ML20073F010

Forwards Annual Financial Rept 1982.Fourth Quarter 1982 Quarterly Review & Estimate of Cash Position & Source of Funds Encl

ML20073F010
Person / Time
Site:	Davis Besse
Issue date:	04/11/1983
From:	Mangans E CLEVELAND ELECTRIC ILLUMINATING CO.
To:	Saltzman J NRC
Shared Package
ML20073F018	List: ML20073F010 ML20073F030
References
NUDOCS 8304150408
Download: ML20073F010 (5)

Text

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THE CLEVELAND ELEdTRIC ILLUMIN ATING COMPANY I P.o. box 5000 - CLEVELAND, OHIO 44101 - TELEPHONE (216) 622-9800 - ILLUMINATING BLDG - 55 PUBLIC SOUARE emng e Best Location in the Nation Edgar H. Maugans VICE PRESiCENT. FINANCE April 11, 1983 Mr. Jerome Saltzman, Chief Antitrust & Indemnity Group Nuclear Reactor Regulation Nuclear Regulatory Commission Washington, D.C. 20555 Re: Docket No. 50-346

Dear Mr. Saltzman:

Retrospective Premium Guarantee The Cleveland Electric Illuminating Company hereby provides the documents described below and enclosed herewith as evidence of its guarantee of its share ($5,138,000) of the retrospective premium which may be levied against the Davis-Besse Unit No. 1 reactor licensees during calendar year 1983.

1. The Cleveland Electric Illuminating Company 1982 Annual Report which includes certified financial statements for the calendar year 1982.

2. The Cleveland Electric Illuminating Company 1982 Fourth Quarter Quarterly Review which includes financial state-ments for the quarter ending December 31, 1982 (the 1983 First Quarter Quarterly Review is not yet available).

3 An Estimate of Cash Position and Source of Funds actual 1982 and projected 1983 Accordingly, The Cleveland Electric Illuminating Company believes that a cash flow can be generated which would be more than adequate should it be required to pay any retrospective premium in the amount of $5,138,000.

Sincerely, C

E. H. Maugans Vice President ance RJU:jl Enclosures cc: Donald G. Nicholson Vice President-Finance 400 Toledo Edison Company .

W ,p KGO4150408 830411 PDR ADOCK 05000346 I PDR ff

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1983 Internal Cash Flow Projection for Davis-Besse Unit No. 1 Nuclear Power Station (Dollars in Thousands) 1982 1983 Actual Projected  !

Retained Earnings (1) . . . . . . . . . . . . . . . . . . . . . . . $ 45,805 $ _o.

Adjustments Depreciation and Amortization. . . . . . . . . . . . . 86,622 92,952 Deferred Income Texes and Investment Tax Credits ............................ 72,103 88,488 Allowance for Funds Used During Construction............................ (104,336) (106,000)

Tot al Adj ustme nt s . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,389 75,440 Internal Cash Flow.................. ....... $100,194 $ 75,440 Average Quarterly Cash Flow. . . . . . . . . . . . . . . . . $ 25,049 $ 18,860 Percentage ownership in Unit. . . . . . . . . . . . . . . . . Davis-Be sse Unit No. 1 = 51.38%

Maximum Total Contingent Liability $ 5,138 $ 5,138 (1) " Retained Earnings" means net income after income taxes and dividends paid. The Company does not publish its projections of these amounts.

Accordingly, net income after taxes and dividends paid used in the 1983 projected data, although contrary to the Company's expectations, has been assumed to be zero. The figures shown for the 1983 projection year are those non-cash items necessary to establish that its maximum total contingent liability can be satisfied from internal cash flow.

[EgilllqAllqE I, Edgar H. Maugans, Vice President-Finance of The Cleveland Electric Illuminating Company, hereby certify that the foregoing Estimate of Cash Position and Source of Funds for calendar year 1983 is derived from accurate data and reasonable assumptions and is a reasonable estimate.

un4s Lh g Date Edgar augans

4 The Cleveland Electric muminating Company and Subsidiaries b STAT M THREE MONTH 5 ENDED DECEM8Ee 31 TWELVE RIONTH5 ENDED' DECEaseEn 31 tunauditedi 1982 1981 1982 1901

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OPfeATING eEVENUES Electric . $ 263.185 $ 244 762 5 1.091.054 $ 1,000.734 heWupW, S W PerStAf9 aBows for earnmes on a portion of tne construction costs for Unt #1 of tne Perry Nuclear Power PlanL 100W Dir0CtOr Elected to 30er13 WHMam J Wuuams, preudent and tNet operating Steam . 4 140 3.441 17.517 12.196 get potOf$In 1,108.571 The ComtWS 1982 revenues, earnings and for the fest time since construction Degan in 1974- officer of eepubuc Steel Corporation. nas been Ibtal operating revenues 267.325 248.203 1.012.950 customers wel De contr1Dutmg toward tne costs M etected to tne Board of Directors. erfectIve FeDruary ernmg5 per snee were at record leven for a calender OPERATINC EXPENSES ver For teS2. Semings for common stoce reached Unit 91. wNdi E scneduled to Degm operating m 1984-me armnmd our cuennon to seem tNs increase 1.1983 ter Welams fills tne vacancy created Dy the Board s decision to espand Rs rnembersNp from Fum . . . . . . . - g ., gyW WM mm

$170.7 rnanon, or 53 01 per snare on revenues or PW M po w . c .4 G.22D nM 29 m in NovemOer 1931 when Inflation was contmume to 91 go 12, Otnw opwauon . 42D da270 m.802 m.374 511 emon compared metn esmmes of 5120 8 rnsson, escalate our costs segmncantly and we saw artie ter Wmlams brmes to the Board not onry N5 or 52 52 per snare. on revenues of $1.0 Demon m Indicadon Enat this SRuation would cnmge. Sinm that M1. Wree irecord for a calender year.1982 seminq, expertence as a leader of one of the nation s largest md amortl2MN ' 9 pw share were tower thers the 53 os por snare time nowever. Innanon has moderated sucstannaHy industrial Concerns Dut also nis partlCular knowledge DMM otne tnm Fedwm mCome taxes . 28I051 19 964 68o4 91'648 1 sa19s2. and entwest rates nave faam mie m incream of utsty saw as a resuR of Ns previous saw practice Federai encome taxes 21'7s7 17.092 106 3s2 67'575 esmed for tne12 monens ended: _ granted was less than requested. we Deneve eMecttwe He 5 active m tne business commumty and m civic.

fne loww eammes per snare reveries an upward 1btaloperatingexpenses . 218.377 204.014 879.644 820.226 trend whicn oegen m tne Sorme of 1931. Cleerty. the cost controls will aNow us to maintam a sound professional and community organtaattora His eleC.

financia condRiorL tion provided a valuaDie addition to our Soard- NETOpfeATINGINCOedE . 48.948 44,189 228.927 192.704 rate incrosse received last month was needed to nelp maintam m adequate semings level. EATING WICOndE Eammes for common stott in tne fourtn Quarter @gte gn EgtgeWV of N Talt Status Of Dfyldends ance for equRy funds used totaled 533 9 menon.or 56 cents por snare.on m pygggcts CONS Dividends pad on born comrnon and preferred dunneconstruction . 19 834 15 M 76896 48 970 revenues of 5267.3 menon compared witn semings As you may rocas, m July 9N1 the CNo Supreme stock in 1982 are fully taxaele as dividend Income Otner income and deductions . (3.9471 2 311 (2 4815 10 566 or 52e 3 melm, or 58 cents per snare. on mvenues Court ruled tnat tne Company could not recover oncept for dividends wnich are reinvested througn Feders income taxes-credit . 5 879 4 22.254 16.176 of 5248 2 minton m last years fourth Quarter W Ngner eamings and rnenues ar'e pnnurty througn custornN rMel, as an opwMing expense, the amounts R nad toent on four nuc$sar generating the Devidend M..G,e,i Plan to the extent aHowed by tax regulations.

Mal nonopwadng hme 2tF66 2W'077 96.669 75,712 the msum of mtnc raw m The esins m construction protects wNcn were termmated m INCOt4E BEFORE INTEREST . 70.714 65.625 325.596 268.416 eersngs ow snare wm acNewn spRe of an W pwtant increm in m numOw M conmn mmt 1900. On January 10.1983, the Urdted States Supreme Court refusack for the second time, to revtew tnat fuling on procedural groundL 100er fall Act teendetes Talt Witrittolding On 00Wldends Y erm debtinet) . .

Snort-term bank loans. commercial 34.424 31.449 134.250 121.040

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$805Off MMBrtEF=M m tne proceedings for tne rate Increase granted Tne tan Eaulty and Fiscs nesponsterity Act of paper and otner 1.254 3.657 9.822 25.672

-KNowattnour sales to ultimate Customers declined 9 2 percent in the fourth Quarter and 70 tD the Cornpeny by the PUCD ofrecuve tsarcn 19. m2 1982, enne preservm0 the tau deferra tenefRs of hm for WM. 'M'M ' S,425) we 30 min asked tne PUCO to permit the Company to our Dividend L_si -,,e Plan, requires M durmg ConstrucDon S 42(3 (27 4a(3 (34.030B

• ercent for the year Tne declines wem cNeny due recover tne costs of the terminated unRs in rates as Company to begin w trinolding 10 percent of all feetInterestcharges . 27.2',8 116'.632 112.682 26.681 to a recession related decline in moustrts salet an operanno expense. Tne PUCO refused to do 50 dividends pad artw June 30.1983. The fWu checks pnmarty among our macnenery manufactunne and because of the ONo Supreme Court's ruim0 wnicn wiu De arfected by witrinolding are as foeows: NETINC0asE . 43.456 38.944 200.964 155.734 steel customers. eesidentim sales fell 3 4 percent for However, the PUCO. In determmine the fair rate Common stock August 15.1983 PREFEpilED AND PREFERENCE DIVIDEND 5. 9.H7 9 612 38.295 54 917 tne fourtn ourter and 0 9 percent for tne year- of return on common nock soumy. recognized the The large decune m the fourth guarter reflected added not mcurred by common stock owners as a Series A preferred stock September 1,1983 EARNINGS AVAILASLE FOR COnsaAON STOCK . ..$ 53 909 $ 29.352 $ 170 669 5 120.817 acnormany warm weather. Includme the warmest resultof disslowingrecowwyof tnecostof the sortes B preferred stoct July 1.1983 EANNINGS PER COldtf0N 5 HARE. based on Decemberof thecentury Also,thenumberof termmated units as an operatin0 expense. m its olvidentas remvested under the Olvidend weighted average outstanding snares . $ .56 5 .58 $ 3.01 $ 2 52 msidentiaf customes OKmed segnpy as noudng order. tne PUCO provided specinc revenues for g w,,,4 Plan are exempt from the witnnolding starts remained doomswd. Commucial sans wem recovery of tnene costs. Tne PUCO also autnortred prowlsionsof the1982 Act.However.snareowners WEIGHTED AVERACE COR8tsON SHARE $

virtuaRy unchanged for tne Quarter and the year- the Company to amorttre tnese costs over a period wno reinvest only a portion of their dividends or OUTSTAND #eG . 00.303,718 50.914.129 56.739.806 48.004.081 agam due to muder werner and a weak economV not to exceed 15 years. An oppone'it nas accealed wno participae m the plan only on an opnonal cash to the Omo supreme Court the PUCOs recognnton Dails are mJolect to the 10% wittinaldin0 on divends N EALANCE M December 31 5AL35 not reinvested uNess they are exempt for anotner (Unauditedi =2 mi of n tN.s add.ed rMk in rate of return. Tne Companypea d tne PuCtn

,eason. refois otnw to miow e.empoons r=-of meiude penNtted of omew 96 the coK of the t i Dividends paid to individuaN with a Federal tar agggg

-pen = Yn= .erminated urWts as an operaung em' fourth couren o mot u enos

,,o.n pessagendin0 n=eisa the Company plans to appeal tNs case to the United maomty of $600 or mss i$i*OOO on a m retumi for the prior ver.

UTtWTy PLANT . . . . . - . . . . . . . . . . . . . . . . . $4.010.532 $3.610.895 ended states supreme Court on Consttestwnal grounds m Less accumulated provision for depreciation . 679 890 621.555 eweer outer enood I- M

• ssa was ta e su s2 ta e sus' a connnumg effwt to estaDelsh M ngnt to recover NaDety as or Net utNity plant . . 5.550.642 2.989.542 Feder

ll":".  ;" -"

": '"".a"me iS2= a--- for = pn-v- o=v o= P-Em a=5=E=5 aNo ruND5 8t= = 07 .

enou.na, ..s .s ,. e2 .s e,f-etve nuai,nc, y 7. =une ease ., anted PuCo to tnetneCompany --=n =='v = a= =aulan=at n a agaln denied M mwn was FM N pmcW ym.

Cu.,,uS5m . . 353 . 8 m 9,2 otner se 79 sta 5e Company recovery of these costs in rates as an DEFEReED CHARCES . 76 990 77.414 ,

operating expense R4creover.Irl tNs rate order tne 3. DMdends paid to certain other entitles sucft as sages to PUCO did not provide specent revenues to recover corporations, tax-exempt organtrations, nominees 1btal . . $ 5.843.294 $ 5.406 075 tnN costs Dy incmasmg W ram of meum on or cuesant CAPITAMIATIDIt AIR UAEILffles Customers 5.sco - e2 18.ON - 70 common stock equRy to reflect tne added risk to

- 89 5 Snare owners who believe that their dividends sages to utunes te 77 1 in may Qualify for exemption from tne 10 percent CAplTALtzATION common stock owners as K nad done last R4arcit in Common stock equity . . . . . . . . $1.227.095 $t002.206 10tas 5 52e 10 s is tes - 77 geepmg witn GeneraNv accepted accounting prin- withnoldm0 requirement must file an exemption ciples, tne Company stopped amorttring the Costs certificate witn tne Campany prior to tne record Preferred and preference stocks of Ene terminated urists as of January 1.1983 date for tne dividend it is not necessary for you Witn mandatory redemption reautrements . . . . . 322.otr 325.000 PUt0 Crwits Este htcrosse to call or write us for the exemption certtMcate Wttnout mandatory redemption requirements . . 95.071 95.071 On January 5.1983. Tne Pucet UtlNttes Commission Tne unamortized cost of the termnated units Long term debt . 1.44t822 1328 404 at Decembe 5t 1982 net of taxes is $515 rNmon. forms. We will mall one to you in tearch. If you of CNo approved an $89 a memon,7 4 percent electric rate increase, effective January 7.1985. Tne or 51 cents per snare. The unamorttred cost of the nave enore than one account or own more tflan one 1otal capitallration . 5.085.988 2.7'io.681 UNts is being detened anne the Company continues class of securtles, you must provide are exemption 38t471 new rates are based on a 1260 percent return on rate CU.NT LIA81UTIES - $55.536 Dase and a 1755 percent return on common equRy its al* peal to estabitsn its regnt to recover tne certificate for eacti account-one certificate will Of tne increase approved, some $58 mmion termmated units costs as an operatin0 experMe. not apply to aR of your accounts. DEFfeeED CeEDITS mvestment tan credits and otner Federalincome tan credits . 309.414 236 481 Other 92 556 57 4_42, 1btal credits . . a0t770 275 925 Total $5 843 294 $3.406 075

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we urge you to consult a tas adwner if you nave to 42 percent common equity a maximum of 48 EIGCutive OfflCes Mall Address f percent oeot and 10 to 12 percent preferred and i any guestions aDout your etsgtDaty for esempoort illuminating Building Post Office 80x SOOO The tan saw a comples and provides penalties ist preference stock. 55 (=uDitC Square Cleveland Onlo44101 mose wno wrongly calm esempoon Cleveland. Onlo 44113 Phone: 216-622-9000 Yne croy exception to tne need to flie an Covernor Proposes Utility Excise Tax increase i

esemption certifrate relates to those snse owners 10ll-Free Telegnone m nn fwst stae of me stae w med Cans in j eno reinvest ad of Enew common stock GNedends as ins Quzteny eeview was gomg to press. orWo s

' tnrougn tne DNidend MZ.,--a Mart Those new Govemor RKnard F Celeste proposed an Cleveland Area 622 9800. Ext 2525 Onio CaH5 1-800-W2p

snae owners wm not De sent an exempUon certifl- inrrease m tne utusty escue tax wnKn would cost Outside Ohio 1 800-521-3206 a

Cate por are they required to file one witM the onto s utsties some sse memort The Governor sad m as y am enroNed m me Ran utmties should not pass the increase along to Please have YOur account numDer ready when f Customers Tnts means the tax increase would De Calling.

j pad Dv snare owners we we meep you meormed.

i Apru 2s oats for Annual meeting

Tne 198s annum menmg or snne owners we l

De held besday Apre 26 at 10 G) a m. In the 10tn-i floor Auditorium at The MecDee Company M down-i town Clevesand. Proxy material and (fie Comghanyt 1982 armua report am De mailed m Martfi to snare owners of record on FeDruary 25.1985 Please

~Y R # A The $CoreCard wistors for tne transport and monitoring of radio-

$ as in recent yess, we Increasmgly have seen actNe wastei we hope tnn action by Congress 1 The Company once agam em hold a senes of s R spMiaHntemt Aps ktanng pontKal we n@ dMpel me mym mat nucleM waste i local meetings with snare owners m our service area' The meennes provide a WWuaDie opporturut'y for and economic polKies wfWcn nave not Deen in GMposal is an unsolvaDie proDlem. Tne tecnnalogy M Sham Owtier.

I the Dest Interests of the energy industry or the in fxt. nal Deen known for years. Only govern-American putsc. we recognize the growmg need enental Ktion, riow taken. was reQured to solve Our Company ended the year 1982 with a Comparatively soild earnings performance

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to - me - ma Companv and a m-e me p- of p=K= -d = mustaace C=sid-ma tne amCuit ===uC Cadians =Ch Catmued emth ioC=iv and nation =

{ wi 0 , ovide mo,mgs,o,maten e ,n m so,e owne,,In owners naam m implernentation. Earnings were at a record hign for a Calendar year but down slightly from the 12 the Cleveland area m the next montn or so we e . Mn@ W, mWng an upwam Wend N began specia Called ir our isan efuch has not yet in June 1981, was due Chiefty to a recession-related drop in industrial sales.

Financings talsed $434 Million in 1982 Quar:erty Reviews. Here. we nave told you aDout mantain that mucn more needs to De sesned The sale of $100 melon of 3(Fyear first mortgage the important issues confrontmg us and recom- aDout the causes and effects of tna pnenomenon A nte increase needed to maintain adequate earnings was received early in January Donds m late NovemDer Drougnt the tota amoung mended the Course of action we Deileve Dest for Defore properly tX9eted correctNe measures when The Pubilt utilities Commission of Ohio approved an $89 4 million,7.4 percent increase of equity and oect financing m 1982 to $436 maiort snare owners. customers arad our servKe area Can De taken The Feoeral government, operatmg M eWIN NM WWE 6 WM mWaW W inMst rates dechning we believe The Donds, wfWch nave an mterest rate of 12-5/4 we we pleased that many of you have made your from a similw view. nas provided funds for views known to your elected representatswes. extensNe researcn into the xid rain pnenomenon. that by Continuing to exercise tight Cost Controls we can maintain an adequate level Of percent, were effered to the puDisc to yield 12 80 earTilngs with RO additlOnalInCrease Iri rates unt51984 at the earliest.

percent. The effectme anterest cost to the Company Trin e the fourtn Quarterly Review to Carry pievertneless, some specialinterest groups

' was 12 92 percent. Proceeds from me sale were used ViewpcInt. Slow s an appropriate time to review Continue to CaN for immediate action, with mid- We are also OptimistlC regarding economic recovery for Oeveland Northeast Ohl0 to pay $20 metan of fust mortgage Donds wnicn wnat nappened on the issues afscussed last yew western electrK utstles as tne primary target.

and the nation. As we reported to the New Ybrit 50Clety of Security Analysts in December, matured on DecemDer 1.1982, to pay a portion of prior to last NovemDers election, Viewpoint Tnese groups are demanding tnat Dmions of apressed opposmon to state issue s. a proposa donns De spent now for comunon Contros devices many oeveland area factories are modern and are expected to participate fuiry in the tne Company s construction-reiated snort-term i Geot and for otner corporate purposes. to elect The Public Utlittles Commissaan of Ofwo. at coal fred generating plantiins added national eCOnOmlC rec 0very.

m NovemDer 1982, we agreed to sen 30 yes Tnat proposal was defeated by an owenemelmmg financial Duroen would have a senous impact on DetMled MformatlOn M GMngs, Mlowh HM the W WM W 0ther

{ notes penodically over the next two years in waymg two-to-one margin tnanks to a successful effort Dotn Ene Company's earnmos and on customer I to Inform voters of the negatNo impKt of such electrK DME We too. Want a clean environment. subject $ Of litterest may be found in the followlfig seCtl0ns Of this Quarterty Rev6ew You may amounts of $2-$s maleon to a maior financial a move Tnat effort attrxted many volunteers we we do our part to control Kid raan But we De esDOClally interested in the explanatlOn Of new tax laws affectirig divide 1ds and the 1 msnturion for inclusion m its puDHcty-offered Dond Detleve the trst step is to complete the reseKCn funds we issued $60 meinon of tirst mortgage Donds from among our snse owners. announcement Of Our anrlual meeting of shMe Owflers. I hope to see many Of you there-

. as coNJterm for these notes Under the agreement, Ariotner i _ _ discussed the nucleM waste needed to determine wnat rneasures win really we can seu a total of up to 560 melon of notes Dy legislation under review Dy the U $ Congrest produce tne dested results. Sincerely, NcwemDer 1984 Tfus new agreement replaces a snare owners were asked to join tnose Cmung for viewpoint w A Continue to keep you informed unas one wnica expired et Acre 1982. The advantage passage of tnis measure so important to the on the status of acid rain proposan and other of the program 5 att flexsD# tty We Can average our continuing development of nuclew energy Late issues of concern we urge you to Continue '

mterest Costs over a period of time or decline to seg last yen Congress enxted the legislaDon. The mating your views known to your elected repre. . .

the notes when interest rates are extremefy higit nation now has a timetaOle for the selection arid sentatives 1Du. too. Can De an influerlC.1Du testing of a Federalwaste repository and pro- have a rignt to De neFQ.

!' Last year, we raised $10 9 mmion tns way.

Rooert u. cann

we apect to we $ioO meion or first mortgage 1 f onds m tne fwst naf of 1983 we also may fmance - - - - - - --- -

President

] pollut91 Control fKihtles and set additaanal pre-

! ferred stoca dunng tne year we we rane additions

common eoulty enrougn me snse Owner DNidend

• Reinvestment pian and our empiovee stock purctuse f plans. For tne ftrit time since 1974 we fiave no plans t for a puDac common stom orfenng

. Tnew fmannngi ne coniscent wim our oDiectN.

i to attan a Daianced Capitanzauon structure of so February 3.1985 i

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