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, 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: 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, 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 Six Months Ended
June 30, June 30,
-------------------- ---------------------
1997 1996 1997 1996
--------- -------- ---------- ----------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES $593,250 $599,317 $1,198,024 $1,210,953
-------- -------- ---------- ----------
OPERATING EXPENSES AND TAXES:
Fuel and purchased power 100,689 108,157 209,790 231,447
Nuclear operating costs 67,320 63,496 135,843 122,270
Other operating costs 107,079 97,470 195,069 198,343
-------- -------- --------- ---------
Total operation and maintenance expenses 275,088 269,123 540,702 552,060
Provision for depreciation 86,615 89,438 186,573 172,729
Amortization of net regulatory assets 7,421 7,188 14,841 12,820
General taxes 55,436 61,140 116,973 125,099
Income taxes 42,736 44,796 86,632 90,127
-------- -------- --------- ---------
Total operating expenses and taxes 467,296 471,685 945,721 952,835
-------- -------- --------- ---------
OPERATING INCOME 125,954 127,632 252,303 258,118
OTHER INCOME 14,075 10,696 27,570 17,692
-------- -------- --------- ---------
TOTAL INCOME 140,029 138,328 279,873 275,810
NET INTEREST AND OTHER CHARGES:
Interest on long-term debt 51,713 52,803 104,338 109,338
Allowance for borrowed funds used during
construction and capitalized interest (381) (890) (761) (2,068)
Other interest expense 7,955 5,967 15,673 10,825
Subsidiaries' preferred stock dividend requirements 3,856 3,856 7,713 7,713
-------- -------- --------- ---------
Net interest and other charges 63,143 61,736 126,963 125,808
-------- -------- --------- ---------
NET INCOME 76,886 76,592 152,910 150,002
PREFERRED STOCK DIVIDEND REQUIREMENTS 3,125 3,124 6,249 6,249
-------- -------- ---------- ----------
EARNINGS ON COMMON STOCK $ 73,761 $ 73,468 $ 146,661 $ 143,753
======== ======== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 144,468 144,027 144,406 143,987
======== ======== ========== ==========
EARNINGS PER SHARE OF COMMON STOCK $ .51 $ .51 $1.02 $1.00
===== ===== ===== =====
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 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1997 1996
------------ -------------
(In thousands)
ASSETS
------
<S> <C> <C>
UTILITY PLANT:
In service, at original cost $8,662,201 $8,634,030
Less--Accumulated provision for depreciation 3,520,432 3,315,344
---------- ----------
5,141,769 5,318,686
---------- ----------
Construction work in progress-
Electric plant 99,471 93,413
Nuclear fuel 15,030 5,786
---------- ----------
114,501 99,199
---------- ----------
5,256,270 5,417,885
---------- ----------
OTHER PROPERTY AND INVESTMENTS:
PNBV Capital Trust 485,262 487,979
Letter of credit collateralization 277,763 277,763
Other 368,353 323,316
---------- ----------
1,131,378 1,089,058
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents 10,489 5,253
Receivables-
Customers (less accumulated provisions of
$5,766,000 and $2,306,000, respectively,
for uncollectible accounts) 224,085 247,027
Other 57,305 58,327
Materials and supplies, at average cost-
Owned 68,623 66,177
Under Consignment 51,583 44,468
Prepayments 100,936 75,681
---------- ----------
513,021 496,933
---------- ----------
DEFERRED CHARGES:
Regulatory assets 1,655,791 1,703,111
Unamortized sale and leaseback costs 97,593 100,066
Property taxes 101,217 100,802
Other 66,523 57,517
---------- ----------
1,921,124 1,961,496
---------- ----------
$8,821,793 $8,965,372
========== ==========
</TABLE>
- 2 -
<TABLE>
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1997 1996
------------ --------------
(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 728,233 727,602
Retained earnings 596,081 557,642
Unallocated employee stock ownership plan common
stock - 8,047,201 and 8,259,053 shares, respectively (150,847) (155,010)
---------- ----------
Total common stockholders' equity 2,546,592 2,503,359
Preferred stock-
Not subject to mandatory redemption 160,965 160,965
Subject to mandatory redemption 20,000 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 2,368,637 2,712,760
---------- ----------
5,282,099 5,582,989
---------- ----------
CURRENT LIABILITIES:
Currently payable long-term debt and preferred stock 534,720 333,667
Short-term borrowings 305,977 349,480
Accounts payable 92,625 93,509
Accrued taxes 186,643 142,909
Accrued interest 51,292 52,855
Other 123,735 131,275
---------- ----------
1,294,992 1,103,695
---------- ----------
DEFERRED CREDITS:
Accumulated deferred income taxes 1,742,228 1,777,086
Accumulated deferred investment tax credits 192,671 199,835
Other 309,803 301,767
---------- ----------
2,244,702 2,278,688
---------- ----------
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 2) ---------- ----------
$8,821,793 $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 Six Months Ended
June 30, June 30,
--------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- --------
(In thousands)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 76,886 $ 76,592 $152,910 $150,002
Adjustments to reconcile net income to net
cash from operating activities -
Provision for depreciation 86,615 89,438 186,573 172,729
Nuclear fuel and lease amortization 14,297 13,274 28,642 25,511
Other amortization, net 7,119 6,747 14,229 11,976
Deferred income taxes, net (8,255) 3,131 (16,696) 11,555
Investment tax credits, net (3,338) (3,520) (7,164) (6,855)
Deferred fuel costs, net - (2,183) - (5,119)
Receivables 6,612 (8,798) 23,964 29,593
Materials and supplies (10,613) (1,781) (9,561) (6,159)
Accounts payable 9,176 26,837 5,312 25,023
Other (16,143) (65,608) 1,038 (61,550)
-------- -------- -------- --------
Net cash provided from operating activities 162,356 134,129 379,247 346,706
-------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt 41,318 - 70,523 40,621
Short-term borrowings, net - 127,957 - 127,000
Redemptions and Repayments-
Preferred stock - 176 - 847
Long-term debt 104,056 192,953 216,543 339,820
Short-term borrowings, net 13,996 - 43,503 -
Dividend Payments-
Common stock 56,419 55,059 109,960 108,921
Preferred stock 3,057 2,875 6,153 6,235
-------- -------- -------- --------
Net cash used for financing activities 136,210 123,106 305,636 288,202
-------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions 29,196 32,507 63,577 76,232
Other 1,748 3,641 4,798 7,010
-------- -------- -------- --------
Net cash used for investing activities 30,944 36,148 68,375 83,242
-------- -------- -------- --------
Net increase (decrease) in cash and cash equivalents (4,798) (25,125) 5,236 (24,738)
Cash and cash equivalents at beginning of period 15,287 30,217 5,253 29,830
-------- -------- -------- --------
Cash and cash equivalents at end of period $ 10,489 $ 5,092 $ 10,489 $ 5,092
======== ======== ======== =========
<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 (Companies), currently forecast expenditures of
approximately $600 million for property additions and improvements
from 1997-2001, of which approximately $135 million is applicable
to 1997. The Companies' nuclear fuel investments 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 June 30, 1997, the
Companies' share of the guarantees were $45.7 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."
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
- 5 -
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.
In December 1996, 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 - MERGER AGREEMENT:
In September 1996, the Company and Centerior Energy
Corporation, an Ohio corporation, entered into an Agreement and
Plan of Merger. Under the Merger Agreement, the Company and
Centerior will form FirstEnergy Corp., a holding company which will
directly hold all of the issued and outstanding common stock of the
Company and all of the issued and outstanding common stock of
Centerior's direct subsidiaries, which include among others, The
Cleveland Electric Illuminating Company and The Toledo Edison
Company. Penn Power will remain a wholly owned subsidiary of the
Company. As a result of the Merger, the respective common stock
shareholders of the Company and Centerior will own all of the
outstanding shares of FirstEnergy Common Stock. 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.
The Merger was approved by the respective common
shareholders of the Company and Centerior and is expected to close
promptly after all of the conditions to the consummation of the
Merger, including the receipt of all necessary regulatory
approvals, are fulfilled or waived. The receipt of all necessary
regulatory approvals, including approvals from the Federal Energy
Regulatory Commission and the Securities and Exchange Commission,
are expected to take approximately twelve to eighteen months from
the date of the Merger Agreement.
- 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, 1997, and the related consolidated statements of
income and cash flows for the three-month and six-month periods
ended June 30, 1997 and 1996. 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 separately herein). 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
August 13, 1997
- 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 $1.02 per share for
the six-month period ended June 30, 1997, compared to $1.00 per
share for the same period last year. For the second quarter of both
years, earnings were $.51 per share. The six-month results for 1997
reflect accelerated depreciation and amortization of nuclear and
regulatory assets totaling approximately $95,000,000 under the
Company's Rate Reduction and Economic Development Plan and Penn
Power's Rate Stability and Economic Development Plan; results for
the first half of 1996 included approximately $82,000,000 of
accelerated depreciation and amortization. For the quarters ended
June 30, 1997, and June 30, 1996, these amounts were approximately
$40,000,000 and $46,000,000, respectively.
During the first half of 1997, retail kilowatt-hour sales
increased 0.2% over last year. Residential and commercial sales
were down 2.2% and 0.7%, respectively, during the period due to
mild weather conditions. An improving local economy, including
increased demand by rubber and plastics and primary metal
manufacturers, contributed to a 2.7 % rise in industrial sales
during the six months ended June 30, 1997, compared to the same
period in 1996. Sales to other utilities fell 30.0% in 1997,
compared to the first half of 1996, as a result of the December 31,
1996 expiration of a one-year contract with another utility to
supply 250 megawatts of power. This decrease caused total kilowatt-
hour sales to drop 6.1% during the period.
Total kilowatt-hour sales were down 3.9% in the second
quarter of 1997 as a result of 23.2% decrease in sales to other
utilities. During that period, retail kilowatt-hour sales increased
0.9% compared to last year, producing a new second quarter record.
Residential and commercial sales fell 0.8% and 0.5%, respectively,
during the period as a result of mild weather. Industrial sales
increased 2.8% during the second quarter of 1997, compared to the
second quarter of 1996 due to an improving local economy.
Because of lower kilowatt-hour sales, the Companies spent
less on fuel and purchased power during the first half of 1997,
compared to last year. Higher nuclear expenses reflect increased
operating costs at the Beaver Valley Plant in 1997 and a $2.2
million retroactive billing adjustment for Beaver Valley costs
applicable to prior years. For the three months ended June 30,
1997, other operating costs were up compared to 1996 due to costs
related to a scheduled maintenance outage at the Sammis Plant and
a $3 million charge for uncollectible customer accounts. For the
six-month period, these increases were more than offset by credits
in the first quarter of 1997 resulting from gains on emission
allowance sales. 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 reducing the Companies'
liabilities for gross receipts taxes.
- 8 -
OHIO EDISON COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Cont'd)
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 last year's $5 million adjustment to Penn
Power's recoverable costs related to Perry Unit 2 since recovery
began sooner than originally anticipated; that adjustment increased
other income in the second quarter of 1996.
Interest costs were up slightly during the second quarter
and first half of 1997 compared to last year. Interest on long-term
debt decreased due to redemptions totaling approximately
$200,000,000 of debt that had been outstanding as of June 30, 1996.
Other interest expenses increased as a result of higher short-term
borrowing levels in 1997.
Capital Resources and Liquidity
The Companies have continuing cash requirements for
planned capital expenditures and debt maturities. During the second
half of 1997, capital requirements for property additions and
capital leases are expected to be about $113,000,000, including
$36,000,000 for nuclear fuel. The Companies have additional cash
requirements of approximately $163,000,000 to meet sinking fund
requirements for preferred stock and maturing long-term debt during
the remainder of 1997. These cash requirements are expected to be
satisfied with internal cash and/or short-term credit arrangements.
In addition, approximately $106,000,000 of variable rate pollution
control bonds are subject to repricing during the remainder of the
year.
As of June 30, 1997, the Companies had about $10,000,000
of cash and temporary investments. The Companies also had
$306,000,000 of short-term indebtedness. The Company had the
capability to borrow approximately $94,000,000 as of June 30, 1997
through unused OES Fuel credit facilities. In addition, the
Companies' unused borrowing capability included $142,000,000 under
revolving lines of credit and $12,000,000 of bank facilities that
provide for borrowings on a short-term basis at the banks'
discretion.
On July 9, 1997, Standard & Poors Corp. lowered the
Companies' security ratings in connection with the pending merger
with Centerior Energy to form FirstEnergy Corp. Standard & Poors
applied a consolidated rating methodology for all of the
FirstEnergy operating units. Standard & Poors assigned ratings of
BB+ to the Companies' senior secured debt, BB- to senior unsecured
debt and preferred stock, all with positive implications.
The Federal Energy Regulatory Commission (FERC) issued an
order on July 16, 1997, in connection with the pending FirstEnergy
merger, which offered FirstEnergy the option of filing a revised
market power analysis and mitigation measures to resolve potential
competitive problems that the FERC concluded could result from the
merger. On August 8, 1997, a revised market power analysis was
filed in response to the FERC order and certain mitigation measures
- 9 -
were offered. These mitigation measures, some of which are similar
to provisions previously included in the settlement agreements
reached with the City of Cleveland and AMP-Ohio and are intended to
benefit municipal systems, include the allocation of transmission
capacity to municipal customers, cooperative transmission planning
considerations, emergency power purchase arrangements and emergency
load curtailment procedures. FirstEnergy has requested that the
comment period on the filing be shortened to thirty days.
- 10 -
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 24, 1997.
(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 123,950,393 2,913,017 0 0
H. P. Burg 124,124,165 2,739,245 0 0
R. M. Carter 123,808,456 3,054,954 0 0
C. A. Cartwright 123,981,196 2,882,214 0 0
W. R. Holland 124,054,712 2,808,698 0 0
R. L. Loughhead 123,917,610 2,945,800 0 0
R. W. Maier 124,063,880 2,799,530 0 0
G. H. Meadows 123,911,843 2,951,567 0 0
P. J. Powers 124,065,601 2,797,809 0 0
C. W. Rainger 124,157,691 2,705,719 0 0
G. M. Smart 124,146,802 2,716,608 0 0
J. T. Williams, Sr. 123,929,589 2,933,821 0 0
(c) At this meeting the appointment of Arthur Andersen LLP,
independent public accountants as auditors for the year 1997
was ratified:
Number of Votes
----------------------------------------------
Against or Broker
For Withheld Abstentions Non-Votes
----------- ------------ ----------- ----------
124,182,627 1,202,726 1,478,053 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
------------ ----------- ----------- ----------
17,751,215 88,459,665 6,234,452 14,418,078
- 11 -
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.
- 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.
August 13, 1997
OHIO EDISON COMPANY
-------------------
Registrant
/s/ H. P. Burg
----------------------------------
H. P. Burg
President, Chief Operating Officer
and Chief Financial 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 June 30, 1997, which includes our report dated August
13, 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
August 13, 1997
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
(Amounts in 1,000's, except earnings per share)
Income tax expense includes $11,755,000 related to other income.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,256,270
<OTHER-PROPERTY-AND-INVEST> 1,131,378
<TOTAL-CURRENT-ASSETS> 513,021
<TOTAL-DEFERRED-CHARGES> 1,921,124
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 8,821,793
<COMMON> 1,373,125
<CAPITAL-SURPLUS-PAID-IN> 577,386
<RETAINED-EARNINGS> 596,081
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,546,592
155,000
211,870
<LONG-TERM-DEBT-NET> 2,368,637
<SHORT-TERM-NOTES> 186,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 119,977
<LONG-TERM-DEBT-CURRENT-PORT> 524,208
5,000
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 5,512
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,698,997
<TOT-CAPITALIZATION-AND-LIAB> 8,821,793
<GROSS-OPERATING-REVENUE> 1,198,024
<INCOME-TAX-EXPENSE> 98,387
<OTHER-OPERATING-EXPENSES> 859,089
<TOTAL-OPERATING-EXPENSES> 945,721
<OPERATING-INCOME-LOSS> 252,303
<OTHER-INCOME-NET> 27,570
<INCOME-BEFORE-INTEREST-EXPEN> 279,873
<TOTAL-INTEREST-EXPENSE> 126,963
<NET-INCOME> 152,910
6,249
<EARNINGS-AVAILABLE-FOR-COMM> 146,661
<COMMON-STOCK-DIVIDENDS> 108,297
<TOTAL-INTEREST-ON-BONDS> 104,338
<CASH-FLOW-OPERATIONS> 379,247
<EPS-PRIMARY> 1.02
<EPS-DILUTED> 1.02
</TABLE>