(1) |
During the
period October 1, 2004 through December 31, 2004, there were no sales of
common stock or preferred securities by
FirstEnergy. |
(2) |
FirstEnergy
issued 290,537 shares of common stock pursuant to dividend reinvestment
plans and zero shares of common stock were granted under employee benefit
plans during the fourth quarter of 2004. |
(3) |
During the
period October 1, 2004 through December 31, 2004, no FirstEnergy common
stock was transferred to a seller of securities of a company being
acquired. |
(4) |
During the
period October 1, 2004 through December 31, 2004, there was no Long-term
Debt and Preferred Securities issued by FirstEnergy. FirstEnergy issued
the following Short-term Debt during the fourth quarter of
2004: |
Transaction |
Maturity |
Transaction |
|||||||||||
Date |
Date |
Rate |
Amount |
||||||||||
CitiBank
(FirstEnergy Revolver - 1 Billion
3 Year
Facility) |
|||||||||||||
FirstEnergy |
10/20/2004 |
10/27/2004 |
2.95 |
% |
$ |
60,000,000.00 |
|||||||
FirstEnergy |
12/1/2004 |
12/8/2004 |
3.20 |
% |
$ |
50,000,000.00 |
|||||||
FirstEnergy |
12/8/2004 |
12/15/2004 |
3.26 |
% |
$ |
20,000,000.00 |
|||||||
FirstEnergy |
12/15/2004 |
12/22/2004 |
3.45 |
% |
$ |
40,000,000.00 |
|||||||
FirstEnergy |
12/20/2004 |
12/29/2004 |
3.45 |
% |
$ |
140,000,000.00 |
|||||||
FirstEnergy |
12/29/2004 |
1/5/2005 |
3.58 |
% |
$ |
140,000,000.00 |
|||||||
FirstEnergy |
12/30/2004 |
1/6/2005 |
3.58 |
% |
$ |
75,000,000.00 |
(5) |
During the
period October 1, 2004 through December 31, 2004, the following short-term
debt was issued by the Utility
Subsidiaries: |
Transaction |
Maturity |
Transaction |
|||||||||||
Date |
Date |
Rate |
Amount |
||||||||||
FirstMerit
(Ohio Edison Company (OE) Bi-Lateral Facility) |
|||||||||||||
OE |
10/1/2004 |
10/4/2004 |
2.50 |
% |
$ |
14,000,000.00 |
|||||||
OE |
10/22/2004 |
10/26/2004 |
2.50 |
% |
$ |
14,000,000.00 |
|||||||
OE |
12/3/2004 |
12/9/2004 |
2.75 |
% |
$ |
14,000,000.00 |
|||||||
OE |
12/10/2004 |
12/13/2004 |
2.81 |
% |
$ |
2,000,000.00 |
|||||||
OE |
12/22/2004 |
12/23/2004 |
3.00 |
% |
$ |
14,000,000.00 |
|||||||
OE |
12/30/2004 |
1/4/2005 |
3.00 |
% |
$ |
14,000,000.00 |
|||||||
KeyBank (OE
Bi-Lateral Facility) |
|||||||||||||
OE |
10/25/2004 |
10/26/2004 |
2.92 |
% |
$ |
6,000,000.00 |
|||||||
OE |
10/29/2004 |
11/2/2004 |
3.00 |
% |
$ |
13,750,000.00 |
|||||||
OE |
11/1/2004 |
11/3/2004 |
3.00 |
% |
$ |
6,250,000.00 |
|||||||
OE |
11/29/2004 |
11/30/2004 |
3.20 |
% |
$ |
10,000,000.00 |
|||||||
OE |
12/1/2004 |
12/2/2004 |
3.19 |
% |
$ |
5,000,000.00 |
|||||||
OE |
12/3/2004 |
12/6/2004 |
3.15 |
% |
$ |
9,000,000.00 |
|||||||
OE |
12/7/2004 |
12/9/2004 |
3.17 |
% |
$ |
8,000,000.00 |
|||||||
OE |
12/22/2004 |
12/23/2004 |
3.39 |
% |
$ |
10,000,000.00 |
|||||||
OE |
12/30/2004 |
12/31/2004 |
3.44 |
% |
$ |
20,000,000.00 |
Regulated
Money Pool |
Average |
Principal |
|||||
Loan
to/(Borrowing from): |
Interest
Rate |
Balance
|
|||||
OE |
1.7596 |
% |
$ |
503,029,195 |
|||
Pennsylvania
Power Company (Penn) |
1.7596 |
% |
(11,789,384 |
) | |||
The Cleveland
Electric Illuminating Company (CEI) |
1.7596 |
% |
(472,876,225 |
) | |||
The Toledo
Edison Company (TE) |
1.7596 |
% |
(429,517,644 |
) | |||
American
Transmission Systems, Incorporated (ATSI) |
1.7596 |
% |
97,964,727 |
||||
Jersey
Central Power & Light Company (JCP&L) |
1.7596 |
% |
(248,532,345 |
) | |||
Metropolitan
Edison Company (Met-Ed) |
1.7596 |
% |
(80,090,192 |
) | |||
Pennsylvania
Electric Company (Penelec) |
1.7596 |
% |
(241,496,076 |
) | |||
York Haven
Power Company |
1.7596 |
% |
13,404,442 |
(6) |
During the
fourth quarter of 2004, there were no financings consummated by any
Non-Utility subsidiary that were not exempt under rule
52. |
(7) |
During the
fourth 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) |
||||||||||
Mirant
Americas Energy Marketing |
$ |
5,000,000 |
(a) |
(b) |
||||||
FES
(Trading - Gas) |
||||||||||
Chevron
Texaco |
$ |
5,000,000 |
(a) |
(b) |
||||||
CoEnergy
Trading Company |
$ |
8,000,000 |
(a) |
(b) |
||||||
Deutsche Bank
AG |
$ |
3,500,000 |
(a) |
(b) |
||||||
Statoil
Natural Gas LLC |
$ |
1,000,000 |
(a) |
(b) |
||||||
FirstEnergy
Generation Corp. (Fuel Marketing / Coal) |
||||||||||
Peabody
COALTRADE |
$ |
1,500,000 |
(a) |
(c) |
(a) |
Such
guarantees are issued for a one-year term, with a ten-day termination
right by FirstEnergy |
(b) |
Parental
guarantees issued by FirstEnergy to provide credit support for natural gas
purchases by subsidiary |
(c) |
Credit
backstop to support coal purchases and emission
trading |
Purpose
of |
|||||||
Beneficiary |
Amount |
LOC |
|||||
FirstEnergy |
|||||||
Travelers
Casualty and Surety Co. of America |
$ |
18,000,000 |
(a |
) | |||
Travelers
Casualty and Surety Co. of America |
$ |
3,000,000 |
(b |
) | |||
Deutsche Bank
Trust Company Americas |
$ |
46,150,595 |
(d |
) | |||
MYR Group
Inc. |
|||||||
C.N.A.
Insurance |
$ |
565,412 |
(c |
) |
(a) |
Replaced
Surety Bonds on self-insurance coverage due to rating agency changes.
Original LOC was issued in the first quarter
2004. |
(b) |
Replaced
Surety Bonds on behalf of JCP&L, FES, FirstEnergy Service Company, and
FirstEnergy Telecom Services, Inc. on workers compensation and
self-insurance coverage due to rating agency changes. Original LOC was
issued in the fourth quarter 2003. |
(c) |
Replaced
Surety Bonds on MYR Group Inc. insurance and workers compensation
policies. Original LOC was issued in the fourth quarter
2003. |
(d) |
Lenders
granted FirstEnergy the ability to sell its remaining 20.1% in Aquila
Sterling Holdings, and unencumbered the Argentina assets abandoned in
April 2003. Original LOC of $60 million was issued in the fourth quarter
2003. |
(8) |
During the
fourth quarter of 2004, FirstEnergy entered into seven (7) transactions
designed to hedge the fair value of a portion of its fixed-rate long-term
debt portfolio against decreases in interest rates. The hedge structures
are fixed - for - floating interest rate swaps, whereby FirstEnergy 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 and
6-month London Interbank Offering Rates (LIBOR) plus or minus an
applicable spread. The debt instruments being hedged, notional amounts,
counterparties, and principal terms of the fair value hedges are filed
pursuant to request for confidential
treatment. |
(9) |
Investments
made during the fourth quarter of 2004 in any intermediate subsidiary or
financing subsidiary are as follows: |
Company |
Investment |
|||
(In Thousands
$) |
||||
Centerior
Funding Corp. |
$ |
97,140 |
||
Penn Power
Funding LLC |
$ |
500 |
||
GPU Power,
Inc. |
$ |
447 |
Company |
Filing Date
|
|||
CEI |
October 7,
2004 |
|||
TE |
October 7,
2004 |
|||
OE |
November 30,
2004 |
(11) | There were no jurisdictional financing transactions during the fourth quarter of 2004. |
(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 fourth quarter 2004. |
FirstEnergy |
Amount |
Ratio |
|||||
Common
Equity |
$ |
8,589,294 |
42.84 |
% | |||
Preferred
Stock |
335,123 |
1.67 |
% | ||||
Long-Term
Debt |
10,954,293 |
54.64 |
% | ||||
Short-Term
Debt |
170,489 |
0.85 |
% | ||||
Total
Capitalization |
$ |
20,049,199 |
100.00 |
% | |||
OE |
|||||||
Common
Equity |
$ |
2,493,809 |
58.19 |
% | |||
Preferred
Stock |
100,070 |
2.33 |
% | ||||
Long-Term
Debt |
1,513,177 |
35.31 |
% | ||||
Short-Term
Debt |
178,859 |
4.17 |
% | ||||
Total
Capitalization |
$ |
4,285,915 |
100.00 |
% | |||
CEI |
|||||||
Common
Equity |
$ |
1,853,561 |
41.33 |
% | |||
Preferred
Stock |
96,404 |
2.15 |
% | ||||
Long-Term
Debt |
2,046,818 |
45.63 |
% | ||||
Short-Term
Debt |
488,633 |
10.89 |
% | ||||
Total
Capitalization |
$ |
4,485,416 |
100.00 |
% |
TE |
|||||||
Common
Equity |
$ |
835,327 |
46.88 |
% | |||
Preferred
Stock |
126,000 |
7.07 |
% | ||||
Long-Term
Debt |
391,249 |
21.95 |
% | ||||
Short-Term
Debt |
429,517 |
24.10 |
% | ||||
Total
Capitalization |
$ |
1,782,093 |
100.00 |
% | |||
Penn |
|||||||
Common
Equity |
$ |
327,379 |
60.77 |
% | |||
Preferred
Stock |
39,105 |
7.26 |
% | ||||
Long-Term
Debt |
160,411 |
29.77 |
% | ||||
Short-Term
Debt |
11,852 |
2.20 |
% | ||||
Total
Capitalization |
$ |
538,747 |
100.00 |
% | |||
JCP&L |
|||||||
Common
Equity |
$ |
3,155,362 |
67.53 |
% | |||
Preferred
Stock |
12,649 |
0.27 |
% | ||||
Long-Term
Debt |
1,255,850 |
26.88 |
% | ||||
Short-Term
Debt |
248,532 |
5.32 |
% | ||||
Total
Capitalization |
$ |
4,672,393 |
100.00 |
% | |||
Met-Ed |
|||||||
Common
Equity |
$ |
1,285,419 |
61.28 |
% | |||
Preferred
Stock |
- |
-
|
% | ||||
Long-Term
Debt |
732,171 |
34.90 |
% | ||||
Short-Term
Debt |
80,090 |
3.82 |
% | ||||
Total
Capitalization |
$ |
2,097,680 |
100.00 |
% | |||
Penelec |
|||||||
Common
Equity |
$ |
1,305,015 |
64.07 |
% | |||
Preferred
Stock |
- |
-
|
% | ||||
Long-Term
Debt |
490,119 |
24.07 |
% | ||||
Short-Term
Debt |
241,496 |
11.86 |
% | ||||
Total
Capitalization |
$ |
2,036,630 |
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 fourth quarter 2004. |
|
|
FirstEnergy |
|
OE |
|
CEI |
TE |
||||||
Balance,
December 31, 2003 |
$ |
1,604,385 |
$ |
522,934 |
$ |
494,212 |
$ |
113,620 |
|||||
Net
Income |
878,175 |
342,766
|
236,531 |
86,283 |
|||||||||
Cash
Dividends on Preferred Stock |
- |
(2,502 |
) |
(7,003 |
) |
(8,844 |
) | ||||||
Cash
Dividends on Common Stock |
(490,529 |
) |
(421,000 |
) |
(170,000 |
) |
- |
||||||
Other* |
(135,168 |
) |
- |
- |
- |
||||||||
Balance,
December 31, 2004 |
$ |
1,856,863 |
$ |
442,198 |
$ |
553,740 |
$ |
191,059 |
|||||
|
Penn |
JCP&L
|
Met-Ed
|
Penelec
|
|||||||||
Balance,
December 31, 2003 |
$ |
54,179 |
$ |
22,132 |
$ |
27,011 |
$ |
18,038 |
|||||
Net
Income |
59,076 |
111,639 |
66,955 |
36,030 |
|||||||||
Cash
Dividends on Preferred Stock |
(2,560 |
) |
(500 |
) |
- |
- |
|||||||
Cash
Dividends on Common Stock |
(23,000 |
) |
(90,000 |
) |
(55,000 |
) |
(8,000 |
) | |||||
Other |
- |
- |
- |
- |
|||||||||
Balance,
December 31, 2004 |
$ |
87,695 |
$ |
43,271
|
$ |
38,966 |
$ |
46,068 |
(14) | During the fourth quarter of 2004, there was no change to any of the credit ratings of FirstEnergy Corp. or any of its subsidiaries by any of the nationally recognized credit rating agencies. |
(15) |
FirstEnergy’s
aggregate investment includes all amounts invested, or commitments to be
invested, in exempt wholesale generators (EWGs), for which there is
recourse, directly or indirectly, to the registered holding company.
Accordingly, FirstEnergy’s aggregate investment as of December 31, 2004 is
as follows: |
(In
Thousands |
||||
FE Generation
Corp. |
$ |
962,645 |
||
Termobarranquilla
S. A. |
46,551 |
|||
Aggregate
Investment in EWGs |
$ |
1,009,196* |
Total
capitalization |
$ |
20,049,199 |
5.0 |
% | |||
Net utility
plant |
$ |
13,478,356 |
7.5 |
% | |||
Total
consolidated assets |
$ |
31,067,944 |
3.2 |
% | |||
Market value
of common equity |
$ |
13,031,831 |
7.7 |
% |
(16) |
Set forth
below is a summary of the direct or indirect investments as defined in SEC
Rule 53(a) by FirstEnergy, as of December 31, 2004 in EWGs, as well as the
percentage of equity ownership. |
FirstEnergy’s |
|||||||||||||
Investment
at |
FirstEnergy’s |
Owners not
Affiliated with FirstEnergy |
|||||||||||
121/31/04 |
%
Equity |
Type |
|||||||||||
Associate
Company |
($000)*
|
Ownership
|
Name of
Entity |
of
Entity |
|||||||||
Termobarranquilla
S.A. (a) |
$ |
46,551 |
0 |
% |
ABB Energy
Ventures, Inc. |
Foreign |
|||||||
Lancaster
Steel |
Foreign |
||||||||||||
Distral
Group |
Foreign |
||||||||||||
Corp.
Electrica |
Foreign |
||||||||||||
Corp.
Electrica |
|||||||||||||
De la
Costa |
|||||||||||||
Atlantica |
|||||||||||||
Darby
Mazzanine |
|||||||||||||
Holdings,
LLC |
|||||||||||||
FE Generation
Corp. |
962,645 |
100 |
% |
Not
Applicable |
N/A |
||||||||
Total
Aggregate Investment |
|||||||||||||
in
EWGs |
$ |
1,009,196 |
(a) |
FirstEnergy
sold Termobarranquilla S.A. on January 31, 2004. The remaining investment
represents outstanding LOCs issued by
FirstEnergy. |
(17) |
FirstEnergy
and Subsidiary Companies Consolidated Capitalization Ratios as of December
31, 2004: |
Amount
(000’s) |
Ratio |
||||||
Common equity
|
$ |
8,589,294 |
42.8 |
% | |||
Preferred
stock not subject to mandatory redemption |
335,123 |
1.7 |
% | ||||
Long-term
debt |
10,954,293 |
54.6 |
% | ||||
Notes
payable |
170,489 |
0.9 |
% | ||||
Total
capitalization |
$ |
20,049,199 |
100.0 |
% |
(18) | Market-to-book ratio of FirstEnergy and Subsidiary Companies common stock at December 31, 2004: |
Closing
Market Price per Share |
$ |
39.51 |
||
Book Value
per Share |
$ |
26.17 |
||
Market-to Book Ratio of Common Stock |
151.0 |
% |
(19) |
No new EWG/FUCO project covered by the Modified Rule
53 Test in which FirstEnergy has invested or committed to invest during
the fourth quarter of 2004. |
(20)
|
Analysis of Growth in Retained Earnings for
FirstEnergy and Subsidiary
Companies: |
(In
Thousands) |
||||
Retained
Earnings as of 12/31/04 |
$ |
1,856,863
|
||
Retained
Earnings as of 12/31/03 |
1,604,385
|
|||
Growth in
Retained Earnings |
$ |
252,478
|
||
Analysis of
Growth in Retained Earnings: |
||||
Income
contribution from regulated utility companies |
$ |
893,910
|
||
Income
contribution from EWGs |
122,996
|
|||
Income
contribution from all other companies |
67,691
|
|||
FirstEnergy
Holding and Service companies |
(206,422) |
|||
Cash
dividends declared on common stock |
(625,697) |
|||
Growth in
Retained Earnings |
$ |
252,478
|
(21) |
Statements of
Operations for the period ended December 31, 2004 for FirstEnergy
Generation Corp. will be filed separately under a request for confidential
treatment under Rule 104 (b) |
FirstEnergy
Corp. | ||
March 23,
2005 |
||
By:
|
/s/ Harvey L.
Wagner | |
|
Harvey L. Wagner
Vice
President, Controller
and Chief
Accounting Officer
(Principal
Accounting Officer) |