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, 1997
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:1-800-736-3402
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 7, 1997.
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 Nine Months Ended
September 30, September 30,
--------------------- ------------------------
1997 1996 1997 1996
-------- -------- ---------- --- ------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES $652,660 $646,902 $1,850,684 $1,857,855
-------- -------- ---------- ----------
OPERATING EXPENSES AND TAXES:
Fuel and purchased power 111,724 114,301 321,514 345,748
Nuclear operating costs 66,990 65,207 202,833 187,477
Other operating costs 101,937 105,080 297,006 303,423
-------- -------- ---------- ----------
Total operation and maintenance expenses 280,651 284,588 821,353 836,648
Provision for depreciation 106,402 92,472 292,975 265,201
Amortization of net regulatory assets 11,288 7,421 26,129 20,241
General taxes 58,986 59,711 175,959 184,810
Income taxes 54,277 55,842 140,909 145,969
-------- -------- ---------- ----------
Total operating expenses and taxes 511,604 500,034 1,457,325 1,452,869
-------- -------- ---------- ----------
OPERATING INCOME 141,056 146,868 393,359 404,986
OTHER INCOME 12,035 7,169 39,605 24,861
-------- -------- ---------- ----------
TOTAL INCOME 153,091 154,037 432,964 429,847
-------- -------- ---------- ----------
NET INTEREST AND OTHER CHARGES:
Interest on long-term debt 50,799 51,388 155,137 160,726
Allowance for borrowed funds used during
construction and capitalized interest (1,056) (476) (1,817) (2,544)
Other interest expense 7,669 6,763 23,342 17,588
Subsidiaries' preferred stock dividend
requirements 3,857 3,857 11,570 11,570
-------- -------- ---------- ----------
Net interest and other charges 61,269 61,532 188,232 187,340
-------- -------- ---------- ----------
NET INCOME 91,822 92,505 244,732 242,507
PREFERRED STOCK DIVIDEND REQUIREMENTS 3,124 3,124 9,373 9,373
-------- -------- ---------- ----------
EARNINGS ON COMMON STOCK $ 88,698 $ 89,381 $ 235,359 $ 233,134
======== ======== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 144,586 144,143 144,466 144,039
======= ======= ======= =======
EARNINGS PER SHARE OF COMMON STOCK $ .61 $ .62 $ 1.63 $ 1.62
===== ===== ====== ======
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.
</TABLE>
- 1 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(In thousands)
ASSETS
-------
<S> <C> <C>
UTILITY PLANT:
In service, at original cost $8,689,329 $8,634,030
Less--Accumulated provision for depreciation 3,633,731 3,315,344
---------- ----------
5,055,598 5,318,686
---------- ----------
Construction work in progress-
Electric plant 91,147 93,413
Nuclear fuel 33,152 5,786
---------- ----------
124,299 99,199
---------- ----------
5,179,897 5,417,885
---------- ----------
OTHER PROPERTY AND INVESTMENTS:
PNBV Capital Trust 484,821 487,979
Letter of credit collateralization 277,763 277,763
Other. 395,292 323,316
---------- ----------
1,157,876 1,089,058
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents 8,444 5,253
Receivables-
Customers (less accumulated provisions of $5,368,000
and $2,306,000, respectively, for uncollectible
accounts) 219,866 247,027
Other 64,929 58,327
Materials and supplies, at average cost-
Owned 71,011 66,177
Under Consignment 49,330 44,468
Prepayments 74,557 75,681
---------- ----------
488,137 496,933
---------- ----------
DEFERRED CHARGES:
Regulatory assets 1,627,690 1,703,111
Unamortized sale and leaseback costs 96,345 100,066
Property taxes 100,043 100,802
Other 71,314 57,517
---------- ----------
1,895,392 1,961,496
---------- ----------
$8,721,302 $8,965,372
========== ==========
</TABLE>
- 2 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1997 1996
-------------- ------------
(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 728,669 727,602
Retained earnings 630,489 557,642
Unallocated employee stock ownership plan common
stock - 7,934,571 and 8,259,053 shares,
respectively (148,841) (155,010)
---------- ----------
Total common stockholders' equity 2,583,442 2,503,359
Preferred stock-
Not subject to mandatory redemption 160,965 160,965
Subject to mandatory redemption 15,000 20,000
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 2,401,833 2,712,760
---------- ----------
5,347,145 5,582,989
---------- ----------
CURRENT LIABILITIES:
Currently payable long-term debt and preferred stock 391,219 333,667
Short-term borrowings 295,674 349,480
Accounts payable 84,907 93,509
Accrued taxes 195,279 142,909
Accrued interest 46,495 52,855
Other 150,286 131,275
---------- ----------
1,163,860 1,103,695
---------- ----------
DEFERRED CREDITS:
Accumulated deferred income taxes 1,717,128 1,777,086
Accumulated deferred investment tax credits 188,613 199,835
Other 304,556 301,767
---------- ----------
2,210,297 2,278,688
---------- ----------
COMMITMENTS, GUARANTEES AND
CONTINGENCIES (Note 2) ---------- ----------
$8,721,302 $8,965,372
========== ==========
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these balance sheets.
</TABLE>
- 3 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ------------------
1997 1996 1997 1996
-------- -------- -------- --------
(In thousands)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 91,822 $ 92,505 $244,732 $242,507
Adjustments to reconcile net income to net
cash from operating activities-
Provision for depreciation 106,402 92,472 292,975 265,201
Nuclear fuel and lease amortization 12,040 13,859 40,682 39,370
Other amortization, net 10,996 7,092 25,225 19,171
Deferred income taxes, net (14,796) (1,269) (31,492) 10,286
Investment tax credits, net (4,058) (3,636) (11,222) (10,491)
Deferred fuel costs, net - 499 - (4,723)
Receivables (3,405) (487) 20,559 29,106
Materials and supplies (135) 8,647 (9,696) 2,488
Accounts payable (9,219) (37,238) (3,907) (12,215)
Other 46,527 69,185 47,565 7,635
-------- -------- -------- --------
Net cash provided from operating
activities 236,174 241,629 615,421 588,335
-------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt 9,694 - 80,217 40,621
Short-term borrowings, net - 326,098 - 453,098
Redemptions and Repayments-
Preferred stock 5,000 122 5,000 969
Long-term debt 121,163 142 337,706 339,962
Short-term borrowings, net 10,303 - 53,806 -
Dividend Payments-
Common stock 53,109 55,333 163,069 164,254
Preferred stock 3,817 3,169 9,970 9,404
-------- -------- -------- --------
Net cash used for (provided from) financing
activities 183,698 (267,332) 489,334 20,870
-------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions 52,147 30,346 115,724 106,578
PNBV Capital Trust investment - 464,325 - 464,325
Other 2,374 6,784 7,172 13,794
-------- -------- -------- --------
Net cash used for investing activities 54,521 501,455 122,896 584,697
-------- -------- -------- --------
Net increase (decrease) in cash and
equivalents (2,045) 7,506 3,191 (17,232)
Cash and cash equivalents at beginning of period 10,489 5,092 5,253 29,830
-------- -------- -------- --------
Cash and cash equivalents at end of period $ 8,444 $ 12,598 $ 8,444 $ 12,598
======== ======== ======== ========
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
</TABLE>
- 4 -
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) 1996 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 (Penn Power), currently forecast
expenditures of approximately $600 million for property additions
and improvements from 1997-2001, of which approximately $127
million is applicable to 1997. Nuclear fuel investments for the
Company and Penn Power (Companies) are expected to be
approximately $194 million during the 1997-2001 period, of which
approximately $45 million is applicable to 1997.
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, 1997, the Companies' share of the guarantees were
$43.4 million. 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 $14 million for the period 1997 through 2001, which
is included in the construction forecast under "Construction
Program."
- 5 -
The Companies are in compliance with the current sulfur
dioxide (SO2) and nitrogen oxides (NOx) reduction requirements
under the Clean Air Act Amendments of 1990. SO2 reductions
through the year 1999 will be 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. In October 1997, the EPA proposed
rules that call for a regional approach for NOx reductions.
Comments are being accepted by the EPA and the rules could go
into effect in late 1998. 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.
In December 1996, the EPA proposed changes in the
National Ambient Air Quality Standard for ozone and proposed a
new standard for previously unregulated ultra-fine particulate
matter. Final regulations for both of these standards were
announced in July 1997. The cost of compliance with these
regulations may be substantial and depends on the manner in which
they are implemented by the states in which the Companies operate
affected facilities.
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.
3 - FIRSTENERGY MERGER:
On November 8, 1997, the merger of the Company and
Centerior Energy Corporation (Centerior) became effective
pursuant to the Merger Agreement, dated September 13, 1996, which
was reported on Form 8-K filed by the Company on September 17,
1996. The Federal Energy Regulatory Commission (FERC) issued an
- 6 -
order on October 29, 1997, conditionally approving the
transaction and the Company and Centerior notified the FERC of
their acceptance of that order on October 30, 1997. The
application of FirstEnergy Corp. (FirstEnergy) to the Securities
and Exchange Commission (SEC) under the Public Utility Holding
Company Act of 1935 to acquire the common stock of the Company,
Pennsylvania Power Company and the Centerior utility subsidiaries
was approved on November 5, 1997. Under the Merger Agreement, the
Company and Centerior formed FirstEnergy, an Ohio holding
company, which after a series of intermediate mergers will hold
directly all of the issued and outstanding common shares of the
Company and all of the issued and outstanding common shares of
Centerior's direct subsidiaries, which include, among others, The
Cleveland Electric Illuminating Company and The Toledo Edison
Company. As a result of the merger, the former common
shareholders of the Company and Centerior now own all of the
outstanding shares of FirstEnergy Common Stock. FirstEnergy's
common shares are registered pursuant to Section 12(b) of the
Securities Exchange Act of 1935. All other classes of capital
stock of the Company and its subsidiaries and of the subsidiaries
of Centerior will be unaffected by the Merger and will remain
outstanding.
- 7 -
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, 1997, and the related consolidated statements of
income and cash flows for the three-month and nine-month periods
then ended. 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, 1996, 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 herein), and, in our report dated
February 7, 1997, we expressed an unqualified opinion on that
statement. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of December 31, 1996,
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 12, 1997
- 8 -
OHIO EDISON COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
Earnings on common stock increased to $1.63 per share for
the nine-month period ended September 30, 1997, from $1.62 per
share in the same period of 1996. The nine-month results for 1997
reflect accelerated depreciation and amortization of nuclear and
regulatory assets totaling approximately $157,000,000 under the
Company's Rate Reduction and Economic Development Plan and Penn
Power's Rate Stability and Economic Development Plan; results for
the first nine months of 1996 included approximately $132,000,000
of accelerated depreciation and amortization. Earnings were $.61
per share in the third quarter of 1997 compared to $.62 per share
for the same period last year. For the quarters ended September 30,
1997, and September 30, 1996, the accelerated amounts under the
Companies' regulatory plans were approximately $62,000,000 and
$49,000,000, respectively.
Operating revenues increased 0.9% in the third quarter of
1997, compared to the same period last year. For the nine-month
period ended September 30, 1997, operating revenues were down 0.4%.
The following table summarizes the percentage changes in kilowatt-
hour sales for the three months and nine months ended September 30,
1997 compared to the corresponding periods in 1996:
3 Months 9 Months
-------- --------
Residential - 0.9% - 1.8%
Commercial + 1.6% + 0.2%
Industrial + 0.2% + 1.8%
Total Retail + 0.2% + 0.2%
Other Utilities -20.3% -26.9%
Total - 3.7% - 5.3%
During 1997, residential sales were down due to milder
weather conditions. An improving local economy, including
increased demand by rubber and plastics and primary metal
manufacturers, contributed to the rise in industrial sales during
the nine months ended September 30, 1997. Sales to other utilities
fell in 1997 as a result of the December 31, 1996 expiration of a
one-year contract with another utility to supply 250 megawatts of
power.
Because of lower kilowatt-hour sales, the Companies spent
less on fuel and purchased power during the first nine months of
1997, compared to last year. Higher nuclear expenses reflect
increased operating costs at the Beaver Valley Plant in 1997. For
the three months ended September 30, 1997, the decrease in other
- 9 -
operating costs reflects the effect of last year's charges for
severance costs, which were included in the 1996 third quarter
results. For the nine-month period, the decrease includes credits
in the first quarter of 1997 resulting from gains on emission
allowance sales, which were partially offset by a $3 million charge
for uncollectible customer accounts and costs related to a
scheduled maintenance outage at the Sammis plant in the second
quarter of 1997.
The changes in depreciation and regulatory asset
amortization reflect accelerations under the regulatory plans
discussed above. The comparative decreases in general taxes are due
to lower property taxes and an adjustment in the second quarter of
1997 which reduced the Companies' liabilities for gross receipts
taxes.
The comparative increases in other income reflect higher
interest income, which resulted from the Company's third quarter
1996 investment in the PNBV Capital Trust. Partially offsetting the
comparative increases was a $5 million adjustment, in last year's
second quarter, to Penn Power's recoverable costs related to Perry
Unit 2 since recovery began sooner than originally anticipated.
Total interest costs changed slightly during the third
quarter and first nine months of 1997 compared to last year.
Interest on long-term debt decreased due to redemptions of debt
totaling approximately $257,000,000 that had been outstanding as of
September 30, 1996. Other interest expenses increased as a result
of higher short-term borrowing levels in 1997. The Companies' total
debt was reduced by approximately $363,000,000 during the twelve
months ended September 30, 1997.
Capital Resources and Liquidity
The Companies have continuing cash requirements for
planned capital expenditures and debt maturities. During the
fourth quarter of 1997, capital requirements for property additions
and capital leases are expected to be about $69,000,000, including
$18,000,000 for nuclear fuel. The Companies have additional cash
requirements of approximately $116,000,000 during the fourth
quarter of 1997 for maturing long-term debt and the optional
redemptions discussed below. These cash requirements are expected
to be satisfied with internal cash and/or short-term credit
arrangements.
As of September 30, 1997, the Companies had about
$8,000,000 of cash and temporary investments. The Companies also
had $296,000,000 of short-term indebtedness. The Company had the
capability to borrow approximately $42,000,000 as of September 30,
1997 through unused OES Fuel credit facilities. In addition, the
Companies' unused borrowing capability included $218,000,000 under
revolving lines of credit and $42,000,000 of bank facilities that
provide for borrowings on a short-term basis at the banks'
discretion.
- 10 -
During October 1997, Penn Power made open market
purchases for $6,000,000 of its 6.625% first mortgage bonds and
$6,500,000 of its 6.375% first mortgage bonds.
On September 30, 1997, Penn Power filed a restructuring
plan with the Pennsylvania Public Utility Commission (PPUC). The
plan describes how Penn Power will restructure its rates and
provide customers with direct access to alternative electricity
suppliers beginning in 1999. Penn Power will continue to deliver
power to homes and businesses through its transmission and
distribution system, which remains regulated by the PPUC. Penn
Power also plans to sell electricity and energy related services in
its own territory and throughout Pennsylvania as an alternative
supplier through its nonregulated subsidiary, Penn Power Energy.
Through the restructuring plan, Penn Power is seeking recovery of
$293 million of stranded costs through a competitive transition
charge starting in 1999 and ending in 2005, which is consistent
with Penn Power's Rate Stability and Economic Development Plan
currently in effect. Later this year, the PPUC is expected to
announce plans to hold public hearings on Penn Power's
restructuring plan.
On October 14, 1997, Standard & Poors Corp. upgraded its
rating on the Company's senior secured debt securities to BBB- from
BB+. Prior to that date, Moody's Investor Services and Duff &
Phelps Credit Rating Co. confirmed their ratings of Ohio Edison and
Penn Power senior securities at Baa2 - stable outlook and BBB+,
respectively.
The Federal Energy Regulatory Commission (FERC) issued an
order on October 29, 1997, conditionally approving the Company's
merger with Centerior Energy Corporation to form FirstEnergy Corp.
The order requires the companies to make some minor modifications
to the mitigation measures filed with the FERC on August 8, 1997.
The FERC order also encourages the companies to participate in the
formation of an independent system operator for the region. The
Company and Centerior notified the FERC of their acceptance of that
order on October 30, 1997. The application of FirstEnergy to the
Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935 to acquire the common stock of Ohio Edison and
Centerior subsidiaries was approved on November 5, 1997, and the
merger was effective on November 8, 1997.
- 11 -
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
The Company filed one report on Form 8-K since June 30,
1997. A report dated November 12, 1997, reported that the
merger of the Company and Centerior Energy Corporation
was effective on November 8, 1997.
- 12 -
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 12, 1997
OHIO EDISON COMPANY
-------------------
Registrant
/s/H. L. Wagner
----------------------------
H. L. Wagner
Comptroller
Principal Accounting Officer
- 13 -
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, No. 333-05277, and No. 333-21011, the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, which includes our report dated
November 12, 1997, 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 12, 1997
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
(Amounts in 1,000's, except earnings per share)
Income tax expense includes $16,082,000 related to other income.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,179,897
<OTHER-PROPERTY-AND-INVEST> 1,157,876
<TOTAL-CURRENT-ASSETS> 488,137
<TOTAL-DEFERRED-CHARGES> 1,895,392
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 8,721,302
<COMMON> 1,373,125
<CAPITAL-SURPLUS-PAID-IN> 579,828
<RETAINED-EARNINGS> 630,489
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,583,442
150,000
211,870
<LONG-TERM-DEBT-NET> 2,401,833
<SHORT-TERM-NOTES> 175,690
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 119,984
<LONG-TERM-DEBT-CURRENT-PORT> 380,913
5,000
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 5,306
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,687,264
<TOT-CAPITALIZATION-AND-LIAB> 8,721,302
<GROSS-OPERATING-REVENUE> 1,850,684
<INCOME-TAX-EXPENSE> 156,991
<OTHER-OPERATING-EXPENSES> 1,316,416
<TOTAL-OPERATING-EXPENSES> 1,457,325
<OPERATING-INCOME-LOSS> 393,359
<OTHER-INCOME-NET> 39,605
<INCOME-BEFORE-INTEREST-EXPEN> 432,964
<TOTAL-INTEREST-EXPENSE> 188,232
<NET-INCOME> 244,732
9,373
<EARNINGS-AVAILABLE-FOR-COMM> 235,359
<COMMON-STOCK-DIVIDENDS> 162,512
<TOTAL-INTEREST-ON-BONDS> 155,137
<CASH-FLOW-OPERATIONS> 615,421
<EPS-PRIMARY> 1.63
<EPS-DILUTED> 1.63
</TABLE>
