-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, tMn1oHntwliHh0l06KlEixsuUk5F4Jcii0GjJuHfWAGumbcqbbieWKhc9Lp9w8EU DeRxrfm4t3LWTLB1VwUP3Q== 0000073960-94-000007.txt : 19940808 0000073960-94-000007.hdr.sgml : 19940808 ACCESSION NUMBER: 0000073960-94-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO EDISON CO CENTRAL INDEX KEY: 0000073960 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 340437786 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02578 FILM NUMBER: 94542002 BUSINESS ADDRESS: STREET 1: 76 S MAIN ST CITY: AKRON STATE: OH ZIP: 44308 BUSINESS PHONE: 2163845100 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------- ----------- Commission File Number 1-2578 OHIO EDISON COMPANY (Exact name of Registrant as specified in its charter) Ohio 34-0437786 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 76 South Main Street, Akron, Ohio 44308 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 216-384-5100 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 152,569,437 shares of common stock, $9 par value, outstanding as of August 5, 1994 OHIO EDISON COMPANY TABLE OF CONTENTS Pages Part I. Financial Information Consolidated Statements of Income . . . . . . . . . . . . . . . 1 Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . 2-3 Consolidated Statements of Cash Flows . . . . . . . . . . . . . 4 Notes to Consolidated Financial Statements. . . . . . . . . . . 5-6 Report of Independent Public Accountants. . . . . . . . . . . . 7 Management's Discussion and Analysis of Results of Operations and Financial Condition . . . . . . . . . . . . . . . . . . . . . . 8-9 Part II.Other Information PART I. FINANCIAL INFORMATION OHIO EDISON COMPANY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ------------------- --------------------- 1994 1993 1994 1993 -------- -------- ---------- ---------- (In thousands, except per share amounts) OPERATING REVENUES $585,428 $563,349 $1,186,676 $1,156,563 -------- -------- ---------- ---------- OPERATING EXPENSES AND TAXES: Fuel and purchased power 107,068 102,227 231,627 219,248 Nuclear operating costs 74,413 66,982 155,554 143,086 Other operating costs 115,244 104,251 222,474 213,095 -------- -------- ---------- ---------- Total operation and maintenance expenses 296,725 273,460 609,655 575,429 Provision for depreciation 52,314 52,567 106,339 110,096 Deferral of net regulatory assets (4,163) (2,033) (5,970) (6,079) General taxes 57,927 57,332 119,106 122,440 Income taxes 44,550 44,028 87,073 85,187 -------- -------- ---------- ---------- Total operating expenses and taxes 447,353 425,354 916,203 887,073 -------- -------- ---------- ---------- OPERATING INCOME 138,075 137,995 270,473 269,490 OTHER INCOME 3,534 4,988 5,789 9,004 -------- -------- ---------- ---------- TOTAL INCOME 141,609 142,983 276,262 278,494 -------- -------- ---------- ---------- NET INTEREST AND OTHER CHARGES: Interest on long-term debt 65,358 65,898 130,129 132,358 Deferred nuclear unit interest (2,129) (2,098) (4,259) (4,196) Allowance for borrowed funds used during construction and capitalized interest (1,382) (1,156) (2,572) (2,583) Other interest expense 4,041 4,260 7,957 8,077 Subsidiary's preferred stock dividend requirements 1,681 1,534 3,037 3,069 -------- -------- ---------- ---------- Net interest and other charges 67,569 68,438 134,292 136,725 -------- -------- ---------- ---------- INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING 74,040 74,545 141,970 141,769 Cumulative effect to January 1, 1993 of a change in accounting for unbilled revenues (net of income taxes of $33,632,000) - - - 58,201 -------- -------- ---------- ---------- NET INCOME 74,040 74,545 141,970 199,970 PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS 5,359 6,235 10,960 12,140 -------- -------- ---------- ---------- EARNINGS ON COMMON STOCK $ 68,681 $ 68,310 $ 131,010 $ 187,830 ======== ======== ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 143,161 152,569 143,097 152,569 ======== ======== ========== ========== EARNINGS PER SHARE OF COMMON STOCK: Before cumulative effect of a change in accounting $ .48 $ .45 $ .92 $ .85 Cumulative effect to January 1, 1993 of a change in accounting for unbilled revenues - - - .38 ----- ----- ----- ----- EARNINGS PER SHARE OF COMMON STOCK $ .48 $ .45 $ .92 $l.23 ===== ===== ===== ===== DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $.375 $.375 $ .75 $ .75 ===== ===== ===== ===== The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
-1- OHIO EDISON COMPANY CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31, 1994 1993 ---------- ------------ (In thousands) ASSETS UTILITY PLANT: In service, at original cost. . . . . . . . . . $8,419,413 $8,380,430 Less--Accumulated provision for depreciation. . . . . . . . . . . . . . . . . 2,837,884 2,732,527 ---------- ---------- 5,581,529 5,647,903 ---------- ---------- Construction work in progress- Electric plant. . . . . . . . . . . . . . . . 240,196 182,894 Nuclear fuel. . . . . . . . . . . . . . . . . 59,754 46,879 ---------- ---------- 299,950 229,773 ---------- ---------- 5,881,479 5,877,676 ---------- ---------- OTHER PROPERTY AND INVESTMENTS: Letter of credit collateralization. . . . . . . 200,000 -- Other . . . . . . . . . . . . . . . . . . . . . 164,996 181,815 ---------- ---------- 364,996 181,815 ---------- ---------- CURRENT ASSETS: Cash and cash equivalents . . . . . . . . . . . 48,151 159,690 Receivables- Customers (less accumulated provisions of $5,803,000 and $6,907,000, respectively, for uncollectible accounts). . . . . . . . . 298,524 298,913 Other . . . . . . . . . . . . . . . . . . . . 39,156 42,428 Materials and supplies, at average cost- Fuel. . . . . . . . . . . . . . . . . . . . . 39,587 41,513 Other . . . . . . . . . . . . . . . . . . . . 87,044 87,689 Prepayments . . . . . . . . . . . . . . . . . . 88,059 72,889 ---------- ---------- 600,521 703,122 ---------- ---------- DEFERRED CHARGES: Regulatory assets . . . . . . . . . . . . . . . 1,992,698 1,993,795 Unamortized sale and leaseback costs. . . . . . 108,136 110,656 Other . . . . . . . . . . . . . . . . . . . . . 42,802 51,203 ---------- ---------- 2,143,636 2,155,654 ---------- ---------- $8,990,632 $8,918,267 ========== ========== -2-
OHIO EDISON COMPANY
CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 1994 1993 ----------- ------------ (In thousands) CAPITALIZATION AND LIABILITIES CAPITALIZATION: Common stockholders' equity- Common stock, $9 par value, authorized 175,000,000 shares- 152,569,437 shares outstanding $1,373,125 $1,373,125 Other paid-in capital 727,061 727,865 Retained earnings 346,300 322,821 Unallocated employee stock ownership plan common stock - 9,354,125 and 9,608,739 shares, respectively (175,596) (180,519) ---------- ---------- Total common stockholders' equity 2,270,890 2,243,292 Preferred stock- Not subject to mandatory redemption 277,335 277,335 Subject to mandatory redemption 25,000 25,000 Preferred stock of consolidated subsidiary- Not subject to mandatory redemption 50,905 50,905 Subject to mandatory redemption 15,000 20,500 Long-term debt 3,238,882 3,039,263 ---------- ---------- 5,878,012 5,656,295 ---------- ---------- CURRENT LIABILITIES: Currently payable preferred stock and long-term debt 295,698 444,170 Short-term borrowings 92,903 104,126 Accounts payable 150,973 127,895 Accrued taxes 89,210 107,687 Accrued interest 69,622 72,667 Other 129,000 141,251 ---------- ---------- 827,406 997,796 ---------- ---------- DEFERRED CREDITS: Accumulated deferred income taxes 1,803,843 1,798,551 Accumulated deferred investment tax credits 227,845 231,863 Property taxes 101,452 101,182 Other 152,074 132,580 ---------- ---------- 2,285,214 2,264,176 ---------- ---------- COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 2) ---------- ---------- $8,990,632 $8,918,267 ========== ========== The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets.
-3- OHIO EDISON COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ------------------ ----------------- 1994 1993 1994 1993 -------- -------- -------- -------- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income. . . . . . . . . . . . . . . . . . . . $ 74,040 $ 74,545 $141,970 $199,970 Adjustments to reconcile net income to net cash from operating activities- Provision for depreciation . . . . . . . . . . 52,314 52,567 106,339 110,096 Nuclear fuel and lease amortization. . . . . . 11,861 11,721 32,188 27,429 Deferred income taxes, net . . . . . . . . . . 6,152 25,240 15,190 31,647 Investment tax credits, net. . . . . . . . . . (2,009) (2,182) (4,018) (4,366) Allowance for equity funds used during construction . . . . . . . . . . . . . . . . (1,560) (938) (3,066) (2,354) Deferred fuel costs, net . . . . . . . . . . . (1,889) (3,812) 318 (9,377) Cumulative effect of a change in accounting for unbilled revenues. . . . . . . . . . . . - - - (58,201) Other amortization, net. . . . . . . . . . . . (132) 1,030 (238) (1,108) -------- -------- -------- -------- Internal cash before dividends . . . . . . . 138,777 158,171 288,683 293,736 Receivables. . . . . . . . . . . . . . . . . . . (15,530) (1,901) 3,661 28,117 Materials and supplies . . . . . . . . . . . . . (6,540) (4,411) 2,571 (640) Accounts payable . . . . . . . . . . . . . . . . 38,380 33,519 34,482 37,700 Other. . . . . . . . . . . . . . . . . . . . . . (46,860) (105,160) 760 (81,386) -------- -------- -------- -------- Net cash provided from operating activities. 108,227 80,218 330,157 277,527 -------- -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: New Financing- Preferred stock. . . . . . . . . . . . . . . . . - 96,670 - 96,670 Long-term debt . . . . . . . . . . . . . . . . . 191,711 305,317 231,797 332,299 Short-term borrowings, net . . . . . . . . . . . - 99,690 - 90,423 Redemptions and Repayments- Preferred and preference stock . . . . . . . . . - 93,532 50,362 94,332 Long-term debt . . . . . . . . . . . . . . . . . 43,039 391,056 139,474 457,434 Short-term borrowings, net . . . . . . . . . . . 9,248 - 11,223 - Dividend Payments- Common stock . . . . . . . . . . . . . . . . . . 56,005 57,429 108,417 110,654 Preferred and preference stock . . . . . . . . . 5,331 3,996 11,145 9,784 -------- -------- -------- -------- Net cash provided from (used for) financing activities. . . . . . . . . . . 78,088 (44,336) (88,824)(152,812) -------- -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property additions . . . . . . . . . . . . . . 80,050 54,099 145,370 115,102 Letter of credit collateralization deposit . . 200,000 - 200,000 - Sale and leaseback restructuring fees. . . . . - 369 - 10,326 Other. . . . . . . . . . . . . . . . . . . . . 3,875 3,987 7,502 1,971 -------- -------- -------- -------- Net cash used for investing activities . . 283,925 58,455 352,872 127,399 -------- -------- -------- -------- Net decrease in cash and cash equivalents . . . 97,610 22,573 111,539 2,684 Cash and cash equivalents at beginning of period 145,761 34,101 159,690 14,212 -------- -------- -------- -------- Cash and cash equivalents at end of period. . . $ 48,151 $ 11,528 $ 48,151 $ 11,528 ======== ======== ======== ======== The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
-4- OHIO EDISON COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1 - FINANCIAL STATEMENTS: The condensed consolidated financial statements reflect all normal recurring adjustments which are, in the opinion of management, necessary to fairly present results of operations for the interim periods. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in Ohio Edison Company's (Company) 1993 Annual Report to Stockholders. The results of operations are not intended to represent results of operations for any future period. 2 - COMMITMENTS, GUARANTEES AND CONTINGENCIES: Construction Program -- The Company and its wholly owned subsidiary, Pennsylvania Power Company (Companies), currently forecast expenditures of approximately $1,000,000,000 for property additions and improvements from 1994-1998, of which approximately $235,000,000 is applicable to 1994. The Companies' nuclear fuel investments are expected to be approximately $204,000,000 during the 1994-1998 period, of which approximately $45,000,000 is applicable to 1994. Guarantees -- The Companies, together with the other Central Area Power Coordination Group companies, have each severally guaranteed certain debt and lease obligations in connection with a coal supply contract for the Bruce Mansfield Plant. As of June 30, 1994, the Companies' share of the guarantees were $89,036,000. The price under the coal supply contract, which includes certain minimum payments, has been determined to be sufficient to satisfy the debt and lease obligations. Environmental Matters -- Various federal, state and local authorities regulate the Companies with regard to air and water quality and other environmental matters. The Companies have estimated additional capital expenditures for environmental compliance of approximately $175,000,000, which is included in the construction forecast under "Construction Program" for 1994 through 1998. The Clean Air Act Amendments of 1990 require significant reductions of sulfur dioxide (SO2) and oxides of nitrogen from the Companies' coal-fired generating units by 1995 and additional emission reductions by 2000. Compliance options include, but are not limited to, installing additional pollution control equipment, burning less polluting fuel, purchasing emission allowances from others, operating existing facilities in a manner which minimizes pollution and retiring facilities. In compliance plans submitted to the Public Utilities Commission of Ohio and to the Environmental Protection Agency (EPA), the Company stated that reductions for the years 1995 through 1999 are likely to be achieved by burning lower sulfur fuel, generating more electricity at its lower emitting plants and/or purchasing emission allowances. The Company continues to evaluate its compliance plans and other compliance options as they arise. Plans for complying with the year 2000 reductions are less certain at this time. -5- OHIO EDISON COMPANY NOTES - (Continued) The Companies are presently required to meet federally approved SO2 regulations, and the violations of such regulations can result in injunctive relief, including shutdown of the generating unit involved, and/or civil or criminal penalties of up to $25,000 per day of violation. The EPA has an interim enforcement policy for the SO2 regulations in Ohio which allows for compliance with the regulations based on a 30-day averaging period. The EPA has proposed regulations which could cause changes in the interim enforcement policy, including revisions of the method of determining compliance with emission limits. The Companies cannot predict what action the EPA may take in the future with respect to the proposed regulations or the interim enforcement policy. The Pennsylvania Department of Environmental Resources has issued regulations dealing with the storage, treatment, transportation and disposal of residual waste such as coal ash and scrubber sludge. These regulations impose additional requirements relating to permitting, ground water monitoring, leachate collection systems, closure, liability insurance and operating matters. The Companies are developing and analyzing various compliance options and are presently unable to determine the ultimate increase in capital and operating costs at existing sites. Legislative and administrative action and the effect of court decisions can be expected in the future (as they have in the past) to change the way that the Companies must operate in order to comply with environmental laws and regulations. With respect to any such changes and to the environmental matters described above, the Companies expect that any resulting additional capital costs which may be required, as well as any required increase in operating costs, would ultimately be recovered from their customers. -6- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Ohio Edison Company: We have reviewed the accompanying consolidated balance sheet of Ohio Edison Company (an Ohio corporation) and subsidiaries as of June 30, 1994, and the related consolidated statements of income and cash flows for the three- month and six-month periods ended June 30, 1994 and 1993. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet and consolidated statement of capitalization of Ohio Edison Company and subsidiaries as of December 31, 1993, and the related consolidated statements of income, retained earnings, capital stock and other paid-in capital, cash flows and taxes for the year then ended (not presented separately herein). In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1993 is fairly stated in all material respects in relation to the balance sheet from which it has been derived. ARTHUR ANDERSEN & CO. Cleveland, Ohio, August 5, 1994 -7- OHIO EDISON COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Earnings on common stock increased to $.48 per share in the second quarter of 1994 from $.45 per share during the second quarter of 1993. For the six month period ended June 30, 1994, earnings increased to $.92 per share from $.85 per share in 1993, excluding the cumulative effect in 1993 of a change in accounting for unbilled revenues. During the first half of 1994, operating revenues increased $30,100,000 compared with the same period in 1993 as a result of record retail sales for any first-half period in the Company's history. Residential and commercial sales increased 5.1% and 4.3%, respectively, due to increased weather-related demand and to an increasing customer base. Sales to industrial customers increased 2.3% during the period. Total kilowatt-hour sales were down 2.1% in the first six months of 1994 due to a 21.5% decrease in sales to other utilities. Increased demand in the retail sector and capacity constraints limited the Companies' opportunities to sell power off system. During the three months ended June 30, 1994, retail kilowatt-hour sales increased 3.2% over the same period last year. Residential and commercial sales were up 5.0% and 4.9%, respectively, while industrial sales increased 1.0%. The comparative increase in industrial sales is somewhat distorted due to reduced production (until mid-1995) by a major steel producer in the Company's service area to modernize its facilities. Sales to all other industrial customers were up 5.9% in the second quarter of 1994 compared to the second quarter of 1993, reflecting strong economic activity in the Companies' service area. The increase in retail kilowatt-hour sales was offset by a 14.4% decrease in sales to other utilities, which caused total kilowatt-hour sales to be relatively flat for the quarter compared to the second quarter of 1993. Fuel and purchased power costs increased in the first half of 1994 compared with 1993 as a result of greater reliance on purchased power due to scheduled generating unit maintenance outages in 1994 combined with a prolonged refueling outage at the Perry Plant. In conjunction with the refueling outage, the company operating the Perry Plant has been undertaking significant corrective maintenance work designed to improve the unit's performance. Activities relating to this outage were essentially complete by the end of July 1994. As a result of this outage, the Companies' nuclear operating costs increased in the second quarter and year to date periods of 1994 as compared to the corresponding periods of 1993. Other operating costs increased in the second quarter of 1994 compared to 1993 primarily due to a $9,600,000 charge by Penn Power relating to a voluntary early retirement program offered to qualifying employees. The decrease in other income during the first six months of 1994 reflects the change in accounting for interest income from the Employee Stock Ownership Plan Trust due to the adoption of The American Institute of Certified Public Accountants Statement of Position 93-6 effective January 1, 1994. The effect of this accounting change on other income was partially offset by increased income from other investments. -8- OHIO EDISON COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION - (Continued) Capital Resources and Liquidity The Companies have continuing cash requirements for planned capital expenditures and debt maturities. During the second half of 1994, capital requirements for property additions and capital leases are expected to be approximately $141,000,000, including $32,000,000 for nuclear fuel. Cash requirements for maturing long-term debt are approximately $207,000,000 for the remainder of 1994. As of June 30, 1994, the Companies had approximately $48,000,000 of cash and temporary investments and $93,000,000 of short-term indebtedness. Funds are also available to the Company through $102,000,000 of unused OES Fuel credit lines. In addition, the Companies have $55,000,000 of unused short-term bank lines of credit and $102,000,000 of bank facilities which provide for borrowings on a short-term basis at the banks' discretion. OES Capital had approximately $27,000,000 of unused short-term borrowing capability at June 30, 1994. During the second quarter of 1994, the Company issued $200,000,000 of secured trust notes. Also during the second quarter, the Company invested $200,000,000 which is designed to collateralize certain letters of credit (LOC) related to the Beaver Valley Unit 2 sale and leaseback transaction. This arrangement will reduce the Company's overall costs associated with the LOCs and will permit the LOCs to have a term substantially longer than what would otherwise be possible. The Company also optionally redeemed $27,600,000 of first mortgage bonds during the second quarter and, early in the third quarter of 1994, optionally redeemed $31,400,000 of first mortgage bonds; Penn Power redeemed $6,000,000 of preferred stock in July 1994. The Companies' performance initiatives activities are continuing and opportunities for improvement and savings are being identified. As a result, certain projects and activities have been eliminated and other process improvements and revenue opportunities are being pursued. In conjunction with this program, the Companies announced, in May 1994, the offering of a voluntary early retirement program to 423 eligible employees, with 394 employees accepting the offer. In addition, Penn Power offered a similar program to 54 eligible members of Utility Workers Union of America Local 140. Those employees have until August 22, 1994 to accept the offer. Costs associated with these early retirement programs have been reflected on the consolidated financial statements through June 30, 1994. On July 22, 1994, the Company notified members of the Utility Workers Union of America and the International Brotherhood of Electrical Workers that it would lay off 236 employees. These work force reductions are a result of the elimination of various capital projects and improvements in the Company's maintenance procedures in connection with the performance initiatives discussed above. The Company and the bargaining units failed to reach an agreement on work practice changes proposed in conjunction with a voluntary early retirement program which would have been available to 172 eligible employees. The unions have filed suit in federal court seeking to prevent the Company from laying off the workers and ordering the Company to extend the terms of the program provided to nonunion employees to union employees as well. -9- PART II. OTHER INFORMATION - --------------------------- Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- (a) The annual meeting of stockholders was held on April 28, 1994. (b) At this meeting the following persons were elected to the Company's Board of Directors: Number of Votes --------------------------------------------- Against or Broker For Withheld Abstentions Non-Votes ----------- ---------- ----------- --------- D. C. Blasius 117,942,910 3,396,067 0 0 H. P. Burg 118,081,866 3,257,111 0 0 R. H. Carlson 117,858,704 3,480,274 0 0 R. M. Carter 117,257,852 4,078,549 0 0 C. A. Cartwright 117,453,835 3,886,006 0 0 W. R. Holland 117,897,346 3,441,632 0 0 R. L. Loughhead 117,889,695 3,449,282 0 0 G. H. Meadows 117,953,315 3,385,662 0 0 P. J. Powers 117,826,058 3,587,332 0 0 C. W. Rainger 118,089,606 3,249,371 0 0 G. M. Smart 118,071,529 3,267,449 0 0 J. T. Williams, Sr. 117,788,654 3,550,324 0 0 (c) At this meeting the appointment of Arthur Andersen & Co., independent public accountants as auditors for the year 1994 was ratified: Number of Votes --------------------------------------------- Against or Broker For Withheld Abstentions Non-Votes ----------- ---------- ----------- --------- 117,980,206 1,540,864 1,823,965 0 (d) At this meeting a shareholder proposal not to count unmarked proxy cards for any issue placed before stockholders was rejected: Number of Votes ----------------------------------------------- Against or Broker For Withheld Abstentions Non-Votes ------------ ---------- ----------- ---------- 27,819,406 70,605,420 6,484,785 16,435,425 Item 6.Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits Exhibit Number ------- 15 Letter from independent public accountants. Item 6. Exhibits and Reports on Form 8-K (Cont'd) -------------------------------- Pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K, the Company has not filed as an exhibit to this Form 10-Q any instrument with respect to long-term debt if the total amount of securities authorized thereunder does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis, but hereby agrees to furnish to the Commission on request any such documents. (b) Reports on Form 8-K None SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. August 5, 1994 OHIO EDISON COMPANY ------------------- Registrant /s/ H. P. Burg ------------------------- H. P. Burg Senior Vice President and Chief Financial Officer EX-15 2 EXHIBIT 15 Ohio Edison Company 76 South Main Street Akron, Ohio 44308 Gentlemen: We are aware that Ohio Edison Company has incorporated by reference in previously filed Registration Statements No. 33-49135, No. 33-49259, No. 33- 49413 and 33-51139, the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, which includes our report dated August 5, 1994, covering the unaudited interim consolidated financial statements contained therein. Pursuant to Rule 436(c) of Regulation C of the Securities Act of 1933, such report is not considered a part of the Registration Statements prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. Very truly yours, ARTHUR ANDERSEN & CO. Cleveland, Ohio, August 5, 1994 -----END PRIVACY-ENHANCED MESSAGE-----