Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported) November 24, 2008
Commission
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Registrant;
State of Incorporation;
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I.R.S.
Employer
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Address; and Telephone
Number
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1-2578
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OHIO
EDISON COMPANY
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34-0437786
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(An
Ohio Corporation)
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c/o
FirstEnergy Corp.
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76
South Main Street
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Akron,
OH 44308
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Telephone (800)736-3402
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1-2323
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THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY
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34-0150020
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(An
Ohio Corporation)
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c/o
FirstEnergy Corp.
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76
South Main Street
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Akron,
OH 44308
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Telephone (800)736-3402
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1-3583
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THE
TOLEDO EDISON COMPANY
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34-4375005
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(An
Ohio Corporation)
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c/o
FirstEnergy Corp.
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76
South Main Street
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Akron,
OH 44308
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Telephone
(800)736-3402
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1-3522
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PENNSYLVANIA
ELECTRIC COMPANY
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25-0718085
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(A
Pennsylvania Corporation)
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c/o
FirstEnergy Corp.
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76
South Main Street
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Akron,
OH 44308
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Telephone (800)736-3402
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2.):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
4.02 (a) Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On November 24,
2008, the Audit Committee of the Board of Directors of FirstEnergy Corp., acting
upon management’s recommendations, concluded that the previously issued
consolidated financial statements of Ohio Edison Company (OE), The Cleveland
Electric Illuminating Company (CEI), The Toledo Edison Company (TE) and
Pennsylvania Electric Company (Penelec) (collectively, the Registrants) as of
and for the year ended December 31, 2007, included in the 2007 Form 10-K, and
the unaudited interim financial statements as of and for the three-month and
nine-month periods ended September 30, 2008 and 2007, the three-month and
six-month periods ended June 30, 2008 and the three-month period ended March 31,
2008, included in Forms 10-Q for the periods ended March 31, 2008, June 30, 2008
and September 30, 2008, should no longer be relied upon due to an error in the
statements of cash flows.
The Board of
Directors for each of the Registrants declared dividends payable for the current
quarter and the following three quarters in the third quarters of 2007 and
2008. The Consolidated Statements of Cash Flows for each of the
Registrants, as originally filed, erroneously reported dividends declared as a
financing activity (rather than the dividends paid to the parent company) in the
third quarter of 2007 and 2008. There was an offsetting error included in
operating liabilities - accounts payable, within the operating activities
section of the Consolidated Statements of Cash Flows. This amount was
subsequently reduced in each succeeding quarter as the applicable portions of
the dividends were paid. Accordingly, the corrections reflected in
the amended filings changed cash flows from financing activities in each
quarter, with a corresponding change in operating liabilities - accounts
payable, included in cash flows from operating activities for each
quarter.
As a result, each of
the Registrants’ Consolidated Statements of Cash Flows have been restated for
the year ended December 31, 2007 as originally filed in its Form 10-K for the
year ended December 31, 2007, and for the three months ended March 31, 2008, the
six months ended June 30, 2008, and the nine months ended September 30, 2008 and
2007 as originally filed in its Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2008, June 30, 2008, and September 30, 2008, respectively, to
correctly report the dividend payments.
The
Audit Committee further determined that the Consolidated Statements of Income
and Comprehensive Income for the year ended December 31, 2007, the three months
ended March 31, 2008 and 2007, the three and six months ended June 30, 2008 and
2007, and the three and nine months ended September 30, 2008 and
2007, and the Consolidated Balance Sheets as of December 31, 2007,
March 31, 2008, June 30, 2008 and September 30, 2008 were not affected by the
error. Accordingly, revenues, net income and total assets reported for the
respective periods remain unchanged.
The Audit Committee
has discussed this matter with PricewaterhouseCoopers LLP, the Registrants’
independent registered public accounting firm.
OE, CEI, TE, and
Penelec are filing this Form 8-K as required under the Exchange Act, within the
time prescribed under the applicable regulations. An amended annual report on
Form 10-K/A for the year ended December 31, 2007 and amended quarterly reports
on Form 10-Q/A for the quarters ended March 31, 2008, June 30, 2008, and
September 30, 2008 for each of OE, CEI, TE and Penelec containing amended
consolidated financial statements as described above, a restated Evaluation of
Disclosure Controls and Procedures and, in the case of the Form 10-K/A, a
restated Management’s Report on Internal Control Over Financial Reporting, will
be filed on November 25, 2008. You should refer to such amended
reports, each of which will contain disclosure regarding the applicable
Registrant’s disclosure controls and procedures and internal control over
financial reporting, including the conclusion by management and the Audit
Committee that the restatements discussed above resulted from a material
weakness in such controls and a description of steps that have been taken to
remediate such controls. Management believes the steps it has taken
to enhance internal controls have remediated the identified material weakness
for the Registrants.
Forward-Looking Statements:
This Form 8-K includes forward-looking statements based on information currently
available to management. Such statements are subject to certain risks and
uncertainties. These statements 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’ Electric Security Plan and
Market Rate Offer 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 greenhouse gas 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 New Source Review 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 Nuclear Regulatory
Commission (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 Electric Security Plan and Market Rate
Offer 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 Rate
Stabilization Plan and the Rate Certainty Plan, 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. 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.
SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, each Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
November 25,
2008
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OHIO EDISON
COMPANY
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Registrant
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THE
CLEVELAND ELECTRIC
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ILLUMINATING
COMPANY
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Registrant
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THE TOLEDO EDISON
COMPANY
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Registrant
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PENNSYLVANIA ELECTRIC
COMPANY
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Registrant
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Harvey L.
Wagner
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Vice President
and Controller
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