<PAGE>
SOUTHERN OHIO COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 21178
BY MONTH, FOR THE QUARTER ENDED DECEMBER 31, 1994
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 11-12
Statements of Cost of Operation 13
Construction Expenditure Budget - 1995 14
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
TOTAL COMPANY
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
October 31, November 30, December 31, December 31,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Parent . . . . . . . . $23,433 $25,066 $16,845 $65,344
COST OF OPERATION . . . . . . . . 21,621 21,593 15,502 58,716
OPERATING INCOME. . . . . . . . . 1,812 3,473 1,343 6,628
NONOPERATING INCOME (LOSS). . . . (118) (1,485) 47 (1,556)
INCOME BEFORE INTEREST CHARGES. . 1,694 1,988 1,390 5,072
INTEREST CHARGES. . . . . . . . . 485 485 444 1,414
INCOME BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . 1,209 1,503 946 3,658
FEDERAL INCOME TAXES
ON OPERATIONS . . . . . . . . . 345 639 82 1,066
NET INCOME. . . . . . . . . . . . $ 864 $ 864 $ 864 $ 2,592
The common stock of the Company is
wholly owned by Ohio Power Company.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
MEIGS DIVISION
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
October 31, November 30, December 31, December 31,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Parent . . . . . . . . $23,433 $25,066 $16,845 $65,344
COST OF OPERATION (including
Depreciation, Depletion and
Amortization of Mining Plant of
$1,056,000 in October, $1,117,000
in November and $1,025,000
in December). . . . . . . . . . 21,621 21,593 15,502 58,716
OPERATING INCOME. . . . . . . . . 1,812 3,473 1,343 6,628
NONOPERATING INCOME (LOSS). . . . (159) (1,526) 47 (1,638)
INCOME BEFORE INTEREST CHARGES. . 1,653 1,947 1,390 4,990
INTEREST CHARGES. . . . . . . . . 444 444 444 1,332
INCOME BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . 1,209 1,503 946 3,658
FEDERAL INCOME TAXES
ON OPERATIONS . . . . . . . . . 345 639 82 1,066
MEIGS NET INCOME. . . . . . . . . $ 864 $ 864 $ 864 $ 2,592
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
MARTINKA DIVISION
STATEMENT OF INCOME
BY MONTH, FOR THE QUARTER ENDED DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
October 31, November 30, December 31, December 31,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
NONOPERATING INCOME AND DEDUCTIONS:
Nonoperating Income -
Interest Income . . . . . . . . . $ 311 $309 $ 307 $ 927
Nonoperating Deductions:
Shutdown Costs. . . . . . . . . . 539 335 1,339 2,213
Tax Credits . . . . . . . . . . . (269) (67) (1,032) (1,368)
Net Nonoperating Income . . . . . . 41 41 - 82
Interest Charges. . . . . . . . . . 41 41 - 82
MARTINKA NET INCOME . . . . . . . . $ - $ - $ - $ -
/TABLE
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
October 31, November 30, December 31,
1994 1994 1994
(in thousands)
<S> <C> <C> <C>
ASSETS
MINING PLANT:
Mining Plant in Service . . . . . . . . . . . . $418,561 $413,379 $413,583
Construction Work in Progress . . . . . . . . . 487 655 1,331
Total Mining Plant . . . . . . . . . . 419,048 414,034 414,914
Accumulated Depreciation and Amortization . . . 200,586 198,812 200,496
NET MINING PLANT. . . . . . . . . . . . 218,462 215,222 214,418
OTHER PROPERTY AND INVESTMENTS. . . . . . . . . . 67,098 67,384 66,272
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . 3,546 18,791 20,369
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . . 4,358 3,529 3,744
Insurance . . . . . . . . . . . . . . . . . . 13,079 13,079 13,079
Affiliated Companies. . . . . . . . . . . . . 16,922 16,566 8,320
Coal. . . . . . . . . . . . . . . . . . . . . . 1,126 2,563 121
Materials and Supplies. . . . . . . . . . . . . 9,104 9,090 10,265
Other . . . . . . . . . . . . . . . . . . . . . 2,189 1,680 1,336
TOTAL CURRENT ASSETS. . . . . . . . . . 50,324 65,298 57,234
REGULATORY ASSETS:
Amounts Due From Customer For Future
Federal Income Taxes. . . . . . . . . . . . . 57,289 56,981 58,722
Other . . . . . . . . . . . . . . . . . . . . . 9,404 2,410 5,646
TOTAL REGULATORY ASSETS . . . . . . . . 66,693 59,391 64,368
DEFERRED CHARGES. . . . . . . . . . . . . . . . . 4,015 3,937 4,819
TOTAL . . . . . . . . . . . . . . . . $406,592 $411,232 $407,111
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
October 31, November 30, December 31,
1994 1994 1994
(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 . . . . . . . . . . . . . . . 39,073 39,937 33,025
TOTAL SHAREOWNER'S EQUITY . . . . . . . 151,767 152,631 145,719
LONG-TERM DEBT - Notes Payable. . . . . . . . . . 90,000 90,000 90,000
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . 27,626 27,006 26,608
Operating Reserves. . . . . . . . . . . . . . . 28,686 29,758 29,745
TOTAL OTHER NONCURRENT LIABILITIES. . . 56,312 56,764 56,353
CURRENT LIABILITIES:
Accounts Payable:
General . . . . . . . . . . . . . . . . . . . 2,959 6,038 8,909
Affiliated Companies. . . . . . . . . . . . . 2,124 1,388 2,310
Taxes Accrued . . . . . . . . . . . . . . . . . 1,147 3,122 1,095
Interest Accrued. . . . . . . . . . . . . . . . 1,305 1,786 2,226
Accrued Vacation Pay. . . . . . . . . . . . . . 2,858 2,624 2,706
Workers' Compensation Claims. . . . . . . . . . 9,819 9,584 10,204
Obligations Under Capital Leases. . . . . . . . 11,399 11,174 11,045
Other . . . . . . . . . . . . . . . . . . . . . 7,109 7,537 7,616
TOTAL CURRENT LIABILITIES . . . . . . . 38,720 43,253 46,111
DEFERRED CREDITS. . . . . . . . . . . . . . . . . 69,793 68,584 68,928
TOTAL . . . . . . . . . . . . . . . . $406,592 $411,232 $407,111
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
STATEMENTS OF RETAINED EARNINGS
BY MONTH, FOR THE QUARTER ENDED DECEMBER 31, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
October 31, November 30, December 31, December 31,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD. . $38,209 $39,073 $39,937 $38,209
NET INCOME. . . . . . . . . . . . 864 864 864 2,592
CASH DIVIDENDS DECLARED . . . . . - - 7,776 7,776
BALANCE AT END OF PERIOD. . . . . $39,073 $39,937 $33,025 $33,025
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
STATEMENTS OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
BY MONTH, FOR THE QUARTER ENDED DECEMBER 31, 1994
<CAPTION>
October November December
1994 1994 1994
(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 . . . . . . . . . . . . . . . . . . . . . . $ 6,580 $ 7,238 $ 7,896
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. . . . . . . . . . . . . . . . . . . . . . . $ 2,640 $ 2,904 $ 3,168
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. . . . . . . . . . . . . . . . . . . . . . . $ 2,400 $ 2,640 $ 2,880
J. Total Earnings Allowable:(a)
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.) . . . . . . . . . . . . $ 11,620 $ 12,782 $ 13,944
K. Net Income per Statements of Income - Meigs Division (a). . . $ 864 $ 864 $ 864
Add: Interest Charges. . . . . . . . . . . . . . . . . . . . 444 444 444
Less: Nonoperating Income. . . . . . . . . . . . . . . . . . (159) (1,526) 47
L. Applied Cost-of-Capital Billing Adder - Meigs Division:
1. Current Month . . . . . . . . . . . . . . . . . . . . . . $ 1,467 $ 2,834 $ 1,261
2. Year-to-Date. . . . . . . . . . . . . . . . . . . . . . . $ 15,574 $ 18,408 $ 19,669
II. Monthly Coal Billing Calculation - Meigs Division:
A. Total Operating Expenses (b). . . . . . . . . . . . . . . . . $ 21,966 $ 22,232 $ 15,584
B. Add: Monthly Cost-of-Capital Billing Adder as Applied
per L. 1. of Section I. . . . . . . . . . . . . . . . . . . 1,467 2,834 1,261
C. Cost Applicable to Current Month Coal Billings (c). . . . . . $ 23,433 $ 25,066 $ 16,845
D. Coal Sold and Shipped in Current Month (in tons)(c) . . . . . 450,309 507,503 537,658
E. Average Price per Ton (in dollars) (C/D)(c) . . . . . . . . . $52.04 $49.39 $31.33
(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
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
ANALYSIS OF OPERATING RESERVES AND DEFERRED CREDITS
BY MONTH-END, FOR THE QUARTER ENDED DECEMBER 31, 1994
<CAPTION>
October 31, November 30, December 31,
1994 1994 1994
(in thousands)
<S> <C> <C> <C>
Operating Reserves:
Workers' Compensation . . . . . . . . . . . . $ 9,307 $ 9,732 $ 9,119
Postemployment Benefits . . . . . . . . . . . 5,647 5,647 5,647
Accrued Postretirement Benefits
Other Than Pensions . . . . . . . . . . . . 12,753 13,374 13,991
Public Liability Insurance. . . . . . . . . . 268 301 285
Tunnel Settlement . . . . . . . . . . . . . . 350 350 350
Martinka Litigation Settlement. . . . . . . . 361 354 353
Total Operating Reserves. . . . . . . $28,686 $29,758 $29,745
Deferred Credits:
Federal Income Taxes. . . . . . . . . . . . . $68,779 $67,285 $67,875
Postemployment Benefits . . . . . . . . . . . 1,012 1,012 994
Other . . . . . . . . . . . . . . . . . . . . 2 287 59
Total Deferred Credits. . . . . . . . $69,793 $68,584 $68,928
</TABLE>
<PAGE>
<PAGE>
SOUTHERN OHIO COAL COMPANY
INFORMATION CONCERNING CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED DECEMBER 31, 1994
See "Information Concerning Operations" with regard to Meigs No. 31
mine.
<PAGE>
<PAGE>
<TABLE>
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 DECEMBER 31, 1994
<CAPTION>
October 31, 1994 November 30, 1994 December 31, 1994
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. . . . . . . . . $ 7,287 $ - $ 7,287 $ 7,403 $ - $ 7,403 $ 7,403 $ - $ 7,403
Mining Structures
and Equipment. . . . . . . . 272,829 155,901 116,928 267,495 153,794 113,701 267,690 155,206 112,484
Coal Interests
(net of depletion) . . . . . 4,296 - 4,296 4,332 - 4,332 4,341 - 4,341
Mine Development Costs . . . . 134,149 44,685 89,464 134,149 45,018 89,131 134,149 45,290 88,859
Total Mining Plant in
Service. . . . . . . . . $418,561 $200,586 $217,975 $413,379 $198,812 $214,567 $413,583 $200,496 $213,087
/TABLE
<PAGE>
<PAGE>
SOUTHERN OHIO COAL COMPANY
INFORMATION CONCERNING OPERATIONS
FOR THE QUARTER ENDED DECEMBER 31, 1994
Recovery of Coal Costs
The Clean Air Act Amendments of 1990 (CAAA) require significant
reductions in sulfur dioxide and nitrogen oxides emitted from Ohio Power
Company's (OPCo's) generating plants. In November 1992 the Public Utilities
Commission of Ohio (PUCO) approved OPCo's compliance plan setting forth
compliance measures for affected generating units, including: installation of
leased scrubbers at Gavin Plant to permit OPCo to continue burning Ohio high-
sulfur coal at Gavin. The plan further provides for Gavin's coal to be
supplied by the Company's Meigs mine and by replacement coal from new long-
term contracts with unaffiliated sources and spot market purchases.
In February 1995 OPCo and certain other parties to a base rate
proceeding entered into a Settlement Agreement to resolve, among other issues,
the pending base rate case and the current electric fuel component (EFC)
proceeding. Under the terms of the Settlement Agreement the EFC rate is fixed
at 1.465 cents per kwh from June 1995 through November 1998; OPCo is provided
with the opportunity to recover its Ohio jurisdictional share of the
investment in and the liabilities and the future shut-down costs of its
affiliated mining operations as well as any fuel costs incurred above the
fixed rate; and OPCo may proceed with its CAAA compliance plan as filed with
the PUCO. The Settlement Agreement was approved by the PUCO on March 23,
1995.
Under the terms of a 1992 stipulation agreement the cost of coal
burned at the Gavin Plant beginning December 1, 1994 is subject to a 15-year
predetermined price of $1.575 per million Btu's with quarterly escalation
adjustments. As discussed above the February 1995 Settlement Agreement fixes
the EFC factor at 1.465 cents per kwh for the period June 1, 1995 through
November 30, 1998. After November 2009 the price that OPCo can recover for
coal from its affiliated Meigs mine will be limited to the lower of cost or
the then-current market price. The predetermined Gavin Plant agreement, in
conjunction with the above-referenced Settlement Agreement, provides OPCo with
an opportunity to recover its investment in and the liabilities and closing
costs of its affiliated mining operations attributable to its Ohio
jurisdiction as well as any operating losses incurred under the fixed EFC
factor to the extent the actual cost of coal burned at the Gavin Plant is
below the predetermined price.
Based on the estimated future cost of coal supplied to the Gavin
Plant, from both Meigs and unaffiliated coal, management believes that OPCo
will recover the PUCO jurisdictional portion of the cost of the Meigs mining
operations including eventual mine closure liabilities under the terms of the
Settlement Agreement. In the event OPCo does not recover its costs, the
Company would still recover from OPCo all of its costs of mining operations
under the terms of the coal supply agreement.
<PAGE>
It may be necessary in the future to shut down the Meigs mining
operations if the predetermined price is not adequate to recover Meigs mining
cost from PUCO jurisdictional fuel clause customers. The cost of a shutdown
would be substantial and would include not only any possible loss on disposi-
tion of assets but also employee benefits, lease commitments, reclamation and
other shutdown costs. If a shutdown should become necessary, results of
operations are not expected to be affected since shutdown costs would be
recoverable from OPCo under the coal supply agreement.
Meigs Mine Litigation
On July 11, 1993, Meigs 31 mine, one of two underground mines
owned by the Company was inundated with water from an adjoining, sealed and
abandoned mine also owned by the Company. On July 26, 1993, the Ohio
Environmental Protection Agency (Ohio EPA) approved a plan to pump water from
the mine. The Company commenced pumping water from its Meigs 31 mine and
encountered opposition from the Federal Office of Surface Mining Reclamation
and Enforcement (OSM) and United States Environmental Protection Agency
(Federal EPA).
In April 1994 the U.S. Court of Appeals for the Sixth Circuit
reversed the judgement of the U.S. District Court for the Southern District of
Ohio which had granted a preliminary injunction to the Company, preventing the
Federal EPA and the OSM from interfering with the removal of water from Meigs
31 mine. On October 11, 1994, the U.S. Supreme Court declined to review the
U.S. Court of Appeals decision. The Company is currently negotiating a
resolution of federal claims.
As a result of the West Virginia Division of Environmental
Protection proposing to fine the Company for alleged violations from the
release of mine water into the Ohio River, the Company filed an action on June
1, 1994 in the U.S. District Court for the Southern District of West Virginia
seeking a determination that the state of West Virginia has no jurisdiction to
impose penalties with respect to the Meigs mine water discharges. On July 27,
1994 West Virginia filed an answer to the Company's complaint disputing the
Company's entitlement to a declaratory judgement and asserting a counterclaim
seeking an award of $2.55 million in civil penalties, reimbursement of
monitoring costs and compensation for unspecified natural resources damage.
An accounts receivable from the insurance company of $13,079,000,
related to the Meigs mine water damage, has been recorded. Management expects
to collect this amount in the future. The cost of the resolution of the
aforementioned litigation and environmental mitigation will be recovered
through insurance or from OPCo under the terms of the coal supply agreement.
Idling of Mine
The Meigs mine was temporarily idled on March 1, 1995. Production
is scheduled to resume 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.
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
STATEMENTS OF COST OF OPERATION
BY MONTH, FOR THE QUARTER ENDED DECEMBER 31, 1994
<CAPTION>
Three
Months
October November December Ended
1994 1994 1994 12/31/94
(in thousands)
<S> <C> <C> <C> <S>
Direct Labor-UMW* . . . . . . . . . . . . . . . . $ 487 $ 480 $ 459 $ 1,426
Indirect Labor-UMW* . . . . . . . . . . . . . . . 1,480 1,444 1,436 4,360
Benefits-UMW* . . . . . . . . . . . . . . . . . . 1,618 1,127 2,335 5,080
Salaries and Benefits-Nonunion. . . . . . . . . . 1,323 2,098 1,061 4,482
Operating Supplies. . . . . . . . . . . . . . . . 820 920 1,052 2,792
Repair Parts and Materials. . . . . . . . . . . . 1,541 1,000 414 2,955
Electricity and Other Utilities . . . . . . . . . 547 594 596 1,737
Outside Services-Maintenance, Haulage
and Reclamation . . . . . . . . . . . . . . . . 1,057 3,344 1,068 5,469
Taxes Other Than Income Taxes** . . . . . . . . . 668 740 751 2,159
Rental of Equipment . . . . . . . . . . . . . . . 801 1,468 1,529 3,798
Depreciation, Depletion and Amortization. . . . . 1,056 1,117 1,025 3,198
Mining Cost Normalization***. . . . . . . . . . . 8,504 8,505 - 17,009
Other Production Costs. . . . . . . . . . . . . . 1,456 193 1,334 2,983
Subtotal. . . . . . . . . . . . . . . . . . . . . 21,358 23,030 13,060 57,448
Transfers of Production Costs (to)/from
Coal Inventory. . . . . . . . . . . . . . . . . 263 (1,437) 2,442 1,268
Total . . . . . . . . . . . . . . . . . $21,621 $21,593 $15,502 $58,716
* 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>
<PAGE>
<PAGE>
<TABLE>
SOUTHERN OHIO COAL COMPANY
CONSTRUCTION EXPENDITURE BUDGET - 1995
<CAPTION>
Description Budgeted Amount*
(in thousands)
<S> <C>
Purchase Mineral Rights $ 646
Upgrade West Bleeder Shaft 636
Expand Refuse and Slurry 615
Mine Plant and Subsidence Blankets 279
Total $2,176
* This budget does not include any possible lease transactions.
</TABLE>
