-----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, USxczMivDgC1WbErogPMgWzEsrxcuwCgGyvI3iceGq6M5GwyU5bumj4NYg2SxjYw YVHaueg7SsdTOpR0nR9nPA== 0000774197-96-000017.txt : 19960629 0000774197-96-000017.hdr.sgml : 19960629 ACCESSION NUMBER: 0000774197-96-000017 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960627 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTERIOR ENERGY CORP CENTRAL INDEX KEY: 0000774197 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 341479083 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09130 FILM NUMBER: 96587144 BUSINESS ADDRESS: STREET 1: 6200 OAK TREE BLVD CITY: INDEPENDENCE STATE: OH ZIP: 44131 BUSINESS PHONE: 2164473100 MAIL ADDRESS: STREET 1: PO BOX 94661 CITY: CLEVELAND STATE: OH ZIP: 44101-4661 FORMER COMPANY: FORMER CONFORMED NAME: NORTH HOLDING CO /OH/ DATE OF NAME CHANGE: 19851002 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: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-02323 FILM NUMBER: 96587145 BUSINESS ADDRESS: STREET 1: 55 PUBLIC SQ STREET 2: PO BOX 5000 CITY: CLEVELAND STATE: OH ZIP: 44101 BUSINESS PHONE: 2166229800 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: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-03583 FILM NUMBER: 96587146 BUSINESS ADDRESS: STREET 1: 300 MADISON AVE CITY: TOLEDO STATE: OH ZIP: 43652 BUSINESS PHONE: 4192495000 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A Amendment No. 1 (Mark One) [ X ] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1995 OR [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____ to ____ Commission Registrant; State of Incorporation; I.R.S. Employer File Number Address; and Telephone Number Identification No. 1-9130 CENTERIOR ENERGY CORPORATION 34-1479083 (An Ohio Corporation) 6200 Oak Tree Boulevard Independence, Ohio 44131 Telephone (216) 447-3100 1-2323 THE CLEVELAND ELECTRIC 34-0150020 ILLUMINATING COMPANY (An Ohio Corporation) 55 Public Square Cleveland, Ohio 44113 Telephone (216) 622-9800 1-3583 THE TOLEDO EDISON COMPANY 34-4375005 (An Ohio Corporation) 300 Madison Avenue Toledo, Ohio 43652 Telephone (419) 249-5000 The Annual Reports on Form 10-K of Centerior Energy Corporation (File No. 1-9130), The Cleveland Electric Illuminating Company (File No. 1-2323) and The Toledo Edison Company (File No. 1-3583) for the fiscal year ended December 31, 1995 are each amended to file as Exhibit 99a under "Part IV. Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K - - - (a) Documents Filed as a Part of the Report -- 4. Exhibits" in each Form 10-K, pursuant to Rule 15d-21 under the Securities Exchange Act of 1934, the attached Financial Statements of the Centerior Energy Corporation Employee Savings Plan for the fiscal year ended December 31, 1995, which Exhibit 99a is an exhibit common to all three Annual Reports on Form 10-K. -1- Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant identified below has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. CENTERIOR ENERGY CORPORATION (Registrant) THE CLEVELAND ELECTRIC ILLUMINATING COMPANY (Registrant) THE TOLEDO EDISON COMPANY (Registrant) By: E. LYLE PEPIN E. Lyle Pepin Controller of each Registrant Date: June 27, 1996 -2- EXHIBIT 99a FINANCIAL STATEMENTS OF THE CENTERIOR ENERGY CORPORATION EMPLOYEE SAVINGS PLAN FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 Centerior Energy Corporation Employee Savings Plan Index Report of Independent Public Accountants............................... 1 Financial Statements: Statements of Net Assets Available for Plan Benefits as of December 31, 1995 and 1994.................................... 2 Statements of Changes in Net Assets Available for Plan Benefits for the Years Ended December 31, 1995 and 1995................ 4 Notes to the Financial Statements...................................... 6 Supplemental Schedules: Schedule I -- Schedule of Assets Held for Investment Purposes as of December 31, 1995............................. 13 Schedule II -- Schedule of Reportable Transactions for the Year Ended December 31, 1995............................. 15 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To: Centerior Energy Corporation We have audited the accompanying statements of net assets available for plan benefits of the Centerior Energy Corporation Employee Savings Plan (the Plan) as of December 31, 1995 and 1994, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1995 and 1994, and the changes in net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits is presented for the purpose of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Cleveland, Ohio June 26, 1996 CENTERIOR ENERGY CORPORATION EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1995 ---------------------------------------------------------------------------------------------- Centerior Fixed Global Stock Equity Income Balanced Equity ASSETS Fund Fund Fund Fund Fund Loans Total - ------ ------------- ------------- ------------- ------------- ------------- ------------- ---------- Investments, at market value: Centerior - common stock $38,277,085 $0 $0 $0 $0 $0 $38,277,085 Equity Fund - diversified common stock fund 0 59,176,612 0 0 0 0 59,176,612 Investments in mutual funds 0 719,331 0 12,197,760 21,459,573 0 34,376,664 Loans receivable from participants 0 0 0 0 0 5,835,438 5,835,438 Investments, at contract value: Funds on deposit with insurance companies and banks 0 0 76,772,809 0 0 0 76,772,809 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total investments 38,277,085 59,895,943 76,772,809 12,197,760 21,459,573 5,835,438 214,438,608 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Receivables: Transfers receivable 0 0 69,911 0 12,410 0 82,321 Investment income receivable 760 104,888 115,868 0 10 0 221,526 Contributions receivable from: Participants 67,173 90,491 78,074 25,745 46,869 0 308,352 Employer 26,866 33,271 29,191 8,793 15,400 0 113,521 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total receivables 94,799 228,650 293,044 34,538 74,689 0 725,720 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Cash and temporary cash investments 242,608 3,482,682 174,938 0 0 0 3,900,228 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total assets 38,614,492 63,607,275 77,240,791 12,232,298 21,534,262 5,835,438 219,064,556 ------------- ------------- ------------- ------------- ------------- ------------- ------------- LIABILITIES - ----------- Transfers payable 308 50,967 0 0 0 31,046 82,321 Liabilities for investment purchases and other 503,167 117,759 129,704 34,538 74,679 0 859,847 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total liabilities 503,475 168,726 129,704 34,538 74,679 31,046 942,168 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net assets available for Plan benefits $38,111,017 $63,438,549 $77,111,087 $12,197,760 $21,459,583 $5,804,392 $218,122,388 ============= ============= ============= ============= ============= ============= ============= The accompanying notes are an integral part of this statement.
CENTERIOR ENERGY CORPORATION EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1994 ---------------------------------------------------------------------------------------------- Centerior Fixed Global Stock Equity Income Balanced Equity ASSETS Fund Fund Fund Fund Fund Loans Total - ------ ------------- ------------- ------------- ------------- ------------- ------------- --------- Investments, at market value: Centerior - common stock $36,992,490 $0 $0 $0 $0 $0 $36,992,490 Equity Fund - diversified common stock fund 0 44,446,774 0 0 0 0 44,446,774 Investments in mutual funds 0 483,478 0 7,136,248 12,878,221 0 20,497,947 Loans receivable from participants 0 0 0 0 0 4,782,757 4,782,757 Investments, at contract value: Funds on deposit with insurance companies and banks 0 0 76,950,126 0 0 0 76,950,126 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total investments 36,992,490 44,930,252 76,950,126 7,136,248 12,878,221 4,782,757 183,670,094 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Receivables: Transfers receivable 8,763 0 235,868 0 0 0 244,631 Investment income receivable 1,628 107,961 126,663 64,504 425 0 301,181 Contributions receivable from: Participants 37,213 90,531 91,757 25,102 69,672 0 314,275 Employer 11,185 27,210 27,578 7,545 20,941 0 94,459 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total receivables 58,789 225,702 481,866 97,151 91,038 0 954,546 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Cash and temporary cash investments 443,062 1,068,184 801,669 15,126 24,828 0 2,352,869 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total assets 37,494,341 46,224,138 78,233,661 7,248,525 12,994,087 4,782,757 186,977,509 ------------- ------------- ------------- ------------- ------------- ------------- ------------- LIABILITIES - ----------- Transfers payable 0 168,024 0 55,889 13,032 7,686 244,631 Liabilities for investment purchases and other 969,993 0 122,817 64,384 0 0 1,157,194 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Total liabilities 969,993 168,024 122,817 120,273 13,032 7,686 1,401,825 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net assets available for Plan benefits $36,524,348 $46,056,114 $78,110,844 $7,128,252 $12,981,055 $4,775,071 $185,575,684 ============= ============= ============= ============= ============= ============= ============= The accompanying notes are an integral part of this statement.
CENTERIOR ENERGY CORPORATION EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the Year Ended December 31, 1995 ------------------------------------------------------------------------------------------------- Centerior Fixed Global Stock Equity Income Balanced Equity Fund Fund Fund Fund Fund Loans Total ------------- ------------- ------------- ------------- ------------- ------------- ------------- Contributions: Participants $2,922,764 $4,217,048 $4,003,295 $1,178,413 $2,287,600 $0 $14,609,120 Employer 1,573,970 1,591,478 1,504,587 415,215 768,983 0 5,854,233 Rollover 2,563,302 65,440 0 46,688 84,432 0 2,759,862 Investment income: Dividends 3,479,947 1,201,132 0 288,507 361,630 0 5,331,216 Interest 14,374 130,532 1,380,081 1,409 2,785 402,830 1,932,011 Net realized gain (loss) and unrealized appreciation (depreciation) in market value of investments (17,903) 13,355,932 3,970,676 1,529,597 2,571,378 0 21,409,680 Transfers (to)/from other funds (net) (5,238,060) 1,691,535 (2,344,161) 2,213,856 3,676,830 0 0 Administrative expenses (25,898) (107,529) (112,099) 0 0 0 (245,526) Loan activity: Borrowings (857,123) (929,852) (1,085,301) (105,033) (342,345) 3,319,654 0 Repayment of borrowings 0 0 2,158,496 0 0 (2,158,496) 0 Interest payments 0 0 402,830 0 0 (402,830) 0 ------------- ------------- ------------- ------------- ------------- ------------- ------------- 4,415,373 21,215,716 9,878,404 5,568,652 9,411,293 1,161,158 51,650,596 Less - Amounts withdrawn by participants 2,828,704 3,833,281 10,878,161 499,144 932,765 131,837 19,103,892 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) 1,586,669 17,382,435 (999,757) 5,069,508 8,478,528 1,029,321 32,546,704 Net assets available for Plan benefits: Beginning of year 36,524,348 46,056,114 78,110,844 7,128,252 12,981,055 4,775,071 185,575,684 ------------- ------------- ------------- ------------- ------------- ------------- ------------- End of year $38,111,017 $63,438,549 $77,111,087 $12,197,760 $21,459,583 $5,804,392 $218,122,388 ============= ============= ============= ============= ============= ============= ============= The accompanying notes are an integral part of this statement.
CENTERIOR ENERGY CORPORATION EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the Year Ended December 31, 1994 ---------------------------------------------------------------------------------------------- Centerior Fixed Global Stock Equity Income Balanced Equity Fund Fund Fund Fund Fund Loans Total ------------- ------------- ------------- ------------- ------------- ------------- ---------- Contributions: Participants $3,717,016 $4,883,354 $4,102,498 $739,110 $1,301,241 $0 $14,743,219 Employer 929,229 1,773,097 1,469,423 254,278 433,104 0 4,859,131 Rollover 640 489,050 1,785,022 0 0 0 2,274,712 Investment income: Dividends 3,016,975 1,259,178 0 149,123 169,752 0 4,595,028 Interest 86,921 35,932 2,449,757 5,623 11,307 338,406 2,927,946 Net realized gain (loss) and unrealized appreciation (depreciation) in market value of investments (16,037,612) (389,854) 926,904 (198,274) 220,095 0 (15,478,741) Transfers (to)/from other funds (net) (669,137) (12,203,037) (6,092,924) 6,974,542 12,000,012 (9,456) 0 Loan activity: Borrowings (631,859) (693,886) (803,077) (74,400) (125,883) 2,329,105 0 Repayment of borrowings 0 0 1,741,936 0 0 (1,741,936) 0 Interest payments 0 0 338,406 0 0 (338,406) 0 ------------- ------------- ------------- ------------- ------------- ------------- ------------- (9,587,827) (4,846,166) 5,917,945 7,850,002 14,009,628 577,713 13,921,295 Less - Amounts withdrawn by participants 6,071,613 11,349,610 50,336,066 721,750 1,028,573 242,789 69,750,401 ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) (15,659,440) (16,195,776) (44,418,121) 7,128,252 12,981,055 334,924 (55,829,106) Net assets available for Plan benefits: Beginning of year 52,183,788 62,251,890 122,528,965 0 0 4,440,147 241,404,790 ------------- ------------- ------------- ------------- ------------- ------------- ------------- End of year $36,524,348 $46,056,114 $78,110,844 $7,128,252 $12,981,055 $4,775,071 $185,575,684 ============= ============= ============= ============= ============= ============= ============= The accompanying notes are an integral part of this statement.
CENTERIOR ENERGY CORPORATION EMPLOYEE SAVINGS PLAN NOTES TO THE FINANCIAL STATEMENTS NOTE 1 - GENERAL DESCRIPTION OF THE PLAN The Centerior Energy Corporation (Centerior) Employee Savings Plan (Plan) was approved by the Centerior Board of Directors in 1986 and went into effect as of January 1, 1987. The purpose of the Plan is to afford eligible employees an opportunity to make systematic savings through payroll deductions, to invest such savings in a manner which will assist them in meeting their savings and investment needs, and to facilitate their becoming share owners of Centerior. Participation in the Plan is voluntary. An eligible employee is any part-time, temporary, full-time probationary or full-time regular employee of Centerior, Centerior Service Company (CSC), The Cleveland Electric Illuminating Company (CEI), The Toledo Edison Company (TE) or any other Centerior affiliate that adopts the Plan according to its terms, and is at least age 18. CSC, CEI and TE are wholly owned subsidiaries of Centerior. The Employee Savings Plan Trust (Trust) has been established by agreement between Centerior, CSC and Key Trust Company, N.A. (Key) [formerly Society National Bank (Society)], Cleveland, Ohio. Key has been selected by Centerior to serve as trustee (Trustee) of the Trust. Effective June 1, 1995, the Trust is divided into two subtrusts - the Savings Plan Subtrust and the Rollover Subtrust. There are five funds in each Subtrust, as follows: (1) Centerior Stock Fund, (2) Equity Fund, (3) Fixed Income Fund, (4) Balanced Fund and (5) Global Equity Fund. The Balanced and Global Equity Funds were new investment fund options effective April 1, 1994. Centerior may close contributions into the Plan at any time. A discontinuance of employer matching contributions into the Plan would constitute a closing of both participant contributions and employer matching contributions into the Plan. In such event, for those participants with an unvested interest in the employer's matching contribution (as specified in Note 3), such interest will become fully vested and nonforfeitable. Centerior may either continue the operation of the Plan with respect to the interests of participants then in the Plan or terminate the Plan. If the Plan is terminated, all assets in the Trust will be distributed among the participants in proportion to their respective interests without any forfeitures. The Plan is subject to the reporting, disclosure, participation, vesting and fiduciary responsibility provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), but is not subject to the funding provisions of Title I and the plan termination insurance provisions of Title IV of ERISA. The number of participants in each fund and in the Plan at the end of the last two years was as follows: December 31, 1995 1994 Centerior Stock Fund 4,445 4,637 Equity Fund 4,107 4,010 Fixed Income Fund 4,302 4,299 Balanced Fund 1,357 926 Global Equity Fund 1,743 1,198 Plan 6,816 6,492 The total number of participants in the Plan was less than the sum of the number of participants in each fund shown above because many were participating in more than one fund. The Plan was amended as of April 1, 1995 and June 1, 1995, switching to daily valuation of the investment funds effective June 1, 1995. All Plan activity, including fund account balances, transfers and withdrawals, is updated each business day by the Trustee. Participants can get up-to-date reports on their accounts via the telephone information access system of the Trustee. As part of the change to daily valuation, all participants are sharing in the investment management costs and certain administrative costs of the Plan. Several other changes, which provided participants more control over contribution levels, investment mix and the frequency of withdrawals, are summarized within these notes. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the Plan are prepared on the accrual basis of accounting. Valuation of Investments Centerior common stock in the Centerior Stock Fund is valued at the average of the high and low sales prices of Centerior common stock as reported on Network A of The Consolidated Transaction Reporting System and as listed by The Wall Street Journal on the last business day of the year. The average price of Centerior common stock was $8.875 per share on December 29, 1995 and $7.3125 per share on June 25, 1996. Equity Fund investment securities in a diversified common stock fund managed by National City Bank, Cleveland, Ohio, and in a mutual fund are valued at market prices on the last business day of the year. Fixed Income Fund investments consist of interest-bearing contracts with insurance companies and investments in Society's EB MaGIC Fund. These investments are fully benefit-responsive and stated at contract value, which equals principal plus accrued interest. Contract value approximated market value at December 31, 1995. The EB MaGIC Fund is a collective fund which invests primarily in insurance and other investment contracts. Investment income earned for the EB MaGIC Fund is reported as net realized gain and unrealized appreciation in the Statement of Changes in Net Assets Available for Plan Benefits. Investments for the Balanced and Global Equity Funds in diversified mutual funds, the Phoenix Balanced Fund and the American Funds' New Perspective Fund, respectively, are valued at market prices on the last business day of the year. Investment Gains (Losses), Appreciation (Depreciation) and Income The net realized gain (loss) and unrealized appreciation (depreciation) amounts shown in the Statements of Changes in Net Assets Available for Plan Benefits for 1995 and 1994 were calculated using the current value methodology for costing investments. Current value represents the market value of investments held at the beginning of the year plus the purchase price for investments acquired during the current year. The realized gains and losses on the distribution or sale of shares in the Centerior Stock, Equity, Balanced and Global Equity Funds represent the difference between the market value of the shares on the date of distribution or sale and the cost of the shares using the current value methodology described above. The realized gain or loss on the sale of securities in the Centerior Stock Fund is included in the amounts withdrawn or transferred by participants which caused the sale. The net realized gain or loss on the sale of investment securities in the Equity, Balanced and Global Equity Funds will contribute to the annual increase (decrease) in the respective Fund's net assets available for Plan benefits. Dividend income within the Centerior Stock Fund and the Equity Fund is recorded on the ex-dividend dates. Income from all other investments is recorded as earned. Effective June 1, 1995, the Plan provides that the market value of all investments shall be determined at the market close each business day of the Trustee. Unrealized appreciation or depreciation, equal to the difference between the cost and the daily market value of the investments, is recognized in determining the value of each fund. Expenses of the Plan Expenses of the Plan incurred by the Trustee to buy and sell securities are included as a cost of those securities. Fund earnings for the Balanced and Global Equity Funds are net of the charges assessed for mutual fund investment management fees. Effective June 1, 1995, all participants are sharing in the investment management costs and certain administrative costs of the Plan. Prior to that date, all expenses for administration of the Plan were paid by CSC, CEI and TE and, accordingly, are not included in the financial statements of the Plan. The annual investment management and administrative fees assessed on total assets under management as of December 31, 1995 were as follows: Percentage Centerior Stock Fund 0.10% Equity Fund 0.60 Fixed Income Fund 0.25 Balanced Fund 1.02 Global Equity Fund 0.83 NOTE 3 - CONTRIBUTIONS The Plan consists of three parts (Parts) - the After Tax Part, the Before Tax Part and the Rollover Part. The maximum participant contribution into both the After Tax Part and the Before Tax Part is 16% of pay: up to 6% as a Basic Contribution and up to 10% as a Supplemental Contribution. The minimum contribution is 1% of pay. Pay includes only straight-time hourly wages or salary paid for regularly scheduled straight-time hours. A participant may allocate contributions in increments of 1% into the Centerior Stock, Equity, Fixed Income, Balanced and Global Equity Funds which total 100% or may allocate all contributions into any one Fund. Effective June 1, 1995, participants make a single election for investment mix for their contributions into both the After Tax and Before Tax Parts. Previously, participants made separate selections for investment mix for their contributions into those two Parts of the Plan. Also, effective June 1, 1995, participants may change their contributions as often as once a month and may change their investment mix, transfer between funds or withdraw as often as once every 30 calendar days, rather than once every three months for these various transactions previously. A participant's withdrawal of post-December 31, 1986 After Tax contributions is penalized by requiring a six-month waiting period for future participant contributions to the After Tax Part of the Plan, except in certain cases of hardship and during certain open enrollment periods. The After Tax Part receives participant contributions after they are taxed as pay. The Before Tax Part receives contributions before they are taxed as pay, as participants may instruct their employer to deposit their contributions into the Trust in exchange for the election to have their pay reduced by the same amount. Participant contributions of pay under the Plan as Before Tax contributions reduce a participant's taxable income for federal and Ohio income tax purposes in the year of contribution. Participant contributions into both the After Tax Part and the Before Tax Part are subject to certain Internal Revenue Service (IRS) limitations. The employer of each participant contributes an amount equal to 50% of the participant's eligible Basic Contributions, which is allocated on the same percentage basis and to the same Funds as the participant's Basic Contributions. Effective April 1, 1995, all employer matching contributions are deposited solely into the Before Tax Part of the Plan. Effective June 1, 1995, all employer matching contributions vest immediately. Previously, employer matching contributions which matched Basic Before Tax Contributions vested immediately, while employer matching contributions which matched Basic After Tax Contributions vested only after 36 months of employee participation in the Plan. Also, employer matching contributions to the After Tax Part and the earnings thereon, which were forfeited by participants, were applied to reduce future employer contributions. Employees retiring on or after July 1, 1993 are allowed to directly transfer or rollover all or any part of their qualified lump sum pension benefit from their respective Centerior pension plan into the Rollover Part of the Plan. The rollover can be invested in the same five investment Funds of the Plan, but the accounts are segregated from existing After Tax Part and Before Tax Part accounts. The minimum rollover required is $3,500. Participants, including those who have terminated employment but maintained account balances, may transfer any or all of their contributions and the earnings thereon and employer matching contributions and the earnings thereon among the five Funds in the same Part. Any integral increment of 1% may be transferred. Effective June 1, 1995, a participant's interests from a plan of a previous employer that is qualified under Internal Revenue Code (IRC) Section 401(k) can be transferred into the Plan. In 1995, The Centerior-Toledo Edison Company Employee Stock Ownership Plan was terminated and distributed its assets. One option for its participants was a direct transfer of Centerior common stock shares into the Rollover Part of the Plan as a rollover contribution to the Centerior Stock Fund on a before-tax basis. Participants electing this option transferred 261,620 shares valued at $2,484,655 into the Plan in December 1995. NOTE 4 - INVESTMENTS Contributions into the Centerior Stock Fund and the earnings thereon are invested by the Trustee in Centerior common stock. At the direction of Centerior, Centerior common stock is either purchased in the open market at prevailing prices or purchased from Centerior at the market value on the date of the purchase. Prior to May 31, 1995, the Trustee was also authorized to match or net to the extent possible within the Centerior Stock Fund all Centerior common stock sales and purchases (exclusive of purchases related to the quarterly reinvestment of cash dividends). The netting was at a price that was the average of the most recent five daily closing prices of Centerior's common stock prior to the effective date of the transactions. Any required sales or purchases in excess of the netted amounts were transacted in the open market or by transactions with Centerior. Contributions into the Equity Fund and the earnings thereon are deposited by the Trustee in a diversified common stock fund. These deposits are then invested by National City Bank primarily in the common stocks of a large number of publicly owned companies, excluding Centerior. At December 31, 1995, contributions into the Fixed Income Fund and the earnings thereon were invested by the Trustee in interest-bearing contracts with insurance companies and in Society's EB MaGIC Fund. For both 1995 and 1994, group fixed-term contracts with insurance companies earned interest at an annual rate which ranged from 7% to 9.26%. The EB MaGIC Fund's earned interest rate varies as the fund's various investment contracts with insurance companies expire and new ones are added. The EB MaGIC Fund's average annual earned interest rate at December 31, 1995 and 1994 was 6.69% and 6.85%, respectively. Contributions into the Balanced Fund and the earnings thereon are deposited by the Trustee in a diversified mutual fund with the objectives of long-term growth of capital, reasonable income and conservation of capital. The Balanced Fund investment is currently in the Phoenix Balanced Fund. Contributions into the Global Equity Fund and the earnings thereon are deposited by the Trustee in a diversified mutual fund with the investment objective of long-term growth of capital through world-wide investments. The Global Equity Fund investment is currently in the American Funds' New Perspective Fund. Investments that represent 5% or more of the Plan's net assets at the end of the last two years were as follows: December 31, 1995 1994 Centerior common stock, 4,312,911 and 4,168,168 shares, respectively $ 38,277,085 $ 36,992,490 Life Insurance Company of Georgia, 7%, due June 1999 10,048,312 10,048,312 EB MaGIC Fund 58,665,637 57,770,695 Phoenix Balanced Fund, 726,057 and 481,204 shares, respectively 12,197,760 7,136,248 American Funds' New Perspective Fund, 1,310,108 and 896,188 shares, respectively 21,459,573 12,878,221 Total $140,648,367 $124,825,966 See Schedule I for a complete list of investments held at December 31, 1995 for each of the five Funds. The Trustee can temporarily keep money in any of the Funds in short-term investments or in cash to have cash available to meet participants' distribution requests or until the Trustee invests it. See Schedule II for a summary of reportable (significant) transactions for 1995. NOTE 5 - WITHDRAWALS PAYABLE TO PARTICIPANTS Subject to certain limitations under the Plan, participants may elect to withdraw their contributions and employer matching contributions and any related gains and earnings on these contributions. Withdrawals payable to participants at the end of the last two years were as follows: December 31, 1995 1994 Centerior Stock Fund $ 78,101 $ 219,922 Equity Fund 61,585 9,331 Fixed Income Fund 115,916 1,086,561 Balanced Fund 19,972 19,472 Global Equity Fund 22,668 18,829 Total $298,242 $1,354,115 NOTE 6 - LOANS TO PARTICIPANTS Participants are eligible to apply for a loan to borrow from their vested available investment accounts having a balance of at least $2,000. To be eligible, participants must receive a regular paycheck from which repayments can be withheld to repay the borrowing and pay interest to their own accounts. Eligible participants may borrow up to the lesser of 50% of their vested account balances or $50,000. Loans from the Rollover Part are not permitted. A participant may elect a repayment period of one to 60 months. All loan repayments are made to the Fixed Income Fund. NOTE 7 - TAX STATUS OF THE PLAN Centerior received a determination letter from the IRS dated March 28, 1995 to the effect that the Plan is a qualified defined contribution plan under Section 401 of the IRC and that the Trust is exempt from income taxes under Section 501 thereof. The effect of such qualification and exemption is that the participating employees are not subject to federal income taxes on employer contributions or any income accruing to their accounts until distributions are made from the accounts. When a distribution is made, the excess of the amount distributed over the participating employee's own After Tax contributions is taxable income to the employee. Distributions from both the Before Tax Part and the Rollover Part are subject to federal income tax. The Plan has been amended since receiving the determination letter. However, CSC (the Plan Administrator) and the Plan's legal counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. CENTERIOR ENERGY CORPORATION SCHEDULE I EMPLOYEE SAVINGS PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1995
Number of Historical Market Common Stock Shares Cost Value --------------------------------------------- ---------- ------------- ------------- CENTERIOR STOCK FUND -------------------- Centerior ................................... 4,312,911 $65,328,616 $38,277,085 ------------- ------------- EQUITY FUND ----------- American Home Products Corp ................. 10,500 719,410 1,018,500 American International Group Inc ............ 20,000 720,120 1,850,000 Arch Communications Group Inc ............... 25,000 657,526 600,000 AT&T Corp ................................... 18,300 874,393 1,184,925 Automatic Data Processing Inc ............... 16,000 333,562 1,188,000 C R Bard Inc ................................ 20,500 581,162 661,125 Bristol-Myers Squibb Co ..................... 19,700 1,010,233 1,691,737 Browning Ferris Inds Inc .................... 55,000 1,490,953 1,615,625 Chubb Corp .................................. 13,100 794,377 1,267,425 Cisco Systems Inc ........................... 18,000 719,517 1,343,250 Walt Disney Co .............................. 22,938 773,106 1,350,475 Dow Chemical Co ............................. 20,000 1,512,300 1,405,000 Emerson Electric Co ......................... 20,000 1,285,764 1,635,000 Exxon Corp .................................. 15,800 777,157 1,271,900 Fleet Financial Group Inc ................... 23,100 657,438 941,325 FPL Group Inc ............................... 13,000 469,946 602,875 General Electric Co ......................... 18,400 706,636 1,324,800 General Motors Corp ......................... 37,000 1,391,929 1,924,000 General Re Corp ............................. 8,500 761,309 1,317,500 Harley Davidson Inc ......................... 50,000 1,252,050 1,437,500 Home Depot Inc .............................. 11,866 396,437 566,602 Hubbell Inc ................................. 7,665 400,738 503,974 Intel Corp .................................. 25,000 1,560,000 1,418,750 Interpublic Group Cos Inc ................... 39,300 1,123,029 1,704,637 Lowes Cos Inc ............................... 36,500 1,234,508 1,222,750 Marsh & McLennan Cos ........................ 6,600 528,284 585,750 Microsoft Corp .............................. 5,700 218,288 500,175 Minnesota Mining & Mfg Co ................... 17,400 683,709 1,154,925 Morton International Inc .................... 9,600 189,386 344,400 Motorola Inc ................................ 27,000 1,518,633 1,539,000 Nestle SA ................................... 23,800 731,651 1,319,781 Nordstrom Inc ............................... 14,000 500,915 567,000 Pepsico Inc ................................. 36,800 960,581 2,056,200 Pfizer Inc .................................. 34,000 1,207,670 2,142,000 Pitney Bowes Inc ............................ 36,800 1,046,675 1,729,600 Reuters Holdings PLC ........................ 22,500 451,732 1,240,313 Royal Dutch Petroleum Co .................... 10,800 748,964 1,524,150 Schering-Plough Corp ........................ 35,000 824,984 1,916,250 Schlumberger Ltd ............................ 16,600 1,085,669 1,149,550 Singer Co ................................... 40,000 1,170,083 1,115,000 Sysco Corp .................................. 39,000 980,475 1,267,500 U S West Inc - Communications Group ......... 21,435 404,238 763,622 U S West Inc - Media Group .................. 21,435 271,529 407,265 Wachovia Corp ............................... 21,200 665,182 969,900 Wells Fargo & Co ............................ 8,000 1,353,143 1,728,000 Wisconsin Energy Corp ....................... 33,850 702,231 1,036,656 Xerox Corp .................................. 8,700 1,016,169 1,191,900 York International Corp ..................... 40,000 1,442,878 1,880,000 ------------- ------------- 40,906,669 59,176,612 ------------- -------------
CENTERIOR ENERGY CORPORATION SCHEDULE I EMPLOYEE SAVINGS PLAN (Continued) SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1995
Historical Market Mutual Funds Cost Value --------------------------------------------------- ------------- ------------- EQUITY FUND ----------- Fidelity Select Portfolio - Biotechnology Fund (20,653 shares) ............................ $500,000 $719,331 BALANCED FUND ------------- Phoenix Balanced Fund (726,057 shares) ............ 11,536,441 12,197,760 GLOBAL EQUITY FUND ------------------ American Funds' New Perspective Fund (1,310,108 shares) .............................. 20,249,521 21,459,573 ------------- ------------- 32,285,962 34,376,664 ------------- ------------- LOANS ----- Loans Receivable from Participants ................ 5,835,438 5,835,438 ------------- ------------- Funds on Deposit with Insurance Companies and Banks --------------------------------------------------- FIXED INCOME FUND ----------------- Life Insurance Company of Georgia, 7%, due June 1999 ............................... 10,048,312 10,048,312 * Massachusetts Mutual Life Insurance Company, 8.65%, due February 1996 ........................ 8,058,860 8,058,860 * EB MaGIC Fund ..................................... 54,393,169 58,665,637 * ------------- ------------- 72,500,341 76,772,809 ------------- ------------- Total Assets Held for Investment Purposes ......... $216,857,026 $214,438,608 ============= ============= * - Contract value approximated market value. The accompanying notes are an integral part of this schedule.
CENTERIOR ENERGY CORPORATION SCHEDULE II EMPLOYEE SAVINGS PLAN SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995
Number of Historical Net Gain Transaction Description Transactions Cost Proceeds (Loss) ------------------------------- ------------ ----------- ------------ ------------ Purchases: Armada Money Market Fund ...... 102 $9,589,856 N/A N/A EB MaGIC Fund ................. 11 3,866,841 N/A N/A Employee Benefits Money Market Fund ................. 332 25,438,491 N/A N/A Sales: Armada Money Market Fund ...... 58 $6,107,174 $6,107,174 $0 EB MaGIC Fund ................. 26 6,561,595 6,942,575 380,980 Employee Benefits Money Market Fund ................. 280 27,373,813 27,373,813 0 Reportable transactions are a series of purchases or sales of the same securities issue which aggregate to an amount in excess of 5% of the market value of the Plan assets at the beginning of the year. The accompanying notes are an integral part of this schedule.
CENTERIOR ENERGY CORPORATION CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report on the financial statements of the Centerior Energy Corporation Employee Savings Plan dated June 26, 1996, included in this Form 10-K/A, into Centerior Energy Corporation's previously filed Registration Statements, File Nos. 33-47231, 33-9736, 33-58935, 33-49957 and 33-59635. ARTHUR ANDERSEN LLP Cleveland, Ohio June 26, 1996 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report on the financial statements of the Centerior Energy Corporation Employee Savings Plan dated June 26, 1996, included in this Form 10-K/A, into The Cleveland Electric Illuminating Company's previously filed Registration Statement, File No. 33-55513. ARTHUR ANDERSEN LLP Cleveland, Ohio June 26, 1996 -----END PRIVACY-ENHANCED MESSAGE-----