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WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED DECEMBER 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
Construction Expenditure Budget 8
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WINDSOR COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED DECEMBER 31, 1997
(UNAUDITED)
(in thousands)
OPERATING REVENUES $22,304
COST OF OPERATION 22,123
OPERATING INCOME 181
NONOPERATING INCOME 70
INCOME BEFORE INTEREST CHARGES 251
INTEREST CHARGES - to Parent Company 4
INCOME BEFORE FEDERAL INCOME TAXES 247
FEDERAL INCOME TAX CREDIT (3)
NET INCOME $ 250
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED DECEMBER 31, 1997
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $ 190
NET INCOME 250
CASH DIVIDENDS DECLARED 362
BALANCE AT END OF PERIOD $ 78
The common stock of the Company is wholly owned by Ohio Power Company.
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
December 31,
1997
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $61,333
Construction Work in Progress 25
Total Mining Plant 61,358
Accumulated Depreciation and Amortization 35,322
NET MINING PLANT 26,036
CURRENT ASSETS:
Cash and Cash Equivalents 8,460
Accounts Receivable:
General 953
Affiliated Companies 6,899
Coal 144
Materials and Supplies 4,503
Other 244
TOTAL CURRENT ASSETS 21,203
REGULATORY ASSETS 527
DEFERRED INCOME TAXES 5,033
DEFERRED CHARGES 371
TOTAL $53,170
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
December 31,
1997
(in thousands)
CAPITALIZATION AND LIABILITIES
SHAREHOLDER'S EQUITY:
Common Stock - Par Value $0.10:
Authorized - 5,000 Shares
Outstanding - 4,064 Shares $ -
Paid-in Capital 8,876
Retained Earnings 78
TOTAL SHAREHOLDER'S EQUITY 8,954
LONG-TERM DEBT:
Finance Obligations 7,141
Advances from Parent Company 225
TOTAL LONG-TERM DEBT 7,366
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases 1,559
Accrued Postretirement Benefits Other Than Pensions 8,292
Operating Reserves 12,749
TOTAL OTHER NONCURRENT LIABILITIES 22,600
CURRENT LIABILITIES:
Long-term Debt Due Within One Year 570
Accounts Payable:
General 3,237
Affiliated Companies 857
Accrued Vacation Pay 1,045
Workers' Compensation Claims 2,105
Obligations Under Capital Leases 1,395
Other 793
TOTAL CURRENT LIABILITIES 10,002
REGULATORY LIABILITIES 4,193
DEFERRED CREDITS 55
TOTAL $53,170
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WINDSOR COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED DECEMBER 31, 1997
There were no significant changes with regard to the Company's
operations and mining plant during the quarter.
On October 30, 1997 the Company returned $2,000,000 to its parent
out of capital and reduced the par value of its authorized common shares
from $100 per share to $0.10 per share, thereby reducing its stated
capital from $406,000 to $406. On January 29, 1998 the Company returned
to its parent $5,000,000 out of paid-in capital (capital surplus). On
February 27, 1998 the Company returned to its parent $3,876,000 out of
paid-in capital (capital surplus). This completed the return of capital
by the Company to its parent as authorized by HCAR No. 26573.
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WINDSOR COAL COMPANY
CALCULATION OF COST OF CAPITAL AND STATEMENT OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
FOR THE QUARTER ENDED DECEMBER 31, 1997
(in thousands, except as noted)
<CAPTION>
October 1 through October 31 through October through
October 30, 1997 December 31, 1997 December 1997
<S> <C> <C> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Equity Investment at Beginning of Period:
Common Stock $ 406 $ -
Paid-in Capital 10,470 8,876
Excess of Acquisition Cost Over Net Book Value 172 172
11,048 9,048
B. Rate of Return Allowable per HCAR No. 26573:
10.29% per annum, 2.5725% per quarter;
prorated to October 1 through October 30, 1997
period and October 31, 1997 through
December 31, 1997 period .008389 .017336
C. Earnings Allowable on Equity Investment
1. Current Quarter $ 92 $ 158 $ 250
2. Year-to-Date $ 1,160
D. Net Income per Statement of Income $ 250
Add: Interest Charges 4
Less: Nonoperating Income 70
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ 184
2. Year-to-Date $ 951
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 22,120
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I 184
C. Cost Applicable to Current Quarter Coal Billings 22,304
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 3,432
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 18,872
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 171,947
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $109.76
(a) As represented by "Cost of Operation" plus "Federal Income Taxes" reported in Statement of Income.
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WINDSOR COAL COMPANY
STATEMENT OF COST OF OPERATION
FOR THE QUARTER ENDED DECEMBER 31, 1997
(in thousands)
Direct Labor-UMW* $ 587
Indirect Labor-UMW* 1,341
Benefits-UMW* 1,939
Salaries and Benefits-Nonunion 1,325
Operating Supplies 1,320
Repair Parts and Materials 3,103
Electricity and Other Utilities 480
Outside Services-Maintenance, Haulage and Reclamation 1,501
Taxes Other Than Federal Income Taxes** 1,214
Rental of Equipment 681
Depreciation, Depletion and Amortization 1,027
Royalties 566
Reclamation 487
Mining Cost Normalization*** 3,653
Other Production Costs 3,040
Subtotal 22,264
Transfers of Production Costs (to)/from Coal Inventory (141)
Total $22,123
* 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
December 31, 1997
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 634 $ - $ 634
Mining Structures and Equipment 49,431 29,115 20,316
Coal Interests (net of depletion) 1,227 - 1,227
Mine Development Costs 10,041 6,207 3,834
Total Mining Plant
in Service $61,333 $35,322 $26,011
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WINDSOR COAL COMPANY
CONSTRUCTION EXPENDITURE BUDGET - 1998*
Description Budgeted Amount
(in thousands)
Upgrade Coal Belt $ 88
Subsidence 65
Mine Plant Blanket 57
Pre-Planning Blanket 50
$260
* This budget does not include any possible lease transactions.
