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CENTRAL OHIO COAL COMPANY
QUARTERLY REPORT PER REQUIREMENTS
OF HOLDING COMPANY ACT RELEASE NO. 22770
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
Regulatory Liabilities 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
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CENTRAL OHIO 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 Parent . . . . . . . . $12,566 $8,227 $10,146 $30,939
COST OF OPERATION (including
Depreciation, Depletion and
Amortization of Mining Plant of
$154,000 in April, $151,000
in May and $147,000 in June). . 12,296 8,175 9,875 30,346
OPERATING INCOME. . . . . . . . . 270 52 271 593
NONOPERATING INCOME . . . . . . . 78 270 50 398
INCOME BEFORE INTEREST CHARGES. . 348 322 321 991
INTEREST CHARGES -
to Parent Company . . . . . . . 4 4 4 12
INCOME BEFORE FEDERAL
INCOME TAXES. . . . . . . . . . 344 318 317 979
FEDERAL INCOME TAXES. . . . . . . 123 97 95 315
NET INCOME. . . . . . . . . . . . $ 221 $ 221 $ 222 $ 664
The common stock of the Company is
wholly owned by Ohio Power Company.
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CENTRAL OHIO 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 . . . . . . . . . . . . $86,891 $87,610 $86,179
Construction Work in Progress . . . . . . . . . 690 568 616
Total Mining Plant . . . . . . . . . . . 87,581 88,178 86,795
Accumulated Depreciation and Amortization . . . 51,747 52,258 51,597
NET MINING PLANT . . . . . . . . . . . . 35,834 35,920 35,198
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . 17,801 26,665 4,083
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . . 339 409 671
Affiliated Companies. . . . . . . . . . . . . 9,187 4,148 5,386
Coal. . . . . . . . . . . . . . . . . . . . . . 3,310 2,579 1,750
Materials and Supplies. . . . . . . . . . . . . 10,543 10,536 7,638
Other . . . . . . . . . . . . . . . . . . . . . 2,406 2,140 2,175
TOTAL CURRENT ASSETS . . . . . . . . . . 43,586 46,477 21,703
DEFERRED FEDERAL INCOME TAXES . . . . . . . . . . 5 590 5 837 14,908
REGULATORY ASSETS:
Amounts Due From Customers For Future
Federal Income Taxes. . . . . . . . . . . . . 3,944 3,904 3,864
Mining Cost Normalization . . . . . . . . . . . - - 9,721
Other . . . . . . . . . . . . . . . . . . . . . 2,345 2,583 3,084
TOTAL REGULATORY ASSETS. . . . . . . . . 6,289 6,487 16,669
TOTAL. . . . . . . . . . . . . . . . . $91,299 $94,721 $88,478
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<TABLE>
CENTRAL OHIO 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 - 100,000 Shares
Outstanding - 69,000 Shares . . . . . . . . . $ 6,900 $ 6,900 $ 6,900
Paid-in Capital . . . . . . . . . . . . . . . . 13,069 13,069 13,069
Retained Earnings . . . . . . . . . . . . . . . 569 790 348
TOTAL SHAREOWNER'S EQUITY. . . . . . . . 20,538 20,759 20,317
LONG-TERM DEBT - to Parent Company. . . . . . . . 1,500 1,500 1,500
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . 13,902 14,076 13,811
Operating Reserves. . . . . . . . . . . . . . . 11,420 12,177 10,806
TOTAL OTHER NONCURRENT LIABILITIES . . . 25,322 26,253 24,617
CURRENT LIABILITIES:
Short-term Debt . . . . . . . . . . . . . . . . - - 427
Accounts Payable:
General . . . . . . . . . . . . . . . . . . . 1,414 1,399 1,250
Affiliated Companies. . . . . . . . . . . . . 609 554 588
Taxes Accrued . . . . . . . . . . . . . . . . . 839 1,216 9,929
Accrued Reclamation Costs . . . . . . . . . . . 7,192 6,691 7,616
Accrued Vacation Pay. . . . . . . . . . . . . . 1,115 1,164 830
Accrued Rent. . . . . . . . . . . . . . . . . . 1,728 2,315 68
Accrued Other Postretirement Benefits . . . . . 5,029 5,291 5,553
Obligations Under Capital Leases. . . . . . . . 3,794 3,969 3,917
Other . . . . . . . . . . . . . . . . . . . . . 3,946 4,058 4,260
TOTAL CURRENT LIABILITIES. . . . . . . . 25,666 26,657 34,438
REGULATORY LIABILITIES AND DEFERRED CREDITS . . . 18,273 19,552 7,606
TOTAL. . . . . . . . . . . . . . . . . $91,299 $94,721 $88,478
</TABLE>
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CENTRAL OHIO 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. . $348 $569 $790 $348
NET INCOME. . . . . . . . . . . . 221 221 222 664
CASH DIVIDENDS DECLARED . . . . . - - 664 664
BALANCE AT END OF PERIOD. . . . . $569 $790 $348 $348
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CENTRAL OHIO 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)
<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 . . . . . . . . . . . . . . . . . . . . . . $ 352 $ 440 $ 528
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 . . . . . . . . . . . . . . . . . . . . . . $ 280 $ 350 $ 420
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 $ 63 $ 64
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 253 $ 316 $ 380
J. Total Earnings Allowable:
1. Current Month (C.1. + F.1. + I.1.) . . . . . . . . . . . $ 221 $ 221 $ 222
2. Year-to-Date (C.2. + F.2. + I.2.). . . . . . . . . . . . $ 885 $ 1,106 $ 1,328
K. Net Income per Statements of Income . . . . . . . . . . . . . $ 221 $ 221 $ 222
Add: Interest Charges . . . . . . . . . . . . . . . . . . . 4 4 4
Less: Nonoperating Income . . . . . . . . . . . . . . . . . 78 270 50
L. Applied Cost-of-Capital Billing Adder:
1. Current Month. . . . . . . . . . . . . . . . . . . . . . $ 147 $ (45) $ 176
2. Year-to-Date . . . . . . . . . . . . . . . . . . . . . . $ 556 $ 511 $ 687
II. Monthly Billing Calculation:
A. Total Operating Expenses (a). . . . . . . . . . . . . . . . . $ 12,419 $ 8,272 $ 9,970
B. Add: Monthly Cost-of-Capital Billing
Adder as Applied per L. 1. of Section I . . . . . . . . . . 147 (45) 176
C. Cost Applicable to Current Month Coal Billings(b) . . . . . . $ 12,566 $ 8,227 $ 10,146
D. Coal Sold and Shipped in Current Month (in tons)(b) . . . . . 119,991 79,925 100,687
E. Average Price per Ton (in dollars) (C/D)(b) . . . . . . . . . $104.72 $102.93 $100.77
(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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CENTRAL OHIO COAL COMPANY
ANALYSIS OF OPERATING RESERVES AND REGULATORY LIABILITIES AND DEFERRED CREDITS
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:
Accrued Reclamation Costs . . . . . . . . . . . $10,477 $11,032 $ 9,603
Public Liability Insurance. . . . . . . . . . . 21 17 17
Workers' Compensation . . . . . . . . . . . . . 70 111 169
Postemployment Benefits . . . . . . . . . . . . 852 1,017 1,017
Total Operating Reserves. . . . . . . . . . $11,420 $12,177 $10,806
Regulatory Liabilities and Deferred Credits:
Gain on Sale and Leaseback of Plant . . . . . . $ 7,705 $ 7,656 $7,606
Mining Cost Normalization . . . . . . . . . . . 10,511 11,896 -
Other . . . . . . . . . . . . . . . . . . . . . 57 - -
Total Regulatory Liabilities
and Deferred Credits. . . . . . . . . . . $18,273 $19,552 $7,606
</TABLE>
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CENTRAL OHIO COAL COMPANY
INFORMATION CONCERNING CAPITAL IMPROVEMENTS
FOR THE QUARTER ENDED JUNE 30, 1994
In June 1994 the Company idled a dragline and shovel, bought out the
operating lease and wrote off the related leasehold improvements. See
"Information Concerning Operations".
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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 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. . . . . . . . . $ 324 $ - $ 324 $ 324 $ - $ 324 $ 324 $ - $ 324
Mining Structures
and Equipment. . . . . . . . 73,764 49,231 24,533 74,491 49,736 24,755 73,213 49,105 24,108
Coal Interests
(net of depletion) . . . . . 9,820 - 9,820 9,812 - 9,812 9,803 - 9,803
Mine Development Costs . . . . 2,983 2,516 467 2,983 2,522 461 2,839 2,492 347
Total Mining Plant in
Service. . . . . . . . . $86,891 $51,747 $35,144 $87,610 $52,258 $35,352 $86,179 $51,597 $34,582
/TABLE
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CENTRAL OHIO COAL COMPANY
INFORMATION CONCERNING OPERATIONS
FOR THE QUARTER ENDED JUNE 30, 1994
In June 1994 a $25 million loss was recorded as the Company idled a
leased dragline and shovel and bought out the lease. 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 buyout and the write-off of $3.1 million 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 June 30, 1994 was deferred and will be billed over the months of
July through November 1994.
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CENTRAL OHIO 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* . . . . . . . . . . . . . . . . $ 129 $ 100 $ 70 $ 299
Indirect Labor-UMW* . . . . . . . . . . . . . . . 624 575 616 1,815
Benefits-UMW* . . . . . . . . . . . . . . . . . . 830 759 708 2,297
Salaries and Benefits-Nonunion. . . . . . . . . . 627 545 546 1,718
Operating Supplies. . . . . . . . . . . . . . . . 672 527 573 1,772
Repair Parts and Materials. . . . . . . . . . . . 728 505 689 1,922
Electricity and Other Utilities . . . . . . . . . 344 298 303 945
Outside Services-Maintenance, Haulage
and Reclamation . . . . . . . . . . . . . . . . 147 236 204 587
Taxes Other Than Federal Income Taxes** . . . . . 186 162 174 522
Rental of Equipment . . . . . . . . . . . . . . . 1,447 1,450 1,189 4,086
Depreciation, Depletion and Amortization. . . . . 154 151 147 452
Coal Contractor Billings. . . . . . . . . . . . . 186 259 219 664
Mining Cost Normalization***. . . . . . . . . . . 5,281 1,385 (21,617) (14,951)
Reclamation Cost - Net. . . . . . . . . . . . . . 113 54 (504) (337)
Loss on Disposition of Mining Assets. . . . . . . - - 25,216 25,216
Other Production Costs. . . . . . . . . . . . . . 244 438 513 1,195
Subtotal. . . . . . . . . . . . . . . . . . . . . 11,712 7,444 9,046 28,202
Transfers of Production Costs (to)/from
Coal Inventory. . . . . . . . . . . . . . . . . 584 731 829 2,144
Total . . . . . . . . . . . . . . . . . $12,296 $8,175 $ 9,875 $ 30,346
* 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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CENTRAL OHIO COAL COMPANY
SCHEDULE OF CHANGES IN COAL INVENTORY
BY MONTH, FOR THE QUARTER ENDED JUNE 30, 1994
<CAPTION>
April May June
1994 1994 1994
(in thousands)
Coal Stockpile:*
<S> <C> <C> <C>
Ending Inventory. . . . . . . . $ 97 $224 $148
Beginning Inventory . . . . . . 101 97 224
Increase (Decrease) in Coal
Stockpile Inventory . . . . . $ (4) $127 $(76)
Coal in Process:**
Ending Inventory. . . . . . . . $3,213 $2,355 $1,602
Beginning Inventory . . . . . . 3,793 3,213 2,355
Increase (Decrease) in Coal in
Process Inventory . . . . . . $ (580) $ (858) $ (753)
* 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.
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