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 June 30, 1996
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: 330-384-5100
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 August 13, 1996
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
<TABLE>
PART I. FINANCIAL INFORMATION
- ------------------------------
OHIO EDISON COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- -----------------------
1996 1995 1996 1995
------ ------ ------ ------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES $599,317 $593,838 $1,210,953 $1,181,572
-------- -------- ---------- ----------
OPERATING EXPENSES AND TAXES:
Fuel and purchased power 108,157 110,060 231,447 220,101
Nuclear operating costs 63,496 78,080 122,270 151,966
Other operating costs 97,470 101,055 198,343 207,898
-------- -------- ---------- ----------
Total operation and maintenance expenses 269,123 289,195 552,060 579,965
Provision for depreciation 89,438 55,899 172,729 112,765
Amortization of net regulatory assets 7,188 3,338 12,820 6,627
General taxes 61,140 60,752 125,099 120,309
Income taxes 44,796 45,240 90,127 88,679
-------- -------- ---------- ----------
Total operating expenses and taxes 471,685 454,424 952,835 908,345
-------- -------- ---------- ----------
OPERATING INCOME 127,632 139,414 258,118 273,227
OTHER INCOME 10,696 3,829 17,692 6,826
-------- -------- ---------- ----------
TOTAL INCOME 138,328 143,243 275,810 280,053
-------- -------- ---------- ----------
NET INTEREST AND OTHER CHARGES:
Interest on long-term debt 52,803 61,805 109,338 123,736
Deferred nuclear unit interest - (2,125) - (4,250)
Allowance for borrowed funds used during
construction and capitalized interest (890) (989) (2,068) (2,303)
Other interest expense 5,967 6,200 10,825 11,762
Subsidiaries' preferred stock dividend
requirements 3,856 1,301 7,713 2,461
-------- -------- ---------- ----------
Net interest and other charges 61,736 66,192 125,808 131,406
-------- -------- ---------- ----------
NET INCOME 76,592 77,051 150,002 148,647
PREFERRED STOCK DIVIDEND REQUIREMENTS 3,124 5,537 6,249 10,896
-------- -------- ---------- ----------
EARNINGS ON COMMON STOCK $ 73,468 $ 71,514 $ 143,753 $ 137,751
======== ======== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 144,027 143,638 143,987 143,579
======== ======== ========== ==========
EARNINGS PER SHARE OF COMMON STOCK $ .51 $ .50 $1.00 $ .96
===== ===== ===== =====
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $.375 $.375 $ .75 $ .75
===== ===== ===== =====
<FN>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
</TABLE>
- 1 -
<PAGE>
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1996 1995
------------ --------------
(In thousands)
<S> <C> <C>
ASSETS
------
UTILITY PLANT:
In service, at original cost $8,580,937 $8,556,722
Less--Accumulated provision for depreciation 3,155,290 3,051,148
---------- ----------
5,425,647 5,505,574
---------- ----------
Construction work in progress-
Electric plant 131,276 150,262
Nuclear fuel 9,633 39,613
---------- ----------
140,909 189,875
---------- ----------
5,566,556 5,695,449
---------- ----------
OTHER PROPERTY AND INVESTMENTS:
Letter of credit collateralization 277,763 277,763
Other 268,895 252,005
---------- ----------
546,658 529,768
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents 5,092 29,830
Receivables-
Customers (less accumulated provisions of
$2,500,000 and $2,528,000, respectively,
for uncollectible accounts) 255,095 274,692
Other 44,992 54,988
Materials and supplies, at average cost-
Owned 62,411 68,829
Under Consignment 53,657 41,080
Prepayments 93,252 82,257
---------- ----------
514,499 551,676
---------- ----------
DEFERRED CHARGES:
Regulatory assets 1,757,179 1,786,543
Unamortized sale and leaseback costs 100,648 103,091
Property taxes 104,071 104,071
Other 53,111 53,336
---------- ----------
2,015,009 2,047,041
---------- ----------
$8,642,722 $8,823,934
========== ==========
</TABLE>
- 2 -
<PAGE>
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
(In thousands)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
- ------------------------------
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 727,116 726,307
Retained earnings 506,970 471,095
Unallocated employee stock ownership plan common
stock - 8,490,064 and 8,663,575 shares,
respectively (158,978) (162,656)
---------- ----------
Total common stockholders' equity 2,448,233 2,407,871
Preferred stock-
Not subject to mandatory redemption 160,965 160,965
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 15,000
Company obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely
Company subordinated debentures 120,000 120,000
Long-term debt 2,749,863 2,786,256
---------- ----------
5,569,966 5,565,997
---------- ----------
CURRENT LIABILITIES:
Currently payable long-term debt 122,198 376,716
Short-term borrowings 246,965 119,965
Accounts payable 117,798 100,536
Accrued taxes 132,280 131,432
Accrued interest 55,272 57,462
Other 145,611 196,482
---------- ----------
820,124 982,593
---------- ----------
DEFERRED CREDITS:
Accumulated deferred income taxes 1,766,573 1,772,434
Accumulated deferred investment tax credits 207,021 213,876
Other 279,038 289,034
---------- ----------
2,252,632 2,275,344
---------- ----------
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 2) ---------- ----------
$8,642,722 $8,823,934
========== ==========
<FN>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these balance sheets.
</TABLE>
- 3 -
<PAGE>
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1996 1995 1996 1995
------ ------ ------ ------
(In thousands)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 76,592 $ 77,051 $150,002 $148,647
Adjustments to reconcile net income to net
cash from operating activities-
Provision for depreciation 89,438 55,899 172,729 112,765
Nuclear fuel and lease amortization 13,274 17,940 25,511 32,200
Deferred income taxes, net 3,131 4,905 11,555 10,708
Investment tax credits, net (3,520) (2,006) (6,855) (4,012)
Allowance for equity funds used during
construction - (649) - (1,315)
Deferred fuel costs, net (2,183) 1,521 (5,119) 6,017
Receivables (8,798) (19,113) 29,593 7,391
Materials and supplies (1,781) 3,220 (6,159) 3,726
Accounts payable 26,837 (4,563) 25,023 86
Other (58,861) (39,073) (49,574) (16,977)
-------- -------- -------- --------
Net cash provided from operating
activities 134,129 95,132 346,706 299,236
-------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt - 52,646 40,621 127,223
Short-term borrowings, net 127,957 72,089 127,000 56,308
Redemptions and Repayments-
Preferred stock 176 - 847 -
Long-term debt 192,953 64,258 339,820 207,295
Dividend Payments-
Common stock 55,059 60,580 108,921 115,385
Preferred stock 2,875 5,333 6,235 10,734
-------- -------- -------- --------
Net cash used for financing
activities 123,106 5,436 288,202 149,883
-------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions 32,507 39,731 76,232 93,936
Other 3,641 13,621 7,010 18,341
-------- -------- -------- --------
Net cash used for investing
activities 36,148 53,352 83,242 112,277
-------- -------- -------- --------
Net increase (decrease) in cash and cash
equivalents (25,125) 36,344 (24,738) 37,076
Cash and cash equivalents at beginning of period 30,217 24,023 29,830 23,291
-------- -------- -------- --------
Cash and cash equivalents at end of period $ 5,092 $ 60,367 $ 5,092 $ 60,367
======== ======== ======== ========
<FN>
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
</TABLE>
- 4 -
<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) 1995 Annual Report to Stockholders.
The results of operations are not intended to be indicative of
results of operations for any future period.
The sole assets of the subsidiary trust that is the obligor
on the preferred securities included in the Company's
capitalization are $123,711,350 principal amount of 9% Junior
Subordinated Debentures of the Company due December 31, 2025.
2 - COMMITMENTS, GUARANTEES AND CONTINGENCIES:
Construction Program --
The Company and its wholly owned subsidiary, Pennsylvania
Power Company (Companies), currently forecast expenditures of
approximately $650,000,000 for property additions and improvements
from 1996-2000, of which approximately $142,000,000 is applicable
to 1996. The Companies' nuclear fuel investments are expected to be
approximately $180,000,000 during the 1996-2000 period, of which
approximately $29,000,000 is applicable to 1996.
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 June 30, 1996, the
Companies' share of the guarantees were $60,417,000. 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
$17,000,000 for the period 1996 through 2000, which is included in
the construction forecast under "Construction Program."
- 5 -
The Companies are in compliance with the sulfur dioxide
(SO2) and nitrogen oxides (NOx) reduction requirements under the
Clean Air Act Amendments of 1990. SO2 reductions through the year
1999 are being achieved by burning lower-sulfur fuel, generating
more electricity from lower-emitting plants, and/or purchasing
emission allowances. Plans for complying with reductions required
for the year 2000 and thereafter have not been finalized. The
Environmental Protection Agency (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
Companies continue to evaluate their 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 the proposed regulations or
the interim enforcement policy.
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 -
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 June 30, 1996, and the related consolidated statements of
income and cash flows for the three-month and six-month periods
ended June 30, 1996 and 1995. 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, 1995, 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, 1995, is fairly stated, in all material respects, in relation
to the balance sheet from which it has been derived.
ARTHUR ANDERSEN LLP
Cleveland, Ohio
August 9, 1996
- 7 -
OHIO EDISON COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
Earnings on common stock increased to $.51 per share in
the second quarter of 1996 compared to $.50 per share for the same
period last year. For the six-month period ended June 30, 1996,
earnings increased to $1.00 per share from $.96 per share in 1995.
The improved earnings were due to record second quarter and first
half retail sales and the Companies' continuing cost control
efforts. These six-month results include accelerated depreciation
and amortization of nuclear and regulatory assets totaling
approximately $82,000,000 under the Company's Rate Reduction and
Economic Development Plan and Penn Power's Rate Stability and
Economic Development Plan. For the quarter ended June 30, 1996,
these amounts were approximately $46,000,000. The Company also
discontinued deferral of postretirement benefits and nuclear unit
interest expense in the third quarter of 1995 in accordance with
its plan.
During the first half of 1996, retail kilowatt-hour sales
increased 6.1% over last year, producing a new sales record for any
first-half in the Company's history. Residential and commercial
sales were up 7.0% and 3.7%, respectively during the period. A 7.1%
increase in industrial sales reflects the restart of operations by
two major customers in the second half of 1995. Excluding sales to
those customers, industrial sales rose 1.8% during the period. The
Company began supplying 250 megawatts of power to another utility
at the beginning of 1996 under a one-year contract, which was the
principal reason for an 18.4% increase in sales to other utilities
in the first half of 1996 compared to last year. This increase,
coupled with the higher level of retail sales, contributed to an
8.4% increase in total kilowatt-hour sales during the period.
Total kilowatt-hour sales were up 1.5% in the second
quarter of 1996, with retail kilowatt-hour sales increasing 4.7%
over the same period last year. Residential and commercial sales
rose 2.4% and 3.4%, respectively, during the period. Industrial
sales increased 7.4% during the second quarter of 1996, compared to
the second quarter of 1995, while sales to other utilities were
down 9.7%.
Because of higher kilowatt-hour sales, the Companies
spent more on fuel and purchased power during the first half of
1996, compared to last year. Reduced nuclear expenses during the
three and six month periods principally reflect lower refueling
outage cost levels in 1996. The comparative decreases in other
operating costs reflect the Companies' continuing cost reduction
efforts. The changes in depreciation and regulatory asset
- 8 -
amortization reflect accelerations under the regulatory plans
discussed above.
The comparative increases in other income are principally
due to higher investment income in 1996 coupled with Penn Power's
adjustment to the recoverable costs related to Perry Unit 2 since
recovery is beginning sooner than originally anticipated through
its rate stability plan.
Interest costs continued to drop during the second
quarter and first half of 1996 compared to last year. Interest on
long-term debt decreased due to redemptions and refinancing of
higher-cost debt that occurred subsequent to June 30, 1995. The
Companies have reduced total outstanding debt by approximately
$427,000,000 since June 30, 1995. Total Company and subsidiaries'
preferred stock dividend requirements were relatively unchanged
from last year's level, taking into account the preferred stock
refinancing that occurred in the fourth quarter of 1995.
Capital Resources and Liquidity
The Companies have continuing cash requirements for
planned capital expenditures and debt maturities. During the second
half of 1996, capital requirements for property additions and
capital leases are expected to be about $100,000,000, including
$19,000,000 for nuclear fuel. The Companies have additional cash
requirements of approximately $60,000,000 to meet maturities of
long-term debt during the remainder of 1996. These requirements are
expected to be satisfied with internal cash and/or short-term
credit arrangements.
The Company has made arrangements to borrow approximately
$400,000,000, on a short-term basis, during the third quarter of
1996. These borrowings will partially fund a trust established to
purchase a portion of the lease obligation bonds issued on behalf
of lessors in the Company's Perry Unit 1 and Beaver Valley Unit 2
sale and leaseback transactions. The economic benefit resulting
from the trust investment will effectively reduce the related lease
costs to the Company. The short-term borrowings are expected to be
ultimately refinanced through the issuance of first mortgage bonds
by the Company.
As of June 30, 1996, the Companies had about $5,000,000
of cash and temporary investments. The Companies also had
$247,000,000 of short-term indebtedness. The Company had the
capability to borrow approximately $62,000,000 as of June 30, 1996
through OES Fuel credit facilities. In addition, the Companies had
$5,000,000 of unused short-term bank lines of credit, and
$55,000,000 of bank facilities that provide for borrowings on a
short-term basis at the banks' discretion.
- 9 -
Legislative proposals changing the structure of the
electric utility industry are receiving attention in Ohio and
Pennsylvania. In Ohio, House Bill 653 has been introduced which
would allow retail customers to choose their electricity supplier
beginning January 1, 1998. In Pennsylvania, three separate bills
have been introduced and the Public Utility Commission has issued
a Report and Recommendation to the Governor and General Assembly
dealing with the implementation of electric utility competition in
the State. Both the Ohio and Pennsylvania bills have provisions
that allow for transition periods in which utilities would have an
opportunity to reduce their potential stranded investment, similar
to what the Companies are accomplishing through their regulatory
plans. Numerous legislative proposals have been introduced in
Congress as well. Distribution services would still be regulated in
Ohio and Pennsylvania under the pending proposals. The Companies do
not expect state or federal legislation dealing with these issues
to be passed during the current sessions.
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The annual meeting of stockholders was held on
April 25, 1996.
(b) At this meeting the following persons were elected to
the Company's Board of Directors:
Number of Votes
-----------------------------------------------
Against or Broker
For Withheld Abstentions Non-Votes
----------- --------- ----------- ---------
D. C. Blasius 121,670,780 1,913,950 0 0
H. P. Burg 121,785,211 1,799,519 0 0
R. M. Carter 121,605,061 1,979,669 0 0
C. A. Cartwright 121,690,458 1,894,272 0 0
W. R. Holland 121,774,061 1,810,669 0 0
R. L. Loughhead 121,660,086 1,924,644 0 0
R. W. Maier 121,581,531 2,003,199 0 0
G. H. Meadows 121,676,000 1,908,730 0 0
P. J. Powers 121,705,290 1,879,440 0 0
C. W. Rainger 121,783,799 1,800,931 0 0
G. M. Smart 121,789,855 1,794,875 0 0
J. T. Williams, Sr. 121,729,507 1,855,223 0 0
- 10 -
(c) At this meeting the appointment of Arthur Andersen LLP,
independent public accountants as auditors for the year 1996
was ratified:
Number of Votes
-------------------------------------------------
Against or Broker
For Withheld Abstentions Non-Votes
----------- ---------- ----------- ---------
120,563,059 1,451,469 1,570,202 0
(d) At this meeting a shareholder proposal to disallow proxies
granting discretionary voting powers for any issue placed
before stockholders was rejected:
Number of Votes
-------------------------------------------------
Against or Broker
For Withheld Abstentions Non-Votes
----------- ---------- ----------- ----------
16,502,740 83,654,301 6,194,795 17,232,894
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
The Company filed one report on Form 8-K since
March 31, 1996. A report dated June 27, 1996, reported
that the Pennsylvania Public Utility Commission had
approved Pennsylvania Power Company's Rate Stability
and Economic Development Plan.
- 11 -
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.
August 13, 1996
OHIO EDISON COMPANY
-------------------
Registrant
/s/ H. P. Burg
------------------------------
H. P. Burg
Senior Vice President and
Chief Financial Officer
- 12 -
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, No. 33-51139, No. 333-01489 and No. 333-05277,
the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996, which includes our report dated August 9, 1996,
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
August 9, 1996
- 1 -
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
(Amounts in 1,000's, except earnings per share)
Income tax expense includes $6,725,000 related to other income.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,566,556
<OTHER-PROPERTY-AND-INVEST> 546,658
<TOTAL-CURRENT-ASSETS> 514,499
<TOTAL-DEFERRED-CHARGES> 2,015,009
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 8,642,722
<COMMON> 1,373,125
<CAPITAL-SURPLUS-PAID-IN> 568,138
<RETAINED-EARNINGS> 506,970
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,448,233
160,000
211,870
<LONG-TERM-DEBT-NET> 2,749,863
<SHORT-TERM-NOTES> 127,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 119,965
<LONG-TERM-DEBT-CURRENT-PORT> 116,578
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 5,620
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,703,593
<TOT-CAPITALIZATION-AND-LIAB> 8,642,722
<GROSS-OPERATING-REVENUE> 1,210,953
<INCOME-TAX-EXPENSE> 96,852
<OTHER-OPERATING-EXPENSES> 862,708
<TOTAL-OPERATING-EXPENSES> 952,835
<OPERATING-INCOME-LOSS> 258,118
<OTHER-INCOME-NET> 17,692
<INCOME-BEFORE-INTEREST-EXPEN> 275,810
<TOTAL-INTEREST-EXPENSE> 125,808
<NET-INCOME> 150,002
6,249
<EARNINGS-AVAILABLE-FOR-COMM> 143,753
<COMMON-STOCK-DIVIDENDS> 108,921
<TOTAL-INTEREST-ON-BONDS> 109,338
<CASH-FLOW-OPERATIONS> 346,706
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
</TABLE>
