SEC File No. 70-10122
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
FirstEnergy Corp.
------------------------------------:
In the matter of :
FirstEnergy Corp. : Certificate Pursuant
: to Rule 24 of Partial
: Completion of
: Transactions
:
SEC File No. 70-10122 :
(Public Utility Holding Company Act :
of 1935) :
------------------------------------
TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, FirstEnergy Corp. (FirstEnergy) hereby certifies
pursuant to Rule 24 of the Rules and Regulations under the Public Utility
Holding Company Act of 1935 (the Act), that certain of the transactions proposed
in the Applications, as amended, filed in SEC File No. 70-10122 have been
carried out in accordance with the Commission's Order dated June 30, 2003 as
follows:
(1) During the period April 1, 2003 through June 30, 2003, there were no sales
of common stock or Preferred Securities by FirstEnergy.
(2) FirstEnergy issued 369,705 shares of common stock pursuant to options
granted under employee benefit plans and dividend reinvestment plans during the
second quarter of 2003.
(3) During the period April 1, 2003 through June 30, 2003, no FirstEnergy common
stock was transferred to a seller of securities of a company being acquired.
(4) During the period April 1, 2003 through June 30, 2003, there were no
Long-term Debt and Preferred Securities issued by FirstEnergy. FirstEnergy
issued the following Short-term Debt during the second quarter of 2003:
Transaction Maturity Transaction
Date Date Rate Amount Loan Balance
----------- -------- ---- -------------- ---------------
CitiBank (FirstEnergy Revolver)
------------------------------
FirstEnergy 4/4/2003 5/6/2003 2.49 $75,000,000.00 $75,165,833.33
FirstEnergy 4/7/2003 5/7/2003 2.49 $340,000,000.00 $340,704,791.67
FirstEnergy 4/10/2003 5/12/2003 2.44 $80,000,000.00 $80,173,333.33
FirstEnergy 4/25/2003 5/2/2003 2.55 $25,000,000.00 $25,012,395.83
FirstEnergy 4/28/2003 5/28/2003 2.55 $85,000,000.00 $85,180,625.00
FirstEnergy 5/1/2003 5/15/2003 2.55 $150,000,000.00 $150,148,750.00
FirstEnergy 5/12/2003 5/20/2003 2.31 $20,000,000.00 $20,010,277.78
FirstEnergy 5/6/2003 5/20/2003 2.55 $35,000,000.00 $35,034,708.33
FirstEnergy 5/12/2003 5/20/2003 2.38 $145,000,000.00 $145,076,527.78
FirstEnergy 5/7/2003 5/21/2003 2.49 $340,000,000.00 $340,328,902.78
FirstEnergy 5/20/2003 5/27/2003 2.44 $20,000,000.00 $20,009,479.17
FirstEnergy 5/20/2003 5/30/2003 2.50 $145,000,000.00 $145,100,694.44
FirstEnergy 5/15/2003 6/5/2003 2.49 $335,000,000.00 $335,486,098.96
FirstEnergy 5/20/2003 6/10/2003 2.50 $155,000,000.00 $155,226,041.67
FirstEnergy 5/28/2003 6/11/2003 2.49 $85,000,000.00 $85,082,225.69
FirstEnergy 5/21/2003 6/20/2003 2.49 $340,000,000.00 $340,704,791.67
FirstEnergy 5/30/2003 6/30/2003 2.50 $125,000,000.00 $125,269,097.22
FirstEnergy 6/17/2003 7/1/2003 2.38 $130,000,000.00 $130,120,069.44
FirstEnergy 6/5/2003 7/7/2003 2.55 $335,000,000.00 $335,759,333.33
FirstEnergy 6/30/2003 7/7/2003 2.31 $185,000,000.00 $185,083,185.76
FirstEnergy 6/27/2003 7/11/2003 2.24 $405,000,000.00 $405,352,406.25
FirstEnergy 6/23/2003 7/23/2003 2.19 $110,000,000.00 $110,200,520.83
FirstEnergy 6/30/2003 7/23/2003 2.30 $65,000,000.00 $65,095,513.89
FirstEnergy 6/25/2003 7/25/2003 2.24 $50,000,000.00 $50,093,229.17
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(5) During the period April 1, 2003 through June 30, 2003, the following
short-term debt was issued by the Utility Subsidiaries:
Transaction Maturity Transaction
Date Date Rate Amount Loan Balance
----------- -------- ---- -------------- ---------------
FirstMerit (Ohio Edison Company (OE) Bi-Lateral Facility)
--------------------------------------------------------
OE 4/18/2003 4/21/2003 2.06 $5,500,000.00 $5,500,945.31
OE 5/2/2003 5/5/2003 2.00 $14,000,000.00 $14,002,333.33
OE 5/6/2003 5/7/2003 2.00 $14,000,000.00 $14,000,777.78
OE 5/27/2003 5/28/2003 1.94 $14,000,000.00 $14,000,753.47
OE 6/30/2003 7/1/2003 2.13 $14,000,000.00 $14,000,826.39
KeyBank (OE Bi-Lateral Facility)
-------------------------------
OE 5/2/2003 5/5/2003 2.25 $5,000,000.00 $5,000,937.50
OE 5/6/2003 5/7/2003 2.25 $6,000,000.00 $6,000,375.00
OE 5/27/2003 5/28/2003 2.31 $3,000,000.00 $3,000,192.71
OE 6/2/2003 6/3/2003 2.34 $10,000,000.00 $10,000,651.06
OE 6/3/2003 6/4/2003 2.25 $10,000,000.00 $10,000,625.00
OE 6/4/2003 6/5/2003 2.22 $10,000,000.00 $10,000,616.33
OE 6/6/2003 6/9/2003 2.25 $5,000,000.00 $5,000,937.50
OE 6/23/2003 6/24/2003 2.24 $7,000,000.00 $7,000,435.56
OE 6/25/2003 6/26/2003 2.03 $13,000,000.00 $13,000,733.51
Under the Utility Money Pool, the principal balance of borrowings at the end of
the second quarter of 2003 and average interest rate during the second quarter
of 2003 are as follows:
Regulated Money Pool Average Principal
Loan to/(from): Interest Rate Balance
-------------------- ------------- ------------
OE 1.4064% $293,711,191
Pennsylvania Power Company (Penn) 1.4064% 3,342,605
The Cleveland Electric Illuminating
Company (CEI) 1.4064% (320,225,640)
The Toledo Edison Company (TE) 1.4064% (275,634,003)
American Transmission Systems,
Incorporated (ATSI) 1.4064% 55,237,754
Jersey Central Power & Light
Company (JCP&L) 1.4064% (193,030,052)
Metropolitan Edison Company (Met-Ed) 1.4064% 6,958,723
Pennsylvania Electric Company
(Penelec) 1.4064% 24,019,135
York Haven Power Company 1.4064% 7,726,954
(6) During the second quarter of 2003, there were no financings consummated by
any Non-Utility subsidiary that were not exempt under rule 52.
(7) During the second quarter of 2003, the following guarantees were made by
FirstEnergy to support activities of its subsidiary, FirstEnergy Solutions Corp.
(FES):
2
Purpose of
Beneficiary Amount Terms Guarantee
----------- --------- ----- ----------
FES (Trading - Electric)
-----------------------
BP Energy 3,000,000 (a) (b)
Carolina Power & Light 4,500,000 (a) (b)
Cinergy Services 5,000,000 (a) (b)
Constellation New Energy 1,500,000 (a) (b)
DTE Energy Trading 2,000,000 (a) (b)
Meyersdale Windpower 1,800,000 (a) (b)
PJM Interconnection 20,000,000 (a) (b)
Public Service 40,000,000 (a) (b)
Sempra Energy 7,500,000 (a) (b)
FE Services- HVAC
-----------------
Elliot Lewis 10,000,000 18 months (c)
(a) Such guarantees are issued for a one-year term, with a ten-day
termination right by FirstEnergy
(b) Parental guarantees issued by FirstEnergy to provide credit support
for electric power and natural gas purchases by subsidiary
(c) Performance backstop for Drexel University Contract
The following Letters of Credits (LOC) were issued during the second quarter of
2003:
Purpose of
Beneficiary Amount LOC
----------- ------ ----------
FirstEnergy
Deutsche Bank Trust
Company Americas $50,000,000 (a)
(a) Guarantees the obligations of GPU Capital, Inc. to the Indemnified
Parties under the Indemnity Agreement between GPU Capital, Inc.,
ABB Switzerland Holding Ltd., ABB Venture Equity, GPU Power, Inc.
(8) During the Second Quarter of 2003, FirstEnergy Corp.'s utility subsidiary
Ohio Edison Company entered into four (4) transactions designed to hedge the
fair value of a portion of Ohio Edison Company's fixed-rate long-term debt
portfolio against decreases in interest rates. The hedge structures are fixed -
for - floating interest rate swaps, whereby Ohio Edison Company will receive
fixed payments equivalent to the fixed coupon rates of the bonds being hedged,
and pay floating rate payments based on the 6-month London Interbank Offering
Rate (LIBOR) plus an applicable spread. The notional amounts, counterparties,
and principal terms of the fair value hedges are filed pursuant to request for
confidential treatment.
(9) Investments made during the second quarter of 2003 in any intermediate
subsidiary or financing subsidiary are as follows:
Company Investment
------- ----------------
(In Thousands $)
Dunbar Mechanical Inc. $1,000
(10) During the second quarter of 2003 FirstEnergy filed the following U-6B-2
forms:
Company Filing Date
------- ------------
JCP&L May 29, 2003
3
(11) OE and JCP&L engaged in jurisdictional financing transactions during the
second quarter of 2003. Consolidated balance sheets of OE and JCP&L for the
quarter ended June 30, 2003 are incorporated by reference to OE's and JCP&L's
Form 10-Q Quarterly Report to SEC for the quarter ended June 30, 2003 (File No.
1-2578 and 1-3141, respectively).
(12) The following table presented in thousands, provides the capital structure
of FirstEnergy on a consolidated basis and each Utility Subsidiary as of the end
of the second quarter 2003.
FirstEnergy Amount Ratio
----------- ---------- -----
Common Equity $7,124,751 33.32%
Preferred Stock 640,224 3.00%
Long-Term Debt 12,565,943 58.79%
Short-Term Debt 1,045,067 4.89%
----------- ------
Total Capitalization $21,375,985 100.00%
----------- ------
OE
--
Common Equity $2,645,490 52.33%
Preferred Stock 114,320 2.26%
Long-Term Debt 2,106,669 41.67%
Short-Term Debt 189,072 3.74%
---------- ------
Total Capitalization $5,055,551 100.00%
---------- ------
CEI
---
Common Equity $1,290,847 31.91%
Preferred Stock 202,421 5.00%
Long-Term Debt 2,212,847 54.71%
Short-Term Debt 338,804 8.38%
---------- ------
Total Capitalization $4,044,919 100.00%
---------- ------
TE
--
Common Equity $707,465 39.81%
Preferred Stock 126,000 7.09%
Long-Term Debt 662,343 37.27%
Short-Term Debt 281,245 15.83%
---------- ------
Total Capitalization $1,777,053 100.00%
---------- ------
Penn
----
Common Equity $198,510 39.50%
Preferred Stock 53,355 10.61%
Long-Term Debt 250,804 49.89%
Short-Term Debt - -%
---------- ------
Total Capitalization $502,669 100.00%
---------- ------
JCP&L
-----
Common Equity $3,092,677 66.29%
Preferred Stock 12,649 0.27%
Long-Term Debt 1,364,459 29.24%
Short-Term Debt 196,126 4.20%
---------- ------
Total Capitalization $4,665,911 100.00%
---------- ------
4
Met-Ed
------
Common Equity $1,289,156 64.06%
Preferred Stock 92,513 4.60%
Long-Term Debt 610,018 30.31%
Short-Term Debt 20,665 1.03%
---------- ------
Total Capitalization $2,012,352 100.00%
---------- ------
Penelec
-------
Common Equity $1,297,506 68.74%
Preferred Stock 92,321 4.89%
Long-Term Debt 470,164 24.91%
Short-Term Debt 27,569 1.46%
---------- ------
Total Capitalization $1,887,560 100.00%
---------- ------
(13) The following table presented in thousands provides retained earnings
analysis of FirstEnergy on a consolidated basis and each Utility Subsidiary as
of the end of the second quarter 2003.
FirstEnergy OE CEI TE
----------- -------- -------- --------
Balance, December 31, 2002
(Restated) $1,634,981 $800,021 $262,323 $ 76,978
Net Income 160,614 134,135 66,990 14,438
Cash Dividends on Preferred Stock - (1,318) (3,726) (4,422)
Cash Dividends on Common Stock (220,442) (285,000) - -
Other - - 2,621 1,807
---------- -------- -------- --------
Balance, June 30, 2003 $1,575,153 $647,838 $328,208 $ 88,801
---------- -------- -------- --------
Penn JCP&L Met-Ed Penelec
------- ------ ------- -------
Balance, December 31, 2002 $50,916 $92,003 $17,841 $32,705
Net Income 9,286 10,238 29,889 13,594
Cash Dividends on Preferred Stock (1,823) (250) - -
Cash Dividends on Common Stock (26,000) (128,000) (20,000) (16,000)
Other - 613 (1) -
------- -------- ------- -------
Balance, June 30, 2003 $32,379 $(25,396) $27,729 $30,299
------- -------- ------- -------
(14) During the second quarter of 2003, there was no change to the ratings of
FirstEnergy or its Utility Subsidiaries by any of the nationally recognized
credit rating agencies.
(15) FirstEnergy's aggregate investment includes all amounts invested, or
commitments to be invested, in foreign utility companies (FUCOs) and exempt
wholesale generators (EWGs), for which there is recourse, directly or
indirectly, to the registered holding company. Accordingly, FirstEnergy's
aggregate investment as of June 30, 2003 is as follows:
(In Thousands)
FUCOs --------------
-----
Midlands Electricity plc $ 64,200
Emdersa - *
----------
Subtotal 64,200
----------
EWGs
----
FE Generation Corp. $ 835,554
GPU Power, Inc. 157,063
----------
Subtotal 992,617
----------
Aggregate Investment in FUCOs and EWGs $1,056,817
==========
* In April 2003, FirstEnergy divested its ownership in Emdersa through the
abandonment of its shares in Emdersa's parent company, GPU Argentina Holdings,
Inc. The abandonment involved the tendering of FirstEnergy's shares in GPU
Argentina Holdings back to that company.
5
Aggregate Investment as a Percentage of FirstEnergy and Subsidiary Companies:
----------------------------------------------------------------------------
Total capitalization $ 21,375,985 4.9%
Net utility plant $ 12,914,236 8.2%
Total consolidated assets $ 34,024,540 3.1%
Market value of common equity $ 11,444,115 9.2%
(16) Set forth below is a summary of the direct or indirect investments as
defined in SEC Rule 53(a) by FirstEnergy, as of June 30, 2003 in EWGs and FUCOs,
as well as the percentage of equity ownership.
First First % Owners not affiliated with
Energy'st Energy's FirstEnergy
FUCO Investment Equity -------------------------------------
Associate or at 6/30/03 Owner- Type of
Company EWG ($000)** ship Name of Entity Entity
--------- ---- ---------- ------- --------------- ------
Empresa EWG 30,151* 50.001% AFP Prevision BBV Foreign
Guaracachi S.A. AFP Futuro de Bolivia Foreign
Guaracachi EWG 54,676* 100% Not Applicable N/A
America, Inc.
GPU Power, Inc. EWG 157,063 100% Not Applicable N/A
EI International EWG 1,612* 100% Not Applicable N/A
GPUI Colombia, EWG 2,110* 100% Not Applicable N/A
Ltda.
Midlands FUCO 64,200 20.1% Aquila Sterling
Domestic
Holdings LLC
Electricity plc
(Midlands)
Termobarranquilla EWG 92,156* 28.67% ABB Energy Ventures, Foreign
S.A. Inc.
Lancaster Steel Foreign
Distral Group Foreign
Corp. Electrica Foreign
De la Costa
Atlantica
EI Barranquilla, EWG 48,809* 100% Not Applicable N/A
Inc.
6
First First % Owners not affiliated with
Energy'st Energy's FirstEnergy
FUCO Investment Equity -----------------------------------
Associate or at 6/30/03 Owner- Type of
Company EWG ($000)** ship Name of Entity Entity
--------- ---- ---------- ------- --------------- ------
Barranquilla EWG 47,478* 100% Not Applicable N/A
Lease Holdings,
Inc.
Los Amigos EWG 12* 100% Not Applicable N/A
Leasing Company,
Ltd.
International
Power Advisors,
Inc. EWG 3,962* 100% Not Applicable N/A
Empresa
Distribuidora
Electrica
Regional,S.A.
(EMDERSA) FUCO - 0% Not Applicable N/A
FE Generation
Corp. EWG 835,554 100% Not Applicable N/A
----------
Total Aggregate
Investment in
EWGs & FUCOs * $1,056,817
==========
(*) FirstEnergy's aggregate investment does not include the items shown with
asterisks in order to avoid duplication.
(**) Aggregate investment amounts reflected here do not include any goodwill or
other fair value adjustments.
As of June 30, 2003, FirstEnergy also owned, directly or indirectly, a
100% interest in each of the following EWGs, in which its aggregate investment
did not exceed $10,000: GPU Power Philippines, Inc.
(17) FirstEnergy and Subsidiary Companies Consolidated Capitalization Ratios as
of June 30, 2003:
Amount (000's) %
-------------- -
Common equity $ 7,124,751 33.3
Cumulative preferred stock 355,390 1.7
Subsidiary-obligated mandatory
redeemable preferred securities 284,834 1.3
Subsidiary-obligated trust
preferred securities - -
Long-term debt 12,565,943 58.8
Notes payable 1,045,067 4.9
------------ -----
Total capitalization $ 21,375,985 100.0%
============ =====
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(18) Market-to-book ratio of FirstEnergy and Subsidiary Companies common stock
at June 30, 2003:
Closing Market Price per Share $38.45
Book Value per Share $24.16
Market-to Book Ratio of Common Stock 159.1%
(19) No new EWG/FUCO project covered by the Modified Rule 53 Test in which
Firstenergy has invested or committed to invest during the second quarter of
2003.
(20) Analysis of Growth in Retained Earnings for FirstEnergy and Subsidiary
Companies:
(In Thousands)
-------------
Retained Earnings as of 06/30/03 $1,575,153
Retained Earnings as of 12/31/02* 1,634,981
----------
Decrease in Retained Earnings $ (59,828)
==========
Analysis of Decrease in Retained Earnings:
-----------------------------------------
Income contribution from regulated utility companies $ 272,654
Loss from FUCOs/EWGs (43,888)
Income contribution from all other companies 8,237
FirstEnergy Holding and Service companies (76,488)
Cash dividends declared on common stock (220,443)
----------
Decrease in Retained Earnings $ (59,828)
==========
* Retained Earnings as of 12/31/02 restated per Amendment No. 2 of FirstEnergy
2002 Form 10-K/A.
(21) Statements of Operations for the period ended June 30, 2003 for the
following Project Parents and Exempt Entities will be filed separately under a
request for confidential treatment under Rule 104 (b):
Termobarranquilla, S.A.
GPUI Colombia, Ltda.
Empresa Guaracachi, S.A.
FirstEnergy Generation Corp.
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SIGNATURE
The undersigned registered holding company has duly caused this
quarterly report to be signed on its behalf by the undersigned officer thereunto
duly authorized pursuant to the requirements of the Public Utility Holding
Company Act of 1935.
FIRSTENERGY CORP.
August 29, 2003
By: /s/ Harvey L. Wagner
----------------------------------------
Harvey L. Wagner
Vice President, Controller
and Chief Accounting Officer
(Principal Accounting Officer)
9