____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
{X} ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED) for the fiscal year ended December 31, 1993
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED) for the transition period
from _________ to 5313 __________.
Commission file number 1-2578
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
OHIO EDISON SYSTEM SAVINGS PLAN
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive
office:
OHIO EDISON COMPANY
76 SOUTH MAIN STREET
AKRON, OH 44308
<PAGE>
Required Information
1. Financial statements with respect to the Ohio Edison System Savings
Plan as of December 31, 1993 and 1992, prepared in accordance with the
financial reporting requirements of the Employee Retirement Income Security
Act of 1974, as amended, together with report of independent public
accountants.
<PAGE>
OHIO EDISON SYSTEM SAVINGS PLAN
-------------------------------
REPORT ON AUDITS OF FINANCIAL STATEMENTS
----------------------------------------
AND SUPPLEMENTAL SCHEDULES
--------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1992
----------------------------------------------
<PAGE>
OHIO EDISON SYSTEM SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
PAGE
REPORT OF INDEPENDENT ACCOUNTANTS 2
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF
DECEMBER 31, 1993 AND 1992 3-5
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993 6-7
NOTES TO FINANCIAL STATEMENTS 8-13
SUPPLEMENTAL SCHEDULES:
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF
DECEMBER 31, 1993 14
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR
ENDED DECEMBER 31, 1993 15
ALL OTHER SCHEDULES ARE OMITTED SINCE THEY ARE NOT APPLICABLE OR ARE NOT
REQUIRED BASED ON THE DISCLOSURE REQUIREMENTS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974 AND APPLICABLE REGULATIONS ISSUED BY THE
DEPARTMENT OF LABOR.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Savings Plan Committee of the
Ohio Edison System Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the Ohio Edison System Savings Plan (the "Plan") as of
December 31, 1993 and 1992, and the related statement of changes in net
assets available for plan benefits for the year ended December 31, 1993.
These financial statements and the supplemental schedules referred to below
are the responsibility of the Savings Plan Committee. Our responsibility is
to express an opinion on these financial statements and supplemental
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 the Savings Plan Committee, 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, 1993 and 1992, and the changes in net assets available for
plan benefits for the year ended December 31, 1993 in conformity with
generally accepted accounting principles.
Our audit was 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, as of and for the
year ended December 31, 1993, 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 supplemental schedules have been subjected to the
auditing procedures applied in the audit 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.
COOPERS & LYBRAND
Cleveland, Ohio
June 6, 1994
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<PAGE>
<TABLE>
OHIO EDISON SYSTEM SAVINGS PLAN
-------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
As of December 31, 1993
<CAPTION>
COMPANY CAPITAL ESOP
COMMON STOCK PRESERVATION S&P 500 UNALLOCATED
FUND FUND INDEX FUND FUND
------------ ------------ ----------- ------------
ASSETS
- ---------------------------------
<S> <C> <C> <C> <C>
CASH/CASH EQUIVALENTS $ 16,989 $ 4,991,209 $ 0 $ 11,451,125
COMPANY COMMON STOCK 24,148,802 0 0 224,705,140
GUARANTEED INSURANCE CONTRACTS 0 31,262,253 0 0
COLLATERALIZED MORTGAGE OBLIG. 0 27,536,831 0 0
DOMESTIC EQUITY STOCKS 0 0 36,655,661 0
INTERNATIONAL EQUITY STOCKS 0 0 0 0
PARTICIPANT LOANS 0 0 0 0
INTEREST & DIVIDENDS RECEIVABLE 402,013 363,825 3,332 3,734,305
EMPLOYER CONTRIBUTIONS RECEIVABLE 0 0 0 3,842,721
EMPLOYEE CONTRIBUTIONS RECEIVABLE 34,512 221,962 155,076 0
REIMBURSEMENTS RECEIVABLE 0 4 0 0
----------- ----------- ----------- ------------
TOTAL ASSETS 24,602,316 64,376,084 36,814,069 243,733,291
LIABILITIES
- --------------------------------
ACCRUED INTRA-FUND TRANSFERS 7,368 114,748 (59,191) 7,951,503
LOAN PAYABLE 0 0 0 199,850,000
ACCRUED INTEREST EXPENSE 0 0 0 19,985,000
----------- ----------- ----------- ------------
TOTAL LIABILITIES 7,368 114,748 (59,191) 227,786,503
----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $24,594,948 $64,261,336 $36,873,260 $ 15,946,788
=========== =========== =========== ============
The accompanying notes are an integral part of these financial statements.
-3-
/TABLE
<PAGE>
<TABLE>
OHIO EDISON SYSTEM SAVINGS PLAN
-------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
As of December 31, 1993
(Continued)
<CAPTION>
ESOP INTERNATIONAL
ALLOCATED INDEX LOAN
FUND FUND FUND PAYSOP TOTAL
------------ ------------- ---------- ------------ ------------
ASSETS
- --------------------------------
<S> <C> <C> <C> <C> <C>
CASH/CASH EQUIVALENTS $ 676,369 $ 0 $ 0 $ 229,423 $ 17,365,115
COMPANY COMMON STOCK 16,886,061 0 0 4,201,647 269,941,650
GUARANTEED INSURANCE CONTRACTS 0 0 0 0 31,262,253
COLLATERALIZED MORTGAGE OBLIG. 0 0 0 0 27,536,831
DOMESTIC EQUITY STOCKS 0 0 0 0 36,655,661
INTERNATIONAL EQUITY STOCKS 0 3,638,224 0 0 3,638,224
PARTICIPANT LOANS 0 0 4,377,055 0 4,377,055
INTEREST & DIVIDENDS RECEIVABLE 280,480 21 0 52,602 4,836,578
EMPLOYER CONTRIBUTIONS REC. 0 0 0 0 3,842,721
EMPLOYEE CONTRIBUTIONS REC. 0 31,092 0 0 442,642
REIMBURSEMENTS RECEIVABLE 0 0 0 711 715
----------- ----------- ----------- ------------ ------------
TOTAL ASSETS 17,842,910 3,669,337 4,377,055 4,484,383 399,899,445
LIABILITIES
- --------------------------------
ACCRUED INTRA-FUND TRANSFERS (7,951,503) (25,285) (37,640) 0 0
LOAN PAYABLE 0 0 0 0 199,850,000
ACCRUED INTEREST EXPENSE 0 78 0 0 19,985,078
----------- ----------- ----------- ------------ ------------
TOTAL LIABILITIES (7,951,503) (25,207) (37,640) 0 219,835,078
----------- ----------- ----------- ------------ ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $25,794,413 $ 3,694,544 $ 4,414,695 $ 4,484,383 $180,064,367
=========== =========== =========== ============ ============
-4-
The accompanying notes are an integral part of these financial statements.
/TABLE
<PAGE>
<TABLE>
OHIO EDISON SYSTEM SAVINGS PLAN
-------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
---------------------------------------------------
As of December 31, 1992
<CAPTION>
COMPANY CAPITAL ESOP ESOP INTERNATIONAL
COMMON STOCK PRESERVATION S&P 500 UNALLOCATED ALLOCATED INDEX PAYSOP
FUND FUND INDEX FUND FUND FUND FUND FUND TOTAL
------------ ------------ ----------- ------------ ----------- ------------ ---------- -----------
ASSETS
- ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CASH/CASH EQUIVALENTS $ 60,558 $10,397,681 $ 0 $ 11,991,324 $ 226,390 $ 21,757 $ 238,555 $ 22,936,265
COMPANY COMMON STOCK 23,354,844 0 0 239,341,183 6,715,925 0 4,611,412 274,023,364
GUARANTEED INSURANCE CONTRACTS 0 28,995,582 0 0 0 0 0 28,995,582
COLLATERALIZED MORTGAGE OBLIG. 0 19,487,329 0 0 0 0 0 19,487,329
DOMESTIC EQUITY STOCKS 0 0 32,969,924 0 0 0 0 32,969,924
INTERNATIONAL EQUITY STOCKS 0 0 0 0 0 1,773,277 0 1,773,277
INTEREST & DIVIDENDS RECEIVABLE 382,856 331,830 1,999 3,903,161 109,851 29 75,514 4,805,240
EMPLOYER CONTRIBUTIONS REC. 0 0 0 3,710,410 0 0 0 3,710,410
EMPLOYEE CONTRIBUTIONS REC. 212 1,157 (1,067) 0 0 (302) 0 0
REIMBURSEMENTS RECEIVABLE 2,306 3,400 16,106 0 0 4,979 393 27,184
----------- ----------- ----------- ------------ ---------- ---------- ---------- ------------
TOTAL ASSETS 23,800,776 59,216,979 32,986,962 258,946,078 7,052,166 1,799,740 4,925,874 388,728,575
LIABILITIES
- ------------------------------
ACCRUED INTRA-FUND TRANSFERS 24,072 4,694 (31,813) 8,537,728 (8,537,728) 3,047 0 0
AMOUNTS OWED FOR
SECURITIES PURCHASED 28,985 0 0 0 0 0 0 28,985
LOAN PAYABLE 0 0 0 199,850,000 0 0 0 199,850,000
ACCRUED INTEREST EXPENSE 0 0 0 19,985,000 0 78 13,000 19,998,078
----------- ----------- ----------- ------------ ----------- ---------- ---------- ------------
TOTAL LIABILITIES 53,057 4,694 (31,813) 228,372,728 (8,537,728) 3,125 13,000 219,877,063
----------- ----------- ----------- ------------ ----------- ---------- ---------- ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $23,747,719 $59,212,285 $33,018,775 $ 30,573,350 $15,589,894 $1,796,615 $4,912,874 $168,851,512
=========== =========== =========== ============ =========== ========== ========== ============
The accompanying notes are an integral part of these financial statements.
-5-
</TABLE>
<PAGE>
<TABLE>
OHIO EDISON SYSTEM SAVINGS PLAN
-------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
For the Year December 31, 1993
<CAPTION>
COMPANY CAPITAL ESOP
COMMON PRESERVATION S&P 500 UNALLOCATED
STOCK FUND FUND INDEX FUND FUND
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
EMPLOYEE CONTRIBUTIONS $ 1,066,589 $ 7,333,794 $ 4,752,998 $ 0
EMPLOYER CONTRIBUTIONS 0 0 0 3,842,721
INTEREST INCOME 792 4,237,648 1,342 218,673
DIVIDEND INCOME 1,565,524 0 0 15,010,164
INTEREST EXPENSE 0 0 0 (19,985,000)
PARTICIPANT LOAN FEES (1,280) (47,267) (17,234) 0
EXCESS (DEFICIENCY) OF NET
PROCEEDS OVER MARKET VALUE
AT BEGINNING OF YEAR
AGGREGATE PROCEEDS 902,655 0 3,369,788 11,345,761
AGGREGATE COST 862,126 0 3,219,156 10,932,113
----------- ----------- ----------- ------------
NET EXCESS 40,529 0 150,632 413,648
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION)
ON SECURITIES (636,523) 0 3,180,364 (6,175,265)
DISTRIBUTIONS TO
PARTICIPANTS (1,260,786) (3,499,750) (2,026,658) 0
NET INTRA PLAN TRANSFERS 72,384 (2,975,374) (2,186,959) (7,951,503)
----------- ----------- ----------- ------------
NET CHANGE IN PLAN EQUITY 847,229 5,049,051 3,854,485 (14,626,562)
NET ASSETS AVAILABLE FOR
PLAN BENEFITS - BEGINNING
OF YEAR 23,747,719 59,212,285 33,018,775 30,573,350
----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS - END OF YEAR $24,594,948 $64,261,336 $36,873,260 $ 15,946,788
=========== =========== =========== ============
The accompanying notes are an integral part of these financial statements.
-6-
</TABLE>
<PAGE>
<TABLE>
OHIO EDISON SYSTEM SAVINGS PLAN
-------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------
For the Year December 31, 1993
(Continued)
<CAPTION>
ESOP INTERNATIONAL
ALLOCATED INDEX LOAN PAYSOP
FUND FUND FUND FUND TOTAL
---------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
EMPLOYEE CONTRIBUTIONS $ 0 $ 752,368 $ 0 $ 0 $ 13,905,749
EMPLOYER CONTRIBUTIONS 0 0 0 0 3,842,721
INTEREST INCOME 10,251 32 199,577 37 4,668,352
DIVIDEND INCOME 950,455 0 0 285,356 17,811,499
INTEREST EXPENSE 0 0 0 0 (19,985,000)
PARTICIPANT LOAN FEES 0 (1,550) 0 0 (67,331)
EXCESS (DEFICIENCY) OF NET
PROCEEDS OVER MARKET VALUE
AT BEGINNING OF YEAR
AGGREGATE PROCEEDS 509,104 3,413,910 0 358,771 19,899,989
AGGREGATE COST 483,912 2,938,307 0 340,508 18,776,122
----------- ----------- ----------- ------------ ------------
NET EXCESS 25,192 475,603 0 18,263 1,123,867
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION)
ON SECURITIES 1,694,896 (55,651) 0 (113,153) (2,105,332)
DISTRIBUTIONS TO
PARTICIPANTS (427,778) (147,704) 0 (618,994) (7,981,670)
NET INTRA PLAN TRANSFERS 7,951,503 874,831 4,215,118 0 0
----------- ----------- ----------- ------------ ------------
NET CHANGE IN PLAN EQUITY 10,204,519 1,897,929 4,414,695 (428,491) 11,212,855
NET ASSETS AVAILABLE FOR
PLAN BENEFITS - BEGINNING
OF YEAR 15,589,894 1,796,615 0 4,912,874 168,851,512
----------- ----------- ----------- ------------ ------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS - END OF YEAR $25,794,413 $ 3,694,544 $ 4,414,695 $ 4,484,383 $180,064,367
=========== =========== =========== ============ ============
The accompanying notes are an integral part of these financial statements.
-7-
</TABLE>
<PAGE>
OHIO EDISON SYSTEM SAVINGS PLAN
-------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
December 31, 1993 and 1992
--------------------------
1. Description of the Plan
-----------------------
The Ohio Edison System Savings Plan (the "Plan") provides eligible
employees of Ohio Edison Company (the "Company") and its wholly-owned
subsidiary, Pennsylvania Power Company ("Penn Power"), a mechanism through
which they can save and invest part of their income on a tax deferred basis
at regular intervals. Additionally, the Company and Penn Power (the
"Companies") may match employee contributions with shares of Company common
stock (see Note 4) held in the Employee Stock Ownership Plan ("ESOP").
Employees may invest their contributions in other investment options (the
"Funds"). All contributions made to employees' accounts are fully and
immediately vested in the Plan. The purpose of the Plan is to encourage
employees to adopt a regular savings program and to provide additional
security for retirement. The following is a brief description of the Plan
and is provided for general information purposes only. Employees should
refer to the Plan documents for more complete information.
The Plan is a qualified profit-sharing plan under Section 401(a) of the
Internal Revenue Code of 1954, as amended (the "Code"), and provides for
salary reduction contributions under Section 401(k) of the Code. In general,
plans established pursuant to Section 401(k) of the Code permit eligible
employees to defer current Federal and, subject to applicable laws, state and
local income taxes on the portion of their current compensation represented
by the amount of the salary reduction elected. The amounts, as elected by
the employees, are contributed to the Plan by the Companies through payroll
deductions.
The Plan is subject to Title I of the Employee Retirement Income
Security Act of 1974 (ERISA) but not Title IV because it is an "individual
account plan". Title I establishes reporting and disclosure requirements,
minimum standards for participation, vesting and benefit accrual,
prohibitions governing the conduct of fiduciaries and provides that ERISA
preempts other federal, state and local statutes relating to employee
benefits. The protective benefits of Title IV which relate to insuring
pension benefits by the Pension Benefit Guaranty Corporation are not
applicable to individual account plans.
Every employee of the Companies is eligible to become a participant in
the Plan, herein referred to as "employee" or "Member, when he or she has
completed one year of service.
Employees may participate in one or more of the Funds through deferral
of compensation. The choice of investments (except the Companies' matching
contributions, which are in the form of Company common stock) are the
-8-
responsibility of the individual employee. Transfers between funds are the
responsibility of the employee and may be made once every 90 days.
Securities in the ESOP Account
- ------------------------------
The ESOP purchased a total of 10,654,114 shares of Company common stock
from November 1990 to December 1991 for the purpose of funding the Company's
matching contribution to the Plan.
The Plan borrowed $200 million, referred to herein as the "ESOP Loan",
at a rate of 10% from the Company to fund the purchase of the stock. The
ESOP Loan is collateralized by the unallocated Company common stock acquired
with the proceeds of the ESOP Loan. The ESOP Loan is expected to be repaid
by December 2005, with the first yearly principal payment taking place in
1998. Interest payments on the loan are made annually. Additionally,
principal payments may be made sooner if additional shares of Company common
stock are needed for distributions to Members.
ESOP Allocation
- ---------------
Each Member's ESOP allocation will be computed at the end of each pay
period based on the Company's matching contribution (see Note 4) and on the
quoted market price of the Company common stock on that day.
As principal and interest payments are made on the ESOP Loan, shares of
the Company common stock are released from the ESOP Unallocated Fund and
transferred to the ESOP Allocated Fund where they are made available for
distribution to Members.
During 1993 and 1992, respectively, 341,405 and 371,989 shares of
Company common stock were allocated to Members. An additional allocation of
47,641 and 28,340 shares in 1993 and 1992, respectively, of Company common
stock were made relative to reinvestments of dividends on the Company common
stock. These shares were subsequently released from the ESOP Unallocated
Fund in February, 1994 and 1993 when the Plan made interest payments of
$19,985,000 in each year, which released 472,740 shares in each year to the
ESOP Allocated Fund for distribution to Members.
As of December 31, 1993 and 1992, the status of the Company common stock
was as follows: 9,877,149 and 10,349,889, shares respectively, of Company
common stock in the ESOP Unallocated Fund at market values of $224,705,140
and $239,341,183, respectively, and 742,244 and 290,418 shares, respectively,
of Company common stock held in the ESOP Allocated Fund at market values of
$16,886,061 and $6,715,925. The market value of the common stock is measured
by the quoted market price.
PAYSOP
- ------
A component of the Plan consists of a qualified payroll-based tax credit
employee stock ownership plan (PAYSOP) under Section 401(a) and Section
501(a) of the Code.
Under the Economic Recovery Tax Act of 1981, effective January 1, 1983,
tax credits were based upon eligible employee compensation. The regulation
permitted the Companies to contribute to the Trust a maximum of one-half of
-9-
one percent of the aggregate compensation of eligible employees and claim a
tax credit on its consolidated Federal income tax return equal to this
amount. The amounts allocated to eligible employees were based upon the
proportion of their wages and salaries (to a maximum of $100,000) to the
wages and salaries of eligible employees for the year.
The Tax Reform Act of 1986 eliminated the PAYSOP tax credit with respect
to compensation earned in 1987 or later years. As a result, the Companies
have not contributed to the PAYSOP after the 1986 contribution other than the
reimbursement of PAYSOP administrative expenses.
Dividends are paid annually to Members in the PAYSOP. The market value
of the common stock in the PAYSOP is measured by the quoted market price.
2. Summary of Accounting Policies
------------------------------
The excess (deficiency) of net proceeds over market value under the Plan
is recognized upon the sale of investments generally in connection with the
termination or withdrawal from the Plan by Members. Unrealized appreciation
or depreciation, equal to the difference between the cost and the market
value of investments at the applicable valuation date, is recognized in
determining the value of Member accounts. The excess (deficiency) of net
proceeds over market value calculation methodology is based on the revalued
cost of assets instead of historical cost. The revalued cost is the market
value of an asset at the beginning of the Plan year or at the time of
purchase during the year.
The financial statements have been prepared on the accrual basis of
accounting. The administrative expenses of the Plan are paid by the
Companies.
3. Plan Termination
----------------
Although the Companies expect that the Plan will be permanent, the
Companies reserve the right to discontinue or terminate the Plan at any time.
If the Plan should be terminated, in whole or in part, Members will be
entitled to withdraw the full value of their accounts, to the extent allowed
by law.
4. Contributions
-------------
Employer Contributions
- ----------------------
The Companies pay a matching contribution of 50% on the first 6% of
compensation contributed by an employee. In addition, the Companies may
designate a number of performance objectives and contribute an additional 5%
for each objective achieved, up to a maximum of 25%. The Companies'
contributions are always invested in Company common stock.
The Companies' contributions have been pre-funded by the Company common
stock held by the ESOP unallocated fund. These shares of Company common
stock earn dividend income and are subject to unrealized appreciation and
depreciation as the market value of the Company common stock fluctuates. The
dividend income serves to pay the ESOP loan and related interest, which
results in the release of shares to the ESOP allocated fund as the Companies'
-10-
matching contribution. To the extent dividend income is not sufficient to
pay the ESOP loan and interest, the Companies will contribute cash which is
reflected as employer contributions in the statement of changes in net assets
available for plan benefits.
Employee Contributions
- ----------------------
Employees may invest between 1% and 12% of their salary in the Plan.
Employee contributions may be made on a before-tax and/or after-tax basis.
Under the before-tax option, deposits are deducted from currently taxable
income but are taxable when they are withdrawn from the Plan. The Tax Reform
Act of 1986 limits the maximum annual before-tax contribution to $8,994 and
$8,728 for 1993 and 1992, respectively. Prior to age 59-1/2, an active
employee may withdraw before-tax deposits only under certain hardship
conditions (see Note 7).
Employees may make rollover contributions to the Plan of funds held in
other tax-qualified plans which the employee was a member of prior to
becoming employed by the Companies. The rollover contributions must be the
result of a qualified total distribution from another tax-qualified plan and
must be contributed to the Plan within 60 days after distribution to the
employee.
Both employer and employee contributions under the Plan are held in a
trust fund (Trust) with an independent trustee (State Street Bank & Trust
Company). Employees may choose to invest their contributions in Funds A, B,
C or D (see Note 6) which are offered by the Plan. A loan option has been
added in 1993 (Fund E).
5. Reconciliation to Form 5500
---------------------------
At December 31, 1993, the Plan has received applications for withdrawals
in the amount of $122,649 which were not paid at year end. Pursuant to
recent professional guidance, no payable has been recorded in the statement
of net assets available for plan benefits at year end. However, the
Department of Labor requires From 5500 to include these pending withdrawals
as liabilities.
6. Descriptions of Funds
---------------------
The following is a brief description of the Funds currently available
to Members at December 31, 1993:
Fund A - S&P 500 Index Fund: This Fund is a common/collective trust
investing in the S&P 500 stocks. The objective of this Fund is the growth of
capital through both appreciation and investment income. The market value of
the S&P 500 Index Fund is based on the market value per share determined by
the Trustee.
Fund B - Capital Preservation Fund: This Fund consists primarily of
guaranteed fixed income contracts issued by insurance companies and banks,
and short-term money market instruments. These contracts guarantee interest
for a fixed period and the principal amount of all investments. The market
value of the Capital Preservation Fund is measured at the contract value as
determined by the insurers and banks.
-11-
<PAGE>
Fund C - International Index Fund: This Fund consists of foreign
currencies designed to produce returns similar to those of the Morgan Stanley
Capital International Europe, Australia, Far East (MSCI EAFE) Index. The
objective of the Fund is the growth of capital through appreciation. The
market value of the International Index Fund is measured at the market value
per share determined by the Trustee.
Fund D - Company Common Stock Fund: This Fund consists entirely of
shares in Ohio Edison Company common stock. The Fund provides an opportunity
for employees to increase their common ownership stake in the Company. The
objective for this Fund is the growth of capital through both appreciation
and current income. The fund also holds the pre-ESOP Company matching
contribution in Company common stock. The common stock is purchased by the
Trustee on the open market. The market value of the common stock is measured
by the quoted market price.
Fund E - Loan Fund: Effective January 1, 1993, the Savings Plan allows
participants to borrow from their before-tax account for certain approved
purposes. When loans are made, they are recorded as interfund transfers.
The repayments of principal and interest are credited to the participants'
account balances within the respective funds. The employee repays the loan
and all related interest through payroll deductions.
Participants may borrow up to 50 percent of their total account balance
or 100 percent of their before-tax account, whichever is less. The interest
rate charged is based on the prime rate plus 1 percent. They may have up to
two loans outstanding at one time. The minimum loan amount is $1,000 and
must be repaid between 6 and 60 months. If the loan is for the purchase of
a principal residence, the loan repayment period can be extended to 15 years.
The maximum loan amount is $50,000.
7. Tax Considerations
------------------
The Plan received a determination letter from the Internal Revenue
Service ("IRS") dated September 3, 1986 regarding amendments through October
18, 1985 that the Plan is qualified under the appropriate sections of the
Code. Although the IRS has not yet issued a revised determination letter,
the Savings Plan Committee and in-house counsel believe that the amended Ohio
Edison System Savings Plan continues to qualify under Sections 401(a) and
40l(k) and therefore continues to be tax-exempt.
The Plan is exempt from Federal, state and local income taxes. The
Federal, state and local income tax treatments of distributions from the Plan
depend upon when they are made and their form. The withdrawal of the
principal amount of a Member's after-tax contribution is not, however,
subject to tax. For tax years beginning after December 31, 1986, the Tax
Reform Act of 1986 requires that an additional tax of 10% be applied to
employee withdrawals from the Plan prior to death, disability, attainment of
age 59-1/2, or under certain other limited circumstances.
In the case of withdrawals by a Member employed by the Companies prior
to the attainment of age 59-1/2, the excess of the value of the withdrawal
over the total amount of the Member's after-tax contributions, is taxable at
ordinary income tax rates. The value of the Company common stock withdrawn
is considered to be its fair market value on the date it is withdrawn.
-12-
<PAGE>
In the case of a distribution that qualifies as a lump-sum distribution
upon a Member's termination of employment with either of the Companies or
after attaining the age of 59-1/2, only the excess of the value of the lump
sum distribution over the amount of the Member's after-tax contributions to
the Plan (less withdrawals) is taxable at ordinary income tax rates. In
determining the value of the lump-sum distribution, the Company common stock
distributed shall be valued at its original cost to the Trustee.
-13-
<PAGE>
<TABLE>
Ohio Edison Company
EIN 34-0437786
PN #002
OHIO EDISON SYSTEM SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1993
<CAPTION>
Description Market
Identity of Issue Maturity Cost Value
- -------------------------------- ---------------------- ---------- ----------
<S> <C> <C> <C>
State Street High Yield STIF Fund Money Market Fund 5,381 5,381
State Street Yield Plus Fund Money Market Fund 3,626,020 3,626,020
State Street STIF Fund Money Market Fund 12,368,526 13,733,714
----------
Total Cash & Cash Equivalents 17,365,115
==========
ESOP Unallocated Fund OEC Common Stock 185,416,979 224,705,140
ESOP Allocated Fund OEC Common Stock 13,932,379 16,886,061
PAYSOP Fund OEC Common Stock 3,082,016 4,201,647
Company Stock Fund OEC Common Stock 20,585,144 24,148,802
International Index Fund International Index Future 3,691,940 3,638,224
(Common/Collective Trust)
S&P 500 Index Fund S&P 500 Stocks 29,127,890 36,655,661
(Common/Collective Trust)
Capital Preservation Fund
FHMA, 7.5% CMO, 07-15-14 603,170 603,170
FHMA, 7.0% CMO, 11-15-14 2,006,041 2,006,041
FHMA, 7.5% CMO, 03-15-15 2,520,645 2,520,645
FHMA, 5.5% CMO, 04-15-13 1,991,174 1,991,174
FHMA, 6.5% CMO, 06-15-04 1,973,759 1,973,759
FNMA, 6.0% CMO, 02-15-19 5,023,959 5,023,959
FNMA, 5.75% CMO, 07-25-06 2,513,902 2,513,903
FNMA, 7.0% CMO, 02-25-15 2,020,800 2,020,800
FNMA, 6.75% CMO, 02-25-15 1,947,011 1,947,011
FNMA, 6.0% CMO, 09-25-12 1,999,381 1,999,381
FNMA, 6.0% CMO, 09-25-14 4,936,988 4,936,988
Aetna Life, 5.30% GIC, 09-15-99 2,021,622 2,021,622
Canada Life, 9.04% GIC, 06-30-94 1,622,083 1,622,083
Hartford Life, 9.36% GIC, 03-01-96 1,336,096 1,336,096
Hartford Life, 9.51% GIC, 06-20-95 1,381,351 1,381,351
Hartford Life, 9.21% GIC, 01-15-96 1,317,071 1,317,071
Lincoln National, 5.64% GIC, 11-15-99 2,500,000 2,500,000
Metropolitan Life, 8.75% GIC, 10-15-96 215,807 215,807
Metropolitan Life, 8.25% GIC, 12-31-98 1,004,991 1,004,991
Metropolitan Life, 8.5% GIC, 04-15-96 212,156 212,156
Metropolitan Life, 8.05% GIC, 12-31-98 985,100 985,100
Metropolitan Life, 8.6% GIC, 04-14-95 2,761,276 2,761,276
Metropolitan Life, 8.6% GIC, 04-14-95 4,141,915 4,141,915
New York Life, 9.15% GAC, 10-02-95 1,380,418 1,380,418
New York Life, 8.40% GIC, 04-22-96 2,102,641 2,102,641
New York Life, 9.15% GIC, 10-02-95 2,070,627 2,070,627
Peoples Security, 9.1% GIC, 07-20-96 1,027,330 1,027,330
Peoples Security, 7.58% GIC, 04-30-93 327,291 327,291
Peoples Security, 6.79% GIC, 12-31-99 1,199,894 1,199,894
Travelers, 9.02% GIC, 03-31-95 1,112,584 1,112,584
Travelers, 8.6% GIC, 11-15-96 1,257,019 1,257,019
Travelers, 9.0% GIC, 05-15-96 1,284,981 1,284,981
-----------
Total Capital Preservation Fund 58,799,084
===========
-14-
/TABLE
<PAGE>
<TABLE>
Ohio Edison Company
EIN 34-0437786
PN #002
OHIO EDISON SYSTEM SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1993
<CAPTION>
Descriptions Number of Total No. of Total
of Purchase Value of Sales Selling Cost of
Assets Transactions Purchase Transactions Price Assets Sold Gain/(Loss)
- ---------------------- ------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
State Street STIF Fund 256 $35,113,517 189 $37,661,802 $37,661,802 $ 0
-15-
<PAGE>
Exhibit A
The Savings Plan Committee of
Ohio Edison System Savings Plan
We consent to the incorporation by reference in the Company's previously filed
Registration Statements (File Nos. 33-49135, 33-49259, 33-49413 and 33-51139) of
our report dated June 16, 1994, on the audit of the Ohio Edison System Savings
Plan as of December 31, 1993 and for the year then ended which report is included
in this Annual Report on Form 11-K of Ohio Edison.
COOPERS & LYBRAND
Cleveland, Ohio
June 16, 1994
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Savings Plan Committee, the administrator of the Ohio Edison System Savings Plan,
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
OHIO EDISON SYSTEM
SAVINGS PLAN
June 17, 1994
- -------------------
Date
By: /s/ James A. Bowers
-------------------
James A. Bowers
Chairman
Savings Plan Committee
<PAGE>
</TABLE>
