<PAGE>
SOUTHERN OHIO COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 21178
BY MONTH, FOR THE QUARTER ENDED MARCH 31, 1995
CONTENTS
Page
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 MARCH 31, 1995
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
January 31, February 28, March 31, March 31,
1995 1995 1995 1995
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Parent . . . . . . . . . $17,823 $18,137 $2,574 $38,534
COST OF OPERATION . . . . . . . . . 16,310 16,152 937 33,399
OPERATING INCOME. . . . . . . . . . 1,513 1,985 1,637 5,135
INTEREST CHARGES. . . . . . . . . . 540 503 503 1,546
OPERATING INCOME BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . . 973 1,482 1,134 3,589
FEDERAL INCOME TAXES ON OPERATIONS. 237 660 330 1,227
NET INCOME FROM OPERATIONS. . . . . 736 822 804 2,362
NONOPERATING INCOME . . . . . . . . 128 42 60 230
NET INCOME. . . . . . . . . . . . . $ 864 $ 864 $ 864 $ 2,592
The common stock of the Company is
wholly owned by Ohio Power Company.
</TABLE>
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SOUTHERN OHIO COAL COMPANY
MEIGS DIVISION
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED MARCH 31, 1995
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
January 31, February 28, March 31, March 31,
1995 1995 1995 1995
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Parent . . . . . . . . . $17,823 $18,137 $2,574 $38,534
COST OF OPERATION (including
Depreciation, Depletion and
Amortization of Mining Plant
of $1,009,000 in January,
$1,041,000 in February and
$727,000 in March). . . . . . . . 16,310 16,152 937 33,399
OPERATING INCOME. . . . . . . . . . 1,513 1,985 1,637 5,135
NONOPERATING INCOME . . . . . . . . 47 1 19 67
INCOME BEFORE INTEREST CHARGES. . . 1,560 1,986 1,656 5,202
INTEREST CHARGES. . . . . . . . . . 459 462 462 1,383
INCOME BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . . 1,101 1,524 1,194 3,819
FEDERAL INCOME TAXES ON OPERATIONS. 237 660 330 1,227
MEIGS NET INCOME. . . . . . . . . . $ 864 $ 864 $ 864 $ 2,592
The common stock of the Company is
wholly owned by Ohio Power Company.
</TABLE>
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SOUTHERN OHIO COAL COMPANY
MARTINKA DIVISION
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED MARCH 31, 1995
<CAPTION>
Three
Months
Month Ended Ended
January 31, February 28, March 31, March 31,
1995 1995 1995 1995
(in thousands)
<S> <C> <C> <C> <C>
NONOPERATING INCOME AND DEDUCTIONS:
Nonoperating Income -
Interest Income . . . . . . . . . . $307 $297 $291 $ 895
Nonoperating Deductions:
Shutdown Costs. . . . . . . . . . . 293 323 317 933
Tax Credit. . . . . . . . . . . . . (67) (67) (67) (201)
Net Nonoperating Income . . . . . . . 81 41 41 163
Interest Charges. . . . . . . . . . . 81 41 41 163
MARTINKA NET INCOME . . . . . . . . . $ - $ - $ - $ -
</TABLE>
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SOUTHERN OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED MARCH 31, 1995
(UNAUDITED)
<CAPTION>
January 31, February 28, March 31,
1995 1995 1995
(in thousands)
<S> <C> <C> <C>
ASSETS
MINING PLANT:
Mining Plant in Service . . . . . . . . . . . . $413,439 $414,333 $413,961
Construction Work in Progress . . . . . . . . . 129 11 67
Total Mining Plant . . . . . . . . . . . 413,568 414,344 414,028
Accumulated Depreciation and Amortization . . . 200,849 202,353 203,125
NET MINING PLANT . . . . . . . . . . . . 212,719 211,991 210,903
OTHER PROPERTY AND INVESTMENTS. . . . . . . . . . 66,554 66,835 65,702
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . 8,894 8,540 9,460
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . . 5,018 5,332 4,589
Insurance . . . . . . . . . . . . . . . . . . 13,079 13,079 13,079
Affiliated Companies. . . . . . . . . . . . . 10,619 11,032 2,684
Coal. . . . . . . . . . . . . . . . . . . . . . 613 2,175 1,134
Materials and Supplies. . . . . . . . . . . . . 9,509 9,196 9,674
Other . . . . . . . . . . . . . . . . . . . . . 853 6,157 5,717
TOTAL CURRENT ASSETS . . . . . . . . . . 48,585 55,511 46,337
REGULATORY ASSETS . . . . . . . . . . . . . . . . 60,835 61,248 67,555
DEFERRED CHARGES. . . . . . . . . . . . . . . . . 4,654 4,564 4,598
TOTAL. . . . . . . . . . . . . . . . . $393,347 $400,149 $395,095
</TABLE>
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<TABLE>
SOUTHERN OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED MARCH 31, 1995
(UNAUDITED)
<CAPTION>
January 31, February 28, March 31,
1995 1995 1995
(in thousands)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
SHAREOWNER'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 . . . . . . . . . . . . . . . 24,064 24,928 25,792
TOTAL SHAREOWNER'S EQUITY. . . . . . . . 136,758 137,622 138,486
LONG-TERM DEBT - Notes Payable. . . . . . . . . . 81,681 81,681 81,681
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . 25,976 26,334 26,070
Operating Reserves. . . . . . . . . . . . . . . 30,896 31,746 32,358
TOTAL OTHER NONCURRENT LIABILITIES . . . 56,872 58,080 58,428
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . 8,319 8,319 8,319
Accounts Payable:
General . . . . . . . . . . . . . . . . . . . 6,031 6,525 5,056
Affiliated Companies. . . . . . . . . . . . . 1,209 1,220 1,120
Taxes Accrued . . . . . . . . . . . . . . . . . 2,092 2,544 3,076
Accrued Vacation Pay. . . . . . . . . . . . . . 2,624 2,830 3,074
Worker's Compensation Claims. . . . . . . . . . 9,911 9,854 9,668
Obligations Under Capital Leases. . . . . . . . 10,863 10,808 10,661
Other . . . . . . . . . . . . . . . . . . . . . 6,517 6,873 7,857
TOTAL CURRENT LIABILITIES. . . . . . . . 47,566 48,973 48,831
DEFERRED CREDITS. . . . . . . . . . . . . . . . . 70,470 73,793 67,669
TOTAL. . . . . . . . . . . . . . . . . $393,347 $400,149 $395,095
</TABLE>
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SOUTHERN OHIO COAL COMPANY
STATEMENTS OF RETAINED EARNINGS
BY MONTH, FOR THE QUARTER ENDED MARCH 31, 1995
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
January 31, February 28, March 31, March 31,
1995 1995 1995 1995
(in thousands)
<S> <C> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD. . $33,025 $24,064 $24,928 $33,025
NET INCOME. . . . . . . . . . . . 864 864 864 2,592
CASH DIVIDENDS DECLARED . . . . . 9,825 - - 9,825
BALANCE AT END OF PERIOD. . . . . $24,064 $24,928 $25,792 $25,792
</TABLE>
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SOUTHERN OHIO COAL COMPANY
STATEMENTS OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
BY MONTH, FOR THE QUARTER ENDED MARCH 31, 1995
<CAPTION>
January February March
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 . . . . . . . . . . . . . . . . . . . . . . $ 658 $ 1,316 $ 1,974
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 . . . . . . . . . . . . . . . . . . . . . . $ 264 $ 528 $ 792
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 . . . . . . . . . . . . . . . . . . . . . . $ 240 $ 480 $ 720
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.). . . . . . . . . . . . $ 1,162 $ 2,324 $ 3,486
K. Net Income per Statements of Income . . . . . . . . . . . . . $ 864 $ 864 $ 864
Add: Interest Charges . . . . . . . . . . . . . . . . . . . 459 462 462
Less: Nonoperating Income . . . . . . . . . . . . . . . . . 47 1 19
L. Applied Cost-of-Capital Billing Adder:
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 1,276 $ 1,325 $ 1,307
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 1,276 $ 2,601 $ 3,908
II. Monthly Coal Billing Calculation - Meigs Division:
A. Total Operating Expenses (b). . . . . . . . . . . . . . . . . $ 16,547 $ 16,812 $ 1,267
B. Add: Monthly Cost-of-Capital Billing Adder as Applied
per L. 1. of Section I. . . . . . . . . . . . . . . . . . . 1,276 1,325 1,307
C. Cost Applicable to Current Month Coal Billings (c). . . . . . $ 17,823 $ 18,137 $ 2,574
D. Coal Sold and Shipped in Current Month (in tons)(c) . . . . . 411,830 429,002 61,463
E. Average Price per Ton (in dollars) (C/D)(c) . . . . . . . . . $43.28 $42.28 $41.87
(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" reported in Statements of Income.
(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 MARCH 31, 1995
<CAPTION>
January 31, February 28, March 31,
1995 1995 1995
(in thousands)
<S> <C> <C> <C>
Operating Reserves:
Accrued Postretirement Benefits
Other Than Pensions. . . . . . . . . . . . . . $14,612 $15,233 $15,820
Workers' Compensation . . . . . . . . . . . . . 9,640 9,878 9,894
Postemployment Benefits . . . . . . . . . . . . 5,647 5,647 5,647
Public Liability Insurance. . . . . . . . . . . 294 303 312
Tunnel Settlement . . . . . . . . . . . . . . . 350 350 350
Martinka Litigation Provision . . . . . . . . . 353 335 335
Total Operating Reserves. . . . . . . . . . $30,896 $31,746 $32,358
Deferred Credits:
Federal Income Taxes. . . . . . . . . . . . . . $67,356 $66,822 $66,341
Mining Costs Normalization. . . . . . . . . . . 2,119 5,999 -
Postemployment Benefits . . . . . . . . . . . . 993 970 958
Other . . . . . . . . . . . . . . . . . . . . . 2 2 370
Total Deferred Credits. . . . . . . . . . . $70,470 $73,793 $67,669
</TABLE>
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SOUTHERN OHIO COAL COMPANY
INFORMATION CONCERNING CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED MARCH 31, 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 MARCH 31, 1995
<CAPTION>
January 31, 1995 February 28, 1995 March 31, 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. . . . . . . . . $ 7,403 $ - $ 7,403 $ 7,403 $ - $ 7,403 $ 7,409 $ - $ 7,409
Mining Structures
and Equipment. . . . . . . . 267,559 155,286 112,273 268,467 156,479 111,988 268,090 157,236 110,854
Coal Interests
(net of depletion) . . . . . 4,328 - 4,328 4,314 - 4,314 4,313 - 4,313
Mine Development Costs . . . . 134,149 45,563 88,586 134,149 45,874 88,275 134,149 45,889 88,260
Total Mining Plant in
Service. . . . . . . . . $413,439 $200,849 $212,590 $414,333 $202,353 $211,980 $413,961 $203,125 $210,836
</TABLE>
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SOUTHERN OHIO COAL COMPANY
INFORMATION CONCERNING OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1995
Idling of Mine
The Meigs mine was temporarily idled on March 1, 1995. Production
resumed on April 3, 1995. The idling was scheduled because of coal inventory
surpluses arising during recent Gavin Plant outages resulting from the
scrubber retrofit project.
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SOUTHERN OHIO COAL COMPANY
STATEMENTS OF COST OF OPERATION
BY MONTH, FOR THE QUARTER ENDED MARCH 31, 1995
<CAPTION>
Three
Months
January February March Ended
1995 1995 1995 3/31/95
(in thousands)
<S> <C> <C> <C> <C>
Direct Labor-UMW* . . . . . . . . . . . . . . . . $ 468 $ 429 $ 86 $ 983
Indirect Labor-UMW* . . . . . . . . . . . . . . . 1,526 1,430 612 3,568
Benefits-UMW* . . . . . . . . . . . . . . . . . . 1,672 1,962 1,531 5,165
Salaries and Benefits-Nonunion. . . . . . . . . . 1,493 1,511 1,218 4,222
Operating Supplies. . . . . . . . . . . . . . . . 944 921 793 2,658
Repair Parts and Materials. . . . . . . . . . . . 2,318 1,618 1,410 5,346
Electricity and Other Utilities . . . . . . . . . 605 572 376 1,553
Outside Services-Maintenance, Haulage
and Reclamation . . . . . . . . . . . . . . . . 1,019 928 1,189 3,136
Taxes Other Than Income Taxes** . . . . . . . . . 648 670 278 1,596
Rental of Equipment . . . . . . . . . . . . . . . 1,514 1,497 1,508 4,519
Depreciation, Depletion and Amortization. . . . . 1,009 1,041 727 2,777
Mining Cost Normalization***. . . . . . . . . . . 2,119 3,880 (11,258) (5,259)
Other Production Costs. . . . . . . . . . . . . . 1,467 1,255 1,426 4,148
Subtotal. . . . . . . . . . . . . . . . . . . . . 16,802 17,714 (104) 34,412
Transfers of Production Costs (to)/from
Coal Inventory. . . . . . . . . . . . . . . . . (492) (1,562) 1,041 (1,013)
Total . . . . . . . . . . . . . . . . . $16,310 $16,152 $ 937 $33,399
* 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>
