-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RdETZFXouFRvmEPajY1T4Oy+DHqIiosOEsHKtCOMVVjau+vto8IZn7zcQs/NlaeB +ibn/Kz/iprh7mdz4RiIbQ== 0001031296-05-000277.txt : 20051024 0001031296-05-000277.hdr.sgml : 20051024 20051024170353 ACCESSION NUMBER: 0001031296-05-000277 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20051024 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051024 DATE AS OF CHANGE: 20051024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLEVELAND ELECTRIC ILLUMINATING CO CENTRAL INDEX KEY: 0000020947 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 340150020 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02323 FILM NUMBER: 051152627 BUSINESS ADDRESS: STREET 1: 76 SOUTH MAIN STREET STREET 2: C/O FIRSTENERGY CORP CITY: AKRON STATE: OH ZIP: 44308 BUSINESS PHONE: 2166229800 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO EDISON CO CENTRAL INDEX KEY: 0000073960 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 340437786 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02578 FILM NUMBER: 051152628 BUSINESS ADDRESS: STREET 1: 76 S MAIN ST CITY: AKRON STATE: OH ZIP: 44308 BUSINESS PHONE: 2163845100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENNSYLVANIA POWER CO CENTRAL INDEX KEY: 0000077278 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 250718810 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03491 FILM NUMBER: 051152625 BUSINESS ADDRESS: STREET 1: 1 E WASHINGTON ST STREET 2: P O BOX 891 CITY: NEW CASTLE STATE: PA ZIP: 16103-0891 BUSINESS PHONE: 4126525531 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOLEDO EDISON CO CENTRAL INDEX KEY: 0000352049 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 344375005 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03583 FILM NUMBER: 051152626 BUSINESS ADDRESS: STREET 1: 76 SOUTH MAIN STREET CITY: AKRON STATE: OH ZIP: 43308 BUSINESS PHONE: 2166229800 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTENERGY CORP CENTRAL INDEX KEY: 0001031296 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 341843785 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-21011 FILM NUMBER: 051152629 BUSINESS ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308-1890 BUSINESS PHONE: 3303845100 MAIL ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308-1890 8-K 1 main8_k.htm FORM 8-K ASSET TRANSFER Form 8K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) October 24, 2005

Commission
Registrant; State of Incorporation;
I.R.S. Employer
File Number
Address; and Telephone Number
Identification No.
     
333-21011
FIRSTENERGY CORP.
34-1843785
 
(An Ohio Corporation)
  
 
76 South Main Street
  
 
Akron, OH 44308
  
 
Telephone (800)736-3402
  
     
1-2578
OHIO EDISON COMPANY
34-0437786
 
(An Ohio Corporation)
  
 
c/o FirstEnergy Corp.
  
 
76 South Main Street
  
 
Akron, OH 44308
  
 
Telephone (800)736-3402
  
     
1-2323
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
34-0150020
 
(An Ohio Corporation)
  
 
c/o FirstEnergy Corp.
  
 
76 South Main Street
  
 
Akron, OH 44308
  
 
Telephone (800)736-3402
  
     
1-3583
THE TOLEDO EDISON COMPANY
34-4375005
 
(An Ohio Corporation)
  
 
c/o FirstEnergy Corp.
  
 
76 South Main Street
  
 
Akron, OH 44308
  
 
Telephone (800)736-3402
  
     
1-3491
PENNSYLVANIA POWER COMPANY
25-0718810
 
(A Pennsylvania Corporation)
  
 
c/o FirstEnergy Corp.
  
 
76 South Main Street
  
 
Akron, OH 44308
  
 
Telephone (800)736-3402
  

 


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
 
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.01 Completion of Acquisition or Disposition of Assets

On October 24, 2005, Ohio Edison Company (OE), The Cleveland Electric Illuminating Company (CEI), The Toledo Edison Company (TE) and Pennsylvania Power Company (Penn, and together with OE, CEI and TE, the Utility Subsidiaries), certain operating utility subsidiaries of FirstEnergy Corp., completed an intra-system transfer of fossil and hydroelectric (non-nuclear) generation assets to FirstEnergy Generation Corp. (FGCO). The asset transfers were consummated pursuant to the separate Purchase and Sale Agreements (Fossil PSAs) entered into with FGCO on May 13, 2005, in the case of Penn, and on May 18, 2005, in the case of OE, CEI and TE, as previously disclosed on Form 8-K filed with the Securities and Exchange Commission on May 19, 2005 (May Form 8-K).

FGCO is a wholly owned subsidiary of FirstEnergy Solutions Corp. (FES). FES, a wholly owned subsidiary of FirstEnergy, provides energy-related products and services, and through FGCO, operates FirstEnergy's non-nuclear generating facilities. Prior to the asset transfer, FGCO leased the non-nuclear plants from the Utility Subsidiaries under a Master Facility Lease, dated as of January 1, 2001 (Master Lease).

Pursuant to FGCO's purchase option under the Master Lease, FGCO purchased each Utility Subsidiary's interest in currently operating non-nuclear generating units at the per unit prices specified in the Master Lease for an aggregate purchase price of approximately $1.6 billion (OE - $980 million; CEI - $389 million; TE - $88 million; Penn - $125 million). In accordance with the Fossil PSAs, FGCO also assumed certain assets and liabilities relating to the purchased units. The Fossil PSAs do not transfer the respective leasehold interests of CEI and TE in certain units under existing sale and leaseback arrangements. As consideration, FGCO delivered to each Utility Subsidiary a promissory note that is secured by a lien on the units purchased, bears interest at a rate per annum based on the weighted cost of long-term debt of such Utility Subsidiary (OE - 3.98%; CEI - 5.99%; TE - 4.38%; Penn 5.39%) and matures twenty years after the date of issuance. FGCO may pre-pay a portion of each promissory note through the refunding from time to time of outstanding pollution control debt of the applicable Utility Subsidiary. The timing of any refunding will be subject to market conditions and other factors.

Item 7.01 Regulation FD Disclosure

The disclosure in this document regarding the intra-system transfers of nuclear and non-nuclear generation assets with respect to FirstEnergy Corp. is being furnished hereunder.

Item 8.01 Other Events

Consummation of the agreements to transfer FirstEnergy's nuclear generation assets from the Utility Subsidiaries to FirstEnergy Nuclear Generation Corp. (NGC), as previously disclosed in the May Form 8-K remains subject to significant regulatory approvals. FirstEnergy currently anticipates completion of the intra-system transfer of nuclear generation assets at book value by the end of 2005; therefore, those transactions are also included in the pro forma financial statements.

Item 9.01 Financial Statements and Exhibits

(b) Pro forma financial information

The following unaudited financial statements reflect the pro forma impact on each Utility Subsidiary of the completed and probable intra-system generation asset transfers, discussed in Items 2.01, 7.01 and 8.01 above. The unaudited Pro Forma Consolidated Balance Sheets as of June 30, 2005 depict the impact of the asset transfers as if the transactions had occurred on June 30, 2005. The unaudited Pro Forma Consolidated Statements of Income for the six month period ended June 30, 2005 and for the year ended December 31, 2004 depict the pro forma impact of the asset transfers as if the transactions had occurred on January 1, 2004. The pro forma financial statements have been prepared for comparative purposes only and do not purport to be indicative of future results of operations or financial condition.


 
2


Combined Explanatory Notes for the Pro Forma Consolidated Statements of Income

a.
The elimination of operating revenues from the lease rental of non-nuclear generation assets to FGCO.
b.
The elimination of depreciation expense on non-nuclear generation assets.
c.
The elimination of property tax expense on non-nuclear generation assets.
d.
The addition of interest income on the new associated company note receivable from FGCO for the transfer of non-nuclear generation net assets.
e.
The elimination of wholesale revenues from the sale of nuclear generation to FES.
f.
The elimination of fuel expense related to nuclear generation assets.
g.
The elimination of operating costs related to nuclear generation assets.
h.
The elimination of depreciation expense and asset retirement obligation accretion related to nuclear generation assets.
i.
The elimination of property tax expense on nuclear generation assets.
j.
The elimination of earnings on nuclear decommissioning trusts.
k.
The addition of interest income on the new associated company note receivable from NGC for the transfer of nuclear generation assets.
l.
The elimination of interest expense on pollution control revenue bonds to be transferred with the disposition of nuclear generation assets.
m.
The elimination of the allowance for borrowed funds used during construction on nuclear capital expenditures.
n.
The reduction of interest expense on associated company money pool debt resulting from the utilization of NGC's initial payment on the new associated company note receivable.
o.
To reclassify the reversal of the lease market valuation liability from nuclear operating costs to purchased power.
p.
The income tax effect of the pro forma adjustments at a composite tax rate of approximately 41%.


 
3
 

OHIO EDISON COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
  
for the year ended December 31, 2004
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$
2,945,583
  
$
(177,774
)
 a
 
  
$
2,767,809
  
$
(332,574
)
e
 
  
$
2,435,235
  
                                             
OPERATING EXPENSES AND TAXES:
                                            
Fuel
    
56,560
               
56,560
   
(45,050
)
 f
    
11,510
 
Purchased power
    
970,670
               
970,670
               
970,670
 
Nuclear operating costs
    
375,309
               
375,309
   
(191,657
)
 g
 
    
183,652
 
Other operating costs
    
336,772
               
336,772
               
336,772
 
Provision for depreciation
    
122,413
   
(53,933
)
b
 
    
68,480
   
(11,783
)
 h
 
    
56,697
 
Amortization of regulatory assets
    
411,326
               
411,326
               
411,326
 
Deferral of new regulatory assets
    
(100,633
)
              
(100,633
)
              
(100,633
)
General taxes
    
180,523
   
(7,319
)
 c
 
    
173,204
   
(6,905
)
 i
    
166,299
 
Income taxes
    
257,114
   
(48,205
)
 p
 
    
208,909
   
(30,922
)
 p
 
    
177,987
 
Total operating expenses and taxes 
    
2,610,054
   
(109,457
)
        
2,500,597
   
(286,317
)
        
2,214,280
 
                                             
OPERATING INCOME
    
335,529
   
(68,317
)
        
267,212
   
(46,257
)
        
220,955
 
                                             
                             
(9,509
)
 j
        
                             
7,833
 
 k
        
OTHER INCOME (net of income taxes)
    
74,077
   
20,305
 d
 
    
94,382
   
(1,676
)
        
92,706
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
59,465
               
59,465
   
(8,685
)
 l
    
50,780
 
Allowance for borrowed funds used during construction
   
(7,211
)
              
(7,211
)
  
6,160
 
 m
 
    
(1,051
)
Other interest expense
    
12,026
               
12,026
               
12,026
 
Subsidiary's preferred stock dividend requirements
    
2,560
               
2,560
               
2,560
 
Net interest charges 
    
66,840
   
-
         
66,840
   
(2,525
)
        
64,315
 
                                             
NET INCOME
    
342,766
   
(48,012
)
        
294,754
   
(45,408
)
        
249,346
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
2,502
               
2,502
               
2,502
 
                                             
EARNINGS ON COMMON STOCK
  
$
340,264
  
$
(48,012
)
      
$
292,252
  
$
(45,408
)
      
$
246,844
  
                                             

 
4
 

OHIO EDISON COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
for the six month period ended June 30, 2005
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$
1,442,970
  
$
(88,666
)
 a
 
  
$
1,354,304
  
$
(138,038
)
  e
 
  
$
1,216,266
  
                                             
OPERATING EXPENSES AND TAXES:
                                            
Fuel
    
23,922
               
23,922
   
(20,075
)
  f
 
    
3,847
 
Purchased power
    
474,097
               
474,097
               
474,097
 
Nuclear operating costs
    
188,260
               
188,260
   
(88,299
)
  g
 
    
99,961
 
Other operating costs
    
178,768
               
178,768
               
178,768
 
Provision for depreciation
    
57,706
   
(20,479
)
 b
 
    
37,227
   
(6,500
)
  h
 
    
30,727
 
Amortization of regulatory assets
    
221,441
               
221,441
               
221,441
 
Deferral of new regulatory assets
    
(63,821
)
              
(63,821
)
              
(63,821
)
General taxes
    
94,121
   
(3,439
)
  c
 
    
90,682
   
(3,084
)
  i    
87,598
 
Income taxes
    
146,164
   
(26,786
)
  p
 
    
119,378
   
(8,252
)
  p
 
    
111,126
 
Total operating expenses and taxes 
    
1,320,658
   
(50,704
)
        
1,269,954
   
(126,210
)
        
1,143,744
 
                                             
OPERATING INCOME
    
122,312
   
(37,962
)
        
84,350
   
(11,828
)
        
72,522
 
                                             
                             
(3,677
)
  j        
                             
3,916
   k
 
        
OTHER INCOME (net of income taxes)
    
17,283
   
10,153
 
 d
    
27,436
   
239
         
27,675
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
31,341
               
31,341
   
(4,342
)
 l
 
    
26,999
 
Allowance for borrowed funds used during construction
   
(5,241
)
              
(5,241
)
  
4,154
 
m
 
    
(1,087
)
Other interest expense
    
8,264
               
8,264
               
8,264
 
Subsidiary's preferred stock dividend requirements
    
1,378
               
1,378
               
1,378
 
Net interest charges 
    
35,742
   
-
         
35,742
   
(188
)
        
35,554
 
                                             
NET INCOME
    
103,853
   
(27,809
)
        
76,044
   
(11,401
)
        
64,643
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
1,317
               
1,317
               
1,317
 
                                             
EARNINGS ON COMMON STOCK
  
$
102,536
  
$
(27,809
)
      
$
74,727
  
$
(11,401
)
      
$
63,326
  
                                             
 
 
 
5
 

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
  
for the year ended December 31, 2004
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$
1,808,485
  
$
(59,365
)
  a
 
  
$
1,749,120
  
$
(255,901
)
  e  
$
1,493,219
  
                                             
OPERATING EXPENSES AND TAXES:
                                            
Fuel
    
78,072
               
78,072
   
(36,698
)
  f    
41,374
 
Purchased power
    
543,949
               
543,949
    (31,200  )  o      
512,749
 
Nuclear operating costs
    
117,091
               
117,091
   
(117,091
)
  g
 
    
-
 
Other operating costs
    
272,303
               
272,303
   
 
 
  
 
    
272,303
 
Provision for depreciation
    
131,854
   
(30,920
)
  b    
100,934
   
(37,103
)
  h
 
    
63,831
 
Amortization of regulatory assets
    
196,501
               
196,501
               
196,501
 
Deferral of new regulatory assets
    
(117,466
)
              
(117,466
)
              
(117,466
)
General taxes
    
146,276
   
(8,255
)
  c
 
    
138,021
   
(9,337
)
  i    
128,684
 
Income taxes
    
111,996
   
(8,332
)
 p
 
    
103,664
   
(8,670
)
  p
 
    
94,994
 
Total operating expenses and taxes 
    
1,480,576
   
(47,507
)
        
1,433,069
   
(240,099
)
        
1,192,970
 
                                             
OPERATING INCOME
    
327,909
   
(11,858
)
        
316,051
   
(15,802
)
        
300,249
 
                                             
                             
(12,364
)
 j
        
                             
14,675
 
 k
 
        
OTHER INCOME (net of income taxes)
    
42,190
   
12,519
 
 d
    
54,709
   
2,311
         
57,020
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
120,058
               
120,058
               
120,058
 
Allowance for borrowed funds used during construction
   
(5,110
)
              
(5,110
)
  
2,583
   m
 
    
(2,527
)
Other interest expense
    
18,620
               
18,620
   
(6,046
)
  n    
12,574
 
Net interest charges 
    
133,568
   
-
         
133,568
   
(3,463
)
        
130,105
 
                                             
NET INCOME
    
236,531
   
661
         
237,192
   
(10,028
)
        
227,164
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
7,008
               
7,008
               
7,008
 
                                             
EARNINGS ON COMMON STOCK
  
$
229,523
  
$
661
        
$
230,184
  
$
(10,028
)
      
$
220,156
  
                                             


 
6


THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
  
for the six month period ended June 30, 2005
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$
881,920
  
$
(29,281
)
  a
 
  
$
852,639
  
$
(95,282
)
  e
 
  
$
757,357
  
                                             
OPERATING EXPENSES AND TAXES:
                                            
Fuel
    
39,437
               
39,437
   
(14,000
)
  f    
25,437
 
Purchased power
    
281,726
               
281,726
    (15,600  )   o      
266,126
 
Nuclear operating costs
    
95,513
               
95,513
   
(95,513
)
  g
 
    
-
 
Other operating costs
    
138,284
               
138,284
   
 
 
  
 
    
138,284
 
Provision for depreciation
    
64,502
   
(10,105
)
  b
 
    
54,397
   
(19,766
)
  h
 
    
34,631
 
Amortization of regulatory assets
    
109,042
               
109,042
               
109,042
 
Deferral of new regulatory assets
    
(65,989
)
              
(65,989
)
              
(65,989
)
General taxes
    
75,492
   
(3,727
)
  c
 
    
71,765
   
(4,511
)
 i
    
67,254
 
Income taxes
    
39,611
   
(6,376
)
 p
 
    
33,235
   
23,161
   p
 
    
56,396
 
Total operating expenses and taxes 
    
777,618
   
(20,208
)
        
757,410
   
(126,229
)
        
631,181
 
                                             
OPERATING INCOME
    
104,302
   
(9,073
)
        
95,229
   
30,947
         
126,176
 
                                             
                             
(2,776
)
  j
 
        
                             
7,338
   k
 
        
OTHER INCOME (net of income taxes)
    
13,574
   
6,596
   d
 
    
20,170
   
4,562
         
24,732
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
56,362
               
56,362
               
56,362
 
Allowance for borrowed funds used during construction
   
(883
)
              
(883
)
  
1,005
   m
 
    
122
 
Other interest expense
    
8,256
               
8,256
   
(3,023
)
  n
 
    
5,233
 
Net interest charges 
    
63,735
   
-
         
63,735
   
(2,018
)
        
61,717
 
                                             
NET INCOME
    
54,141
   
(2,477
)
        
51,664
   
37,527
         
89,191
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
2,918
               
2,918
               
2,918
 
                                             
EARNINGS ON COMMON STOCK
  
$
51,223
  
$
(2,477
)
      
$
48,746
  
$
37,527
        
$
86,273
  
                                             





 
7


THE TOLEDO EDISON COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
  
for the year ended December 31, 2004
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$ 1,008,112
 
$ (14,988)
  
a
  
$ 993,124
 
$ (143,241)
  
e
  
$ 849,883
 
                               
OPERATING EXPENSES AND TAXES:
                              
Fuel
    
50,892
               
50,892
   
(20,051
)
 f
    
30,841
 
Purchased power
    
312,867
               
312,867
               
312,867
 
Nuclear operating costs
    
168,401
               
168,401
   
(91,444
)
  g    
76,957
 
Other operating costs
    
152,879
               
152,879
               
152,879
 
Provision for depreciation
    
57,948
   
(5,245
)
  b
 
    
52,703
   
(24,926
)
  h
 
    
27,777
 
Amortization of regulatory assets
    
123,858
               
123,858
               
123,858
 
Deferral of new regulatory assets
    
(38,696
)
              
(38,696
)
              
(38,696
)
General taxes
    
54,142
   
(3,261
)
  c
 
    
50,881
   
(5,034
)
  i    
45,847
 
Income taxes
    
32,746
   
(2,675
)
  p
 
    
30,071
   
(63
)
  p
 
    
30,008
 
Total operating expenses and taxes 
    
915,037
   
(11,181
)
        
903,856
   
(141,518
)
        
762,338
 
                                             
OPERATING INCOME
    
93,075
   
(3,807
)
        
89,268
   
(1,723
)
        
87,545
 
                                             
                             
(9,524
)
  j
 
        
                             
8,301
   k
 
        
OTHER INCOME (net of income taxes)
    
22,951
   
1,834
   d
 
    
24,785
   
(1,223
)
        
23,562
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
27,153
               
27,153
               
27,153
 
Allowance for borrowed funds used during construction
   
(3,696
)
              
(3,696
)
  
1,941
   m    
(1,755
)
Other interest expense
    
6,286
               
6,286
   
(3,575
)
  n
 
    
2,711
 
Net interest charges 
    
29,743
   
-
         
29,743
   
(1,634
)
        
28,109
 
                                             
NET INCOME
    
86,283
   
(1,973
)
        
84,310
   
(1,312
)
        
82,998
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
8,844
               
8,844
               
8,844
 
                                             
EARNINGS ON COMMON STOCK
  
$
77,439
  
$
(1,973
)
      
$
75,466
  
$
(1,312
)
      
$
74,154
  
                                             





 
8


THE TOLEDO EDISON COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
  
for the six month period ended June 30, 2005
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$
500,864
  
$
(7,258
)
  a
 
  
$
493,606
  
$
(57,870
)
  e
 
  
$
435,736
  
                                             
OPERATING EXPENSES AND TAXES:
                                            
Fuel
    
26,973
               
26,973
   
(8,886
)
  f
 
    
18,087
 
Purchased power
    
152,456
               
152,456
               
152,456
 
Nuclear operating costs
    
105,852
               
105,852
   
(61,823
)
  g    
44,029
 
Other operating costs
    
75,659
               
75,659
               
75,659
 
Provision for depreciation
    
29,889
   
(1,716
)
  b
 
    
28,173
   
(13,108
)
  h
 
    
15,065
 
Amortization of regulatory assets
    
68,096
               
68,096
               
68,096
 
Deferral of new regulatory assets
    
(22,094
)
              
(22,094
)
              
(22,094
)
General taxes
    
27,801
   
(1,394
)
  c
 
    
26,407
   
(1,835
)
  i    
24,572
 
Income taxes
    
23,849
   
(1,712
)
  p
 
    
22,137
   
12,772
   p
 
    
34,909
 
Total operating expenses and taxes 
    
488,481
   
(4,822
)
        
483,659
   
(72,880
)
        
410,779
 
                                             
OPERATING INCOME
    
12,383
   
(2,436
)
        
9,947
   
15,010
         
24,957
 
                                             
                             
(2,371
)
  j        
                             
4,150
   k
 
        
OTHER INCOME (net of income taxes)
    
5,890
   
917
   d
 
    
6,807
   
1,779
         
8,586
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
8,743
               
8,743
               
8,743
 
Allowance for borrowed funds used during construction
   
255
               
255
   
330
   m
 
    
585
 
Other interest expense
    
1,234
               
1,234
   
(3,494
)
  n
 
    
(2,260
)
Net interest charges 
    
10,232
   
-
         
10,232
   
(3,164
)
        
7,068
 
                                             
NET INCOME
    
8,041
   
(1,519
)
        
6,522
   
19,953
         
26,475
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
4,422
               
4,422
               
4,422
 
                                             
EARNINGS ON COMMON STOCK
  
$
3,619
  
$
(1,519
)
      
$
2,100
  
$
19,953
        
$
22,053
  
                                             
                                           

 

 
9


PENNSYLVANIA POWER COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
  
for the year ended December 31, 2004
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$
549,121
  
$
(20,256
)
  a
 
  
$
528,865
  
$
(177,285
)
  e
 
  
$
351,580
  
                                             
OPERATING EXPENSES AND TAXES:
                                            
Fuel
    
22,894
               
22,894
   
(22,865
)
  f
 
    
29
 
Purchased power
    
181,031
               
181,031
               
181,031
 
Nuclear operating costs
    
106,659
               
106,659
   
(106,659
)
  g
 
    
-
 
Other operating costs
    
51,180
               
51,180
               
51,180
 
Provision for depreciation
    
14,134
   
(4,335
)
  b
 
    
9,799
   
(1,741
)
  h
 
    
8,058
 
Amortization of regulatory assets
    
40,012
               
40,012
               
40,012
 
General taxes
    
23,607
   
(742
)
  c
 
    
22,865
   
(1,395
)
  i    
21,470
 
Income taxes
    
48,824
   
(6,293
)
  p
 
    
42,531
   
(18,920
)
  p
 
    
23,611
 
Total operating expenses and taxes 
    
488,341
   
(11,370
)
        
476,971
   
(151,580
)
        
325,391
 
                                             
OPERATING INCOME
    
60,780
   
(8,886
)
        
51,894
   
(25,705
)
        
26,189
 
                                             
OTHER INCOME (net of income taxes)
    
3,464
   
2,752
   d
 
    
6,216
   
2,503
   k
 
    
8,719
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
8,250
               
8,250
   
(3,155
)
  l
 
    
5,095
 
Allowance for borrowed funds used during construction
   
(4,563
)
              
(4,563
)
  
4,164
   
m
 
    
(399
)
Other interest expense
    
1,481
               
1,481
               
1,481
 
Net interest charges 
    
5,168
   
-
         
5,168
   
1,009
         
6,177
 
                                             
NET INCOME
    
59,076
   
(6,134
)
        
52,942
   
(24,211
)
        
28,731
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
2,560
               
2,560
               
2,560
 
                                             
EARNINGS ON COMMON STOCK
  
$
56,516
  
$
(6,134
)
      
$
50,382
  
$
(24,211
)
      
$
26,171
  
                                             


 

 
10


PENNSYLVANIA POWER COMPANY
  
                               
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
  
for the six month period ended June 30, 2005
  
(Unaudited)
  
       
Non-Nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
   
(In thousands)
  
                               
OPERATING REVENUES
  
$
268,766
  
$
(10,068
)
  a
 
  
$
258,698
  
$
(76,107
)
  e
 
  
$
182,591
  
                                             
OPERATING EXPENSES AND TAXES:
                                            
Fuel
    
11,146
               
11,146
   
(11,132
)
  f
 
    
14
 
Purchased power
    
89,706
               
89,706
               
89,706
 
Nuclear operating costs
    
39,713
               
39,713
   
(39,713
)
  g
 
    
0
 
Other operating costs
    
29,511
               
29,511
               
29,511
 
Provision for depreciation
    
7,504
   
(1,803
)
  b
 
    
5,701
   
(1,073
)
  h
 
    
4,628
 
Amortization of regulatory assets
    
19,715
               
19,715
               
19,715
 
General taxes
    
12,916
   
(311
)
  c
 
    
12,605
   
(560
)
  i
 
    
12,045
 
Income taxes
    
25,653
   
(3,298
)
  p
 
    
22,355
   
(10,271
)
  p
 
    
12,084
 
Total operating expenses and taxes 
    
235,864
   
(5,412
)
        
230,452
   
(62,749
)
        
167,703
 
                                             
OPERATING INCOME
    
32,902
   
(4,656
)
        
28,246
   
(13,358
)
        
14,888
 
                                             
OTHER INCOME (net of income taxes)
    
74
   
1,376
   d
 
    
1,450
   
1,252
   k
 
    
2,702
 
                                             
NET INTEREST CHARGES:
                                            
Interest on long-term debt
    
5,106
               
5,106
   
(1,578
)
  l
 
    
3,528
 
Allowance for borrowed funds used during construction
   
(2,843
)
              
(2,843
)
  
2,722
   
m
 
    
(121
)
Other interest expense
    
-
               
-
               
-
 
Subsidiary's preferred stock dividend requirements
    
-
               
-
               
-
 
Net interest charges 
    
2,263
   
-
         
2,263
   
1,144
         
3,407
 
                                             
NET INCOME
    
30,713
   
(3,280
)
        
27,433
   
(13,250
)
        
14,183
 
                                             
PREFERRED STOCK DIVIDEND REQUIREMENTS
    
1,378
               
1,378
               
1,378
 
                                             
EARNINGS ON COMMON STOCK
  
$
29,335
  
$
(3,280
)
      
$
26,055
  
$
(13,250
)
      
$
12,805
  
                                             

 
 
11


Combined Explanatory Notes for the Pro Forma Consolidated Balance Sheets

a.
The transfer of non-nuclear generation plant in service to FGCO.
b.
The transfer of the accumulated provision for depreciation on non-nuclear plant in service to FGCO.
c.
The transfer of non-nuclear plant construction work in progress to FGCO.
d.
The establishment of an associated company note receivable as consideration for the purchased assets and assumption of liabilities.
e.
The transfer of other property and investments related to non-nuclear plant assets to FGCO.
f.
The transfer of working cash funds used for expense advances at certain non-nuclear generation facilities to FGCO.
g.
The transfer of materials and supplies for non-nuclear generation plant to FGCO.
h.
The transfer of deferred property tax charges for non-nuclear generation plant to FGCO.
i.
The distribution of the nuclear net assets spin as a dividend to the respective parent company.
j.
To record in other paid-in capital the difference between the net book value and the purchase price, pursuant to the purchase option in the Master Lease, for the non-nuclear generation assets.
k.
The transfer of unrealized gains and losses on decommissioning trust investments recorded as other comprehensive income to NGC.
l.
The use of proceeds from the nuclear asset transfer to reduce associated company money pool debt.
m.
The transfer of accumulated deferred income taxes for non-nuclear generation plant to FGCO.
n.
The transfer of accumulated deferred investment tax credits for non-nuclear generation plant to FGCO.
o.
The transfer of asset retirement obligations related to the non-nuclear generation plants to FGCO.
p.
The transfer of deferred property taxes and accumulated deferred investment tax credits for non-nuclear generation plant to FGCO.
q.
The transfer of nuclear plant in service and nuclear fuel in service to NGC.
r.
The transfer of the accumulated provision for depreciation and amortization for nuclear plant in service and nuclear fuel in service to NGC.
s.
The transfer of nuclear plant construction work in progress to NGC.
t.
The transfer of nuclear fuel construction work in progress to NGC.
u.
The transfer of nuclear plant decommissioning trusts to NGC.
v.
The establishment of a parent company investment in NGC.
w.
The transfer of materials and supplies for nuclear plant to NGC.
x.
The reclassification of regulatory liabilities to regulatory assets related to the nuclear decommissioning trusts top-off.
y.
The transfer of property taxes for nuclear generation plant to NGC.
z.
The transfer of unamortized debt expense related to the pollution control revenue bonds transferred to NGC.
aa.
The transfer of other deferred charges for nuclear plant to NGC.
bb.
The reclassification of the nuclear decommissioning trusts top-off liability to an associated company note payable.
cc.
The transfer of the long-term portion of pollution control revenue bonds related to nuclear generation plant to NGC.
dd.
The transfer of the current portion of pollution control revenue bonds related to nuclear generation plant to NGC.
ee.
The establishment of notes payable to associated companies to reflect the net liabilities transferred to NGC.
ff.
The establishment of a nuclear decommissioning trusts top-off liability netted against note payment.
gg.
The transfer of accrued interest for debt related to nuclear generation plant to NGC.
hh.
The transfer of other current liabilities related to nuclear generation plant to NGC.
ii.
The transfer of accumulated deferred income taxes for nuclear generation plant to NGC.
jj.
The transfer of accumulated deferred investment tax credits for nuclear generation plant to NGC.
kk.
The transfer of asset retirement obligations related to the nuclear generation plants to NGC.
ll.
The transfer of other non-current liabilities related to nuclear generation plant to NGC.



 
12
 

OHIO EDISON COMPANY
  
PRO FORMA CONSOLIDATED BALANCE SHEETS
As of June 30, 2005
  
(Unaudited)
  
                           
Transfer
          
       
Non-nuclear
          
Nuclear
      
Investment in
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Subsidiary
      
Pro Forma
  
                                       
   
(In thousands)
  
ASSETS
                                      
UTILITY PLANT:
                                      
In service
  
$
5,553,362
  
$
(2,254,640
)
 a
 
  
$
3,298,722
  
$
(892,504
)
 q
 
              
$
2,406,218
  
Less-Accumulated provision for depreciation
    
2,770,924
   
(1,316,543
)
 b
 
    
1,454,381
   
(486,245
)
  r
               
968,136
 
     
2,782,438
   
(938,097
)
        
1,844,341
   
(406,259
)
        
-
         
1,438,082
 
Construction work in progress-
                                                    
-
 
Electric plant
    
226,124
   
(344
)
  c    
225,780
   
(205,523
)
  s                
20,257
 
Nuclear Fuel
    
-
               
-
                           
-
 
     
226,124
   
(344
)
        
225,780
   
(205,523
)
        
-
         
20,257
 
     
3,008,562
   
(938,441
)
        
2,070,121
   
(611,782
)
        
-
         
1,458,339
 
OTHER PROPERTY AND INVESTMENTS:
                                                    
-
 
Investment in lease obligation bonds
    
341,582
               
341,582
                           
341,582
 
Nuclear plant decommissioning trusts
    
447,649
               
447,649
   
(352,306
)
  u
 
                
95,343
 
Long-term notes receivable from associated companies
   
207,430
   
1,159,779
   d
 
    
1,367,209
   
489,994
   d
 
                
1,857,203
 
Other
    
45,394
   
(243
)
  e
 
    
45,151
   
78,410
   v
 
    
(78,410
)
  i    
45,151
 
     
1,042,055
   
1,159,536
         
2,201,591
   
216,098
         
(78,410
)
        
2,339,279
 
CURRENT ASSETS:
                                                    
-
 
    Cash and cash equivalents
    
1,283
   
(24
)
  f    
1,259
                           
1,259
 
Receivables-
                                                    
-
 
Customers
   
282,283
               
282,283
                           
282,283
 
Associated companies
    
167,260
               
167,260
                           
167,260
 
Other
   
10,549
               
10,549
                           
10,549
 
Notes receivable from associated companies
    
598,151
               
598,151
                           
598,151
 
Materials and supplies, at average cost
    
108,221
   
(18,481
)
  g
 
    
89,740
   
(89,740
)
  w
 
                
-
 
Prepayments and other
    
20,324
               
20,324
                           
20,324
 
     
1,188,071
   
(18,505
)
        
1,169,566
   
(89,740
)
        
-
         
1,079,826
 
DEFERRED CHARGES:
                                                    
-
 
Regulatory assets
    
935,223
               
935,223
   
64,561
   x                
999,784
 
Property taxes
    
61,419
   
(2,535
)
  h
 
    
58,884
   
(3,967
)
  y
 
                
54,917
 
Unamortized sale and leaseback costs
    
57,670
               
57,670
                           
57,670
 
Other
    
67,867
               
67,867
   
(5,575
)
  z,aa
 
                
62,292
 
     
1,122,179
   
(2,535
)
        
1,119,644
   
55,019
                     
1,174,663
 
   
$
6,360,867
  
$
200,055
        
$
6,560,922
  
$
(430,405
)
      
$
(78,410
)
      
$
6,052,107
  
CAPITALIZATION AND LIABILITIES
                                                        
CAPITALIZATION:
                                                        
Common stockholder's equity-
                                                        
Common stock, without par value
  
$
2,099,089
  
$
167,038
    j  
$
2,266,127
  
$
(10
)
      
$
-
        
$
2,266,117
  
Accumulated other comprehensive loss
    
(57,125
)
              
(57,125
)
  
(9,012
)
  k
 
                
(66,137
)
Retained earnings
    
367,734
               
367,734
               
(78,410
)
  i    
289,324
 
Total common stockholder's equity 
    
2,409,698
   
167,038
         
2,576,736
   
(9,022
)
        
(78,410
)
        
2,489,304
 
Preferred stock
    
60,965
               
60,965
                           
60,965
 
Preferred stock of consolidated subsidiary
    
14,105
               
14,105
                           
14,105
 
Long-term debt and other long-term obligations
    
1,104,584
               
1,104,584
   
(239,631
)
  cc
 
                
864,953
 
     
3,589,352
   
167,038
         
3,756,390
   
(248,653
)
        
(78,410
)
        
3,429,327
 
CURRENT LIABILITIES:
                                                        
Currently payable long-term debt
   
289,215
               
289,215
   
(15,500
)
  dd
 
                
273,715
 
Short-term borrowings-
                                                        
Associated companies
    
82,389
               
82,389
   
141,995
   ee
 
                
224,384
 
Other
    
143,912
               
143,912
                           
143,912
 
Accounts payable-
                                                        
Associated companies
    
100,452
               
100,452
                           
100,452
 
Other
    
12,824
               
12,824
                           
12,824
 
Notes payable to associated companies
    
-
                                                 
Accrued taxes
    
172,478
               
172,478
                           
172,478
 
Accrued interest
    
11,201
               
11,201
   
(1,002
)
  gg
 
                
10,199
 
Other
    
73,344
               
73,344
   
(4,171
)
  hh
 
                
69,173
 
     
885,815
   
-
         
885,815
   
121,322
         
-
         
1,007,137
 
NONCURRENT LIABILITIES:
                                                        
Accumulated deferred income taxes
    
724,040
   
68,328
   m
 
    
792,368
   
(21,678
)
  ii
 
                
770,690
 
Accumulated deferred investment tax credits
    
55,800
   
(23,326
)
  n
 
    
32,474
   
(65
)
  jj                
32,409
 
Asset retirement obligation
    
350,387
   
(9,096
)
  o    
341,291
   
(275,525
)
  kk
 
                
65,766
 
Retirement benefits
    
314,543
               
314,543
   
-
                     
314,543
 
Other
    
440,930
   
(2,889
)
  h
 
    
438,041
   
(5,806
)
  y, ll
 
                
432,235
 
     
1,885,700
   
33,017
         
1,918,717
   
(303,074
)
        
-
         
1,615,643
 
COMMITMENTS AND CONTINGENCIES
                                                        
   
$
6,360,867
  
$
200,055
        
$
6,560,922
  
$
(430,405
)
      
$
(78,410
)
      
$
6,052,107
  
                                                         
 
 

 
13
 

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
  
PRO FORMA CONSOLIDATED BALANCE SHEETS
  
as of June 30, 2005
  
(Unaudited)
  
                               
       
Non-nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
ASSETS
                              
   
(In thousands)
  
UTILITY PLANT:
                              
In service
  
$
4,497,877
  
$
(1,250,234
)
  a
 
  
$
3,247,643
  
$
(1,242,239
)
  q
 
  
$
2,005,404
  
Less-Accumulated provision for depreciation
    
2,000,871
   
(827,608
)
  b
 
    
1,173,263
   
(408,998
)
  r    
764,265
 
     
2,497,006
   
(422,626
)
        
2,074,380
   
(833,241
)
        
1,241,139
 
Construction work in progress-
                                            
Electric plant
    
79,897
   
(4,772
)
  c
 
    
75,125
   
(51,078
)
  s
 
    
24,047
 
Nuclear fuel
    
4,330
               
4,330
   
(4,330
)
  t    
-
 
     
84,227
   
(4,772
)
        
79,455
   
(55,408
)
        
24,047
 
     
2,581,233
   
(427,398
)
        
2,153,835
   
(888,649
)
        
1,265,186
 
OTHER PROPERTY AND INVESTMENTS:
                                            
Investment in lessor notes
    
564,172
               
564,172
               
564,172
 
Nuclear plant decommissioning trusts
    
401,610
               
401,610
   
(401,610
)
 u
 
    
-
 
Long-term notes receivable from associated companies
   
7,546
   
416,762
   d
 
    
424,308
   
576,713
   d
 
    
1,001,021
 
Other
    
15,945
   
(5,176
)
  e
 
    
10,769
               
10,769
 
     
989,273
   
411,586
         
1,400,859
   
175,103
         
1,575,962
 
CURRENT ASSETS:
                                            
Cash and cash equivalents
    
207
               
207
               
207
 
Receivables-
                                            
Customers
   
255,422
               
255,422
               
255,422
 
Associated companies
    
29,279
               
29,279
               
29,279
 
Other
   
11,109
               
11,109
               
11,109
 
Notes receivable from associated companies
    
23,537
               
23,537
               
23,537
 
Materials and supplies, at average cost
    
87,713
   
(27,278
)
  g
 
    
60,435
   
(60,435
)
  w
 
    
-
 
Prepayments and other
    
1,948
               
1,948
               
1,948
 
     
409,215
   
(27,278
)
        
381,937
   
(60,435
)
        
321,502
 
DEFERRED CHARGES:
                                            
Goodwill
    
1,693,629
               
1,693,629
               
1,693,629
 
Regulatory assets
    
902,137
               
902,137
               
902,137
 
Property taxes
    
77,792
   
(7,088
)
  h
 
    
70,704
   
(9,591
)
 y
 
    
61,113
 
Other
    
36,471
               
36,471
               
36,471
 
     
2,710,029
   
(7,088
)
        
2,702,941
   
(9,591
)
        
2,693,350
 
   
$
6,689,750
  
$
(50,178
)
      
$
6,639,572
  
$
(783,572
)
      
$
5,856,000
  
CAPITALIZATION AND LIABILITIES
                                            
CAPITALIZATION:
                                            
Common stockholder's equity-
                                            
Common stock, without par value
  
$
1,356,983
  
$
-
        
$
1,356,983
  
$
-
        
$
1,356,983
  
Other paid-in capital
    
-
   
(19,410
)
  j    
(19,410
)
              
(19,410
)
Accumulated other comprehensive income
    
16,212
               
16,212
   
(37,963
)
  k
 
    
(21,751
)
Retained earnings
    
480,957
               
480,957
               
480,957
 
Total common stockholder's equity 
    
1,854,152
   
(19,410
)
        
1,834,742
   
(37,963
)
        
1,796,779
 
Long-term debt and other long-term obligations
    
1,948,083
               
1,948,083
               
1,948,083
 
     
3,802,235
   
(19,410
)
        
3,782,825
   
(37,963
)
        
3,744,862
 
CURRENT LIABILITIES:
                                            
Currently payable long-term debt
    
75,694
               
75,694
               
75,694
 
Short-term borrowings-
                                            
Associated companies
    
404,290
               
404,290
   
(404,290
)
  l    
-
 
Other
    
155,000
               
155,000
               
155,000
 
Accounts payable-
                                            
Associated companies
    
191,959
               
191,959
               
191,959
 
Other
    
5,733
               
5,733
               
5,733
 
Accrued taxes
    
122,675
               
122,675
               
122,675
 
Accrued interest
    
21,782
               
21,782
               
21,782
 
Lease market valuation liability
    
60,200
               
60,200
               
60,200
 
Other
    
43,841
               
43,841
   
(1,500
)
  hh
 
    
42,341
 
     
1,081,174
   
-
         
1,081,174
   
(405,790
)
        
675,384
 
NONCURRENT LIABILITIES:
                                            
Accumulated deferred income taxes
    
543,554
   
223
   m
 
    
543,777
   
(33,866
)
  ii
 
    
509,911
 
Accumulated deferred investment tax credits
    
58,241
   
(21,151
)
 n
 
    
37,090
   
(18,908
)
  jj    
18,182
 
Asset retirement obligation
    
281,206
   
(2,752
)
  o
 
    
278,454
   
(277,454
)
kk
 
    
1,000
 
Retirement benefits
    
84,428
               
84,428
               
84,428
 
Lease market valuation liability
    
638,100
               
638,100
               
638,100
 
Other
    
200,812
   
(7,088
)
  h
 
    
193,724
   
(9,591
)
  y
 
    
184,133
 
     
1,806,341
   
(30,768
)
        
1,775,573
   
(339,819
)
        
1,435,754
 
COMMITMENTS AND CONTINGENCIES
                                           
   
$
6,689,750
  
$
(50,178
)
      
$
6,639,572
  
$
(783,572
)
      
$
5,856,000
  
                                             
 
 
 
 
 
 
14
 

THE TOLEDO EDISON COMPANY
  
PRO FORMA CONSOLIDATED BALANCE SHEETS
  
as of June 30, 2005
  
(Unaudited)
  
                               
       
Non-nuclear
          
Nuclear
          
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
Pro Forma
  
ASSETS
                              
   
(In thousands)
  
UTILITY PLANT:
                              
In service
  
$
1,902,930
  
$
(250,831
)
  a
 
  
$
1,652,099
  
$
(833,174
)
  q
 
  
$
818,925
  
Less-Accumulated provision for depreciation
    
802,653
   
(179,882
)
  b
 
    
622,771
   
(261,751
)
  r
 
    
361,020
 
     
1,100,277
   
(70,949
)
        
1,029,328
   
(571,423
)
        
457,905
 
Construction work in progress-
                                            
Electric plant
    
52,465
   
(2,688
)
  c
 
    
49,777
   
(40,953
)
  s    
8,824
 
Nuclear Fuel
    
4,063
               
4,063
   
(4,063
)
  t    
-
 
     
56,528
   
(2,688
)
        
53,840
   
(45,016
)
        
8,824
 
     
1,156,805
   
(73,637
)
        
1,083,168
   
(616,439
)
        
466,729
 
OTHER PROPERTY AND INVESTMENTS:
                                            
Investment in lessor notes
    
178,797
               
178,797
               
178,797
 
Nuclear plant decommissioning trusts
    
315,142
               
315,142
   
(260,657
)
  u    
54,485
 
Long-term notes receivable from associated companies
   
40,014
   
102,557
   d
 
    
142,571
   
439,535
   d
 
    
582,106
 
Other
    
1,784
   
(156
)
  e
 
    
1,628
               
1,628
 
     
535,737
   
102,401
         
638,138
   
178,878
         
817,016
 
CURRENT ASSETS:
                                            
Cash and cash equivalents
    
15
   
(3
)
  f
 
    
12
               
12
 
Receivables-
                                            
Customers
   
2,105
               
2,105
               
2,105
 
Associated companies
    
19,373
               
19,373
               
19,373
 
Other
   
3,182
               
3,182
               
3,182
 
Notes receivable from associated companies
    
16,099
               
16,099
               
16,099
 
Materials and supplies, at average cost
    
46,192
   
(4,936
)
  g
 
    
41,256
   
(41,256
)
  w
 
    
-
 
Prepayments and other
    
742
               
742
               
742
 
     
87,708
   
(4,939
)
        
82,769
   
(41,256
)
        
41,513
 
DEFERRED CHARGES:
                                            
Regulatory assets
    
504,522
               
504,522
               
504,522
 
Goodwill
    
330,192
               
330,192
               
330,192
 
Property taxes
    
24,100
   
(2,535
)
 h
   
21,565
   
(3,967
)
  y
 
    
17,598
 
Other
    
39,189
               
39,189
               
39,189
 
     
898,003
   
(2,535
)
        
895,468
   
(3,967
)
        
891,501
 
   
$
2,678,253
  
$
21,290
        
$
2,699,543
  
$
(482,784
)
      
$
2,216,759
  
CAPITALIZATION AND LIABILITIES
                                            
CAPITALIZATION:
                                            
Common stockholder's equity-
                                            
Common stock, $5 par value
  
$
195,670
              
$
195,670
              
$
195,670
  
Other paid-in capital
    
428,566
   
22,061
   j    
450,627
               
450,627
 
Accumulated other comprehensive income
    
18,646
               
18,646
   
(23,073
)
  k    
(4,427
)
Retained earnings
    
184,678
               
184,678
               
184,678
 
Total common stockholder's equity 
    
827,560
   
22,061
         
849,621
   
(23,073
)
        
826,548
 
Preferred stock not subject to mandatory redemption
    
126,000
               
126,000
               
126,000
 
Long-term debt
   
296,482
               
296,482
               
296,482
 
     
1,250,042
   
22,061
         
1,272,103
   
(23,073
)
        
1,249,030
 
CURRENT LIABILITIES:
                                            
Currently payable long-term debt
   
90,950
               
90,950
               
90,950
 
Short-term borrowings
                                            
Accounts payable-
                      
 
                
 
  
Associated companies
    
34,806
               
34,806
               
34,806
 
Other
    
3,117
               
3,117
               
3,117
 
Notes payable to associated companies
    
333,136
               
333,136
   
(250,000
)
  l    
83,136
 
Accrued taxes
    
57,466
               
57,466
               
57,466
 
Lease market valuation liability
    
24,600
               
24,600
               
24,600
 
Other
    
25,802
               
25,802
   
(1,125
)
  hh
 
    
24,677
 
     
569,877
   
-
         
569,877
   
(251,125
)
        
318,752
 
NONCURRENT LIABILITIES:
                                            
Accumulated deferred income taxes
    
235,448
   
10,233
   m
 
    
245,681
   
(22,571
)
  ii    
223,110
 
Accumulated deferred investment tax credits
    
24,024
   
(6,813
)
  n
 
    
17,211
   
(9,211
)
  jj    
8,000
 
Retirement benefits
    
41,464
               
41,464
               
41,464
 
Asset retirement obligation
    
200,867
   
(1,656
)
  o
 
    
199,211
   
(172,837
)
  kk
 
    
26,374
 
Lease market valuation liability
    
255,700
               
255,700
               
255,700
 
Other
    
100,831
   
(2,535
)
  h
 
    
98,296
   
(3,967
)
  y
 
    
94,329
 
     
858,334
   
(771
)
        
857,563
   
(208,586
)
        
648,977
 
COMMITMENTS AND CONTINGENCIES
                                            
   
$
2,678,253
  
$
21,290
        
$
2,699,543
  
$
(482,784
)
      
$
2,216,759
  
                                             
 
 
 
 
15

PENNSYLVANIA POWER COMPANY
  
PRO FORMA CONSOLIDATED BALANCE SHEETS
  
as of June 30, 2005
  
(Unaudited)
  
                           
Transfer
          
       
Non-nuclear
          
Nuclear
      
Investment
         
   
As Reported
  
Adjustments
      
Pro Forma
  
Adjustments
      
in Subsidiary
      
Pro Forma
  
                                       
   
(In thousands)
  
ASSETS
                                      
UTILITY PLANT:
                                      
In service
  
$
892,826
  
$
(253,637
)
  a
 
  
$
639,189
  
$
(287,885
)
  q  
$
-
        
$
351,304
  
Less-Accumulated provision for depreciation
    
371,569
   
(129,881
)
  b
 
    
241,688
   
(116,479
)
  r
 
                
125,209
 
     
521,257
   
(123,756
)
        
397,501
   
(171,406
)
        
-
         
226,095
 
Construction work in progress-
                                                        
Electric plant
    
122,232
   
(86
)
  c
 
    
122,146
   
(119,325
)
  s
 
                
2,821
 
Nuclear Fuel
    
-
               
-
   
-
                     
-
 
     
122,232
   
(86
)
        
122,146
   
(119,325
)
        
-
         
2,821
 
     
643,489
   
(123,842
)
        
519,647
   
(290,731
)
        
-
         
228,916
 
OTHER PROPERTY AND INVESTMENTS:
                                                        
Nuclear plant decommissioning trusts
    
144,704
               
144,704
   
(144,704
)
  u                
-
 
Long-term notes receivable from associated companies
   
32,795
   
125,047
   d    
157,842
   
162,436
   d
 
                
320,278
 
Other
    
526
   
(240
)
  e
 
    
286
   
78,410
   v
 
    
(78,410
)
  i    
286
 
     
178,025
   
124,807
         
302,832
   
96,142
         
(78,410
)
        
320,564
 
CURRENT ASSETS:
                                                        
Cash and cash equivalents
    
24
   
(23
)
  f
 
    
1
                           
1
 
Notes receivable from associated companies
    
448
               
448
                           
448
 
Receivables-
                                                        
Customers
    
46,545
               
46,545
                           
46,545
 
Associated companies
    
10,632
               
10,632
                           
10,632
 
Other
   
939
               
939
                           
939
 
Materials and supplies, at average cost
    
38,729
   
(1,515
)
  g
 
    
37,214
   
(37,214
)
  w
 
                
-
 
Prepayments and other
    
17,184
               
17,184
                           
17,184
 
     
114,501
   
(1,538
)
        
112,963
   
(37,214
)
        
-
         
75,749
 
DEFERRED CHARGES:
                                                        
Regulatory assets
    
-
               
-
   
27,673
   x
 
                
27,673
 
Other
    
9,915
               
9,915
   
(2,296
)
  aa                
7,619
 
     
9,915
   
-
         
9,915
   
25,377
         
-
         
35,292
 
   
$
945,930
  
$
(573
)
      
$
945,357
  
$
(206,426
)
      
$
(78,410
)
      
$
660,521
  
CAPITALIZATION AND LIABILITIES
                                                        
CAPITALIZATION:
                                                        
Common stockholder's equity-
                                                        
                                                         
Common stock, $30 par value
  
$
188,700
  
$
-
        
$
188,700
  
$
-
        
$
-
        
$
188,700
  
Other paid-in capital
    
65,035
   
1,655
   j    
66,690
                           
66,690
 
Accumulated other comprehensive loss
    
(13,706
)
              
(13,706
)
                          
(13,706
)
Retained earnings
    
109,030
               
109,030
               
(78,410
)
  i
 
    
30,620
 
Total common stockholder's equity 
    
349,059
   
1,655
         
350,714
   
-
         
(78,410
)
        
272,304
 
Preferred stock not subject to mandatory redemption
    
14,105
               
14,105
                           
14,105
 
Long-term debt and other long-term obligations
    
121,167
               
121,167
   
(53,431
)
  cc
 
                
67,736
 
     
484,331
   
1,655
         
485,986
   
(53,431
)
        
(78,410
)
        
354,145
 
CURRENT LIABILITIES:
                                                        
Currently payable long-term debt
    
25,774
               
25,774
   
(10,300
)
  dd
 
                
15,474
 
Short-term borrowings-
                                                        
Associated companies
    
25,597
               
25,597
   
44,561
   ff                
70,158
 
Other
    
20,000
               
20,000
                           
20,000
 
Accounts payable-
                                                        
Associated companies
    
25,282
               
25,282
                           
25,282
 
Other
    
2,627
               
2,627
                           
2,627
 
Accrued taxes
    
26,158
               
26,158
                           
26,158
 
Accrued interest
    
1,988
               
1,988
   
(845
)
  gg
 
                
1,143
 
Other
    
8,712
               
8,712
                           
8,712
 
     
136,138
   
-
         
136,138
   
33,416
         
-
         
169,554
 
NONCURRENT LIABILITIES:
                                                        
Accumulated deferred income taxes
    
84,400
   
729
 
 m
 
    
85,129
   
(7,024
)
  ii                
78,105
 
Asset retirement obligation
    
142,872
   
(2,212
)
  o
 
    
140,660
   
(140,660
)
  kk                
-
 
Retirement benefits
    
50,697
               
50,697
                           
50,697
 
Regulatory liabilities
    
36,888
               
36,888
   
(36,888
)
 bb 
 
                
-
 
Other
    
10,604
   
(745
)
  p
 
    
9,859
   
(1,839
)
  ll
 
                
8,020
 
     
325,461
   
(2,228
)
        
323,233
   
(186,411
)
        
-
         
136,822
 
COMMITMENTS AND CONTINGENCIES
                                                        
   
$
945,930
  
$
(573
)
      
$
945,357
  
$
(206,426
)
      
$
(78,410
)
      
$
660,521
  
                                                         
 
 
16
 
Forward-Looking Statements: This Form 8-K includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements typically contain, but are not limited to, the terms "anticipate", "potential", "expect", "believe", "estimate" and similar words. Actual results may differ materially due to the speed and nature of increased competition and deregulation in the electric utility industry, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of our regulated utilities to collect transition and other charges, maintenance costs being higher than anticipated, legislative and regulatory changes (including revised environmental requirements), the uncertainty of the timing and amounts of the capital expenditures (including that such amounts could be higher than anticipated) or levels of emission reductions related to the settlement agreement resolving the New Source Review litigation, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits, fines or other enforcement actions and remedies) of government investigations and oversight, including by the Securities and Exchange Commission, the United States Attorney’s Office and the Nuclear Regulatory Commission as disclosed in the registrants’ Securities and Exchange Commission filings, generally, and with respect to the Davis-Besse Nuclear Power Station outage and heightened scrutiny at the Perry Nuclear Power Plant in particular, the availability and cost of capital, the continuing availability and operation of generating units, the ability of generating units to continue to operate at, or near full capacity, the inability to accomplish or realize anticipated benefits of strategic goals (including the proposed transfer of nuclear generation assets), the ability to improve electric commodity margins and to experience growth in the distribution business, any decision of the Pennsylvania Public Utility Commission regarding the plan filed by Penn on October 11, 2005 to secure electricity supply for its customers at a set rate, the ability to access the public securities and other capital markets, the outcome, cost and other effects of present and potential legal and administrative proceedings and claims related to the August 14, 2003 regional power outage, the final outcome in the proceeding related to FirstEnergy's Application for a Rate Stabilization Plan (RSP) in Ohio, specifically, the Public Utilities Commission of Ohio's acceptance of the September 9, 2005 proposed supplement to the RSP, the risks and other factors discussed from time to time in the registrants' Securities and Exchange Commission filings, and other similar factors. Dividends from time to time during any annual period may in aggregate vary from the indicated amounts due to circumstances considered by the Board at the time of the actual declarations. The registrants expressly disclaim any current intention to update any forward-looking statements contained in this document as a result of new information, future events, or otherwise.
 
 


17
 
SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



October 24, 2005



 
FIRSTENERGY CORP.
 
Registrant
   
 
OHIO EDISON COMPANY
 
Registrant
   
 
THE CLEVELAND ELECTRIC
 
ILLUMINATING COMPANY
 
Registrant
   
 
THE TOLEDO EDISON COMPANY
 
Registrant
   
 
PENNSYLVANIA POWER COMPANY
 
Registrant

 
 

_____       /s/__Harvey L. Wagner______________ 
                                                                   Harvey L. Wagner
                                        Vice President, Controller and
                                          Chief Accounting Officer
 

 
18
 
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