Cumulative preferred stock: par value $100 per share, 32%,

150,000 shares...

15,000,000

Common stock equity:

Earned surplus ($1,032,979 restricted as to dividends on

common stock).

Unamortized debt premium, less expense, in process of amorti

Deferred credits:

() Decrease.

NOTES

Pro forma "A" gives effect to proposed exchange of 81,744 shares of no
par common stock of Public Service Company of Indiana, Inc., for all the
capital stock of Southeastern Indiana Power Company consisting of 4,832
shares of $100 par value, 5% preferred stock and 40,000 shares of $10 par
value common stock, on the basis of 4% shares Public Service common stock
for each share of Southeastern preferred stock, and 12 shares common stock
for 1 share of Southeastern common stock.

Pro forma "B" gives effect to liquidation and dissolution of Southeastern
and acquisition of its assets by Public Service. This transaction is to be
effected as soon as practicable after the exchange offer is consummated.

• The pro forma consolidated statement gives effect to minor adjustments,
and the consolidation of Southeastern with that of its real estate subsidiary,
Southeastern Properties Corporation.

These adjustments give effect to the acquisition of assets and assumption
of liabilities of Southeastern.

• Based on an original cost study, as of October 31, 1939, filed by Southeastern Indiana Power Company with the Public Service Commission of

Indiana. The staff of that Commission has questioned items in the study
aggregating, as of October 31, 1939, $307,839. Public Service, in connection
with its proposed acquisition of Southeastern's property, has been ordered by
the Public Service Commission of Indiana to record such properties at original
cost, and to charge to earned surplus any excess of acquisition cost over
original cost, less accrued depreciation.

The balance in this account is being amortized to earned surplus during
the period ending October 31, 1958.

• This amount represents excess of cost to Public Service over underlying
book value of net assets, of Southeastern which is to be charged off to earned
surplus by Public Service within six months of date of acquisition, pursuant
to orders of the Public Service Commission of Indiana.

It is proposed to debit investment account with the value to be assigned
to the no par value common shares of Public Service to be issued in exchange
for the securities of Southeastern, namely $24 per share, or an aggregate of
$1,961,856.

• Public Service will retire Southeastern's long-term debt, either through issue of $1,906,940 of its own bonds, or through treasury cash.

PUBLIC SERVICE COMPANY OF INDIANA, INC.

Income deductions: