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<PAGE>
WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED DECEMBER 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
Construction Expenditure Budget 8
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WINDSOR COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED DECEMBER 31, 1998
(UNAUDITED)
(in thousands)
OPERATING REVENUES $ 9,590
COST OF OPERATION 10,024
OPERATING LOSS (434)
NONOPERATING INCOME 182
LOSS BEFORE FEDERAL INCOME TAXES (252)
FEDERAL INCOME TAX CREDIT 257
NET INCOME $ 5
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED DECEMBER 31, 1998
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $10
NET INCOME 5
BALANCE AT END OF PERIOD $15
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,
1998
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $59,156
Accumulated Depreciation and Amortization 39,514
NET MINING PLANT 19,642
CURRENT ASSETS:
Cash and Cash Equivalents 10,096
Accounts Receivable:
General 4,414
Affiliated Companies 1,562
Coal 51
Materials and Supplies 3,979
Other 291
TOTAL CURRENT ASSETS 20,393
REGULATORY ASSETS 918
DEFERRED INCOME TAXES 9,346
DEFERRED CHARGES 290
TOTAL $50,589
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
December 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 15
TOTAL SHAREHOLDER'S EQUITY 15
LONG-TERM DEBT - Finance Obligations 6,572
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases 710
Accrued Postretirement Benefits Other Than Pensions 10,136
Operating Reserves 17,856
TOTAL OTHER NONCURRENT LIABILITIES 28,702
CURRENT LIABILITIES:
Long-term Debt Due Within One Year 570
Accounts Payable:
General 1,453
Affiliated Companies 3,147
Taxes Accrued 432
Accrued Vacation Pay 1,047
Workers' Compensation Claims 1,998
Obligations Under Capital Leases 929
Other 1,128
TOTAL CURRENT LIABILITIES 10,704
REGULATORY LIABILITIES 4,596
TOTAL $50,589
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WINDSOR COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED DECEMBER 31, 1998
There were no significant changes with regard to the Company's
operations and mining plant during the quarter.
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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, 1998
(in thousands, except as noted)
<CAPTION>
October through
December
1998
<S> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Equity Investment at Beginning of Period:
Common Stock $ -
Paid-in Capital -
Excess of Acquisition Cost Over Net Book Value 172
B. Rate of Return Allowable per HCAR No. 26573:
10.51% per annum, 2.6275% per quarter .026275
C. Earnings Allowable on Equity Investment
1. Current Quarter $ 5
2. Year-to-Date $ 123
D. Net Income per Statement of Income $ 5
Add: Interest Charges -
Less: Nonoperating Income 182
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ (177)
2. Year-to-Date $ (614)
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 9,767
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I (177)
C. Cost Applicable to Current Quarter Coal Billings 9,590
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 7,064
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 2,526
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 87,133
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $28.99
(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 DECEMBER 31, 1998
(in thousands)
Direct Labor-UMW* $ 635
Indirect Labor-UMW* 1,586
Benefits-UMW* 1,683
Salaries and Benefits-Nonunion 1,371
Operating Supplies 763
Repair Parts and Materials 657
Electricity and Other Utilities 543
Outside Services-Maintenance, Haulage and Reclamation 921
Taxes Other Than Federal Income Taxes** 807
Rental of Equipment 614
Depreciation, Depletion and Amortization 1,097
Royalties 821
Mining Cost Normalization*** (3,757)
Other Production Costs 2,303
Subtotal 10,044
Transfers of Production Costs (to)/from Coal Inventory (20)
Total $10,024
* United Mine Workers of America.
** Excludes FICA, Federal Unemployment and State Unemployment Taxes.
These costs are reflected in benefits.
*** Represents the deferral/accrual required to establish a monthly
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, 1998
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 633 $ - $ 633
Mining Structures and Equipment 47,537 32,111 15,426
Coal Interests (net of depletion) 945 - 945
Mine Development Costs 10,041 7,403 2,638
Total Mining Plant
in Service $59,156 $39,514 $19,642
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WINDSOR COAL COMPANY
CONSTRUCTION EXPENDITURE BUDGET - 1999*
Description Budgeted Amount
(in thousands)
Install Surge Bunker $1,500
Mine Plant Blanket 1,001
Acquire Mining Rights 750
Subsidence Blanket 210
Pre-Planning Blanket 100
Transportation Blanket 21
General Plant Blanket 18
$3,600
* This budget does not include any possible lease transactions.
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