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WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED MARCH 31, 1997
CONTENTS
Page
Statements of Income and Retained Earnings 1
Balance Sheets 2-3
Information Concerning Mine Operations and
Capital Improvements 4
Calculation of Cost of Capital and
Statement of Cost of Commercial Coal Sold and Shipped 5
Statement of Cost of Operation 6
Analysis of Mining Plant in Service 7
Calculation of Allowed Cost of Capital -
Effective April 1, 1997 8
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WINDSOR COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED MARCH 31, 1997
(UNAUDITED)
(in thousands)
OPERATING REVENUES $10,762
COST OF OPERATION 10,206
OPERATING INCOME 556
NONOPERATING INCOME 35
INCOME BEFORE INTEREST CHARGES 591
INTEREST CHARGES - to Parent Company 3
INCOME BEFORE FEDERAL INCOME TAXES 588
FEDERAL INCOME TAXES 247
NET INCOME $ 341
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED MARCH 31, 1997
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $1,268
NET INCOME 341
BALANCE AT END OF PERIOD $1,609
The common stock of the Company is wholly owned by Ohio Power Company.
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
1997
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $60,047
Construction Work in Progress 200
Total Mining Plant 60,247
Accumulated Depreciation and Amortization 32,233
NET MINING PLANT 28,014
CURRENT ASSETS:
Cash and Cash Equivalents 755
Accounts Receivable:
General 2,239
Affiliated Companies 7,450
Coal 11
Materials and Supplies 3,439
Other 223
TOTAL CURRENT ASSETS 14,117
REGULATORY ASSETS 6,472
DEFERRED INCOME TAXES 1,528
DEFERRED CHARGES 272
TOTAL $50,403
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
1997
(in thousands)
CAPITALIZATION AND LIABILITIES
SHAREHOLDER'S EQUITY:
Common Stock - Par Value $100:
Authorized - 5,000 Shares
Outstanding - 4,064 Shares $ 406
Paid-in Capital 10,470
Retained Earnings 1,609
TOTAL SHAREHOLDER'S EQUITY 12,485
LONG-TERM DEBT:
Finance Obligations 7,568
Advances from Parent Company 225
TOTAL LONG-TERM DEBT 7,793
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases 1,299
Operating Reserves 15,787
TOTAL OTHER NONCURRENT LIABILITIES 17,086
CURRENT LIABILITIES:
Long-term Debt Due Within One Year 570
Accounts Payable:
General 1,065
Affiliated Companies 566
Taxes Accrued 1,820
Accrued Vacation Pay 888
Workers' Compensation Claims 3,225
Obligations Under Capital Leases 839
Other 774
TOTAL CURRENT LIABILITIES 9,747
REGULATORY LIABILITIES 3,292
TOTAL $50,403
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WINDSOR COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED MARCH 31, 1997
There were no significant changes with regard to the Company's
operations and mining plant during the quarter.
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<TABLE> WINDSOR COAL COMPANY
CALCULATION OF COST OF CAPITAL AND STATEMENT OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
FOR THE QUARTER ENDED MARCH 31, 1997
(in thousands, except as noted)
<CAPTION> January through
March
1997
<S> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Equity Investment at Beginning of Period:
Common Stock $ 406
Paid-in Capital (excluding item D) 8,353
Excess of Acquisition Cost Over Net Book Value 172
8,931
B. Rate of Return Allowable per HCAR No. 22179:
12.04% per annum, 3.01% per quarter (a) .0301
C. Earnings Allowable on Equity Investment
1. Current Quarter $ 269
2. Year-to-Date $ 269
D. Equity Investment for the month of December 1982 $ 2,117
E. Rate of Return Allowable per HCAR No. 22179:
13.58% per annum, 3.395% per quarter .03395
F. Earnings Allowable: (re investment in item D)
1. Current Quarter $ 72
2. Year-to-Date $ 72
G. Total Earnings Allowable:
1. Current Quarter (C.1. + F.1.) $ 341
2. Year-to-Date (C.2. + F.2.) $ 341
H. Net Income per Statement of Income $ 341
Add: Interest Charges 3
Less: Nonoperating Income 35
I. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ 309
2. Year-to-Date $ 309
II. Coal Billing Calculation:
A. Total Operating Expenses (b) $ 10,453
B. Add: Cost-of-Capital Billing Adder as Applied per I. 1. of Section I 309
C. Cost Applicable to Current Quarter Coal Billings 10,762
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 3,075
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 7,687
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 105,991
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $72.53
(a) HCAR No. 22179 pertains to only a portion of the equity investment ($7,497,000), however, the approved rate
is being applied to Ohio Power Company's full equity investment, excluding retained earnings.
(b) As represented by "Cost of Operation" plus "Federal Income Taxes" reported in Statement of Income.
/TABLE
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WINDSOR COAL COMPANY
STATEMENT OF COST OF OPERATION
FOR THE QUARTER ENDED MARCH 31, 1997
(in thousands)
Direct Labor-UMW* $ 649
Indirect Labor-UMW* 1,836
Benefits-UMW* 2,100
Salaries and Benefits-Nonunion 1,483
Operating Supplies 1,035
Repair Parts and Materials 1,547
Electricity and Other Utilities 470
Outside Services-Maintenance, Haulage and Reclamation 813
Taxes Other Than Federal Income Taxes** 1,033
Rental of Equipment 798
Depreciation, Depletion and Amortization 1,088
Royalties 190
Reclamation 540
Mining Cost Normalization*** (4,883)
Other Production Costs 1,500
Subtotal 10,199
Transfers of Production Costs (to)/from Coal Inventory 7
Total $10,206
* United Mine Workers of America.
** Excludes FICA, Federal Unemployment and State Unemployment.
These costs are reflected in employee benefits.
*** Represents the deferral/accrual required to establish a selling
price based on forecasted results for the year.
The amount of mining cost normalization is established on an
"overall" company basis(i.e., not itemized) and is eliminated by
year-end.
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WINDSOR COAL COMPANY
ANALYSIS OF MINING PLANT IN SERVICE
AND RELATED ACCUMULATED PROVISIONS FOR
DEPRECIATION AND AMORTIZATION
March 31, 1997
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 634 $ - $ 634
Mining Structures and Equipment 47,899 26,826 21,073
Coal Interests (net of depletion) 1,473 - 1,473
Mine Development Costs 10,041 5,407 4,634
Total Mining Plant
in Service $60,047 $32,233 $27,814
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OHIO POWER COMPANY'S (OPCo's) ACTIVE COAL MINES
CENTRAL OHIO COAL COMPANY; SOUTHERN OHIO COAL - MEIGS;
AND WINDSOR COAL COMPANY
ALLOWED AFTER-TAX COMPOSITE COST-OF-CAPITAL IS 10.29%
EFFECTIVE 4-1-97
THE 10.29% IS OPCo's WEIGHTED AVERAGE COST-OF-CAPITAL AND WAS
CALCULATED AS FOLLOWS:
CAPITALIZATION AFTER-TAX
@12/31/96 PERCENT EFFECTIVE WEIGHTED
COMPONENT (000) OF TOTAL COST RATE OF RETURN
Long-term Debt $ 957,626(a) 39.14% 7.47%(c) 2.92%
Preferred Stock 148,432 6.07% 5.73%(c) 0.35%
Common Stock 1,340,260(b) 54.79% 12.81%(d) 7.02%
Total $2,446,318 100.00% 10.29%*
Authorization: HCAR 35-26573 dated 9-13-96
(SEC File No. 70-8611).
(a) Includes long-term debt due in one year and is net of
unamortized debt premium and discount, unamortized debt
expense and unamortized loss on reacquired debt.
(b) Common equity includes premium on preferred stock and
excludes undistributed subsidiary earnings.
(c) Embedded cost at 12/31/96.
(d) No more than the rate allowed by the PUCO in a retail rate
proceeding involving OPCo and settled in 1995.
* Rate will be applied for billing purposes to the twelve
months period commencing April 1, 1997.
