ML20084A494
| ML20084A494 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley |
| Issue date: | 12/31/1994 |
| From: | OHIO EDISON CO. |
| To: | |
| Shared Package | |
| ML20084A425 | List: |
| References | |
| NUDOCS 9505300362 | |
| Download: ML20084A494 (32) | |
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Operating Performance Retail Kilowatt-Hour Sales (Millions) 25,071 25,042 Peak Load (Megawatts) 5,744 5,729 Customers Served 1,083,327 1,070,152 Number of Employees 5,166 5,978 Customers per Employee 210 179 Cost of Fuel per Million Btu $1.21 $ 1.26 Financial Performance Operating Revenues $2,368,191,000 $2,369,940,000 Operating Income-Before Nonrecurring Charges $557,254,000 $553,165,000 After Nonrecurring Charges $557,254,000 $525,330,000 Net income-Before Nonrecurring Charges $303,531,000 $301,101,000 After Nonrecurring Charges $303,531,000 $82,724,000 Earnings per Common Share-Before Nonrecurring Charges $1.97 $1.82 After Nonrecurring Charges $1.97 $.39 Return on Average Common Equity-Before Nonrecurring Charges 12.4% 11.4% After Nonrecurring Charges 12.4% 2.4% Dividends per Common Shore $1.50 $1.50 12.4 1.97 553.2 5573 II d 1.82 522.1 , 1.70 l 10.8 l Return On A~rae. operatine l Common Equity Earnings Per income Before shore Before Before Nonroevering Nonresurring Nonrecurring Charges Charges Charges (terrent) (Dollars) ($ Millions) 92 93 94 92 93 94 92 93 94 1
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J! i V E - V L ) ) b ( L.J z 7,i LI I e ir i' ? ~~ a], The progress we made in 1994 Many of the savings identified in 1994 alone, we addedl3,175 will help us meet the competitive through Performance Initiatives resulted customers, including 101 industrial challenges that lie ahead. from the reprioritization of construction and 2,431 commercial businesses. Through Performance Initiatives projects, improvements in mainte- Future electric sales should benefit - an ongoing effort to control costs nonce procedures and the use of new from our marketing strategy that will and encourage continuous improve. technologies. These changes led to help us build stronger partnerships with ment throughout our Company - we a work-force reduction of 812 the businesses we serve. By giving our identified savings that could reduce employees, representing a savings of largest customers individualized our cash requirements by more than more than $40 million annually. The marketing support and targeting our $200 million annually within the 14 percent reduction was achieved services to specific market segments, next five years. This effort helped us through a voluntary retirement we will create new sales opportunities achieve 1994 earnings of $282 million, Program, layoffs and attrition. and enhance customer loyolty in the or $1.97per share, compared with Our future success will demand years ahead. $277million,or $1.82 per share for an even stronger emphasis on cost
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1993, excluding nonrecurring charges. control and revenue enhancement. While achieving our second con- That's why we've made the We're continuing to promote sales secutive year of record retail sales, Performance Initiatives strategy growth through our Rate Stabilization we also strengthened our commitment Permanent part of the way we d and Service Area Development to exceptional customer service, which business. This program will play a Program, which will keep 1990 base is reflected in both our marketing key role in the years ahead as we electric prices frozen until at least 1992 strategy and our Customer Value achieve new operating efficiencies And our goal to extend the freeze Improvement Program. and cost savings that will help us until the year 2000 remains in effect. In addition, we're moving forward becorne a stronger competitor in the By the end of 1994,we had made on a corporate strategy initiative that electnc utility mdustry. , , is focusing on a wide range of options soosting soso. $50-million efficiency fund for and opportunities to enhance our companies and local governments. ability to meet future competition. As we make our business more These loans are supporting investments productive, we're also working hard in energy-efficient electrical equipment Aggressively Cutting Co.t. to increase sales and add to the and other improvements at large Performance Initiatives began with v lue of our product and services. manufacturers and institutions teams of employees looking at every Despite mild weather through throughout our Ohio service area. facet of our business for opportunities most of the year, electric sales In addition, we began using the to reduce costs, increase revenue remained strong. Record retail sales program's $25-million fund to promote and improve efficiency. In 1994, the of 25.1 billion kilowatt-hours reflect energy efficiency among our residential program produced excellent results, the continued vitolh of our service customers. A portion of these funds including a $45 million reduction in area's economy as well as steady is being distributed through the our annual capital budget, growth in the number of our customers. 2 i
i Community Partners Program, which is utility. Whi!e regulators appear to be supporting efficiency improvements at increasingly reluctant to move in this l local homeless shelters, homes for direction - primarily because of the battered women and children and adverse impact retail wheeling would other agencies, and providing have on small users-we expect the energy-saving items such as fluores- debate will place downward pressure cent light bulbs and weatherization on our prices in the future. materials to low-income customers. Whether or not retail wheeling Providing Exceptional becomes a reality, we will continue Servios to compete with existing sources such / N We're also adding value to the s natural gas and other fuel suppliers; service we provide customers through municipal electric systems looking to j/ our Customer Value Improvement expand; major manufacturers choosing Program, or Customer VIP. Introduced mong several plant locations; and [, ' in 1994, Customer VIP underscores c generators and independent # I I l. our commitment to offer responsive, Power producers. quahty service in areas that customers Regardless of what form it takes, y value the most-such as high reliability, competition is here to stay in our related energy services and conve. industry. We're meeting this challenge nient operating hours at our service through the hard work of our centers. The goals of this program employees, who are doing more with have been shared with all employees less, and through the bold actions we - through our new Customer VIP Promise, our pledge to deliver superior took during the year. We're enthusiastic about the
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value to our customers - beyond future of our busiress - a future in what they expect. which electricity will fuel the most O signific nt bre kthroughs in tomorrow's willard R. Holland M.. ting Th. competitiv. homes and worl< places. President and Chief Executive Officer Challenge Exceptional service is especially And we're confident of our success 7,,,,,,,g , ,g important in an increasingh Competitive in the years ahead as we work hard energy market. Much of this compection to earn our customers' business and is being driven by technological a fair return for our shareholders. advances and regulatory changes. In addition, many large users will continue to push for some form of retail wheeling, which would enable retail customers to purchase electricity from producers other than the local 3 l
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/ j 1 121 2 m .s V > ' / ; Y l We've made fundamental For example, we've made improvements to our business that changes to our materials manage-Will establish Ohio Edison as a ment process that will achieve ,
l I solid performer in tomorrow's some $32 million in cost savings-l ! energy market. ranging from improvements in how Many of these improvements are we buy, store and use transformers emerging from our Performance to reductions in inventory at our p, s4236
] nitiatives program. Through this effort, teams of Ohio Edison Power plants. Changes in our tree-trimming process alone should 7 '-& l Produce savings of about Hof ,
employees studied every facet of
$5 million annually.
%p our operations - looking for 5 * *-
- . _ . opportunities to cut costs, increase Now firmly established within l
revenue and enhance efficiency. our organization, the cost-saving initiatives, we mode subtle By the end of 1994, steps taken and improvement strategies l changes to the look of ou' through these initiatives had iden. developed through Performance fified savings that could reduce our Initiatives are an essential part of u $85 n ual y cash requirements by more than the way we do business.
$200 million annually within the next five years.
After years of generating its own power, Chopel Hill Moll of Akron, Ohio, loined our system in I994. 4
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More than 800 transformsrs at { eur substatiws and gensrating plants help ensure the high reliability of our electrical system. I h The clearest examples of our i
"",'j*E",8,sj, rat.sv u,.
ongoing commitment to cost control ; are in the areas of capital spending We're ready to meet future and staffing. competition with a marketing in 1994,we deferred or elimi-j strategy that will retain existing ! noted many power generation and l customers, increase electric sales, electric transmission and distribution ' and take advantage of new projects, changed the scope of opportunities. Others and replaced some with form the Western Division, and the We have studied the marketing lower-cost alternatives-saving ! Warren Division became part of strategies of companies that suc-
$45 million annually.
the Youngstown Division. While cessfully made the transition ,,om These changes - along with improving our flexibility, the highly regulated to highly comperi-
- improvements in technology, consolidations will help us provide tive environments in industries such enhancements in maintenance greater focus to customer service, as airlines, telecommunications procedures and the streamlinin9 marketing and community activities. and trucking.
, of our operations - resulted in a In addition, we achieved savings Using these and other strategies, work-force reduction of 14 percent by consolidating several line shops we began a comprehensive during the year, saving the and eliminating a number of restructuring of our marketing Company more than $40 million management positions. efforts that will help us add eccr annually. Reductions totaling 812 nomic value to our product and employees were achieved through enhance customer loyalty in a a combination of voluntary retire-
' competitive market. ments, layoffs and attrition Basic marketing changes address i We now serve 118,000 more the challenges electric companies 4 customers with about 2,700 wil be facing. For example: fewer employees than we had 2io j in 1982. .We began segmenting our t business customers by During 1994, we also consoli- 179 : market - recognizing that dated the operations of several plastics manufacturers need l divisions. The Bay, Mansfield and energy-related services and Marion divisions were merged to pricing options that are { significantly different from those offered to steel companies or health care providers. Employee ProJverivity (Number Of Customers Served Per Employee) 92 93 94 5
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? .We began allocating marketing resources based on higher standards of profitability to help l
os pursue sales and demand-j side opportunities that make y #) . the most economic sense for our (, Company and our customers.
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s, p_' . This restructuring is already paying off. In 1994, before our , programs were fully implemented, l 4
. new sales in competitive markets j l
H ' reached $73 million in projected l lifetime contribution-a 38 percent l
, increase over the previous year. l Lifetime contribution is new revenue minus costs over the estimated life one or the world's largest makers .We added major account f new f cihties or equipment, such l of ,,osi,,, 'h' d ' 8**' Ca=Paar representatives to bring a new ,
of Medina, Ohio, celebrated its as electric heating or industrial 125th anniversary with a major perspective to our marketing Process opp ications.
.xpansion in 1994. efforts and to accelerate our
. shift to a more competitive For 1995, the first full year of l . environment. the marketing strategy, we've set
.We created teams of market. an ambitious goal that exceeds ;
ing specialists to focus on key 1994 s increase. areas such as dealer incentives, l demand-side management Other Business incentives l . and equipment financing.They ) will improve and add to the Other efforts such as our Rote i many services we provide Stabilization and Service Area ' customers. Development Program will also contribute to our success. While establishing our commit- ; E g ment to freeze 1990 base electric rates through the balance of this , j we developed a more decade, our rate freeze program efficient acoustic system l continues to provide long-term , to detect leaking vah es
; that is now bemy ;
l marketed through a i licensing agreement j i o with Babcock & Wilcox. . I ? i-__ _______ _ ___ _ ____ '
W2 worked with the Nylonge Campany on its expansion and Installation af highly ofHelent electrical production
, equipment at its Elyria, Ohio, sponge i
manufacturing plant.
^1 7 MR g ,1 loans that business and govem-Q. 3 Over the year, we added 13,175 yc .;y [gy }f mental customers are using to L" new customers - including 101 improve the energy efficiency of y e"" '
industrial and 2,431 commercial their operations. . z JS businesses. Through the program, we helped one manufacturer install Q 'f { g New business activity in our service area included the follow-new standby generators that can ing major projects: reduce its demand during peak and creating nearly 3,300 new . Washington Steel Corporation operating hours. Another loan jobs. These new operations are selected Massillon, Ohio, over enabled a plastics company to expected to generate more than a site in Pennsylvania to build replace natural gas-fueled chillers $22 million in new annual sales its new $57-million facility to with highly efficient electrical for our Company. anneal and pickle stainless chillers used to cool injection molds. steel sheets. While keeping By the end cl 1994, we had made BuHdng On A 260 jobs in the Massillon Strong Economy 43 loans totaling $12 million area, the project will create to businesses and institutions in As we focus on new ways to m re than 60 new jobs over our service area, with another the next three years. sell our product, we're also taking
$10 million in loans committed or advantage of another important In Warren, Ohio, the Packard l
under consideration. Electric Division of General asset - a strong economy through. We also continue to offer five~ out our service area. Motors added more than year incentive rates for new and 1,600 new jobs in 1994-expanding businesses that meet and will create another 1,000 i criterio related to increased employ- jobs this year - as it increases ment and capital investment. In production of its component 1994,53 companies took advan- parts to meet a growing tage of these rates while investing automotive market worldwide.
$250 million in new facilities 8.53 8.27 8.17 l
Embedded Cost Of Debt (Persent) g 92 93 94 l I 7 j
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] Over the past two years, sales record of 25.0 billion kilowatt-d Canal Place in Akron, Ohio, hours. In addition, customers of
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'd i 1 has signed new leases for Ohio Edison and Penn Power set 4
. +3 ,
500,000 square feet of records for peak demand and i j industrial and office space 24-hour use on July 20. Peak g ' j - the size of more than 11 customer demand hit 5,744 "7 <
.%. j football fields. Adjacent to megawatts, surpassing the previous
'l the complex, Advanced record of 5,729 megawatts set r
Elastomer Systems - the on July 28,1993. The new 24-hour ( [J'4 g world's leading maker and marketer of thermoplastic use record of 105,071 megawart-hours beat the previous mark of e I 1 rubber-is renovating a former 103,745 megawatt-hours set on fJmd ? BFGoodrich plant into its June 171994. p ~
, ,_ l new U.S. headquarters. Retail sales should remain in addition, housing starts strong due to continued growth
# in our service area's economy.
reached on all-time high as we added nearly 11,000 new single- For example, Ohio steel producers
'N- Q family housing units to our service expect to Spend more than @"NPmaar s f ,- area-an increase of 10 percent $650 million on capital improve-c- a __s:=ma ment projects in 1995 -a over the previous year.
ass environmental systems is 40 percent increase over 1994. In building a new flue-gas our service area alone, steelmakers Hecord Retail Sales desulfurlaatson system at our Niles Plant that is expected such as USS/KOBE' WCl Steel to outperform conventiono' This economic growth helped and Empire-Detroit are expected
'"""*"' to complete nearly $160 million us achieve our second consecutive year of record retail sales. Despite in modernization projects in 1995.
mild weather through most of the year, retail sales reached 25.1 billion kilowatt-hcurs-a slight increase over last year's Chq6; _[ b.. f Our service area added
.j?.} 1 *] -G y
nearly 11,000 new ;; { j single-family hensing - - - - - F units in I994 - an yf ' all-time high. l( O ?{ ; k[ i l
Ons cf avr largest commercizi customsrs, Wsi-Mart continuss to adi new, all-electric stores in communities throughout our service area.
.A recognition program will motivate employees to achieve top-notch service and reward their exceptional performances.
We're also encouraging employees to offer proposals on cost effective ways to enhance customer service. An existing program is
~
unking svory service needs in the areas of improving our efforts to track custonier count and resolve customer prob-performance, services and quality: lems-focusing on greater l i
. ' To become a strong' competitor .We're initiating a program ccountability, effective l
l In the electricity marketplace, we communications and quick ih t v luotes our service at need to provide the best possible tumaround. the time of contact and com. service to all of our customers - .In addition, employee tearns pares it to service available both large and small. will be established in each fr m ther companies. Exceptional service is the goal d. . .ivision and area to review Another program will use of our Customer Value Improvement our customer service efforts. effective fo w-up to help Program (Customer VIP). As part of These teams will also evaluate increase loyalty and improve th.is new effort, we,re testing employee suggestions, several programs that can help service. All levels of suPerv. sory personnel will contact recognize top performers, deli r superior value to our n lyze complaints and randomly selected customers to confirm satisfaction and develop new programs Customer satisfaction is based that promote the goals of identify ways of exceeding on four key factors-performance, Customer VIP. expectations. services, quality and price. These goals are best expressed While our rate freeze helps through our new Customer VIP l address the issue of price, all of the Promise, which includes the I Customer VIP programs are 2s.o 2s.i following guidelines: 24.1 designed to meet specific customer.
=Take the customers' view-point and let their needs point the way.
Treat customers in friendly, personable ways that instill confidence and trust.
- Deliver high9uality power, Retail Kilowatt-Hour Solen (Billions) rellability and r6 pairs.
92 93 94 e
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.Be readily accessible and through which we will spend 1 most responsive. approximately S5 million over Follow up to ensure the next several years to help low-E satisfaction. income customers, senior citizens
)
Surface and resolve prob- and community-based agencies lems or mistoles promptly. reduce their energy bills. Provide the information our For example, we're providing customers need to make the energy audits and appliance best buying decision and upgrades at facilities such as a
, confirm our value. home for battered women and
. . _ _ . .. _A .. _ lead the way in makin9 children, a homeless shelter, and our communities grow and an emergency shelter for runaway, partners progrom Prosper. obused or foster children. We've includes the distribution alSo teamed up yjth lacal of high-efficiency, fluo- Working Closely With rescent light bulbs to bolvation Army corps to distribute Our Communities low locome customers. high-efficiency fluorescent light .
We're also providing support bulbs and weatherization materials. l to our residential customers While underscoring our commit- I through our rate freeze program's ment to meet the special needs ;
$25-million effort to encourage of all our customers, these projects !
efficient uses of electricity. An help us delay the need for new l important part of this effort is our power plants. new Community Partners Program, This scenic lighthouse in Vermkn, Ohio, is one of many attractions that contribute to the quality of
% in our service area.
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_ __ _ _ _ _ _ ~ ~ . _ _ . _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ Our cost sffectivs strategy for complying with new clean-cir standards includes ths usa of lower-sulfur coal at our W. H. Semmis Plant. I l Clean Air Compliance To meet nitrogen oxides (NO,) regulations that take effect this We are meeting the requirements year, we installed low-NO, bumers of the Clean Air Act Amendments at the Bruce Mansfield Plant's of 1990 through a wide range Unit i boiler. The $10 rnillion project of cost-effective strategies. was completed on schedule through a cooperative effort with Our cost of complying with the ec n mic fe sibility of ABBES' our suppliers that will help us law's 1995 standards is modest LS-2 sulfur-dioxide (502) scrubber achieve significant savings in due to steps taken in recent years. system, which is designed to be future outages, such as the one ; for example, a key feature of our less costly to build and operate planned for the first half of this compliance strategy involves the than conventional scrubbers. year to install low-NO, burners at j use of lower-sulfur coal at our Scheduled for commercial opera- Mansfield Unit 2. By achieving l W. H. Sommis Plant - made ti n this summer, the $32.2 million significant reductions in NOx ! possible by innovative agreements Project should reduce SO2 emissions, the burners will enable
- negotiated with a number of our missi ns at the plant well under the plant to meet stringent, coal suppliers in 1991. Through 1995 compliance standards, Ozone-related regulations for both these agreements,certain suppliers l Producing emission allowances stationary and mobile sources in l provide either the quality of coal or that ABBES can sell to help an eastem 12-state area that ;
the emission allowances needed ' rec e its capital investment. includes Pennsylvania. for compliance with clean-air i standards. As a result, we're We also converted Unit 4 at achieving compliance at the least our Edgewater Plant to burn both cost to us and our customers. oil and natural gas. While reducing ver ll emissions, the project Through another unique agree. i gives us valuable experience in ment, ABB Environmental Systems n tural gas generation-a supply (ABBES) is financing the construc. Ption that could play a key role ; tion of a newgeneration fluegas tosa in meeting future energy needs. i desulfurization system at our Niles to7g Plant The fiveyear project will toss demonstrate the technical and : i Customers Served (Millions) I 92 93 94 11 , I
MANAGEM T NT RTPORT RT PORT OF INDEPENDENT PUT LIC ACCOUNTA W The consolidated financial statements were prepared by the management of Ohio Edison To the Stockholders and Board of Directors of Company who takes responsibility for their integrity Ohio Edison Company: and objectivity The statements were prepared in con- We have audited the accompanying consolidated formity with generally accepted accounting principles balance sheets and consolidated ctatements of and are consistent with other financial information capitalization of Ohio Edison Company (an Ohio cor-appearing elsewhere in this report. Arthur Andersen poration) and subsidiaries as of December 31,1994 LLP independent public accountants, have expressed and 1993, and the related consolidated statements of an opinion on the Company's consolidated financial income, retained earnings, capital stock and other statements. paid-in capital, cash flows and taxes for each of the The Company's internal auditors, who are three years in the period ended December 31,1994. responsible to the Audit Committee of the Board of These financial statements are the responsibility of Directors, review the results and performance of the Company's management. Our responsibility is to operating units within the Company for adequacy, express an opinion on these financial statements effectiveness and reliability of accounting and report- based on our audits. ing systems, as well as managerial and operating We conducted our audits in accordance with controls. generally accepted auditing standards.Those stan-The Audit Committee consists of four nonem- dards require that we plan and perform the audit to ployee directors whose duties include: consideration obtain reasonable assurance about whether the of the adequacy of the internal controls of the financial statements are free of material misstate-Compan/ and the objectivity of financial reporting; ment. An audit includes examining, on a test basis, inquiry into the number, extent, adequacy and validity evidence supporting the amounts and disclosures in of regular end special audits conducted by indepen- the financial statements. An audit also includes dent public accountants and the internal auditors; assessing the accounting principles used and signifi-the recommandation to the Board of Directors of cant estimates made by management, as well as independent accountants to conduct the normal evaluating the overall financial statement presenta-annual audit and special purpose audits as may be tion.We believe that our audits provide a reasonable required; and reporting to the Board of Directors the basis for our opinion Committees findings and any recommendation for In our opinion, the financial statements referred changes in scope, methods or procedures of the to above present fairly, in all material respects, the auditing functions.The Audit Committee held four financia position of Ohio Edison Company and meetings during 1994. subsidiaries as of December 31,1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended H. P Burg ( Senior Vice President December 31,1994, in conformity with generally accepted accounting principles. As discussed in Notes 1 and 2 to the consolidated Chief FinancialOfficer financial statements, ef fective January 1,1993, the Company changed its method of accounting for unbilled revenues, income taxes and postretirement benefits other than pensions. H. L. Wagner ComptroIler j ARTHUR ANDERSEN LLP Cleveland, Ohio February 3,1995 12
MANAGEME NT'O DISCUIlON AN 3 ANALYCl]C F RZ ULTO CF OPERATION 3 AND FINANCIAL CONDITION Results of Operations An improving local economy helped us achieve record retail sales of 25.1 billion kilowatt-hours in 1994, We accomplished a great deal in 1994 as we which occurred despite milder weather conditions continued preparing for the significant changes expected to take place in the electric utility industry during the second half of the year as compared to 1993. More importantly we added more than 13,100 For the second straight year, the Companies achieved record retail sales. This accomplishment, in new retail customers in 1994 af ter gaining approximately combination with our aggressive cost control ef forts, 14,500 customers the previous year. Commercial sales rose 14% in 1994, which follows a 4.7% gain in the raised earnings on common stock to $1.97 per share previous year. Residential sales fell slightly in 1994 in 1994 compared to $182 a year earlier.The 1993 amount, up from $1.70 per share in 1992, excludes af ter posting a healthy 7.2% increase in 1993. Indus-nonrecurring charges of $1.43 per share, which trial tales were also down slightly in 1994 because of included a $276,578,000 after tax wnte-off of Perry redu:ed production (until mid-1995) by a major steel Unit 2, the expected resolution of fuel cost recovery custamer that is modernizing its facilities. Sales to all issues in Pennsylvania and certain costs associated other industrial customers were up 3.5% for the year, with our Performance Initiatives program.The effect folicwing a 1.3% increase in 1993. Reduced demand of the write-off was partially offset by a $58,201,000 for bulk power and capacity constraints reduced our oppo'tunity sales to other utikties in 1994 and 1993, credit from the cumulative effect of a change in f hg 18.2% and 11.7%, respectively As a result of accounting to accrue metered but unbilled revenue these 1sctors, total kilowatt-hour sales were down (see Note 2). 3.9% compared with sales in 1993, which were up Our ongoing commitment to cost control is slightly o/er 1992. producing good results. Although total revenues Because of lower total kilowatt-hour sales, we dropped slightly in 1994, lower operation and mainte. spent 3.4% less on fuel and purchased power ,n i nance exoenses pushed operating income to its highest leve; in our history A review of the work we do 1994. However, we experienced higher nuclear expenses in 1994 and 1993 mainly due to corrective was an integral part of the Performance Initiatives maintenance work at the Perry Plant. Due to rnechan,-i program that began in 1993. As a result of this revievv cal failures and an extended refueling outage in 1994, ef ficiencies were identified and the work force has Perry's availability was below expected levels during been reduced by 812 employees since the beginning of 1994 through voluntary retirements, layoffs and both years.The plant's operator has developed a com-prehensive plan that is expected to improve Perry's normal attrition. This 14% reduction is expected to produce annual savings of at least $40,000,000. performance. A major portion of the corrective action pl n was completed during the 1994 outage, and the Operating revenues decreased 0.1 % from remainder will be implemented during Perry's next 1993 levels, which were 1.6% higher than 1992.The refueling, which is scheduled for early 1996.The plant following table summarizes the sources of changes in returned to service on August 14,1994, and ran contin-operating revenues for 1994 and 1993 as compared to the previous year: uously for the remainder of the year. Our other operating costs were down markedly ,n i 1994 compared with the two previous years. Costs in 1994 1993 on rnnhons) 1993 included a one-time $39,000,000 charge related Change in retad kilowatt-hour sales $ 2.4 $ 95.9 to the Performance Initiatives program. Both 1994 and Change in average retad electnc pnce a 1) a7 8) 1993 include higher expenses associated with the Sates to utMt'es 2.2 (17 0) January 1,1993, adoption of Statement of Financial other a 2) a 5) Accounting Standards (SFAS) No.106, " Employers' Net incr ease (Decr ease) $ (1.7) $ 37 6 Accounting for Postretirement Benefits Other Than Pensions." These comparative increases were partially offset in 1993 by the previous year's addi-tional provision for uncollectible accounts. Our cost-containment efforts resulting from the initiatives also contributed to lower operation and maintenance expensee in 1994. Lower general taxes in 1994 resulted primarily from property taxes recognized in 1993 related to poor 13
1 years. Penn Power provided an $8,728,000 reserve for preferred and preference stock was red'uced from i deferred postretirement benefit costs (see Note 1) in 9.87% at the end of 1984 to 7.15% at the end of 1994. !
.1994, which was responsible for the majority of the As a result of these actions, we have improved our ,
change in net amortization of regulatory assets com- financial position. For example, we have enhanced our i pared to 1993.The change between 1993 and 1992 coverage ratios and the percentage of common ; was due to the deferral of incremental costs resulting
~
equity to total capitahzation. Our indenture ratio, which
~ from the adoption of SFAS No.106 and the amortiza- is used to determine the ability to issue first mortgage
- tion of regulatory liabilities. bonds, improved from 3.18 at the end of 1984 to 5.34
, Other income was lower in 1994 than in 1993 at the end of 1994. Over the same period, our charter ;
because of a change in accounting for interest income ratio, a measure of the ability to issue preferred stock, from the Employee Stock Ownership Plan Trust (see improved from 1.72 to 2.11, and, our common equity Note 1),The effect of this accounting change on other percentage of capitalization rose from approximately
. income was partially offset by increased income from 33% at the end of 1984 to about 40% at the end !
other investments.These include deposits by OES of 1994. Finance as collateral for reimbursement obligations At the end of 1994, we had the capability to issue l relating to certain letters of credit supporting our $1,461,000,000 principal amount of first mortgage > obligations to lessors under the BeaverValley 2 sale bonds and $1,089,000,000 of preferred stock. How-and leaseback arrangements (see Note 4).The ever, our projections for 1995 indicate no need to decrease in 1993 resulted from 1992's amortization of issue new long-term securities during the year. ; investment tax credits associated with disallowed We had about $23,000,000 of cash and ! Perry Unit 1 and Beaver Valley Unit 2 construction temporary investments and $175,000,000 of short-costs (see Note 1). term indebtedness on December 31,1994. OES Fuel The electric utility industry is subject to the same had approximately $30,000,000 of unused borrowing inflationary pressures as those experienced by other capability at the end of 1994 that was available for industries.To the extent that we incur additional costs - reloan to the Company.We also had $55,000,000 or receive benefits resulting from the effects of infla- of unused short-term bank lines of credit, and tion, those ef fects are generally reflected in our electric $72,000,000 of bank facilities that provide for borrow-rates through the traditional rate making proce:s. ings on a short-term basis at the banks' discretion. OES Capital had approximately $15,000,000 of unused, C:pital Resources and Liquidity short-term borrowing capability on December 31,1994. During the past five years, we spent approximately L Over the past decade, we have improved our
$ , 0,000,000 on our construction programs (exclud- )
financial position significantly. Because of higher rev- ' ing nuclear fuel). During that period, the Employee enues and aggressive cost controls, cash generated Stock Ownership Plan Trust was also funded with from operations was 42% higher in 1994 than it was ;
$200,000,000.We estimate our construction prc-ten years ago. By the enJ of 1994, we were serving ;
grams and capital lease requirements for the period ; about 104,000 more customers than at the end of 1995-1999 to be about $800,000,000 (excluding 1984, with approximately 2,400 fewer employees. In ; nuclear fuel), of which approximately $180,000,000 1984, our customer-employee ratio was 129 to 1.That applies to 1995.We also have cash requirements of j ratio has improved significantly over the years, stand-approximately $1,301,000,000 for the 1995-1999 period . ing at 210 customers per employee at the end of ' to meet maturities of, and sinking fund requirements 1994. In addition, capital expenditures have dropped f r,I ng-term debt and preferred stock. Of that ' significantly during that period. Expenditures in 1994 amount, approximately $227,000,000 applies to 1995. were less than one-third of what they were in 1984, { and annual depreciation charges have exceeded , property additions since the end of 1987. i' We have also taken advantage of opportunities in the financial markets to reduce our embedded capital costs during the past decade.Through refinancing )
. activities, we have reduced the average cost of 4 outstanding debt from 1104% at the end of 1984 to 8.17% at the end of 1994. Also, the cost of outstanding l
14 L ._.--_---_-__ _ _____ _.----- ---,-~ . - -~ec , --- -- -- -- - . . .. - - - , - - - - _ - - ~ , .
Investments for additional nuclear fuel during the Area Development Program will heip respond to 1995-1999 period are estimated to be approximately these market forces by freezing base electric rates at $172,000,000, of which about $30,000,000 applies to 1990 levels until at least 1997, absent any significant 1995, During the same periods, our nuclear fuel changes in regulatory, environmental or tax require-investments are expected to be reduced by approxi- ments. In addition, we have a corporate goal of mately $225,000,000 and $56,000,000, respectively, as extending the rate freeze until the year 2000, the nuclear fuel is consumed. Also, we have operating Effective operation of the nuclear facilities we lease commitments of approximately $575,000,000 jointly own will also help meet these competitive chal-for the 1995-1999 period, of which approximately lenges. Proper planning to eventually decommission $106,000,000 relates to 1995.We recover the cost of those facilities is also important to our competitive nuclear fuel consumed and operating leases through position. Beginning in 1995, we plan to increase our our electric rates. annual funding of the decommissioning obligation. Reference is made to Note 1 for a discussion of Also, the staff of the Securities and Exchange Com-regulatory assets. Although the recoverable amounts mission (SEC) has raised questions regarding the are significant, about 83% of these deferred costs recognition, measurement and classification of are already reflected in our rates, and are being decommissioning costs in the financial statements of recovered over approximately 22 years. Recovery of electric utilities. Any future SEC actions are uncertain the remaining amounts will be requested in a future at this time (see Note 1). rate proceeding- The Clean Air Act Amendments of 1990, aiscussed The Central Area Power Coordination Group in Note 7, require significant reductions of sulfur (CAPCO) companies filed suit against Westinghouse dioxide and nitrogen oxides from our coal-fired gener-Electric Corporation in 1991, alleging that six steam ating units by 1995 and additional emission reductions generators supplied by Westinghouse for the Beaver by 2000.We are well-positioned to meet the 1995 Valley Plant are defective and that replacement could requirements at minimal costs, and we are pursuing be required earlier than the 40-year design life. A cost-effective compliance strategies for meeting the federal court rejected the c! aims of the CAPCO com- reduction requirements that begin in 2000. panies in December 1994, af ter a three-month trial. Through the Performance Initiatives program, we The CAPCO companies have appealed the verdict. have identified substantial savings that will better The plant's operator has no current plans to replace position us to successfully compete in the future. In the steam generators and is evaluating the feasibility addition, the program ensures that en economic value of applying new technoiogies to repair the generators. added-based justification will be required for capital if the generators need to be replaced and the compa- expenditures.We are also conducting studies to iden-nies decide to do so, the capital costs to the CAPCO tify other opportunities to increase revenues and companies could range from $100,000,000 to operating efficiency.The focus of the entire organiza- $150,000,000 per unit.That estimats is based upon tion is to improve our competitive position in order to costs other utilities have experienced.We have a maximize the value of our shareholders' investment in 52.5% interest in Beaver Valley Unit 1 and a 41.88% the Company interest in Unit 2. Outlook We will be facing many competitive challenges in the years ahead as the electric utility industry becomes more deregulat?d and more energy sup-pliers enter the marketplace. Retail wheeling, which would allow retail customers to purchase electricity from other energy producers, would be one of those challenges if legislators choose to move in that direc-tion. In any event, changing market forces make it imperative that we continue to find ways to reduce costs, increase revenues and enhance shareholder value.The Company's Rate Stabilization and Service 15
SELECTED FINANCIAL DATA Ohio Edison Company (In thousands, except per share amounts) i
; 1994 1993 l 1992 1991 ! 1990
$2,368,191 $2.369,940
- -$2,332,378 Operating Revenues _ . . - - . ' - . - _ . - -$2,358,946 ' $2,240,646 Operating Ir'come $557,254 ' $525,330 : $522.115 $550,452 $510,279 Net income $303,531 $82,724 , $24,986 $264,823 ' $281,676 Earnings on Common Stock $281,852 , $59,017 $253,060 $240,069 $254,048 Eamings per Share of Common Stock $1.97 5 .39 ' $1.70 I $1.60 $167 l Dividends Declared per Share of Common Stock $1.50 $1.50 $1.50 $1.50 ; $1.73 l Total Assets $8,993,964 $8,918,267 $7,830,026 $7,812,345 ; $7,841,621 l Capitaltzation at December 31:
Common Stockholders' Equ:ty $2,317,197 $2.243,292 $2,408,164 $2,371,946 52,545,159 ,' Preferred and Preference Stock: Not Subject to Mandatory Redemption 328,240 328,240 354,240 354,240 354.240 Subject to Mandatory Redemption 40,000 45,500 59,862 65,582 62,822 Long Term Dett 3,166,593 , 3,039.263 3,121,647 3 243,167 3,105,248 ' Total Caprtahzation $5,852,030 $5.656,295 $5,943,913 $6,034,935 $6,067,469 COMMON STOCK DATA The Company's Common Stock is hsted on the New York and Chicago stock exchanges and is traded on other reg:stered exchanges. PRICE RANGE OF COMMON STOCK 1994 1993 First Quarter High-Low 22 3/4 18 7/8 25-3/8 22-1/8 Second Quarter High-Low 19-1/4 16-1/2 26 22-3/4 Third 0uarter High-Low 19-5/8 17-1/2 25 7/8 24-3/8 Fourth Quarter High-Low 19 1/4 17-7/8 25-1/4 21 Yearly High Low 22-3/4 16-1/2 26 21 Pnces are based on reports pubbshed in The Itall Street Jovmalfor New York Stock Exchange Composite Transactions. l l CLASSIFICATION OF HOLDERS OF COMMON STOCK AS OF DECEMBER 31,1994 l Holdersof Record Shares Held Number Number % 9{ Individuais 121,289 82.87 53,849,390 35.30 Friucianes 23,167 15.83 9.510,404 6.23 Nominees 68 .05 87.448,432 57.32 Al' Others 1,834 1 25 1,761.211 1.15 Total 146.358 100 00 152,569,437 100 00 As of January 31,1995. 'here were 145,578 holders of 152,569.437 shares of the Company's Common Stock. Quarterly dividends of 37 Se per share were paid on the Company's Common Stock during 1994 and 1993 Information regarding retained earnings eva'lable for payment of cash div>dends is geven in Note 5A 13
CONSOLIDATED STATEMENTS OF INCOME Ohio Edisen Company (In thousands, except per share amounts) i l For the Years Ended December 31, 1994 1993 1992 1 1 OPERATING REVENUES $2,368,191 $2,369,940 $2,332,378 )
. OPERATING EXPENSES AND TAXES:
Fuel and purchased power l' 440,936 304,716 456,494 290,321 463,599 274,7'9 Nuclear operating costs l Other operating costs i '427,133 474,241 440,425 Total operation and maintenance expenses 1,172,785 1,221,056 1,178,743 Provision for depreciation 220,502 217,980 223,497
. Generaltaxes 237,020 245,554 229,332 1 Amortization (deferral) of net regulatory assets (884) (6,753) 18,3'r3 income taxes 181,514 166,773- 160,358 Totaloperating expenses and taxes 1,810,937 1,844.610 1,810,263 OPERATING INCOME 557,254 525,330 522.115 )
OTHER INCOME AND EXPENSE: I j Perry Unit 2 terminat,on (Note 3) 1 - (390,835) -- Income tax benefit from Perry Unit 2 termination - 142,092 -
! 36,283
) Other 16,459 15,921 Total other income (expense) 16,459 (228,822) 36,283 t TOTAL INCOME ! 573,713 296,508 558,398 j _ . . . __ _..___-- - .__...__,!_ NETINTEREST AND OTHER CHARGES: Interest on long-term debt 259,554 262,861 275,835 Deferred nt. clear unit interest (8,511) (8,518) . (8.392) i Allowance for borrowed funds used during i ! ] construction and capitalized interest ! (5,156 H (4,666) (6,488) ' 1 18,931 ' Other interest expense 16,445 13,958 l Subsidiary's pre!9rred stock dividend requirements j 5,364 5,863 6.499 Net interest and other charges 270,182 , 271,985 281,412 INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING i 303,531 l 24,523 276,986 Cumulative effect to January 1,1993 of a change in accounting for unbilled revenues (net of income taxes of $33.632,000)(Note 2) - 58,201 - NETINCOME ! 303,531 82,724 276,986 PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS ! 21,679 23,707 23,926 EARNINGS ON COMMON STOCK i $ 281,852'I $ 59,017 $ 253,060 EARNINGS PER SHARE OF COMMON STOCK: 8efore cumulative effect of a change in accountinD ' $1.97 $ .01 $1.70 Cumulative effect to January 1,1993 of a change ! in accounting for unbilled revenues (Note 2) -
.38 -
EARNINGS PER SHARE OF COMMON STOCK ! $1.97 $ .39 i $1.70 f $1.50 DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $1,50 ; $1.50 ; The accompanying Notes to Consohdated Financial Statements are an integral part of these statements. l
)
17
CONSOLIDATED BALANCE SHEETS Ohio Edison Company ' (In thousands)
. - . ~ _ . . . . _ . _ - . _ . - .._.._._...._._.___,.___..~u..._ , . _ - 9 At December 31, 1994 l__._ ._. 1 __ _1993 ,
UTILmf PLANT. l In service, at original cost i ' $8,518,050 $8,380,430 Less-Accumulated provision for depreciation 2,910.587 2,732,527 l . _ - _ _ . ._ _ _ _ ._. _ _._ _ _ __._. _ ,____ l _ . ._5,607,463 , _ 5,6_ 47,903 Construct;on work in progress-Electric plant 174,970 182,894 Nuclear fuel 52,470 46,879 227,440 229,773 5,834,903 5.877,676 OTHER PROPERTY AND INVESTMENTS: Letter of credit collateralization (Note 4) 277,763 - 01her_ _. - , , . , . _ _ , , _ _ _ _ _ _ _ _ _ _ _ _ , , _ , _ 197,546 _ , ___181,8,_15_,_ _ ___..43 309 _,,. ,1B_1,81,5 t CURRENT ASSETS: , Cash and cash equivalents ; 23,291 Receivables- 159.690 { ,
! t Customers (less accumulated provisions of $2,517,000 and $6,907,000, respectively, !
for uncollectible accounts) [ 254,515 298,913 Other j 54,713 42,428 , Materials and supphes, at average cost- i Fuel 40,528 l 41,513 Ii Other 81,809 87,689 Prepayments 71,836 72,889 , 526,692 _ 703,122_ i , DEFERRED CHARGES: Regulatory assets Unamortized sale and leaseback costs l' 2,005,333 106.883 1,993,795 110,656 l Other _j _ _ 44.844 _ ._ 5,1,203 2,157,060 2,155,654 _l t
; $8,993,964 $8,918.267 ;
CAPITAUZATION AND UABluTIES !' i i CAPITAll/ATION (See Consohdated Statements of Capitalization): Common stockholders' equity l $2,317,197 $2,243,292 Preferred stock- ' Not subject to mandatory redemption l 277,335 277,335 Subject to mandatory redemption i 25,000 25,000 Preferred stock of consohdated subsidiary- ; Not subject to mandatory redemption l 50,905 50,905 Subject to mandatory redemption ! 15,000 20,500 Long. term debt _ _ _.
.._..__.._.._,; 3,166,593 3,039,263 CURRENT UABluTIES: i Currently payable preferred stock and long-term debt ! 227,496 444,170 '
Short term borrowings (Note 6) i 174,642 104,126 , Accounts payable ! 100,884 127,895 Accrued taxes i 140,629 , 107,687 ! Accrued interest ! 65,743 + 72,667 Other .- - . . _ _ _ .- 152,856 l 141,251 l DEFERRED CREDITS: i Accumulated deferred income taxes 1,799,324 1,798,551 [ Accumulated deferred investment tax cred:ts l 223,827 , 231,863 I Property taxes 106,458 l 101,* 32 l Other _ _ 150,075 i _ _ _ _132,58,0_
, .i 2,279,6_84 l ._ 2_,264,1_76 !
1 COMMITMENTS, GUARANTEES AND CONTINGENCIES 1 i (Notes 4 and 7)
! __ i
$8,993.964 $8,918.267 ,
10 The accompanying Notes to Consohdated Financial Statements are an integral part of these balance sheets. 1
l l CONSOLIDATED STATEMENTS OF RETAINED EARNINGS Ohio Edison Company (In thousands) I 1993 } l For the hears hnde[becember31 1994
. _1992_ i
}
Balance at beginning of year $322,821 ! $490.564 ! $462,087 Net income 303,531 l 82,724 l 276,986 Tax benefit from ESOP dividends ; l . - - .5,256 i . _ _5,592 _ 626,352 __ . . _ . _ . _ _ _ _ . . _ _ . _ . . ' _ _ _ _ ' _ .578,544 I _ _744,665 - _. - r i Cash dividends on preferred a.1d preference stock 21,026 23,275 23.874 : Cash dividends on common stock 214,826 228,855 . 228.855 : Premium on redemption of preferred stock 1 3,593 ! 1,372
._l ___~{ __ . _ . _ , . _ _ _
236,752 ! 255,723 ! 254,101 Balance at end of year (Note SA) 1 $389,600 i $322,821 $490,564 g CONSOLIDATED STATEMENTS OF CAPITAL STOCK AND OTHER PAID-IN CAPITAL . _ . _ . . _ . , _ _ _ _ - _ . _ . _ _ _ . _ . , _ . _ . . _ _ . _ _ . . . _ . _ _ . . . . . . ~ . . _ . _
' l i Preferred and Preference Stock j j __ _ _ _ _ . . . _ .
_.._..l l ! Not Subject to ! Subject to Common Stock
._ -._._ _ _ . _ _ . . - +! )nadocated :j Mandatory Redempton i Mandatory Redemption t - --;
i Other i ESOP i Par or l ; Par or t Number i Par Paid-In l Common l Number i Number ! Stated of Sharesl. Stated
! of Shares Value ,
Capital i Stock Value , of Shares Value l (Dollars in thousands) ! Bajance. January 1.1992 152.569.437 $1,373.125 $731.793 ' $(195.059)! 3.542.399' I $354 240 l 636.216 ! $70.102 i I' 7,741 ' Altocatonof ESOPShares , l ! l Sale of 7 625% Preferred Stock l 1 l t ! 150,000 ' 15.000 i' Redemptions- >
$102 50 Seres i ! 11.800) l 11.800) l 8 24% Senes l , ,
l (5.000)i 1500)!
' i 1100% Senes i (8.000) (800)
(5.440) l 1500% Senes ,
. (54.400) 10 50% Senes l 1100.000) t (10.000)i l
11.50% Seres I ( ! l (15.0001! (1.500) j 1300% Seres ! < (10,000)I (1.000) !, _. i. .__ ; _. Batance. December 31.1992 152.569 437 ' 1,373.125 ! 731.793 (187.318)! 3.542.399 354.240 592.016 , 64.062 Mocatonof ESOPShares i ; 6.799 l ; {
' I Sae of 7 75% Class A ! i ;
l 4,000.000 , 100.000 i Preferred Stock l 0.361)! , 25.000 [ l Sa!e of 7 75% Pre' erred Stock , l i 045)j i 1 Redemptons- !
; l 250.000 l , , i
$102 50 Senes (216) ; (5.400) ! 15.400) l 14.500) l 824% Senes j ,
(45.000) j 3 8 48% Ser es (6) i ; (80.0001 l (8.0001{ ; . i ! 864% Seres ; ! 1400.0001! 140.000)i 912% Seres ; I 1450.000l! 145000) l l 916% Senes j , (80.000l i (8.000l i I i i 1100% Senes
! 18.000)i (800) l i
1150% Senes i l (60.000) l (6.000) ! 13 00% Settes l
! (10.000): t (1.0001 l Balaxe. December 31,1993 152.569.437 1,373.125 , 727.865 i (180.5191 6.782.399 , 378.240 , 463.616 46.362 {
Minmamielity f or unfunded l , l ! retrement benefits ! O,053)t i Mocaton of ESOP Shares > 36 10.143 ; ! i Redemptons- l l l Ma4et AXteon Senes > i (500.000). (50,000)i t100% Senes 4
' ' O.616) i 062)i I
1300% Seres 160.000)i 16.000)! l Baunce December 31.1994 152 569.437 $1.373.125 i $724.848 Sil70.376 > l 6.282.393 $328.240 400.000 ' $40.000 ' The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 19 l l
CONSOLIDATED STATEMENTS OF CAPITALIZATION Ohio Edison Company Un thousands. except per share amounts) At Decembe 31, 1994 1993 COMMON STOCKHOLDERS' EQUITY: Common stock. 59 par value, authonzed 175.000,000 shares- 152.569.437 shares outstanding $1,373,125 $1,373.125 Other paid 4n capital 724,848 727,865 Retained earnings (Note SA) 389,600 322.821 Unallocated employee stock ownership plan common stock-9,076.489 and 9.608.739 shares, respectiveh (Note 58) (170,376) (180.519)[ Totaicommon stockholders' equey 2,317,197 2,243,292 Number of Shares Optonal Outstanding Redemption Pnce 1994 1993 Per Share Aggregate PREFERRED STOCK (Note SCI Cumulat>ve. $100 par value-Authonted 6,000.000 shares Not Subi ect to Mandatory Redemption: 3 85 % - 500.000 $- $ - - 50.000 3 90 % 152.510 152.510 103 63 15.804 15,251 15.251 4 40% 176,280 176.280 108 00 19.038 17,628 17.628 4 44 % 136,560 136,560 103.50 14.134 13.656 13.656 4 56 % 144.300 144.300 103 38 14.917 14,430 14.430 7 24 % 363.700 363.700 101.98 37,090 36,370 36.370 7.36 % 350.000 350.000 101.74 35.609 35,000 35.000 8 20 % 450,000 450.000 102.07 45,932 45,000 45.000 Optonal Redempton - February 1994 - (50.000) 1,773.350 2,273.350 182.524 177,335 177,335 Cumulatve. $25 par va!ue-Authonzed 8 000.000 shares Not Subject to Mandatory Redempton. 7.75 % t.000.000 4.000.000 25 00 100.000 100,000 100.000 Total not subject to mandatory redempt6on 5.773.350 6.273.350 $282.524 277,335 277,335 Cumutative, $100 par value-- Subject to Mandatory Redemption (Note SD): 8 45 % 250.000 250.000 25,000 25.000 PREFERRED STOCK OF CONSOUDATED SUBSIDIARY (Note SC) Cumulatve $100 par value-Authonzed 1.200.000 sha es Not Subject to Mandatory Reaempt on. 4 24 % 40.000 40,000 $10313 $ 4,125 4,000 4.000 4 25 % 41.043 41,043 105 00 4.310 4,105 4,105 464% 60.000 60.000 102.98 6.179 6,000 6.000 l 7 64 % 60.000 60.000 101 42 6.085 6,000 6,000 7 75 % 250,000 250,000 100 00 25.000 25,000 25.000 8 00 % 58.000 58.000 102 07 5.920 5,800 5.800 Total not subject to mandatcry redemption 509.049 509 049 $ 51.619 50,905 50.905 Subject to Mandatory Redempton (Note SD) 7 625 % 150.000 150.000 $107.63 $ 16.144 15,000 15.000 11 00 % - 3.616 - - - 362 13 00 % - 60.000 - - - 6.000 Redemption utNn one year - (862) Total sub3 ect to mandatcry redempt on 150.000 213.616 5 16.144 15,000 20.500 20
CONSOLIDATED STATEMENTS OF CAPITALIZATION (cont.1 Ohio Edison Company On thousands) At Dee.enber 31 1994 1993 1994 1933 1994 , 1993 ! LONG-TERM DEBT INote SD Erst mormage bonds , 1 ONc Ed' son Compary- PennsyNanla Power Congy- , ; ( l 8 800% aue 1994 SG - 27.600 9 000% due 19% 50,000 50,000 > i 13 430% due 1994 - 30.000 9740% due19912019 20,000 20.000 ; 12 740% due 1993 30,000 30.000 7.500% due2003 40,000 40.000 j 8 $00% due 1996 150,000 150.000 6 375% due 2004 50.000 ' 50.000 8 750% due 1998 150,000 150.000 6 625% due 2004 20,000 20.000 ; f 6 875% due 1999 150.000 150.000 8 500% due2022 50,000 50.000 i 1 6 375% due 2000 80,000 80,000 7 625% due 2023 40,000 ' 40.000 . I 7 375% due 2002 120,000 120.000 7 500% di.e 2002 34,265 34,265 t j 8 250% due 2002 125.000 125.000 j 8625% due 2003 150,000 150.000 l, ' 80,000 ! 6 675% due 2005 80.000 9 750% due 2019 35,300 150,000 ! 8 750% due 2022 100.000 100.000 7 625% d.,e 2023 75,000 75.000 7 875% due 2023 100,000 100 000 l Total t.rst mortgage bonds 1,379.565 1.551,865 270,000 270.000 1,649,565 1.821.865 l Secured no'es Ohio Ed, son Compary- Pevsykna Power Company-- - , 9 345% due 1394 - 50.000 4 750% due 1998 850 850 i 8 380% due 1996 53,718 87.987 6 080% due2000 23,000 23.000 i 7 930 K dee 2002 77,997 - 5 400% due 2013 1,600 1,000 7 6e0% de2005 200.000 - 12 000% due 2014 - 12.700 l 9 200% due 2014 - 50.000 8125% due2015 14.250 14.250 . i 10 500% due 2015 60.000 60.000 5 400% due 2017 10.600 10.600 ' 10625% due2015 40.000 40.000 7.150% due2017 17,925 17.925 7 450% due 20 6 47.725 47.725 5 900% dae 2018 16,800 16,800 7100% due2018 26.000 26.000 8100% due2018 10,300 10.300 i l 7 000% due 2021 69.500 69.500 8100% due2020 5,200 5.200 7150% due2021 443 443 7150% due2021 14,482 14.482 7 625% due 2023 50,000 50.000 6150% due2023 12,700 - 8100% dee2023 30,000 30.000 6 450% due 2027 14,500 14.500 7.750% due 2024 108,000 108.000 5 450% due 2028 6,950 6.950 5 625% due 2029 50.000 50 000 5 950% due 2029 238 238 5 950% due 2029 56,212 56.212 5 450% dae 2033 14,800 14 800 884,395 740 667 148,795 148.795 1,033,190 889,462 OES Fuel-512% we'ghted average r.terest ate 124,984 13L611 Totat secured notes 1,158,174 1.021.073 Unsecured netes Omc Edson CecTary-9 440% due 1995 75.000 75.000 7 380% due 1997 100.000 100.000 8 635% due 1937 50.000 50.000 4 900% due 20t2 50.000 50.000 4 250% due 2014 50,000 50.000 3 450% due 2015 50.000 50.000 4 250% due 2018 56.000 56 000 4 750% due2018 57,100 57,100 3 450% due 2032 53.400 53 400 Tata! ursecuted notes $41.500 541.500 541,500 54i.~500 I CaManease opgav>rs (Note 4) 54,180 59.312 , Net uramort :ed d<scount on dett _ !9,330) , _ j11,179) I torttem dett dve wtNn one year (227,496) (393'308) Tatanong term debt _,3,166,593 3 039 263 TOTAL CAPiTAUZATION $5,852,030 $5 656 295 The accompanyrng Notes to Conschdated Fenancial $tatements are an integral part of these statements. 21 l l
CONSOUDATED STATEMENTS OF CASH FLOWS Ohio Edison Company (In thousands) - j For the Years Ended December 31, ! 1994 1993 1992 CASH FLOWS FROM OPERATING ACTMTIES- ! Net income $ 303,531 - $ 82,724 $ 276,986 l
. Adjustments to reconcile net income to net cash from operating activities:
Provision for depreciation 220,502 l 217,980 223,497 Nuclear fueland lease amortization 72,141 59,858 . 85,419 Deferred income taxes, net 21,156 (26,233) j 18,221 Investment tax cred:ts, net (8,036) (8,345) ' (17,857) Deferred revenue -
- ! 19,517 Allowance for equity funds used '
during construction (5,277) (4,257) (3,025) Deferred fuel costs, net (2,656) (1,078) 5.130 Perry Unit 2 termination - , 390.835 j - Cumulativeeffectof achangein j accounting for unbilled revenues - ! - Other amortization, net r (58,201) 1,184 ! 9,941 { _ _._8,422 _! . __ _ . l Intemal cash before dividends 1 609,783 l 654,467 , 617,829 - Receivables 32,113 l 11,962) 2,278 Matenals and supplies 6,865 41,467 (14,889) Accounts payable - > (18,261) ll 9,823 (19,986) Other ! 64,564 ! 19,088 4,727 l-. _.. Net cash provided f rom operating activities 722,883 : 589,959 _ . _ . _ . _ . . _ . . . . , . _ . _ ____._.__l , 695,064 j _..._..___l_.._..__l CASH FLOWS FROM FINANCING ACTMTIES: i I New Financing- l l l Preferred stock - 121,294 l 15,000 Long-term debt ! 434,759 ; 765,358 ' 937,797 l Short-term borrowings, net ! 70,516 , 56,716 i Redemptions and Repayments- { Preferred and preference stock i 56,362 l' 122,502 j 22,412 l 3 i
~'
Long term debt ' 483,347 ! 773,128 i, 1,065,377 l - Short. term borrowings, net ! 47,445 ' Dividend Payments-f Common stock i 216,782 l 224,943 234,188 i Preferred and preference stock l 21,483 i 20,926 , 23,786 l l Net cash used for financing activities 272,699 302,292 l 336,250 l CASH FLOWS FROM INVESTING ACTMTIES: ! I < Property additions l 258,249 ! 256,740 l 241,508 i Letter of credit collateralization deposit 277,763 I - l - 'I Sale and leaseback restructunng fees ! 1,507 10.417 1 37,654 l Other 21,245 ;; 7,950 i 14,133 ' Net cash used for investing activities i 558,764 i 275.113 293,295 i Net increase (decrease) in cash and cash equivalen.a ' (136,399) i 145,478 (39,586) { I 159,690 ; 14,212 53,798 ' Cash and cash equivalents at beginning of year- . - - - - . - -; - . . -
\
Cash and cash equivalents at end of year { $ 23,291 i $ 159,690 J I $ 14.212 f SUPPLEMENTAL CASH FLOWS INFORMATION: : .! Cash Paid Dunng the Year- : ! Interest (net of amounts capitalized) 1 $ 267,319 ' $ 262,410 i $ 290,420 , income taxes 143,202 ' 94,272 134,768 t The accompanying Notes to Consoltdated Financial Statements are an integral part of these statements. l L 22 t -
r CONSOLIDATED STATEMENTS OF TAXES Oh'o Edison Company (in thousands) ror the Years Ended December 31, 1994 1993 1992 GENERAL TAXES: Real and personal property $ 113,484 $ 124,709 $111,533 State gross receipts 100,996 97,348 94,415 Social secunty and unemployment 14,822 15,626 15,166 Other 7,718 7,871 8.218 Total general taxes $ 237,020 $ 245,554 $229,332 PROVISION FOR INCOME TAXES: Currently payable-Federal $ 161,219 $ 61,920 $132,712 State 14,547 5,544 14,331 175,766 67,464 147,043 Oef erred, net-Federal 20,796 489 17.586 State 360 6.455 635 21,156 6,944 18,221 Investment tax cred:ts, net of amortization (8,036) (8.345) (17,857) Total provision for income taxes $ 188,886 $ 66,063 $147,407 INCOME STATEMENT CLASSIFICATION OF PROVISION FOR INCOME TAXES. Operating income $ 181,514 $ 166,773 $160,358 Other income 7,372 (134,342) (12.951) Cumulatrve effect of a change in accounting - 33,632 - Total provioon for income taxes $ 188,886 $ 66,063 $147,407 RECONCIUATION OF FEDERAL INCOME TAX EXPENSE AT STATUTORY RATE TO TOTAL PROVIS!ON FOR INCOME TAXES: Book income before proasion for income ta =es $ 492,417 $ 148,787 $424,393 Federal income tax expense at statutory rate $ 172,346 .$ 52,075 $144,44 Increases (reductions) in taxes resulting f rom-Excess of book over tax depreciation - - 19,741 Amortization of investment tax credits (8,036) (8,345) (32,092) State income taxes net of f ederal income tax benefit 9,690 7,799 9,878 Amortaation of tax regulatory assets 14,503 15.412 - Other, net 383 (878) 5.586 Total provision for income taxes $ 188,886 $ 66,063 $147,407 SOURCES OF DEFERRED TAX EXPENSE: Excess of tax over book depreciation, net $ 27,627 Diff erence between tax and book revenue, net (9.084) Alternative minimum tax credits utikred 12,467 Other, net i (12,789) Net deferred tax expense $ 18,221 ACCUMULATED DEFERRED INCOME TAXES AT DECEMBER 31. Property basis differences $1,024,737 $ 972,501 n. i A!!owance ior equity funds used dunng constructron 278,172 282,525 i Deferred nuclear expense 272,516 277,555 Customer receivabtes for future income taxes 237,826 244,540 Deferred sale and leaseback costs 87,068 90.878 I Unamortized investment tax credits (82,491) (85,459) Other (18,504) 16.011 Net def erred income tax habihty $1,799,324 $1,798,551 1he accompanying Notes to Consobdated Financial Statements are an integral part of these statements j 23
NOTES TO CONSOUDATE3 FINANCIAL STATEMINTS
- 1. summAny or slGNIFICANT ACCOUNTING reserve for depreciation on the Consolidated Balance poucess:
Sheet. If the actual costs of decommissioning the units The consolidated financial statements include exceed the accumulated amounts recovered from cus-Ohio Edison Company (Company) and its wholly owned tomers, the Companies expect that difference will be subsidiaries, Pennsylvania Power Company (Penn Power), recoverable from their customers.The Companies have OES Capital, incorporated (OES Capital), OES Finance, approximately $34,400,000 invested in external decommis-Incorporated (OES Finance) and OES Fuel, Incorporated sioning trust funds as of December 31,1994. Earnings on (OES Fuel). All significant intercompany transactions have these funds are reinvested with a corresponding increase been eliminated.The Company and Penn Power (Companies) to the depreciation reserve.The Companies have also rec-follov, the accounting policies and practices prescribed by ognized an estimated liability of approximately $19,900,000 the Public Utdities Commission of Ohio (PUCO), the related to decontamination and decommissioning of Pennsylvania Public Utility Commission (PPUC) and the nuclear enrichment facilities operated by the United States Federal Energy Regulatory Commission (FERC). Department of Energy (DOE), as required by the Energy Revenues -The Companies' retail customers are Policy Act of 1992.The Companies recover these costs metered on a cycle basis. Revenue was recognized for through their respective energy rates, electric service based on meters read through the end of The staff of the Securities and Exchange Commission the year for years prior to 1993. Beginning in 1993, revenue has raised questions regarding the recognition, measure-is recognized to include unbilled sales through the end of ment and classification of decommissioning costs for the year (see Note 2). nuclear generating stations in the financial statements of Receivables from customers include sales to residential, electric utilities. In response to these questions, the Finan-commercial and industrial customers located in the cial Accounting Standards Board (FASB) has agreed to Companies' service area and sales to wholesale customers. review the accounting for nuclear decommissioning costs. There was no material concentration of receivables at if current electric utility industry accounting practices for December 31,1994 or 1993, with respect to any particular decommissioning are changed: (1) annual provisions for segment of the Companies' customers. decommissioning could increase; (2) the full estimated Fuel Costs -The Companies recover fuel-related costs cost for decommissioning could be recorded as a liability not otherwise included in base rates from retail customers rather than as accumulated depreciation; and (3) income through separate energy rates. Any over or under collection from the extemal decommissioning trusts could be resulting from the operation of these rates are included as reported as investment income. The FASB's review is adjustments to subsequent energy rates. Accordingly the expected to be completed in 1995. Companies defer the dif ference between actual fuel- Common Ownership Of Generating Facilities-related costs incurred and the amounts currently recovered The Companies and other Central Area Power Coordi-from their customers, nation Group (CAPCO) companies own, as tenants in Utility Plant and Depreciation - Utility plant reflects the common, various power generating facilities. Each of the original cost of construction, including payroll and related companies is obligated to pay a share of the costs associ-costs such as taxes, employee benefits, administrative and ated with any jointly owned facility in the same proportion general costs and financing costs (allowance for funds as its interest.The Companies' portions of operating used during construction). expenses associated with jointly owned facilities are The Companies provide for depreciation on a straight- included in the corresponding operating expenses on the line basis at various rates over the estimated lives of Consolidated Statements of Income.The amounts property included in plant in service. The annual composite reflected on the Consolidated Balance Sheet under utility rate for electric plant was approximately 3.0% in 1994,1993 plant at December 31,1994, include the following: and 1992. companies-The Companies recognize approximately $5,000,000 utsty Accumulated Construction ownersw annually hs uepreciation expense) for future decommis-ceneraong unas in Ne tin NeIs- - 'tUeY ~- sioning costs applicable to their ownership and leasehold - - - - - ' - -- gg " interests in three nuclear generating units.The Companies' W.H. Sammis 47 $ 308.000 $ 88.200 $ 3.300 68 80 % share of the future obligation to decommission these units Bruce Mansfield is approsmately $388,000,000 in current dollars and (using #1, #2 and #3 762.800 335.000 9.600 50 68 % a 2.8% escalation rate) approximately $865,000,000 in sea e a future dollars The estimated obligation (based on site spe- 00 @ 900 m Perry #1 1.623.000 281,700 4,300 35 24 % cific studies) and the escalation rate were developed using g ggg MU00 Mo ~ ~ -- information obtained from consultr nts. Payments for decommissioning are expected to begin in 2016, when actual decommissioning work begins. The Companies have recovered approximately $48.000,000 for decommis-sioning through their electric rates from customers through December 31,1994; such amounts are reflected in the 23
1 Nuclear Fuel- Nuclear fuel is recorded at original cost, The assets of the plans consist primarily of common which includes material, enrichment, fabrication and inter- stocks, United States government bonds and corporate . est costs incurred prior to reactor load.The Companies bonds.liet pension costs for the three years ended amortize the cost of nuclear fuel based on the rate of con- December 31,1994, were computed as follows: sumption.The Companies' electric rates include amounts ~ m4 ma m2 for the future disposal of spent nuclear fuel based upon vn mou3,nas; the formula used to compute payments to the DOE. service cost.benehts income Taxes - Details of the total provision for income samed during the penod $ 15.159 $ 13.171 $ 13.278 Interest on projected beneht obhgaton 45.299 42.723 40,291 taxes are shown on the Consolidated Statements of Taxes. Retum on plan asses 8,344 (37,849) (51297) Deferred income taxes result from timing ditferences in * ' ' the recognition of revenues and expenses for tax and he'iu te tINn1 accounting purposes. Investment tax credits (lTC), which program expense 37.299 6.014 7.289 were deferred when utilized, are being amortized over the Net pension cost $ 16.777 $(20.987) $(20.817) estimated life of the related property. ITC amortization in 1992 included $21,300,000 associated with portions of the The assumed discount rate used in determining the Company's investments in Perry Unit 1 and Beaver Valley actuarial present value of the projected benefit obligation Unit 2 which are not recoverable from retail customers. was 8.5% in 1994,7.5% in 1993 and 9% in 1992.The The Companies adopted Statement of Financial assumed rate of increase in future compensation levels Accounting Standards (SFAS) No.109, " Accounting for used to measure this obligation was 4.5% in each year, Income Taxes," on January 1,1993, which requires the Expected long-term rates of return on plan assets were liability method to be used to account for deferred income assumed to be 10% in 1994 and 11 % in 1993 and 1992. taxes. Under this standard, deferred income tax liabilities The Companies provide a minimum amount of related to tax and accounting basis dif ferences are recog- noncontributory life insurance to retired employees in nized at the statutory income tax ratos in effect when the addition to optional contributory insurance. Health care liabilities are expected to be paid.The components of accu- benefits, which include certain employee deductibles and mutated deferred income taxes as of December 31,1994 copayments, are also available to retired employees, their and 1993, are disclosed on the Consolidated Statements dependents and, under certain circumstances, their of Taxes. survivors.The Companies pay insurance premiums to Retirement Benefits -The Companies' trusteed, cover a portion of these benefits in excess of set limits; all noncontributory defined benefit pension plans cover amounts up to the limits are paid by the Companies. almost all full-time employees. Upon retirement, employ- In 1993 the Companies adopted SFAS No.106 ees receive a monthly pension based on length of service " Employers' Accounting for Postretirement Benefits Other and compensation.The Companies use the projected unit Than Pensions," which requires companies to recognize credit method for funding purposes and were not required the expected cost of providing other postretirement to make pension contributions during the three years benefits to employees and their beneficiaries and covered ended December 31,1994. dependents from the time employees are hired until they The following sets forth the funded status of the plans become eligible to receive those benefits.The Companies and amounts recognized on the Consolidated Balance do not currently fund these future benefits. Costs paid by Sheets as of December 31: the Companies for retiree health care and life insurance m4 ma benefits of $9,689,000 were charged to income in 1992.
~ ~ ~ ~
va mousandsi The following sets forth the accrued postretirement Actuanal present value of beneht obkgatrons: benefit cost on the Consolidated Baiance Sheets as of
%ted benetts $483.850 $471.205 December 31:
27.312 28.180 Nonvested beneflts Accumulated beneht obhgation $511.162 $499.385
- Plan assets at fair value $719,310 $770.240 Accumulated postretirement beneht t
Actpanal preset voy of projeged benett obhgaton 593 931 605.848 obhgation allocation: Plan assets in excess of prosected benett obligaton 125.379 164.392 Retirees $t65.386 34S.288 8.868 (6,743) Fully eligible actNe plan participants 12,381 M.827 Unrecognaed netloss Igain) Other active plan participants 77,599 67,597 Unrecogneed pnot service cost 12.755 14.074 Untecogneed net transition asset (57.719) Accumulated postretirement beneht obhgaton 255.366 240,712 ,
, J49.775)
Net penson asset $ 97.227 $114.004 Unrecognized transiton obiigaton (183.196) (193.374) Unrecogneed netloss (23.425) (25.048) Accrued postretirement beneht cost $ 48.745 $ 22.290 25 ;
NOTE] Continued Net periodic postretirement benefit costs for the years Earnings per share of common stock shown on the ended December 31,1994 and 1993, were computed Consolidated Statements of Income for the three years as follows: ended December 31,1994, were computed as follows: m4 1993 1994 1993 1992 0n thouw&) Vn thousanas. mceprper shve amounts) Service cost benetts attnbuted to the pened $ 4.865 $ 3.929 Eamings. Interest cost on accumulated beneht abhgabon 19 332 18.039 income before cumulative etfect $303.531 $ 24.523 $276.986 Amort:zanon of transmon obhgaSon 10,178 10.178 Prefer <ed and preference Amorteation of loss 787 - stock d,vidend roquirements (21.679) (23.707) (23.926) Voluntary eady retrement p'og*am e pense 2.815 1.533 Tax benett from empioyee stock Net penodic postretgement beneht cost 33,679
"* " * ~~ ~
37.977 Benehts paid 11,522 11.389 Eamings before cumulatrve effect 281.852 816 258.652 Inct eason accrued postretn ement benefit cost $26.455 $22 290 a e n ccou tng - 58.201 - Earnings af ter cumulanve ef fect $281.852 $ 59.017 $258.652 The health care trend rate assumption is 789% in the Sh m first year gradually decreasing to 3 5% for the year 2008 bghted average numt:er and later. The discount rates used to compute the accumu.. of common shares outstanding 143.237 152,569 152.569 lated postretirement benefit obhgation in 1994 and 1993 Eamings per share of Common Stock-were 8.5% and 75%, respectively An increase in the Be e n e n c o nt n $197 $ 01 $1.70 health care trend rate assumption by one percentage point Cumulative ef fect of a in all years would increase the accumulated postretirement change in accounting - 38 - benefit obhgation by approximately $33,200.000 and the Eamings per share of Common Stock $197 $ 39 $1.70 aggregate annual service and interest costs by approxi-mately $3,700,000 Supplemental Cash Flows information - All temporary The PUCO and PPUC have authonzed the Companies cash investments purchased with an initia! matunty of to defer the incremental costs resulting from adopting three months or less are reported as cash equivalents on SFAS No.106 (compared to costs computed under the the Conschdated Balance Sheets.The Companies reflect former accounting basis) for future recovery from their temporary cash investments at cost, which approximates retaal customers. Smilar authonzations relat;ng to other their market value. Noncash financing and investing activi-utilities regulated by the PPUC were appealed by the ties included capital lease transactions amounting to Office of Consumer Advocate to the Commonwealth $3,613,000, $1,487,000 and $5,831,000 for the years 1994, Court of Pennsylvania The Commonwealth Court has 1993 and 1992, respectively OES Fuel commercial paper issued conf heting opinions and both cases have been transactions have initial matunty periods of three months appealed to the Pennsylvania Supreme Court. Due or less, are reported net within financing activities under to the uncertainty resulting from these confhcting opinions, long-term debt and are reflected as long-term debt on the Penn Power provided a reserve in 1994 against the full Consolidated Balance Sheets (see Note SE). amount deferred. All borrowings with initial maturities of less than one Earnings Per Share Of Common Stock - The American year are defined as financial instruments under generally Institute of Certified Pubhc Accountants issued its accepted accounting pnnciples and are reported on the Statement of Position 93-6 (SOP) in late 1993, which Consohdated Balance Sheets at cost which approximates changes generally accepted accounting pnnciples relating their fair market value. The following sets forth the approxi-to employee stock ownership plans (ESOP) for shares pur- mate fair value and related carrying amounts of all other chased af ter December 31,1992. The Company's ESOP long-term debt, preferred stock subject to mandatory shares were purchased poor to that date, but the Company redemption and investments other than cash and cas5 elected to adopt the SOP effective January 1,1994.This equivalents as of December 31: change in accounting reduced net income by approxi-1994 m3 mately $8,700,000 in 1994; the net ef fect to earnings per t, n9 7,, g, ng 7, common share resul ting from this change was an increase vyue vaiue vaiue value of six cents af ter ekminating unallocated ESOP shares from suons; the computation. Lorg term debt $ 3,224 $ 3.062 $ 3 253 $ 3 451 Prefened stock $ 40 $ 38 $ 46 $ 48 l Investmeris omer than cash j aqa cash eqwvatents $ 320 $ 317 $ 37 $ 37 23
, _ ___ _ _ _ _ - . _ . - _ _ __ . . - . . . ~ . _ _ _ _. 1 1 l The fair values of long-term debt and preferred stock reported results of operations for the year ended reflect the present value of the cash outflows relating to December 31,1992, wou!d not have been materially those securities based on the current call price, the yield to different if this new accounting policy had been in effect maturity or the yield to call, as deemed appropriate at the during that year. end of each respective year.The yields assumed were 3. PERRY UNIT 2 TERMINATION: based on securities with similar characteristics of fered by in December 1993, the Companies announced a corporation with credit ratings similar to the Companies, that they would not participate in further construction of i ratings.The fair value of investments other than cash and Perry Unit 2 and abandoned Perry Unit 2 as a possible cash equivalents represent cost (which approximates fair electric generating plant.The Company determined that value) or the present value of the cash inflows based on recovery from customers of its Perry Unit 2 investment ; the yield to maturity. The yields assumed were based on was not probable, resulting in a $366,377,000 write-off of ! financial instruments with similar characteristics and ts investment in 1993. Penn Power expects its Perry Unit 2 terms. All of the Companies financialinstruments are for investment to be recoverable from its retail customers. i purposes other than trading. However, due to the anticipated delay in commencement ! Regulatory Assets-The Companies recognize, as regu-of recovery and taking into account the expected rate treat-latory assets, costs which the FERC, PUCO and PPUC have ment, Penn Power recognized an impairment to its Perry authorized for recovery from customers in future periods. Unit 2 investment of $24,458,000 in 1993. As a result, net Without such authorization, the costs would have been income for the year ended December 31,1993, was charged to income as incurred. Amounts shown below as reduced by $248,743,000 ($1.63 per share of common stock). being recovered currently would be recovered over approx-imately 22 years based upon amounts amortized during 4. LEASES: 1994. Amortization of the remaining assets, which are The Companies lease a portion of their nuclear deferred for recovery in future rate proceedings, would generating facilities, certain transmission facilities, com-increase revenues by less than 2% on an annual basis. puter equipment, of fice space and other property and Regulatory assets on the Consolidated Balance Sheets equipment under cancelable and noncanceiable leases. are comprised of the following: In 1987, the Company sold portions of its ownership
% wu interests in Perry Unit 1 and Boaver Valley Unit 2 and simul-mw taneously entered into operating leases on the portions currently being recovered through rates sold for basic lease terms of approximately 29 years. During Nuclear unit expenses S 503.625 $ 519.533 the terms of the leases the Company continues to be Customer receivables for future income taxes 639.592 658,115 responsible, to the extent of its combined ownership and :
By leasehold interest, for costs associated with the units p yt es 0 0 including construction expenditures, operation and mainte-Loss on reacquired debt 99.384 103.158 DOE decommissioning and nance expenses, insurance, nuclear fuel, property taxes decontaminaton costs 21,170 19.275 and decommissioning.The basic rental payments are Unconectibie customer accounts 44.308 13.425 adjusted when applicable federal tax law changes.The Other 15.669 12,987 Company has the right, at the end of the respective basic L672.299 _ (680.300 lease terms, to renew the leases for up to two years.The Not current!y rocovered through rates Company also has the right to purchase the facilities at the expiration of the basic lease term or renewal term (if elected) eeIs e$t nefa costs 70 Perry Und 2 termination 38,066 37.637 at a price equal to the fair market value of the facilities. OES Finance was established during the third quarter 333.034 313.495 '
' ~ ~ ~
of 1994 for the sole purpose of maintaining deposits Total $2.005.333 ' $1.993.795 pledged as collateral to secure reimbursement obligations
- 2. CHANGE IN ACCOUNTING FOR UNBILLED relating to certain letters of credit supporting the Company's REVENUES: obligations to lessors under the Beaver Valley Unit 2 sale On January 1,1993, the Companies changed their and leaseback arrangements.The deposits pledged to the accounting policies to recognize revenue relating to financial institution providing those letters of credit are the metered sales which remain unbilled at the end of the sole property of OES Finance. In the event of liquidation, accounting period.This change was made to more closely OES Finance, as a separate corporate entity, would have to match the Companies' revenues with the costs of services satisfy its obligations to creditors before any of its assets provided.The effect of this change increased net income could be made available to the Company as sole owner of for the year ended December 31,1993 (before the cumula. OES Finance common stock.
tive etfect from periods prior to 1993) by approximately
$4,600,000 ($.03 per share of common stock).The cumulative offect to January 1,1993 was $58.201000 (net of $33,632,000 of income taxes) or $.38 per share.The 27 1
- ~ --- . _\
NOTEJ Continued Consistont with the regulatory treatment, the rental Total ESOP related compensation expense was calct. lated payments for capital and operating leases are charged to as follows: , operating expenses on the Consolidated Statements of ina 1992 1 income. Such costs for the three years ended December
- ~ ~ ~ ~ ~ ' ~ - '1994
~ i s,M; - -
31,1994, are summarized as follows: Base compensation $ 10,179 $ 7,741
$ 6.799 19x 1993 1992 Interest on ESOP debt - 19,985 19,985 Dmdends on common stock held by the ESOP and used Opastingleases to service debt (1.966) (15.944) (15.970)
Interest element $100,980 $ 96.804 $108,870
-Interest eamed by the ESOP -
(275) 317) Other 14,530 15,418 13,308 Totalexpense " $ 8,213 $10,565 $11,45 Capctalleases
$e[steement Totairentalpayments
$ [,B g (398 .
(C) Preferred Stock - Penn Power's 7.625% and 7.75% senes of preferred stock have restrictions which prevent
$129.953 $126.961 $137.517 early redemption pdor to October 1997 and July 2003, The future minimum lease payments as of December respectively.The Company's 8.45% series of preferred 31,1994, are: stock has no optional redemption provision, and its 7,75%
cetal operating series is not redeemable before April 1998. All other pre-ferred stock may be redeemed by the Companies in d"""** whole, or in part, with 30-60 days' notice.The optional 1995 $ 16,744 $ 106.073 redemption price for Penn Power's 7.625% series shown 1998 h05 12,434 g 120,741 on the Consolidated Statements of Capitalization will decline to $100 per share by 2007. 1999 11.117 125.595 (D) Preferred Stock Subject To Mandatory Redemption - Years thereafter 103.858 2,362,768 The Company's 845% series of preferred stock has an Totalminimumlease payrnents 172,769 $2.937,504 annual sinking fund requirement for 50,000 shares begin-Executory costs
~
43,086 ning on September 16,1997. Penn Power's 7.625% series i.et rrun, mum lea'se payments ~ ~ 129
~ 56 has an annual sinking fund requirement for 7,500 shares interest porton 75.503 beginning on October 1,2002.
Wesent vase of net minrnum icase payment ~ ~54.1i0 Preferred shares are retired at $100 per share plus Less current portion 6,573 accrued dividends. Sinking fund requirements for the Noncurrent porton $ 47,607 next five years are $5,000,000 in each year from 1997 through 1999. O. CAPITAUZATION: (E) Long Term Debt -The first mortgage indentures (A) Retained Earnings - Under the Company's first and their supplements, which secure all of the Companies' mortgage indenture, the Company's consolidated retained first mortgage bonds, serve as direct first mortgage liens earnings unrestricted for payment of cosh dividends on on substantially all property and franchises, other than the Company's common stock were C22,781,000 at specifically excepted property, owned by the Companies. December 31,1994. Based on the amount of bonds authenticated by the (B) Employee Stock Ownership Plan -The Companies Trustee through December 31,1994, the Company's annual fund the matching contribution for their 401(k) savings plan sinking and improvement fund requirement for all bonds through an ESOP Trust. All full-time employees eligible for issued under the mortgage amounts to $30,056,000.The participation in the 401(k) savings plan are covered by the Company expects to deposit funds in 1995 which will be ESOP The ESOP borrowed $200,000,000 from the withdrawn upon the surrender for cancellation of a like Company and acquired 10,654,114 shares of the Company's principal amount of bonds, which are specifically authenti-common stock on the open market. Dividends on ESOP cated for such purposes against unfunded property shares are used to service the debt. Shares are released additions or against previously retired bonds.This method from the ESOP on a pro-rata basis as debt service can result in minor increases in the amount of the annual payments are made. In 1994,1993 and 1992,532,250 sinking fund requirement. , shares,369,956 shares and 412,167 shares, respectively, Sinking fund requirements for first mortgage bonds i were allocated to employees with the corresponding and maturing long-term debt (excluding capital leases) for expense recognized based on the shares allocated the next five years are: method.The fair value of 9,076,489 shares unallocated as _ _ _ _ _ . - - - of December 31,1994, was approximately $168,000,000. 1995 $220.923,0% 1996 382.675.000 1997 334.845.000 l' 1998 161.521,000 1999 162.036.000 C3
The Cornpanies' obligations to repay certain pollution power plant to $8,920,000,000.The amount is covered control revenue bonds are secured by several series of first by a combination of private insurance and an industry mortgage bonds and, in some cases, by subordinate liens retrospective rating plan. Based on their present ownership on the related pollution control facilities. Certain pollution and leasehold interests in the Beaser Valley Station and control revenue bonds are entitled to the benefit of irrevo- the Perry Plant, the Companies' maximum potential cable bank letters of credit of $338,831,000.To the extent assessment under the industry retrospective rating plan that drawings are made under those letters of credit to pay (assuming the other CAPCO companies were to contribute principal of, or interest on, the pollution control revenue their proportionate share of any assessments under the bonds, the Company is entitled to a credit against its obli- retrospective rating plan) would be $102,800,000 per gation to repay those bonds.The Company pays an annual incident but not more than $13,000,000 in any one year for fee of 0.625% to 0.925% of the amounts of the letters of each incident. credit to the issuing banks and is obligated to reimburse The Companies are also insured as to their respective the banks for any drawings thereunder. interests in the Beaver Valley Station and the Perry Plant Nuclear fuel ourchases are financed through the under policies issued to the operating company for each issuance of OES Fuel commercial paper and loans, both of plant. Under these policies, up to $2,750,000,000 is pro-which are supported by a $225,000,000 long-term bank vided for property damage and decontamination and credit agreement which expires March 31,1997. Accord- decommissioning costs.The Companies have also ingly the commercial paper and loans are reflected as obtained approximately $345,000,000 of insurance cover-long-term debt on the Consolidated Balance Sheets. age for replacement power costs for their respective OES Fuel must pay an annual facility fee of 0.1875% on interests in Perry and Beaver Valley Under these policies, the total line of credit and an annual commitment fee of the Companies can be assessed a maximum of approxi-0.0625% on any unused amount. mately $15,200,000 for accidents at any covered nuclear facility occurring during a policy year which are in excess of
- 6. SHORT TERM BORROWINGS AND BANK LINES OF CREDIT: accumulated funds available to the insurer for paying losses.
Short-term borrowings outstanding at December 31, The Companies intend to maintain insurance against 1994, include OES Capital debt which is secured by cus. nuclear risks as described above as long as it is available. tomer accounts receivable. OES Capital can borrow up to To the extent that replacement power, property damage, $120,000,000 under a receivables financing agreement at decontamination, decommissioning, repair and replace-rates based on certain bank commercial paper. OES Capital ment costs and other such costs arising from a nuclear is required to pay an annual fee of 0.46% on the amount of incident at any of the Companies' plants exceed the policy the entire finance limit.The receivables financing agree. limits of the insurance from time to time in effect with ment expires April 23,1996. respect to that plant, to the extent a nuclear incident is The Companies have lines of credit with domestic determined not to be covered by the Companies'insur-banks that provide for borrowings of up to $55,000,000 ance policies, or to the extent such insurance becomes under various interest rate options. Short-term borrowings unavailable in the future, the Companies would remain at may be made under these lines of credit on the Companies' risk for such costs. unsecured notes.To assure the availability of these lines, Guarantees -The Companies, together with the the Companies are required to pay annual commitment other CAPCO companies, have each severally guaranteed fees that vary from 0.22% to 0.50 A These lines expire at certain debt and lease obligations in connection with a various times during 1995.The weighted average interest coal supply contract for the Bruce Mansfield Plant. rates on short-term borrowings outstanding at December As of December 31,1994, the Companies' shares of the 31,1994 and 1993, ware 5.76% and 3.23%, respectively guarantees (which approximate fair market value) were
- 7. COMMITMENTS, GUARANTEES AND which includes certain minimum payments, has been CONTINGENCIES:
determined to be sufficient to satisfy the debt and lease Construction Program -The Companies' current fore-bligations.The Companies' total payments under the coal casts reflect expenditures of approximately $800,000,000 supply contract were $99,774,000, $114,572,000 and for property additions and improvements from 1995-1999,
$103,657,000 during 1994,1993 and 1992, respectively of which approximately $180,000,000 is applicable to Under the coal supply contract, the Companies' minimum 1995. Investments for additional nuclear fuel during the payments in each year during the period 1995 through 1995-1999 period are estimated to be approximately 1999 are pproximately $35,000,000. $172,000,000, of which approximately $30,000,000 applies Environmental Matters -Various federal, state and to 1995. During the same periods, the Companies' nuclear local authorities regulate the Companies with regard to ;
fuel investments are expected to be r6duced by approxi-mate!y $225,000,000 and $56,000,000, respectively as the af aM water @aW aM oh enememal mams. The Companies have estimated additional capital expend.i-nuclear fuelis consumed. tures for environmental compliance of approximately Nuclearinsurance-The Price-Anderson Act limits the $70,000,000, which is included in the construction forecast public liability relative to a single incident at a nuclear 29
NOTE] ConUnued given above under " Construction Program" for 1995 s.
SUMMARY
OF CLUARTERLY FINANCIAL DATA . through 1999. wwAuomo): The following summarizes certain consolidated The Clean Air Act Amendments of 1990 require significant reductions of sulfur dioxide (SO2) and nitrogen operating results by quarter for 1994 and 1993. oxides (NO,) from the Companies' coal-fired generating Msch 31 June 30. september 30 Decernbw at, Dru M nos Ended 2 N N N units by 1995 and additional emission reductions by 2000. Compliance options include, but are not limited to, installing Operadng Rems $601,248 $585.423 $614.390 $ 567,125 additional pollution control equipment, burning less-pollut- Operating Expenses ing fuel, purchasing emission allowances, operating andiaxes 468.850 447.353 462.573 432.161 facilities in a manner that minimizes pollution, and retiring Operat ng income 132.398 138.075 151,817 134.964 facilities. In compliance plans submitted to the PUCO and Other income 2.255 3.534 5.032 5.638 - to the Environmental Protection Agency (EPA), the Net Interest and Other Charges 66.723 67,569 68.624 67.266 Company stated that SO2 reductions for the years 1995 through 1999 likely will be achieved by burning lower-sulfur Net income $ 67.930 $ 74.040 $ 88.225 $ 73.336 fuel, generating more electricity from lower-emitting Eamings on plants, and/or purchasing emission allowances. Equipment Common Stock $ 62.329 $ 68.681 $ 82.869 $ 67.973 already installed, or to be installed by May 1995, is Eamings per share of expected to provide NO, reductions sufficient to meet Common stock $ 44 $ 48 $ 58 $ 47 1995 requirements. Plans for complying with the year Macn 31 June 30. septembe 30. Decembn al. 2000 and later reductions have not been finalized. EPA .is bree Months Ended 1993 1993 1993 1993 conducting additional studies which could indicate the un nousanas. exceproer shere anounts need for additional NO, reductions from the Companies' Operating Revenues $593.214 $563.349 $624.524 $ 588,853 Pennsylvania facihties by the year 2003.The cost of such Operating Expenses and Taxes 461.719 425.354 472.341 485.196 reductions,if required, may be substantial.The Company continues to evaluate its compliance plans and other 0 0 oe xpense) 0 88 4 .9 ) compliance options. Netinterest and The Companies are required to meet federally approved Other Charges 68.287 68.438 68.041 67.219
~ ~ ~ ~ ~~ ~
SO2regulations. Violations of such regulations can result in incomeilos BeEre shutdown of the generating unit involved and/or civil or CumulativeEffectof a , criminal penalties of up to $25,000 for each day the unit is Changein Accounting 67.224 74,545 88.221 (205.467) Cu in violation. The EPA has an interim enforcement policy for c gNnAccount?ng58.201 - - - SO2regulations in Ohio that allows for compliance based ~ ~ gtincomMLosd ~ $125I425 Tf4.5W $ 88121 si2iS367) on a 30 day averaging penod.The EPA has proposed regu-n lations that could change the interim enforcement policy, EaQp,g kosl t-including the method of determining compliance with Common stock $119.520 $ 68.310 $ 82,462 $(211.275) emission limits.The Companies cannot predict what action Earnings (Loss) per the EPA may take in the future with respect to proposad share of Common regulations or the intorim enforcement policy Stock Before t of The Pennsylvania Department of Environmental $*"g%ur t g $ 40 $e $ 54 $n.38) Resources has issued regulations dealing witn the storage, Cumulative Effect of a treatment, transportation and disposal of residual warte Changein Accounting .38
~
~
such as coal ash and scrubber sludge. These regulations EamingslLoss)per Share impose additional requirements relating to permitting, of Common Stock $ 78 $ 45 $ 54 $n.38) ground water monitoring, leachate collection systems, closure, liabikty insurance and operating matters.The Companies are considering various compliance options but are presently unable to determine the ultimate increase in capital and operating costs at existing sites. Legislative, administrative and judicial actions will continue to change the way that the Companies must operate in order to comply with environmental laws and regulations. With respect to any such changes and to the environmental matters described above, the Companies expect that any resulting additional capital costs which may be required, as well as any required increase in operating costs, would ultimately be recovered from their customers. CO
~ - - .
i l CONSOLIDATED FINANCIAL AND OPERATING STATISTICS Ohio Edison Company 1 ---- - . _ -
! 1994 .l '1993 [ 1992 1991 1990 1989 ! 1984 I
GEtiERA5kkAh4CIALINh0bM TlbN ! ! i I I ' (Dollars in thousands) [ f l Opersang Revenues $2,368,191 ; $2,369.940 ! $2,332,378 4
$2,240,646 ! $2.162,720 $1,646.152 Operating income $ 557,254
$ 281,852
$ 525,330 j $ 522.115 l $2.358.946
$ 550.452 $ 510,279 i $ 543.659 $ 342,713 l I
l Eamings on Common Stock $ 59.017 : $ 253.060 l $ 240,069 $ 254.048 l $ 332,932 ! $ 290,694 , SEC Ratio of Earnings to Fixed Charges '2.24 1.12 ! 2.01 . 1.95 1.97 : 2 03 l 2 25 i i l! $5,834,903 !
$6,081,737
$5.983,214 i NQt utihty Plant ; $5,877,676 ! $5,938.410 l $5,985415 { $6,049.219 l Capital Expenditures l $ 258,642 i $ 263,179 $ 252,592 $ 235,622 l $ 270.993 ! $ 258,041 Total Capitakzation $5.943.913 jl$6.034.935 $ 868.099 l
$5.867,503 ,
l i $5,852,030 l $5.656.295 j $6,067.469 j $6,083.504 i I I l Capitakzation Ratios: l l j l l Common Stockholders' Equity ! 39.6 % ' 39.7 %; 40 5 %' 39.3 %: 41.9 %! 42.2 %' 33 2 %' Preferred and Preference Stock: ! j l Not Subl ect to Mandatory Redemption j 5.6 ' 5.8 6.0j [ 5.9 , 5.9 lI 58 j 7.8 Subject to Mandatory Redemption l 0.7 ! 08 1.0 i 1.1 l 1.0 j 1.5 j 2.7 , 54.1 i 53 7 j 50.5 56.3 Long Term Debt, Total Capitakzation _. _l ' 53 7 l 52 5 l 100.0 % 100 0 %: _ 1000%j 51.2 100 0 %' _100 0 %l. ] __ 100.0 % 100.0 %l . i l l ' Embedded Capital Costs- , l
. ; l l
l Preferred and Preference Stock 7.15 %' 6.86 %' 7.32 % 7.60 % 8 59 %' 8.72 % 9 87 % t Long. Term Debt l 8.17 % 8 27 %l 8 53 %' 8 75 %- 9.28 %' 9 67 %! 11.04 %' , COMMON STOCK DATA l l
; i l l Earnings per Share' , $1.97 i $1.82 $1.70 $1.60 ! $1.67 . $2.18 { $2.50 j Retum on Average Common Equity * , 12.4 % 11.4 %' 108%' 99 0 99%
i 13 0 %' 15.9 %
)
Dividends Paid per Share $1.50 . $1.50 , $1.50 l $1.50 , $1.73 i $1.96 i $1.84 l Dividend Payout Ratio' ' 76%' 82 %' 88 % 94 %' 104 % 90 % 74 %' Dividend Yield ! 8.1 %' 6.6 % 65%' 7.3 %^ 88%! 83%i 13 6 %' l Pnce/Eamings Ratio' ! 9.4 l 12.5 13.6 12.8 10.3 10.9 i 5.4 8cokValue per Share ! $16.15 ,
$14.70 t $15.78 . $15 55 $16.68 $16.82 j $15.93 Market Price per Share <
$18.50 $22.75 l $23.125 ' $20.50 i $17.125 , $23.75 l $13.50 j Ratio of Market Pnce to Book Value :
i 115 %) < 155 % 147 % i 132 %, 103 %i t 141 % i 85 % i
- Before net nonrecurnng charges in 1993. l l l j j i
REVENUE FROM ELECTRIC SALES (Thousandst ! l >
' { '
Residential > $ 859,781 l $ 868.422 $ 820,687 $ 839.387 $ 768.226 ! $ 749.345 $ 571,878 Commercel t 641,164 I 631.088 ! 616.261 l 627,418 SLA947 558,524 j 400,291 , industnal-25 Largest i 231,440 l 241,679 { 259.154 267,680 259,012 , 248.405 ; 241,986 j
- Other 6 368,782 i 360,714 ' 347,655 337,080 321.612 : 305,632 , 227,126 !
0ther 11,785 : 12,575 14,037 , 15.392 I 16,491_} 17,243 l 14,621 _. Total Retail 2,112.952 + 2,114.478 l 2,057.794 2.086,957 1,952,288 ! 1,879.149 . 1.455.902
~ ~~
TotalWholesale 221,805 ' 220,355 i 259.663 l ~~ 23dO0 ~ 257.'634 ; 252.626 I68;677 l Total $2,334,757 $2.334 833 ! $2 297.457 , $2.324 657 $2.209 922 $2.131.775 i i l $5[624.579 f KitoWAri-HoVR SALES (Milkonst , ,
; i Residential 8,201 8,237 7,685 ! 7,908 7,527 7,619 l 6.836 i Commercel ,
6,885 j 6,787 6,479 ! 6.608 6,370 6.234 5.101 Industrel-25 Largest 4,664 4.666 5.074 i 5.255 i 5,315 5,371 l 5.034 l
- Other 5,177 5,008 1 4.716 4.524 4.617 4,480 ;. 3.790 !
Other ~ 144 144 145 143 , 144 : 139 ! 160 l Total Retail 25,071 24,059 l 24.257 23.913 23,787 21,258
, 25.042 l ,
TotalWholesale _ 5.879 _ 7.162 , 8,126 __ _ 7.456 8.210 ; 8.494 _ 5~,901 Tetal ; 30.950 1 32.204 32.185 1 31.713 32.123 32 281 27.159 l ! customers SERVED' Residentel l 968.483 957.867 944,927 935.547 928.026 919.935 ,' 885,376 i Commercel 109.832 107,401 105,792 104,462 103,297 102.055 90.810 I Industnal 3,786 3,685 3.467 3.361 i 3.032 2.836 i 1,757 Other 1,226 . 1,199 , 1,151 1,094 1,061 883 ) 721
' I '
' Total 1.083.327 17070.152 1.055 337 1.044.464 1.035 416 1.025 709 . 978.664 I
Average Annual Residential kWh Usage 8,524 ' 8.660 8,182 8.498 8.159 8.336 ! 7,762 i Average Retail Pnce per kWh 8.43 e . 8 44 e 863 e 8.75 e 818e d 7.79e i 685e : Cost of Fuel per Milhon 8tu $1,21 $t26 $126 $1.27 $1.27 $1.26 $1.51 Peak Load Megawatts 5,744 5.729 5,247 5.513 5.394 5,152 4.093 l Numter of Employees 5,166 5,978 6.263 6.481 6.792 6.905 7,611 ; 31 i l l
i l l Investor Services Transfer Agent And Registrar ~ For assistance or informaton, sharehdders and fJst mortgage bond. For Stock And First Mortgage Bonds holders can wnte to Investor Services. Ohc Ed son Company. Ohio Edison Company 76 Scah Mo.n Street. Ahon, Ohio 443081890, or cdl tFe fdioung investor Services to4 free telephone number. 1800-736-3402. The to3 f'ee number is 76 South Main Street vahd in the Unaed States Canada, Puerto R:co and the Wg:n Islands Akron, Ohio 44308-1890 Business hours are 8 a.m to 4:30 p.m., Eastern time, Monday Multiple Annual neports through Fridag You may be receimng more than one copy of the annual report ;f Dividend Direct Deposit you have more than one stock account. If you want to ma:ntain Shorehdders can e!ect to have the:r d.v;dends electronicaHy deposaed separate stock accounts but elminate multiple copies, please wnte into their bank checkmg ar saWngs account. To receive on authorization to Insestor Services and request that we stop maihng an annual form, cortact Investor $ervices report to a part,cular account. Be sure to provide the exact reg:straton Sharebuilder Investment Plan of the stock account for which you want the annual report maling stepped. DMdends and proxy mater;al wdi cont;nue to be sent for The Company's Sharebuilder Investment Plan provides an opportunay for registered sharehdders to acqube shmes of Ch:o Ed son
- O CC '"
Common Stock Part c pants may 'nvest d! or some of their d:v:dends Combining Stock Accounts or make optional cash payments of up to $50,000 annudly. At the lf you have more than ore stock account and wish to cornbine them, end d 1994, about 58.000 sharehdders were part.c porng in the please wrae or cdl Investor Services and spec fy the account that you plan. To receme an enrefmert form, contact insestor Serv ces. would I;ke to reta:n as we!! as the reg:straten of each of your accounts. Dividends Your request wdl be rev;ewed to determine if your accounts con be Proposed dates for the payment of common stock dividends in c mbined or whether we need add.t;ond documentaten from you. 1995 are as fdlows: In stitutional Investor / Payment Date Security Analyst Inquiries Ex D>vidend Date Remrd Date March I March 7 March 3 - Insuut:onal investors and secunty andysts should d: rect inquHes to: June 7 Jure 30 R chard H. Marsh Theodore F. Struck 11 Grego y F. LaFlame June 1 September 6 September 8 September 29 Treasurer Assistant Treasurer and Manager, December 5 December 7 December 29 216 384 5318 Assrstant Secretary Investor Relot ons Stock Listing And Trading 216 384 5202 216-384-5500 Oho Ed son Common Stock is Lsted on the New York and Ch cogo
* "" U***" """U" stock exchanges under the "OEC' trad ng symbd. Newspapers usudf/ Frank C. Wa son reached mandatory retrement age and reved from use 'OhioEd" in their I st ngs. the Bocrd, e;fecove Apn! 28.1994. Fo<mer president of The (oungstown Form 10-K Annual Report g g g pony, bg9own, GJo, & hon prcmded ou'standmg service during his 20 years on the Board.
Form 10 K, the Annud Report to the Securmes and Exchange An hory N. Gorant former vice president, was named senior vice Commisson, wll be sent w thout charge upon w6tten request to president, nd Earl T. Ccrey. former manager of the Performance Nancy C. Bnnk, Secretary, Ohc Ed son Company. 76 Sosh Ma.n Street, Akron, Ohio 443081890 Inm ws Deponet was named vice president. Annual Meeting Of Shareholders Nancy C. Bnnk, former assistant secrea y. was named secretary, replac-ing Gregory F. Laflame, who was remed manaaer, Investor Relat;ons. W,e inv te sharehdders to attend the 1QQ5 Annual Meet.ng of TIeodore F. Struck ll was named ass s' ant treasure? and asssant secretary. Sharehaders on Thursday, Apnl 27 at 10 a m~ in the Company's General Off.ce in Akron. Oh:o. Peg stered hdders d common stock The newly brned Wes em DMs;on, managed by Gary M. Sta:r, not aFend rg con vo'e on rLe Jems d bus ness by f li ng out and indJdes the Bcry. Mansf eid and Mcnon areas The Youngsrown DM3 ion, return:ng the proxy card tho' is rna !ed about 40 days bebe the managd by Doug as l S. Elliot now indudes the War en Area. rneet ng Sha'ehdders whose shcres are Feld n the rame of a broker in August, we we'e saddened by the passing d Pennsyvania l Power can ciend the meet ng f a le"er from 'he brcker :s preserJed ind.catng P es; den' Robert L Kersaget Mr Ke singe <,59, served as p<esident carersh:p d Oh;o Ed son Commo" 5+0ck on Mc ch 7,1005 sece 1991 ano sewed t e h Oh:o Ed son Sysem since 1960. The Bocrd no ed H. Pe'er Burg presde m of Penrshan;o Power on on r'ecm bas s Mr. Beg contr+es serMg as sen;or vice pres: dent and Chief f; nonce! No Ce C f oho Ed 30- o,d a member d the boards d
- d. recto's of DCJhCo"po%es 3
a l L Bohrd Of Directors Offloors Division Managers ;; DONALD C. BLASIUS,65 ROBERT L. LOUGHHEAD,65 WILLARD R. HOLLAND GUY L. PIPITONE Rztired, forrnerly President d Wh:te , Retired, formedy Chairman of the President and Chief Executive Officer Akron Division l Consdidoed Industries, Inc., Board, President and Chief Executive -
. Officer of Weirton Steel ANTHONYJ. ALEXANDER CHARLES E. JONES
' Cleveland. Chio (home and com-Sent r Vice President and take Erie Division mercial oppliances, outdoor and Corporation, Weirton, West Virginia j Industriol products). Chairman, (steel products) Chairman, General Counsel . '
THOMAS A. CLARK Nominating Comminee; Member, Compensation Comminee; Member. H. PETER BURG Springfield Division Finance Committee. Elected 1981 Audit Comminee. Elected 1980 Senior Vice President and R. JOSEPH HRACH . : Chief Financid Officer
' H. PETER BURG,48 GLENN H. MEADOWS,65 Stark Division j Senior Vice President and Ch:ef Retired, formedy President and Chief ANTHONY N. GORANT Financial Officer d Ohio Edison Executive Officer of McNeil Senior V;ce President GARY M. STAIR :
and President of its subsidiary, Corporation, Akron, Ohio (manufac. Westem Division l Pennsylvan!o Puer. Member, tured products). Chairman, Aud>t ROBERT J. McWHORTER Finance Comminee. Elected 1989 Comminee; Member, Compensation Senior Vice President Cannuna Sected 1981 ROBERT H. CARLSON,68 EARL T. CAREY l Retired, formerly President and Chief PAUL J. POWERS,60 V;ce President : Execut:ve Officer of Universal-Rund!e Chairman of the Board and Chief ARTHUR R. GARFIELD Corporation, New Castle, Executive Officer d Commercial Vice President Pennsylvania (plumbing fixtures). Intertech Corporation. Youngstown, Member, Aud t Comminee. Ohio (engineered metal compo- JOHN A. GILL Elected 1987 nents). Member, Compensation Vice President ROBERT M. CARTER,44 BARRY M. MILLER Partner. Coner & Associates, CHARLES W. RAINGER,61 Vice President Cleveland. Ohio (Iow firm). Member, President d Sandusky Intemational Audit Comm; nee DAVID L. YEAGER Inc., Sondusky. Ohio (centrifugal Vice President Elected 1994 costings). Member, Nominating Comminee. Elected 1987 DANIEL P. ZENO DR. CAROL A. CARTWRIGHT,53 Vice President President, Kent State University. GEORGE M. SMART,49 Kent Ohio Member. Nom; noting Chairman of the Board and NANCY C. BRINK Comminee. Elected 1992 Pres: dent of Phoenix Packagin9 Secre'ory Corpaction, North Conton, Ohio
. WILLARD R. HOLLAND,58 RICHARD H. MARSH (easyepening lids). Member.
President and Chief Executive Off,cer Finance Comminee. Elected 1988 Treasurer of Ohio Edison and Chairman d the Board and Chief Executise Off.cer of JESSE T. WILLIAMS, SR.,55 HARVEY L WAGNER its subsidiary, Pennsylvania Power. Vice President, Compensation and Comptroller c Chairman, Finance Comminee: Employment Proctices of The l- THEODORE F. STRUCK 11 Member, Nominating Comminee. Goodyear Tire & Rubber Company. Assistant Treasurer and Elec!ed 1991 Akron, Ohio (tires and rubberrelated Assistant Secretary b products). Member, Compensaton Comm. nee. Elected 1992 HOWARD j. TUBER Assistant Comptrdler PnnW on recycled pope, j
@ 15% post consumer ms's j l
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