1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
CENTRAL AND SOUTH WEST CORPORATION
RETIREMENT SAVINGS PLAN
(Full title of the plan)
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of issuer of the securities held
pursuant to the plan and the address
of its principal executive office)
CENTRAL AND SOUTH WEST CORPORATION RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
PAGE
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . . . . 4
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits. . . . . . . . . . . 5
Statements of Changes in Net Assets Available for Benefits . . . . . 6
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . 7-12
SUPPLEMENTAL SCHEDULE:
I. Schedule of Assets Held as of December 31, 2001. . . . . . . . 13
EXHIBIT:
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Consent of Independent Auditors. . . . . . . . . . . . . . . . . . . 15
CENTRAL AND SOUTH WEST CORPORATION RETIREMENT SAVINGS PLAN
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Employee Benefit Trusts Committee has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
By: /s/ J. Steven Kiser
---------------------------------
J. Steven Kiser, Secretary
Employee Benefit Trusts Committee
Date: June 25, 2002
INDEPENDENT AUDITORS' REPORT
American Electric Power Service Corporation, as Plan Administrator:
We have audited the accompanying statements of net assets available for
benefits of the Central and South West Corporation Retirement Savings
Plan (the "Plan") as of December 31, 2001 and 2000, and the related
statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by Plan management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the Plan as
of December 31, 2001 and 2000, and the changes in net assets available
for benefits for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule
listed in the Table of Contents is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 (ERISA). This
supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Columbus, Ohio
June 25, 2002
CENTRAL AND SOUTH WEST CORPORATION RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
2001 2000
---- ----
Assets:
Investments:
Bank Investment and Other Fixed Income Contracts $192,824,952 $177,623,922
American Electric Power Company, Inc. - Common Stock
202,688,478 230,499,010
Registered Investment Company Funds 301,278,613 349,265,577
Fidelity Institutional Cash Portfolio Fund 5,744,073 -
Participant Loans 28,291,280 28,548,564
------------ ------------
Total Investments 730,827,396 785,937,073
Other Receivables 587,237 -
------------ ---------
Net Assets Available For Benefits $731,414,633 $785,937,073
============ ============
See notes to financial statements.
CENTRAL AND SOUTH WEST CORPORATION RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
---- ----
Investment Income:
Interest $ 7,597,315 $ 11,989,823
Dividends 18,888,110 39,413,096
Net Appreciation (Depreciation) in Fair
Value of Investments (57,149,058) 26,663,750
Administrative and Investment Expenses (112,476) (314,160)
------------ ------------
Total Net Investment Income (Loss) (30,776,109) 77,752,509
Contributions:
Employers 14,472,672 15,239,396
Participants 28,570,302 30,771,253
------------ ------------
Total Contributions 43,042,974 46,010,649
Distributions to Participants (66,789,305) (91,017,596)
Increase (Decrease) In Net Assets (54,522,440) 32,745,562
Net Assets Available For Benefits
Beginning of Year 785,937,073 753,191,511
------------ ------------
Net Assets Available For Benefits
End of Year $731,414,633 $785,937,073
============ ============
See notes to financial statements.
CENTRAL AND SOUTH WEST CORPORATION
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
1. PLAN DESCRIPTION
The following description of the Central and South West Corporation Retirement
Savings Plan is provided for general information purposes only. Participants
should refer to the Plan documents for more complete information.
The Central and South West Corporation (CSW or the Corporation) Employees'
Thrift Plan (Thrift Plan), a defined contribution plan, was adopted by the
Corporation effective December 22, 1959, and was renamed "Central and South West
Corporation Thrift Plus" (Thrift Plus), effective January 1, 1991. It was
renamed "Central and South West Corporation Retirement Savings Plan" (the
"Plan"), effective July 1, 1997.
On June 15, 2000 American Electric Power Company, Inc (the Company) merged with
CSW so that CSW became a wholly-owned subsidiary of the Company. The merger
agreement provides that the CSW qualified plans will remain in effect until July
1, 2002. The Company anticipates that the Plan will merge with the American
Electric Power System Retirement Savings Plan on January 1, 2003.
The following former Central and South West System companies are participating
employers in the Plan as of December 31, 2001:
Central Power and Light Company (CPL)
Public Service Company of Oklahoma (PSO)
Southwestern Electric Power Company (SWEPCo)
West Texas Utilities Company (WTU)
Central and South West Services, Inc. (CSWS)
CSW Energy, Inc. (CSWE)
CSW Energy Services, Inc.
C3 Communications, Inc.
EnerShopSM Inc.
Effective May 15, 2000, Fidelity Management Trust Company (Fidelity) was
appointed Trustee and Recordkeeper for the Plan and all Plan assets were
transferred to Fidelity's custody as of that date. Prior to that date, Mellon
Bank was the Trustee and Hewitt Associates was the Recordkeeper for the Plan.
Some enhancements were made to the Plan in conjunction with the change to
Fidelity, including immediate vesting by participants in employer contributions,
thereby making them not subject to forfeiture. In addition, participants who
terminate employment with the Corporation and have outstanding loans may elect
the option of paying off the balance under the existing terms over the remaining
life of the loan.
Generally, eligible employees participating in the Plan may make contributions
in 1% increments up to 20% of their salary. The employers contribute to the
Plan, on behalf of each participant, an amount equal to 75% of the participant's
contribution up to 6% of the participant's compensation for each payroll period,
subject to certain limitations. All contributions are participant directed. All
contributions are deposited to the trust after each pay period. The Tax Reform
Act of 1986 restricts the amount that certain participants who are deemed highly
compensated may contribute to the Plan. Participants are allowed to change
investment elections, change contribution percentages, or move existing fund
balances on a daily basis. Prior to May 15, 2000, forfeitures of the employer
contributions without a fully vested interest resulting from termination of
participation in the Plan were used by the employers to reduce their future
contributions. Forfeitures were reinstated if the participant was re-employed by
a participating employer and returned to the Plan within five years. The
forfeitures for the year ended December 31, 2001, and 2000 were $-0-, and
$78,151, respectively.
Net contributions made to the Plan by the employers and the participants for the
years ended December 31, 2001, and 2000, were $43,042,974, and $46,010,649,
respectively.
A participant's account shall be distributed at the option of the participant,
to the participant or the participant's designated beneficiary, upon termination
of employment or death. In the event of termination of a participant's
employment before reaching age 55, other than by death, there shall be available
to the participant for distribution the vested interest in the participant's
account as a lump sum. A participant may make withdrawals at any time from any
remaining contributions previously made, but not exceeding the entire balance in
the account. Participants may elect to receive the funds either by lump sum,
equal to market value at time of withdrawal, or an actuarially determined
annuity payment, or by rolling the funds into another qualified plan of the
participant's choice. Additionally, employees may direct that their
contributions be made on an after-tax basis and/or a pre-tax basis in accordance
with Section 401(k) of the Internal Revenue Code (Code). An employee's taxable
income for federal income tax is reduced by any pre-tax contribution. Certain
restrictions, as defined by the Code, are placed on the availability of those
pre-tax accumulated funds.
American Electric Power Service Corporation has been the Plan Administrator
since May 15, 2000. Prior to that time, the Plan was administered by CSW's
Benefits Advisory Committee.
Subsequent to May 15, 2000, participants may direct the investments of their
contributions to any of the following funds:
The Fixed Income Fund, the objective of which is to invest in the
Fidelity Retirement Government Money Market Portfolio and investment
contracts from a wide variety of providers at varying annual interest
rates.
The AEP Stock Fund, the objective of which is to invest in AEP common
stock and temporary investments in the Fidelity Institutional Cash
Portfolio Money Market Fund.
The Fidelity Puritan Fund, the objective of which is to invest in a
broadly diversified portfolio of domestic and foreign common stocks,
and preferred stocks and bonds, including lower-quality, high-yield
debt securities. The prospectus for the Puritan Fund indicates that the
Puritan Fund is a growth and income fund.
The Fidelity OTC Portfolio, the objective of which is to invest in
common stocks, preferred stocks, securities convertible into common
stocks, and debt securities that are traded on the over-the-counter
(OTC) securities market. The prospectus for the OTC Portfolio indicates
that the OTC Portfolio is a growth fund.
The Fidelity Overseas Fund, the objective of which is to invest in
foreign securities, including common stocks and securities convertible
into common stocks, as well as debt instruments. The prospectus for the
Overseas Fund indicates that the Overseas Fund is an international
growth fund.
The Fidelity Blue Chip Growth Fund, the objective of which is to invest
in a diversified portfolio of common stocks of well-known and
established domestic and foreign companies. The prospectus for the Blue
Chip Growth Fund indicates that the Blue Chip Growth Fund is a growth
fund.
The Fidelity Equity-Income Fund, the objective of which is to seek
reasonable income and also to consider the potential for capital
appreciation. The fund seeks a yield that exceeds the yield on the
securities comprising the Standard and Poor's 500 index and normally
invests at least 65% of its total assets in income-producing equity
securities, while potentially investing in other types of equity
securities and debt securities, including lower-quality debt
securities.
The Fidelity Low-Priced Stock Fund, the objective of which is to seek
capital appreciation by normally investing at least 65% of total assets
in low-priced common stocks ($35 or less at time of purchase), which
can lead to investments in small and medium-sized companies.
The Fidelity Freedom Income Fund, the objective of which is to seek
high current income and, secondarily, to seek capital appreciation. The
fund invests in a combination of Fidelity equity, fixed-income, and
money market funds (underlying Fidelity Funds) and allocates its assets
among these funds according to a stable asset allocation strategy
designed for investors already in retirement.
The Fidelity Freedom 2000 Fund, the objective of which is to seek high
total return, by investing in a combination of Fidelity equity,
fixed-income, and money market funds (underlying Fidelity funds) and
allocating its assets among these funds according to an asset
allocation strategy that becomes increasingly conservative as Freedom
2000 approaches its target retirement date. Targeted to investors
expected to retire around the year 2000.
The Fidelity Freedom 2010 Fund, the objective of which is to seek high
total return, by investing in a combination of Fidelity equity,
fixed-income, and money market funds (underlying Fidelity funds) and
allocating its assets among these funds according to an asset
allocation strategy that becomes increasingly conservative as Freedom
2010 approaches its target retirement date. Targeted to investors
expected to retire around the year 2010.
The Fidelity Freedom 2020 Fund, the objective of which is to seek high
total return, by investing in a combination of Fidelity equity,
fixed-income, and money market funds (underlying Fidelity funds) and
allocating its assets among these funds according to an asset
allocation strategy that becomes increasingly conservative as Freedom
2020 approaches its target retirement date. Targeted to investors
expected to retire around the year 2020.
The Fidelity Freedom 2030 Fund, the objective of which is to seek high
total return, by investing in a combination of Fidelity equity,
fixed-income, and money market funds (underlying Fidelity funds) and
allocating its assets among these funds according to an asset
allocation strategy that becomes increasingly conservative as Freedom
2030 approaches its target retirement date. Targeted to investors
expected to retire around the year 2030.
The Fidelity Freedom 2040 Fund, the objective of which is to seek high
total return, by investing in a combination of Fidelity equity,
fixed-income, and money market funds (underlying Fidelity funds) and
allocating its assets among these funds according to an asset
allocation strategy that becomes increasingly conservative as Freedom
2040 approaches its target retirement date. Targeted to investors
expected to retire around the year 2040.
The Fidelity Spartan U.S. Equity Index Portfolio, the objective of
which is to invest in a group of common stocks. The prospectus for the
Spartan U.S. Equity Index portfolio indicates that the Spartan U.S.
Equity Index Portfolio is a growth and income fund which is designed to
approximate the composition and total return of the S&P 500.
Prior to May 15, 2000, participants could direct the investment of
their contributions to any combination of the following funds:
Fixed Income Fund, the objective of which was to invest in fixed income
securities such as guaranteed investment contracts, temporary cash
investments, government obligations and other fixed income securities
that has been selected by the Investment Committee.
CSW Corporation Stock Fund, the objective of which was to invest in
Central and South West Corporation common stock. In 1994, the fund
enrolled in the CSW PowerShare Dividends Reinvestment and Stock
Purchase Plan with the intention of reducing the administrative
expenses of the Plan associated with the payment of dividends.
Asset Allocation Fund, the objective of which was to invest in equity
mutual funds and a fixed income corporate bond fund. The allocation
between equity mutual funds and the fixed income corporate bond fund
could be shifted from time to time based on the attractiveness of the
stock market.
Capital Appreciation Fund, the objective of which was to invest in
mutual funds that had a goal of long-term growth with no emphasis on
current income. The mutual funds purchase stocks of rapidly growing
companies or companies with the potential for exceptional growth.
Growth and Income Fund, the objective of which was to invest in mutual
funds whose goal was a combination of both growth and current income.
These mutual funds purchased stocks of growing companies as well as
those whose share price had increased while paying steady dividends.
Participants may transfer the value of their own cumulative contributions, in
any whole percentage or dollar amount, among investments, change their
investment elections, and change their contribution percentage as often as they
like. Except for their pre-tax contributions, participants may make an unlimited
number of withdrawals of their interest in the Plan, including company matching
contributions which are immediately vested. Pre-tax contributions are not
eligible for withdrawal by participants not yet age 59-1/2, except under
hardship as defined by the Plan.
Participants may borrow from their savings plan accounts, a minimum of $1,000
($500 prior to May 2000) up to a maximum equal to the lesser of $50,000 or 50%
of their account balance. Loan terms range from one year to 60 months, except
for certain loans to purchase a home for which the maximum term is 15 years.
Interest rates, fixed for the life of the loan, are established by the Plan
Administrator in accordance with the requirements of law. Active employees make
principal and interest payments through payroll deductions. Retirees/surviving
spouses make monthly payments using a coupon book.
2. ACCOUNTING POLICIES
The accompanying financial statements are prepared on the accrual basis of
accounting.
Investments have been recorded based on the trade-date and are reported in the
Statements of Net Assets Available for Benefits at fair value or contract value.
The AEP Stock Fund investments are valued at year-end quoted closing prices. The
year-end valuations for the various Fidelity funds are based on the closing
market prices for the underlying securities as provided by the Trustee.
Dividends and interest income are recorded as earned. These amounts are
reinvested by the Trustees in the same funds which generated such income.
Investment management fees are accounted for as a reduction in net investment
income.
Distributions are recorded when paid. There were no amounts due to participants
who requested distributions from the Plan at December 31, 2001 and 2000.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The Plan utilizes various investment instruments. Investment securities, in
general, are exposed to various risks, such as interest rate, credit, and
overall market volatility. Due to the level of risk associated with certain
investment securities, it is reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could
materially affect the amounts reported in the Statements of Net Assets Available
for Benefits.
Certain amounts in the 2000 financial statements have been reclassified to
conform with the 2001 presentation.
3. INVESTMENTS EXCEEDING 5% OF PLAN NET ASSETS
Investments exceeding five percent of net assets were:
Fair Value
December 31,
------------------------
2001 2000
---- ----
AEP Common Stock $202,688,478 $230,499,010
Fixed Income Fund 192,824,952 177,623,922
Fidelity Blue Chip Growth Fund 120,120,145 159,127,794
Fidelity Equity Income Fund 94,071,790 104,768,291
4. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
During 2001 and 2000, the Plan's investments (including investments bought, sold
as well as held during the year) appreciated (depreciated) in value by
$(57,149,057) and $26,663,750, respectively, as follows:
Year Ended December 31,
2001 2000
---- ----
Investments at Fair Value:
Central and South West
Corporation Common Stock $ - $ 10,125,387
American Electric Power
Company Common Stock (11,870,277) 59,184,228
Investments at Estimated Fair
Value:
Registered Investment Companies
and Group Annuity, Bank
Investment and Other Fixed
Income Contracts (45,278,781) (42,645,865)
- ----------- ------------
Total $(57,149,058) $ 26,663,750
============ ============
5. FEDERAL INCOME TAX
The Internal Revenue Service (IRS) has determined that the Plan meets the
requirements of Section 401(a) of the Code; therefore, the Plan is exempt from
federal income tax pursuant to Section 501(a) of the Code.
The Plan obtained its latest determination letter on August 17, 1999, in which
the IRS stated that the Plan, as then designed, was in compliance with the
applicable requirements of the Code. The Plan has been amended since receiving
the determination letter. However, the plan administrator believes that the Plan
is currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
Under current income tax laws and regulations, participants are not subject to
federal income tax on the employer contributions to their accounts or on the
accumulated earnings on employee and employer contributions until such amounts
are distributed to participants. Employees have the option to make contributions
to the Plan on a pre-tax basis, in which case federal income tax is deferred
until pre-tax contributions and earnings are distributed.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, AEP has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of Plan termination,
participants remain 100 percent vested in their accounts.
7. RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Fidelity.
Fidelity is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest.
CENTRAL AND SOUTH WEST CORPORATION RETIREMENT SAVINGS PLAN
SUPPLEMENTAL SCHEDULE I
-----------------------
ASSETS HELD AS OF DECEMBER 31, 2001
NUMBER OF FAIR/CONTRACT
SHARES/UNITS VALUE COST
------------------ ------------- ------------
FIXED INCOME FUND 192,824,952 Units $192,824,952 $192,824,952
THE AEP STOCK FUND:
American Electric Power
Company, Inc. Common
Stock $6.50 per value 4,656,294 Shares $202,688,478 $177,215,252
Fidelity Institutional
Cash Portfolio Fund 5,744,073 Units 5,744,073 5,744,073
--- --------- --- ---------
Total - The AEP Stock Fund $208,432,551 $182,959,325
============ ============
REGISTERED INVESTMENT COMPANY:
The Fidelity Blue Chip
Growth Fund 2,797,395 Units $120,120,145 $155,924,718
The Fidelity Equity Income Fund 1,928,886 Units 94,071,790 98,665,730
The Fidelity Freedom
2000 Fund 214,802 Units 2,474,524 2,632,669
The Fidelity Freedom
2010 Fund 171,667 Units 2,164,723 2,380,763
The Fidelity Freedom
2020 Fund 155,272 Units 1,953,324 2,292,942
The Fidelity Freedom
2030 Fund 149,820 Units 1,881,744 2,345,560
The Fidelity Freedom
2040 Fund 13,064 Units 96,540 98,194
The Fidelity Freedom Income
Fund 140,062 Units 1,530,880 1,557,430
The Fidelity Low-Priced
Stock Fund 536,599 Units 14,713,539 13,427,379
The Fidelity OTC Portfolio 639,885 Units 19,945,202 32,200,152
The Fidelity Overseas Fund 190,665 Units 5,228,032 7,412,709
The Fidelity Puritan Fund 1,718,181 Units $ 30,360,262 $ 31,957,775
The Fidelity Spartan
U.S. Equity Index
Portfolio 165,795 Units 6,737,908 7,913,421
--- --------- --- ---------
Total - Registered Investment
Company $301,278,613 $358,809,442
============ ============
PARTICIPANT LOANS (interest rates
ranging from 7% through 10.5%
maturing through December 2015) $ 28,291,280 $ 28,291,280
============ ============
TOTAL INVESTMENTS $730,827,396 $762,884,999
============ ============
CENTRAL AND SOUTH WEST CORPORATION RETIREMENT SAVINGS PLAN
EXHIBIT INDEX
Exhibit No. Description
23 Consent of Deloitte & Touche LLP
CENTRAL AND SOUTH WEST CORPORATION RETIREMENT SAVINGS PLAN
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
Central and South West Corporation:
We consent to the incorporation by reference in the previously filed
registration statement on Form S-8 (File No. 333-39402), of our report dated
June 25, 2002 appearing in this Annual Report on Form 11-K of Central and South
West Corporation Retirement Savings Plan for the year ended December 31, 2001.
DELOITTE & TOUCHE LLP
Columbus, Ohio
June 28, 2002