<PAGE>
WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 26573
FOR THE QUARTER ENDED SEPTEMBER 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 SEPTEMBER 30, 2000
(UNAUDITED)
(in thousands)
OPERATING REVENUES $ 9,505
COST OF OPERATION 10,533
OPERATING LOSS (1,028)
NONOPERATING INCOME 1,008
LOSS BEFORE FEDERAL INCOME TAXES (20)
FEDERAL INCOME TAX CREDIT (24)
NET INCOME $ 4
STATEMENT OF RETAINED EARNINGS
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
(UNAUDITED)
(in thousands)
BALANCE AT BEGINNING OF PERIOD $42
NET INCOME 4
BALANCE AT END OF PERIOD $46
The common stock of the Company is wholly owned by Ohio Power Company.
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
September 30,
2000
(in thousands)
ASSETS
MINING PLANT:
Mining Plant in Service $ 46,663
Accumulated Depreciation and Amortization 44,737
NET MINING PLANT 1,926
CURRENT ASSETS:
Cash and Cash Equivalents 21
Accounts Receivable:
General 4,871
Affiliated Companies 1,726
Advances to Affiliates 56,570
Coal 124
Materials and Supplies 3,280
Accrued Tax Benefit 15,395
Other 587
TOTAL CURRENT ASSETS 82,574
DEFERRED INCOME TAXES 21,236
DEFERRED CHARGES 371
TOTAL $106,107
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WINDSOR COAL COMPANY
BALANCE SHEET
(UNAUDITED)
September 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 46
TOTAL SHAREHOLDER'S EQUITY 46
OTHER NONCURRENT LIABILITIES:
Accrued Postretirement Benefits Other Than Pensions 30,502
Mine Closure Costs 16,839
Workers' Compensation Claims 14,206
Operating Reserves 25,385
TOTAL OTHER NONCURRENT LIABILITIES 86,932
CURRENT LIABILITIES:
Accounts Payable:
General 1,609
Affiliated Companies 689
Accrued Vacation Pay 1,074
Workers' Compensation Claims 4,120
Other 2,736
TOTAL CURRENT LIABILITIES 10,228
REGULATORY LIABILITIES 8,898
DEFERRED CREDITS 3
TOTAL $106,107
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WINDSOR COAL COMPANY
INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED SEPTEMBER 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.
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 September 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 SEPTEMBER 30, 2000
(in thousands, except as noted)
<CAPTION> July through
September
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 $ 13
D. Net Income per Statement of Income $ 4
Add: Interest Charges -
Less: Nonoperating Income 1,008
E. Applied Cost-of-Capital Billing Adder:
1. Current Quarter $ (1,004)
2. Year-to-Date $ (2,217)
II. Coal Billing Calculation:
A. Total Operating Expenses (a) $ 10,509
B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I (1,004)
C. Cost Applicable to Current Quarter Coal Billings 9,505
Less: Cost Applicable to Coal Sold to Unaffiliated Companies 4,936
Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 4,569
D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 114,322
E. Average Price per Ton to Ohio Power (in dollars) (C/D) $39.97
(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 SEPTEMBER 30, 2000
(in thousands)
Direct Labor-UMW* $ 552
Indirect Labor-UMW* 1,460
Benefits-UMW* 2,205
Salaries and Benefits-Nonunion 1,944
Operating Supplies 666
Repair Parts and Materials 529
Electricity and Other Utilities 45
Outside Services-Maintenance, Haulage and Reclamation 731
Taxes Other Than Federal Income Taxes** 987
Rental of Equipment (1,608)
Depreciation, Depletion and Amortization 1,278
Royalties 100
Mining Cost Normalization*** (1,195)
Other Production Costs 2,901
Subtotal 10,595
Transfers of Production Costs (to)/from Coal Inventory (62)
Total $10,533
* 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
September 30, 2000
Net
Gross Accumulated Carrying
Cost Provisions Amount
(in thousands)
Description
Surface Lands $ 623 $ - $ 623
Mining Structures and Equipment 35,890 34,837 1,053
Coal Interests (net of depletion) 109 - 109
Mine Development Costs 10,041 9,900 141
Total Mining Plant
in Service $46,663 $44,737 $1,926
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