<PAGE>
WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED MARCH 31, 1999
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, 1999 8
<PAGE>
<PAGE>
WINDSOR COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED MARCH 31, 1999
(UNAUDITED)
(in thousands)
OPERATING REVENUES $32,326
COST OF OPERATION 32,587
OPERATING LOSS (261)
NONOPERATING INCOME 129
LOSS BEFORE FEDERAL INCOME TAXES (132)
FEDERAL INCOME TAX CREDIT 137
NET INCOME $ 5
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED MARCH 31, 1999
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $15
NET INCOME 5
BALANCE AT END OF PERIOD $20
The common stock of the Company is wholly owned by Ohio Power Company.
<PAGE>
<PAGE>
WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
1999
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $47,195
Construction Work in Progress 4
Total Mining Plant 47,199
Accumulated Depreciation and Amortization 32,331
NET MINING PLANT 14,868
CURRENT ASSETS:
Cash and Cash Equivalents 11,948
Accounts Receivable:
General 3,734
Affiliated Companies 12,807
Coal 32
Materials and Supplies 3,682
Other 258
TOTAL CURRENT ASSETS 32,461
DEFERRED INCOME TAXES 10,390
DEFERRED CHARGES 276
TOTAL $57,995
<PAGE>
<PAGE>
WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
1999
(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 20
TOTAL SHAREHOLDER'S EQUITY 20
OTHER NONCURRENT LIABILITIES:
Accrued Postretirement Benefits Other Than Pensions 10,616
Operating Reserves 15,973
TOTAL OTHER NONCURRENT LIABILITIES 26,589
CURRENT LIABILITIES:
Accounts Payable:
General 2,831
Affiliated Companies 4,104
Taxes Accrued 1,871
Accrued Vacation Pay 1,199
Workers' Compensation Claims 1,992
Other 1,241
TOTAL CURRENT LIABILITIES 13,238
REGULATORY LIABILITIES 18,148
TOTAL $57,995
<PAGE>
<PAGE>
WINDSOR COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED MARCH 31, 1999
In March 1999 the Company bought out all its leases for $8.5
million. After taking into account amounts previously provided for the
lease buyouts, the Company recorded $5.5 million as a mining plant
asset. Certain of the leases terminated were the result of sale/lease
transactions not accounted for as a sale and a leaseback but rather
subject to special lease accounting treatment in accordance with SFAS
No. 98 whereby the leases were accounted for under the financing method.
As a result of the lease buyout finance obligations totaling $7.1
million were redeemed.
<PAGE>
<PAGE>
<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, 19998
(in thousands, except as noted)
<CAPTION>
January
through
March
1999
<S> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Equity Investment at Beginning of Period:
Common Stock $ -
Paid-in Capital (excluding item D) -
Excess of Acquisition Cost Over Net Book Value 172
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 $ 5
D. Net Income per Statement of Income $ 5
Add: Interest Charges -
Less: Nonoperating Income 129
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ (124)
2. Year-to-Date $ (124)
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 32,450
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I (124)
C. Cost Applicable to Current Quarter Coal Billings 32,326
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 3,915
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 28,411
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 231,316
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $122.82
(a) As represented by "Cost of Operation" plus "Federal Income Taxes" reported in Statement of Income.
</TABLE>
<PAGE>
<PAGE>
WINDSOR COAL COMPANY
STATEMENT OF COST OF OPERATION
FOR THE QUARTER ENDED MARCH 31, 1999
(in thousands)
Direct Labor-UMW* $ 770
Indirect Labor-UMW* 1,919
Benefits-UMW* 2,087
Salaries and Benefits-Nonunion 1,699
Operating Supplies 1,184
Repair Parts and Materials 2,204
Electricity and Other Utilities 37
Outside Services-Maintenance, Haulage and Reclamation 947
Taxes Other Than Federal Income Taxes** 1,394
Rental of Equipment 896
Depreciation, Depletion and Amortization 1,099
Royalties 699
Reclamation 714
Mining Cost Normalization*** 12,708
Other Production Costs 4,211
Subtotal 32,568
Transfers of Production Costs (to)/from Coal Inventory 19
Total $32,587
* United Mine Workers of America.
** Excludes FICA, Federal Unemployment and State Unemployment Taxes.
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.
<PAGE>
<PAGE>
WINDSOR COAL COMPANY
ANALYSIS OF MINING PLANT IN SERVICE
AND RELATED ACCUMULATED PROVISIONS FOR
DEPRECIATION AND AMORTIZATION
March 31, 1999
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 633 $ - $ 633
Mining Structures and Equipment 35,625 24,680 10,945
Coal Interests (net of depletion) 896 - 896
Mine Development Costs 10,041 7,651 2,390
Total Mining Plant
in Service $47,195 $32,331 $14,864
<PAGE>
<PAGE>
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 10.43%
EFFECTIVE 4-1-99
THE 10.43% IS OPCo's WEIGHTED AVERAGE COST-OF-CAPITAL AND WAS
CALCULATED AS FOLLOWS:
CAPITALIZATION AFTER-TAX
@12/31/98 PERCENT EFFECTIVE WEIGHTED
COMPONENT (000) OF TOTAL COST RATE OF RETURN
Long-term Debt $ 993,647(a) 41.92% 7.38%(c) 3.09%
Preferred Stock 29,220 1.23% 5.00%(c) 0.06%
Common Stock 1,347,681(b) 56.85% 12.81%(d) 7.28%
Total $2,370,548 100.00% 10.43%*
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 12/31/98.
(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
month period commencing April 1, 1999.
