .... , ,

28,258 22.320 1,161 Credite<1 to Other income and ikductions . . . . . . . . .. , , , , (7,905) (7,%9) (2,851)

Charged to Nonrecurring Cumulative Effect of Accounting Change (a) ,

5,501 - -

Total i ederal income Tases , , , , . 525.854 514 351 5 (1.690)

(a) Represents deferred tases applicable to the change in the Company's book accounting method to recognize unbilled revenues (See Note 21.

The Company's efTective Federalincome tax rates were less than the statutory rates for the years 1980.1979 and 1978. The following is a reconciliation of the differences between the amount of Federalincome taxes computed by multiplying pre-tax book income by the statutory rate and the amount of Federalincome tax expense reported in the Consolidated Statements of Income.

Year Ended December 31.

1980 1979 1978 (in Thousands)

Consolidated Net income - before preferred and preference stock dividend requirements $68.952 F59.977 539,827 Federal income Tases 25.854 14.351 (1,690)

Pre-Tax lhk Income , , , . 594.806 571.328 538,137 rederal Income Tas on Pre. Tax Book income at Statutory Rate of 469 in 1980 and 1979 and 487< in 1978 . U35 SME 518,306 Inercase (Decrease)in Federal Income Tases Resulting from:

Excess of Tas over IWL Depreciation , . . , ,

(8346) (9.524) (10,374)

Allowance for Funds lhed During Construction and Miscellaneous items Capitalized on Hooks but Deducted for Tax Purposes (Not shown below) , . (9.990) (l l .471) (12.030)

Unbilled Revenues , ,

(6.390) - -

Other ,, , , i3.013) (2,092) 740-l ederal Income Tn on Current Year Taxane income (Separate Return Basio 15,872 I I,1N (3,358)

Adjastment due to System Conwlidation 2.046 - -.-

Current Year investment Tax Credit . (12.805) (7M31) 5.174 Currently Payable ... , . , 5.113 3,273 1.816 Adjustments of Prior. Year Accruals (Net) (l j64) 801 499 Adjustments for Tax Loucs (al:

I ederal income Tases (2,332) - -

Investment Tax Credit 1,632 _ - ,_ _n Current i ederal income Tases (Net) , , 2,849 4.074 2.315 Deferred Federal income Taxes (Net of Amortizationi Resulting from the following Timing Differenceo l

Depreciation (laberalized and Auct Depreciation Range) . 6.689 4,740 2.480 UnNiled Resenues , 6390 - -

Accelerated Amortization of Emergeney racihties i Amortization of prior > car provisions) (230) (231) (232)

Insestment Tax Credit Applicable to Deferred Federal income Taxes on Certain Timing Differenees (4.473) - -

Deferred I ederal income Taxes (Net) 8.376 4.509 2,248 '

Deferred investment Tux Credit (Net) ,14.629 5.768 16,253)

Total I ederal Income Tases $25,854 514,351 5(1,690) i (a) Pr sur to the acquisition of the Company by ALPon May 9.1980, the Company was not subject to regulations under the Put.lic Utiht) lloidmg Company Act of 1935 and computed Federalincome tases on a separate Company basis. The AEP System allocates Federalincome taxes currently payable in accordance with Securities and Exchange Commission (SEC) regulations, w hich require that the benefit of tax lowes be ,

allocated to the AE P Sysitm companies wit h taxable income. The benefits of tax losset without affectmg ta ses payable, are reallocated to the ALP System compames gising rise to such losses, as it is expected that these loues would be usable in subsequent years to reduce taxes payable of the lou companies through the application of the SEC allocation, 16

COL 5]MBUS AND SOUTHERM OHIO ELECTRIC COMPANY AND SUBSIDIARIES The Company will file a separate Federal income tax return for the pre-acquisition period. From the date of acquisition the Company willjoin in filing a consolidated Federal income tax return with its affiliated companies in the AEP System.

Unused AEP System investment tax credits at December 31,1980 aggregated approximately $267,000,000, of which approximately $13.000,000 may be carried forward through 1984, $92,300,000 through 1985, $56,800,000 through 1986 and $104,900,000 through 1987. As required by the Internal Revenue Code, approximately $37,300,000 of these amounts, genera:ed by the Company prior to its acquisition, must be utilized by it. Of the AEP System invest nent tax credit carryforwards, inclusive of the Company's credit, approximately $29,000,000 has been applied as a seduction of deferred income taxes prior to December 31,1980 and will not be reflected in net income when realized in future years except as affected by changes in deferred income taxes.

The Federal income tax returns of the Company for the years prior to 1975 have been settled. The Internal Revenue Service has review ed the returns for 1975 and 1976. The Res enue Agents' Report has not yet been received.

4, Common Ownership of Generating and Transmission Facilities:

The fo!W.ving table summarizes the Company's ownership in facilities in which the Company's ownership l interest, and that of the Cincinnati Gas & Electric Company and The Dayton Power and Light Company,is that of a

tenant in common. Each of the participating companies is obligated to pay a share of the costs of any suclijointly owned facilities in the same proportion as its ownership interest. Tha Company's proportionate share of the operating costs associated with such facilities are included in the Consolidated Statements of Income and the amounts renected in the accompanying Consolidated Balance Sheets under utility plant include such costs as follows

l l

Company's Share December 31.

1980 1979 Percent Utility Construction Utility Construction of Plant Work Plant Work Ownership in Service in Progress in Senice in Progress (In Thousands)

Praluction W. C.11eck.iord Generatmg Station (Unit No. 6) 12.5 $ 9.620 1 25 $ 9.486 $ 4

( Concoille Generatmg Staden f Unit No. 45 43.5 57,918 756 58.0n6 72 J. M. Stuart Generating Station . . 26.0 123.649 4,493 119.968 2.602 Wm. H. 7immer Nuclear Power Station (Unit No.1) . 28.5 -

262.323(a) -

220.705(a)

$191,187 $267.597 $187.460 $223.383 Transmiwion . (b) $ 33371 5 940 $ 52.893 $ l.507 tal Insludes $19.050Axx) and $16.060.000 at December 31.1980 and 1979, respectisely, for Zimmer Unit No. I nuclear fuel.

(b) Varying percentges of ownership.

At December 31,1980 and 1979, the accumulated provision for depreciation with respect to the Company's share j of jointly ou ned facilities amounted to $50,058.000 and $43.631,000, respectively.

l

5. Coal Operation:

Simco ou ns coal mining equipment and participates in ajoint venture w ith Peabody Coal Company for the mining of coal ow ned by the Company and primarily used in its Conesville Generating Station. The Company can give no assurance that environmental regulations will not limit or prevent the use of its coal Coal property and related assets (net) consisi of:

December 31, 1980 1979 (in Thousands)

Coal lands and rights ou ned by the Compan), len depletion 5 9.234 1 9.168 Coal mining equipment ou ned by Simeo 351 @ 27.002 1.ess: Resene for Depreciation 12.163 13.336 12.872 13.666 Other aucts of Simco lew liabilities lexcluding term loan described in Note 10) I768 1.434

$23.874 $24.268 17

NOTES TO CONSOLIDATED STATEMENTS (Continued)

Operating results from coal operations before interest charges paid on the term loan described in Note 10 for the twelve months ended December 31,1980,1979, and 1978, respectively, were:

Year Ended December 31.

19%0 1979 1978 lin Thousands)

Simco resenues $4.419 54.631 *2,835 Simco net income before interes charges . . 52.163 51.972 5 350 T he Compann net income from its other investment in coal operation 878 728 635 Total net income from cual operations before interest charges 53.n41 $2.70u $ 985 The percentage of the amount provided for depreciation for the year to merage balances of related depreciable property and depletion provided for coal lands and rights per ton of coal mined are as detailed below:

Year Ended December 31.

1980 1979 1978 Coal mimng equipment . 5.0"r 5.97< 7. lfr Depletion teents per ton) 13.5c 13.5C 13.5c

6. Common Stock, Premiums on Capital Stock and Other Paid-in Capital:

The changes in common stock outstanding during the three y ears ended December 31,1980 are detailed below:

Common Stock issued Premiurns Net N umber Stated of Espense on year pf, Share $ Value Caprtal Stock (in ThousandO 1%0 64.475 S161 $1.150 1979 197.975 495 4.033 1978 139.388 348 3.107 The chenges in common stock show n above resulted e xclusively from issuances through the Company's dividend reinvestmer.t and employeci stock purchase plans. As a result of the acquisition of the Company by AEP, the dividend reinvestment plan was terminated and parent company common stock is now being purchased for the employees' stock purchase plan.

The premiums on capital stock was reduced $2.074,600 in 1980. The reduction represents the amount of premium originally contributed by certain shares of preferred stock u hich w ere reacquired as a result of the tenfer offer during the second quarter of 1980.

The Company receis ed from its parent a cash capital contribution of $30.000.000 in 1980 w hich was credited to Other Paid-in Capital.

7. Retained Earnings:

Vmious restrictions on the use of retained earnings for cash dividends on common stock and other purposes are contained in or result from covenants in the Company's mortgage indenture, debenture indenture, and charter provisions. Approximately S67.726.000 were so restricted at December 31.1980.

8. Reacquisition of Cumulative Preferred Stock and Issuance of Cumulathe Preference Stock:

During Ihe period March 31,1980 through April 22.1980, the Company offered its holders of cumulative preferred stock (escept the 9.50's Series) the option of(a) tendering their shares for cash. (b) tendering their shares in exchange for shares of cumulative preference stock, $15.25 Series, or (c) retaining their preferred shares. The tender offer was made in connection with the acquisition of the Company by AEP.

As a result of the tender olTer. 1,737,822 shares of cumulative preferred stock were reacquired. Of the total shares reacquired. 769,983 shares were er, changed for 548,342 shares of cumulative preference stock at a stated value of

$54.834.200 and cash payments amounting to approximately 566.966.000 w ere made to shareholders who tendered the remaining 967.839 preferred shares. No cumulative preference shares were outstanding prior to the tender offer.

18

p 3 LCOLUMBUS AND S'OUTHERN OHIO ELECTRIC COMPANY

.AND SUBSIDIARIES 9[ Cumulative Preferred Stock:

At December 31,1980 authorized shares of cumulative preferred stock were as follows:

! Par Value Shares Authorized ,

$100 . .. , , . . . . , .. . , , 1,500.0(X) 25 . . . .. . . . . ,, .. . . m , 5.000,000 The cumulative preferred stock is callable at the option of the Company at the prices indicated plus accrued dividends. The inv'oluntary liquidation preference is par value.

A. Cumulative Preferred Stock Not Subject to Mandatory Redemption:

. Shares Outstanding - Amount Redemption Current Restricted Par December 31. December 31.

Series Call Price Prior to Value 1980 1979 1980 1979 tln Thousands) 44% , . . $110 - $100 7,942 103.491 5 794 $10.359 l

4.65#1 101 - 100 4.852 89,950 485 - 8.995 10 % . , 106.75 - 100 20,967 I80.000 2.097 - ' i N.000 7.52% ,, 108 - 100 8,393 160.000 839 16.000 8.52'i , 108 - 100 9.258 200.000 926 20J100 -

$2.42 , 31.07 11281 25 126.503 1.000.000 3.163 25 000

$8.304 $98.354 .

l i

H. Cumulative Preferred Stock Subject to. Mandatory Redemption:

Shares Outstanding- .

Amount Redemption Current Restricted Par December 31. December 31.

Series Call Price Prior to Value 1980 1979 -1980 1979 (In Thousands) iO.52ma) . . $107.25 -

$100 17.804 200,000 $'i,780 $20JkK)

, 9.5(YUb) . 120 5-1 84 100 400fxxXd) 400dx)0 40.000 40.000 l $3.49c) . 2H.45 11 185 25 2.000,000 d) - 50 (MW) -

$91.780 $60.0(X)

(a) A sinking fund for the 10.5207 Series requires the Company to provide, on or before August 1. of each year beginning in 198I. for the redemption of 10.0lxhhares of such series. The Company has the right, on each sinking fund date, to redeem an additional 10,000 shares and has the option to credit shares purchased or otherwise acquired in lieu of redeeming shares for the sinking fund. Approximately l82.20u shares of the 10.52% Series w cre acquired in 1980 w hich may be used to satisfy sinking fund requirements through 1998. Prior to August 2,1985 shares may not be redeemed, other than by operation of the applicable sinking fand. through refunding operations at an effective cost ofless than.

~

10.52% per annum.

(b) A sinking fund for the 9.50% Series requires the Company to provide, on or before May 1. of each wear beginnmg in 1984, for the redemption of 16.000 shares of such series. The Company has the right, on each sinking fund date, to. redeem an additional 16.000 share .

(c) A sinking fund for the $3.45 Cries requires the Company to provide on or before November 1. of each year beginning in 1985, for the redemption of 100.000 shares of such series. The Company has the right, on each sinking fund date, to redeem an additional 100,000 shares.

(d) The shares of the 9.507 Series and the $3.45 Series were issued in 1978 and '1980 respectively.

(e} The minimum sinking fund provisions ofihe series subject to mandatory redempsion aggregate $1.600.000 for 19R4 and $4,100.000 for 1935.

(f) Differences between redemption prices (including commissions and reacquisition expenses)and the stated value plus any premium and less any discount or expenses applicable to the shares as they are retired are accounted for in the following manner as prescribed by the FERC, Gains on reacquisition are recorded as an increase in proprietary capital a id losses are a reduction of previous reacquisition gains with any excen being charged to retained earnings.

.19

NOTES TO CONSOLIDATED STATEMENTS (Continued)

10. lamg-term Debt, Lines of Credit and Compensating Balances:

Long-term debt by major category was outstanding as follows (less portion due within one year):

December 31, 1980 1979 (In Thousands)

I trst Mortgage Bonds , $609,903 5538,937 Debentures . , , . 20,714 20,866 Other teng-term Debt:

t Term loans 22,960 26,920 Other, including Simco Note , , 1.145 3.051 Total . . . $654.722 5589.774 First mortgage bonds outstanding were as follows:

December 31, Series Due 1980 1979 (in Thousando 2.80 4 1980 - March I ... $ - 5 7,500 7hG 1980 - Nosember 1 - 50,000 3R9 1981 - September ! ,

9,000 9.(KK) 9VI 1982 - June 1 . 50.00e 50.000 119 1983 - January I 30,000 30,(XN)

.W9 1983 - November I .

7,590 7.665 349 1984 - October I , 7,698 7.698 959 1984 - November l , 60.(KX) 60,000 7%4 1985 - July I 45.000 45,(XK) 3W 1986 - April l 9,480 9,480 4%4 1987 - Martn I , 15,789 15,789 4 Mi 1988 - January 1 13,860 13,860 13 % 4 1990 - October 1 (a' , . 80,000 -

4WT 19u2 - May I , . .

15,827 15.827 9.454 1996 - May I .. , . ,

40,000 40,(NK) 649 1997 - October ! , ,

14,640 14.640 9.209 1998 - March 1 . .

45,(KX) 45,000 79 1998 - June i . , . .

24,750 24,750 10%W 1999 - September 1 60,000 60,0tM) 9"i 1999 - December i . , ,

20,000 20,000 9.907 2004 - May l 35Axx) 35.(KK) 8h7 2006 - September ! , 35,000 35,000 Unamortized Debt item um and Discount (Net), , , 269 228 618,903 596,437 t.cu Portion Due Within One Year , ,

9,000 57,500 Total ,

5609,903 5538,937 tal tuued by the Company in October,1980.

The aggregate amount of scheduled maturities and sinking fund requirements for alllong-term debt outstanding at December 31.1980 is $16,725.300 for 1981, $50.926,100 for 1982,546,207,400 for 1983,581.313,900 for 1984 and

$58,813,900 for 1985. The portion of the sinking fund requirements which may be satisfied by bonding property additions is 51,860,000 for each of the five yea,s ended December 31,1985, in 1976, Simco, one of the Company's subsidiaries, borrowed $10,000,000 from a bank. The Company has guaranteed this note, w hich is payable by Simco in twenty-four consecutive quarterly installments and may be prepaid without penalty at any time. At December 31,1980, the balance of the note outstanding was $2,083,400.

Interest on this note, w hich is based on the bank's prime rate plus IV.G. is ' included under Interest Charges in the Consolidated Statements of income, 20

COLUMBUS AND SOUTilERN 01110 ELECTRIC COMPANY AND SUBSIDIARIES The Company had unused short-term bank lines of credit of approximately $187,000.000 and $104.066,000 at December 31,1980 and 1979. respectively. Available lines of eredit are subject to withdrawal at the banks' option and approximately $181,000,000 of such lines at December 31,1980 are shared with other companies in the A EP System.

In accordance with informal agreements with the banks, compensating balance deposits of up to 10% or, in certain instances, equivalent fees are required to maintain the lines of credit, and, on any amounts actually borrowed, generally either additional compensating balance deposits of up to 10% are maintained or adjustments in interest

, rates are made. Substantially all bank balances are maintained by the Company to compensate the banks for services and for both used and available lines of credit.

The Company has a line of credit which extends until October 1982 with a major leasing company under which

$30,000,000 was borrowed at December 31. 1980. There are no compensating balance requirements but the short-term notes payable are secured by the Company's coal and oil inventories.  !

The Company also has a loan agreement with various banks, in connection with the repurchase of preferred shares, under w hich $15.956.000 was outstanding at December 31,1980.

Under the Company's lines of credit and other short-term borrowing agreements, notes will mature not more than 270 days after the day of isauance or renewal.

I i1. Supplementary Income Statement Information Related Party Transactions: l Operating Revenues - Electric shown in the Consolidated Statement ofincome for 1980 includes approximately I

$3,757.000 representing sales of energy to an affiliated company within the AEP System subsequent to May 9,1980.

Operating expenses shown in the Consolidated Statements of Income include certain items not shown sep-l arately, as follows: i Year Ended Decernber 31, 1980 1979 1978 (in Thousands)

Purchascd Power (a)(b) $ 459 $ 430 $10.981 Interchange Power (NeO (a) . (606) (2,215) 7.779

$ (147) $ (1.785) $ 18.7_60 Taxes Other Than Federal Income Taxes:

Real und Personal Property Taxes $20.711 $20.654 $17.852 State Exche on Gross Receipts . .. 16,283 14.323 12.156 Social Security Taxes - I ederal and State 3,351 2.764 2.377

, Other . 454 452 378

$40.799 $38.193 $32.763 Depreciation and Depletion applicable to coal operations included in Othcr income and Deductions $ l.414 $ l.994 $ 2.668 (a) Purchased power and interchange power for 1980 include $227.200 and $280.700. respectively, terresenting transactions with an affiliated company within the AEP Splem subsequent to May 9.1980.

Ib) Inch Jes pou er purchased from Ohio Valley Electric Corporation of approximately $(366.(X)0)in 1980. $87.000in 1979 and $9103XX)in 1978. l l The Company and its subsidiaries have no significant royalty or advertising expenses.

American Electric Power Service Corporation provides certain services to the Company and the affiliated j companies in the AEP System. The costs of the services are determined by the sersice company on a direct-charge basis to the extent practicable and on reasonable bases of proration for indirect costs. The charges for services are made on a cost basis but include no compensation for the use of equity capital, all of w hich is furnished to the service company by AEP. The service company is subject to the regulat.ipn of the SEC under the Public Utility Holding .

Company Act of 1935.  !

l 21

1 NOTES '!O CONSOLIDATED STATEh!ENTS (Continued) .

12. Commitments and Contingencies:

The Company estimates that its construction program for the year 1981 will require expenditures of appros-imately $134.939,000. Substantial commitments have been made in connection with the construction program including commitments for commonly-owned nuclear generation and transmission facilities.

EfTective December 31. 1980 construction associated with two generating units at the Poston Station was suspended and approximately 535,312.000 of related costs w ere transferred from Construction Work In Progress to Other Work in Progress as shown in the Consolidated Balance Sheets under Deferred Debits. Construction on the project will resume provided American Municipal Pow er-Ohio, Inc. comprised of certain Ohio municipal electric utilities, elects to purchase the generating units pursuant to a coordination agreement made in connection with the acquisition of the Company by AEP.

The Company's facilities are subject to law s and regulations with respect to air and water quality and other environmental matters. Strict application of proposed and existing ensironmental regulations and compliance timetables may adversely impact the Company's fuel procurement policies and place limitations on using coal mined from Company-owned coal property. Regulations could also delay the commercial operation of facilities under construction, require estensise modification er curtail the use of esisting coal-fired generating facilities as well as atTect expansion plans for coal-fired generating facilities.

Ohio Valley Electric Corporation (OVEC), w hich was organized by the Company, its parent. three alTiliated operating companies and several unaffiliated utility companies, has a long-term contract which estends to 1992 to supply pow er to the U.S. Department of Energy (DOE). The proceeds from the sale of pow er by OVEC are designed to be sufficient for OVEC to meet its operating expenses and fixed costs. including amortization oflong-term debt capital (balance approsimately 54 000.000 as of December 31.1980) over a period ending in 1981 and to provide an annual return on its equity capital. The Company is entitled to receis e from OVEC, and is obligated to pay for. 4.3G of the power not required by DOE.

13. Coal Slining Operati<ms:

Simco ou ns a tw o-thirds interest in ajoint venture w hich mines coal from Company owned coal lands. Thejoint  ;

venture has e sperienced various regulatory and operational problems in the reclamation of such coallands u hich has

~

resulted in a reclamation reser e deficieney for Simco at December 31.1980 in the range of $1,000,000 to 51,5N),000.

The Compan) implemented a plan in 1979 designed to increase prospectis ely Ihe reserve to an adequate les el through the price charged for coal mined in the future. It is the Company's opinion that such amounts will be ultimately recoserable through the fuel adjustment clause. ,

T e

14. Leases:

The Company , as part of its operations. leases property, plant and equipment under leases ranging in length up to 30 y ears. Most ofIhe leases require the Company Io pay related propert3 tases, maintenance costs and other costs of operation. The Company expects that in the normal course of business, leases will generally be renew ed or replaced by other leases. The greatest part of the rentals is under leases having purchase options or having renew al options for substantially all of the economic lives of the properties.

Rentals are analyzed as follows:

.._3"' ("Jed Dece,mber)1._

19m 1979 1978 tin Thouwr.do Operaimg L tr*tnses 53.783 53.147 $3.170 Clearing and Ntncellaneous Accounts W 5.567 3.195 1.826 T otal $9.350 56.342 54,u%

w in the apportionment of these accounts. pan of the amount > shown are charged to income.

22 '

p -

COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY AND SUBSIDIARIES <

r Future minimum lease payments, by period and in the aggregate, under the Company's noncancellable operating leases consisted of the following at December 31,1980:

Operating Leasen e fin Thousands) 1981 . . . . 5 3.604 I 19M2 , ,. . 4.075 1983 . , , ,, , , 4.423 1984 . . .. . 4.423 19M5 .. , . . 4.423 l.ater Yeath .. . . 49.076

'lotal Future Minimum 1xase Payments , , , 570.024 i

The following !s a pro forma analysis of leased properties under capitalizable leases and related obligations, assuming that such leases were capitalized:

December 31.

1980 1979 (in Thousands)

Generating i acilities , . . . . 513,447 513.433 Ens ironmental I acilities , , ,, , 10.467 10.467 -

General F.quipment , , . , 9.832 6,029 Other . 37 37 '

Grou Properties Under Capitalizable 1. cases . 33,783 29,966 Len Accumulated Provision for Amortization , , 10.562 8.227 Net Properties Under Capitalizable t. eases $23.221 521.739 ObligatHns Under Capitalitable I. cases (a) , , . 55 58 523.304 ta) Including an estimated 52.250JWM) and 52.239.000, respectisely, due within one > car, llad capitalizable leases been capitalized, any additional net expenses would have been insignificant. The pro forma data do not give recognition to offsetting adjustments in allowable revenues that the Company believes would normally be espected to occur through the regulatory rate-making process,if the related leases had been capitalized.

15. Unaudited Quarterly Financial Information:

The following consolidated quarterly financial information is unaudited but, in the opinion of the Company, includes all adjustments necessary for a fair presentation of the amounts shown:

(Juarterly Periods Operating Operating Net Ended Resenues Income income (b)

(in Thousands) 1980 (a) -

Mar. 31 5124.185 526.258 523,402 Jun 30 . I12,343 22.590 10.614 Sept. 30 142.824 33.460 21.055 Dec. 31 . 121.741 25,236 13.881 1979 -

Mar. 31 5106,259 . $ 19.895 512.371 Jun.30 101.294 19.644 12.242 Sept. 30 , . 117.545 29,073 21,724 Dec. 31 107,744 21.459 13,640 (a) The 1980 quarterly results shown above has e been restated to reflect the change in accounting, adopted in 1980. to record unbilled revenues.

(b) Net income for the quarter ended March 31,1980 includes 56.457.(KKIwhich represents the nonrecurring cumulative effect of the accounting c hange. Net income, as reported prior to the accounting c hange, amounted to 517.083JNN). 511,507.(HN)and 520.502JkK)for the quarters ended March 31. June 30 and September 30.1980. respectively. lf the Company had recorded unbille:I res enues in 1979, net income w ould have been

$10.726.000, il 3.2 lbJ100, $21,874JN K) and 513.H89JNKl. respectis cly, for the quarters ended March 31. J une 30. September 30 and December 31,1979 23

1 i

NOTES TO CONSOLIDATED STATEMENTS (Continued)

16. Unaudited Information on Inflation and Changing Prices:

i The supplementary information in the statements below is presented in compliance with the requirements of Statement No. 33 issued by the Financial Accounting Standards Board (FASil). The information is intended to disclose the effects of both general innation and changing prices, however, the amounts should be considered approximations of such effects rather than precise measures since a number of subjectivejudgments and estimating techniques were employed in developing the information.

Constant Dollar amounts represent historical costs stated in terms of dollars of equal purchasing power, as measured by the average level of the 1980 Consumers Price Index for All Urban Consumers (CPI-U).

Current Cost amounts renect the changes in specific prices of property, plant and equipment from the date such assets w ere acquired to the present, and differ from Constant Dollar amounts to the extent that specific prices have risen at a different rate than the generalinnation rate as measured by the CPI-U. The Current Cost of property, plant and equipment represents the approximate cost of replacing such resources and includes utility plant in service, construction work in progress, land, land rights and other property and investments. Current Cost amounts were determined primarily by applying appropriate indexes from the Handy-Whitman Index of Public Utility Construction Cost s.

l l

Conwlidatcd Statement of Income l

Adjusted for liffects of Changing Prices Year Ended December 31,1980 l As Stated Adjusted Adjusted

[

in the Primary for General for Changes i Financial inflation in Specific Prices Statements (Constant Dollar) (Current Cost)

(in Thousands)

Operating Resenues , 5 501.093 $ 501,093 $ 501.09)

Operating Expenses:

Operation:

Fuel for i lectric Generation 151.018 151,018 151.018 Purchased and Interchange Power (Net) (147) (147) (147)

Other 82.400 82,400 82,400 Maintenance 49,516 49,516 49.516 Depreciation ta) . . 41,705 81,847 83.846 Tases Other Than Federal income Tases 40,799 40,799 40,799

, l'ederal income Tases 28,258 28.258 28.258 Total Operating Expense 393.549 413.691 435.690 Operating Income .. 107,544 ^ 7,402 65.403 Other incorne and Deductions (a) 19,725 1k,358 18.391 Net interest Charges ., . (64,774) 164.774) (64,774)

Nonrecurring Cumulative i frect of Accounting Change (Net of tases) 6.457 6.457 6.457 Preferred and Preference Stock Dividend Requirements (14,723) (14,723)

_ (14.723)

Consolidated Net income (b) $ 54.229 $ 12.720 $ 10,754 increase in Specifie Prices leurrent costs) of Property. Plant and Equipment Held During the Year te) . . $ 179,169 Reduction To Net Recoserable Cost hil $(113,909) (3,637)

I frect of increase in General Price Level (287,124)

Escess of increase in General Price Lesel Over Inercase in Specific Prices After Reduction to Net Recoverable Cost (111.592)

Gain from I)echne in Purchasing Power of Net Amounts Owed te) 95,038 95,038 Net $ _( 18.87_1)

_ $_(16.554) 24

l l-COLUMBUS AND SOUTHERN OHIO ELECTRIC COMPANY AND SUBSIDIARIES (a) As prescribed by the FASH, the items in'the Consolidated Statement of Income that have been adjusted are depreciation and depletion tincluding portions classified in Other income and Deductions) The inflation-adjusted data for accumulated provisions for depreciation were estimated by applying to such amounts the historical ratios of accumulated provisions to original cost. Depreciation and depletion charges were computed by applying current accrual rates to various accounts after adjusting such accounts for the effects of changing prices.

(b) including the reduction to net recoverable cost the income tion) from operations on a Constant Dollar basis and Current Cost basis w ould

. have been $(101.IN9Alo) and $7.117,000, re spectively.

(c) At December 31,1980. Current Cost of property, plant and equipment, net of accumulated depreciation and depletion was $2,515,832.000 m hile historical cost or net cost recoverable through depreciation was $1,335.364,000.

t d)The reduction to net recovetable cost of property, plant and equipr. ent (as exprewed in terms ofinflation. adjusted cost)io historical cost recognizes that the rate-making process limits the Company to recovery of the historical cost of the subject . assets.

tc) To properly reflect the economics of rate regulation in the Consolidated Statement ofIncome Adjusted for Effects of Changing Prices, the .

reduction to net recoserable cost should be offset by the gain that results from the decline in purchasing pow er of the net amounts owed by the Corapany. During a period of inflation. holders of monetary assets such as cash and receivables suffer a loss of general purchasing power w hile holders of monetary liabihties, generally long-term debt, experience a gain (because debt w ill be repaid in dollars having less purchasing pow er).

1 he Company's gain from the decline in purchasing power ofits net amounts owed is primarily attributable to the substantial amount of debt and cumulative preferred stock subject to mandatory redemption s,hich has been used to finance utility plant.

Five Year Comparison of Selected Supplementary Data Adjusted for the Effects of Changing Prices (Dollar Amounts Are Expressed in Terms of Average 1980 Dollars)

Year Ended December 31. _

1980 1979 1978 1977 1976 l (In Thousands Except Index Data)

Operating P.evenues .

$501,093 $491,151 $476,076 $440,525 $405.441 Ilistorkal cost information adjusted for general inflation income from operations (excluding reduction to net recoverable costl $ 12,720 $ 31,399 Net Assets at ) ear-end at net recoverable cost , $450.683 5567.135 Current cost Information income from operations (excluding reduction to net recoserable cost) ..

. $ 10.754 $ 20,951 Exceu of increase in general price lesel over increase in specific prices after reduction to net recoserable cost .. $111,592 $112.965 Net assets at year-end at net recoverable cost , , $450.683 $567,135 General financial data Gain from dechne in purchasing power of net amounts owed , $ 95,038 $106.444 Aserage consumer price index , 246.8 217.5 195.4 181.5 170.5 t

l L

l l

1 25

s Operating Statistics 1980 1979 1978.- 1977 19/6 OPERATING STATISTICS Eucinic Ort nAriNG REVI:NUIs (in Thousands):

1 rom Kilowatt hour Sales: '

Residential: ,

Without Electric licating ...... ... $156,464 $134.915 $121.883(a) $111,470 ' '5101,100 With Electric Ileating . . . ... . _46,682 37.037 ' 33.459(a) . ,24,801 :18.046-Total Residential . . .... . .. 203t l46. _171,952 155.342' _136.271 119.146 Commereial . . . . ... .... ...... 155,287 131.773 Ii1.7I7 100.226 87.701 Inelustrial . ......... ........ . .. _ 87,519' _80.057 69.802 60.019, $3.191 Sales for Resale:

Municipalities . . . .... ...... .. . . 19,023 15,931 15.168. 10.747 9.029 Other Electric Utilities .. . .... .. 15,333 16,655 11.183' 4.582 365j Total Sales for Resale: . . . . .... 34.356_ 32,586 _,26,351 15.329, 9.394 '

Miscellaneous . .. ......... .. , 16,816 12.688: 10.016- 9.130 8.541 Total from Kilowatt-hour Sales . . 497,124 429.056 373.228 320.975 277,973 Other Operating Revenues .. ... .... . 3,969 3.786- 3.698 2.993 2,123 Total Electric Operating Reverwes $501,093 $432.842 $376.926 $323.968 $280.0%

Socuct:s aso S4 tis or ENinov (in Millions of ,

Kilowatt-hours):

Sources:

Net Generated - Steam: '

170ssil Fuel ..............o... 10,540 10.495 9.427 ' 9.670 8,647-Purchased . .... ......... . . ... 108' 3 306 55 195 Net interchange . . . .................. (66) (115) 98 ( 173) _

9 Total Sources .... ... .... 10,582 10.383 9,831 9.552 8,851 Less: Losses. Company Use, Etc. . . 719 699 739 687' 735 Net Sources ..... . .. . .... 9,863 9.684 9.092 8.865 8.116

, mr _ _ . _ _ _ ===

Sales:

Residential: 1 Without Electric lleating ..... . . 2,468 2,349 . 2.300(a) 2.433 2.309 With Electric ilcating ., . .. 968 873 855(a) 676 550 . -

Total Residential . . . .. 3.436 3.222 3.155 3.109 2.859 -

Commercial .. . ... .. . . ..... . 2,902 ' 2.74' '584

. 2.684 2.527 Industrial . . . . . . ... .... ... . . _ 2,0453 .131 2.042 2.045 1 965 Sales for Resale:

Municipalities . . . . ........ .... 589 559 520 498 439 Other Electric Utilities .. .... ..... 5!8 678 484 216 17-s Total Sales for Resale . . . . ... _ 1,107 1.237: 1.004 . 714 456 Miscellaneous .... . ... .. . .. 373 352 307 313 309 Total Sales ... . ....... . 9.8 9.684 9.092 .-- 8865-- -8.116 -

.=. =~. 63- . --. . . = _

L l

26

_ ,_ _.a . - _ - , . _ - . . r -

COLUhfBUS AND SOUTHERN 0$10 ELECTRIC C05fPANY l

1

-)

l 1980 -1979- 1978 19'77 - 1976

. AvrRAoE Cost or FUEL CONSUMEDI ,

. Cents per Million iltu: . .

C oal . . . . . . . . . . . . . . . . . . . . . . . . . . . 129.38 l 19.66 ..115.89. 95.61 92.07- I Fuel Oil ........ ................. . .386.03 - 310.99 285.17 .251.30 225.78- j Gas ., ........ , ... . . . . . . . . . 284.10 233.97 228.83 - t 178.19 154.52 l Overall ... ........ . . . . . . . . . . . . 131.24 121.66- 120.88 97.97 95.23 l Cents per Kilowatt. hour Generated: .

Coal ....... ........ . ........ ... 1.41 .l.28 1.24 1.03' O.98  :

Fuel Oil .. . .......... ...... .... 5.55 4.21 3.92- 3.45 - 3.06 -

Gas .... ....... ,, . . . . . . . . . . . . . . 4.42 ' 3.89 - 4.20 3.86 2.43-Overall ...... .... . . . ... . . . . . . . 1.43 1.31 ~ 1.30 1.06 1.02 RESIDrNTIAL SERVICE - AVI: RAGES:

Annual KWii Use per Customer: .

Total ......... ......... .... ' 8,270; 7.896 7,876 - .7,883- 7,362..

With Electric Heating . . . . . . . . . 19,930 20,471 20.425(a) 22,079 21.895 Annual Electric Bill:

To t al . . . . . . . . . . . . . . . . ... . . . '$489.03' - $421.36 $387.82 5345.5 l - $306.79 -

With Electric Heating . . . .. . . . . $960.93 $868.16 $799.36(a) $810.05 - ' $718.30 L Price per KWH (Cents):

Total ......... . . . . . . . . . . 5.91 5.34 4.92 4.38 - 4.17 With Electric Heating . . . . . . . . . . 4.82 4.24 3.91(a) 3.67 3.28' NUMBER OF ELECTRIC CustoutRs - Year-End:

Residential:

Without Electric Heating . . . . . . . . . 366,277 366,068 L 364,319- 364,194 '360.345 With Electric Heating . . . . . . . . . . . . . '51,115 45.948 39.204- 33.806 32,127-Total Residential . . . . . . . . . . . 417,392 412,016 , 403,523 398,000. 392,472-

' Commercial .. . . . . . . . . . . . . . . . 391906 41,461 40.708 40.018 39.293 Industrial ...... .................. . 2,400 2,487, 2,505 _ 2.563 2.634 Sales for Resale:

Municipalities ... ....., ... ..... 4. 4 4 4 4 Other Electric Utilities . . . . . . . . . . 5 4 4 3 2 Total Sales for Resale . . . . . . . , 9 8 8 7 6 Miscellaneous ... . . .. . . . . . . . . . 1,324 1.318 - 1,169 1.130 1.085 Total Electric Customers . . . 461,031 457.290 447.913 441,718 435.490 (a) Estimated 27 y

y

Price Range of Common, Cumulative Preference and Cumulative Preferred Stock fly Quarters (1980 and 1979) 1980 - Quarters 1979 - Quarters lst 2nd 3rd 4th ist 2nd 3rd 4th___

Ct ""'"!"L$951/II (No Par Value)

Dividends Paid Per Share $ .58 5 .58 $ .58 $ .58 $ :8 $ .55 $ .58 5 .39 (2)

Market ' ice - $ Per Share (NY -

igh 22 % 25 % 25 % 24h 24 % 25 26 % 24 Low 19 % 19 % 21 % (9% 20 % 21 22 % 20 %

Curnulative Pre). rence Stock (3)

(No Far Value)

$15.25 Series (Old Money issuel Dividends Paid Per Share - -

$3.4736 $3.8125 - - - -

Market Price - 5 Per Share (N YS E) - liigh -

115 113 105 - - - -

- Low - ll0 110 % 1(M - - - -

$15.25 Series (New Money Issue) 1 Dividends Paid Per Share - - $3.4736 $3.8125 - - - -

Market Price - $ Per Share 1 (N YS E) - liigh -

Il9M 114 til - - - -

- Low -

100 109% l(M - - -- -

Curnulative l'referrcJ Stock

($100 Par Value) 449 Series Dividends Paid Per Share $1.06 $ 1.06 $1.06 $1.07 $ 1.06 $ 1.06 $1.06 $ 1.07 Market Price -- $Per Share (UTC)

Ask (liighLow) 93W936 1In i10 35/35 3I/31 39b!396 40%/40h 4N46 49/49 Ilid (Iliglt Low ) 56/56 90/90 30/30 25/25 3R'38 39/39 40h'40% 4&'48 4.65G Series Dividends Paid Per Share $1.16 $1.16 $1.16 $ 1.17 $1.16 $1.16 $1.16 $1.17 Market Price - 5 Per Share (OTC)

Ask (High/ Low) 85'85 101/101 38/38 35/35 434'43 M 42/42 49'49 52/52 )

llid (High Low) 80'80 85/85 334/33h 28/28 4142 41/41 41/41 51/51 7.52G Series Disidends Paid Per Share $1.88 $ 1.88 $ 1.88 $1.88 $1.88 $ 1.88 $1.88 $1.88 Market Price - $ Per Share (OTC)

Ask (High/ Low) 92'92 108!!08 62%'62% 56%!56% 71/71 7n70 76/76 7878 Ilid (High/ Low) 7474 53h/53% 55/55 48/48 7070 7070 7070 76/76 l

1 1

I I

1 l 28 l

COLUAfBUS AND SOUTHERN OHIO ELECTRIC COAfPANY 1980 - Quarters 1979 - Quarters ist 2nd Sw 4th ist 2nd 3rd 4th Cumulative Preferred Stod

($100 Par Value) 8.52% Series Div!dends Paid Per Share $2.13 $2.13 $2.13 $2.13 $2.13 $2.13 $2.13 $2.13 Market Price - $ Per Share (OTC)

Ask (iiigh/ Low) 92/92 108/108 7101 64 % /64 % 7979 79'79 86/86 88/88 Ilid (Iligh/ Low) 86/86 57/57 64:64 55/55 7505 7878 78/78 8E86 10.0(Y4 Series Dividends Paid Per Share $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 $2.50 Market Price - $ Per Share (UTC)

Ask (Iligh/ Low) 9&96 109 %!!09 % H3'83 71/71 94/94 92/92 92/92 92/92 flid (liigh! Low) 9690 71/71 72 %!72 % 62.62 91/9 t 9090 9Q90 90/90 9.50'7 Series Dividends Paid Per Share $2.375 $2.375 $2.375 $2.375 $2.373 $2.375 ' $2.375 $2.375 Market Price - $ Per Share (UTC)

Ask (Eligh/ Low) 76/76 63/63 7070 63'63 95/95 -95/95 93/93- 82/82 l flid (liigh/ Low ) 72 %/72 % 59/59 63/63 59/59 90/90 9090 88/88 75/75 10.52% Series (4)

Dividends Paid Per Share $2.63 $2.63 $2.63 $2.63 $2.63 $2.63 $2.63 $2.63 Market Price - 5 Per Share (N YSE) - liigh 104 115 90 79 % 105 IN 105 10l %

- Low 94 75 76% 70 99 % 98 10l % 91

($25 Par Value) 52.42 Series Dividends Paid Per Share $ .605 $ .605 ' S .605 $ .605 5 .605 5 .605 $ .605 5 .605 Market Price - 5 Per Share (N YSE) - Ifigh 28 % 31.07 24 21 23M 25 27 27

- Low 25 % 19 % 17 % 16 22b 21 % 24 % 24

$3.45 Series (5) .

Dividends Paid Per Share - - -

5 .21 - - - -

Market Price - $ Per Share (UTC)

Ask (iiigh' Low) - - -

25 % i25 % - - - -

l Ilid (liigh' Low) - - -

24%f24% - - - -

OTC - Over-the-Counter NYSE - New York Stock Exchange (1) As of December 31, 1980 American Electric Power Company, Inc. owned 100'A of the Company's common stock.

(2) Rellects two-thirds dividend payment due to a change in dividend payment dates.

(3) Issued May 1980.

(4) Delisted from NYSE in 1980.

(5) Issued October 1980. Application to be made for listing on NYSE.

Note - The above quotations bid and asked represent prices between dealers and do not represent actual transactions.

1 I

29 l

l

l 'COLUAfBUS AND SOUTHERN OHIO ELECTRIC COAfPANY Directors JonN E. ARTHUR ROBERT J. GRUESER FRANK N. BIEN (a) JAMES F. KuRTz W. A. CARLILE.JR. BEN T. RAY RienARD E. DisBRow (a) ' RALPH E. WALDO .

JOHN E. DOLAN (a) W. S. Wn TE. J R. (a)

ARTuuR G. GREEN Officers JOHN E. DOLAN (a)(n STANLEY P. .TousSEK W. S. WHrrE.JR. (aun

. Vice President Vice President-Corporate Chairinan of the Board and. Planning Chie,f Executive Ol]icer A. JoSErn DowD(aan _

i ROBERT 3. GRUESER (a) vice President WituS C. wEten Vice C.hairinan of

1. NO"A""0

. JonN M. EMERY the Board Vic President and . A I"""R"'"'

BEN T, RAY ta) Treasurer M ARGARET E.' McCAIN -

President and Chief g,ygonog,up,y,ug Metan ad hshtant OP "h"R UIII' Treasura _l Vice President and J AMES P. FENSTERMAKER Controller QUENTIN E. BOWERS Senior Vice President- ;ong y,gsggggy khant GmW ,

and Assistant Secretary Operations Vice President-Purchasing RICllARD P. BouRotRIE (c)(n FRED V. STINE 3 Senior Vice President- W. ROBERT KELLEY (d)

Customer Serrace Vice President-Electric JonN R. BURion (a)(n EvAN E. WnLLnrus Operations Assistant Secretary -l

~

Senior Vice President- GERALD P. M ALONEY (a)(n john F. DiLORENZO. IR. (a)(n -

Assistant Secretary Adtnmistration Vice President and i JOHN P. APEL(di Principal Financial Wituru E. OtsoN (ano l Vice President- Of]icer . Assistant Secretary j b " *, ""'"'"#"I RICHARD M. McMoRRow . WILLIAM J. PRocHAsxA (c)(o i FRANK N. BLEN (ann Vice President-Lase and Assistant Secretary -

Vice President Risk Afanagernent LEON ARD V. ASSANTE (aHn l RICHARD A. BuRoERT Puitir R. McNAvoHTON Aggfgfanf Treggyrer ]

Vice President- Vice President-Empicree

• Wntusu N. D,ONorRio(a)( n Distribution and Relations '

- Assistant Treasurer Scri.n.e , EUGENE D. MEYERS (c)  !

GsnALD R. KNORR (a)(n .j PETER 3. DEM ARIA (a)(f) Vice Pres / dent-Assistant Treasurer  ;

Assistant Treasurer and Administrative Services Principal Accounting goggg,g,g,gggogg WAm L, %m l 0.0ccer Assistant Treasurn

- Vice President-Rates and Corporate Vfairs Ricu ARD E. DisBRow (a) to Vice President (a) Elected July 23.1980 (b) Resigned Seriember 1,1980.

(c) Elected Sep(ember 17,198J (d) Resigned November 1,1980 (e) Resigned February I.1981 (O Principal occupation is at ;1n employee of American Electri; Power Service Corporation of Columbus, Ohio 30

l l-

['

1 l

l l

'l i

The Company's Annual Report (Form ' J" 10-K) to the Securities and Exchange Commission will be availab'e or, or about ' l March 31,1981 to shareowners upon l written request and at no cost. Please address such requests to:

Mr. R. A. Heimann Vice President and Controller o

Columbus and Southern Ohio -

Electric Company 215 North Front Street Columbus, Ohio 43215 Transfer Agents Cumulative Preferred Stock  ;

I The Huntington National Bank -

P.O. Box 1558, Columbus, Ohio 43216 -

l Citibank, N.A.*

111 Wall Street, New York, New York 10043

. i Cumulative Puference Stock ArneriTrust Company .

900 Euclid Avenue, Cleveland, Ohio 4A101:

Registrars 1 Cumulative Preferred Stock BancOhio National Bank 15.' East Broad Street, Columbus, Ohio 43265 i

Manufacturers Hanover Trust Company

• 4 New York Plaza New York, New York 10015 Cumulative Preference Stock AmeriTrust Company 900 Euclid Avenue, Cleveland, Ohio 44101

• Not applicab!c to the 4-%% Series..

/ _ _ ,l l 3 M  :- Il <

)k j f ["~Tlf' k 'j! Il i l

,g\f '!!l -

2/

-\

g '

o m .

't Ni_!fl..O

. I*8 l 'Hf Il 1

r

,il i 1 d  ; d* L  :

v,;; .a ,

lil j rv 1

3AE lii:lill I l %j{ j i, -I'.'_'Z'N

"* I" n

\ 7 v: F , '/

f,.U 3 )N,l.., r; ., N a 4 .

l j 'f  ; c.

f "[ ,

!k,I),s[lf; ~

[; '

j 1 4j.,

NE s "EW 1 s '

,3

' D N

r f~ h,7 j k l tg -g jj f /  ;  ; [ge--- .. , y ;; - -

j '% /  ; $; ""-

{i 9 8 r, jf ' i' 'e l .,I j L*"**") ,/ {

E4 2 l;, ( g i y b} >

h k/[.Q;sb 'J~" ,

h #

]

} !l l  !

-a

_ _ k%

t ; 4.;y th r'q ,4 gr } :, rg gg... j -,\

7,e, g ql- s-g,t y x

>d'~L,i/; l ia

( h;; ;lAy"(

ad t. i J j;p y" J 1 .. ,i ln q

l fN'I [; $!I)gj- g $ f.lf E E kg,, {

<  ? i- x  : !iR $1 ;,

\ * "n -

N.& '

[gs J' n. 1

!:,[fij

<i'j lli il c/

'l /

7 Yl, ;It i: . Mc...J'k,.,\ .N.

.d.

i = a (. -

c se , :p= ~Tif, i 19 4.k - p I

4

. 5 f ,\ ~"y y N \  !: !!* /(

" ~

l s 7 l.i Ul

- 4 6 ii

- 3 !! ,a i tif 9

1 I a I

,I - ---, , l. .P.. s o!

' 5 z Ms\ -

p' F :ll 'l -

. /

, T" ,

.J

' ".. } . {  ;; g lN : J

' , 'y 3pr -

d'N. l

h tl -'I ;t 5 I' l I

"'~

.. <- , 'i . j  :

f i 'j 'h !;

d.. U is M=j

.E*

, (

Q ;;b A . ..

? '?= i l I V~ ~

). ?ds M O E!, ..lm.

4  : ,

, /

i , = .e A.  ;

i

~

(.  ; - - i

( . .

h1 i

c

/ 5 M"%

T, 3 af-- ..-/ l := + k.. %--

w

, L . i, *3.,} ;~' ----*sq _j.y.af L..

. i  !

V. 1 .W \

,\ .m L,, , , w % " * * "

• COL UMB US A ND SOUTilERN 01110 ELECTRIC COMPAN Y