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WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED MARCH 31, 2000
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, 2000 8
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WINDSOR COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED MARCH 31, 2000
(UNAUDITED)
(in thousands)
OPERATING REVENUES $32,730
COST OF OPERATION 33,686
OPERATING LOSS (956)
NONOPERATING INCOME 912
LOSS BEFORE FEDERAL INCOME TAXES (44)
INTEREST CHARGES 6
LOSS BEFORE FEDERAL INCOME TAXES (50)
FEDERAL INCOME TAX CREDIT (55)
NET INCOME $ 5
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED MARCH 31, 2000
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $33
NET INCOME 5
BALANCE AT END OF PERIOD $38
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,
2000
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $ 46,569
Construction Work in Progress 28
Total Mining Plant 46,597
Accumulated Depreciation and Amortization 44,557
NET MINING PLANT 2,040
CURRENT ASSETS:
Cash and Cash Equivalents 55,202
Accounts Receivable:
General 2,692
Affiliated Companies 13,291
Coal 158
Materials and Supplies 3,339
Accrued Tax Benefit 13,514
Other 409
TOTAL CURRENT ASSETS 88,605
DEFERRED INCOME TAXES 19,956
DEFERRED CHARGES 212
TOTAL $110,813
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
March 31,
2000
(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 38
TOTAL SHAREHOLDER'S EQUITY 38
OTHER NONCURRENT LIABILITIES:
Accrued Postretirement Benefits Other Than Pensions 27,151
Mine Closure Costs 18,906
Workers' Compensation Claims 15,692
Operating Reserves 24,845
TOTAL OTHER NONCURRENT LIABILITIES 86,594
CURRENT LIABILITIES:
Accounts Payable:
General 912
Affiliated Companies 898
Accrued Vacation Pay 1,066
Workers' Compensation Claims 5,934
Other 1,970
TOTAL CURRENT LIABILITIES 10,780
REGULATORY LIABILITIES 13,381
DEFERRED CREDITS 20
TOTAL $110,813
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WINDSOR COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED MARCH 31, 2000
The Company announced plans to discontinue mining operations
effective April 30, 2000. Subsequently the Company revised the mine
closing date to December 31, 2000. A provision of $48.4 million for
mine closure costs, postretirement benefits other than pensions and
workman's compensation costs was recorded in July 1999 and billed to
Ohio Power Company under the coal supply agreement.
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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, 20008
(in thousands, except as noted)
<CAPTION>
January
through
March
2000
<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:
10.43% per annum, 2.6075% per quarter .026075
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 6
Less: Nonoperating Income 912
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ (901)
2. Year-to-Date $ (901)
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 33,631
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I (901)
C. Cost Applicable to Current Quarter Coal Billings 32,730
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 4,429
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 28,301
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 346,831
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $81.60
(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 MARCH 31, 2000
(in thousands)
Direct Labor-UMW* $ 820
Indirect Labor-UMW* 1,906
Benefits-UMW* 4,845
Salaries and Benefits-Nonunion 2,938
Operating Supplies 1,240
Repair Parts and Materials 1,518
Electricity and Other Utilities 28
Outside Services-Maintenance, Haulage and Reclamation 2,174
Taxes Other Than Federal Income Taxes** 1,667
Rental of Equipment 6
Depreciation, Depletion and Amortization 4,220
Royalties 425
Mining Cost Normalization*** 5,287
Other Production Costs 6,740
Subtotal 33,814
Transfers of Production Costs (to)/from Coal Inventory (128)
Total $33,686
* 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.
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WINDSOR COAL COMPANY
ANALYSIS OF MINING PLANT IN SERVICE
AND RELATED ACCUMULATED PROVISIONS FOR
DEPRECIATION AND AMORTIZATION
March 31, 2000
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 623 $ - $ 623
Mining Structures and Equipment 35,848 34,813 1,035
Coal Interests (net of depletion) 57 - 57
Mine Development Costs 10,041 9,744 297
Total Mining Plant
in Service $46,569 $44,557 $2,012
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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 10.27%
EFFECTIVE 4-1-00
THE 10.27% IS OPCo's WEIGHTED AVERAGE COST-OF-CAPITAL AND WAS
CALCULATED AS FOLLOWS:
CAPITALIZATION AFTER-TAX
@12/31/99 PERCENT EFFECTIVE WEIGHTED
COMPONENT (000) OF TOTAL COST RATE OF RETURN
Long-term Debt $1,077,200(a) 43.67% 7.19%(c) 3.14%
Preferred Stock 25,787 1.05% 4.88%(c) 0.05%
Common Stock 1,363,572(b) 55.28% 12.81%(d) 7.08%
Total $2,466,559 100.00% 10.27%*
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 12/31/99.
(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, 2000.
