SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
[ X ] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1995
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____ to ____
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
1-9130 CENTERIOR ENERGY CORPORATION 34-1479083
(An Ohio Corporation)
6200 Oak Tree Boulevard
Independence, Ohio 44131
Telephone (216) 447-3100
1-2323 THE CLEVELAND ELECTRIC 34-0150020
ILLUMINATING COMPANY
(An Ohio Corporation)
55 Public Square
Cleveland, Ohio 44113
Telephone (216) 622-9800
1-3583 THE TOLEDO EDISON COMPANY 34-4375005
(An Ohio Corporation)
300 Madison Avenue
Toledo, Ohio 43652
Telephone (419) 249-5000
The Annual Reports on Form 10-K of Centerior Energy Corporation (File No.
1-9130), The Cleveland Electric Illuminating Company (File No. 1-2323) and
The Toledo Edison Company (File No. 1-3583) for the fiscal year ended
December 31, 1995 are each amended to file as Exhibit 99a under "Part IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K -
- - (a) Documents Filed as a Part of the Report -- 4. Exhibits" in each Form
10-K, pursuant to Rule 15d-21 under the Securities Exchange Act of 1934,
the attached Financial Statements of the Centerior Energy Corporation
Employee Savings Plan for the fiscal year ended December 31, 1995, which
Exhibit 99a is an exhibit common to all three Annual Reports on Form 10-K.
-1-
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant identified below has duly caused this amendment to be signed on
its behalf by the undersigned, thereunto duly authorized.
CENTERIOR ENERGY CORPORATION
(Registrant)
THE CLEVELAND ELECTRIC
ILLUMINATING COMPANY
(Registrant)
THE TOLEDO EDISON COMPANY
(Registrant)
By: E. LYLE PEPIN
E. Lyle Pepin
Controller of each Registrant
Date: June 27, 1996
-2-
EXHIBIT 99a
FINANCIAL STATEMENTS
OF THE
CENTERIOR ENERGY CORPORATION
EMPLOYEE SAVINGS PLAN
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
Centerior Energy Corporation
Employee Savings Plan
Index
Report of Independent Public Accountants............................... 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits as of
December 31, 1995 and 1994.................................... 2
Statements of Changes in Net Assets Available for Plan Benefits
for the Years Ended December 31, 1995 and 1995................ 4
Notes to the Financial Statements...................................... 6
Supplemental Schedules:
Schedule I -- Schedule of Assets Held for Investment
Purposes as of December 31, 1995............................. 13
Schedule II -- Schedule of Reportable Transactions for
the Year Ended December 31, 1995............................. 15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To: Centerior Energy Corporation
We have audited the accompanying statements of net assets available for
plan benefits of the Centerior Energy Corporation Employee Savings Plan
(the Plan) as of December 31, 1995 and 1994, and the related statements of
changes in net assets available for plan benefits for the years then
ended. These financial statements and the schedules referred to below are
the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the
Plan as of December 31, 1995 and 1994, and the changes in net assets
available for plan benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes and reportable transactions are
presented for purposes of additional analysis and are not a required part
of the basic financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974.
The fund information in the statements of net assets available for plan
benefits and the statements of changes in net assets available for plan
benefits is presented for the purpose of additional analysis rather than to
present the net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
June 26, 1996
<TABLE>
CENTERIOR ENERGY CORPORATION
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
December 31, 1995
----------------------------------------------------------------------------------------------
Centerior Fixed Global
Stock Equity Income Balanced Equity
ASSETS Fund Fund Fund Fund Fund Loans Total
- ------ ------------- ------------- ------------- ------------- ------------- ------------- ----------
Investments, at market value:
<S> <C> <C> <C> <C> <C> <C> <C>
Centerior - common stock $38,277,085 $0 $0 $0 $0 $0 $38,277,085
Equity Fund - diversified
common stock fund 0 59,176,612 0 0 0 0 59,176,612
Investments in mutual funds 0 719,331 0 12,197,760 21,459,573 0 34,376,664
Loans receivable from
participants 0 0 0 0 0 5,835,438 5,835,438
Investments, at contract value:
Funds on deposit with
insurance companies and
banks 0 0 76,772,809 0 0 0 76,772,809
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total investments 38,277,085 59,895,943 76,772,809 12,197,760 21,459,573 5,835,438 214,438,608
------------- ------------- ------------- ------------- ------------- ------------- -------------
Receivables:
Transfers receivable 0 0 69,911 0 12,410 0 82,321
Investment income receivable 760 104,888 115,868 0 10 0 221,526
Contributions receivable
from:
Participants 67,173 90,491 78,074 25,745 46,869 0 308,352
Employer 26,866 33,271 29,191 8,793 15,400 0 113,521
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total receivables 94,799 228,650 293,044 34,538 74,689 0 725,720
------------- ------------- ------------- ------------- ------------- ------------- -------------
Cash and temporary cash
investments 242,608 3,482,682 174,938 0 0 0 3,900,228
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total assets 38,614,492 63,607,275 77,240,791 12,232,298 21,534,262 5,835,438 219,064,556
------------- ------------- ------------- ------------- ------------- ------------- -------------
LIABILITIES
- -----------
Transfers payable 308 50,967 0 0 0 31,046 82,321
Liabilities for investment
purchases and other 503,167 117,759 129,704 34,538 74,679 0 859,847
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total liabilities 503,475 168,726 129,704 34,538 74,679 31,046 942,168
------------- ------------- ------------- ------------- ------------- ------------- -------------
Net assets available for
Plan benefits $38,111,017 $63,438,549 $77,111,087 $12,197,760 $21,459,583 $5,804,392 $218,122,388
============= ============= ============= ============= ============= ============= =============
<F>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
CENTERIOR ENERGY CORPORATION
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
December 31, 1994
----------------------------------------------------------------------------------------------
Centerior Fixed Global
Stock Equity Income Balanced Equity
ASSETS Fund Fund Fund Fund Fund Loans Total
- ------ ------------- ------------- ------------- ------------- ------------- ------------- ---------
Investments, at market value:
<S> <C> <C> <C> <C> <C> <C> <C>
Centerior - common stock $36,992,490 $0 $0 $0 $0 $0 $36,992,490
Equity Fund - diversified
common stock fund 0 44,446,774 0 0 0 0 44,446,774
Investments in mutual funds 0 483,478 0 7,136,248 12,878,221 0 20,497,947
Loans receivable from
participants 0 0 0 0 0 4,782,757 4,782,757
Investments, at contract value:
Funds on deposit with
insurance companies and
banks 0 0 76,950,126 0 0 0 76,950,126
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total investments 36,992,490 44,930,252 76,950,126 7,136,248 12,878,221 4,782,757 183,670,094
------------- ------------- ------------- ------------- ------------- ------------- -------------
Receivables:
Transfers receivable 8,763 0 235,868 0 0 0 244,631
Investment income receivable 1,628 107,961 126,663 64,504 425 0 301,181
Contributions receivable
from:
Participants 37,213 90,531 91,757 25,102 69,672 0 314,275
Employer 11,185 27,210 27,578 7,545 20,941 0 94,459
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total receivables 58,789 225,702 481,866 97,151 91,038 0 954,546
------------- ------------- ------------- ------------- ------------- ------------- -------------
Cash and temporary cash
investments 443,062 1,068,184 801,669 15,126 24,828 0 2,352,869
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total assets 37,494,341 46,224,138 78,233,661 7,248,525 12,994,087 4,782,757 186,977,509
------------- ------------- ------------- ------------- ------------- ------------- -------------
LIABILITIES
- -----------
Transfers payable 0 168,024 0 55,889 13,032 7,686 244,631
Liabilities for investment
purchases and other 969,993 0 122,817 64,384 0 0 1,157,194
------------- ------------- ------------- ------------- ------------- ------------- -------------
Total liabilities 969,993 168,024 122,817 120,273 13,032 7,686 1,401,825
------------- ------------- ------------- ------------- ------------- ------------- -------------
Net assets available for
Plan benefits $36,524,348 $46,056,114 $78,110,844 $7,128,252 $12,981,055 $4,775,071 $185,575,684
============= ============= ============= ============= ============= ============= =============
<F>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
CENTERIOR ENERGY CORPORATION
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
For the Year Ended December 31, 1995
-------------------------------------------------------------------------------------------------
Centerior Fixed Global
Stock Equity Income Balanced Equity
Fund Fund Fund Fund Fund Loans Total
------------- ------------- ------------- ------------- ------------- ------------- -------------
Contributions:
<S> <C> <C> <C> <C> <C> <C> <C>
Participants $2,922,764 $4,217,048 $4,003,295 $1,178,413 $2,287,600 $0 $14,609,120
Employer 1,573,970 1,591,478 1,504,587 415,215 768,983 0 5,854,233
Rollover 2,563,302 65,440 0 46,688 84,432 0 2,759,862
Investment income:
Dividends 3,479,947 1,201,132 0 288,507 361,630 0 5,331,216
Interest 14,374 130,532 1,380,081 1,409 2,785 402,830 1,932,011
Net realized gain (loss) and
unrealized appreciation
(depreciation) in market
value of investments (17,903) 13,355,932 3,970,676 1,529,597 2,571,378 0 21,409,680
Transfers (to)/from other
funds (net) (5,238,060) 1,691,535 (2,344,161) 2,213,856 3,676,830 0 0
Administrative expenses (25,898) (107,529) (112,099) 0 0 0 (245,526)
Loan activity:
Borrowings (857,123) (929,852) (1,085,301) (105,033) (342,345) 3,319,654 0
Repayment of borrowings 0 0 2,158,496 0 0 (2,158,496) 0
Interest payments 0 0 402,830 0 0 (402,830) 0
------------- ------------- ------------- ------------- ------------- ------------- -------------
4,415,373 21,215,716 9,878,404 5,568,652 9,411,293 1,161,158 51,650,596
Less - Amounts withdrawn by
participants 2,828,704 3,833,281 10,878,161 499,144 932,765 131,837 19,103,892
------------- ------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) 1,586,669 17,382,435 (999,757) 5,069,508 8,478,528 1,029,321 32,546,704
Net assets available for
Plan benefits:
Beginning of year 36,524,348 46,056,114 78,110,844 7,128,252 12,981,055 4,775,071 185,575,684
------------- ------------- ------------- ------------- ------------- ------------- -------------
End of year $38,111,017 $63,438,549 $77,111,087 $12,197,760 $21,459,583 $5,804,392 $218,122,388
============= ============= ============= ============= ============= ============= =============
<F>
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
CENTERIOR ENERGY CORPORATION
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
For the Year Ended December 31, 1994
----------------------------------------------------------------------------------------------
Centerior Fixed Global
Stock Equity Income Balanced Equity
Fund Fund Fund Fund Fund Loans Total
------------- ------------- ------------- ------------- ------------- ------------- ----------
Contributions:
<S> <C> <C> <C> <C> <C> <C> <C>
Participants $3,717,016 $4,883,354 $4,102,498 $739,110 $1,301,241 $0 $14,743,219
Employer 929,229 1,773,097 1,469,423 254,278 433,104 0 4,859,131
Rollover 640 489,050 1,785,022 0 0 0 2,274,712
Investment income:
Dividends 3,016,975 1,259,178 0 149,123 169,752 0 4,595,028
Interest 86,921 35,932 2,449,757 5,623 11,307 338,406 2,927,946
Net realized gain (loss) and
unrealized appreciation
(depreciation) in market
value of investments (16,037,612) (389,854) 926,904 (198,274) 220,095 0 (15,478,741)
Transfers (to)/from other
funds (net) (669,137) (12,203,037) (6,092,924) 6,974,542 12,000,012 (9,456) 0
Loan activity:
Borrowings (631,859) (693,886) (803,077) (74,400) (125,883) 2,329,105 0
Repayment of borrowings 0 0 1,741,936 0 0 (1,741,936) 0
Interest payments 0 0 338,406 0 0 (338,406) 0
------------- ------------- ------------- ------------- ------------- ------------- -------------
(9,587,827) (4,846,166) 5,917,945 7,850,002 14,009,628 577,713 13,921,295
Less - Amounts withdrawn by
participants 6,071,613 11,349,610 50,336,066 721,750 1,028,573 242,789 69,750,401
------------- ------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) (15,659,440) (16,195,776) (44,418,121) 7,128,252 12,981,055 334,924 (55,829,106)
Net assets available for
Plan benefits:
Beginning of year 52,183,788 62,251,890 122,528,965 0 0 4,440,147 241,404,790
------------- ------------- ------------- ------------- ------------- ------------- -------------
End of year $36,524,348 $46,056,114 $78,110,844 $7,128,252 $12,981,055 $4,775,071 $185,575,684
============= ============= ============= ============= ============= ============= =============
<F>
The accompanying notes are an integral part of this statement.
</TABLE>
CENTERIOR ENERGY CORPORATION
EMPLOYEE SAVINGS PLAN
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 - GENERAL DESCRIPTION OF THE PLAN
The Centerior Energy Corporation (Centerior) Employee Savings Plan (Plan) was
approved by the Centerior Board of Directors in 1986 and went into effect as of
January 1, 1987. The purpose of the Plan is to afford eligible employees an
opportunity to make systematic savings through payroll deductions, to invest
such savings in a manner which will assist them in meeting their savings and
investment needs, and to facilitate their becoming share owners of Centerior.
Participation in the Plan is voluntary.
An eligible employee is any part-time, temporary, full-time probationary or
full-time regular employee of Centerior, Centerior Service Company (CSC), The
Cleveland Electric Illuminating Company (CEI), The Toledo Edison Company (TE)
or any other Centerior affiliate that adopts the Plan according to its terms,
and is at least age 18. CSC, CEI and TE are wholly owned subsidiaries of
Centerior.
The Employee Savings Plan Trust (Trust) has been established by agreement
between Centerior, CSC and Key Trust Company, N.A. (Key) [formerly Society
National Bank (Society)], Cleveland, Ohio. Key has been selected by Centerior
to serve as trustee (Trustee) of the Trust. Effective June 1, 1995, the Trust
is divided into two subtrusts - the Savings Plan Subtrust and the Rollover
Subtrust. There are five funds in each Subtrust, as follows: (1) Centerior
Stock Fund, (2) Equity Fund, (3) Fixed Income Fund, (4) Balanced Fund and (5)
Global Equity Fund. The Balanced and Global Equity Funds were new investment
fund options effective April 1, 1994.
Centerior may close contributions into the Plan at any time. A discontinuance
of employer matching contributions into the Plan would constitute a closing of
both participant contributions and employer matching contributions into the
Plan. In such event, for those participants with an unvested interest in the
employer's matching contribution (as specified in Note 3), such interest will
become fully vested and nonforfeitable. Centerior may either continue the
operation of the Plan with respect to the interests of participants then in the
Plan or terminate the Plan. If the Plan is terminated, all assets in the Trust
will be distributed among the participants in proportion to their respective
interests without any forfeitures.
The Plan is subject to the reporting, disclosure, participation, vesting and
fiduciary responsibility provisions of Title I of the Employee Retirement
Income Security Act of 1974 (ERISA), but is not subject to the funding
provisions of Title I and the plan termination insurance provisions of Title IV
of ERISA.
The number of participants in each fund and in the Plan at the end of the last
two years was as follows:
December 31,
1995 1994
Centerior Stock Fund 4,445 4,637
Equity Fund 4,107 4,010
Fixed Income Fund 4,302 4,299
Balanced Fund 1,357 926
Global Equity Fund 1,743 1,198
Plan 6,816 6,492
The total number of participants in the Plan was less than the sum of the
number of participants in each fund shown above because many were
participating in more than one fund.
The Plan was amended as of April 1, 1995 and June 1, 1995, switching to daily
valuation of the investment funds effective June 1, 1995. All Plan activity,
including fund account balances, transfers and withdrawals, is updated each
business day by the Trustee. Participants can get up-to-date reports on their
accounts via the telephone information access system of the Trustee. As part of
the change to daily valuation, all participants are sharing in the investment
management costs and certain administrative costs of the Plan. Several other
changes, which provided participants more control over contribution levels,
investment mix and the frequency of withdrawals, are summarized within these
notes.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of
accounting.
Valuation of Investments
Centerior common stock in the Centerior Stock Fund is valued at the average of
the high and low sales prices of Centerior common stock as reported on Network
A of The Consolidated Transaction Reporting System and as listed by The Wall
Street Journal on the last business day of the year. The average price of
Centerior common stock was $8.875 per share on December 29, 1995 and $7.3125 per
share on June 25, 1996.
Equity Fund investment securities in a diversified common stock fund managed
by National City Bank, Cleveland, Ohio, and in a mutual fund are valued at
market prices on the last business day of the year.
Fixed Income Fund investments consist of interest-bearing contracts with
insurance companies and investments in Society's EB MaGIC Fund. These
investments are fully benefit-responsive and stated at contract value, which
equals principal plus accrued interest. Contract value approximated market
value at December 31, 1995. The EB MaGIC Fund is a collective fund which
invests primarily in insurance and other investment contracts. Investment
income earned for the EB MaGIC Fund is reported as net realized gain and
unrealized appreciation in the Statement of Changes in Net Assets Available for
Plan Benefits.
Investments for the Balanced and Global Equity Funds in diversified mutual
funds, the Phoenix Balanced Fund and the American Funds' New Perspective Fund,
respectively, are valued at market prices on the last business day of the
year.
Investment Gains (Losses), Appreciation (Depreciation) and Income
The net realized gain (loss) and unrealized appreciation (depreciation) amounts
shown in the Statements of Changes in Net Assets Available for Plan Benefits
for 1995 and 1994 were calculated using the current value methodology for
costing investments. Current value represents the market value of investments
held at the beginning of the year plus the purchase price for investments
acquired during the current year.
The realized gains and losses on the distribution or sale of shares in the
Centerior Stock, Equity, Balanced and Global Equity Funds represent the
difference between the market value of the shares on the date of distribution
or sale and the cost of the shares using the current value methodology
described above. The realized gain or loss on the sale of securities in the
Centerior Stock Fund is included in the amounts withdrawn or transferred by
participants which caused the sale. The net realized gain or loss on the sale
of investment securities in the Equity, Balanced and Global Equity Funds will
contribute to the annual increase (decrease) in the respective Fund's net
assets available for Plan benefits.
Dividend income within the Centerior Stock Fund and the Equity Fund is recorded
on the ex-dividend dates. Income from all other investments is recorded as
earned.
Effective June 1, 1995, the Plan provides that the market value of all
investments shall be determined at the market close each business day of the
Trustee. Unrealized appreciation or depreciation, equal to the difference
between the cost and the daily market value of the investments, is recognized
in determining the value of each fund.
Expenses of the Plan
Expenses of the Plan incurred by the Trustee to buy and sell securities are
included as a cost of those securities. Fund earnings for the Balanced and
Global Equity Funds are net of the charges assessed for mutual fund investment
management fees.
Effective June 1, 1995, all participants are sharing in the investment
management costs and certain administrative costs of the Plan. Prior to that
date, all expenses for administration of the Plan were paid by CSC, CEI and TE
and, accordingly, are not included in the financial statements of the Plan.
The annual investment management and administrative fees assessed on total
assets under management as of December 31, 1995 were as follows:
Percentage
Centerior Stock Fund 0.10%
Equity Fund 0.60
Fixed Income Fund 0.25
Balanced Fund 1.02
Global Equity Fund 0.83
NOTE 3 - CONTRIBUTIONS
The Plan consists of three parts (Parts) - the After Tax Part, the Before Tax
Part and the Rollover Part. The maximum participant contribution into both the
After Tax Part and the Before Tax Part is 16% of pay: up to 6% as a Basic
Contribution and up to 10% as a Supplemental Contribution. The minimum
contribution is 1% of pay. Pay includes only straight-time hourly wages or
salary paid for regularly scheduled straight-time hours. A participant may
allocate contributions in increments of 1% into the Centerior Stock, Equity,
Fixed Income, Balanced and Global Equity Funds which total 100% or may allocate
all contributions into any one Fund.
Effective June 1, 1995, participants make a single election for investment mix
for their contributions into both the After Tax and Before Tax Parts.
Previously, participants made separate selections for investment mix for their
contributions into those two Parts of the Plan. Also, effective June 1, 1995,
participants may change their contributions as often as once a month and may
change their investment mix, transfer between funds or withdraw as often as
once every 30 calendar days, rather than once every three months for these
various transactions previously. A participant's withdrawal of post-December
31, 1986 After Tax contributions is penalized by requiring a six-month waiting
period for future participant contributions to the After Tax Part of the Plan,
except in certain cases of hardship and during certain open enrollment
periods.
The After Tax Part receives participant contributions after they are taxed as
pay. The Before Tax Part receives contributions before they are taxed as
pay, as participants may instruct their employer to deposit their
contributions into the Trust in exchange for the election to have their pay
reduced by the same amount. Participant contributions of pay under the Plan as
Before Tax contributions reduce a participant's taxable income for federal and
Ohio income tax purposes in the year of contribution. Participant contributions
into both the After Tax Part and the Before Tax Part are subject to certain
Internal Revenue Service (IRS) limitations.
The employer of each participant contributes an amount equal to 50% of the
participant's eligible Basic Contributions, which is allocated on the same
percentage basis and to the same Funds as the participant's Basic
Contributions. Effective April 1, 1995, all employer matching contributions are
deposited solely into the Before Tax Part of the Plan. Effective June 1, 1995,
all employer matching contributions vest immediately. Previously, employer
matching contributions which matched Basic Before Tax Contributions vested
immediately, while employer matching contributions which matched Basic After
Tax Contributions vested only after 36 months of employee participation in
the Plan. Also, employer matching contributions to the After Tax Part and
the earnings thereon, which were forfeited by participants, were applied to
reduce future employer contributions.
Employees retiring on or after July 1, 1993 are allowed to directly transfer or
rollover all or any part of their qualified lump sum pension benefit from their
respective Centerior pension plan into the Rollover Part of the Plan. The
rollover can be invested in the same five investment Funds of the Plan, but the
accounts are segregated from existing After Tax Part and Before Tax Part
accounts. The minimum rollover required is $3,500.
Participants, including those who have terminated employment but maintained
account balances, may transfer any or all of their contributions and the
earnings thereon and employer matching contributions and the earnings thereon
among the five Funds in the same Part. Any integral increment of 1% may be
transferred.
Effective June 1, 1995, a participant's interests from a plan of a previous
employer that is qualified under Internal Revenue Code (IRC) Section 401(k)
can be transferred into the Plan.
In 1995, The Centerior-Toledo Edison Company Employee Stock Ownership Plan was
terminated and distributed its assets. One option for its participants was a
direct transfer of Centerior common stock shares into the Rollover Part of the
Plan as a rollover contribution to the Centerior Stock Fund on a before-tax
basis. Participants electing this option transferred 261,620 shares valued at
$2,484,655 into the Plan in December 1995.
NOTE 4 - INVESTMENTS
Contributions into the Centerior Stock Fund and the earnings thereon are
invested by the Trustee in Centerior common stock. At the direction of
Centerior, Centerior common stock is either purchased in the open market at
prevailing prices or purchased from Centerior at the market value on the date
of the purchase. Prior to May 31, 1995, the Trustee was also authorized to
match or net to the extent possible within the Centerior Stock Fund all
Centerior common stock sales and purchases (exclusive of purchases related to
the quarterly reinvestment of cash dividends). The netting was at a price that
was the average of the most recent five daily closing prices of Centerior's
common stock prior to the effective date of the transactions. Any required
sales or purchases in excess of the netted amounts were transacted in the open
market or by transactions with Centerior.
Contributions into the Equity Fund and the earnings thereon are deposited by
the Trustee in a diversified common stock fund. These deposits are then
invested by National City Bank primarily in the common stocks of a large
number of publicly owned companies, excluding Centerior.
At December 31, 1995, contributions into the Fixed Income Fund and the earnings
thereon were invested by the Trustee in interest-bearing contracts with
insurance companies and in Society's EB MaGIC Fund. For both 1995 and 1994,
group fixed-term contracts with insurance companies earned interest at an annual
rate which ranged from 7% to 9.26%. The EB MaGIC Fund's earned interest rate
varies as the fund's various investment contracts with insurance companies
expire and new ones are added. The EB MaGIC Fund's average annual earned
interest rate at December 31, 1995 and 1994 was 6.69% and 6.85%, respectively.
Contributions into the Balanced Fund and the earnings thereon are deposited by
the Trustee in a diversified mutual fund with the objectives of long-term
growth of capital, reasonable income and conservation of capital. The Balanced
Fund investment is currently in the Phoenix Balanced Fund.
Contributions into the Global Equity Fund and the earnings thereon are
deposited by the Trustee in a diversified mutual fund with the investment
objective of long-term growth of capital through world-wide investments. The
Global Equity Fund investment is currently in the American Funds' New
Perspective Fund.
Investments that represent 5% or more of the Plan's net assets at the end of
the last two years were as follows:
December 31,
1995 1994
Centerior common stock, 4,312,911 and
4,168,168 shares, respectively $ 38,277,085 $ 36,992,490
Life Insurance Company of Georgia,
7%, due June 1999 10,048,312 10,048,312
EB MaGIC Fund 58,665,637 57,770,695
Phoenix Balanced Fund, 726,057 and
481,204 shares, respectively 12,197,760 7,136,248
American Funds' New Perspective Fund,
1,310,108 and 896,188 shares,
respectively 21,459,573 12,878,221
Total $140,648,367 $124,825,966
See Schedule I for a complete list of investments held at December 31, 1995
for each of the five Funds.
The Trustee can temporarily keep money in any of the Funds in short-term
investments or in cash to have cash available to meet participants'
distribution requests or until the Trustee invests it.
See Schedule II for a summary of reportable (significant) transactions for
1995.
NOTE 5 - WITHDRAWALS PAYABLE TO PARTICIPANTS
Subject to certain limitations under the Plan, participants may elect to
withdraw their contributions and employer matching contributions and any
related gains and earnings on these contributions.
Withdrawals payable to participants at the end of the last two years were as
follows:
December 31,
1995 1994
Centerior Stock Fund $ 78,101 $ 219,922
Equity Fund 61,585 9,331
Fixed Income Fund 115,916 1,086,561
Balanced Fund 19,972 19,472
Global Equity Fund 22,668 18,829
Total $298,242 $1,354,115
NOTE 6 - LOANS TO PARTICIPANTS
Participants are eligible to apply for a loan to borrow from their vested
available investment accounts having a balance of at least $2,000. To be
eligible, participants must receive a regular paycheck from which repayments
can be withheld to repay the borrowing and pay interest to their own accounts.
Eligible participants may borrow up to the lesser of 50% of their vested
account balances or $50,000. Loans from the Rollover Part are not permitted.
A participant may elect a repayment period of one to 60 months. All loan
repayments are made to the Fixed Income Fund.
NOTE 7 - TAX STATUS OF THE PLAN
Centerior received a determination letter from the IRS dated March 28, 1995 to
the effect that the Plan is a qualified defined contribution plan under Section
401 of the IRC and that the Trust is exempt from income taxes under Section 501
thereof. The effect of such qualification and exemption is that the
participating employees are not subject to federal income taxes on employer
contributions or any income accruing to their accounts until distributions are
made from the accounts. When a distribution is made, the excess of the amount
distributed over the participating employee's own After Tax contributions is
taxable income to the employee. Distributions from both the Before Tax Part and
the Rollover Part are subject to federal income tax.
The Plan has been amended since receiving the determination letter. However,
CSC (the Plan Administrator) and the Plan's legal counsel believe that the
Plan is currently designed and being operated in compliance with the applicable
requirements of the IRC.
<TABLE>
CENTERIOR ENERGY CORPORATION SCHEDULE I
EMPLOYEE SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1995
<CAPTION>
Number of Historical Market
Common Stock Shares Cost Value
--------------------------------------------- ---------- ------------- -------------
CENTERIOR STOCK FUND
--------------------
<S> <C> <C> <C>
Centerior ................................... 4,312,911 $65,328,616 $38,277,085
------------- -------------
EQUITY FUND
-----------
American Home Products Corp ................. 10,500 719,410 1,018,500
American International Group Inc ............ 20,000 720,120 1,850,000
Arch Communications Group Inc ............... 25,000 657,526 600,000
AT&T Corp ................................... 18,300 874,393 1,184,925
Automatic Data Processing Inc ............... 16,000 333,562 1,188,000
C R Bard Inc ................................ 20,500 581,162 661,125
Bristol-Myers Squibb Co ..................... 19,700 1,010,233 1,691,737
Browning Ferris Inds Inc .................... 55,000 1,490,953 1,615,625
Chubb Corp .................................. 13,100 794,377 1,267,425
Cisco Systems Inc ........................... 18,000 719,517 1,343,250
Walt Disney Co .............................. 22,938 773,106 1,350,475
Dow Chemical Co ............................. 20,000 1,512,300 1,405,000
Emerson Electric Co ......................... 20,000 1,285,764 1,635,000
Exxon Corp .................................. 15,800 777,157 1,271,900
Fleet Financial Group Inc ................... 23,100 657,438 941,325
FPL Group Inc ............................... 13,000 469,946 602,875
General Electric Co ......................... 18,400 706,636 1,324,800
General Motors Corp ......................... 37,000 1,391,929 1,924,000
General Re Corp ............................. 8,500 761,309 1,317,500
Harley Davidson Inc ......................... 50,000 1,252,050 1,437,500
Home Depot Inc .............................. 11,866 396,437 566,602
Hubbell Inc ................................. 7,665 400,738 503,974
Intel Corp .................................. 25,000 1,560,000 1,418,750
Interpublic Group Cos Inc ................... 39,300 1,123,029 1,704,637
Lowes Cos Inc ............................... 36,500 1,234,508 1,222,750
Marsh & McLennan Cos ........................ 6,600 528,284 585,750
Microsoft Corp .............................. 5,700 218,288 500,175
Minnesota Mining & Mfg Co ................... 17,400 683,709 1,154,925
Morton International Inc .................... 9,600 189,386 344,400
Motorola Inc ................................ 27,000 1,518,633 1,539,000
Nestle SA ................................... 23,800 731,651 1,319,781
Nordstrom Inc ............................... 14,000 500,915 567,000
Pepsico Inc ................................. 36,800 960,581 2,056,200
Pfizer Inc .................................. 34,000 1,207,670 2,142,000
Pitney Bowes Inc ............................ 36,800 1,046,675 1,729,600
Reuters Holdings PLC ........................ 22,500 451,732 1,240,313
Royal Dutch Petroleum Co .................... 10,800 748,964 1,524,150
Schering-Plough Corp ........................ 35,000 824,984 1,916,250
Schlumberger Ltd ............................ 16,600 1,085,669 1,149,550
Singer Co ................................... 40,000 1,170,083 1,115,000
Sysco Corp .................................. 39,000 980,475 1,267,500
U S West Inc - Communications Group ......... 21,435 404,238 763,622
U S West Inc - Media Group .................. 21,435 271,529 407,265
Wachovia Corp ............................... 21,200 665,182 969,900
Wells Fargo & Co ............................ 8,000 1,353,143 1,728,000
Wisconsin Energy Corp ....................... 33,850 702,231 1,036,656
Xerox Corp .................................. 8,700 1,016,169 1,191,900
York International Corp ..................... 40,000 1,442,878 1,880,000
------------- -------------
40,906,669 59,176,612
------------- -------------
</TABLE>
<TABLE>
CENTERIOR ENERGY CORPORATION SCHEDULE I
EMPLOYEE SAVINGS PLAN (Continued)
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1995
<CAPTION>
Historical Market
Mutual Funds Cost Value
--------------------------------------------------- ------------- -------------
EQUITY FUND
-----------
Fidelity Select Portfolio - Biotechnology
<S> <C> <C>
Fund (20,653 shares) ............................ $500,000 $719,331
BALANCED FUND
-------------
Phoenix Balanced Fund (726,057 shares) ............ 11,536,441 12,197,760
GLOBAL EQUITY FUND
------------------
American Funds' New Perspective Fund
(1,310,108 shares) .............................. 20,249,521 21,459,573
------------- -------------
32,285,962 34,376,664
------------- -------------
LOANS
-----
Loans Receivable from Participants ................ 5,835,438 5,835,438
------------- -------------
Funds on Deposit with Insurance Companies and Banks
---------------------------------------------------
FIXED INCOME FUND
-----------------
Life Insurance Company of Georgia,
7%, due June 1999 ............................... 10,048,312 10,048,312 *
Massachusetts Mutual Life Insurance Company,
8.65%, due February 1996 ........................ 8,058,860 8,058,860 *
EB MaGIC Fund ..................................... 54,393,169 58,665,637 *
------------- -------------
72,500,341 76,772,809
------------- -------------
Total Assets Held for Investment Purposes ......... $216,857,026 $214,438,608
============= =============
<F>
* - Contract value approximated market value.
The accompanying notes are an integral part of this schedule.
</TABLE>
<TABLE>
CENTERIOR ENERGY CORPORATION SCHEDULE II
EMPLOYEE SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Number of Historical Net Gain
Transaction Description Transactions Cost Proceeds (Loss)
------------------------------- ------------ ----------- ------------ ------------
Purchases:
<S> <C> <C> <C> <C>
Armada Money Market Fund ...... 102 $9,589,856 N/A N/A
EB MaGIC Fund ................. 11 3,866,841 N/A N/A
Employee Benefits Money
Market Fund ................. 332 25,438,491 N/A N/A
Sales:
Armada Money Market Fund ...... 58 $6,107,174 $6,107,174 $0
EB MaGIC Fund ................. 26 6,561,595 6,942,575 380,980
Employee Benefits Money
Market Fund ................. 280 27,373,813 27,373,813 0
<F>
Reportable transactions are a series of purchases or sales of the same securities issue
which aggregate to an amount in excess of 5% of the market value of the Plan assets at
the beginning of the year.
The accompanying notes are an integral part of this schedule.
</TABLE>
CENTERIOR ENERGY CORPORATION
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report on the financial statements of the Centerior
Energy Corporation Employee Savings Plan dated June 26, 1996, included in
this Form 10-K/A, into Centerior Energy Corporation's previously filed
Registration Statements, File Nos. 33-47231, 33-9736, 33-58935, 33-49957
and 33-59635.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
June 26, 1996
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report on the financial statements of the Centerior
Energy Corporation Employee Savings Plan dated June 26, 1996, included in
this Form 10-K/A, into The Cleveland Electric Illuminating Company's
previously filed Registration Statement, File No. 33-55513.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
June 26, 1996
