q108_main10-qamended.htm
 


 
 

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

FORM 10-Q/A

Amendment No. 1

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

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.
     
1-2578
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
 
     
1-3522
PENNSYLVANIA ELECTRIC COMPANY
25-0718085
 
(A Pennsylvania Corporation)
 
 
c/o FirstEnergy Corp.
 
 
76 South Main Street
 
 
Akron, OH  44308
 
 
Telephone (800)736-3402
 



 
 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes (X)  No (  )
Ohio Edison Company and Pennsylvania Electric Company
Yes (  )  No (X)
The Cleveland Electric Illuminating Company and The Toledo Edison Company

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer,” “accelerated filer” and “smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer
(  )
 
N/A
Accelerated Filer
(  )
 
N/A
Non-accelerated Filer (Do not check if a smaller reporting company)
(X)
Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Pennsylvania Electric Company

Smaller Reporting Company
(  )
N/A

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes (  ) No (X)
Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Pennsylvania Electric Company

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

 
OUTSTANDING
CLASS
AS OF MAY 8, 2008
Ohio Edison Company, no par value
60
The Cleveland Electric Illuminating Company, no par value
67,930,743
The Toledo Edison Company, $5 par value
29,402,054
Pennsylvania Electric Company, $20 par value
4,427,577

This combined Form 10-Q/A is separately filed by Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Pennsylvania Electric Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf.

OMISSION OF CERTAIN INFORMATION

Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Pennsylvania Electric Company meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q/A with the reduced disclosure format specified in General Instruction H(2) to Form 10-Q.

 
 

 

Forward-Looking Statements: This Form 10-Q/A includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management’s intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Actual results may differ materially due to:
·  
the speed and nature of increased competition in the electric utility industry and legislative and regulatory changes affecting how generation rates will be determined following the expiration of existing rate plans in Ohio and Pennsylvania,
·  
the impact of the PUCO’s rulemaking process on the Ohio Companies’ ESP and MRO filings,
·  
economic or weather conditions affecting future sales and margins,
·  
changes in markets for energy services,
·  
changing energy and commodity market prices and availability,
·  
replacement power costs being higher than anticipated or inadequately hedged,
·  
the continued ability of FirstEnergy’s regulated utilities to collect transition and other charges or to recover increased transmission costs,
·  
maintenance costs being higher than anticipated,
·  
other legislative and regulatory changes, revised environmental requirements, including possible GHG emission regulations,
·  
the impact of the U.S. Court of Appeals’ July 11, 2008 decision to vacate the CAIR rules and the scope of any laws, rules or regulations that may ultimately take their place,
·  
the uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement the Air Quality Compliance Plan (including that such amounts could be higher than anticipated) or levels of emission reductions related to the Consent Decree resolving the NSR litigation or other potential regulatory initiatives,
·  
adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight) by the NRC (including, but not limited to, the Demand for Information issued to FENOC on May 14, 2007),
·  
the timing and outcome of various proceedings before the PUCO (including, but not limited to, the ESP and MRO proceedings as well as the distribution rate cases and the generation supply plan filing for the Ohio Companies and the successful resolution of the issues remanded to the PUCO by the Ohio Supreme Court regarding the RSP and RCP, including the recovery of deferred fuel costs),
·  
Met-Ed’s and Penelec’s transmission service charge filings with the PPUC as well as the resolution of the Petitions for Review filed with the Commonwealth Court of Pennsylvania with respect to the transition rate plan for Met-Ed and Penelec,
·  
the continuing availability of generating units and their ability to operate at or near full capacity,
·  
the ability to comply with applicable state and federal reliability standards,
·  
the ability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives),
·  
the ability to improve electric commodity margins and to experience growth in the distribution business,
·  
the changing market conditions that could affect the value of assets held in the registrants’ nuclear decommissioning trusts, pension trusts and other trust funds, and cause FirstEnergy to make additional contributions sooner, or in an amount that is larger than currently anticipated,
·  
the ability to access the public securities and other capital and credit markets in accordance with FirstEnergy’s financing plan and the cost of such capital,
·  
changes in general economic conditions affecting the registrants,
·  
the state of the capital and credit markets affecting the registrants, and
·  
the risks and other factors discussed from time to time in the registrants’ SEC filings, and other similar factors.

The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on the registrants’ business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. Also, a security rating is not a recommendation to buy, sell or hold securities, and it may be subject to revision or withdrawal at any time and each such rating should be evaluated independently of any other rating. The registrants expressly disclaim any current intention to update any forward-looking statements contained herein as a result of new information, future events or otherwise.



 
 

 



EXPLANATORY NOTE

This combined Amendment No. 1 on Form 10-Q/A for the quarter ended March 31, 2008 is being filed by Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company and Pennsylvania Electric Company (the “registrants”) to correct common stock dividend payments reported in their respective consolidated statements of cash flows for the three months ended March 31, 2008, contained in Part I, Item 1, Consolidated Financial Statements. This correction does not affect the respective registrants’ previously reported consolidated statements of income and comprehensive income for the three months ended March 31, 2008 and consolidated balance sheets as of March 31, 2008 contained in the combined Form 10-Q for the quarter ended March 31, 2008, as originally filed on May 8, 2008 (the “original Form 10-Q”). Except for Part I, Items 1 and 4T and certain exhibits under Part II, Item 6, no other information included in the Form 10-Q as originally filed is being revised by, or repeated in this amendment.

As discussed under “Restatement of the Consolidated Statements of Cash Flows” in Note 1 to the revised Combined Notes Consolidated Financial Statements of the registrants included in the Form 10-Q/A, the registrants have restated their respective consolidated statements of cash flows to correct common stock dividend payments reported in cash flows from financing activities. The consolidated statements of cash flows for those registrants, as originally filed, erroneously did not reflect the payment of common stock dividends in the first quarter of 2008, which were declared in the third quarter of 2007. The corrections resulted in a corresponding change in operating liabilities - accounts payable, included in cash flows from operating activities.

The original Form 10-Q was a combined Form 10-Q representing separate filings by each of the registrants and their affiliates, FirstEnergy Corp., FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company (the “affiliates”). However, this Form 10-Q/A constitutes an amendment only to Part I, Items 1 and 4T and Part II, Item 6 of the Original Form 10-Q filed by each registrant. In addition, information contained herein relating to any individual registrant is filed by such registrant on its own behalf and no registrant makes any representation as to information contained herein relating to any other registrant or any of the affiliates, including, but not limited to, any such information contained in the revised Combined Notes to Consolidated Financial Statements included herein.

Please note that the information contained in this Amendment No. 1, including the consolidated financial statements and notes thereto, does not reflect events occurring after the date of the original Form 10-Q filing on May 8, 2008, except to the extent described above.


 

 
 

 

TABLE OF CONTENTS



   
Pages
Glossary of Terms
ii-iv
     
Part I.     Financial Information
 
     
Item 1. Financial Statements.
1
     
Ohio Edison Company
 
     
 
Report of Independent Registered Public Accounting Firm
2
 
Consolidated Statements of Income and Comprehensive Income
3
 
Consolidated Balance Sheets
4
 
Consolidated Statements of Cash Flows
5
     
The Cleveland Electric Illuminating Company
 
     
 
Report of Independent Registered Public Accounting Firm
6
 
Consolidated Statements of Income and Comprehensive Income
7
 
Consolidated Balance Sheets
8
 
Consolidated Statements of Cash Flows
9
     
The Toledo Edison Company
 
     
 
Report of Independent Registered Public Accounting Firm
10
 
Consolidated Statements of Income and Comprehensive Income
11
 
Consolidated Balance Sheets
12
 
Consolidated Statements of Cash Flows
13
     
Pennsylvania Electric Company
 
     
 
Report of Independent Registered Public Accounting Firm
14
 
Consolidated Statements of Income and Comprehensive Income
15
 
Consolidated Balance Sheets
16
 
Consolidated Statements of Cash Flows
17
   
Combined Notes to Consolidated Financial Statements
18-50
   
Item 4T.   Controls and Procedures – OE, CEI, TE and Penelec.
51
     
Part II.    Other Information
 
     
Item 6.     Exhibits.
52





 
i

 

GLOSSARY OF TERMS


The following abbreviations and acronyms are used in this report to identify FirstEnergy Corp. and its current and former subsidiaries:

ATSI
American Transmission Systems, Inc., owns and operates transmission facilities
 
CEI
The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary
 
Companies
OE, CEI, TE, JCP&L, Met-Ed and Penelec
 
FENOC
FirstEnergy Nuclear Operating Company, operates nuclear generating facilities
 
FES
FirstEnergy Solutions Corp., provides energy-related products and services
 
FESC
FirstEnergy Service Company, provides legal, financial and other corporate support services
 
FGCO
FirstEnergy Generation Corp., owns and operates non-nuclear generating facilities
 
FirstEnergy
FirstEnergy Corp., a public utility holding company
 
GPU
GPU, Inc., former parent of JCP&L, Met-Ed and Penelec, which merged with FirstEnergy on
November 7, 2001
 
JCP&L
Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary
 
JCP&L Transition
   Funding
JCP&L Transition Funding LLC, a Delaware limited liability company and issuer of transition
    bonds
 
JCP&L Transition
   Funding II
JCP&L Transition Funding II LLC, a Delaware limited liability company and issuer of transition bonds
 
Met-Ed
Metropolitan Edison Company, a Pennsylvania electric utility operating subsidiary
 
NGC
FirstEnergy Nuclear Generation Corp., owns nuclear generating facilities
 
OE
Ohio Edison Company, an Ohio electric utility operating subsidiary
 
Ohio Companies
CEI, OE and TE
 
Penelec
Pennsylvania Electric Company, a Pennsylvania electric utility operating subsidiary
 
Penn
Pennsylvania Power Company, a Pennsylvania electric utility operating subsidiary of OE
 
Pennsylvania Companies
Met-Ed, Penelec and Penn
 
PNBV
PNBV Capital Trust, a special purpose entity created by OE in 1996
 
Shippingport
Shippingport Capital Trust, a special purpose entity created by CEI and TE in 1997
 
TE
The Toledo Edison Company, an Ohio electric utility operating subsidiary
 
TEBSA
Termobarranquila S.A. Empresa de Servicios Publicos
 
     
The following abbreviations and acronyms are used to identify frequently used terms in this report:
 
     
AEP
American Electric Power Company, Inc.
 
AOCL
Accumulated Other Comprehensive Loss
 
AQC
Air Quality Control
 
ARB
Accounting Research Bulletin
 
ARO
Asset Retirement Obligation
 
ASM
Ancillary Services Market
 
BGS
Basic Generation Service
 
BPJ
Best Professional Judgment
 
CAA
Clean Air Act
 
CAIR
Clean Air Interstate Rule
 
CAMR
Clean Air Mercury Rule
 
CBP
Competitive Bid Process
 
CO2
Carbon Dioxide
 
DFI
Demand for Information
DOJ
United States Department of Justice
DRA
Division of Ratepayer Advocate
EIS
Energy Independence Strategy
EITF
Emerging Issues Task Force
EMP
Energy Master Plan
EPA
United States Environmental Protection Agency
EPACT
Energy Policy Act of 2005
ESP
Electric Security Plan
FASB
Financial Accounting Standards Board
FERC
Federal Energy Regulatory Commission
FIN
FASB Interpretation
FIN 46R
FIN 46 (revised December 2003), "Consolidation of Variable Interest Entities"

 
ii

 

GLOSSARY OF TERMS, Cont’d.


FIN 47
FIN 47, "Accounting for Conditional Asset Retirement Obligations - an interpretation of FASB
    Statement No. 143"
FIN 48
FIN 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement
    No. 109”
FirstCom
First Communications, Inc.
FMB
First Mortgage Bonds
FSP
FASB Staff Position
FSP FAS 157-2
FSP FAS 157-2, “Effective Date of  FASB Statement No. 157”
FTR
Financial Transmission Rights
GAAP
Accounting Principles Generally Accepted in the United States
GHG
Greenhouse Gases
ICE
Intercontinental Exchange
IRS
Internal Revenue Service
ISO
Independent System Operator
kV
Kilovolt
KWH
Kilowatt-hours
LIBOR
London Interbank Offered Rate
LOC
Letter of Credit
MEIUG
Met-Ed Industrial Users Group
MISO
Midwest Independent Transmission System Operator, Inc.
Moody’s
Moody’s Investors Service
MRO
Market Rate Offer
MW
Megawatts
NAAQS
National Ambient Air Quality Standards
NERC
North American Electric Reliability Corporation
NJBPU
New Jersey Board of Public Utilities
NOPR
Notice of Proposed Rulemaking
NOV
Notice of Violation
NOX
Nitrogen Oxide
NRC
Nuclear Regulatory Commission
NSR
New Source Review
NUG
Non-Utility Generation
NUGC
Non-Utility Generation Charge
NYMEX
New York Mercantile Exchange
OCA
Office of Consumer Advocate
OTC
Over the Counter
OVEC
Ohio Valley Electric Corporation
PCRB
Pollution Control Revenue Bond
PICA
Penelec Industrial Customer Alliance
PJM
PJM Interconnection L. L. C.
PLR
Provider of Last Resort
PPUC
Pennsylvania Public Utility Commission
PRP
Potentially Responsible Party
PSA
Power Supply Agreement
PUCO
Public Utilities Commission of Ohio
PUHCA
Public Utility Holding Company Act of 1935
RCP
Rate Certainty Plan
 
RECB
Regional Expansion Criteria and Benefits
 
RFP
Request for Proposal
 
RPM
Reliability Pricing Model
 
RSP
Rate Stabilization Plan
 
RTO
Regional Transmission Organization
 
S&P
Standard & Poor’s Ratings Service
 
SBC
Societal Benefits Charge
 
SEC
U.S. Securities and Exchange Commission
 
SECA
Seams Elimination Cost Adjustment
 
SFAS
Statement of Financial Accounting Standards
 
SFAS 109
SFAS No. 109, “Accounting for Income Taxes”
 
SFAS 123(R)
SFAS No. 123(R), "Share-Based Payment"
 
SFAS 133
SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”
 

 
iii

 

GLOSSARY OF TERMS, Cont’d.


SFAS 141(R)
SFAS No 141(R), “Business Combinations”
SFAS 143
SFAS No. 143, “Accounting for Asset Retirement Obligations”
SFAS 157
SFAS No. 157, “Fair Value Measurements”
SFAS 159
SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an
    Amendment of FASB Statement No. 115”
SFAS 160
SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment
   of ARB No. 51”
SFAS 161
SFAS No 161, “Disclosure about Derivative Instruments and Hedging Activities – an Amendment
    of FASB Statement No. 133”
SIP
State Implementation Plan(s) Under the Clean Air Act
SNCR
Selective Non-Catalytic Reduction
SO2
Sulfur Dioxide
TBC
Transition Bond Charge
TMI-1
Three Mile Island Unit 1
TMI-2
Three Mile Island Unit 2
TSC
Transmission Service Charge
VIE
Variable Interest Entity

 
iv

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.



 
1

 

 
Report of Independent Registered Public Accounting Firm










To the Stockholder and Board of
Directors of Ohio Edison Company:

We have reviewed the accompanying consolidated balance sheet of Ohio Edison Company and its subsidiaries as of March 31, 2008 and the related consolidated statements of income, comprehensive income and cash flows for each of the three-month periods ended March 31, 2008 and 2007. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2007, and the related consolidated statements of income, capitalization, common stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated February 28, 2008, except as to the error correction described in Note 1, which is as of November 24, 2008, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2007, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2008 financial statements to correct an error.

 
PricewaterhouseCoopers LLP
Cleveland, Ohio
May 7, 2008, except as to the error correction described in Note 1,
which is as of November 24, 2008.
 





 
2

 


 
OHIO EDISON COMPANY
 
             
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
(Unaudited)
 
             
   
Three Months Ended
 
   
March 31,
 
             
   
2008
   
2007
 
   
(In thousands)
 
             
REVENUES:
           
Electric sales
  $ 622,271     $ 594,344  
Excise tax collections
    30,378       31,254  
Total revenues
    652,649       625,598  
                 
EXPENSES:
               
Fuel
    3,170       3,015  
Purchased power
    340,186       349,852  
Nuclear operating costs
    43,021       41,514  
Other operating costs
    94,135       88,486  
Provision for depreciation
    21,493       18,848  
Amortization of regulatory assets
    48,538       45,417  
Deferral of new regulatory assets
    (25,411 )     (36,649 )
General taxes
    50,453       49,745  
Total expenses
    575,585       560,228  
                 
OPERATING INCOME
    77,064       65,370  
                 
OTHER INCOME (EXPENSE):
               
Investment income
    15,055       26,630  
Miscellaneous income (expense)
    (3,806 )     373  
Interest expense
    (17,641 )     (21,022 )
Capitalized interest
    110       110  
Total other income (expense)
    (6,282 )     6,091  
                 
INCOME BEFORE INCOME TAXES
    70,782       71,461  
                 
INCOME TAXES
    26,873       17,426  
                 
NET INCOME
    43,909       54,035  
                 
OTHER COMPREHENSIVE INCOME (LOSS):
               
Pension and other postretirement benefits
    (3,994 )     (3,423 )
Change in unrealized gain on available-for-sale securities
    (7,571 )     (126 )
Other comprehensive loss
    (11,565 )     (3,549 )
Income tax benefit related to other comprehensive loss
    (4,262 )     (1,503 )
Other comprehensive loss, net of tax
    (7,303 )     (2,046 )
                 
TOTAL COMPREHENSIVE INCOME
  $ 36,606     $ 51,989  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to Ohio Edison Company are an integral part
 
of these statements.
               

 
3

 


OHIO EDISON COMPANY
 
             
CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
   
March 31,
   
December 31,
 
   
2008
   
2007
 
   
  (In thousands)
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 732     $ 732  
Receivables-
               
Customers (less accumulated provisions of $7,870,000 and $8,032,000,
               
respectively, for uncollectible accounts)
    266,360       248,990  
Associated companies
    179,875       185,437  
Other (less accumulated provisions of $5,638,000 and $5,639,000,
               
respectively, for uncollectible accounts)
    16,474       12,395  
Notes receivable from associated companies
    589,790       595,859  
Prepayments and other
    17,785       10,341  
      1,071,016       1,053,754  
UTILITY PLANT:
               
In service
    2,804,505       2,769,880  
Less - Accumulated provision for depreciation
    1,106,174       1,090,862  
      1,698,331       1,679,018  
Construction work in progress
    60,617       50,061  
      1,758,948       1,729,079  
OTHER PROPERTY AND INVESTMENTS:
               
Long-term notes receivable from associated companies
    258,405       258,870  
Investment in lease obligation bonds
    253,747       253,894  
Nuclear plant decommissioning trusts
    119,948       127,252  
Other
    33,014       36,037  
      665,114       676,053  
DEFERRED CHARGES AND OTHER ASSETS:
               
Regulatory assets
    709,969       737,326  
Pension assets
    235,933       228,518  
Property taxes
    65,520       65,520  
Unamortized sale and leaseback costs
    43,882       45,133  
Other
    44,640       48,075  
      1,099,944       1,124,572  
    $ 4,595,022     $ 4,583,458  
LIABILITIES AND CAPITALIZATION
               
CURRENT LIABILITIES:
               
Currently payable long-term debt
  $ 334,656     $ 333,224  
Short-term borrowings-
               
Associated companies
    50,692       50,692  
Other
    2,609       2,609  
Accounts payable-
               
Associated companies
    155,654       174,088  
Other
    19,376       19,881  
Accrued taxes
    93,390       89,571  
Accrued interest
    16,459       22,378  
Other
    99,532       65,163  
      772,368       757,606  
CAPITALIZATION:
               
Common stockholder's equity-
               
Common stock, without par value, authorized 175,000,000 shares -
               
60 shares outstanding
    1,220,368       1,220,512  
Accumulated other comprehensive income
    41,083       48,386  
Retained earnings
    351,186       307,277  
Total common stockholder's equity
    1,612,637       1,576,175  
Long-term debt and other long-term obligations
    839,107       840,591  
      2,451,744       2,416,766  
NONCURRENT LIABILITIES:
               
Accumulated deferred income taxes
    783,777       781,012  
Accumulated deferred investment tax credits
    15,990       16,964  
Asset retirement obligations
    95,009       93,571  
Retirement benefits
    176,597       178,343  
Deferred revenues - electric service programs
    36,821       46,849  
Other
    262,716       292,347  
      1,370,910       1,409,086  
COMMITMENTS AND CONTINGENCIES (Note 10)
               
    $ 4,595,022     $ 4,583,458  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to Ohio Edison Company are an integral part
 
of these balance sheets.
               

 
4

 
 
OHIO EDISON COMPANY
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
   
  Three Months Ended
 March 31,
 
   
Restated
       
   
2008
   
2007
 
   
(In thousands)
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
  $ 43,909     $ 54,035  
Adjustments to reconcile net income to net cash from operating activities-
               
Provision for depreciation
    21,493       18,848  
Amortization of regulatory assets
    48,538       45,417  
Deferral of new regulatory assets
    (25,411 )     (36,649 )
Amortization of lease costs
    32,934       32,934  
Deferred income taxes and investment tax credits, net
    6,866       (3,992 )
Accrued compensation and retirement benefits
    (19,482 )     (16,794 )
Pension trust contribution
    -       (20,261 )
Increase in operating assets-
               
Receivables
    (27,496 )     (102,469 )
Prepayments and other current assets
    (7,451 )     (6,339 )
Increase (decrease) in operating liabilities-
               
Accounts payable
    (3,939 )     42,095  
Accrued taxes
    2,991       (46,791 )
Accrued interest
    (5,919 )     (6,812 )
Electric service prepayment programs
    (10,028 )     (9,053 )
  Other
    (2,066 )     (3,283 )
Net cash provided from (used for) operating activities
    54,939       (59,114 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
 New Financing-
               
Short-term borrowings, net
    -       77,473  
 Redemptions and Repayments-
               
Common stock
    -       (500,000 )
Long-term debt
    (80 )     (72 )
 Dividend Payments-
               
Common stock
    (15,000 )     -  
 Net cash used for financing activities
    (15,080 )     (422,599 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Property additions
    (49,011 )     (29,888 )
Sales of investment securities held in trusts
    62,344       12,951  
Purchases of investment securities held in trusts
    (63,797 )     (13,805 )
Loan repayments from associated companies, net
    6,534       511,082  
Cash investments
    147       168  
Other
    3,924       1,187  
Net cash provided from (used for) investing activities
    (39,859 )     481,695  
                 
Net change in cash and cash equivalents
    -       (18 )
Cash and cash equivalents at beginning of period
    732       712  
Cash and cash equivalents at end of period
  $ 732     $ 694  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to Ohio Edison Company are an integral part
 
of these statements.
               
 
 
5


Report of Independent Registered Public Accounting Firm









To the Stockholder and Board of Directors of
The Cleveland Electric Illuminating Company:

We have reviewed the accompanying consolidated balance sheet of The Cleveland Electric Illuminating Company and its subsidiaries as of March 31, 2008 and the related consolidated statements of income, comprehensive income and cash flows for each of the three-month periods ended March 31, 2008 and 2007. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2007, and the related consolidated statements of income, capitalization, common stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated February 28, 2008, except as to the error correction described in Note 1, which is as of November 24, 2008, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2007, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2008 financial statements to correct an error.
 

 
PricewaterhouseCoopers LLP
Cleveland, Ohio
May 7, 2008, except as to the error correction described in Note 1,
which is as of November 24, 2008.

 
6

 


 
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
 
             
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
(Unaudited)
 
             
   
 Three Months Ended
 
   
 March 31,
 
             
   
2008
   
2007
 
   
 (In thousands)
 
             
REVENUES:
           
Electric sales
  $ 418,708     $ 422,805  
Excise tax collections
    18,600       18,027  
Total revenues
    437,308       440,832  
                 
EXPENSES:
               
Fuel
    -       13,191  
Purchased power
    193,244       180,657  
Other operating costs
    65,118       74,951  
Provision for depreciation
    19,076       18,468  
Amortization of regulatory assets
    38,256       33,129  
Deferral of new regulatory assets
    (29,248 )     (33,957 )
General taxes
    40,083       38,894  
Total expenses
    326,529       325,333  
                 
OPERATING INCOME
    110,779       115,499  
                 
OTHER INCOME (EXPENSE):
               
Investment income
    9,188       17,687  
Miscellaneous income
    534       731  
Interest expense
    (32,520 )     (35,740 )
Capitalized interest
    196       205  
Total other expense
    (22,602 )     (17,117 )
                 
INCOME BEFORE INCOME TAXES
    88,177       98,382  
                 
INCOME TAXES
    30,326       34,833  
                 
NET INCOME
    57,851       63,549  
                 
OTHER COMPREHENSIVE INCOME (LOSS):
               
Pension and other postretirement benefits
    (213 )     1,202  
Income tax expense related to other comprehensive income
    281       355  
Other comprehensive income (loss), net of tax
    (494 )     847  
                 
TOTAL COMPREHENSIVE INCOME
  $ 57,357     $ 64,396  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating
 
Company are an integral part of these statements.
               

 
 
7

 

 
 
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
 
             
CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
   
March 31,
   
December 31,
 
   
2008
   
2007
 
   
(In thousands)
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 241     $ 232  
Receivables-
               
Customers (less accumulated provisions of $7,224,000 and $7,540,000,
    266,701       251,000  
respectively, for uncollectible accounts)
               
Associated companies
    70,727       166,587  
Other
    3,643       12,184  
Notes receivable from associated companies
    54,679       52,306  
Prepayments and other
    1,728       2,327  
      397,719       484,636  
UTILITY PLANT:
               
In service
    2,142,458       2,256,956  
Less - Accumulated provision for depreciation
    827,160       872,801  
      1,315,298       1,384,155  
Construction work in progress
    40,834       41,163  
      1,356,132       1,425,318  
OTHER PROPERTY AND INVESTMENTS:
               
Investment in lessor notes
    425,722       463,431  
Other
    10,275       10,285  
      435,997       473,716  
DEFERRED CHARGES AND OTHER ASSETS:
               
Goodwill
    1,688,521       1,688,521  
Regulatory assets
    853,716       870,695  
Pension assets
    64,497       62,471  
Property taxes
    76,000       76,000  
Other
    32,735       32,987  
      2,715,469       2,730,674  
    $ 4,905,317     $ 5,114,344  
LIABILITIES AND CAPITALIZATION
               
CURRENT LIABILITIES:
               
Currently payable long-term debt
  $ 207,281     $ 207,266  
Short-term borrowings-
               
Associated companies
    365,816       531,943  
Accounts payable-
               
Associated companies
    139,423       169,187  
Other
    6,169       5,295  
Accrued taxes
    118,102       94,991  
Accrued interest
    37,726       13,895  
Other
    35,044       34,350  
      909,561       1,056,927  
CAPITALIZATION:
               
Common stockholder's equity
               
Common stock, without par value, authorized 105,000,000 shares -
               
67,930,743 shares outstanding
    873,353       873,536  
Accumulated other comprehensive loss
    (69,623 )     (69,129 )
Retained earnings
    743,278       685,428  
Total common stockholder's equity
    1,547,008       1,489,835  
Long-term debt and other long-term obligations
    1,447,980       1,459,939  
      2,994,988       2,949,774  
NONCURRENT LIABILITIES:
               
Accumulated deferred income taxes
    719,938       725,523  
Accumulated deferred investment tax credits
    18,102       18,567  
Retirement benefits
    94,322       93,456  
Deferred revenues - electric service programs
    21,297       27,145  
Lease assignment payable to associated companies
    38,420       131,773  
Other
    108,689       111,179  
      1,000,768       1,107,643  
COMMITMENTS AND CONTINGENCIES (Note 10)
               
    $ 4,905,317     $ 5,114,344  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating
 
Company are an integral part of these balance sheets.
               

 
8

 
 
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
   
Three Months Ended
 
   
March 31,
 
   
Restated
       
   
2008
   
2007
 
   
(In thousands)
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
  $ 57,851     $ 63,549  
Adjustments to reconcile net income to net cash from operating activities-
               
Provision for depreciation
    19,076       18,468  
Amortization of regulatory assets
    38,256       33,129  
Deferral of new regulatory assets
    (29,248 )     (33,957 )
Deferred rents and lease market valuation liability
    -       (46,528 )
Deferred income taxes and investment tax credits, net
    (4,965 )     (5,453 )
Accrued compensation and retirement benefits
    (3,507 )     (890 )
Pension trust contribution
    -       (24,800 )
Decrease in operating assets-
               
Receivables
    90,280       224,011  
Prepayments and other current assets
    604       592  
Increase (decrease) in operating liabilities-
               
Accounts payable
    1,111       (256,808 )
Accrued taxes
    23,196       13,959  
Accrued interest
    23,831       18,122  
Electric service prepayment programs
    (5,847 )     (5,313 )
Other
    (63 )     (167 )
Net cash provided from (used for) operating activities
    210,575       (2,086 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
New Financing-
               
Long-term debt
    -       247,715  
Redemptions and Repayments-
               
Long-term debt
    (165 )     (150 )
Short-term borrowings, net
    (177,960 )     (130,585 )
Dividend Payments-
               
Common stock
    (30,000 )     (24,000 )
Net cash provided from (used for) financing activities
    (208,125 )     92,980  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Property additions
    (37,203 )     (36,682 )
Loans to associated companies, net
    (2,373 )     (231,907 )
Collection of principal on long-term notes receivable
    -       133,341  
Redemptions of lessor notes
    37,709       35,614  
Other
    (574 )     9,294  
Net cash used for investing activities
    (2,441 )     (90,340 )
                 
Net increase in cash and cash equivalents
    9       554  
Cash and cash equivalents at beginning of period
    232       221  
Cash and cash equivalents at end of period
  $ 241     $ 775  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to The Cleveland Electric Illuminating
 
Company are an integral part of these statements.
               
 
 
9


 Report of Independent Registered Public Accounting Firm






 


 
To the Stockholder and Board of
Directors of The Toledo Edison Company:

We have reviewed the accompanying consolidated balance sheet of The Toledo Edison Company and its subsidiary as of March 31, 2008 and the related consolidated statements of income, comprehensive income and cash flows for each of the three-month periods ended March 31, 2008 and 2007. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2007, and the related consolidated statements of income, capitalization, common stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated February 28, 2008, except as to the error correction described in Note 1, which is as of November 24, 2008, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2007, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2008 financial statements to correct an error.

 
PricewaterhouseCoopers LLP
Cleveland, Ohio
May 7, 2008, except as to the error correction described in Note 1,
which is as of November 24, 2008.
 

 
 
10

 


 
THE TOLEDO EDISON COMPANY
 
             
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
(Unaudited)
 
             
   
Three Months Ended
 
   
March 31,
 
             
   
2008
   
2007
 
   
(In thousands)
 
             
REVENUES:
           
Electric sales
  $ 203,669     $ 233,056  
Excise tax collections
    8,025       7,400  
Total revenues
    211,694       240,456  
                 
EXPENSES:
               
Fuel
    1,482       10,147  
Purchased power
    101,298       96,169  
Nuclear operating costs
    10,457       17,721  
Other operating costs
    33,390       42,921  
Provision for depreciation
    9,025       9,117  
Amortization of regulatory assets
    25,025       23,876  
Deferral of new regulatory assets
    (9,494 )     (13,481 )
General taxes
    14,377       13,734  
Total expenses
    185,560       200,204  
                 
OPERATING INCOME
    26,134       40,252  
                 
OTHER INCOME (EXPENSE):
               
Investment income
    6,481       7,225  
Miscellaneous expense
    (1,514 )     (3,100 )
Interest expense
    (6,035 )     (7,503 )
Capitalized interest
    37       83  
Total other expense
    (1,031 )     (3,295 )
                 
INCOME BEFORE INCOME TAXES
    25,103       36,957  
                 
INCOME TAXES
    8,088       11,097  
                 
NET INCOME
    17,015       25,860  
                 
OTHER COMPREHENSIVE INCOME (LOSS):
               
Pension and other postretirement benefits
    (63 )     573  
Change in unrealized gain on available-for-sale securities
    1,961       379  
Other comprehensive income
    1,898       952  
Income tax expense related to other comprehensive income
    728       334  
Other comprehensive income, net of tax
    1,170       618  
                 
TOTAL COMPREHENSIVE INCOME
  $ 18,185     $ 26,478  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company
 
are an integral part of these statements.
               

 
11

 


THE TOLEDO EDISON COMPANY
 
             
CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
 
 
March 31,
   
December 31,
 
   
2008
   
2007
 
   
 (In thousands)
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 213     $ 22  
Receivables-
               
Customers
    966       449  
Associated companies
    42,232       88,796  
Other (less accumulated provisions of $471,000 and $615,000,
         
respectively, for uncollectible accounts)
    4,241       3,116  
Notes receivable from associated companies
    107,664       154,380  
Prepayments and other
    684       865  
      156,000       247,628  
UTILITY PLANT:
               
In service
    854,457       931,263  
Less - Accumulated provision for depreciation
    397,670       420,445  
      456,787       510,818  
Construction work in progress
    28,735       19,740  
      485,522       530,558  
OTHER PROPERTY AND INVESTMENTS:
               
Investment in lessor notes
    142,657       154,646  
Long-term notes receivable from associated companies
    37,457       37,530  
Nuclear plant decommissioning trusts
    69,491       66,759  
Other
    1,734       1,756  
      251,339       260,691  
DEFERRED CHARGES AND OTHER ASSETS:
               
Goodwill
    500,576       500,576  
Regulatory assets
    187,579       203,719  
Pension assets
    29,420       28,601  
Property taxes
    21,010       21,010  
Other
    28,959       20,496  
      767,544       774,402  
    $ 1,660,405     $ 1,813,279  
LIABILITIES AND CAPITALIZATION
               
CURRENT LIABILITIES:
               
Currently payable long-term debt
  $ 34     $ 34  
Accounts payable-
               
Associated companies
    56,448       245,215  
Other
    3,973       4,449  
Notes payable to associated companies
    66,217       13,396  
Accrued taxes
    37,085       30,245  
Lease market valuation liability
    36,900       36,900  
Other
    51,563       22,747  
      252,220       352,986  
CAPITALIZATION:
               
Common stockholder's equity-
               
Common stock, $5 par value, authorized 60,000,000 shares -
         
29,402,054 shares outstanding
    147,010       147,010  
Other paid-in capital
    173,141       173,169  
Accumulated other comprehensive loss
    (9,436 )     (10,606 )
Retained earnings
    192,633       175,618  
Total common stockholder's equity
    503,348       485,191  
Long-term debt and other long-term obligations
    303,392       303,397  
      806,740       788,588  
NONCURRENT LIABILITIES:
               
Accumulated deferred income taxes
    99,732       103,463  
Accumulated deferred investment tax credits
    9,967       10,180  
Lease market valuation liability
    300,775       310,000  
Retirement benefits
    64,422       63,215  
Asset retirement obligations
    28,744       28,366  
Deferred revenues - electric service programs
    9,969       12,639  
Lease assignment payable to associated companies
    28,835       83,485  
Other
    59,001       60,357  
      601,445       671,705  
COMMITMENTS AND CONTINGENCIES (Note 10)
               
    $ 1,660,405     $ 1,813,279  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company
 
are an integral part of these balance sheets.
               

 
12

 
 
THE TOLEDO EDISON COMPANY
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
   
Three Months Ended
 
   
March 31,
 
   
Restated
       
   
2008
   
2007
 
   
(In thousands)
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net income
  $ 17,015     $ 25,860  
Adjustments to reconcile net income to net cash from operating activities-
               
Provision for depreciation
    9,025       9,117  
Amortization of regulatory assets
    25,025       23,876  
Deferral of new regulatory assets
    (9,494 )     (13,481 )
Deferred rents and lease market valuation liability
    6,099       (10,891 )
Deferred income taxes and investment tax credits, net
    (3,404 )     (3,639 )
Accrued compensation and retirement benefits
    (1,813 )     (756 )
Pension trust contribution
    -       (7,659 )
Decrease in operating assets-
               
Receivables
    45,738       158  
Prepayments and other current assets
    181       312  
Increase (decrease) in operating liabilities-
               
Accounts payable
    (174,243 )     (17,533 )
Accrued taxes
    6,840       9,379  
Accrued interest
    4,663       3,951  
Electric service prepayment programs
    (2,670 )     (2,616 )
Other
    991       (541 )
Net cash provided from (used for) operating activities
    (76,047 )     15,537  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
New Financing-
               
Short-term borrowings, net
    52,821       -  
Redemptions and Repayments-
               
Long-term debt
    (9 )     -  
Short-term borrowings, net
    -       (46,518 )
Dividend Payments-
               
Common stock
    (15,000 )     -  
Net cash provided from (used for) financing activities
    37,812       (46,518 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Property additions
    (19,435 )     (6,064 )
Loans repayments from (loans to) associated companies, net
    46,789       (8,583 )
Collection of principal on long-term notes receivable
    -       32,202  
Redemption of lessor notes
    11,989       14,804  
Sales of investment securities held in trusts
    3,908       16,863  
Purchases of investment securities held in trusts
    (4,715 )     (17,642 )
Other
    (110 )     (420 )
Net cash provided from investing activities
    38,426       31,160  
                 
Net increase in cash and cash equivalents
    191       179  
Cash and cash equivalents at beginning of period
    22       22  
Cash and cash equivalents at end of period
  $ 213     $ 201  
                 
The accompanying Notes to Consolidated Financial Statements as they relate to The Toledo Edison Company are an
         
integral part of these statements.
               
 

 
13

 

Report of Independent Registered Public Accounting Firm




 




 
To the Stockholder and Board of
Directors of Pennsylvania Electric Company:

We have reviewed the accompanying consolidated balance sheet of Pennsylvania Electric Company and its subsidiaries as of March 31, 2008 and the related consolidated statements of income, comprehensive income and cash flows for each of the three-month periods ended March 31, 2008 and 2007. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2007, and the related consolidated statements of income, capitalization, common stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated February 28, 2008, except as to the error correction described in Note 1, which is as of November 24, 2008, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2007, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 1 to the consolidated financial statements, the Company has restated its 2008 financial statements to correct an error.

 
PricewaterhouseCoopers LLP
Cleveland, Ohio
May 7, 2008, except as to the error correction described in Note 1,
which is as of November 24, 2008.

 
 
14

 


PENNSYLVANIA ELECTRIC COMPANY
 
             
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
(Unaudited)
 
             
 
Three Months Ended
 
 
March 31,
 
             
   
2008
   
2007
 
             
 
(In thousands)
 
             
REVENUES:
           
Electric sales
  $ 376,028     $ 339,226  
Gross receipts tax collections
    19,464       16,680  
Total revenues
    395,492       355,906  
                 
EXPENSES:
               
Purchased power
    221,234       200,842  
Other operating costs
    71,077       59,461  
Provision for depreciation
    12,516       11,777  
Amortization of regulatory assets
    16,346       15,394  
Deferral of new regulatory assets
    (3,526 )     (17,088 )
General taxes
    21,855       19,851  
Total expenses
    339,502       290,237