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CENTRAL OHIO COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED MARCH 31, 1998
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, 1998 8
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CENTRAL OHIO COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED MARCH 31, 1998
(UNAUDITED)
(in thousands)
OPERATING REVENUES $33,340
COST OF OPERATION 33,833
OPERATING LOSS (493)
NONOPERATING INCOME 485
LOSS BEFORE FEDERAL INCOME TAXES (8)
FEDERAL INCOME TAX CREDIT (8)
NET INCOME $ -
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED MARCH 31, 1998
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $-
NET INCOME -
CASH DIVIDENDS DECLARED -
BALANCE AT END OF PERIOD $-
The common stock of the Company is wholly owned by Ohio Power Company.
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CENTRAL OHIO COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
1998
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $48,352
Construction Work in Progress 41
Total Mining Plant 48,393
Accumulated Depreciation and Amortization 42,945
NET MINING PLANT 5,448
OTHER PROPERTY AND INVESTMENTS 2,442
CURRENT ASSETS:
Cash and Cash Equivalents 31,245
Accounts Receivable:
General 1,376
Affiliated Companies 10,499
Coal 12
Materials and Supplies 7,215
Prepayments 198
TOTAL CURRENT ASSETS 50,545
DEFERRED INCOME TAXES 26,037
REGULATORY ASSETS 313
DEFERRED CHARGES 157
TOTAL $84,942
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CENTRAL OHIO COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
1998
(in thousands)
CAPITALIZATION AND LIABILITIES
SHAREHOLDER'S EQUITY:
Common Stock - Par Value $0.10:
Authorized - 100,000 Shares
Outstanding - 69,000 Shares $ 7
Retained Earnings -
TOTAL SHAREHOLDER'S EQUITY 7
LONG-TERM DEBT - Finance Obligations 156
OTHER NONCURRENT LIABILITIES:
Accrued Postretirement Benefits Other Than Pensions 15,101
Accrued Reclamation Costs 29,177
Other Operating Reserves 7,910
TOTAL OTHER NONCURRENT LIABILITIES 52,188
CURRENT LIABILITIES:
Long-term Debt Due Within One Year 104
Accounts Payable:
General 2,037
Affiliated Companies 810
Taxes Accrued 1,429
Accrued Reclamation Costs 6,194
Accrued Vacation Pay 976
Workers' Compensation Claims 832
Obligations Under Capital Leases 667
Other 1,551
TOTAL CURRENT LIABILITIES 14,600
DEFERRED CREDITS 17,991
TOTAL $84,942
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CENTRAL OHIO COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED MARCH 31, 1998
There were no significant changes with regard to the Company's
operations and mining plant during the quarter.
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CENTRAL OHIO COAL COMPANY
CALCULATION OF COST OF CAPITAL AND STATEMENT OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
FOR THE QUARTER ENDED MARCH 31, 1998
(in thousands, except as noted)
<CAPTION> January through
March
1998
<S> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Equity Investment at Beginning of Period:
Common Stock $ 7
B. Rate of Return Allowable per HCAR No. 26573:
10.29% per annum, 2.5725% per quarter .025725
C. Earnings Allowable: (re investment in item A)
1. Current Quarter $ -
2. Year-to-Date $ -
D. Net Income per Statement of Income $ -
Add: Interest Charges -
Less: Nonoperating Income 485
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ (485)
2. Year-to-Date $ (485)
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 33,825
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I (485)
C. Cost Applicable to Current Quarter Coal Billings 33,340
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 507
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 32,833
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 408,577
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $80.36
(a) As represented by "Cost of Operation" plus "Federal Income Taxes" reported in Statements of Income.
/TABLE
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CENTRAL OHIO COAL COMPANY
STATEMENT OF COST OF OPERATION
FOR THE QUARTER ENDED MARCH 31, 1998
(in thousands)
Direct Labor-UMW* $ 557
Indirect Labor-UMW* 1,804
Benefits-UMW* 2,166
Salaries and Benefits-Nonunion 1,290
Operating Supplies 1,880
Repair Parts and Materials 1,168
Electricity and Other Utilities 697
Outside Services-Maintenance, Haulage and Reclamation 422
Taxes Other Than Federal Income Taxes** 506
Rental of Equipment 799
Depreciation, Depletion and Amortization 961
Mining Cost Normalization*** 15,471
Reclamation 3,484
Other Production Costs 2,612
Subtotal 33,817
Transfers of Production Costs (to)/from Coal Inventory 16
Total $33,833
* 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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CENTRAL OHIO COAL COMPANY
ANALYSIS OF MINING PLANT IN SERVICE
AND RELATED ACCUMULATED PROVISIONS FOR
DEPRECIATION AND AMORTIZATION
March 31, 1998
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 324 $ - $ 324
Mining Structures and Equipment 43,187 40,721 2,466
Coal Interests (net of depletion) 2,549 - 2,549
Leasehold Improvements 2,292 2,224 68
Total Mining Plant in Service $48,352 $42,945 $5,407
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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 10.51%
EFFECTIVE 4-1-98
THE 10.51% IS OPCo's WEIGHTED AVERAGE COST-OF-CAPITAL AND WAS
CALCULATED AS FOLLOWS:
CAPITALIZATION AFTER-TAX
@12/31/97 PERCENT EFFECTIVE WEIGHTED
COMPONENT (000) OF TOTAL COST RATE OF RETURN
Long-term Debt $ 960,665(a) 41.05% 7.45%(c) 3.06%
Preferred Stock 29,392 1.26% 5.00%(c) 0.06%
Common Stock 1,350,011(b) 57.69% 12.81%(d) 7.39%
Total $2,340,068 100.00% 10.51%*
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 12/31/97.
(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, 1998.
