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WINDSOR 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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WINDSOR COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED MARCH 31, 1998
(UNAUDITED)
(in thousands)
OPERATING REVENUES $27,326
COST OF OPERATION 27,370
OPERATING LOSS (44)
NONOPERATING INCOME 80
INCOME BEFORE INTEREST CHARGES 36
INTEREST CHARGES - to Parent Company 2
INCOME BEFORE FEDERAL INCOME TAXES 34
FEDERAL INCOME TAX CREDIT (76)
NET INCOME $ 110
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED MARCH 31, 1998
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $ 78
NET INCOME 110
CASH DIVIDENDS DECLARED 186
BALANCE AT END OF PERIOD $ 2
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,
1998
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $60,826
Accumulated Depreciation and Amortization 36,710
NET MINING PLANT 24,116
CURRENT ASSETS:
Cash and Cash Equivalents 12,783
Accounts Receivable:
General 2,232
Affiliated Companies 4,742
Coal 67
Materials and Supplies 3,748
Other 210
TOTAL CURRENT ASSETS 23,782
REGULATORY ASSETS 46
DEFERRED INCOME TAXES 6,187
DEFERRED CHARGES 269
TOTAL $54,400
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
1998
(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 -
Retained Earnings 2
TOTAL SHAREHOLDER'S EQUITY 2
LONG-TERM DEBT - Finance Obligations 6,999
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases 1,321
Accrued Postretirement Benefits Other Than Pensions 8,753
Operating Reserves 14,309
TOTAL OTHER NONCURRENT LIABILITIES 24,383
CURRENT LIABILITIES:
Long-term Debt Due Within One Year 570
Accounts Payable:
General 1,176
Affiliated Companies 962
Taxes Accrued 1,771
Accrued Vacation Pay 1,094
Workers' Compensation Claims 1,988
Obligations Under Capital Leases 1,133
Other 682
TOTAL CURRENT LIABILITIES 9,376
REGULATORY LIABILITIES 13,586
DEFERRED CREDITS 54
TOTAL $54,400
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WINDSOR 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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<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, 1998
(in thousands, except as noted)
<CAPTION>
January 1 January 30 February 28 January
through through through through
January 29 February 27 March 31 March
1998 1998 1998 1998
<S> <C> <C> <C> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Equity Investment at Beginning of Period:
Common Stock $ - $ - $ -
Paid-in Capital (excluding item D) 8,876 3,876 -
Excess of Acquisition Cost Over Net Book Value 172 172 172
9,048 4,048 172
B. Rate of Return Allowable per HCAR No. 26573:
10.29% per annum, 2.5725% per quarter;
prorated to January 1 through January 29
period, January 30 through February 27
period and February 28 through March 31 period .0082892 .0082892 .0091466
C. Earnings Allowable on Equity Investment
1. Current Quarter $ 75 $ 34 $ 1 $ 110
2. Year-to-Date $ 110
D. Net Income per Statement of Income $ 110
Add: Interest Charges 2
Less: Nonoperating Income 80
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ 32
2. Year-to-Date $ 32
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 27,294
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I 32
C. Cost Applicable to Current Quarter Coal Billings 27,326
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 4,106
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 23,220
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 395,144
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $58.76
(a) 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, 1998
(in thousands)
Direct Labor-UMW* $ 746
Indirect Labor-UMW* 2,012
Benefits-UMW* 2,158
Salaries and Benefits-Nonunion 1,526
Operating Supplies 899
Repair Parts and Materials 1,757
Electricity and Other Utilities 527
Outside Services-Maintenance, Haulage and Reclamation 678
Taxes Other Than Federal Income Taxes** 1,922
Rental of Equipment 668
Depreciation, Depletion and Amortization 1,285
Royalties 678
Reclamation 968
Mining Cost Normalization*** 9,518
Other Production Costs 1,951
Subtotal 27,293
Transfers of Production Costs (to)/from Coal Inventory 77
Total $27,370
* 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, 1998
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 634 $ - $ 634
Mining Structures and Equipment 49,039 30,124 18,915
Coal Interests (net of depletion) 1,112 - 1,112
Mine Development Costs 10,041 6,586 3,455
Total Mining Plant
in Service $60,826 $36,710 $24,116
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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.
