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WINDSOR COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 22179
BY MONTH, FOR THE QUARTER ENDED JUNE 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
and Regulatory Liabilities 6
Information Concerning Capital Improvements 7
Analysis of Mining Plant in Service 8
Information Concerning Operations 9
Statements of Cost of Operation 10
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WINDSOR COAL COMPANY
STATEMENTS OF INCOME
BY MONTH, FOR THE QUARTER ENDED JUNE 30, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
April 30, May 31, June 30, June 30,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES -
Sales to Affiliated Company . . $5,852 $6,234 $2,677 $14,763
COST OF OPERATION (including
Depreciation, Depletion and
Amortization of Mining Plant
of $147,000 in April, $144,000
in May and $108,000 in June). . 5,650 6,026 2,457 14,133
OPERATING INCOME. . . . . . . . . 202 208 220 630
NONOPERATING INCOME (LOSS). . . . 4 1 (12) (7)
INCOME BEFORE INTEREST CHARGES. . 206 209 208 623
INTEREST CHARGES -
to Parent Company . . . . . . . 1 1 1 3
INCOME BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . 205 208 207 620
FEDERAL INCOME TAXES. . . . . . . 92 94 94 280
NET INCOME. . . . . . . . . . . . $ 113 $ 114 $ 113 $ 340
The common stock of the Company is
wholly owned by Ohio Power Company.
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WINDSOR COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED JUNE 30, 1994
(UNAUDITED)
<CAPTION>
April 30, May 31, June 30,
1994 1994 1994
(in thousands)
ASSETS
<S> <C> <C> <C>
MINING PLANT:
Mining Plant in Service . . . . . . . . . . . . $66,020 $66,157 $66,149
Construction Work in Progress . . . . . . . . . 458 321 332
Total Mining Plant . . . . . . . . . . . 66,478 66,478 66,481
Accumulated Depreciation and Amortization . . . 24,092 24,429 24,744
NET MINING PLANT . . . . . . . . . . . . 42,386 42,049 41,737
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . 17 17 10
Accounts Receivable - General . . . . . . . . . 381 58 89
Coal. . . . . . . . . . . . . . . . . . . . . . 474 422 85
Materials and Supplies. . . . . . . . . . . . . 3,651 3,739 3,774
Other . . . . . . . . . . . . . . . . . . . . . 204 221 222
TOTAL CURRENT ASSETS . . . . . . . . . . 4,727 4,457 4,180
REGULATORY ASSETS . . . . . . . . . . . . . . . . 2,680 2,306 3,855
TOTAL. . . . . . . . . . . . . . . . . $49,793 $48,812 $49,772
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WINDSOR COAL COMPANY
BALANCE SHEETS
BY MONTH-END, FOR THE QUARTER ENDED JUNE 30, 1994
(UNAUDITED)
<CAPTION>
April 30, May 31, June 30,
1994 1994 1994
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
SHAREOWNER'S EQUITY:
Common Stock - Par Value $100:
Authorized - 5,000 Shares
Outstanding - 4,064 Shares. . . . . . . . . . $ 406 $ 406 $ 406
Paid-in Capital . . . . . . . . . . . . . . . . 10,470 10,470 10,470
Retained Earnings . . . . . . . . . . . . . . . 814 928 701
TOTAL SHAREOWNER'S EQUITY. . . . . . . . 11,690 11,804 11,577
LONG-TERM DEBT:
Finance Obligations . . . . . . . . . . . . . . 9,099 9,051 9,004
Advances from Parent Company. . . . . . . . . . 225 225 225
TOTAL LONG-TERM DEBT . . . . . . . . . . 9,324 9,276 9,229
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . 3,943 3,778 3,608
Operating Reserves. . . . . . . . . . . . . . . 1,116 1,275 1,423
TOTAL OTHER NONCURRENT LIABILITIES . . . 5,059 5,053 5,031
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . 567 567 567
Short-term Debt . . . . . . . . . . . . . . . . - - 51
Accounts Payable:
General . . . . . . . . . . . . . . . . . . . 1,091 1,156 843
Affiliated Companies. . . . . . . . . . . . . 327 204 187
Taxes Accrued . . . . . . . . . . . . . . . . . 493 766 189
Accrued Vacation Pay. . . . . . . . . . . . . . 974 1,034 608
Workers' Compensation Claims. . . . . . . . . . 2,093 2,111 2,088
Accrued Other Postretirement Benefits . . . . . 2,889 3,089 3,290
Obligations Under Capital Leases. . . . . . . . 2,061 2,064 2,063
Other . . . . . . . . . . . . . . . . . . . . . 1,978 1,900 1,528
TOTAL CURRENT LIABILITIES. . . . . . . . 12,473 12,891 11,414
DEFERRED CREDITS AND REGULATORY LIABILITIES . . . 11,247 9,788 12,521
TOTAL. . . . . . . . . . . . . . . . . $49,793 $48,812 $49,772
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WINDSOR COAL COMPANY
STATEMENTS OF RETAINED EARNINGS
BY MONTH, FOR THE QUARTER ENDED JUNE 30, 1994
(UNAUDITED)
<CAPTION>
Three
Months
Month Ended Ended
April 30, May 31, June 30, June 30,
1994 1994 1994 1994
(in thousands)
<S> <C> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD. . $701 $814 $928 $701
NET INCOME. . . . . . . . . . . . 113 114 113 340
CASH DIVIDENDS DECLARED . . . . . - - 340 340
BALANCE AT END OF PERIOD. . . . . $814 $928 $701 $701
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WINDSOR COAL COMPANY
STATEMENTS OF COST OF COMMERCIAL COAL SOLD AND SHIPPED
BY MONTH, FOR THE QUARTER ENDED JUNE 30, 1994
<CAPTION>
April May June
1994 1994 1994
(in thousands, except as noted)
I. Calculation of Cost-of-Capital Compensation:
<S> <C> <C> <C>
A. Equity Investment at Beginning of Month:
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . $ 406 $ 406 $ 406
Paid-in Capital (excluding item D). . . . . . . . . . . . . 8,353 8,353 8,353
Excess of Acquisition Cost Over Net Book Value. . . . . . . 172 172 172
8,931 8,931 8,931
B. Rate of Return Allowable per HCAR No. 22179:
12.04% per annum, 1.0033% per month (a) . . . . . . . . . . .010033 .010033 .010033
C. Earnings Allowable on Equity Investment
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 89 $ 90 $ 89
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 358 $ 448 $ 537
D. Equity Investment for the month of December 1982 . . . . . . . $ 2,117 $ 2,117 $ 2,117
E. Rate of Return Allowable per HCAR No. 22179:
13.58% per annum, 1.1317% per month . . . . . . . . . . . . .011317 .011317 .011317
F. Earnings Allowable: (re investment in item D)
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 24 $ 24 $ 24
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 96 $ 120 $ 144
G. Total Earnings Allowable:
1. Current Month (C.1. + F.1.). . . . . . . . . . . . . . . $ 113 $ 114 $ 113
2. Year-to-Date (C.2. + F.2.) . . . . . . . . . . . . . . . $ 454 $ 568 $ 681
H. Net Income per Statements of Income. . . . . . . . . . . . . . $ 113 $ 114 $ 113
Add: Interest Charges . . . . . . . . . . . . . . . . . . . 1 1 1
Less: Nonoperating Income (Loss). . . . . . . . . . . . . . 4 1 (12)
I. Applied Cost-of-Capital Billing Adder:
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 110 $ 114 $ 126
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 455 $ 569 $ 695
II. Monthly Billing Calculation:
A. Total Operating Expense (b). . . . . . . . . . . . . . . . . . $ 5,742 $ 6,120 $ 2,551
B. Add: Monthly Cost-of Capital Billing
Adder as Applied per I. 1. of Section I. . . . . . . . . . . 110 114 126
C. Cost Applicable to Coal Sold and Shipped (c) . . . . . . . . . $ 5,852 $ 6,234 $ 2,677
D. Coal Sold and Shipped in Current Month (in tons) (c) . . . . . 153,123 158,287 69,957
E. Average Price per Ton Sold and Shipped (in dollars) (C/D) (c). $38.22 $39.38 $38.27
(a) HCAR No. 22179 pertains to only a portion of the equity investment ($7,497,000), however, the approved rate
is being applied to Ohio Power Company's full equity investment, excluding retained earnings.
(b) As represented by "Cost of Operation" plus "Federal Income Taxes" reported in Statements of Income.
(c) Sales were to an affiliated company for the Cardinal Plant.
/TABLE
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WINDSOR COAL COMPANY
ANALYSIS OF OPERATING RESERVES AND DEFERRED CREDITS AND REGULATORY LIABILITIES
BY MONTH-END, FOR THE QUARTER ENDED JUNE 30, 1994
<CAPTION>
April 30, May 31, June 30,
1994 1994 1994
(in thousands)
<S> <C> <C> <C>
Operating Reserves:
Workers' Compensation . . . . . . . . . . . . . $ 606 $ 617 $ 765
Postemployment Benefits . . . . . . . . . . . . 506 654 654
Public Liability Insurance. . . . . . . . . . . 4 4 4
Total Operating Reserves. . . . . . . . . . $1,116 $1,275 $1,423
Deferred Credits and Regulatory Liabilities:
Federal Income Taxes. . . . . . . . . . . . . . $ 4,990 $4,886 $ 4,742
Amounts Due to Customer For Future
Federal Income Taxes. . . . . . . . . . . . . 3,779 3,813 3,846
Receipts for Future Coal Deliveries . . . . . . 2,300 242 3,749
West Liberty Portal Regulatory Liability. . . . 176 179 182
Mining Cost Normalization . . . . . . . . . . . - 666 -
Other . . . . . . . . . . . . . . . . . . . . . 2 2 2
Total Deferred Credits and
Regulatory Liabilities. . . . . . . . . . $11,247 $9,788 $12,521
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WINDSOR COAL COMPANY
INFORMATION CONCERNING CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED JUNE 30, 1994
The Company entered into a financing obligation relative to the Short
Creek Acid Mine Drainage facility through a sale and leaseback transaction.
The lease term is 20 years with a bargain purchase option at the end of the
term. In accordance with Statement of Financial Accounting Standards No. 98
for accounting purposes the transaction did not qualify as a sale. Therefore,
the facility was transferred to mining plant in service and is being
depreciated over 20 years which is the remaining life of the facility.
Future minimum lease payments for the facility by year and in the
aggregate consisted of the following at June 30, 1994:
(in thousands)
1994. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81
1995. . . . . . . . . . . . . . . . . . . . . . . . . . . 162
1996. . . . . . . . . . . . . . . . . . . . . . . . . . . 162
1997. . . . . . . . . . . . . . . . . . . . . . . . . . . 162
1998. . . . . . . . . . . . . . . . . . . . . . . . . . . 162
Later Years . . . . . . . . . . . . . . . . . . . . . . . 2,461
Total Future Minimum Lease Payments . . . . . . . . . . . $3,190
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WINDSOR COAL COMPANY
ANALYSIS OF MINING PLANT IN SERVICE
AND RELATED ACCUMULATED PROVISIONS FOR
DEPRECIATION AND AMORTIZATION
BY MONTH-END, FOR THE QUARTER ENDED JUNE 30, 1994
<CAPTION>
April 30, 1994 May 31, 1994 June 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)
Description
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Surface Lands. . . . . $ 638 $ - $ 638 $ 638 $ - $ 638 $ 638 $ - $ 638
Mining Structures
and Equipment. . . . 52,976 21,177 31,799 53,134 21,478 31,656 53,134 21,780 31,354
Coal Interests
(net of depletion) . 2,365 - 2,365 2,344 - 2,344 2,336 - 2,336
Mine Development Costs 10,041 2,915 7,126 10,041 2,951 7,090 10,041 2,964 7,077
Total Mining Plant
in Service . . . $66,020 $24,092 $41,928 $66,157 $24,429 $41,728 $66,149 $24,744 $41,405
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WINDSOR COAL COMPANY
INFORMATION CONCERNING OPERATIONS
FOR THE QUARTER ENDED JUNE 30, 1994
The Company announced a reduction of 95 employees effective May 28, 1994
as part of the American Electric Power (AEP) System's Clean Air Act compliance
plan. Approximately 238 employees will remain in the Company's work force.
The Cardinal Plant's Unit 2 will switch to low-sulfur coal to comply with
Phase I of the Clean Air Act Amendments of 1990 (CAAA), which become effective
January 1, 1995. The work force restructuring was implemented in order to
reduce the high-sulfur coal inventory at the plant in preparation for the fuel
switch.
The Public Utilities Commission of Ohio (PUCO) strongly recommended that
the Company not supply coal to the Cardinal Plant Unit 1 after the commence-
ment of Phase I of the CAAA in January 1995. AEP's systemwide PUCO approved
CAAA Phase I compliance plan includes continued use of Windsor coal at
Cardinal Unit 1 until the commencement of Phase II of the CAAA in January
2000.
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WINDSOR COAL COMPANY
STATEMENTS OF COST OF OPERATION
BY MONTH, FOR THE QUARTER ENDED JUNE 30, 1994
<CAPTION>
Three
Months
April May June Ended
1994 1994 1994 6/30/94
(in thousands)
<S> <C> <C> <C> <C>
Direct Labor-UMW* . . . . . . . . . . . . . . . . $ 215 $ 201 $ 96 $ 512
Indirect Labor-UMW* . . . . . . . . . . . . . . . 540 524 307 1,371
Benefits-UMW* . . . . . . . . . . . . . . . . . . 671 737 669 2,077
Salaries and Benefits-Nonunion. . . . . . . . . . 610 511 512 1,633
Operating Supplies. . . . . . . . . . . . . . . . 376 388 223 987
Repair Parts and Materials. . . . . . . . . . . . 402 342 354 1,098
Electricity and Other Utilities . . . . . . . . . 174 153 142 469
Outside Services-Maintenance, Haulage
and Reclamation . . . . . . . . . . . . . . . . 205 30 404 639
Taxes Other Than Federal Income Taxes** . . . . . 519 535 283 1,337
Rental of Equipment . . . . . . . . . . . . . . . 386 396 406 1,188
Depreciation, Depletion and Amortization. . . . . 147 144 108 399
Royalties . . . . . . . . . . . . . . . . . . . . 77 65 18 160
Mining Cost Normalization***. . . . . . . . . . . 1,295 1,283 (1,820) 758
Other Production Costs. . . . . . . . . . . . . . 340 665 418 1,423
Subtotal. . . . . . . . . . . . . . . . . . . . . 5,957 5,974 2,120 14,051
Transfers of Production Costs (to)/from
Coal Inventory. . . . . . . . . . . . . . . . . (307) 52 337 82
Total . . . . . . . . . . . . . . . . . $5,650 $6,026 $ 2,457 $14,133
* 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.
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