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WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED JUNE 30, 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
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WINDSOR COAL COMPANY
STATEMENT OF INCOME
FOR THE QUARTER ENDED JUNE 30, 2000
(UNAUDITED)
(in thousands)
OPERATING REVENUES $14,180
COST OF OPERATION 12,377
OPERATING INCOME 1,803
NONOPERATING INCOME 316
INCOME BEFORE FEDERAL INCOME TAXES 2,119
FEDERAL INCOME TAXES 2,115
NET INCOME $ 4
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED JUNE 30, 2000
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $38
NET INCOME 4
BALANCE AT END OF PERIOD $42
The common stock of the Company is wholly owned by Ohio Power Company.
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
June 30,
2000
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $ 46,668
Construction Work in Progress 70
Total Mining Plant 46,738
Accumulated Depreciation and Amortization 43,507
NET MINING PLANT 3,231
CURRENT ASSETS:
Cash and Cash Equivalents 39
Accounts Receivable:
General 2,770
Affiliated Companies 1,276
Advances to Affiliates 60,401
Coal 62
Materials and Supplies 3,333
Accrued Tax Benefit 16,122
Other 382
TOTAL CURRENT ASSETS 84,385
DEFERRED INCOME TAXES 21,494
DEFERRED CHARGES 59
TOTAL $109,169
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
June 30,
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 42
TOTAL SHAREHOLDER'S EQUITY 42
OTHER NONCURRENT LIABILITIES:
Accrued Postretirement Benefits Other Than Pensions 30,097
Mine Closure Costs 17,857
Workers' Compensation Claims 11,952
Operating Reserves 25,271
TOTAL OTHER NONCURRENT LIABILITIES 85,177
CURRENT LIABILITIES:
Accounts Payable:
General 1,593
Affiliated Companies 722
Accrued Vacation Pay 1,082
Workers' Compensation Claims 5,948
Other 2,583
TOTAL CURRENT LIABILITIES 11,928
REGULATORY LIABILITIES 12,022
TOTAL $109,169
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WINDSOR COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED JUNE 30, 2000
MINE CLOSURE
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.
BLACK LUNG
In April 2000, the Company recorded a $4.5 million provision for
black lung expense. The amount provided was based on an actuarial
valuation prepared as of January 1, 2000 which projected the amount of
current black lung liabilities in excess of available trust funds.
MONEY POOL
On June 15, 2000, the Company became a participant in the American
Electric Power (AEP) System Money Pool (Money Pool). The Money Pool is
a mechanism structured to meet the short-term cash requirements of the
participants with AEP Company, Inc. acting as the primary borrower on
behalf of the Money Pool. The Company's affiliates that are U.S.
domestic electric utility operating companies and coal-mining companies
are the primary participants in the Money Pool.
The operation of the Money Pool is designed to match on a daily
basis the available cash and borrowing requirements of the participants.
Participants with excess cash loan funds to the Money Pool reducing the
amount of external funds AEP Company, Inc. needs to borrow to meet the
short-term cash requirements of other participants with advances from
the Money Pool. AEP Company, Inc. borrows the funds needed on a daily
basis to meet the net cash requirements of the Money Pool participants.
A weighted average daily interest rate which is calculated based on the
outstanding short-term debt borrowings made by AEP Company, Inc. is
applied to each Money Pool participant's daily outstanding investment or
debt position to determine interest income or interest expense. Interest
income is included in nonoperating income, and interest expense is
included in interest charges. At June 30, 2000 the Company was a net
investor in the Money Pool and reports its investment in the Money Pool
as Advances to Affiliates on the Balance Sheet.
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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 JUNE 30, 2000
(in thousands, except as noted)
<CAPTION> April through
June
2000
<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: 10.27% per annum, 2.5675% per quarter .025675
C. Earnings Allowable on Equity Investment
1. Current Quarter $ 4
2. Year-to-Date $ 9
D. Net Income per Statement of Income $ 4
Add: Interest Charges -
Less: Nonoperating Income 316
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ (312)
2. Year-to-Date $ (1,213)
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 14,492
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I (312)
C. Cost Applicable to Current Quarter Coal Billings 14,180
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 6,276
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 7,904
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 132,755
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $59.54
(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 JUNE 30, 2000
(in thousands)
Direct Labor-UMW* $ 687
Indirect Labor-UMW* 1,642
Benefits-UMW* 6,665
Salaries and Benefits-Nonunion 1,776
Operating Supplies 935
Repair Parts and Materials 897
Electricity and Other Utilities 89
Outside Services-Maintenance, Haulage and Reclamation 1,362
Taxes Other Than Federal Income Taxes** 1,256
Rental of Equipment 10
Depreciation, Depletion and Amortization (1,063)
Royalties 149
Mining Cost Normalization*** (4,757)
Other Production Costs 2,633
Subtotal 12,281
Transfers of Production Costs (to)/from Coal Inventory 96
Total $12,377
* 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
JUNE 30, 2000
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 623 $ - $ 623
Mining Structures and Equipment 35,848 33,707 2,141
Coal Interests (net of depletion) 156 - 156
Mine Development Costs 10,041 9,800 241
Total Mining Plant
in Service $46,668 $43,507 $3,161
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