-----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, Dj0mqy5zgdp89t8NQiAZ8R9tUI2t2gt/mrMhI3ijUi9+8zIGDyS2v7EuDsnvLeJc ZP4F2Nl4nodKFLSnUFWc8w== 0001031296-04-000127.txt : 20040526 0001031296-04-000127.hdr.sgml : 20040526 20040526140844 ACCESSION NUMBER: 0001031296-04-000127 CONFORMED SUBMISSION TYPE: 35-CERT PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20040526 EFFECTIVENESS DATE: 20040526 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: 35-CERT SEC ACT: 1935 Act SEC FILE NUMBER: 070-10122 FILM NUMBER: 04831998 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 35-CERT 1 financing_r24.txt RULE 24 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 January 1, 2004 through March 31, 2004, there were no sales of common stock or preferred securities by FirstEnergy. (2) During the first quarter of 2004, 3,614,249 shares of common stock were issuable pursuant to options granted under employee benefit plans and dividend reinvestment plans. (3) During the period January 1, 2004 through March 31, 2004, no FirstEnergy common stock was transferred to a seller of securities of a company being acquired. (4) During the period January 1, 2004 through March 31, 2004, there were no Long-term Debt and Preferred Securities issued by FirstEnergy. FirstEnergy issued the following Short-term Debt during the first quarter of 2004:
Transaction Maturity Transaction Date Date Rate Amount Loan Balance ----------- -------- ---- ------------ ------------ CitiBank (FirstEnergy Revolver - 375mm 364 Day Facility) - -------------------------------------------------------- FirstEnergy 1/20/2004 1/21/2004 3.00% $80,000,000.00 $250,000,000.00 CitiBank (FirstEnergy Revolver - 500mm 3 Year Facility) - ------------------------------------------------------- FirstEnergy 1/20/2004 1/27/2004 2.58% $25,000,000.00 $295,000,000.00 FirstEnergy 1/30/2004 2/6/2004 2.58% $50,000,000.00 $295,000,000.00 FirstEnergy 3/1/2004 3/5/2004 2.58% $40,000,000.00 $215,000,000.00 FirstEnergy 3/19/2004 3/22/2004 2.58% $40,000,000.00 $185,000,000.00 FirstEnergy 3/22/2004 3/29/2004 2.58% $110,000,000.00 $295,000,000.00 CitiBank (FirstEnergy Revolver - 375mm 3 year Facility) - ------------------------------------------------------- FirstEnergy 3/25/2004 4/1/2004 2.84% $75,000,000.00 $75,000,000.00
(5) During the period January 1, 2004 through March 31, 2004, the following short-term debt was issued by the Utility Subsidiaries: 1
Transaction Maturity Transaction Date Date Rate Amount Loan Balance ----------- -------- ---- ------------ ------------ CitiBank (Ohio Edison Company (OE) Revolver) - -------------------------------------------- OE 3/1/2004 3/15/2004 2.18% $60,000,000.00 $60,000,000.00 OE 3/15/2004 3/25/2004 2.30% $70,000,000.00 $130,000,000.00 FirstMerit (OE Bi-Lateral Facility) - ----------------------------------- OE 1/12/2004 1/13/2004 1.75% $14,000,000.00 $14,000,000.00 OE 1/20/2004 1/23/2004 1.75% $14,000,000.00 $14,000,000.00 OE 2/27/2004 3/3/2004 1.81% $7,000,000.00 $7,000,000.00 OE 3/1/2004 3/3/2004 1.81% $7,000,000.00 $7,000,000.00 OE 3/15/2004 3/16/2004 1.81% 14,000,000.00 14,000,000.00 KeyBank (OE Bi-Lateral Facility) - -------------------------------- OE 12/31/2003 1/6/2004 2.00% $3,000,000.00 $3,000,000.00 OE 1/2/2004 1/6/2004 2.03% $5,000,000.00 $5,000,000.00 OE 1/5/2004 1/6/2004 2.02% $12,000,000.00 $12,000,000.00 OE 1/16/2004 1/21/2004 2.00% $4,000,000.00 $4,000,000.00 OE 1/20/2004 1/23/2004 2.03% $18,000,000.00 $18,000,000.00 OE 2/2/2004 2/3/2004 2.02% $18,000,000.00 $18,000,000.00 OE 3/1/2004 3/2/2004 2.06% $10,500,000.00 $10,500,000.00 OE 3/15/2004 3/16/2004 2.05% $6,000,000.00 $6,000,000.00
Under the Utility Money Pool, the principal balance of borrowings at the end of the first quarter of 2004 and average interest rate during the first quarter of 2004 are as follows: Regulated Money Pool Average Principal Loan to/(Borrowing from): Interest Rate Balance ------------------------- ------------- ---------- OE 1.3041% $ 453,365,926 Pennsylvania Power Company (Penn) 1.3041% (40,418,244) The Cleveland Electric Illuminating Company (CEI) 1.3041% 2,410,192 The Toledo Edison Company (TE) 1.3041% (262,654,074) American Transmission Systems, Incorporated (ATSI) 1.3041% 97,885,223 Jersey Central Power & Light Company (JCP&L) 1.3041% (151,241,254) Metropolitan Edison Company (Met-Ed) 1.3041% 114,879,557 Pennsylvania Electric Company (Penelec) 1.3041% (17,184,644) York Haven Power Company 1.3041% 11,645,943 (6) During the first quarter of 2004, there were no financings consummated by any Non-Utility subsidiary that were not exempt under rule 52. (7) During the first quarter of 2004, the following guarantees were made by FirstEnergy to support activities of its subsidiaries: Purpose of Beneficiary Amount Terms Guarantee ----------- ------ ----- ---------- FirstEnergy Solutions Corp. (FES) (Trading - Electric) ------------------------------------------------------ ACES Power Marketing $50,000 (a) (b) FES (Trading - Gas) -------------------- BG LNG Services, LLC 3,000,000 (a) (b) 2 FirstEnergy Generation Corp. (Fuel Marketing / Coal) ---------------------------------------------------- Ceredo Synfuel, LLC 10,000,000 (a) (c) Peabody Coal Trade 1,000,000 (a) (c) Met-Ed (Long-term Power Supply) ------------------------------- Constellation Power Source 7,500,000 (d) (e) Penelec (Long-term Power Supply) ------------------------------- Constellation Power Source 7,500,000 (d) (f) Elliott Lewis Corp.- HVAC ------------------------- Dept of Housing & Urban Dev. 5,000,000 5 years (g) (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) Credit backstop to support coal purchases and emission trading (d) Expires on December 31, 2010. (e) Parental guaranty issued by FirstEnergy to support the long-term power purchase by Metropolitan Edison Company from Constellation. (f) Parental guaranty issued by FirstEnergy to support the long-term power purchase by Pennsylvania Electric Company from Constellation. (g) Credit backstop to support Elliott Lewis in a commercial facilities management services contract. The following Letters of Credits (LOC) were issued during the first quarter of 2004: Purpose of Beneficiary Amount LOC ----------- ------ ----------- FES --- Nicor Gas $ 100,000 (a) FirstEnergy ----------- Travels Casualty and Surety Co. of America 18,000,000 (b) (a) Pledge security for participation in the Nicor Gas transportation territory. Amount reduced from $720,000 to $100,000 in the first quarter of 2004. (b) Replaces Surety Bonds on self-insurance coverage due to rating agency changes. (8) During the First Quarter of 2004, FirstEnergy Corp. entered into one (1) transaction designed to hedge the fair value of a portion of its fixed-rate long-term debt portfolio against decreases in interest rates. The hedge structure is a fixed - for - floating interest rate swap, whereby FirstEnergy Corp. will receive fixed payments equivalent to the fixed coupon rate of the bond being hedged, and pay floating rate payments based on the 3-month London Interbank Offering Rate (LIBOR) plus or minus an applicable spread. The debt instrument being hedged, notional amount, counterparty, and principal terms of the fair value hedge are filed pursuant to request for confidential treatment. 3 (9) There were no investments made during the first quarter of 2004 in any intermediate subsidiary or financing subsidiary. (10) There were no U-6B-2 filed during the first quarter of 2004. (11) Met-Ed and Penelec engaged in jurisdictional financing transactions during the first quarter of 2004. Consolidated balance sheets of Met-Ed and Penelec for the quarter ended March 31, 2004 are incorporated by reference to Met-Ed's and Penelec's Form 10-Q Quarterly Report to SEC for the quarter ended March 31, 2004 (File No. 1-446 and 1-3522, 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 first quarter 2004. FirstEnergy Amount Ratio - ----------- ---------- ----- Common Equity $8,344,723 40.31% Preferred Stock 335,123 1.62% Long-Term Debt 11,886,804 57.42% Short-Term Debt 133,999 0.65% ---------- ------ Total Capitalization $20,700,649 100.00% ---------- ------ OE - -- Common Equity $2,607,538 58.00% Preferred Stock 100,070 2.23% Long-Term Debt 1,588,890 35.34% Short-Term Debt 199,216 4.43% ---------- ------ Total Capitalization $4,495,714 100.00% ---------- ------ CEI - --- Common Equity $1,775,311 42.05% Preferred Stock 96,404 2.28% Long-Term Debt 2,334,493 55.29% Short-Term Debt 16,203 0.38% ---------- ------ Total Capitalization $4,222,411 100.00% ---------- ------ TE - -- Common Equity $758,192 43.14% Preferred Stock 126,000 7.17% Long-Term Debt 610,545 34.74% Short-Term Debt 262,654 14.95% ---------- ------ Total Capitalization $1,757,391 100.00% ---------- ------ Penn - ---- Common Equity $241,816 47.98% Preferred Stock 39,105 7.76% Long-Term Debt 182,621 36.24% Short-Term Debt 40,418 8.02% ---------- ------ Total Capitalization $503,960 100.00% ---------- ------ 4 JCP&L - ----- Common Equity $3,162,229 68.84% Preferred Stock 12,649 0.28% Long-Term Debt 1,267,345 27.59% Short-Term Debt 151,241 3.29% ---------- ------ Total Capitalization $4,593,464 100.00% ---------- ------ Met-Ed - ------ Common Equity $1,302,464 59.83% Preferred Stock - - % Long-Term Debt 874,515 40.17% Short-Term Debt - - % ---------- ------ Total Capitalization $2,176,979 100.00% ---------- ------ Penelec - ------- Common Equity $1,302,996 64.06% Preferred Stock - - % Long-Term Debt 713,860 35.10% Short-Term Debt 17,185 0.84% ---------- ------ Total Capitalization $2,034,041 100.00% ---------- ------ (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 first quarter 2004. FirstEnergy OE CEI TE ----------- ------ -------- -------- Balance, December 31, 2003 $1,604,385 $522,934 $494,212 $113,620 Net Income 173,999 76,093 48,475 7,531 Cash Dividends on Preferred Stock - (561) (1,743) (2,211) Cash Dividends on Common Stock (122,465) (54,000) (55,000) - Other - - - - ---------- -------- -------- -------- Balance, March 31, 2004 $1,655,919 $544,466 $485,944 $118,940 ---------- -------- -------- ------- Penn JCP&L Met-Ed Penelec ------- ------- ------ -------- Balance, December 31, 2003 $54,179 $22,132 $27,011 $18,038 Net Income 19,670 13,398 18,044 5,659 Cash Dividends on Preferred Stock (640) (124) - - Cash Dividends on Common Stock (8,000) (5,000) (5,000) - Other - - - - ------- ------- ------- ------- Balance, March 31, 2004 $65,209 $30,406 $40,055 $23,697 ------- ------- ------- ------- (14) On February 6, 2004, Moody's downgraded FirstEnergy senior unsecured debt to Baa3 from Baa2 and downgraded the senior secured debt of JCP&L, Met-Ed and Penelec to Baa1 from A2. Moody's also downgraded the preferred stock rating of JCP&L to Ba1 from Baa2 and the senior unsecured rating of Penelec to Baa2 from A2. The ratings of OE, CEI, TE and Penn were confirmed. A complete list of Moody's ratings actions follows: The ratings of the following issuers were downgraded: FirstEnergy Corp - senior unsecured and Issuer Rating to Baa3 from Baa2 Jersey Central Power & Light Company - senior secured rating to Baa1 from A2, Issuer Rating to Baa2 from A3, and Preferred Stock rating to Ba1 from Baa2 5 Metropolitan Edison Company - senior secured rating to Baa1 from A2, Senior Secured Shelf to (P)Baa1 from (P)A2, Issuer Rating to Baa2 from A3, and Preferred Shelf to (P)Ba1 from (P)Baa2 Pennsylvania Electric Company - senior secured rating to Baa1 from A2, senior unsecured rating to Baa2 from A2, and Issuer Rating to Baa2 from A3 The ratings of the following FirstEnergy subsidiaries and affiliates were confirmed: Ohio Edison Company - senior secured Baa1, senior secured shelf (P)Baa1, Issuer Rating Baa2, Preferred Stock Ba1 Cleveland Electric Illuminating Company - senior secured rating Baa2, Issuer Rating Baa3, Preferred Stock Ba2 Toledo Edison Company - Senior Secured Baa2, Issuer Rating Baa3, Preferred Stock Ba2 Pennsylvania Power Company - senior secured Baa1, senior secured shelf (P)Baa1, Issuer Rating Baa2, Preferred Stock Ba1 PNPP II Funding Corp. - Backed Senior Secured Baa2 BVPS II Funding Corp. - Backed Senior Secured Baa2 CTC Beaver Valley Funding Corp. - Backed Senior Secured Baa3 CTC Mansfield Funding Corp. - Backed Senior Secured Baa3 Beaver Valley II Funding Corp. - Backed Senior Secured Baa3 (15) FirstEnergy's aggregate investment includes all amounts invested, or commitments to be invested, in exempt wholesale generators (EWGs), for which there is recourse, directly or indirectly, to the registered holding company. Accordingly, FirstEnergy's aggregate investment as of March 31, 2004 is as follows: (In Thousands) -------------- FE Generation Corp. $ 906,184 Termobarranquilla S. A. 60,400 --------- Aggregate Investment in EWGs $ 966,584* ========= * Aggregate investment amounts reflected here include LOCs and guarantees, but do not include any goodwill or other fair value adjustments. 6 Aggregate Investment as a Percentage of FirstEnergy and Subsidiary Companies: - ---------------------------------------------------------------------------- Total capitalization $ 20,700,649 4.7% Net utility plant $ 13,259,146 7.3% Total consolidated assets $ 32,584,536 3.0% Market value of common equity $ 12,890,002 7.5% (16) Set forth below is a summary of the direct or indirect investments as defined in SEC Rule 53(a) by FirstEnergy, as of March 31, 2004 in EWGs, as well as the percentage of equity ownership. First First Owners not affiliated with Energy's Energy's % FirstEnergy Investment Equity ----------------------------- Associate at 03/31/04 Owner- Type of Company ($000)* ship Name of Entity Entity - --------- ---------- ------- --------------- ------ Termobarranquilla 60,400 0% ABB Energy Foreign S.A. (a) Ventures, Inc. Lancaster Steel Foreign Distral Group Foreign Corp. Electrica Foreign De la Costa Atlantica Darby Mazzanine Holdings, LLC FE Generation Corp. 906,184 100% Not Applicable N/A --------- Total Aggregate Investment in EWGs $ 966,584 ========= (*) Aggregate investment amounts reflected here include LOCs and guarantees, but do not include any goodwill or other fair value adjustments. (a) FirstEnergy sold Termobarranquilla S.A.; Barranquilla Lease Holding, Inc.; Los Amigos Leasing Company, Ltd.; EI Barranquilla, Inc.; EI International and GPUI Colombia, Ltda. to Darby Delaware Mezzanine Holdings L.L.C. on January 31, 2004. The remaining investment represents outstanding LOCs issued by FirstEnergy. In addition, FirstEnergy sold Midlands Domestic Electricity plc on January 16, 2004. 7 (17) FirstEnergy and Subsidiary Companies Consolidated Capitalization Ratios as of March 31, 2004: Amount (000's) % -------------- ---- Common equity $ 8,344,723 40.3 Preferred stock not subject to 335,123 1.6 mandatory redemption Long-term debt- Preferred stock subject to mandatory redemption * 18,513 0.1 Subordinated debentures to affiliated trusts** 198,667 1.0 Other 11,669,624 56.3 Notes payable 133,999 0.7 ----------- ----- Total capitalization $ 20,700,649 100.0% =========== ===== * Effective July 1, 2003 with the adoption of SFAS 150 "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity", preferred stock subject to mandatory redemptions were reclassified as long-term debt. ** Effective in December 2003 with the adoption of FIN 46R, "Consolidation of Variable Interest Entities, and Interpretation of ARB No. 51", certain business trusts and their trust preferred securities previously reported by FirstEnergy in its consolidated financial statements have been deconsolidated and FirstEnergy began reporting the related subordinated debentures to those trusts in its consolidated financial statements. (18) Market-to-book ratio of FirstEnergy and Subsidiary Companies common stock at March 31, 2004: Closing Market Price per Share $ 39.08 Book Value per Share $ 25.46 Market-to Book Ratio of Common Stock 153.5% (19) No new EWG/FUCO project covered by the Modified Rule 53 Test in which Firstenergy has invested or committed to invest during the first quarter of 2004. (20) Analysis of Growth in Retained Earnings for FirstEnergy and Subsidiary Companies: (In Thousands) -------------- Retained Earnings as of 03/31/04 $1,655,919 Retained Earnings as of 12/31/03 1,604,385 ---------- Growth in Retained Earnings $ 51,534 ========== 8 Analysis of Growth in Retained Earnings: - ---------------------------------------- Income contribution from regulated utility companies $ 167,295 Income contribution from EWGs 30,298 Income contribution from all other companies 20,625 FirstEnergy Holding and Service companies (44,219) Cash dividends declared on common stock (122,465) --------- Growth in Retained Earnings $ 51,534 ========= (21) Statements of Operations for the period ended March 31, 2004 for FirstEnergy Generation Corp. will be filed separately under a request for confidential treatment under Rule 104 (b) 9 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. May 26, 2004 By: /s/ Harvey L. Wagner ------------------------------------ Harvey L. Wagner Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) 10 EX-99 2 financing_ex-a.txt EXHIBIT A Exhibit A FirstEnergy Corp. 76 South Main Street, Akron, Ohio 44308 Certificate ----------- Pursuant to the requirements of Rule 24 of the Public Utility Holding Company Act of 1935, the undersigned certifies that: A copy of certificate pursuant to Rule 24 related to FirstEnergy Corp.'s financing activities, for the period ended December 31, 2003, was filed with the state commissions having jurisdiction over the electric retail rates of the company's public utility subsidiary companies. The names and addresses of these state commissions are as follows: New Jersey Division of Energy Board of Public Utilities Two Gateway Center Newark, NJ 07102 Commonwealth of Pennsylvania* Public Utility Commission P.O. Box 3265 Harrisburg, PA 17105-3265 The Public Utilities Commission of Ohio* 180 E. Broad Street Columbus, Ohio 43215-3793 * A conformed copy of the publicly available report was filed with the Pennsylvania Public Utility Commission and The Public Utilities Commission of Ohio. FirstEnergy Corp. May 26, 2004 By: /s/ Harvey L. Wagner -------------------------------------- Harvey L. Wagner Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) Note: Pennsylvania Electric Company (Penelec) is also subject to retail rate - ---- regulation by the New York Public Service Commission with respect to retail service to approximately 3,700 customers in Waverly, New York served by Waverly Electric Power & Light Company, a Penelec subsidiary. Waverly Electric's revenues are immaterial, accounting for less than 1% of Penelec's total operating revenues. -----END PRIVACY-ENHANCED MESSAGE-----