<PAGE>
CENTRAL OHIO COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 22770
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
CONTENTS
Page
Statements of Income 1
Balance Sheets 2-3
Statements of Retained Earnings 4
Statements of Cost of Commercial Coal Sold and Shipped 5
Analysis of Operating Reserves and Deferred Credits 6
Information Concerning Capital Improvements 7
Analysis of Mining Plant in Service 8
Information Concerning Operations 9
Statements of Cost of Operation 10
Schedule of Changes in Coal Inventory 11
<PAGE>
<TABLE>
CENTRAL OHIO COAL COMPANY
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
July 31, August 31, September 30, September 30,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Parent . . . . . . . . $7,054 $11,453 $10,795 $29,302
COST OF OPERATION (including
Depreciation, Depletion and
Amortization of Mining Plant of
$147,000 in July,
$151,000 in August and
$150,000 in September). . . . . 6,936 11,229 10,558 28,723
OPERATING INCOME. . . . . . . . . 118 224 237 579
NONOPERATING INCOME . . . . . . . 172 92 77 341
INCOME BEFORE INTEREST CHARGES. . 290 316 314 920
INTEREST CHARGES - (including
$4,000 each in July, August
and September to Parent
Company). . . . . . . . . . . . 6 5 4 15
INCOME BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . 284 311 310 905
FEDERAL INCOME TAXES. . . . . . . 63 89 89 241
NET INCOME. . . . . . . . . . . . $ 221 $ 222 $ 221 $ 664
The common stock of the Company is
wholly owned by Ohio Power Company.
</TABLE>
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<TABLE>
CENTRAL OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
(UNAUDITED)
<CAPTION>
July 31, August 31, September 30,
1994 1994 1994
(in thousands)
<S> <C> <C> <C>
ASSETS
MINING PLANT:
Mining Plant in Service . . . . . . . . . . . . $87,053 $86,551 $86,009
Construction Work in Progress . . . . . . . . . 380 396 636
Total Mining Plant . . . . . . . . . . . 87,433 86,947 86,645
Accumulated Depreciation and Amortization . . . 52,042 52,011 52,039
NET MINING PLANT . . . . . . . . . . . . 35,391 34,936 34,606
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . 7,361 12,439 3,862
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . . 335 424 509
Affiliated Companies. . . . . . . . . . . . . 4,808 6,177 5,443
Coal. . . . . . . . . . . . . . . . . . . . . . 1,437 1,367 676
Materials and Supplies. . . . . . . . . . . . . 7,647 7,702 7,288
Other . . . . . . . . . . . . . . . . . . . . . 2,320 2,063 1,722
TOTAL CURRENT ASSETS . . . . . . . . . . 23,908 30,172 19,500
DEFERRED FEDERAL INCOME TAXES . . . . . . . . . . 15,056 15,098 15,125
REGULATORY ASSETS:
Amounts Due From Customers For Future
Federal Income Taxes. . . . . . . . . . . . . 3,745 3,729 3,707
Mining Cost Normalization . . . . . . . . . . . 7,527 1,920 2,701
Other . . . . . . . . . . . . . . . . . . . . . 3,176 3,918 6,550
TOTAL REGULATORY ASSETS. . . . . . . . . 14,448 9,567 12,958
TOTAL. . . . . . . . . . . . . . . . . $88,803 $89,773 $82,189
</TABLE>
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<TABLE>
CENTRAL OHIO COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
(UNAUDITED)
<CAPTION>
July 31, August 31, September 30,
1994 1994 1994
(in thousands)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
SHAREOWNER'S EQUITY:
Common Stock - Par Value $100:
Authorized - 100,000 Shares
Outstanding - 69,000 Shares . . . . . . . . . $ 6,900 $ 6,900 $ 6,900
Paid-in Capital . . . . . . . . . . . . . . . . 13,069 13,069 13,069
Retained Earnings . . . . . . . . . . . . . . . 569 791 348
TOTAL SHAREOWNER'S EQUITY. . . . . . . . 20,538 20,760 20,317
LONG-TERM DEBT - to Parent Company. . . . . . . . 1,500 1,500 1,500
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . 13,973 13,704 13,410
Operating Reserves. . . . . . . . . . . . . . . 11,273 12,009 9,478
TOTAL OTHER NONCURRENT LIABILITIES . . . 25,246 25,713 22,888
CURRENT LIABILITIES:
Short-term Debt . . . . . . . . . . . . . . . . 427 427 604
Accounts Payable:
General . . . . . . . . . . . . . . . . . . . 1,389 1,517 1,155
Affiliated Companies. . . . . . . . . . . . . 551 836 443
Taxes Accrued . . . . . . . . . . . . . . . . . 9,912 10,129 2,471
Accrued Reclamation Costs . . . . . . . . . . . 6,746 5,682 7,616
Accrued Vacation Pay. . . . . . . . . . . . . . 856 928 959
Workers' Compensation Claims. . . . . . . . . . 1,346 1,369 1,329
Accrued Other Postretirement Benefits . . . . . 5,815 6,077 6,189
Obligations Under Capital Leases. . . . . . . . 3,904 3,854 3,796
Other . . . . . . . . . . . . . . . . . . . . . 3,015 3,473 5,462
TOTAL CURRENT LIABILITIES. . . . . . . . 33,961 34,292 30,024
DEFERRED CREDITS. . . . . . . . . . . . . . . . . 7,558 7,508 7,460
TOTAL. . . . . . . . . . . . . . . . . $88,803 $89,773 $82,189
</TABLE>
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<TABLE> CENTRAL OHIO COAL COMPANY
STATEMENTS OF RETAINED EARNINGS
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
July 31, August 31, September 30, September 30,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD. . $348 $569 $791 $348
NET INCOME. . . . . . . . . . . . 221 222 221 664
CASH DIVIDENDS DECLARED . . . . . - - 664 664
BALANCE AT END OF PERIOD. . . . . $569 $791 $348 $348
</TABLE>
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<TABLE>
CENTRAL OHIO COAL COMPANY
STATEMENTS OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
<CAPTION>
July August September
1994 1994 1994
(in thousands, except as noted)
<S> <C> <C> <C>
I. Calculation of Cost-of-Capital Compensation:
A. Equity Investment at Beginning of Month:
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . $ 6,900 $ 6,900 $ 6,900
Paid-in Capital (excluding item D and item G) . . . . . . . 450 450 450
7,350 7,350 7,350
B. Rate of Return Allowable per HCAR No. 22770:
14.34% per annum, 1.195% per month. . . . . . . . . . . . . .01195 .01195 .01195
C. Earnings Allowable: (re investment in item A)
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 88 $ 88 $ 88
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 616 $ 704 $ 792
D. Equity Investment - January 1983 (Preparation Plant). . . . . $ 6,431 $ 6,431 $ 6,431
E. Rate of Return Allowable per HCAR No. 22770:
13.01% per annum, 1.0842% per month . . . . . . . . . . . . .010842 .010842 .010842
F. Earnings Allowable: (re investment in item D)
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 70 $ 70 $ 70
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 490 $ 560 $ 630
G. Equity Investment - January 1983 (Other Assets) . . . . . . . $ 6,188 $ 6,188 $ 6,188
H. Rate of Return Allowable per HCAR No. 22770:
12.37% per annum, 1.0308% per month . . . . . . . . . . . . .010308 .010308 .010308
I. Earnings Allowable: (re investment in item G)
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 63 $ 64 $ 63
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 443 $ 507 $ 570
J. Total Earnings Allowable:
1. Current Month (C.1. + F.1. + I.1.) . . . . . . . . . . . $ 221 $ 222 $ 221
2. Year-to-Date (C.2. + F.2. + I.2.). . . . . . . . . . . . $ 1,549 $ 1,771 $ 1,992
K. Net Income per Statements of Income . . . . . . . . . . . . . $ 221 $ 222 $ 221
Add: Interest Charges . . . . . . . . . . . . . . . . . . . 6 5 4
Less: Nonoperating Income . . . . . . . . . . . . . . . . . 172 92 77
L. Applied Cost-of-Capital Billing Adder:
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 55 $ 135 $ 148
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 742 $ 877 $ 1,025
II. Monthly Billing Calculation:
A. Total Operating Expenses (a). . . . . . . . . . . . . . . . . $ 6,999 $ 11,318 $ 10,647
B. Add: Monthly Cost-of-Capital Billing
Adder as Applied per L. 1. of Section I . . . . . . . . . . 55 135 148
C. Cost Applicable to Current Month Coal Billings(b) . . . . . . $ 7,054 $ 11,453 $ 10,795
D. Coal Sold and Shipped in Current Month (in tons)(b) . . . . . 86,821 139,103 133,434
E. Average Price per Ton (in dollars) (C/D)(b) . . . . . . . . . $81.25 $82.34 $80.90
(a) As represented by "Cost of Operation" plus "Federal Income Taxes" reported in Statements of Income.
(b) Sales were to the Parent Company - Ohio Power Company for the Muskingum River Plant.
</TABLE>
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<TABLE>
CENTRAL OHIO COAL COMPANY
ANALYSIS OF OPERATING RESERVES AND DEFERRED CREDITS
BY MONTH-END, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
<CAPTION>
July 31, August 31, September 30,
1994 1994 1994
(in thousands)
<S> <C> <C> <C>
Operating Reserves:
Accrued Reclamation Costs . . . . . . . . . . . $10,045 $10,774 $8,224
Public Liability Insurance. . . . . . . . . . . 16 16 16
Workers' Compensation . . . . . . . . . . . . . 195 202 221
Postemployment Benefits . . . . . . . . . . . . 1,017 1,017 1,017
Total Operating Reserves. . . . . . . . . . $11,273 $12,009 $9,478
Deferred Credits:
Gain on Sale and Leaseback of Plant . . . . . . $7,558 $7,508 $7,460
</TABLE>
<PAGE>
CENTRAL OHIO COAL COMPANY
INFORMATION CONCERNING CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
In September 1994 various pieces of mining equipment were retired as a
result of the Company idling a dragline and shovel. The Company bought out
the operating leases and wrote off the related leasehold improvements. See
"Information Concerning Operations".
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<TABLE>
CENTRAL 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, 1994
<CAPTION>
July 31, 1994 August 31, 1994 September 30, 1994
Net Net Net
Gross Accumulated Carrying Gross Accumulated Carrying Gross Accumulated Carrying
Cost Provisions Amount Cost Provisions Amount Cost Provisions Amount
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Description
Surface Lands. . . . . . . . . $ 324 $ - $ 324 $ 324 $ - $ 324 $ 324 $ - $ 324
Mining Structures
and Equipment. . . . . . . . 74,096 49,545 24,551 73,607 49,509 24,098 73,624 50,010 23,614
Coal Interests
(net of depletion) . . . . . 9,794 - 9,794 9,781 - 9,781 9,769 - 9,769
Mine Development Costs . . . . 2,839 2,497 342 2,839 2,502 337 2,292 2,029 263
Total Mining Plant in
Service. . . . . . . . . $87,053 $52,042 $35,011 $86,551 $52,011 $34,540 $86,009 $52,039 $33,970
</TABLE>
<PAGE>
CENTRAL OHIO COAL COMPANY
INFORMATION CONCERNING OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
In September 1994 a $5.6 million loss was recorded on various pieces of
mining equipment as of result of the Company idling a leased dragline and
shovel and terminating the leases. Management concluded that this mining
equipment would no longer be needed due to the Muskingum River Plant's Clean
Air Act Amendments of 1990 compliance plan to use low sulfur coal from
unaffiliated sources. Included in the recorded loss were the operating lease
buyouts and the write-off of the net book value of leasehold improvements and
capitalized spare parts. These costs are being normalized for selling price
purposes and the portion of this provision unbilled at September 30, 1994 was
deferred and will be billed over the months of October and November 1994.
Due to the high inventory at the Muskingum River Plant the Company
temporarily idled coal production at its mine on November 14, 1994. The mine
is expected to resume production on December 5. Land reclamation activities,
preventive maintenance and administrative work will continue during the
idling.
<PAGE>
<TABLE>
CENTRAL OHIO COAL COMPANY
STATEMENTS OF COST OF OPERATION
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
<CAPTION>
Three
Months
July August September Ended
1994 1994 1994 9/30/94
(in thousands)
<S> <C> <C> <C> <C>
Direct Labor-UMW* . . . . . . . . . . . . . . . . $ 60 $ 91 $ 64 $ 215
Indirect Labor-UMW* . . . . . . . . . . . . . . . 469 606 535 1,610
Benefits-UMW* . . . . . . . . . . . . . . . . . . 728 851 654 2,233
Salaries and Benefits-Nonunion. . . . . . . . . . 536 554 841 1,931
Operating Supplies. . . . . . . . . . . . . . . . 448 667 664 1,779
Repair Parts and Materials. . . . . . . . . . . . 396 366 458 1,220
Electricity and Other Utilities . . . . . . . . . 275 310 286 871
Outside Services-Maintenance, Haulage
and Reclamation . . . . . . . . . . . . . . . . 105 289 124 518
Taxes Other Than Federal Income Taxes** . . . . . 166 198 194 558
Rental of Equipment . . . . . . . . . . . . . . . 1,179 1,182 1,185 3,546
Depreciation, Depletion and Amortization. . . . . 147 151 150 448
Coal Contractor Billings. . . . . . . . . . . . . 190 221 242 653
Mining Cost Normalization***. . . . . . . . . . . 2,194 5,607 (781) 7,020
Reclamation Cost - Net. . . . . . . . . . . . . . (428) (335) (617) (1,380)
Loss on Disposition of Mining Assets. . . . . . . - - 5,570 5,570
Other Production Costs. . . . . . . . . . . . . . 158 401 298 857
Subtotal. . . . . . . . . . . . . . . . . . . . . 6,623 11,159 9,867 27,649
Transfers of Production Costs (to)/from
Coal Inventory. . . . . . . . . . . . . . . . . 313 70 691 1,074
Total . . . . . . . . . . . . . . . . . $6,936 $11,229 $10,558 $28,723
* 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>
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<TABLE>
CENTRAL OHIO COAL COMPANY
SCHEDULE OF CHANGES IN COAL INVENTORY
BY MONTH, FOR THE QUARTER ENDED SEPTEMBER 30, 1994
<CAPTION>
July August September
1994 1994 1994
(in thousands)
<S> <C> <C> <C>
Coal Stockpile:*
Ending Inventory. . . . . . . . $311 $284 $ 120
Beginning Inventory . . . . . . 148 311 284
Increase (Decrease) in Coal
Stockpile Inventory . . . . . $163 $(27) $(164)
Coal in Process:**
Ending Inventory. . . . . . . . $1,126 $1,083 $ 556
Beginning Inventory . . . . . . 1,602 1,126 1,083
Increase (Decrease) in Coal in
Process Inventory . . . . . . $ (476) $ (43) $ (527)
* The production level of coal at the Company has been greater than the demand for coal
at Muskingum River Plant, which has created a raw coal stockpile.
** In connection with its strip-mining operations, the Company defers, as an element of
inventory, costs of removing over-burden. Such deferred costs will be charged to
expense as the uncovered coal is mined and sold.
</TABLE>
