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SOUTHERN OHIO COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 21178
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
<CAPTION>
CONTENTS
Page
<S> <C>
Statements of Income:
Total Company 1
Meigs Division 2
Martinka Division 3
Balance Sheets 4-5
Statements of Retained Earnings 6
Statements of Cost of Commercial Coal Sold and Shipped 7
Analysis of Operating Reserves and Deferred Credits 8
Information Concerning Capital Improvements 9
Analysis of Mining Plant in Service 10
Information Concerning Operations 11
Statements of Cost of Operation 12
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SOUTHERN OHIO COAL COMPANY
TOTAL COMPANY
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
July 31, August 31, September 30, September 30,
1995 1995 1995 1995
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Parent . . . . . $14,255 $12,851 $15,033 $42,139
COST OF OPERATION . . . . . 12,175 10,961 13,178 36,314
OPERATING INCOME. . . . . . 2,080 1,890 1,855 5,825
INTEREST CHARGES. . . . . . 503 497 493 1,493
OPERATING INCOME BEFORE
FEDERAL INCOME TAXES. . . 1,577 1,393 1,362 4,332
FEDERAL INCOME TAXES
ON OPERATIONS . . . . . . 763 618 599 1,980
NET INCOME FROM OPERATIONS. 814 775 763 2,352
NONOPERATING INCOME . . . . 50 89 101 240
NET INCOME. . . . . . . . . $ 864 $ 864 $ 864 $ 2,592
The common stock of the Company is
wholly owned by Ohio Power Company.
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SOUTHERN OHIO COAL COMPANY
MEIGS DIVISION
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
July 31, August 31, September 30, September 30,
1995 1995 1995 1995
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Parent. . . . . . $14,255 $12,851 $15,033 $42,139
COST OF OPERATION (including
Depreciation, Depletion and
Amortization of Mining Plant
of $1,346,000 in July,
$1,082,000 in August and
$1,142,000 in September) . 12,175 10,961 13,178 36,314
OPERATING INCOME . . . . . . 2,080 1,890 1,855 5,825
NONOPERATING INCOME. . . . . 9 48 60 117
INCOME BEFORE INTEREST
CHARGES . . . . . . . . . . 2,089 1,938 1,915 5,942
INTEREST CHARGES . . . . . . 462 456 452 1,370
INCOME BEFORE FEDERAL
INCOME TAXES . . . . . . . 1,627 1,482 1,463 4,572
FEDERAL INCOME TAXES
ON OPERATIONS. . . . . . . 763 618 599 1,980
MEIGS NET INCOME . . . . . . $ 864 $ 864 $ 864 $ 2,592
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SOUTHERN OHIO COAL COMPANY
MARTINKA DIVISION
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
July 31, August 31, September 30, September 30,
1995 1995 1995 1995
(in thousands)
NONOPERATING INCOME AND DEDUCTIONS:
<S> <C> <C> <C> <C>
Nonoperating Income -
Interest Income . . . . . . . . $ 296 $294 $302 $ 892
Nonoperating Deductions:
Shutdown Costs. . . . . . . . . 442 334 342 1,118
Tax Credit. . . . . . . . . . . (187) (81) (81) (349)
Net Nonoperating Income . . . . . 41 41 41 123
Interest Charges. . . . . . . . . 41 41 41 123
MARTINKA NET INCOME . . . . . . . $ - $ - $ - $ -
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SOUTHERN OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
July 31, August 31, September 30,
1995 1995 1995
(in thousands)
ASSETS
<S> <C> <C> <C>
MINING PLANT:
Mining Plant in Service . . . . . . . . . . $404,476 $405,486 $405,802
Construction Work in Progress . . . . . . . 4 11 173
Total Mining Plant . . . . . . . . . 404,480 405,497 405,975
Accumulated Depreciation and Amortization . 199,933 201,453 202,380
NET MINING PLANT . . . . . . . . . . 204,547 204,044 203,595
OTHER PROPERTY AND INVESTMENTS. . . . . . . . 65,274 65,551 64,403
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . 6,951 8,303 5,699
Accounts Receivable:
General . . . . . . . . . . . . . . . . . 4,002 3,552 3,539
Insurance . . . . . . . . . . . . . . . . 13,079 13,079 13,079
Affiliated Companies. . . . . . . . . . . 8,027 8,475 10,019
Coal. . . . . . . . . . . . . . . . . . . . 754 725 226
Materials and Supplies. . . . . . . . . . . 9,302 9,087 9,349
Other . . . . . . . . . . . . . . . . . . . 4,000 3,420 3,042
TOTAL CURRENT ASSETS . . . . . . . . 46,115 46,641 44,953
REGULATORY ASSETS . . . . . . . . . . . . . . 68,120 70,835 71,292
DEFERRED CHARGES. . . . . . . . . . . . . . . 4,493 4,428 4,350
TOTAL. . . . . . . . . . . . . . . $388,549 $391,499 $388,593
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SOUTHERN OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
July 31, August 31, September 30,
1995 1995 1995
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
SHAREHOLDER'S EQUITY:
Common Stock - Par Value $1:
Authorized and Outstanding - 5,000 Shares. $ 5 $ 5 $ 5
Premium on Common Stock. . . . . . . . . . . 9,996 9,996 9,996
Other Paid-in Capital. . . . . . . . . . . . 102,693 102,693 102,693
Retained Earnings. . . . . . . . . . . . . . 24,063 24,927 23,199
TOTAL SHAREHOLDER'S EQUITY. . . . . . 136,757 137,621 135,893
LONG-TERM DEBT - Notes Payable to Banks. . . . 81,681 81,681 81,681
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases . . . . . . 23,922 23,799 24,196
Operating Reserves . . . . . . . . . . . . . 34,809 35,226 34,937
TOTAL OTHER NONCURRENT LIABILITIES. . 58,731 59,025 59,133
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . 8,319 8,319 8,319
Accounts Payable:
General. . . . . . . . . . . . . . . . . . 5,838 5,713 5,450
Affiliated Companies . . . . . . . . . . . 1,585 1,545 1,169
Taxes Accrued. . . . . . . . . . . . . . . . 868 1,806 313
Accrued Vacation Pay . . . . . . . . . . . . 3,021 3,098 3,147
Workers' Compensation Claims . . . . . . . . 9,075 8,933 9,597
Obligations Under Capital Leases . . . . . . 10,582 11,273 11,397
Other. . . . . . . . . . . . . . . . . . . . 7,120 7,827 8,619
TOTAL CURRENT LIABILITIES . . . . . . 46,408 48,514 48,011
DEFERRED CREDITS . . . . . . . . . . . . . . . 64,972 64,658 63,875
TOTAL . . . . . . . . . . . . . . . $388,549 $391,499 $388,593
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SOUTHERN OHIO COAL COMPANY
STATEMENTS OF RETAINED EARNINGS
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
July 31, August 31, September 30, September 30,
1995 1995 1995 1995
(in thousands)
<S> <C> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD. $23,199 $24,063 $24,927 $23,199
NET INCOME. . . . . . . . . . . 864 864 864 2,592
CASH DIVIDENDS DECLARED . . . . - - 2,592 2,592
BALANCE AT END OF PERIOD. . . . $24,063 $24,927 $23,199 $23,199
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SOUTHERN OHIO COAL COMPANY
STATEMENTS OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
<CAPTION>
July August September
1995 1995 1995
(in thousands, except as noted)
<S> <C> <C> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Investment at Beginning of Month:
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . $ 5 $ 5 $ 5
Premium on Common Stock . . . . . . . . . . . . . . . . . . 9,996 9,996 9,996
Other Paid-in Capital (excluding item D and item G) . . . . 55,233 55,233 55,233
65,234 65,234 65,234
B. Rate of Return Allowable per HCAR Nos. 20515 and
21008: 12.11% per annum, 1.0092% per month. . . . . . . . . .010092 .010092 .010092
C. Earnings Allowable: (re investment in item A)
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 658 $ 658 $ 658
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 4,606 $ 5,264 $ 5,922
D. Equity Investment for the months of June 1981,
December 1981 and September 1982. . . . . . . . . . . . . . $ 26,240 $ 26,240 $ 26,240
E. Rate of Return Allowable per HCAR Nos. 21008, 21537,
22129 and 22401: 12.04% per annum, 1.0033% per month. . . . .010033 .010033 .010033
F. Earnings Allowable: (re investment in item D)
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 264 $ 264 $ 264
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 1,848 $ 2,112 $ 2,376
G. Equity Investment for the months of March 1982,
June 1982 and December 1982 . . . . . . . . . . . . . . . . $ 21,220 $ 21,220 $ 21,220
H. Rate of Return Allowable per HCAR Nos. 21008, 21537,
22129 and 22401: 13.58% per annum, 1.1317% per month. . . . .011317 .011317 .011317
I. Earnings Allowable: (re investment in item G)
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 240 $ 240 $ 240
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 1,680 $ 1,920 $ 2,160
J. Total Earnings Allowable:
1. Current Month (C.1. + F.1. + I.1.) . . . . . . . . . . . $ 1,162 $ 1,162 $ 1,162
2. Year-to-Date (C.2. + F.2. + I.2.). . . . . . . . . . . . $ 8,134 $ 9,296 $ 10,458
K. Net Income per Statements of Income - Meigs Division (a). . . $ 864 $ 864 $ 864
Add: Interest Charges . . . . . . . . . . . . . . . . . . . 462 456 452
Less: Nonoperating Income . . . . . . . . . . . . . . . . . 9 48 60
L. Applied Cost-of-Capital Billing Adder - Meigs Division:
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 1,317 $ 1,272 $ 1,256
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 8,979 $ 10,251 $ 11,507
II. Monthly Coal Billing Calculation - Meigs Division:
A. Total Operating Expenses (b). . . . . . . . . . . . . . . . . $ 12,938 $ 11,579 $ 13,777
B. Add: Monthly Cost-of-Capital Billing Adder as Applied
per L. 1. of Section I. . . . . . . . . . . . . . . . . . . 1,317 1,272 1,256
C. Cost Applicable to Current Month Coal Billings (c). . . . . . $ 14,255 $ 12,851 $ 15,033
D. Coal Sold and Shipped in Current Month (in tons)(c) . . . . . 347,927 321,881 365,358
E. Average Price per Ton (in dollars) (C/D)(c) . . . . . . . . . $40.97 $39.92 $41.15
(a) The Company sold its Martinka mining division and most of the Martinka related coal reserves to an
unaffiliated company. No return on equity investment associated with these operations has been billed since
the division ceased mining coal effective July 1, 1992. All results associated with the Martinka division
since then are billed to the Parent Company, Ohio Power Company, eliminating any earnings effect to the
Company.
(b) As represented by "Cost of Operation" plus "Federal Income Taxes On Operations" reported in Statements of
Income - Meigs Division.
(c) Sales were to the Parent Company - Ohio Power Company for the Gavin Plant.
/TABLE
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SOUTHERN OHIO COAL COMPANY
ANALYSIS OF OPERATING RESERVES AND DEFERRED CREDITS
BY MONTH-END, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
<CAPTION>
July 31, August 31, September 30,
1995 1995 1995
(in thousands)
<S> <C> <C> <C>
Operating Reserves:
Accrued Postretirement Benefits
Other Than Pensions . . . . . . . . . . . . $18,124 $18,696 $19,200
Workers' Compensation . . . . . . . . . . . . 10,392 10,229 9,427
Postemployment Benefits . . . . . . . . . . . 5,647 5,647 5,647
Public Liability Insurance. . . . . . . . . . 346 354 363
Tunnel Settlement . . . . . . . . . . . . . . 300 300 300
Total Operating Reserves. . . . . . . . . $34,809 $35,226 $34,937
Deferred Credits:
Income Taxes. . . . . . . . . . . . . . . . . $64,013 $63,487 $62,951
Postemployment Benefits . . . . . . . . . . . 912 912 887
Other . . . . . . . . . . . . . . . . . . . . 47 259 37
Total Deferred Credits. . . . . . . . . . $64,972 $64,658 $63,875
</TABLE>
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SOUTHERN OHIO COAL COMPANY
INFORMATION CONCERNING CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
There were no significant changes with regard to the Company's mining plant
during the quarter.
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SOUTHERN OHIO COAL COMPANY
ANALYSIS OF MINING PLANT IN SERVICE
AND RELATED ACCUMULATED PROVISIONS FOR
DEPRECIATION AND AMORTIZATION
BY MONTH-END, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
<CAPTION>
July 31, 1995 August 31, 1995 September 30, 1995
Net Net Net
Gross Accumulated Carrying Gross Accumulated Carrying Gross Accumulated Carrying
Cost Provisions Amount Cost Provisions Amount Cost Provisions Amount
(in thousands)
Description
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Surface Lands. . . . . . . . . $ 7,409 $ - $ 7,409 $ 7,409 $ - $ 7,409 $ 7,409 $ - $ 7,409
Mining Structures
and Equipment. . . . . . . . 258,679 152,709 105,970 259,709 153,896 105,813 260,048 154,433 105,615
Coal Interests
(net of depletion) . . . . . 4,239 - 4,239 4,219 - 4,219 4,196 - 4,196
Mine Development Costs . . . . 134,149 47,224 86,925 134,149 47,557 86,592 134,149 47,947 86,202
Total Mining Plant in
Service. . . . . . . . . $404,476 $199,933 $204,543 $405,486 $201,453 $204,033 $405,802 $202,380 $203,422
</TABLE>
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SOUTHERN OHIO COAL COMPANY
INFORMATION CONCERNING OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
There were no significant changes with regard to the Company's operations
during the quarter.
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SOUTHERN OHIO COAL COMPANY
STATEMENTS OF COST OF OPERATION
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1995
<CAPTION>
Three
Months
July August September Ended
1995 1995 1995 9/30/95
(in thousands)
<S> <C> <C> <C> <C>
Direct Labor-UMW* . . . . . . . . . . . . . $ 423 $ 495 $ 386 $ 1,304
Indirect Labor-UMW* . . . . . . . . . . . . 1,275 1,557 1,457 4,289
Benefits-UMW* . . . . . . . . . . . . . . . 1,663 1,735 1,713 5,111
Salaries and Benefits-Nonunion. . . . . . . 1,474 1,474 1,403 4,351
Operating Supplies. . . . . . . . . . . . . 1,001 1,214 939 3,154
Repair Parts and Materials. . . . . . . . . 1,574 1,803 1,549 4,926
Electricity and Other Utilities . . . . . . 534 480 480 1,494
Outside Services-Maintenance, Haulage
and Reclamation . . . . . . . . . . . . . 950 1,118 1,310 3,378
Taxes Other Than Federal Income Taxes** . . 630 586 632 1,848
Rental of Equipment . . . . . . . . . . . . 1,316 1,332 1,372 4,020
Depreciation, Depletion and Amortization. . 1,346 1,082 1,142 3,570
Mining Cost Normalization***. . . . . . . . (1,549) (3,209) (1,245) (6,003)
Other Production Costs. . . . . . . . . . . 1,557 1,265 1,541 4,363
Subtotal. . . . . . . . . . . . . . . . . . 12,194 10,932 12,679 35,805
Transfers of Production Costs (to)/from
Coal Inventory. . . . . . . . . . . . . . (19) 29 499 509
Total . . . . . . . . . . . . . . $12,175 $10,961 $13,178 $36,314
* United Mine Workers of America.
** Excludes FICA, Federal Unemployment and State Unemployment. These costs are
reflected in employee benefits.
*** Represents the deferral/accrual required to establish a selling price based on
forecasted results for the remainder of 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.
</TABLE>
