<PAGE>
C E N T R A L O H I O
C O A L C O M P A N Y
1994 Annual Report
AMERICAN ELECTRIC POWER SYSTEM<PAGE>
<PAGE>
CENTRAL OHIO COAL COMPANY
Page
CONTENTS
Statements of Income and Statements of Retained Earnings . . . 1
Balance Sheets . . . . . . . . . . . . 2-3
Statements of Cash Flows . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . 5-11
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<TABLE>
CENTRAL OHIO COAL COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Year Ended December 31,
1994 1993 1992
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES - Sales to Parent Company . . . . . $100,837 $112,770 $95,398
OPERATING EXPENSES (including depreciation, depletion
and amortization of mining plant of $1,802,000 in
1994, $2,220,000 in 1993 and $2,743,000 in 1992) . . 98,813 110,785 97,278
OPERATING INCOME (LOSS). . . . . . . . . . . . . . . . 2,024 1,985 (1,880)
NONOPERATING INCOME. . . . . . . . . . . . . . . . . . 1,253 1,019 1,995
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . 3,277 3,004 115
INTEREST CHARGES (including $49,000 in 1994,
$50,000 in 1993 and $541,000 in 1992 on
long-term debt to Parent Company). . . . . . . . . . 57 56 596
INCOME (LOSS) BEFORE FEDERAL INCOME TAXES. . . . . . . 3,220 2,948 (481)
FEDERAL INCOME TAX EXPENSE (CREDIT). . . . . . . . . . 564 292 (3,137)
NET INCOME . . . . . . . . . . . . . . . . . . . . . . $ 2,656 $ 2,656 $ 2,656
</TABLE>
<TABLE>
STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<CAPTION>
Year Ended December 31,
1994 1993 1992
(in thousands)
<S> <C> <C> <C>
RETAINED EARNINGS JANUARY 1. . . . . . . . . . . . . . $ 347 $ 346 $ 346
NET INCOME . . . . . . . . . . . . . . . . . . . . . . 2,656 2,656 2,656
CASH DIVIDENDS DECLARED. . . . . . . . . . . . . . . . 2,655 2,655 2,656
RETAINED EARNINGS DECEMBER 31. . . . . . . . . . . . . $ 348 $ 347 $ 346
See Notes to Financial Statements.
</TABLE>
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<TABLE>
CENTRAL OHIO COAL COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
December 31,
1994 1993
(in thousands)
<S> <C> <C>
ASSETS
MINING PLANT:
Surface Lands . . . . . . . . . . . . . . . . . . . . . . . . . $ 324 $ 324
Mining Structures and Equipment . . . . . . . . . . . . . . . . 61,524 70,827
Coal Interests (net of depletion) . . . . . . . . . . . . . . . 9,745 9,870
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,292 2,983
Construction Work in Progress . . . . . . . . . . . . . . . . . 179 244
Total Mining Plant. . . . . . . . . . . . . . . . . . . 74,064 84,248
Accumulated Depreciation and Amortization . . . . . . . . . . . 45,809 52,091
NET MINING PLANT. . . . . . . . . . . . . . . . . . . . 28,255 32,157
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . 6,025 11,652
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . . . . . . . . . . 535 459
Affiliated Companies. . . . . . . . . . . . . . . . . . . . . 1,210 2,869
Coal - at average cost. . . . . . . . . . . . . . . . . . . . . 413 2,893
Materials and Supplies - at average cost. . . . . . . . . . . . 7,307 10,816
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,228 1,379
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . . 16,718 30,068
DEFERRED FEDERAL INCOME TAX ASSETS. . . . . . . . . . . . . . . . 15,474 4,965
REGULATORY ASSETS:
Amounts Due From Parent Company For
Future Federal Income Taxes . . . . . . . . . . . . . . . . . 3,547 4,118
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,017 -
TOTAL REGULATORY ASSETS . . . . . . . . . . . . . . . . 4,564 4,118
DEFERRED CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . 7,399 1,422
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . $72,410 $72,730
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CENTRAL OHIO COAL COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
December 31,
1994 1993
(in thousands)
<S> <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
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . 13,069 13,069
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . 348 347
TOTAL SHAREOWNER'S EQUITY . . . . . . . . . . . . . . . 20,317 20,316
LONG-TERM DEBT:
Advances from Parent Company. . . . . . . . . . . . . . . . . . 1,500 1,500
Finance Obligation. . . . . . . . . . . . . . . . . . . . . . . 478 -
TOTAL LONG-TERM DEBT. . . . . . . . . . . . . . . . . . 1,978 1,500
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . . . . . . . . . 7,914 10,470
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,072 13,024
TOTAL OTHER NONCURRENT LIABILITIES. . . . . . . . . . . 23,986 23,494
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . . . . . . . . . 101 -
Accounts Payable:
General . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,549 1,880
Affiliated Companies. . . . . . . . . . . . . . . . . . . . . 485 644
Taxes Accrued . . . . . . . . . . . . . . . . . . . . . . . . . 1,447 735
Accrued Reclamation Costs . . . . . . . . . . . . . . . . . . . 7,616 7,616
Accrued Vacation Pay. . . . . . . . . . . . . . . . . . . . . . 798 829
Obligations Under Capital Leases. . . . . . . . . . . . . . . . 3,344 3,373
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,466 4,384
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . 18,806 19,461
DEFERRED GAIN ON SALE AND LEASEBACK OF PLANT. . . . . . . . . . . 7,312 7,901
DEFERRED CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . 11 58
COMMITMENTS AND CONTINGENCIES (Note 2)
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . $72,410 $72,730
See Notes to Financial Statements.
/TABLE
<PAGE>
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<TABLE>
CENTRAL OHIO COAL COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Year Ended December 31,
1994 1993 1992
(in thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . $ 2,656 $ 2,656 $ 2,656
Adjustments for Noncash Items:
Depreciation, Depletion and Amortization . . . . 1,802 2,220 2,743
Deferred Federal Income Taxes. . . . . . . . . . (9,937) (3,620) 1,252
Amortization of Deferred Strike Costs (net). . . - 51 615
Accrued Other Postretirement Benefits. . . . . . 3,032 3,941 -
Equipment Buyout . . . . . . . . . . . . . . . . (5,920) - -
Changes in Certain Current Assets
and Liabilities:
Accounts Receivable. . . . . . . . . . . . . . . 1,583 (94) (2,952)
Coal, Materials and Supplies . . . . . . . . . . 5,989 4,513 3,684
Accounts Payable . . . . . . . . . . . . . . . . (490) 228 (1,619)
Taxes Accrued. . . . . . . . . . . . . . . . . . 712 4,186 (1,643)
Other (net). . . . . . . . . . . . . . . . . . . . (2,489) (1,313) 83
Net Cash Flows From (Used For) Operating
Activities . . . . . . . . . . . . . . . . (3,062) 12,768 4,819
INVESTING ACTIVITIES:
Cash Used for Construction Expenditures. . . . . . (1,053) (303) (198)
Proceeds from Sales of Property. . . . . . . . . . 546 3,537 11
Net Cash Flows From (Used For)
Investing Activities . . . . . . . . . . . (507) 3,234 (187)
FINANCING ACTIVITIES:
Issuance of Long-term Debt . . . . . . . . . . . . 604 - -
Retirement of Long-term Debt . . . . . . . . . . . (25) - (8,957)
Change in Short-term Debt (net). . . . . . . . . . 18 - -
Receipts from (Payments to) Parent Company for
Future Coal Deliveries . . . . . . . . . . . . . - (1,730) (5,225)
Dividends Paid . . . . . . . . . . . . . . . . . . (2,655) (2,655) (2,656)
Net Cash Flows Used For Financing Activities (2,058) (4,385) (16,838)
Net Increase (Decrease) in Cash and Cash Equivalents (5,627) 11,617 (12,206)
Cash and Cash Equivalents January 1. . . . . . . . . 11,652 35 12,241
Cash and Cash Equivalents December 31. . . . . . . . $ 6,025 $11,652 $ 35
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
CENTRAL OHIO COAL COMPANY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES:
Organization and Regulation. Central Ohio Coal Company (the Company or
COCCo), is a wholly-owned subsidiary of Ohio Power Company (OPCo), which is a
subsidiary of American Electric Power Company, Inc. (AEP Co., Inc.), a public
utility holding company. The Company conducts surface mining operations in
southeastern Ohio to supply coal to OPCo's Muskingum River Plant. All coal is
sold to OPCo at prices regulated by the Securities and Exchange Commission
(SEC) under the Public Utility Holding Company Act of 1935 (1935 Act). Prices
billed in connection with coal sales are sufficient to recover expenses and
provide for a return on OPCo's equity investment excluding retained earnings.
Basis of Accounting. As a cost-based rate-regulated entity, COCCo's financial
statements reflect actions of regulators that result in the recognition of
revenues and expenses in different time periods than enterprises that are not
regulated. In accordance with Statement of Financial Accounting Standards
(SFAS) No. 71 Accounting for the Effects of Certain Types of Regulation,
regulatory assets and liabilities are recorded and represent deferred expenses
and revenues, respectively, resulting from regulatory actions. Such deferrals
are amortized commensurate with their inclusion in billings to OPCo.
Coal Supply Agreement. Pursuant to a coal supply agreement with OPCo, the
Company is obligated to deliver the coal it mines to OPCo and entitled to
receive payment for all costs incurred, even under circumstances in which such
coal is not mined and/or delivered due to a natural disaster, labor unrest or
any other forced or voluntary cessation or curtailment of mining, either
temporary or permanent.
Mining Plant and Depreciation, Depletion and Amortization. Mining plant is
stated at cost and includes expenditures for mine development. Mine
development includes all costs in excess of amounts realized from coal
produced during the development of commercial mines. As a subsidiary of a
regulated public utility, an allowance for funds used during construction
(AFUDC) is recorded as a noncash income item that is recovered over the
service life of mining plant through depreciation and represents a reasonable
return on funds used to finance construction projects. The average rates used
to accrue AFUDC were 9.75% in 1994, 9.50% in 1993 and 7.25% in 1992. Since
there were no major long-term construction projects, AFUDC was not significant
in 1994, 1993 and 1992.
Depreciation, depletion and amortization are provided over the
estimated useful asset lives and are calculated using the straight-line method
for mining structures and equipment and the units-of-production method for
coal rights and mine development costs.
<PAGE>
<PAGE>
Costs of ordinary maintenance, repairs, renewals and minor
replacements of property are expensed while major additions of property,
replacements of property and betterments are capitalized. Mining plant and
related accumulated provisions for depreciation and amortization are relieved
upon disposition of the related property with any gain or loss recorded as
income or expense in the period of disposition. Such gains and losses are
included in costs billed to OPCo under the coal supply agreement.
Cash and Cash Equivalents. Cash and cash equivalents include temporary cash
investments with original maturities of three months or less.
Income Taxes. The Company follows the liability method of accounting for
income taxes as prescribed by SFAS 109, Accounting for Income Taxes. Under
the liability method, deferred income taxes are provided for all temporary
differences between book cost and tax basis of assets and liabilities which
will result in a future tax consequence. Where the flow-through method of
accounting for temporary differences is reflected in the Company's coal
billings and OPCo's fuel rates, regulatory assets and liabilities are recorded
in accordance with SFAS 71.
Black Lung Benefits and Workers' Compensation. The Company is liable under
the Federal Coal Mine Health and Safety Act of 1969 (Act), as amended, to pay
certain black lung benefits to eligible present and former employees. An
irrevocable Black Lung Benefits Trust is maintained under the Internal Revenue
Code which, based on the most recent actuarial study, is fully funded.
Therefore no accruals for Black Lung liabilities were made in 1994, 1993 or
1992.
The Company is self-insured for workers' compensation. The
estimated present value of workers' compensation claim payments has been
provided for based on known events and claims.
Reclamation. Accruals are made for estimated costs of direct reclamation as
a result of the surface mining of coal. The accrual is for the estimated
amount necessary to restore the land and water resources affected by the
mining operations to their post mining land uses, as approved by the Ohio
Department of Natural Resources.
The Surface Mining and Reclamation Act of 1977 established minimum
standards for the final closure of mines after their coal reserves are
exhausted. This would include reclaiming the support acreage at surface mines
and the removal or covering of refuse piles and water settling ponds.
Reclamation costs associated with support operations at the Company's surface
mines are recorded as incurred.
Reclassifications. Certain prior-period amounts were reclassified to conform
with current-period presentation.
2. COMMITMENTS AND CONTINGENCIES:
The Company recovers all costs from OPCo under the coal supply
agreement.
3. CONTINUATION OF MINING OPERATIONS:
The Clean Air Act Amendments of 1990 (CAAA) require significant
<PAGE>
reductions in sulfur dioxide and nitrogen oxides emitted from OPCo's
generating plants. In November 1992 the Public Utilities Commission of Ohio
(PUCO) approved OPCo's compliance plan which includes switching in 1995 to low
sulfur coal for Muskingum River Plant Unit 5 (which represents about 40% of
the Muskingum River Plant capacity). Additionally, the plan tentatively
proposes switching Muskingum River units 1 through 4 to natural gas in the
year 2000.
Under settlement agreements applicable to OPCo's PUCO jurisdiction,
OPCo's recovery of fuel costs is fixed at predetermined prices and OPCo is
provided with the opportunity to recover its Ohio jurisdictional share of its
investment in and the liabilities and future shut-down costs of the Muskingum
mine to the extent the actual cost of coal is sufficiently below the
predetermined prices. Based on the estimated future cost of coal supplies,
from both affiliated and unaffiliated sources, OPCo's management believes that
OPCo will recover under the terms of the settlement agreements the cost of the
Muskingum mining operations including eventual mine closure liabilities
attributable to its PUCO jurisdiction.
It may be necessary in the future to shut down the Muskingum mining
operations if for some unforeseen reason the predetermined price is not
adequate to recover the Muskingum mining cost from PUCO jurisdictional fuel
clause customers or if it is no longer economic due to the CAAA or otherwise
to continue mining operations. The cost of a shutdown would be substantial
and would include not only any possible loss on disposition 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.
4. OTHER RELATED-PARTY TRANSACTIONS:
American Electric Power Service Corporation (AEPSC) provides certain
managerial and professional services to AEP System companies including COCCo.
The costs of the services are billed by AEPSC on a direct-charge basis to the
extent practicable and on reasonable bases of proration for indirect costs.
The charges for services are made at cost and include no compensation for the
use of equity capital, which is furnished to AEPSC by AEP Co., Inc. Billings
from AEPSC are capitalized or expensed depending on the nature of the services
rendered. AEPSC and its billings are subject to the regulations of the SEC
under the 1935 Act.
5. BENEFIT PLANS:
United Mine Workers of America (UMWA) Pension Plans
The Company provides UMWA pension benefits for UMWA employees
meeting eligibility requirements. Benefits are based on age at retirement and
years of service. As of June 30, 1994, the UMWA actuary estimates that the
Company's share of the UMWA pension plans unfunded vested liabilities was
approximately $10.6 million. In the event the Company ceases or significantly
reduces mining operations or contributions to the UMWA pensions plans, a
withdrawal obligation may be triggered for all or a portion of its share of
the unfunded vested liability. Contributions are based on the number of hours
worked, are expensed when paid and totaled $315,000 in 1994, $480,000 in 1993
and $498,000 in 1992.
<PAGE>
AEP System Pension Plan
The Company participates in the AEP pension plan, a trusteed,
noncontributory defined benefit plan covering all employees meeting
eligibility requirements, except participants in the UMWA pension plans.
Benefits are based on service years and compensation levels. Pension costs
are allocated by first charging each System company with its service cost and
then allocating the remaining pension cost in proportion to its share of the
projected benefit obligation. The funding policy is to make annual trust fund
contributions equal to the net periodic pension cost up to the maximum amount
deductible for federal income taxes, but not less than the minimum
contribution required by the Employee Retirement Income Security Act of 1974.
The Company's share of net pension cost of the AEP System pension plan
for the years ended December 31, 1994, 1993 and 1992 was $231,000, $239,000
and $307,000, respectively.
AEP System Savings Plan
An employee savings plan is offered to non-UMWA employees which
allows participants to contribute up to 17% of their salaries into three
investment alternatives, including AEP Co., Inc. common stock. An employer
matching contribution, equaling one-half of the employees' contribution to the
plan up to a maximum of 3% of the employees' base salary, is invested in AEP
Co., Inc. common stock. The employer's annual contributions totaled $114,000
in 1994, $131,000 in 1993 and $149,000 in 1992.
Postretirement Benefits Other Than Pensions
Postretirement medical benefits for the Company's UMWA employees who
have retired or will retire after January 1, 1976 are the liability of the
Company. They are eligible for postretirement health care and life insurance
if they have at least 10 service years and are age 55 at retirement. Non-
active UMWA employees become eligible at age 55 if they have 20 service years.
The cost of health care benefits for this group was expensed when paid in 1992
and totaled $3.3 million.
The AEP System provides certain other benefits for retired
employees. Substantially all non-UMWA employees are eligible for
postretirement health care and life insurance if they have at least 10 service
years and are age 55 at retirement. Prior to 1993, net costs of these
benefits were also recognized as an expense when paid and totaled $89,000 in
1992.
SFAS 106, Employers' Accounting for Postretirement Benefits Other
Than Pensions, was adopted in January 1993 for the Company's aggregate
liability for postretirement benefits other than pensions (OPEB). SFAS 106
requires the accrual of the present value liability for OPEB costs during the
employee's service years. Costs for the accumulated postretirement benefits
earned and not recognized at adoption are being recognized, in accordance with
SFAS 106, as a transition obligation over 20 years. OPEB costs are determined
by the application of AEP System actuarial assumptions to each company's
employee complement. The Company's annual accrued costs for 1994 and 1993
required by SFAS 106 for employees and retirees, which includes the
recognition of one-twentieth of the prior service transition obligation, was
$5.1 million and $5.8 million, respectively.
<PAGE>
In order to fund OPEB benefits the Company established a Voluntary
Employees Beneficiary Association (VEBA) trust fund and a corporate owned life
insurance (COLI) program. The insurance policies have a substantial cash
surrender value which is recorded, net of equally substantial policy loans, as
deferred charges. The amount contributed to the VEBA trust fund is the
difference between the pay-as-you-go OPEB cost and SFAS 106 total OPEB cost.
This contribution is funded by amounts billed to OPCo plus net earnings from
the COLI program. Contributions to the VEBA trust fund were $341,000 in 1994
and $377,000 in 1993.
Several UMWA health plans pay the postretirement medical benefits
for the Company's UMWA retirees who retired before January 2, 1976 and their
survivors plus retirees and others whose last employer is no longer a
signatory to the UMWA contract or is no longer in business. The UMWA health
plans are funded by payments from current and former UMWA wage agreement
signatories, the 1950 UMWA Pension Plan surplus and the Abandoned Mine Land
Reclamation Fund Surplus. Required annual payments to the UMWA health funds
made by the Company were recognized as expense when paid and totaled $233,000
in 1994, $342,000 in 1993 and $2.4 million in 1992.
The Energy Policy Act of 1992 (Energy Act) permits recovery of
excess Black Lung Trust funds of the AEP System to pay certain postretirement
medical benefits under one of the UMWA health plans. Reimbursement
limitations apply to the System's excess funding. The Company has a fund
surplus that it is able to transfer to other AEP System Companies that are
members of the fund and have a deficit. No transfers were made to other
companies in 1994 or 1993. In 1994 $1.1 million and in 1993 $1.5 million of
Black Lung surplus was applied in accordance with the Energy Act to reimburse
the Company for benefits paid. The Company's share of the excess Black Lung
Trust funds at December 31, 1994 and 1993 was $4.7 million and $4.8 million,
respectively.
6. FEDERAL INCOME TAXES:
The details of Federal income taxes are as follows:
Year Ended December 31,
1994 1993 1992
(in thousands)
Current (net) . . . . . . . . . . . . . . . . . . $10,501 $ 3,912 $(4,389)
Deferred (net). . . . . . . . . . . . . . . . . . (9,937) (3,620) 1,252
Total Federal Income Taxes. . . . . . . . . . . . $ 564 $ 292 $(3,137)
Federal income taxes as reported are different from pre-tax book
income multiplied by the statutory tax rate predominantly due to permanent
differences for corporate owned life insurance and the practice of flow-
through accounting for book/tax differences associated with certain
depreciation differences. Additionally in 1992, adjustments were recorded
associated with Internal Revenue Service audits of prior years' tax returns.
The Company joins in the filing of a consolidated federal income tax
return with its affiliated companies in the AEP System. The allocation of the
AEP System's current consolidated federal income tax to the System companies
is in accordance with SEC rules under the 1935 Act. These rules permit the
allocation of the benefit of current tax losses to the System companies giving
<PAGE>
rise to them in determining their current tax expense. The tax loss of the
System parent company, AEP Co., Inc., is allocated to its subsidiaries with
taxable income. With the exception of the loss of the parent company, the
method of allocation approximates a separate return result for each company in
the consolidated group.
The AEP System has settled with the Internal Revenue Service (IRS)
all issues from the audits of the consolidated federal income tax returns for
the years prior to 1988. Returns for the years 1988 through 1990 are
presently being audited by the IRS. In the opinion of management, the final
settlement of open years will not have a material effect on results of
operations.
The following tables show the elements of the net deferred tax asset
and the significant temporary differences that gave rise to it:
December 31,
1994 1993
(in thousands)
Deferred Tax Assets . . . . . . . . . . . . $20,434 $11,358
Deferred Tax Liabilities. . . . . . . . . . (4,960) (6,393)
Net Deferred Tax Assets . . . . . . . . . $15,474 $ 4,965
Property Related Temporary Differences. . . $(3,182) $(3,844)
Amounts Due From Parent Company
For Future Federal Income Taxes . . . . . (1,241) (1,441)
Accrued Mine Reclamation Expense. . . . . . 5,439 5,781
Abandonment of Dragline . . . . . . . . . . 8,825 -
Deferred Book Gain - Sale/Leaseback
of Plant. . . . . . . . . . . . . . . . . 2,559 2,765
Accrued Postretirement Expense. . . . . . . 2,494 1,442
All Other (net) . . . . . . . . . . . . . . 580 262
Total Net Deferred Tax Assets . . . . . . $15,474 $ 4,965
7. SUPPLEMENTARY CASH FLOW INFORMATION:
Year Ended December 31,
1994 1993 1992
(in thousands)
Cash was paid (received) for:
Interest. . . . . . . . . . . . . . . . $ 57 $ 56 $ 597
Income Taxes. . . . . . . . . . . . . . 10,167 (43) (2,712)
Noncash acquisitions under capital leases. 7,276 1,255 5,395
8. LONG-TERM DEBT:
Long-term debt was outstanding as follows:
December 31,
1994 1993
(in thousands)
Advances from Parent - 3.3% Open Account . . . $1,500 $1,500
Finance Obligation . . . . . . . . . . . . . . 579 -
2,079 1,500
Less Portion Due Within One Year . . . . . . . 101 -
Total . . . . . . . . . . . . . . . . . . $1,978 $1,500
<PAGE>
<PAGE>
A finance obligation was entered into for the Mid Rail Loadout
facility in October 1994 through a sale and leaseback transaction. The term
of the obligation is six years, with a bargain purchase option at the
expiration of the agreement. In accordance with SFAS 98, the transaction did
not qualify as a sale and leaseback for accounting purposes. Future minimum
payments under the agreement are $101,000 per year for 1995 through 1999 and
$74,000 in 2000.
9. LEASES:
Leases of property, plant and equipment are for periods up to 30
years and require payments of related property taxes, maintenance and
operating costs. The majority of the leases have purchase or renewal options
and will be renewed or replaced by other leases as long as mining operations
continue.
Lease rentals are primarily charged to operating expenses. The
components of rental cost are as follows:
Year Ended December 31,
1994 1993 1992
(in thousands)
Operating Leases. . . . . . . . . . . . . . . $ 9,220 $11,620 $14,294
Amortization of Capital Leases. . . . . . . . 3,242 4,052 4,687
Interest on Capital Leases. . . . . . . . . . 620 1,227 2,446
Total Rental Cost . . . . . . . . . . . . $13,082 $16,899 $21,427
Properties under capital leases and related obligations recorded on
the balance sheets are as follows:
December 31,
1994 1993
(in thousands)
Mining Plant. . . . . . . . . . . . . . . . . . . . . . $27,135 $35,882
Accumulated Provision for Amortization. . . . . . . . . 15,877 22,039
Net Properties under Capital Leases . . . . . . . . . $11,258 $13,843
Obligations under Capital Leases:
Noncurrent Liability. . . . . . . . . . . . . . . . . $ 7,914 $10,470
Liability Due Within One Year . . . . . . . . . . . . 3,344 3,373
Total Capital Lease Obligations . . . . . . . . . . $11,258 $13,843
Properties under operating leases and related obligations are not
included in the balance sheets.
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Future minimum lease rentals consisted of the following at December
31, 1994:
Non-
Cancelable
Capital Operating
Leases Leases
(in thousands)
1995. . . . . . . . . . . . . . . . . . . $ 3,833 $ 5,545
1996. . . . . . . . . . . . . . . . . . . 3,329 4,710
1997. . . . . . . . . . . . . . . . . . . 2,945 4,190
1998. . . . . . . . . . . . . . . . . . . 2,495 4,144
1999. . . . . . . . . . . . . . . . . . . 1,246 3,796
Later Years . . . . . . . . . . . . . . . 804 16,227
Total Future Minimum Lease Rentals. . . . 14,652 $38,612
Less Estimated Interest Element . . . . . 3,394
Estimated Present Value of Future
Minimum Lease Rentals . . . . . . . . . $11,258
