-----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, H2dp0a+keyvbIFa4NfY8st/iFpsbMnwox50cSgeR/Jx9coBpr/6hI5uNBwo1ZIxS hwO13RN+2Aa2aWCrL4T6zw== 0001031296-98-000004.txt : 19980302 0001031296-98-000004.hdr.sgml : 19980302 ACCESSION NUMBER: 0001031296-98-000004 CONFORMED SUBMISSION TYPE: U-3A-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980227 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTENERGY CORP CENTRAL INDEX KEY: 0001031296 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 341843785 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-3A-2 SEC ACT: SEC FILE NUMBER: 069-00423 FILM NUMBER: 98551350 BUSINESS ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308-1890 BUSINESS PHONE: 8007363402 MAIL ADDRESS: STREET 1: 76 SOUTH MAIN ST CITY: AKRON STATE: OH ZIP: 44308-1890 U-3A-2 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. FORM U-3A-2 Statement by Holding Company Claiming Exemption Under Rule U-3A-2 from the Provisions of the Public Utility Holding Company Act of 1935 To Be Filed Annually Prior to March 1 FIRSTENERGY CORP. hereby files with the Securities and Exchange Commission (Commission), pursuant to Rule 2, its statement claiming exemption as a holding company from the provisions of the Public Utility Holding Company Act of 1935, and submits the following information: 1. Name, State of organization, location and nature of business of claimant and every subsidiary thereof, other than any exempt wholesale generator (EWG) or foreign utility company in which claimant directly or indirectly holds an interest. FirstEnergy Corp. (FirstEnergy) was organized under the laws of the State of Ohio in 1996. The principal executive offices of FirstEnergy are located in Akron, Ohio. FirstEnergy is a holding company within the meaning of Section 2(a)(7) of the Public Utility Holding Company Act of 1935 (1935 Act). FirstEnergy's principal business is the holding of all of the outstanding common stock of the following eight direct subsidiaries: (i) Ohio Edison Company (Ohio Edison), (ii) The Cleveland Electric Illuminating Company (Cleveland Electric), (iii) The Toledo Edison Company (Toledo Edison); (iv) Centerior Service Company; (v) Centerior Properties Company; (vi) Centerior Enterprises Corporation; (vii) Market Responsive Energy, Inc.; and (viii) FirstEnergy Securities Transfer Company. OHIO EDISON - ----------- Ohio Edison was organized under the laws of the State of Ohio in 1930 and is both a public utility and a public utility holding company which is exempt from regulation by the Commission under the 1935 Act (except for Section 9(a)(2) thereof) because it is predominantly a public utility company whose operations as such do not extend beyond the State of Ohio and contiguous states. See Ohio Edison Company, Holding Co. Act Release No. 21019 (April 26, 1979). Ohio Edison furnishes electric service to communities in a 7,500 square mile area of central and northeastern Ohio. Ohio Edison also provides transmission services and electric energy for resale to certain municipalities in its service area and transmission services to certain rural cooperatives. Ohio Edison also has ownership interests in certain generating facilities located in the Commonwealth of Pennsylvania. Ohio Edison also engages in the sale, purchase and interchange of electric energy with other electric companies. The area it serves has a population of approximately 2,543,000. During the twelve months ended December 31, 1997, the principal source of Ohio Edison's operating revenues was derived from the sale of electricity. OHIO EDISON SUBSIDIARIES - PENNSYLVANIA POWER COMPANY ----------------------------------------------------- Ohio Edison owns all of the Common Stock of Pennsylvania Power Company (Penn Power). Penn Power was organized under the laws of the Commonwealth of Pennsylvania in 1930 and owns property and does business as an electric public utility in that state. Penn Power is also authorized to do business and owns property in the State of Ohio. Penn Power furnishes electric service to communities in a 1,500 square mile area of western Pennsylvania. Penn Power also provides transmission services and electric energy for resale to certain municipalities in Pennsylvania. The area served by Penn Power has a population of approximately 344,000. During the twelve months ended December 31, 1997, the principal source of Penn Power's operating revenues was derived from the sale of electricity. OVEC and IKEC ------------- Ohio Edison owns directly 16.5% of the Common Stock of Ohio Valley Electric Corporation, an Ohio corporation (OVEC). Similarly, Toledo Edison owns directly 4% of the Common Stock of OVEC, resulting in an indirect ownership of 20.5% of OVEC by FirstEnergy. OVEC, in turn, owns all of the Common Stock of Indiana-Kentucky Electric Corporation (IKEC). OVEC is a public utility company organized under the laws of Ohio in 1952. On the same date, IKEC was organized under the laws of Indiana. The two companies were formed by 15 independent investor-owned public utilities (including Ohio Edison, Penn Power, and Toledo Edison), furnishing electric service in the Ohio River Valley for the purpose of providing the large electric power requirements projected for the major uranium enrichment complex near Portsmouth, Ohio, then being built by the Atomic Energy Commission, the predecessor to the Department of Energy (DOE). OHIO EDISON SUBSIDIARIES - OTHER -------------------------------- In addition to Penn Power, Ohio Edison has eight other wholly-owned subsidiaries: (i) OES Capital, Incorporated, organized under the laws of the State of Ohio; (ii) OES Fuel, Incorporated, organized under the laws of the State of Ohio; (iii) OES Finance, Incorporated, organized under the laws of the State of Ohio; (iv) Ohio Edison Financing Trust, organized under the laws of the State of Delaware; (v) Ohio Edison Financing Trust II, organized under the laws of the State of Delaware; (vi) OES Nuclear, Incorporated, organized under the laws of the State of Ohio; (vii) OES Ventures, Incorporated, organized under the laws of the State of Ohio; and (viii) FirstEnergy Services Corp., organized under the laws of the State of Ohio. These subsidiaries manage and finance nuclear fuel for Ohio Edison and Penn Power, finance certain electric accounts receivable, provide structures for investment in energy-related projects and the raising of capital by Ohio Edison, finance and manage business opportunities not directly related to the provision of electric service, or provide other energy-related products and services. FirstEnergy Services Corp. includes two subsidiaries, Roth Bros., Inc. and RPC Mechanical Inc. who are providers of engineered heating, ventilation and air-conditioning equipment, and energy management and control systems. OES Ventures, Incorporated is part owner of three limited liability companies which own or apply technologies for the production of gypsum products and one limited liability company that owns facilities for the transloading of bulk materials on the Ohio River. These companies, all of which are organized under the laws of the State of Ohio, are Eastroc LLC; Eastroc Technologies LLC; Engineered Processes, Ltd. and Warrenton River Terminal, Ltd. OES Ventures also has two other subsidiaries, both of which are organized in Ohio; COMSE Energy Managers Inc. (provides energy efficiency planning) and Millennium Fuel Services, Ltd. (provides fuel management services). In addition, OES Ventures has a 49% beneficial interest in the PNBV Capital Trust, a business trust organized under the laws of the State of Delaware to facilitate the acquisition of lease obligation bonds relating to Ohio Edison's sale and leaseback of individual interests in Beaver Valley Unit No. 2 and Perry Nuclear Power Plant Unit No. 1 (Perry Unit 1) and the resultant reduction in effective cost to Ohio Edison under those leases. Finally, Ohio Edison has a 49% interest in OES Engineering Incorporated, an Ohio corporation that provides engineering services at cost as a subcontractor on construction projects undertaken by Ohio Edison for third parties. Other than Penn Power, these subsidiaries do not, individually or in the aggregate, have a material effect on the consolidated financial statements of Ohio Edison. CLEVELAND ELECTRIC - ------------------ Cleveland Electric was organized under the laws of the State of Ohio in 1892 and is a public utility engaged primarily in the generation, transmission, distribution and sale of electric energy to an area of approximately 1,700 square miles in northeastern Ohio, including the City of Cleveland. It has one subsidiary, Centerior Funding Corporation. During the twelve months ended December 31, 1997, nearly all of Cleveland Electric's operating revenues were derived from the sale of electricity. TOLEDO EDISON - ------------- Toledo Edison was organized under the laws of the State of Ohio in 1901 and is a public utility engaged primarily in the generation, transmission, distribution and sale of electric energy to an area of approximately 2,500 square miles in northwestern Ohio, including the City of Toledo. During the twelve months ended December 31, 1997, nearly all of Toledo Edison's operating revenues were derived from the sale of electricity. CENTERIOR SERVICE COMPANY - ------------------------- Centerior Service Company was organized under the laws of the State of Ohio in 1986 and is a service company that has entered into service agreements in the State of Ohio concerning management, engineering, legal, finance, nuclear operations, construction, systems dispatch and certain other matters with Cleveland Electric and Toledo Edison at cost. CENTERIOR PROPERTIES COMPANY - ---------------------------- Centerior Properties Company is an Ohio corporation organized in 1929 that primarily manages non-residential real estate. It has one subsidiary, BSG Properties, Inc., organized under the laws of the State of Ohio in 1996 that pursues real estate development. CENTERIOR ENTERPRISES COMPANY - ----------------------------- Centerior Enterprises Company is an Ohio corporation organized in 1971 whose principal business involves the ownership of stock investments in certain non-utility ventures. It has six subsidiaries: (i) Centerior Power Enterprises Incorporated which, together with CPICOR Management LLC (a non-affiliate), is responsible for implementing a DOE clean coal project; (ii) Centerior Energy Services Inc., which provides various energy services; (iii) Fertile-Earth Inc., which composts certain wastes and wood products into salable mulch and soil amendments; (iv) Centerior Telecom Company, which provides telecommunications services; (v) Centerior Communications Holdings Inc., which holds equity investments for certain telecommunications ventures and (vi) Bay Shore Power Company, which proposes to provide steam to a Toledo Edison generating unit and a nonaffiliated refinery. MARKET RESPONSIVE ENERGY, INC. - ------------------------------ Market Responsive Energy, Inc. is a Delaware corporation organized in 1995 that is a power marketer in the wholesale power markets. CENTERIOR FUNDING CORPORATION Centerior Funding Corporation is a Delaware corporation organized in 1996 that finances accounts receivable. THE TOLEDO EDISON CAPITAL CORPORATION The Toledo Edison Capital Corporation is a Delaware corporation organized in 1997 which makes equity investments in Delaware business trusts which hold lessor debt instruments issued in connection with Cleveland Electric's and Toledo Edison's sale and leaseback of interests in the Bruce Mansfield Plant. FIRST ENERGY SECURITIES TRANSFER COMPANY - ---------------------------------------- FirstEnergy Securities Transfer Company is an Ohio corporation organized in 1997 to act as transfer agent and registrar for the securities of FirstEnergy and its direct and indirect subsidiaries. 2. A brief description of the properties of claimant and each of its subsidiary public utility companies used for the generation, transmission, and distribution of electric energy for sale, or for the production, transmission, and distribution of natural or manufactured gas, indicating the location of principal generating plants, transmission lines, producing fields, gas manufacturing plants, and electric and gas distribution facilities, including all such properties which are outside the State in which claimant and its subsidiaries are organized and all transmission or pipelines which deliver or receive electric energy or gas at the borders of such State. FirstEnergy owns no such property. OES Capital, Incorporated, OES Fuel, Incorporated, OES Finance, Incorporated, Ohio Edison Financing Trust, Ohio Edison Financing Trust II, OES Nuclear, Incorporated, OES Ventures, Incorporated, FirstEnergy Services Corp., Centerior Service Company, Centerior Properties Company, Centerior Enterprises Corporation, Market Responsive Energy, Inc., Centerior Funding Corporation, The Toledo Edison Capital Corporation and FirstEnergy Securities Transfer Company are not public utilities. OHIO EDISON and PENN POWER - -------------------------- Ohio Edison and Penn Power (OES) own or lease all or a portion of 39 electric generating units, consisting of 18 coal fired units, three nuclear units, seven oil fired units, one gas/oil fired unit and 10 diesel generators (located at three sites), which have total net generating capacity of 5,757 megawatts (MW). All of the electric properties owned by OES are located within the State of Ohio and the Commonwealth of Pennsylvania. Eleven of the 18 coal fired units are 100% owned by Ohio Edison, and all such units are located in Ohio. Four of the 18 coal fired units are held in a combined OES ownership along with other parties and the remaining three coal fired units are 100% owned by Penn Power. The three nuclear units consist of (i) Beaver Valley 1, located in Pennsylvania and representing a 425 MW share from a combined OES ownership of 52.50%, (ii) Beaver Valley 2, also located in Pennsylvania and representing a 343 MW share from an Ohio Edison ownership and leasehold interest of 41.88%, and (iii) Perry Unit 1, located in Ohio and representing a 421 MW share from a combined OES ownership and leasehold interest of 35.24%. One of the seven oil fired units is located in Ohio and 100% owned by Ohio Edison. The remaining six oil fired units are also located in Ohio but are held in a combined OES ownership. The oil/natural gas unit is located in Ohio and is 100% owned by Ohio Edison. Two of the three diesel generator sites are located in Ohio and the remaining diesel generator site is located in Pennsylvania. All three diesel generator sites are held in a combined OES ownership. OES has a transmission system of 5,647 circuit line miles covering an area of approximately 9,000 square miles. The transmission system has 629 circuit miles of 345 kilovolt (kV) lines, 2,350 circuit miles of 138 kV lines, 1,894 circuit miles of 69 kV lines, 180 circuit miles of 34.5 kV lines and 594 circuit miles of 23 kV lines. Additionally, OES's electric distribution systems include 26,463 miles of overhead pole line and underground conduit carrying primary, secondary and street lighting circuits. OES owns, individually or together with one or more of the other Central Area Power Coordination Group (CAPCO) companies (Cleveland Electric, Toledo Edison and Duquesne Light Company (Duquesne)) as tenants in common, 448 substations with a total installed transformer capacity of 24,849,513 kV-amperes, of which 70 are transmission substations, including nine located at generating plants. Ohio Edison and Penn Power are extensively interconnected, with 12 points of interconnection at voltage levels ranging from 23 kV to 345 kV. Ohio Edison and Cleveland Electric have five 345 kV and four 138 kV interconnections, and Ohio Edison and Toledo Edison have one 345 kV and one 138 kV interconnection. Ohio Edison and Toledo Edison also have one 69 kV interconnection, which is normally operated open. Ohio Edison has one 345 kV interconnection with Allegheny Power System, Inc. (Allegheny Power), seven 345 kV interconnections with American Electric Power Company, Inc. (AEP) and five 345 kV interconnections with Duquesne. Ohio Edison has the following 138 kV interconnections: one with Allegheny Power, eight with AEP and three with Dayton Power and Light Company (Dayton). Ohio Edison also has one 23 kV interconnection with AEP. The 69 kV interconnections with Dayton and AEP, and the 23 kV interconnection with AEP, normally are operated open. One of the 138 kV interconnections with AEP is also normally operated open. . OES also has the following 69 kV interconnections: one with Dayton, one with AEP, one with Allegheny Power, and one with Duquesne. Ohio Edison does not own or have any financial interest in any natural gas pipeline company. However, at Ohio Edison's Edgewater plant, OES Fuel owns a four mile gas pipeline that connects the Edgewater plant to the Columbia Gas Transmission system. OVEC and IKEC - ------------- OVEC owns the Kyger Creek Plant at Cheshire, Ohio, which is a coal-fired facility with a capacity of 1,075 MW. IKEC owns the Clifty Creek Plant at Madison, Indiana, which is a coal-fired facility with a capacity of 1,290 MW. These plants are connected by a 780-mile 345 kV transmission network and are interconnected with the major transmission systems of OVEC's sponsor companies, although OVEC's transmission facilities do not interconnect directly with the OES or Toledo Edison systems. CLEVELAND ELECTRIC - ------------------ Cleveland Electric's generating properties consist of all or a portion of: (i)15 units at four fossil fuel plants including the Avon Lake Plant, located in Avon Lake, Ohio, the Lake Shore Plant, located in Cleveland, Ohio, the Eastlake Plant, located in Eastlake, Ohio, and the Ashtabula Plant, located in Ashtabula, Ohio; (ii) a 452 MW share of Davis-Besse Nuclear Power Station located in Oak Harbor, Ohio; and a (iii) 351 MW share of a pumped storage hydroelectric plant (Seneca Plant) located in Warren, Pennsylvania. These six Cleveland Electric-owned plants have a net demonstrated capability of 2,997 MW. On September 30, 1987, Cleveland Electric sold essentially all of its 470 MW undivided tenant-in-common interests in Units 1, 2 and 3 of the Bruce Mansfield Plant located in Shippingport, Pennsylvania. As a result of separate sale and leaseback transactions completed on that date, Cleveland Electric and Toledo Edison are co-lessees of 6.5% (51 MW), 45.9% (358 MW) and 44.38% (355 MW) of Units 1, 2 and 3, respectively, of the coal- fired Bruce Mansfield Plant for terms of about 29-1/2 years. Cleveland Electric also owns a 371 MW share of Perry Unit 1 located in Perry, Ohio, which was placed in commercial operation on November 18, 1987 and a 201 MW share of Beaver Valley Nuclear Power Station Unit No. 2 (Beaver Valley Unit 2) located in Shippingport, Pennsylvania, which was placed in commercial operation on November 17, 1987 and leases, as co-lessee with Toledo Edison, another 18.26% (150 MW) of Beaver Valley Unit 2 for a term of about 29-1/2 years. Cleveland Electric owns the transmission facilities located in the area it serves in northeastern Ohio for transmitting electric energy to all of its customers, except for one 5.5 mile 138 kV transmission line that Cleveland Electric leases from the City of Cleveland. The portions of the transmission lines located in Pennsylvania to the Seneca Plant, Bruce Mansfield Plant and the Beaver Valley Power Station are not owned by Cleveland Electric. Cleveland Electric has a transmission interconnection with Pennsylvania Electric Company, which provides for transmission of electric energy from the Seneca Plant. Cleveland Electric also has interconnections with Ohio Edison which provide for the transmission of electric energy from the Bruce Mansfield Plant and the Beaver Valley Nuclear Power Station, and also interconnects with AEP. Cleveland Electric's transmission facilities consist of transmission lines and transmission substations operating at various voltages between 11,000 volts and 345,000 volts. Cleveland Electric owns the distribution facilities located in the area it serves in northeastern Ohio for distributing electric energy to all of its customers. These distribution facilities consist primarily of distribution lines and distribution substations and related service facilities and are used to serve electric energy to customers pursuant to franchises granted by the State of Ohio and, in some instances, by municipalities. TOLEDO EDISON - ------------- Toledo Edison's generating properties consist of : (i) one wholly-owned fossil fuel electric generating station, Bay Shore, located in Lucas County, Ohio; (ii) a 428 MW share of Davis-Besse Nuclear Power Station located in Oak Harbor, Ohio; and (iii) five internal combustion turbine generator units with an aggregate capability of 77 MW located in northwestern Ohio. These Toledo Edison-owned plants have a net demonstrated capability of 1,136 MW. On September 30, 1987, Toledo Edison sold essentially all of its 294 MW undivided tenant-in-common interests in Units 2 and 3 of the Bruce Mansfield Plant located in Shippingport, Pennsylvania. As a result of separate sale and leaseback transactions completed on that date, Toledo Edison and Cleveland Electric are co-lessees of 6.5% (51 MW), 45.9% (358 MW) and 44.38% (355 MW) of Units 1, 2 and 3, respectively, of the coal- fired Bruce Mansfield Plant for terms of about 29-1/2 years. Toledo Edison also owns a 238 MW share of Perry Unit 1. On September 30, 1987, Toledo Edison sold about 18.26% (150 MW) of its undivided tenant-in-common interests in Beaver Valley Unit 2 located in Shippingport, Pennsylvania (Toledo Edison had owned 19.91% (163 MW) and has retained about a 1.65% interest in that Unit). On the same day, the purchasers leased those interests to Toledo Edison (with Cleveland Electric as co-lessee) for a term of about 29-1/2 years. Toledo Edison is selling 150 MW of its Beaver Valley Unit 2 leased capacity entitlement of Cleveland Electric. This sale commenced in November 1988 and it is anticipated that it will continue at least until 1998. Toledo Edison's transmission facilities consist of transmission lines and transmission substations operating at various voltages between 23,000 volts and 345,000 volts. Toledo Edison owns the transmission facilities located in the area it serves in northwestern Ohio for transmitting electric energy to all of its customers. The portions of the transmission lines located in Pennsylvania to the Bruce Mansfield Plant and the Beaver Valley Power Station are not owned by Toledo Edison. Toledo Edison has interconnections with Ohio Edison which provide for the transmission of electric energy from the Bruce Mansfield Plant and the Beaver Valley Nuclear Power Station. Toledo Edison also has transmission interconnections with Consumers Power Company, The Detroit Edison Company and AEP. Toledo Edison owns the distribution facilities located in the area it serves in northwestern Ohio for distributing electric energy to all of its customers. These distribution facilities consist primarily of distribution lines and distribution substations and related service facilities and are used to serve electric energy to its customers. 3. The following information for the last calendar year with respect to claimant and each of its subsidiary public utility companies: (a) Number of kwh. of electric energy sold (at retail or wholesale), and Mcf. of natural or manufactured gas distributed at retail. Ohio Edison 28,670,762,000 kwh Penn Power 4,817,119,000 kwh Cleveland Electric 22,278,546,000 kwh Toledo Edison 11,850,191,000 kwh (b) Number of kwh. of electric energy and Mcf. of natural or manufactured gas distributed at retail outside the State in which each such company is organized. Ohio Edison None Penn Power None Cleveland Electric None Toledo Edison None (c) Number of kwh. of electric energy and Mcf. of natural or manufactured gas sold at wholesale outside the State in which each such company is organized, or at the State line. Ohio Edison 5,255,575,000 kwh Penn Power 783,914,000 kwh Cleveland Electric 1,831,716,000 kwh Toledo Edison 349,131,000 kwh (d) Number of kwh. of electric energy and Mcf. of natural or manufactured gas purchased outside the State in which each such company is organized, or at the State line. Ohio Edison 1,412,729,000 kwh Penn Power 684,381,000 kwh Cleveland Electric 181,262,000 kwh Toledo Edison 57,045,000 kwh 4. The following information for the reporting period with respect to claimant and each interest it holds directly or indirectly in an EWG or a foreign utility company, stating monetary amounts in United States dollars: (a) Name, location, business address and description of the facilities used by the EWG or foreign utility company for the generation, transmission and distribution of electric energy for sale or for the distribution at retail of natural or manufactured gas. Not applicable. (b) Name of each system company that holds an interest in such EWG or foreign utility company and description of the interest held. Not applicable. (c) Type and amount of capital invested, directly or indirectly, by the holding company claiming exemption; any direct or indirect guarantee of the security of the EWG or foreign utility company by the holding company claiming exemption; and any debt or other financial obligation for which there is recourse, directly or indirectly, to the holding company claiming exemption or another system company other than the EWG or foreign utility company. Not applicable. (d) Capitalization and earnings of the EWG or foreign utility company during the reporting period. Not applicable. (e) Identify any service, sales or construction contract(s) between the EWG or foreign utility company and a system company, and describe the services to be rendered or goods sold and fees or revenues under such agreement(s). Not applicable. The above-named claimant has caused this statement to be duly executed on its behalf by its authorized officer on this 27th day of February 1998. FirstEnergy Corp. By: /s/ Harvey L. Wagner ---------------------- Title: Controller CORPORATE SEAL Attest: /s/ Nancy C. Ashcom -------------------- Title: Corporate Secretary Name, title, and address of officer to whom notices and correspondence concerning this statement should be addressed: Harvey L. Wagner Controller - ------------------------------ (Name) (Title) 76 South Main Street, Akron, OH 44308 - ------------------------------------- (Address) EXHIBIT A FIRSTENERGY CORP. UNAUDITED CONSOLIDATED FINANCIAL INFORMATION The consolidated financial statements include FirstEnergy Corp. (Company) and its principal electric utility operating subsidiaries, Ohio Edison Company (OE) which includes its wholly owned subsidiary Pennsylvania Power Company, The Cleveland Electric Illuminating Company (CEI), and The Toledo Edison Company (TE). The Company and its utility subsidiaries are referred to throughout as "Companies." The Company's 1997 results of operations include the results of CEI and TE for the period November 8, 1997 through December 31, 1997. All significant intercompany transactions have been eliminated. The Companies follow the accounting policies and practices prescribed by the Public Utilities Commission of Ohio (PUCO), the Pennsylvania Public Utility Commission (PPUC) and the Federal Energy Regulatory Commission (FERC). The preparation of financial statements in conformity with generally accepted accounting principles requires management to make periodic estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. FirstEnergy Consolidated Balance Sheet - December 31, 1997
Centerior Centerior Centerior FE OE CEI TE Service Properties Enterprises Holding Intercompany FE Consolid. Consolid. Consolid. Company Companies Consolid. MREI Company Eliminations Consolid. --------- --------- --------- --------- ----------- ---------- ---- ------- ------------ ----------- ASSETS (Dollars in Thousands) UTILITY PLANT: In service $8,666,272 $4,578,649 $1,763,495 $ 0 $ 0 $ 32 $ 0 $ 0 $ 0 $15,008,448 Less--Accumulated provision for depreciation 3,546,594 1,470,084 619,222 - - - - - - 5,635,900 ----------------------------------------------------------------------------------------------------------- 5,119,678 3,108,565 1,144,273 - - 32 - - - 9,372,548 ----------------------------------------------------------------------------------------------------------- Construction work in- progress-- Electric plant 99,158 41,261 19,901 - - 5,517 - - - 165,837 Nuclear fuel 21,360 6,833 6,632 - - - - - - 34,825 ----------------------------------------------------------------------------------------------------------- 120,518 48,094 26,533 - - 5,517 - - - 200,662 ----------------------------------------------------------------------------------------------------------- 5,240,196 3,156,659 1,170,806 - - 5,549 - - - 9,573,210 ----------------------------------------------------------------------------------------------------------- OTHER PROPERTY AND INVESTMENTS: Capital trust invest- ments 482,220 575,084 312,873 - - - - - - 1,370,177 Letter of credit collateralization 277,763 - - - - - - - - 277,763 Other 529,408 126,816 89,120 12,913 23,950 25,530 - 4,183,821 (4,332,396) 659,162 ---------------------------------------------------------------------------------------------------------- 1,289,391 701,900 401,993 12,913 23,950 25,530 - 4,183,821 (4,332,396) 2,307,102 ---------------------------------------------------------------------------------------------------------- CURRENT ASSETS: Cash and cash equivalents 4,680 33,775 22,170 17,183 6,555 10,485 3,389 - - 98,237 Accounts Receivable Customers 235,332 29,759 19,071 - - - - - - 284,162 Other 87,566 98,077 2,593 2,031 1,136 731 26,972 - - 219,106 Associated companies 25,348 8,695 15,199 57,480 223 13 - 1,104 (108,062) - Notes receivable from associated companies - - 40,802 16,000 - - - - (56,802) - Materials and supplies, at average cost-- Owned 75,580 47,489 31,892 - - - - - - 154,961 Under consignment 47,890 25,411 9,538 - - - - - - 82,839 Prepayments and other 78,348 57,763 26,437 1,138 - - - - - 163,686 ----------------------------------------------------------------------------------------------------------- 554,744 300,969 167,702 93,832 7,914 11,229 30,361 1,104 (164,864) 1,002,991 ------------------------------------------------------------------------------------------------------------ DEFERRED CHARGES: Regulatory assets 1,601,709 579,711 442,724 - - - - - - 2,624,144 Goodwill 40,850 1,552,483 514,462 - - - - - - 2,107,795 Unamortized sale and leaseback costs 95,096 - - - - - - - - 95,096 Property taxes 100,043 125,204 45,338 - - - - - - 270,585 Other 55,426 23,358 15,127 3,180 3,220 (20) 1,471 - (1,890) 99,872 ----------------------------------------------------------------------------------------------------------- 1,893,124 2,280,756 1,017,651 3,180 3,220 (20) 1,471 - (1,890) 5,197,492 ----------------------------------------------------------------------------------------------------------- Total Assets $8,977,455 $6,440,284 $2,758,152 $109,925 $35,084 $42,288 $31,832 $4,184,925 $(4,499,150) $18,080,795
FirstEnergy Consolidated Balance Sheet - December 31, 1997
Centerior Centerior Centerior FE OE CEI TE Service Properties Enterprises Holding Intercompany FE Consolid. Consolid. Consolid. Company Companies Consolid. MREI Company Eliminations Consolid. --------- --------- --------- --------- ----------- ---------- ---- ------- ------------ --------- (Dollars in Thousands) CAPITALIZATION AND LIABILITIES CAPITALIZATION Common stockholders' equity $2,724,319 $ 950,904 $ 531,650 $53,240 $29,173 $40,496 $ 2,614 $4,159,598 $(4,332,396) $ 4,159,598 Preferred stock -- Not subject to mandatory redemption 160,965 238,325 210,000 - - - - - (609,290) - Subject to mandatory redemption 15,000 183,174 1,690 - - - - - (199,864) - Preferred stock of consolidated subsidiaries-- Not subject to mandatory redemption 50,905 - - - - - - - 609,290 660,195 Subject to mandatory redemption 15,000 - - - - - - - 199,864 214,864 Ohio Edison obligated mandatorily redeem- able preferred securi- ties of subsidiary trust holding solely Ohio Edison subordin- ated debentures 120,000 - - - - - - - - 120,000 Long-term debt 2,569,802 3,189,590 1,210,190 - - 253 - - - 6,969,835 ------------------------------------------------------------------------------------------------------------ 5,655,991 4,561,993 1,953,530 53,240 29,173 40,749 2,614 4,159,598 (4,332,396) 12,124,492 ------------------------------------------------------------------------------------------------------------ CURRENT LIABILITIES: Currently payable long-term debt and preferred stock 278,492 121,965 69,979 - - - - - - 470,436 Short-term borrowings 302,229 - - - - - - - - 302,229 Accounts payable Other 114,085 90,737 60,756 19,666 1 149 27,296 - - 312,690 Associated companies 1,751 56,109 21,173 2,107 2,125 701 659 25,327 (109,952) - Notes payable to associated companies - 56,802 - - - - - - (56,802) - Accrued taxes 157,095 194,394 34,441 (5,575) 1,639 689 (746) - - 381,937 Accrued interest 53,165 67,896 26,633 - - - - - - 147,694 Other 115,256 52,297 22,603 3,694 - - - - - 193,850 ----------------------------------------------------------------------------------------------------------- 1,022,073 640,200 235,585 19,892 3,765 1,539 27,209 25,327 (166,754) 1,808,836 ------------------------------------------------------------------------------------------------------------ DEFERRED CREDITS: Accumulated deferred income taxes 1,698,354 496,437 104,543 3,332 1,639 - - - - 2,304,305 Accumulated deferred investment tax credits 184,804 96,131 43,265 - - - - - - 324,200 Pensions and other postretirement benefits 158,038 198,642 113,254 22,491 - - - - - 492,425 Other 258,195 446,881 307,975 10,970 507 - 2,009 - - 1,026,537 ----------------------------------------------------------------------------------------------------------- 2,299,391 1,238,091 569,037 36,793 2,146 - 2,009 - - 4,147,467 ----------------------------------------------------------------------------------------------------------- Total Capitalization and Liabilities $8,977,455 $6,440,284 $2,758,152 $109,925 $35,084 $42,288 $31,832 $4,184,925 $(4,499,150) $18,080,795 ===========================================================================================================
FirstEnergy Consolidated Income Statement - 1997 (Dollars in Thousands)
Centerior Centerior Centerior FE OE CEI TE Service Enterprises Properties Holding Intercompany FE Consolid. Consolid. Consolid. Company Consolid. Companies MREI Company Eliminations Consolid. --------- --------- --------- --------- ----------- ---------- ---- ------- ------------ --------- Operating Revenues $2,473,582 $253,963 $122,669 $48,096 $ 0 $ 0 $ 0 $ 0 $ (76,875) $2,821,435 ---------- -------- -------- ------- --- ---- ---- --------- --------- ---------- Operation & Mainte- nance Expenses Fuel and Purchased Power 437,223 51,381 21,261 0 0 0 0 0 (23,598) 486,267 Nuclear Operating Costs 267,681 15,465 28,977 0 0 0 0 0 0 312,123 Other O&M Expenses 446,779 61,036 22,668 48,571 0 0 0 0 (52,982) 526,072 ----------- -------- -------- ------- --- ---- ---- --------- -------- ---------- Total Operation and Maintenance 1,151,683 127,882 72,906 48,571 0 0 0 0 (76,580) 1,324,462 Depreciation 392,525 22,352 8,882 0 0 0 0 0 0 423,759 General Taxes 234,964 33,912 13,126 559 0 0 0 0 (398) 282,163 Regulatory Asset Amortization 37,416 3,867 2,338 0 0 0 0 0 0 43,621 Goodwill Amortization 0 5,759 1,913 0 0 0 0 0 0 7,672 Income Taxes 168,427 10,689 4,449 292 0 0 0 0 (59) 183,798 ---------- -------- -------- ------- --- ---- ---- -------- --------- ---------- Total Operating Expenses 1,985,015 204,461 103,614 49,422 0 0 0 0 (77,037) 2,265,475 ---------- -------- -------- ------- --- ---- ---- -------- --------- ---------- Operating Income 488,567 49,502 19,055 (1,326) 0 0 0 0 162 555,960 ---------- -------- -------- ------- --- ---- ---- -------- --------- ---------- AFUDC (Equity) 0 140 61 0 0 0 0 0 0 201 Subsidiary Earnings 0 0 0 0 0 0 0 305,774 (305,774) 0 Miscellaneous - Net 72,225 7,772 3,424 175 38 204 (887) 397 (1,019) 82,329 Income Taxes (19,378) (3,340) (1,332) (65) 0 (72) 0 0 0 (24,187) ---------- -------- -------- ------- --- ---- ---- -------- --------- --------- Total Other Income 52,847 4,572 2,153 110 38 132 (887) 306,171 (306,793) 58,343 ---------- -------- -------- ------- --- ---- ---- -------- --------- --------- Total Income 541,414 54,074 21,208 (1,216) 38 132 (887) 306,171 (306,631) 614,303 ---------- -------- -------- ------- --- ---- ---- -------- --------- --------- AFUDC (Borrowed) and Capitalized Interest (2,700) (631) (138) 0 0 0 0 0 0 (3,469) Interest on Long-term Debt 204,285 35,300 13,689 1 0 0 0 397 (857) 252,815 Other Interest Expense 31,209 115 41 0 0 0 0 0 0 31,365 Subsidiaries Preferred Dividends 15,426 0 0 0 0 0 0 0 12,392 27,818 ---------- -------- -------- ------- --- ---- ---- -------- --------- ---------- Net Interest and Other Charges 248,220 34,784 13,592 1 0 0 0 397 11,535 308,529 ---------- -------- -------- ------- --- ---- ---- -------- --------- ---------- Net Income 293,194 19,290 7,616 (1,217) 38 132 (887) 305,774 (318,166) 305,774 Preferred Stock Dividends 12,392 0 0 0 0 0 0 0 (12,392) 0 ---------- -------- -------- ------- --- ---- ---- -------- --------- ---------- Earnings on Common Stock $ 280,802 $ 19,290 $ 7,616 $(1,217) $38 $132 $(887) $305,774 $(305,774) $ 305,774 ========== ======== ======== ======= === ==== ===== ======== ========= ==========
FirstEnergy Corp. - Consolidated Statement of Retained Earnings For the Year Ended December 31, 1997 (In Thousands)
Centerior Centerior Centerior FE OE CEI TE Service Properties Enterprises Holding Intercompany FE Consolid. Consolid. Consolid. Company Companies Consolid. MREI Company Eliminations Consolid. --------- --------- --------- --------- ----------- ---------- ---- ------- ------------ --------- Balance at beginning of year $557,642 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $557,642 Net Income 293,194 19,290 7,616 (1,217) 132 38 (887) 305,774 (318,166) 305,774 --------------------------------------------------------------------------------------------------------- 850,836 19,290 7,616 (1,217) 132 38 (887) 305,774 (318,166) 863,416 --------------------------------------------------------------------------------------------------------- Cash dividends on common stock 216,770 - - - - - - - - 216,770 Cash dividends on preferred stock 12,392 - - - - - - - (12,392) - --------------------------------------------------------------------------------------------------------- 229,162 - - - - - - - (12,392) 216,770 --------------------------------------------------------------------------------------------------------- Balance at end of year $621,674 $19,290 $7,616 (1,217) $132 $38 $(887) $305,774 $(305,774) $646,646 =========================================================================================================
EXHIBIT B FIRSTENERGY CORP. TWELVE MONTHS ENDED DECEMBER 31, 1997 (IN MILLIONS) FINANCIAL DATA SCHEDULE ITEM NO. CAPTION HEADING - ------- --------------- 1 TOTAL ASSETS $ 18,081 2 TOTAL OPERATING REVENUES $ 2,821 3 NET INCOME $ 306 -----END PRIVACY-ENHANCED MESSAGE-----