35-CERT 1 wccsec.txt 35-CERT WINDSOR COAL COMPANY QUARTERLY REPORT PER REQUIREMENTS OF HOLDING COMPANY ACT RELEASE NO. 26573 FOR THE QUARTER ENDED DECEMBER 31, 2000 CONTENTS Page Statements of Income and Retained Earnings 1 Balance Sheets 2-3 Information Concerning Mine Operations and Capital Improvements 4 Calculation of Cost of Capital and Statement of Cost of Commercial Coal Sold and Shipped 5 Statement of Cost of Operation 6 Analysis of Mining Plant in Service 7 Construction Expenditure Budget 8 WINDSOR COAL COMPANY STATEMENT OF INCOME FOR THE QUARTER ENDED DECEMBER 31, 2000 (UNAUDITED) (in thousands) OPERATING REVENUES $11,175 COST OF OPERATION 13,565 OPERATING LOSS (2,390) NONOPERATING INCOME 1,361 LOSS BEFORE INTEREST CHARGES (1,029) INTEREST CHARGES 73 LOSS BEFORE FEDERAL INCOME TAXES (1,102) FEDERAL INCOME TAX CREDIT ON OPERATIONS (1,107) NET INCOME $ 5 STATEMENT OF RETAINED EARNINGS FOR THE QUARTER ENDED DECEMBER 31, 2000 (UNAUDITED) (in thousands) BALANCE AT BEGINNING OF PERIOD $46 NET INCOME 5 BALANCE AT END OF PERIOD $51 The common stock of the Company is wholly owned by Ohio Power Company. WINDSOR COAL COMPANY BALANCE SHEET (UNAUDITED) December 31, 2000 (in thousands) ASSETS MINING PLANT: Mining Plant in Service $ 46,603 Accumulated Depreciation and Amortization 45,675 NET MINING PLANT 928 CURRENT ASSETS: Cash and Cash Equivalents 998 Accounts Receivable: General 7,252 Affiliated Companies 532 Advances to Affiliates 45,035 Coal 324 Materials and Supplies 3,695 Accrued Tax Benefit 1,203 Other 510 TOTAL CURRENT ASSETS 59,549 REGULATORY ASSETS 9 DEFERRED INCOME TAXES 43,939 DEFERRED CHARGES 465 TOTAL $104,890 WINDSOR COAL COMPANY BALANCE SHEET (UNAUDITED) December 31, 2000 (in thousands) CAPITALIZATION AND LIABILITIES SHAREHOLDER'S EQUITY: Common Stock - Par Value $0.10: Authorized - 5,000 Shares Outstanding - 4,064 Shares $ - Paid-in Capital - Retained Earnings 51 TOTAL SHAREHOLDER'S EQUITY 51 OTHER NONCURRENT LIABILITIES: Accrued Postretirement Benefits Other Than Pensions 31,716 Mine Closure Costs 497 Workers' Compensation Claims 12,296 Operating Reserves 38,680 TOTAL OTHER NONCURRENT LIABILITIES 83,189 CURRENT LIABILITIES: Accounts Payable: General 3,827 Affiliated Companies 1,114 Accrued Vacation Pay 697 Postemployment Benefits 5,844 Other 1,428 TOTAL CURRENT LIABILITIES 12,910 REGULATORY LIABILITIES 8,731 DEFERRED CREDITS 9 TOTAL $104,890 WINDSOR COAL COMPANY INFORMATION CONCERNING MINE OPERATIONS AND CAPITAL IMPROVEMENTS FOR THE QUARTER ENDED DECEMBER 31, 2000 MINE CLOSED The Company closed the Windsor Mine in 2001 and efforts are underway to reclaim the property. On going efforts continue to sell the shutdown Windsor Mine along with the Meigs and Muskingum Mines. MONEY POOL On June 15, 2000, the Company became a participant in the American Electric Power (AEP) System Money Pool (Money Pool). The Money Pool is a mechanism structured to meet the short-term cash requirements of the participants with AEP Company, Inc. acting as the primary borrower on behalf of the Money Pool. The Company's affiliates that are U.S. domestic electric utility operating companies and coal-mining companies are the primary participants in the Money Pool. The operation of the Money Pool is designed to match on a daily basis the available cash and borrowing requirements of the participants. Participants with excess cash loan funds to the Money Pool reducing the amount of external funds AEP Company, Inc. needs to borrow to meet the short-term cash requirements of other participants with advances from the Money Pool. AEP Company, Inc. borrows the funds needed on a daily basis to meet the net cash requirements of the Money Pool participants. A weighted average daily interest rate which is calculated based on the outstanding short-term debt borrowings made by AEP Company, Inc. is applied to each Money Pool participant's daily outstanding investment or debt position to determine interest income or interest expense. Interest income is included in nonoperating income, and interest expense is included in interest charges. At September 30, 2000 the Company was a net investor in the Money Pool and reports its investment in the Money Pool as Advances to Affiliates on the Balance Sheet. WINDSOR COAL COMPANY CALCULATION OF COST OF CAPITAL AND STATEMENT OF COST OF COMMERCIAL COAL SOLD AND SHIPPED FOR THE QUARTER ENDED DECEMBER 31, 2000 (in thousands, except as noted)
October through December 2000 I. Calculation of Cost-of-Capital Compensation: A. Equity Investment at Beginning of Period: Common Stock $ - Paid-in Capital - Excess of Acquisition Cost Over Net Book Value 172 B. Rate of Return Allowable per HCAR No. 26573: 10.27% per annum, 2.5675% per quarter .025675 C. Earnings Allowable on Equity Investment 1. Current Quarter $ 5 2. Year-to-Date $ 18 D. Net Income per Statement of Income $ 5 Add: Interest Charges 73 Less: Nonoperating Income 1,361 E. Applied Cost-of-Capital Billing Adder: 1. Current Quarter $(1,283) 2. Year-to-Date $(3,500) II. Coal Billing Calculation: A. Total Operating Expenses (a) $12,458 B. Add: Cost-of-Capital Billing Adder as Applied per E. 1. of Section I (1,283) C. Cost Applicable to Current Quarter Coal Billings 11,175 Less: Cost Applicable to Coal Sold to Unaffiliated Companies 6,779 Cost Applicable to Current Quarter Coal Billings to Ohio Power $ 4,396 D. Coal Sold and Shipped in Current Quarter to Ohio Power (in tons) 101,276 E. Average Price per Ton to Ohio Power (in dollars) (C/D) $43.40 (a) As represented by "Cost of Operation" plus "Federal Income Taxes" reported in Statement of Income.
WINDSOR COAL COMPANY STATEMENT OF COST OF OPERATION FOR THE QUARTER ENDED DECEMBER 31, 2000 (in thousands) Direct Labor-UMW* $ 534 Indirect Labor-UMW* 1,474 Benefits-UMW* 1,538 Salaries and Benefits-Nonunion 1,271 Operating Supplies 781 Repair Parts and Materials 1,613 Electricity and Other Utilities 47 Outside Services-Maintenance, Haulage and Reclamation 824 Taxes Other Than Federal Income Taxes** 218 Rental of Equipment 11 Depreciation, Depletion and Amortization 1,004 Royalties 38 Mining Cost Normalization*** (704) Other Production Costs 5,116 Subtotal 13,765 Transfers of Production Costs (to)/from Coal Inventory (200) Total $13,565 * United Mine Workers of America. ** Excludes FICA, Federal Unemployment and State Unemployment Taxes. These costs are reflected in benefits. *** Represents the deferral/accrual required to establish a monthly selling price based on forecasted results for 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. WINDSOR COAL COMPANY ANALYSIS OF MINING PLANT IN SERVICE AND RELATED ACCUMULATED PROVISIONS FOR DEPRECIATION AND AMORTIZATION December 31, 2000 Net Gross Accumulated Carrying Cost Provisions Amount (in thousands) Description Surface Lands $ 629 $ - $629 Mining Structures and Equipment 35,890 35,695 195 Coal Interests (net of depletion) 43 - 43 Mine Development Costs 10,041 9,980 61 Total Mining Plant in Service $46,603 $45,675 $928 WINDSOR COAL COMPANY CONSTRUCTION EXPENDITURE BUDGET - 2001* Description Budgeted Amount (in thousands) The Company has no construction expenditures planned for 2001. * This budget does not include any possible lease transactions.