<PAGE>
W I N D S O R C O A L C O M P A N Y
1994 Annual Report
AMERICAN ELECTRIC POWER SYSTEM<PAGE>
<PAGE>
WINDSOR 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>
WINDSOR COAL COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Year Ended December 31,
1994 1993 1992
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . . . . . . $52,821 $57,934 $57,174
OPERATING EXPENSES (including depreciation, depletion
and amortization of mining plant of $1,413,000 in
1994, $1,565,000 in 1993 and $1,599,000 in 1992) . . 50,590 55,111 54,356
OPERATING INCOME . . . . . . . . . . . . . . . . . . . 2,231 2,823 2,818
NONOPERATING INCOME. . . . . . . . . . . . . . . . . . 71 94 16
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . 2,302 2,917 2,834
INTEREST CHARGES (including $34,000 in 1994 and
$278,000 in 1993 and 1992 on long-term debt to
Parent Company). . . . . . . . . . . . . . . . . . . 85 703 718
INCOME BEFORE FEDERAL INCOME TAXES . . . . . . . . . . 2,217 2,214 2,116
FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . 854 851 753
NET INCOME . . . . . . . . . . . . . . . . . . . . . . $ 1,363 $ 1,363 $ 1,363
</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. . . . . . . . . . . . . . $ 700 $ 697 $ 694
NET INCOME . . . . . . . . . . . . . . . . . . . . . . 1,363 1,363 1,363
CASH DIVIDENDS DECLARED. . . . . . . . . . . . . . . . 680 1,360 1,360
RETAINED EARNINGS DECEMBER 31. . . . . . . . . . . . . $1,383 $ 700 $ 697
See Notes to Financial Statements.
</TABLE>
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<TABLE>
WINDSOR COAL COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
December 31,
1994 1993
(in thousands)
ASSETS
<S> <C> <C>
MINING PLANT:
Surface Lands . . . . . . . . . . . . . . . . . . . . . . . . . $ 638 $ 638
Mining Structures and Equipement. . . . . . . . . . . . . . . . 53,448 52,950
Coal Interests (net of depletion) . . . . . . . . . . . . . . . 2,303 2,398
Mine Development Costs. . . . . . . . . . . . . . . . . . . . . 10,041 10,041
Construction Work in Progress . . . . . . . . . . . . . . . . . 415 3,365
Total Mining Plant. . . . . . . . . . . . . . . . . . . 66,845 69,392
Accumulated Depreciation and Amortization . . . . . . . . . . . 26,665 26,109
NET MINING PLANT. . . . . . . . . . . . . . . . . . . . 40,180 43,283
CURRENT ASSETS:
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . 18 2,211
Accounts Receivable - General . . . . . . . . . . . . . . . . . 155 142
Accounts Receivable - Affiliated Companies. . . . . . . . . . . 815 3,652
Coal - at average cost. . . . . . . . . . . . . . . . . . . . . 390 302
Materials and Supplies - at average cost. . . . . . . . . . . . 4,021 3,895
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 273
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . . 5,640 10,475
REGULATORY ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 655 -
DEFERRED CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . 494 565
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . $46,969 $54,323
See Notes to Financial Statements.
</TABLE>
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<TABLE>
WINDSOR COAL COMPANY
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
December 31,
1994 1993
(in thousands)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
SHAREOWNER'S EQUITY:
Common Stock - Par Value $100:
Authorized - 5,000 Shares
Outstanding - 4,064 Shares. . . . . . . . . . . . . . . . . . $ 406 $ 406
Paid-in Capital . . . . . . . . . . . . . . . . . . . . . . . . 10,470 10,470
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . 1,383 700
TOTAL SHAREOWNER'S EQUITY . . . . . . . . . . . . . . . 12,259 11,576
LONG-TERM DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . 8,994 6,344
OTHER NONCURRENT LIABILITIES:
Obligations Under Capital Leases. . . . . . . . . . . . . . . . 2,876 4,431
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,777 2,986
TOTAL OTHER NONCURRENT LIABILITIES. . . . . . . . . . . 8,653 7,417
CURRENT LIABILITIES:
Long-term Debt Due Within One Year. . . . . . . . . . . . . . . 570 8,697
Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . 66 2,251
Accounts Payable - General. . . . . . . . . . . . . . . . . . . 786 1,144
Accounts Payable - Affiliated Companies . . . . . . . . . . . . 633 550
Workers' Compensation . . . . . . . . . . . . . . . . . . . . . 2,290 1,330
Obligations Under Capital Leases. . . . . . . . . . . . . . . . 2,079 2,151
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,646 3,495
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . 9,070 19,618
DEFERRED FEDERAL INCOME TAXES . . . . . . . . . . . . . . . . . . 3,997 5,532
REGULATORY LIABILITIES:
Amounts Due To Parent Company For Future
Federal Income Tax Benefits . . . . . . . . . . . . . . . . . 3,795 3,673
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 163
TOTAL REGULATORY LIABILITIES. . . . . . . . . . . . . . 3,996 3,836
COMMITMENTS AND CONTINGENCIES (Note 2)
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . $46,969 $54,323
See Notes to Financial Statements.
</TABLE>
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<TABLE>
WINDSOR 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 . . . . . . . . . . . . . . . . . . . . $ 1,363 $ 1,363 $ 1,363
Adjustments for Noncash Items:
Depreciation, Depletion and Amortization . . . . 1,413 1,565 1,599
Deferred Federal Income Taxes. . . . . . . . . . (1,414) (1,010) 363
Deferred Strike Costs (net). . . . . . . . . . . - 18 220
Accrued Other Postretirement Benefits. . . . . . 2,267 2,121 -
Changes in Certain Current Assets and Liabilities:
Accounts Receivable. . . . . . . . . . . . . . . 2,824 (467) (1,970)
Coal, Materials and Supplies . . . . . . . . . . (214) (601) 15
Accounts Payable . . . . . . . . . . . . . . . . (275) 486 (312)
Other (net). . . . . . . . . . . . . . . . . . . . 670 1,153 738
Net Cash Flows From Operating Activities . . 6,634 4,628 2,016
INVESTING ACTIVITIES:
Construction Expenditures. . . . . . . . . . . . . (488) (2,435) (1,955)
Proceeds from Sales of Property. . . . . . . . . . 3 99 16
Net Cash Flows Used For
Investing Activities . . . . . . . . . . . (485) (2,336) (1,939)
FINANCING ACTIVITIES:
Change in Short-term Debt (net). . . . . . . . . . (2,185) 2,251 (1,208)
Issuance of Long-term Debt . . . . . . . . . . . . 3,301 - 2,154
Retirement of Long-term Debt . . . . . . . . . . . (8,778) (397) (352)
Receipts from (Payments to) Parent Company for
Future Coal Deliveries . . . . . . . . . . . . . - (609) 609
Dividends Paid . . . . . . . . . . . . . . . . . . (680) (1,360) (1,360)
Net Cash Flows Used For Financing Activities (8,342) (115) (157)
Net Increase (Decrease) in Cash and Cash Equivalents (2,193) 2,177 (80)
Cash and Cash Equivalents January 1. . . . . . . . . 2,211 34 114
Cash and Cash Equivalents December 31. . . . . . . . $ 18 $ 2,211 $ 34
See Notes to Financial Statements.
</TABLE>
<PAGE>
<PAGE>
WINDSOR COAL COMPANY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES:
Organization and Regulation. Windsor Coal Company (the Company or WCCo), 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 underground mining operations in West
Virginia on properties owned or leased by OPCo or the Company. All coal is
mined and sold to generating units wholly owned by OPCo and jointly owned by
OPCo and an unaffiliated company at prices regulated by the Securities and
Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935
(1935 Act). The majority of the Company's coal production is shipped to
OPCo's Cardinal Plant. Prices billed 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, WCCo'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 Certains 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 AFUDC
rates used 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 by use of the straight-line
method for mining structures and equipment and by use of the units-of-
production method for coal interests and mine development costs.
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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, depletion 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
invest-ments 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. A 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 based on known events and claims.
Reclamation. The Surface Mining and Reclamation Act of 1977 established
minimum standards for the final closure of mines after their coal resources
are exhausted. This would include, among other things, sealing the portals at
underground mines and the removal or covering of refuse piles and water
settling ponds. The Company accrues reclamation costs 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
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 for Phase I compliance at affected
generating units. The plan tentatively proposes switching Cardinal Plant unit
1, which is supplied by the Company, to lower sulfur coal from unaffiliated
sources in 2001 to meet Phase II compliance.
<PAGE>
<PAGE>
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 Windsor
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
Windsor mining operations including eventual mine closure liabilities
attributable to its PUCO jurisdiction.
It may be necessary in the future to shut down the Windsor mining
operations if for some unforeseen reason the predetermined price is not
adequate to recover the Windsor 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 WCCo.
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 $6.6 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 their share of
the unfunded vested liability. Contributions are based on the number of hours
worked, are expensed when paid and totaled $303,000 in 1994, $360,000 in 1993
and $350,000 in 1992.
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
<PAGE>
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
was $201,000 for the year ended December 31, 1994 and $177,000 for December
31, 1993 and 1992.
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 $85,000
in 1994, $94,000 in 1993 and $91,000 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 $1.4 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 cost of these benefits
were also recognized as an expense when paid and totaled $44,000 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
$2.9 million and $2.8 million, respectively.
In order to fund OPEB benefits the Company established a Voluntary
Employees Beneficiary Association (VEBA) trust fund. The amount contributed
to 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. Contributions to the VEBA trust fund were $202,000 in 1994, $192,000 in
1993.
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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 $289,000
in 1994, $347,000 in 1993 and $1.7 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
deficit so it is able to acquire surplus fund transfers from other AEP System
Companies that are members of the fund and have a surplus. The Company pays
cash for the amount transferred. In 1994 $426,000 and in 1993 $655,000 of
Black Lung surplus was applied in accordance with the Energy Act to reimburse
the Company for benefits paid of which $426,000 in 1994 and $133,000 in 1993
was reallocated from the surplus Black Lung trust fund of other System member
companies. The Company was a deficit member of the excess Black Lung Trust
funds on December 31, 1994 at ($166,000) and a surplus member on December 31,
1993 at $29,000.
6. FEDERAL INCOME TAXES:
The details of federal income taxes are as follows:
Year Ended December 31,
1994 1993 1992
(in thousands)
Current (net) . . . . . . . . . . . . . . . . . $ 2,268 $ 1,861 $390
Deferred (net). . . . . . . . . . . . . . . . . (1,414) (1,010) 363
Total Federal Income Taxes. . . . . . . . . . . $ 854 $ 851 $753
Federal income taxes as reported are different from pre-tax book
income multiplied by the statutory tax rate predominantly due to the practice
of flow-through accounting for book/tax differences associated with self
insurance reserves.
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
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 <PAGE>
<PAGE>
operations.
The following tables show the elements of the net deferred tax
liability and the significant temporary differences that gave rise to it:
December 31,
1994 1993
(in thousands)
Deferred Tax Assets. . . . . . . . . . . . . . $ 5,130 $ 4,411
Deferred Tax Liabilities . . . . . . . . . . . (9,127) (9,943)
Net Deferred Tax Liabilities . . . . . . . . $(3,997) $(5,532)
Property Related Temporary Differences . . . . $(8,168) $(8,577)
Amounts Due To Parent Company
For Future Federal Income Taxes. . . . . . . 1,328 1,285
Self-Insurance Reserves. . . . . . . . . . . . 1,029 889
Accrued Postretirement Expenses. . . . . . . . 1,574 774
All Other (net). . . . . . . . . . . . . . . . 240 97
Total Net Deferred Tax Liabilities . . . . . $(3,997) $(5,532)
7. SUPPLEMENTARY CASH FLOW INFORMATION:
Year Ended December 31,
1994 1993 1992
(in thousands)
Cash was paid for:
Interest . . . . . . . . . . . . . . . $ 266 $ 703 $ 721
Income Taxes . . . . . . . . . . . . . 3,132 2,221 825
Noncash acquisitions under capital
leases were. . . . . . . . . . . . . . 582 1,020 2,891
8. LEASES:
Leases of property, plant and equipment are for periods up to 20
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.
The components of rental cost are as follows:
Year Ended December 31,
1994 1993 1992
(in thousands)
Operating Leases . . . . . . . . . . . . . . . . $ 887 $ 895 $1,588
Amortization of Capital Leases . . . . . . . . . 2,051 2,539 2,217
Interest on Capital Leases . . . . . . . . . . . 430 612 674
Total Rental Cost. . . . . . . . . . . . $3,368 $4,046 $4,479
<PAGE>
<PAGE>
Properties under capital leases and related obligations recorded on
the balance sheets are as follows:
December 31,
1994 1993
(in thousands)
Mining Plant. . . . . . . . . . . . . . . . . . . . . $12,957 $15,747
Accumulated Amortization. . . . . . . . . . . . . . . 8,002 9,165
Net Properties under Capital Leases . . . . . . . $ 4,955 $ 6,582
Obligations under Capital Leases:
Noncurrent Liability. . . . . . . . . . . . . . . $ 2,876 $ 4,431
Less Portion Due Within One Year. . . . . . . . . 2,079 2,151
Total Capital Lease Obligations . . . . . . . $ 4,955 $ 6,582
Properties under operating leases and related obligations are not
included in the balance sheets.
Future minimum lease rentals, consisted of the following at December
31, 1994:
Non-
Cancelable
Capital Operating
Leases Leases
(in thousands)
1995. . . . . . . . . . . . . . . . . . . . . . . . $2,365 $ 967
1996. . . . . . . . . . . . . . . . . . . . . . . . 1,354 967
1997. . . . . . . . . . . . . . . . . . . . . . . . 886 725
1998. . . . . . . . . . . . . . . . . . . . . . . . 687 4
1999. . . . . . . . . . . . . . . . . . . . . . . . 294 2
Later Years . . . . . . . . . . . . . . . . . . . . 152 -
Total Future Minimum Lease Rentals. . . . . . . . . 5,738 $2,665
Less Estimated Interest Element Included Therein. . 783
Estimated Present Value of Future Minimum
Lease Rentals . . . . . . . . . . . . . . . . . . $4,955
9. LONG-TERM DEBT AND SHORT-TERM DEBT:
Long-term debt was outstanding as follows:
December 31,
1994 1993
(in thousands)
Notes Payable to Banks - 8% due January 1994. . . . . $ - $ 5,000
Notes Payable to Parent - 8.02% due January 1994. . . - 3,300
Advances from Parent - 6% open account. . . . . . . . 225 225
Finance Obligations . . . . . . . . . . . . . . . . . 9,339 6,516
9,564 15,041
Less Portion Due Within One Year. . . . . . . . . . . 570 8 697
Total. . . . . . . . . . . . . . . . . . . . . . $ 8,994 $ 6,344
The notes payable to banks are guaranteed by OPCo.
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Finance obligations were entered into for the West Liberty portal in
August 1989, the Long's Run Ventilation facility in June 1992 and the Short
Creek Acid Mine Drainage facility in February 1994 through sale and leaseback
transactions. The term on these obligations is 20 years (Long's Run is for 10
years with a 10 year renewal) with a bargain purchase option at expiration of
the agreements. In accordance with SFAS 98, the transactions did not qualify
as a sale and leaseback for accounting purposes. Future minimum payments
under these agreements are $570,000 per year for 1995 through 1999 and
$6,489,000 in later years.
