FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_________________to_________________
Commission File Number 1-2578
OHIO EDISON COMPANY
(Exact name of Registrant as specified in its charter)
Ohio 34-0437786
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
76 South Main Street, Akron, Ohio 44308
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 216-384-5100
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
___ ___
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date:
152,569,437 shares of common stock, $9 par value, outstanding
as of November 4, 1994.<PAGE>
OHIO EDISON COMPANY
TABLE OF CONTENTS
Pages
Part I. Financial Information
Consolidated Statements of Income 1
Consolidated Balance Sheets 2-3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5-6
Report of Independent Public Accountants 7
Management's Discussion and Analysis of Results of
Operations and Financial Condition 8-9
Part II. Other Information
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
OHIO EDISON COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- --------------------------
1994 1993 1994 1993
---- ---- ---- ----
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES $614,390 $624,524 $1,801,066 $1,781,087
-------- -------- ---------- ----------
OPERATING EXPENSES AND TAXES:
Fuel and purchased power 109,199 116,767 340,826 336,015
Nuclear operating costs 80,021 75,537 235,575 218,623
Other operating costs 102,431 107,354 324,905 320,449
-------- -------- ---------- ----------
Total operation and maintenance expenses 291,651 299,658 901,306 875,087
Provision for depreciation 58,579 55,169 164,918 165,265
Amortization (deferral) of net regulatory assets (1,244) 137 (7,214) (5,942)
General taxes 61,255 64,264 180,361 186,704
Income taxes 52,332 53,113 139,405 138,300
-------- -------- ---------- ----------
Total operating expenses and taxes 462,573 472,341 1,378,776 1,359,414
-------- -------- ---------- ----------
OPERATING INCOME 151,817 152,183 422,290 421,673
OTHER INCOME 5,032 4,079 10,821 13,083
-------- -------- ---------- ----------
TOTAL INCOME 156,849 156,262 433,111 434,756
-------- -------- ---------- ----------
NET INTEREST AND OTHER CHARGES:
Interest on long-term debt 65,638 65,375 195,767 197,733
Deferred nuclear unit interest (2,124) (2,193) (6,383) (6,389)
Allowance for borrowed funds used during
construction and capitalized interest (1,224) (923) (3,796) (3,506)
Other interest expense 5,167 4,354 13,124 12,431
Subsidiary's preferred stock dividend requirements 1,167 1,428 4,204 4,497
--------- --------- ---------- -----------
Net interest and other charges 68,624 68,041 202,916 204,766
--------- --------- ---------- -----------
INCOME BEFORE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING 88,225 88,221 230,195 229,990
Cumulative effect to January 1, 1993 of a change
in accounting for unbilled revenues (net of income
taxes of $33,632,000) - - - 58,201
--------- ---------- ---------- -----------
NET INCOME 88,225 88,221 230,195 288,191
PREFERRED AND PREFERENCE STOCK
DIVIDEND REQUIREMENTS 5,356 5,759 16,316 17,899
--------- --------- ---------- -----------
EARNINGS ON COMMON STOCK $ 82,869 $ 82,462 $ 213,879 $ 270,292
========= ========= ========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 143,310 152,569 143,168 152,569
========= ========= ========== ===========
EARNINGS PER SHARE OF COMMON STOCK:
Before cumulative effect of a change in accounting $ .58 $ .54 $ 1.49 $ 1.39
Cumulative effect to January 1, 1993 of a change
in accounting for unbilled revenues - - - .38
--------- --------- ---------- -----------
EARNINGS PER SHARE OF COMMON STOCK $ .58 $ .54 $ 1.49 $ 1.77
========= ========= ========== ===========
DIVIDENDS DECLARED PER SHARE OF
COMMON STOCK $.375 $.375 $1.125 $1.125
========= ========= ========== ===========
<FN>
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
-1-
</TABLE>
<PAGE>
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1994 1993
------------- ------------
(In thousands)
ASSETS
------
<S> <C> <C>
UTILITY PLANT:
In service, at original cost $8,471,133 $8,380,430
Less--Accumulated provision for depreciation 2,847,582 2,732,527
---------- ----------
5,623,551 5,647,903
---------- ----------
Construction work in progress-
Electric plant 185,503 182,894
Nuclear fuel 45,960 46,879
---------- ----------
231,463 229,773
---------- ----------
5,855,014 5,877,676
---------- ----------
OTHER PROPERTY AND INVESTMENTS:
Letter of credit collateralization (Note 1) 277,763 --
Other 184,935 181,815
---------- ----------
462,698 181,815
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents 47,150 159,690
Receivables-
Customers (less accumulated provisions of $2,504,000
and $6,907,000, respectively, for uncollectible accounts) 271,021 298,913
Other 42,703 42,428
Materials and supplies, at average cost-
Fuel 43,266 41,513
Other 79,668 87,689
Prepayments 64,517 72,889
---------- ----------
548,325 703,122
---------- ----------
DEFERRED CHARGES:
Regulatory assets 2,013,553 1,993,795
Unamortized sale and leaseback costs 106,982 110,656
Other 42,689 51,203
---------- ----------
2,163,224 2,155,654
---------- ----------
$9,029,261 $8,918,267
========== ==========
-2-
</TABLE>
<PAGE>
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1994 1993
------------ ------------
(In thousands)
CAPITALIZATION AND LIABILITIES
------------------------------
<S> <C> <C>
CAPITALIZATION:
Common stockholders' equity-
Common stock, $9 par value,
authorized 175,000,000 shares-
152,569,437 shares outstanding $1,373,125 $1,373,125
Other paid-in capital 726,628 727,865
Retained earnings 375,410 322,821
Unallocated employee stock ownership plan common
stock - 9,207,961 and 9,608,739 shares, respectively (172,854) (180,519)
---------- ----------
Total common stockholders' equity 2,302,309 2,243,292
Preferred stock-
Not subject to mandatory redemption 277,335 277,335
Subject to mandatory redemption 25,000 25,000
Preferred stock of consolidated subsidiary-
Not subject to mandatory redemption 50,905 50,905
Subject to mandatory redemption 15,000 20,500
Long-term debt 3,337,754 3,039,263
---------- ----------
6,008,303 5,656,295
---------- ----------
CURRENT LIABILITIES:
Currently payable preferred stock
and long-term debt 149,430 444,170
Short-term borrowings 149,661 104,126
Accounts payable 100,969 127,895
Accrued taxes 106,430 107,687
Accrued interest 64,876 72,667
Other 165,765 141,251
---------- ----------
737,131 997,796
---------- ----------
DEFERRED CREDITS:
Accumulated deferred income taxes 1,806,944 1,798,551
Accumulated deferred investment tax credits 225,836 231,863
Property taxes 101,459 101,182
Other 149,588 132,580
---------- ----------
2,283,827 2,264,176
---------- ----------
COMMITMENTS, GUARANTEES AND
CONTINGENCIES (Note 2) ---------- ----------
$9,029,261 $8,918,267
========== ==========
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these balance sheets.
-3-
</TABLE>
<PAGE>
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
1994 1993 1994 1993
------ ----- ------ ------
(In thousands)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 88,225 $ 88,221 $230,195 $288,191
Adjustments to reconcile net income to net
cash from operating activities-
Provision for depreciation 58,579 55,169 164,918 165,265
Nuclear fuel and lease amortization 19,028 19,644 51,216 47,073
Deferred income taxes, net 8,499 5,125 23,689 36,772
Investment tax credits, net (2,009) (2,181) (6,027) (6,547)
Allowance for equity funds used during
construction (1,094) (431) (4,160) (2,785)
Deferred fuel costs, net (6,423) 543 (6,105) (8,834)
Cumulative effect of a change in accounting
for unbilled revenues - - - (58,201)
Other amortization, net 12 1,844 (226) 736
---------- ---------- --------- --------
Internal cash before dividends 164,817 167,934 453,500 461,670
Receivables 23,956 (20,055) 27,617 8,062
Materials and supplies 3,697 15,149 6,268 14,509
Accounts payable (47,304) (38,757) (12,822) (1,057)
Other 47,414 112,823 48,174 31,437
---------- ---------- --------- --------
Net cash provided from operating activities 192,580 237,094 522,737 514,621
---------- ---------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Preferred stock - 24,624 - 121,294
Long-term debt 93,167 286,573 324,964 618,872
Short-term borrowings, net 136,758 - 125,535 -
Redemptions and Repayments-
Preferred and preference stock 6,000 28,170 56,362 122,502
Long-term debt 216,782 159,502 356,256 616,936
Short-term borrowings, net - 127,000 - 36,577
Dividend Payments-
Common stock 54,684 55,855 163,101 166,509
Preferred and preference stock 5,533 5,583 16,678 15,367
--------- --------- ---------- --------
Net cash used for financing activities 53,074 64,913 141,898 217,725
--------- --------- ---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions 60,895 67,832 206,265 182,934
Letter of credit collateralization deposit 77,763 - 277,763 -
Sale and leaseback restructuring fees - 86 - 10,412
Other 1,849 1,515 9,351 3,486
---------- --------- ---------- --------
Net cash used for investing activities 140,507 69,433 493,379 196,832
---------- --------- ---------- --------
Net increase (decrease) in cash and cash equivalents (1,001) 102,748 (112,540) 100,064
Cash and cash equivalents at beginning of period 48,151 11,528 159,690 14,212
---------- --------- ---------- --------
Cash and cash equivalents at end of period $ 47,150 $114,276 $ 47,150 $114,276
========== ========= ========== ========
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
-4-
</TABLE>
<PAGE>
OHIO EDISON COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1 - FINANCIAL STATEMENTS:
The condensed consolidated financial statements reflect all
normal recurring adjustments that, in the opinion of management,
are necessary to fairly present results of operations for the
interim periods. These statements should be read in conjunction
with the consolidated financial statements and notes included in
Ohio Edison Company's (Company) 1993 Annual Report to Stockholders.
The results of operations are not intended to represent results of
operations for any future period.
OES Finance, Incorporated (a wholly owned subsidiary of the
Company) was established during the third quarter of 1994 for the
sole purpose of maintaining deposits pledged as collateral for
reimbursement obligations relating to certain letters of credit
supporting the Company's obligations to lessors under the Beaver
Valley Unit 2 sale and leaseback arrangements. The deposits pledged
to the financial institution providing those letters of credit are
the sole property of OES Finance. In the event of liquidation, OES
Finance, as a separate corporate entity, would have to satisfy its
obligations to creditors before any of its assets could be made
available to the Company as owner of OES Finance common stock.
2 - COMMITMENTS, GUARANTEES AND CONTINGENCIES:
Construction Program --
The Company and its wholly owned subsidiary, Pennsylvania
Power Company (Companies), currently forecast expenditures of
approximately $1,000,000,000 for property additions and
improvements from 1994-1998, of which approximately $235,000,000 is
applicable to 1994. The Companies' nuclear fuel investments are
expected to be approximately $204,000,000 during the 1994-1998
period, of which approximately $45,000,000 is applicable to 1994.
Guarantees --
The Companies, together with the other Central Area Power
Coordination Group companies, have each severally guaranteed
certain debt and lease obligations in connection with a coal supply
contract for the Bruce Mansfield Plant. As of September 30, 1994,
the Companies' share of the guarantees were $87,159,000. The price
under the coal supply contract, which includes certain minimum
payments, has been determined to be sufficient to satisfy the debt
and lease obligations.
Environmental Matters --
Various federal, state and local authorities regulate the
Companies with regard to air and water quality and other
environmental matters. The Companies have estimated additional
capital expenditures for environmental compliance of approximately
$175,000,000, which is included in the construction forecast under
"Construction Program" for 1994 through 1998.
The Clean Air Act Amendments of 1990 require significant
reductions of sulfur dioxide (SO2) and oxides of nitrogen (NOx)
from the Companies' coal-fired generating units by 1995 and
additional emission reductions by 2000. Compliance options include,
but are not limited to, installing additional pollution control
-5-
OHIO EDISON COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
(Unaudited)
equipment, burning less polluting fuel, purchasing emission
allowances, operating facilities in a manner that minimizes
pollution and retiring facilities. In compliance plans submitted to
the Public Utilities Commission of Ohio and to the Environmental
Protection Agency (EPA), the Company stated that SO2 reductions for
the years 1995 through 1999 likely will be achieved by burning
lower-sulfur fuel, generating more electricity from lower-emitting
plants, and/or purchasing emission allowances. Equipment already
installed, or to be installed by May 1995, is expected to provide
NOx reductions sufficient to meet 1995 requirements. Plans for
complying with the year 2000 and later reductions have not been
finalized. EPA is conducting additional studies which could
indicate the need for additional NOx reductions from the Companies'
Pennsylvania facilities by the year 2003. The cost of such
reductions, if required, may be substantial. The Company continues
to evaluate its compliance plans and other compliance options.
The Companies are required to meet federally approved SO2
regulations. Violations of such regulations can result in shutdown
of the generating unit involved and/or civil or criminal penalties
of up to $25,000 for each day the unit is in violation. The EPA has
an interim enforcement policy for SO2 regulations in Ohio that
allows for compliance based on a 30-day averaging period. The EPA
has proposed regulations that could change the interim enforcement
policy, including the method of determining compliance with
emission limits. The Companies cannot predict what action the EPA
may take in the future with respect to proposed regulations or the
interim enforcement policy.
The Pennsylvania Department of Environmental Resources has
issued regulations dealing with the storage, treatment,
transportation and disposal of residual waste such as coal ash and
scrubber sludge. These regulations impose additional requirements
relating to permitting, ground water monitoring, leachate
collection systems, closure, liability insurance and operating
matters. The Companies are considering various compliance options
but are presently unable to determine the ultimate increase in
capital and operating costs at existing sites.
Legislative, administrative and judicial actions will
continue to change the way that the Companies must operate in order
to comply with environmental laws and regulations. With respect to
any such changes and to the environmental matters described above,
the Companies expect that any resulting additional capital costs
which may be required, as well as any required increase in
operating costs, would ultimately be recovered from their
customers.
-6-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Ohio Edison Company:
We have reviewed the accompanying consolidated balance sheet
of Ohio Edison Company (an Ohio corporation) and subsidiaries as of
September 30, 1994, and the related consolidated statements of
income and cash flows for the three-month and nine-month periods
ended September 30, 1994 and 1993. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data and
making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the financial statements
referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet and
consolidated statement of capitalization of Ohio Edison Company and
subsidiaries as of December 31, 1993, and the related consolidated
statements of income, retained earnings, capital stock and other
paid-in capital, cash flows and taxes for the year then ended (not
presented separately herein). In our opinion, the information set
forth in the accompanying consolidated balance sheet as of December
31, 1993 is fairly stated in all material respects in relation to
the balance sheet from which it has been derived.
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
November 4, 1994
-7-
<PAGE>
OHIO EDISON COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
Earnings on common stock increased to $1.49 per share for the
nine month period ended September 30, 1994, from $1.39 per share in
1993, excluding the cumulative effect in 1993 of a change in
accounting for unbilled revenues. Earnings increased to $.58 per
share in the third quarter of 1994 from $.54 per share during the
third quarter of 1993.
Higher retail sales during the nine months ended September
30, 1994, pushed total sales revenue up by $20,900,000 over the
same period last year. Residential and commercial sales were up
2.1% and 3.0%, respectively, while industrial sales were relatively
flat. Total kilowatt-hour sales were down 3.5% in the first nine
months of 1994 due to a 21.9% decrease in sales to other utilities.
Opportunities to sell power to other utilities were limited due to
reduced demand for these sales, generating capacity constraints and
increased demand in the retail sector.
Milder temperatures during the three months ended September
30, 1994, contributed to a 2.2% drop in retail kilowatt-hour sales
compared to record third quarter retail kilowatt-hour sales in
1993. Residential sales were down 3.5% and commercial sales
remained relatively flat. Industrial sales fell 3.2% during the
third quarter of 1994 due to reduced production (until mid-1995) by
a major steel customer that is modernizing its facilities. Sales to
all other industrial customers were up 1.6% in the third quarter of
1994. Total kilowatt-hour sales were down 6.4% in the period due
primarily to a 22.8% decrease in sales to other utilities.
Fuel and purchased power costs decreased in the third quarter
of 1994 compared with 1993 as a result of the lower sales levels.
Higher nuclear expenses during the 1994 periods were primarily due
to corrective maintenance work and refueling costs at the Perry
Plant. The plant was returned to full operational power on August
14, 1994, following the completion of the outage.
Capital Resources and Liquidity
The Companies have continuing cash requirements for planned
capital expenditures and debt maturities. During the fourth quarter
of 1994, capital requirements for property additions and capital
leases are expected to be approximately $80,000,000, including
$20,000,000 for nuclear fuel. Cash requirements for maturing long-
term debt are approximately $12,000,000 for the remainder of 1994.
As of September 30, 1994, the Companies had approximately
$47,000,000 of cash and temporary investments and $150,000,000 of
short-term indebtedness. Funds are also available to the Company
through $7,000,000 of unused OES Fuel credit lines. In addition,
the Companies have $24,000,000 of unused short-term bank lines of
credit and $102,000,000 of bank facilities which provide for
borrowings on a short-term basis at the banks' discretion. OES
Capital had approximately $11,000,000 of unused short-term
borrowing capability as of September 30, 1994.
-8-
OHIO EDISON COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Cont'd)
During the third quarter of 1994, the Company retired
$30,000,000 of 13.43% first mortgage bonds at maturity and an
additional $49,400,000 of 9.75% first mortgage bonds which it
purchased from the bondholders. Penn Power issued $12,700,000 of
pollution control notes with an interest rate of 6.15%. The
proceeds from that issue will be used in the fourth quarter of 1994
to redeem a like amount of 12% pollution control notes. Penn Power
also redeemed $6,000,000 of preferred stock during the quarter.
Also, Ohio Edison entered into a forward refunding arrangement with
the Ohio Water Development Authority to refinance $40,000,000 of
its 1985 10.625% pollution control revenue bonds. The interest rate
on the new bonds will be 6.75% with maturity in July 2015. Early in
the fourth quarter of 1994, the Company entered into a similar
arrangement with the Beaver County Industrial Development Authority
to refinance $60,000,000 of its 1985 10.50% pollution control
revenue bonds. The interest rate on the new bonds will be 7.05% and
maturity has been extended to October 2020. The Company also issued
through a trust $80,000,000 of 7.93% secured trust notes to private
investors.
OES Finance, Incorporated (a wholly owned subsidiary of the
Company) facilitated the issuance of new ten-year cash
collateralized letters of credit on behalf of certain lessors in
the Beaver Valley Unit 2 sale and leaseback arrangement by
purchasing certificates of deposit from the issuing bank in the
aggregate amount of $277,763,000. These deposits are pledged as
security for repayment of any amounts drawn under the letters of
credit.
On September 29, 1994, a federal judge dismissed the lawsuit
filed against the Company on July 22, 1994, by members of the
Utility Workers Union of America and the International Brotherhood
of Electrical Workers. The unions filed suit in federal court
seeking to prevent the Company from laying off 236 employees and to
order the Company to extend the terms of a voluntary early
retirement program provided to nonunion employees to union
employees as well. The U.S. District Judge ruled that the Company
did not violate its retirement plan or federal law by not providing
early retirement benefits to union employees.
-9-
<PAGE>
PART II. OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit
Number
-------
15 Letter from independent public accountants.
Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of
Regulation S-K, the Company has not filed as an exhibit to
this Form 10-Q any instrument with respect to long-term
debt if the total amount of securities authorized
thereunder does not exceed 10% of the total assets of the
Company and its subsidiaries on a consolidated basis, but
hereby agrees to furnish to the Commission on request any
such documents.
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
November 4, 1994
OHIO EDISON COMPANY
-------------------
Registrant
/s/H. P. Burg
----------------------------------
H. P. Burg
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT 15
Ohio Edison Company
76 South Main Street
Akron, Ohio 44308
Gentlemen:
We are aware that Ohio Edison Company has incorporated by reference
in previously filed Registration Statements No. 33-49135, No. 33-
49259, No. 33-49413 and No. 33-51139, the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1994, which
includes our report dated November 4, 1994, covering the unaudited
interim consolidated financial statements contained therein.
Pursuant to Rule 436(c) of Regulation C of the Securities Act of
1933, such report is not considered a part of the Registration
Statements prepared or certified by our firm or a report prepared
or certified by our firm within the meaning of Sections 7 and 11 of
the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
November 4, 1994
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
(Amounts in 1,000's, except earnings per share)
Income tax expense includes $4,453,000 related to other income.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,855,014
<OTHER-PROPERTY-AND-INVEST> 462,698
<TOTAL-CURRENT-ASSETS> 548,325
<TOTAL-DEFERRED-CHARGES> 2,163,224
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 9,029,261
<COMMON> 1,373,125
<CAPITAL-SURPLUS-PAID-IN> 553,774
<RETAINED-EARNINGS> 375,410
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,302,309
40,000
328,240
<LONG-TERM-DEBT-NET> 3,337,754
<SHORT-TERM-NOTES> 41,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 108,661
<LONG-TERM-DEBT-CURRENT-PORT> 142,725
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 6,705
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,721,867
<TOT-CAPITALIZATION-AND-LIAB> 9,029,261
<GROSS-OPERATING-REVENUE> 1,801,066
<INCOME-TAX-EXPENSE> 143,858
<OTHER-OPERATING-EXPENSES> 1,239,371
<TOTAL-OPERATING-EXPENSES> 1,378,776
<OPERATING-INCOME-LOSS> 422,290
<OTHER-INCOME-NET> 10,821
<INCOME-BEFORE-INTEREST-EXPEN> 433,111
<TOTAL-INTEREST-EXPENSE> 202,916
<NET-INCOME> 230,195
16,316
<EARNINGS-AVAILABLE-FOR-COMM> 213,879
<COMMON-STOCK-DIVIDENDS> 161,042
<TOTAL-INTEREST-ON-BONDS> 195,767
<CASH-FLOW-OPERATIONS> 522,737
<EPS-PRIMARY> 1.49
<EPS-DILUTED> 1.49
</TABLE>
