-----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, Ofwe8tekM3tWcLIBHvf49l6aTJ5fvtEJdzzNE67Z+lbKHcnj0/HQQ2zNQQclBVHC 5BfFQIdODejegAHDAfQaRg== 0001031296-03-000098.txt : 20030501 0001031296-03-000098.hdr.sgml : 20030501 20030501171525 ACCESSION NUMBER: 0001031296-03-000098 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030430 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTENERGY CORP CENTRAL INDEX KEY: 0001031296 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 341843785 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-21011 FILM NUMBER: 03677612 BUSINESS ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308-1890 BUSINESS PHONE: 3303845100 MAIL ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308-1890 8-K 1 fe_8-k.txt 333-21011 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) April 30, 2003 Commission Registrant; State of Incorporation; I.R.S. Employer File Number Address; and Telephone Number Identification No. - ----------- ----------------------------------- ------------------ 333-21011 FIRSTENERGY CORP. 34-1843785 (An Ohio Corporation) 76 South Main Street Akron, Ohio 44308 Telephone (800)736-3402 Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits (c) Exhibits. Exhibit No. Description - ----------- ----------- 99.1 Press Release issued by FirstEnergy Corp., dated April 30, 2003 99.2 Consolidated Report to the Financial Community, dated April 30, 2003 Item 9. Regulation FD Disclosure The information in this Current Report on Form 8-K, including the exhibits listed above, is being furnished, not filed, under Item 9 pursuant to Regulation FD and Item 12, "Disclosure of Results of Operations and Financial Condition" in accordance with SEC Release Nos. 33-8216 and 34-47583. The information in this report and in such exhibits shall not be incorporated by reference into any registration statement filed pursuit to the Securities Act of 1933, as amended. On April 30, 2003, FirstEnergy Corp. issued two public announcements, which are attached as Exhibits 99.1 and 99.2 hereto and incorporated by reference. FirstEnergy's Consolidated Report to the Financial Community contains non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP. Pursuant to the requirements of Regulation G, FirstEnergy has provided quantitative reconciliations within the Consolidated Report to the Financial Community of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The Consolidated Report to the Financial Community includes normalized earnings per share, which is not calculated in accordance with GAAP because it excludes the impact of "unusual or one-time items". Unusual items reflect the impact on earnings of events that are not routine, are related to prior periods, are related to discontinued businesses or the cumulative effect of an accounting change. Management believes presenting normalized earnings calculated in this manner provides useful information to investors in evaluating the ongoing results of FirstEnergy's businesses and assists investors in comparing the company's operating performance to the operating performance of others in the energy sector. FirstEnergy's management frequently references these non-GAAP financial measures in its decision-making, using them to facilitate historical and ongoing performance comparisons as well as comparisons to the performance of peer companies. The non-GAAP information presented in the Consolidated Report to the Financial Community should be considered in addition to, and not as a substitute for, reported earnings per share prepared in accordance with GAAP. This Form 8-K includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Actual results may differ materially due to the speed and nature of increased competition and deregulation in the electric utility industry, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy market prices, legislative and regulatory changes (including revised environmental requirements), availability and cost of capital, inability to accomplish or realize anticipated benefits of strategic goals and other similar factors. 1 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. May 1, 2003 FIRSTENERGY CORP. ----------------- Registrant /s/Harvey L. Wagner ---------------------------- Harvey L. Wagner Vice President, Controller and Chief Accounting Officer 2 EX-99 3 exhibit_99-1.txt EXHIBIT 99.1 2 Exhibit 99.1 FirstEnergy Corp. For Release: April 30, 2003 76 South Main Street Akron, Ohio 44308 www.firstenergycorp.com News Media Contact: Investor Contact: Kristen Baird Kurt Turosky (330) 761-4261 (330) 384-5500 FIRSTENERGY REPORTS HIGHER FIRST QUARTER EARNINGS; UPDATES DAVIS-BESSE SCHEDULE FirstEnergy Corp. (NYSE: FE) today reported first quarter 2003 net income of $138.8 million, or basic and diluted earnings per share of $0.47, before the cumulative effect of an accounting change resulting from the adoption of a new accounting standard for asset retirement obligations. After the accounting change, first quarter net income was $241.0 million, or basic and diluted earnings of $0.82 per share. These results compare with net income for the first quarter of 2002 of $116.5 million, or basic and diluted earnings of $0.40 per share. Contributions to FirstEnergy's 2003 first quarter earnings growth include a 9.4 percent increase in electric distribution deliveries; improved natural gas margins due to reduced sourcing costs; lower financing costs associated with debt-reduction and refinancing activities; and the absence of unusual charges that reduced earnings by $0.05 per share in the first quarter of 2002. Earnings growth was partially offset by several items, including $88 million, or $0.18 per share, in additional expenses associated with the extended outage at the Davis-Besse Nuclear Power Station and efforts to prepare the plant for restart ($52 million for replacement power costs and $36 million of incremental operating and maintenance expenses). The increase in first quarter earnings also was partially offset by a $50-million increase in pension and other employee benefit costs. Total revenues for the first quarter of 2003 were $3.2 billion, compared with $2.9 billion during the same period in 2002. For the quarter, total generation kilowatt-hour sales rose 30.6 percent, reflecting both retail and wholesale transactions. (more) FirstEnergy continued making progress in its effort to improve its financial flexibility through debt reduction and refinancing. During the quarter, the company retired, refinanced or repriced long-term debt totaling $685 million, which will produce approximately $20 million in annual savings. With respect to the schedule for Davis-Besse's return to service, the FirstEnergy Nuclear Operating Company now expects the plant to be ready for restart in the first half of the summer, rather than this spring. The revised timeline reflects work associated with the reactor vessel pressure test, as well as other physical work required for restart. The Nuclear Regulatory Commission will make the final determination of when the plant can return to service. FirstEnergy's Consolidated Report to the Financial Community - which provides highlights on company developments and financial results for the first quarter of 2003 - is posted on the company's Internet site - www.firstenergycorp.com/ir. To access the report, click on Consolidated Report to the Financial Community. FirstEnergy is a registered public utility holding company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity; exploration and production of oil and natural gas; transmission and marketing of natural gas; and energy management and other energy-related services. Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Actual results may differ materially due to the speed and nature of increased competition and deregulation in the electric utility industry, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy market prices, legislative and regulatory changes (including revised environmental requirements), availability and cost of capital, inability to accomplish or realize anticipated benefits of strategic goals and other similar factors. (043003) EX-99 4 exhibit_99-2.txt EXHIBIT 99.2 Exhibit 99.2 Consolidated Report to the Financial Community (Unaudited) - -----------------------------------
---------------------------------------------------------- First Quarter 2003 Highlights |After Tax EPS Variance Analysis 1st Qtr.| (Released April 30, 2003) |-------------------------------- ------- | |1st Quarter 2002 Basic EPS - GAAP Basis $ 0.40 | o Net income for the first | One-Time Items - 2002 (See page 6) 0.05 | quarter, before a cumulative | ----- | effect of an accounting change |1st Quarter 2002 Normalized Earnings $ 0.45 | for the adoption of SFAS No. | Electric Gross Margin 0.23 | 143, was $139 million, or | Natural Gas Gross Margin 0.04 | $0.47 per share. Excluding | International Operaitons (0.04)| costs associated with the | Pension and Other Employee Benefits (0.10)| Davis-Besse extended outage, | Depreciation and Amortization (0.04)| normalized earnings were $0.65 | Financing Costs 0.11 | per share, compared to first | ----- | quarter 2002 normalized |1st Quarter 2003 Normalized Earnings $ 0.65 | earnings of $0.45 per share. | Davis-Besse Incremental Expenses (0.18)| Net income for the first | ----- | quarter of 2003 was $241 |Subtotal $ 0.47 | million, or $0.82 per share, | Cumulative Effect of Accounting Change - 2003 0.35 | compared to $116 million, or | ----- | $0.40 per share, for the same |1st Quarter 2003 Basic EPS - GAAP Basis $ 0.82 | period last year. | ===== | ----------------------------------------------------------
1Q 2003 Results Compared With 1Q 2002 - ------------------------------------- o Electric distribution deliveries increased 9%, largely driven by a 15% rise in residential deliveries, reflecting colder weather. Commercial deliveries increased 12%, while industrial deliveries only increased slightly. Total electric generation sales increased 31%. Approximately 75% of the increase was attributable to higher wholesale sales and 25% attributable to higher retail sales. o Electric gross margin increased $113 million after adjusting for changes in regulatory deferrals and Davis-Besse replacement power costs. Excluding these adjustments, electric sales revenue increased $390 million, due largely to an increase in wholesale spot sales and Basic Generation Service sales in New Jersey. Purchased power costs increased $290 million, after adjusting for regulatory deferrals and $52 million of Davis-Besse replacement power costs. Fuel expenses decreased $13 million due to lower generation output. o Natural gas gross margin rose $21 million, primarily due to reduced sourcing costs for our gas marketing business. o International operations net income decreased $12 million primarily as a result of the earnings reflected last year, when we owned 100% of Avon Energy Partners Holdings. o Pension and other employee benefit costs increased $50 million, principally reflecting reduced asset values, reduced return assumptions on trust assets, and lower discount rates used to value projected obligations. 1 o Total depreciation and amortization expenses increased $19 million. The increase is primarily attributable to a $29 million increase in Ohio transition costs amortization and $10 million of depreciation expense associated with the Lake Plants in 2003. These expenses were partially offset by $18 million of lower nuclear decommissioning and depreciation expenses related to SFAS No. 143 implementation. o Excluding international operations, net interest charges decreased $47 million as a result of our aggressive debt reduction program and refinancing initiatives. Financing activities during the quarter included $122 million in mandatory long-term debt redemptions, $563 million of refinancings, and $50 million in incremental long-term debt issuance. 2003 Earnings Impact Associated with Davis-Besse - ------------------------------------------------ o Incremental expenses associated with the extended outage at Davis-Besse during the quarter totaled $88 million, or $0.18 per share ($52 million of replacement power costs and $36 million of O&M expenses). For additional information, please contact: Kurt E. Turosky Terrance G. Howson Thomas C. Navin Director, Vice President, Treasurer Investor Relations Investor Relations (330) 384-5889 (330) 384-5500 (973) 401-8519 2
Actual FIRSTENERGY CORP. Three Months Ended CONSOLIDATED INCOME March 31, --------------------------------------- STATEMENTS (thousands): 2003 2002 Change ---------------------------------------- ----------- ----------- --------- (1)REVENUES: (2) Electric Sales $ 2,633,200 $ 2,085,000 $ 548,200 (3) Natural Gas 248,496 204,594 43,902 (4) FE Facilities 77,380 119,753 (42,373) (5) MYR 112,294 139,794 (27,500) (6) International 42,340 204,626 (162,286) (7) Other 130,762 99,511 31,251 ----------- ----------- --------- (8) Total revenues 3,244,472 2,853,278 391,194 ----------- ----------- --------- (9) (10)EXPENSES: (11) Fuel 157,738 170,621 (12,883) (12) Purchased Power 1,024,372 514,219 510,153 (13) Purchased Gas 229,465 206,227 23,238 (14) Other operating expenses 720,644 695,337 25,307 (15) FE Facilities 78,263 118,135 (39,872) (16) MYR 110,635 136,871 (26,236) (17) International 16,007 88,547 (72,540) (18) Mark-to-Market Adjustment 3,690 (1,139) 4,829 (19) Provision for depreciation and amortization 281,662 262,828 18,834 (20) General taxes 178,282 171,988 6,294 ----------- ----------- --------- (21) Total expenses 2,800,758 2,363,634 437,124 ------------ ----------- --------- (22)INCOME BEFORE INTEREST (23) AND INCOME TAXES 443,714 489,644 (45,930) ----------- ----------- ---------- (24)Net interest charges: (25) Interest expense 200,650 260,465 (59,815) (26) Capitalized interest (9,152) (5,814) (3,338) (27) Subsidiaries' preferred stock dividends 11,242 24,071 (12,829) ----------- ----------- --------- (28) Net interest charges 202,740 278,722 (75,982) ----------- ----------- --------- (29)Income taxes 102,136 94,429 7,707 ----------- ----------- --------- (30)Income before cumulative effect of a (31) change in accounting 138,838 116,493 22,345 (32)Cumulative effect of a change in accounting 102,147 - 102,147 ----------- ----------- --------- (33)NET INCOME $ 240,985 $ 116,493 $ 124,492 =========== =========== ========= (34) (35)Basic earnings per common share: (36) Before accounting change $ 0.47 $ 0.40 $ 0.07 (37) Cumulative effect of accounting change 0.35 - 0.35 ----------- ----------- --------- (38) $ 0.82 $ 0.40 $ 0.42 =========== =========== ========= (39)Weighted average number of basic (40) shares outstanding 293,886 292,791 1,095 =========== =========== ========= (41) (42) Diluted earnings per common share: (43) Before accounting change $ 0.47 $ 0.40 $ 0.07 (44) Cumulative effect of accounting change 0.35 - 0.35 ----------- ----------- --------- (45) $ 0.82 $ 0.40 $ 0.42 =========== =========== ========= (46)Weighted average number of diluted (47) shares outstanding 294,877 294,492 385 =========== =========== ========= 3
FirstEnergy Actual Consolidated Income Segments Three Months Ended March 31, 2003
----------------------------------------------------------------------- Regulated Competitive Other Reconciling (In thousands): Services Services (c) Adjustments Consolidated ----------------------------------------- ----------- ----------- ------------- ------------ ------------ (1)REVENUES: (2) Electric Sales $2,219,999 $ 413,201 $ - $ - $2,633,200 (3) Natural Gas - 248,496 - - 248,496 (4) FE Facilities - 77,380 - - 77,380 (5) MYR - 112,294 - - 112,294 (6) International - - 42,340 - 42,340 (7) Other 95,065 14,910 8,746 12,041 (a) 130,762 (8) Internal revenues 264,502 559,694 123,794 (947,990)(b) - ---------- ---------- --------- --------- ---------- (9) Total revenues 2,579,566 1,425,975 174,880 (935,949) 3,244,472 ---------- ---------- --------- --------- ---------- (10) (11)EXPENSES: (12) Fuel - 155,322 2,416 - 157,738 (13) Purchased Power 1,111,612 472,454 - (559,694)(b) 1,024,372 (14) Purchased Gas - 229,465 - - 229,465 (15) Other operating expenses 531,559 422,941 107,692 (341,548)(a)(b) 720,644 (16) FE Facilities - 78,263 - - 78,263 (17) MYR - 110,635 - - 110,635 (18) International - - 16,007 - 16,007 (19) Mark-to-Market Adjustment - 3,841 (151) - 3,690 (20) Provision for depreciation and amortization 263,658 7,492 10,512 - 281,662 (21) General taxes 163,758 10,552 3,972 - 178,282 ---------- ---------- --------- --------- ---------- (22) Total expenses 2,070,587 1,490,965 140,448 (901,242) 2,800,758 ---------- ---------- --------- --------- ---------- (23)INCOME BEFORE INTEREST (24) AND INCOME TAXES 508,979 (64,990) 34,432 (34,707) 443,714 ---------- ---------- --------- --------- ---------- (25)Net interest charges: (26) Interest expense 118,017 12,693 104,647 (34,707)(b) 200,650 (27) Capitalized interest (7,050) (2,102) - - (9,152) (28) Subsidiaries' preferred stock dividends 11,242 - - - 11,242 ---------- ---------- --------- --------- ---------- (29) Net interest charges 122,209 10,591 104,647 (34,707) 202,740 ---------- ---------- --------- --------- ---------- (30)Income taxes 159,404 (31,336) (25,932) - 102,136 ---------- ---------- --------- --------- ---------- (31)Income before cumulative effect of a (32) change in accounting 227,366 (44,245) (44,283) - 138,838 (33)Cumulative effect of a change in accounting 100,960 1,187 - - 102,147 ----------- ---------- --------- --------- ---------- (34)NET INCOME $ 328,326 $ (43,058) $ (44,283) $ - $ 240,985 ========== ========== ========= ========= ========== Three Months Ended Mar 31, 2002 ------------------------------------------------------------------------ Regulated Competitive Other Reconciling (In thousands): Services Services (c) Adjustments Consolidated ----------------------------------------- ---------- ----------- --------- ----------- ------------ (1)REVENUES: (2) Electric Sales $1,924,242 $ 160,758 $ - $ - $2,085,000 (3) Natural Gas - 204,592 - - 204,592 (4) FE Facilities - 119,753 - - 119,753 (5) MYR - 139,794 - - 139,794 (6) International - - 204,626 - 204,626 (7) Other 70,620 12,955 9,409 6,529 (a) 99,513 (8) Internal revenues 354,680 410,296 117,459 (882,435)(b) - ---------- ---------- --------- --------- ---------- (9) Total revenues 2,349,542 1,048,148 331,494 (875,906) 2,853,278 ---------- ---------- --------- --------- ---------- (10) (11)EXPENSES: (12) Fuel 1,176 166,533 2,912 - 170,621 (13) Purchased Power 905,791 66,665 - (458,237)(b) 514,219 (14) Purchased Gas - 206,227 - - 206,227 (15) Other operating expenses 516,672 440,453 141,475 (403,263)(a)(b) 695,337 (16) FE Facilities - 118,135 - - 118,135 (17) MYR - 136,871 - - 136,871 (18) International - - 88,547 - 88,547 (19) Mark-to-Market Adjustment - (9,184) 8,045 - (1,139) (20) Provision for depreciation and amortization 243,779 6,661 12,388 - 262,828 (21) General taxes 160,912 7,251 3,825 - 171,988 ---------- ---------- --------- --------- ---------- (22) Total expenses 1,828,330 1,139,612 257,192 (861,500) 2,363,634 ---------- ---------- --------- --------- ---------- (23)INCOME BEFORE INTEREST (24) AND INCOME TAXES 521,212 (91,464) 74,302 (14,406) 489,644 ---------- ---------- ---------- --------- ---------- (25)Net interest charges: (26) Interest expense 140,780 12,056 122,035 (14,406)(b) 260,465 (27) Capitalized interest (3,387) (2,427) - - (5,814) (28) Subsidiaries' preferred stock dividends 24,071 - - - 24,071 ---------- ---------- --------- --------- ---------- (29) Net interest charges 161,464 9,629 122,035 (14,406) 278,722 ---------- ---------- ---------- --------- ---------- (30)Income taxes 161,876 (41,469) (25,978) - 94,429 ---------- ---------- --------- --------- ---------- (31)Income before cumulative effect of a (32) change in accounting 197,872 (59,624) (21,755) - 116,493 (33)Cumulative effect of a change in accounting - - - - - ---------- ---------- --------- --------- ---------- (34)NET INCOME $ 197,872 $ (59,624) $ (21,755) $ - $ 116,493 ========== ========== ========= ========= ========== 4
FirstEnergy Actual Consolidated Income Segments Three Months Ended March 31, 2003 VS 2002 ----------------------------------------------------------------------
Regulated Competitive Other Reconciling (In thousands): Services Services (c) Adjustments Consolidated ---------------------------------------- --------- ----------- --------- ------------ ------------ (1)REVENUES: (2) Electric Sales $ 295,757 $ 252,443 $ - $ - $ 548,200 (3) Natural Gas - 43,904 - - 43,904 (4) FE Facilities - (42,373) - - (42,373) (5) MYR - (27,500) - - (27,500) (6) International - - (162,286) - (162,286) (7) Other 24,445 1,955 (663) 5,512 (a) 31,249 (8) Internal revenues (90,178) 149,398 6,335 (65,555)(b) - --------- --------- --------- --------- --------- (9) Total revenues 230,024 377,827 (156,614) (60,043) 391,194 --------- --------- --------- --------- --------- (10) (11)EXPENSES: (12) Fuel (1,176) (11,211) (496) - (12,883) (13) Purchased Power 205,821 405,789 - (101,457)(b) 510,153 (14) Purchased Gas - 23,238 - - 23,238 (15) Other operating expenses 14,887 (17,512) (33,783) 61,715 (a)(b) 25,307 (16) FE Facilities - (39,872) - - (39,872) (17) MYR - (26,236) - - (26,236) (18) International - - (72,540) - (72,540) (19) Mark-to-Market Adjustment - 13,025 (8,196) - 4,829 (20) Provision for depreciation and amortization 19,879 831 (1,876) - 18,834 (21) General taxes 2,846 3,301 147 - 6,294 --------- --------- --------- --------- --------- (22) Total expenses 242,257 351,353 (116,744) (39,742) 437,124 --------- --------- --------- ---------- --------- (23)INCOME BEFORE INTEREST (24) AND INCOME TAXES (12,233) 26,474 (39,870) (20,301) (45,930) --------- --------- --------- --------- --------- (25)Net interest charges: (26) Interest expense (22,763) 637 (17,388) (20,301)(b) (59,815) (27) Capitalized interest (3,663) 325 - - (3,338) (28) Subsidiaries' preferred stock dividends (12,829) - - - (12,829) --------- --------- --------- ---------- --------- (29) Net interest charges (39,255) 962 (17,388) (20,301) (75,982) --------- --------- --------- --------- --------- (30)Income taxes (2,472) 10,133 46 - 7,707 --------- --------- --------- --------- --------- (31)Income before cumulative effect of a (32) change in accounting 29,494 15,379 (22,528) - 22,345 (33)Cumulative effect of a change in accounting 100,960 1,187 - - 102,147 --------- --------- --------- --------- --------- (34)NET INCOME $ 130,454 $ 16,566 $ (22,528) $ - $ 124,492 ========= ========= ========= ========= ========= Reconciling adjustments to segment operating results from internal management reporting to consolidated external financial reporting. (a) Principally fuel marketing revenues which are reflected as reductions to expenses for internal management reporting purposes. (b) Elimination of intersegment transactions. (c) "Other" segment primarily consists of corporate support services and international businesses. 5
FirstEnergy Statistical Summary - ---------------------------------------------------------------------------------------------------- FirstEnergy Combined Electric Sales Statistics - ----------------------------------------------------------------------------------------------------
Three Months Ended March 31, ---------------------------------- 2003 2002 Change --------- --------- ------- (In Millions) ELECTRIC GENERATION SALES (KWHs): Retail - Regulated 22,118 21,672 2.1% Unregulated 3,230 1,403 130.2% ---------- --------- -------- Total Retail 25,348 23,075 9.9% Wholesale 10,426 4,321 141.3% ---------- --------- -------- Total Electric Generation Sales 35,774 27,396 30.6% ========= ========= ======== ELECTRIC DISTRIBUTION DELIVERIES (KWHs): Residential 10,127 8,773 15.4% Commercial 8,292 7,427 11.6% Industrial 8,724 8,608 1.3% Other 140 138 1.4% --------- --------- -------- Total Distribution Deliveries 27,283 24,946 9.4% ========= ========= ======== ELECTRIC SALES SHOPPED (KWHs): Residential 1,647 1,178 39.8% Commercial 1,626 719 126.1% Industrial 1,892 1,377 37.4% --------- --------- -------- Total Electric Sales Shopped 5,165 3,274 57.8% ========= ========= ======== - ---------------------------------------------------------------------------------------------------- At March 31, ------------------------------------------------------------- 2003 % Total 2002 % Total ------------ -------- ------------ ------- Capitalization ( in thousands): ------------------------------- Total common equity $ 7,262,260 31% $ 7,436,518 29% Preferred stock * 765,363 3% 1,074,971 4% Long-term debt * 12,666,967 55% 14,706,813 57% Short-term debt * 855,327 4% 862,528 3% Off-balance sheet debt equivalents: - Sale-leaseback arrangements 1,496,580 6% 1,467,254 6% - Accounts receivable factoring 145,000 1% 200,000 1% ------------ ------- ------------ ------ Total Capitalization $ 23,191,497 100% $ 25,748,084 100% ============ ======= ============ ====== * Includes amounts due to be paid within one year, JCP&L securitization of $320 million and debt related to pending divestitures in 2002. - ------------------------------------------------------------------------------------------------------------------------ Three Months Ended March 31, ------------------------------------------------------ 2003 2002 Change ------------------------------------------------------ (in thousands) Financial Statistics ( in thousands): ------------------------------------ L-T Debt and Preferred Stock Redemptions $ 121,814 $ 167,529 $ (45,715) Short-term Debt Increase (Decrease) $ (237,490) $ (16,338) $(221,152) Capital Investments $ 190,841 $ 164,918 $ 25,923 - ------------------------------------------------------------------------------------------------------------------------ One-Time Items: 2003 vs 2002 (a) Three Months Ended March 31, ----------------------------------------------------- 2003 2002 Change ---------- ---------- -------- Long-term Derivative Contract Adjustment $ - $ (18,091) $ 18,091 Equity Investment - Bankruptcy - (30,371) 30,371 Telecommunications Investment Writedown - (12,610) 12,610 Generation Project Cancellation - (17,102) 17,102 Cumulative Avon adjustment (b) - 45,300 (45,300) ---------- ---------- -------- Total - Income before income taxes $ - $ (32,874) $ 32,874 ========== ========== ======== EPS Effect $ 0.00 $ (0.05) $ 0.05 ========== ========== ======== Notes: (a) Expense amounts except as noted in footnote (b) (b) Cumulative Avon adjustment amounts reflected in 2002 income statement - Revenues - international $ 91,300 Expenses - international 27,100 Net interest charges 18,900 -------- Income before income taxes 45,300 Income taxes 13,600 --------- Net income $ 31,700 ======== 6
FirstEnergy Statistical Summary Three Months Ended March 31, ----------------------------------- 2003 2002 Change --------- --------- -------- NATURAL GAS SALES (Decatherms): (in thousands) Retail 29,577 38,266 -22.7% Wholesale 10,037 12,300 -18.4% --------- ------- -------- Total Natural Gas Sales 39,614 50,566 -21.7% ========= ======= ======== - ----------------------------------------------------------------------------- Three Months Ended March 31, ----------------------------------- 2003 2002 Change --------- --------- -------- Regulatory Asset Amortization (in thousands) ------------------------------ Depreciation and Amortization $ 181,234 $ 142,789 $ 38,445 Income Tax Amortization 15,490 13,070 2,420 --------- --------- -------- Total $ 196,724 $ 155,859 $ 40,865 ========= -======== ======== Regulatory Deferrals --------------------- Ohio Transition Plan -------------------- Beginning Balance $ 259,353 $ 75,406 Deferral of Shopping Incentives 45,426 31,036 $ 14,390 Deferral of New Regulatory Assets 4,589 12,459 (7,870) --------- --------- -------- Current period deferrals 50,015 43,495 $ 6,520 ======== --------- --------- Ending Balance-Ohio Deferrals $ 309,368 $ 118,901 ========= ========= Deferred Energy Costs ----------------------- Pennsylvania ------------ Beginning Balance $ - $ 218,531 Deferral (recovery) of energy costs - (19,131) $ 19,131 --------- --------- -------- Current period change - (19,131) $ 19,131 --------- --------- ======== Ending Balance $ - $ 199,400 ========= ========= New Jersey ---------- Beginning Balance $ 548,641 $ 301,204 Deferral (recovery) of energy costs (18,313) 18,651 $(36,964) --------- --------- ======== Ending Balance $ 530,328 $ 319,855 ========= ========= Mark-to-Market Adjustment -------------------------- Expenses - Pre-Tax Income Effect: Increase (Decrease) $ 3,690 $ (1,139) $ 4,829 EPS Effect $ (0.01) $ 0.00 $ (0.01) - --------------------------------------------------------------------- At March 31, --------------------------- Operating Statistics (12 mos. Ending) 2003 2002 ------------------------------------- ------ ------ System Load Factor 61.3% 59.2% Capacity Factors: Fossil 59.9% 53.1% Nuclear 70.8% 86.4% Generation Output: Fossil 67% 59% Nuclear 33% 41% Weather ------- Composite Heating Days Year-to-Date 3,116 2,519 (Normal - 2,806) 7 RECENT DEVELOPMENTS Standard & Poor's (S&P) and Moody's Ratings Actions - --------------------------------------------------- On April 14, S&P Ratings Services affirmed its 'BBB' corporate credit rating on FirstEnergy Corp. and its subsidiaries. S&P also upgraded FirstEnergy's Business Position rating from '6' to '5.' In addition, on April 11, Moody's Investors Service affirmed its 'Baa2' issuer and senior unsecured ratings for FirstEnergy Corp. Davis-Besse Nuclear Power Station - --------------------------------- FirstEnergy continues to make progress toward returning Davis-Besse to safe and reliable operation. Milestones achieved included modification of the Containment Emergency Sump, installation of a FLUS leak detection system on the bottom of the reactor vessel, and successful completion of the Integrated Leak Rate Test on the containment building. Additionally, the Company's consultant, Dr. Sonja Haber, has completed the safety culture assessment report, which will be discussed at a future NRC meeting. The next milestone will be the pressure test of the reactor coolant system, including the reactor vessel. Nuclear Plant Refueling Outages - ------------------------------- Beaver Valley Unit 1 completed its refueling outage and returned to service on April 29. During the refueling, repairs were made to minor surface cracks on four of the 65 control rod drive mechanism nozzles. The cracks did not result in coolant leakage and inspection of the reactor head indicated it is in good condition. The Perry Plant began its refueling outage on April 5 and is expected to return to service in early May. Jersey Central Power & Light (JCP&L) Rate Case - ---------------------------------------------- The schedule in the JCP&L rate case has been revised as follows: o Hearings completed on o Administrative Law Judge Recommended Decision April 28 due end of June o Briefs are due May 2 o Board of Public Utilities decision expected in July o Reply Briefs are due May 16 o New rates will be effective August 1 Pennsylvania Public Utility Commission (PAPUC) Activity - ------------------------------------------------------- Following the Pennsylvania Supreme Court's denial of appeals of the Commonwealth Court's Order on the merger settlement and Provider of Last Resort rate relief, the PAPUC: o transmitted the issue of merger savings to the Office of Administrative Law Judge for hearings, o directed Met-Ed and Penelec to file a position paper by May 2 describing the status of a settlement stipulation in light of the Commonwealth Court's opinion; and o directed all interested parties to submit responses within 30 days of the Companies' position paper filing Shelf Registration - ------------------ On March 17, FirstEnergy filed a registration statement with the U.S. Securities and Exchange Commission covering securities in the aggregate of up to $2 billion. Although the Company does not have any current plans to issue securities, the shelf provides the flexibility to issue and sell various types of securities, including common stock, debt securities, or share purchase contracts and related share purchase units. Emdersa Abandonment - ------------------- On April 18, FirstEnergy divested its ownership in the Argentine distribution company Emdersa through the abandonment of its shares in Emdersa's parent company, GPU Argentina Holdings, Inc. FirstEnergy will recognize a one-time, non-cash charge of $63 million in the second quarter ($0.21 per share). Since FirstEnergy had recorded a $90 million currency translation adjustment in the fourth quarter of 2002, the net effect of the $63 million charge will be an increase in common shareholders' equity of $27 million. FirstEnergy anticipates income tax benefits of $129 million related to the abandonment, which will be reflected in earnings in a future period. This Consolidated Report to the Financial Community includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements typically contain, but are not limited to, the terms "anticipate," "expect," "believe," "estimate," and similar words. Actual results may differ materially due to a number of factors including, but not limited to, the speed and nature of regulatory approvals. 8 -----END PRIVACY-ENHANCED MESSAGE-----