UNITED STATES
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) October 24, 2005
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, OH 44308 | ||
Telephone (800)736-3402 | ||
1-2578 | OHIO EDISON COMPANY | 34-0437786 |
(An Ohio Corporation) | ||
c/o FirstEnergy Corp. | ||
76 South Main Street | ||
Akron, OH 44308 | ||
Telephone (800)736-3402 | ||
1-2323 | THE CLEVELAND ELECTRIC ILLUMINATING COMPANY | 34-0150020 |
(An Ohio Corporation) | ||
c/o FirstEnergy Corp. | ||
76 South Main Street | ||
Akron, OH 44308 | ||
Telephone (800)736-3402 | ||
1-3583 | THE TOLEDO EDISON COMPANY | 34-4375005 |
(An Ohio Corporation) | ||
c/o FirstEnergy Corp. | ||
76 South Main Street | ||
Akron, OH 44308 | ||
Telephone (800)736-3402 | ||
1-3491 | PENNSYLVANIA POWER COMPANY | 25-0718810 |
(A Pennsylvania Corporation) | ||
c/o FirstEnergy Corp. | ||
76 South Main Street | ||
Akron, OH 44308 | ||
Telephone (800)736-3402 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets
On October 24, 2005, Ohio Edison Company (OE), The Cleveland Electric Illuminating Company (CEI), The Toledo Edison Company (TE) and Pennsylvania Power Company (Penn, and together with OE, CEI and TE, the Utility Subsidiaries), certain operating utility subsidiaries of FirstEnergy Corp., completed an intra-system transfer of fossil and hydroelectric (non-nuclear) generation assets to FirstEnergy Generation Corp. (FGCO). The asset transfers were consummated pursuant to the separate Purchase and Sale Agreements (Fossil PSAs) entered into with FGCO on May 13, 2005, in the case of Penn, and on May 18, 2005, in the case of OE, CEI and TE, as previously disclosed on Form 8-K filed with the Securities and Exchange Commission on May 19, 2005 (May Form 8-K).
FGCO is a wholly owned subsidiary of FirstEnergy Solutions Corp. (FES). FES, a wholly owned subsidiary of FirstEnergy, provides energy-related products and services, and through FGCO, operates FirstEnergy's non-nuclear generating facilities. Prior to the asset transfer, FGCO leased the non-nuclear plants from the Utility Subsidiaries under a Master Facility Lease, dated as of January 1, 2001 (Master Lease).
Pursuant to FGCO's purchase option under the Master Lease, FGCO purchased each Utility Subsidiary's interest in currently operating non-nuclear generating units at the per unit prices specified in the Master Lease for an aggregate purchase price of approximately $1.6 billion (OE - $980 million; CEI - $389 million; TE - $88 million; Penn - $125 million). In accordance with the Fossil PSAs, FGCO also assumed certain assets and liabilities relating to the purchased units. The Fossil PSAs do not transfer the respective leasehold interests of CEI and TE in certain units under existing sale and leaseback arrangements. As consideration, FGCO delivered to each Utility Subsidiary a promissory note that is secured by a lien on the units purchased, bears interest at a rate per annum based on the weighted cost of long-term debt of such Utility Subsidiary (OE - 3.98%; CEI - 5.99%; TE - 4.38%; Penn 5.39%) and matures twenty years after the date of issuance. FGCO may pre-pay a portion of each promissory note through the refunding from time to time of outstanding pollution control debt of the applicable Utility Subsidiary. The timing of any refunding will be subject to market conditions and other factors.
Item 7.01 Regulation FD Disclosure
The disclosure in this document regarding the intra-system transfers of nuclear and non-nuclear generation assets with respect to FirstEnergy Corp. is being furnished hereunder.
Item 8.01 Other Events
Consummation of the agreements to transfer FirstEnergy's nuclear generation assets from the Utility Subsidiaries to FirstEnergy Nuclear Generation Corp. (NGC), as previously disclosed in the May Form 8-K remains subject to significant regulatory approvals. FirstEnergy currently anticipates completion of the intra-system transfer of nuclear generation assets at book value by the end of 2005; therefore, those transactions are also included in the pro forma financial statements.
Item 9.01 Financial Statements and Exhibits
(b) Pro forma financial information
The following unaudited financial statements reflect the pro forma impact on each Utility Subsidiary of the completed and probable intra-system generation asset transfers, discussed in Items 2.01, 7.01 and 8.01 above. The unaudited Pro Forma Consolidated Balance Sheets as of June 30, 2005 depict the impact of the asset transfers as if the transactions had occurred on June 30, 2005. The unaudited Pro Forma Consolidated Statements of Income for the six month period ended June 30, 2005 and for the year ended December 31, 2004 depict the pro forma impact of the asset transfers as if the transactions had occurred on January 1, 2004. The pro forma financial statements have been prepared for comparative purposes only and do not purport to be indicative of future results of operations or financial condition.
2
Combined Explanatory Notes for the Pro Forma Consolidated Statements of Income
a. | The elimination of operating revenues from the lease rental of non-nuclear generation assets to FGCO. |
b. | The elimination of depreciation expense on non-nuclear generation assets. |
c. | The elimination of property tax expense on non-nuclear generation assets. |
d. | The addition of interest income on the new associated company note receivable from FGCO for the transfer of non-nuclear generation net assets. |
e. | The elimination of wholesale revenues from the sale of nuclear generation to FES. |
f. | The elimination of fuel expense related to nuclear generation assets. |
g. | The elimination of operating costs related to nuclear generation assets. |
h. | The elimination of depreciation expense and asset retirement obligation accretion related to nuclear generation assets. |
i. | The elimination of property tax expense on nuclear generation assets. |
j. | The elimination of earnings on nuclear decommissioning trusts. |
k. | The addition of interest income on the new associated company note receivable from NGC for the transfer of nuclear generation assets. |
l. | The elimination of interest expense on pollution control revenue bonds to be transferred with the disposition of nuclear generation assets. |
m. | The elimination of the allowance for borrowed funds used during construction on nuclear capital expenditures. |
n. | The reduction of interest expense on associated company money pool debt resulting from the utilization of NGC's initial payment on the new associated company note receivable. |
o. | To reclassify the reversal of the lease market valuation liability from nuclear operating costs to purchased power. |
p. | The income tax effect of the pro forma adjustments at a composite tax rate of approximately 41%. |
3
OHIO EDISON COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the year ended December 31, 2004 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ | 2,945,583 | $ | (177,774 | ) | a | $ | 2,767,809 | $ | (332,574 | ) | e | $ | 2,435,235 | ||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 56,560 | 56,560 | (45,050 | ) | f | 11,510 | ||||||||||||||||
Purchased power | 970,670 | 970,670 | 970,670 | |||||||||||||||||||
Nuclear operating costs | 375,309 | 375,309 | (191,657 | ) | g | 183,652 | ||||||||||||||||
Other operating costs | 336,772 | 336,772 | 336,772 | |||||||||||||||||||
Provision for depreciation | 122,413 | (53,933 | ) | b | 68,480 | (11,783 | ) | h | 56,697 | |||||||||||||
Amortization of regulatory assets | 411,326 | 411,326 | 411,326 | |||||||||||||||||||
Deferral of new regulatory assets | (100,633 | ) | (100,633 | ) | (100,633 | ) | ||||||||||||||||
General taxes | 180,523 | (7,319 | ) | c | 173,204 | (6,905 | ) | i | 166,299 | |||||||||||||
Income taxes | 257,114 | (48,205 | ) | p | 208,909 | (30,922 | ) | p | 177,987 | |||||||||||||
Total operating expenses and taxes | 2,610,054 | (109,457 | ) | 2,500,597 | (286,317 | ) | 2,214,280 | |||||||||||||||
OPERATING INCOME | 335,529 | (68,317 | ) | 267,212 | (46,257 | ) | 220,955 | |||||||||||||||
(9,509 | ) | j | ||||||||||||||||||||
7,833 | k | |||||||||||||||||||||
OTHER INCOME (net of income taxes) | 74,077 | 20,305 | d | 94,382 | (1,676 | ) | 92,706 | |||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 59,465 | 59,465 | (8,685 | ) | l | 50,780 | ||||||||||||||||
Allowance for borrowed funds used during construction | (7,211 | ) | (7,211 | ) | 6,160 | m | (1,051 | ) | ||||||||||||||
Other interest expense | 12,026 | 12,026 | 12,026 | |||||||||||||||||||
Subsidiary's preferred stock dividend requirements | 2,560 | 2,560 | 2,560 | |||||||||||||||||||
Net interest charges | 66,840 | - | 66,840 | (2,525 | ) | 64,315 | ||||||||||||||||
NET INCOME | 342,766 | (48,012 | ) | 294,754 | (45,408 | ) | 249,346 | |||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 2,502 | 2,502 | 2,502 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 340,264 | $ | (48,012 | ) | $ | 292,252 | $ | (45,408 | ) | $ | 246,844 | ||||||||||
4
OHIO EDISON COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the six month period ended June 30, 2005 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | �� | ||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ | 1,442,970 | $ | (88,666 | ) | a | $ | 1,354,304 | $ | (138,038 | ) | e | $ | 1,216,266 | ||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 23,922 | 23,922 | (20,075 | ) | f | 3,847 | ||||||||||||||||
Purchased power | 474,097 | 474,097 | 474,097 | |||||||||||||||||||
Nuclear operating costs | 188,260 | 188,260 | (88,299 | ) | g | 99,961 | ||||||||||||||||
Other operating costs | 178,768 | 178,768 | 178,768 | |||||||||||||||||||
Provision for depreciation | 57,706 | (20,479 | ) | b | 37,227 | (6,500 | ) | h | 30,727 | |||||||||||||
Amortization of regulatory assets | 221,441 | 221,441 | 221,441 | |||||||||||||||||||
Deferral of new regulatory assets | (63,821 | ) | (63,821 | ) | (63,821 | ) | ||||||||||||||||
General taxes | 94,121 | (3,439 | ) | c | 90,682 | (3,084 | ) | i | 87,598 | |||||||||||||
Income taxes | 146,164 | (26,786 | ) | p | 119,378 | (8,252 | ) | p | 111,126 | |||||||||||||
Total operating expenses and taxes | 1,320,658 | (50,704 | ) | 1,269,954 | (126,210 | ) | 1,143,744 | |||||||||||||||
OPERATING INCOME | 122,312 | (37,962 | ) | 84,350 | (11,828 | ) | 72,522 | |||||||||||||||
(3,677 | ) | j | ||||||||||||||||||||
3,916 | k | |||||||||||||||||||||
OTHER INCOME (net of income taxes) | 17,283 | 10,153 | d | 27,436 | 239 | 27,675 | ||||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 31,341 | 31,341 | (4,342 | ) | l | 26,999 | ||||||||||||||||
Allowance for borrowed funds used during construction | (5,241 | ) | (5,241 | ) | 4,154 | m | (1,087 | ) | ||||||||||||||
Other interest expense | 8,264 | 8,264 | 8,264 | |||||||||||||||||||
Subsidiary's preferred stock dividend requirements | 1,378 | 1,378 | 1,378 | |||||||||||||||||||
Net interest charges | 35,742 | - | 35,742 | (188 | ) | 35,554 | ||||||||||||||||
NET INCOME | 103,853 | (27,809 | ) | 76,044 | (11,401 | ) | 64,643 | |||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 1,317 | 1,317 | 1,317 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 102,536 | $ | (27,809 | ) | $ | 74,727 | $ | (11,401 | ) | $ | 63,326 | ||||||||||
5
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the year ended December 31, 2004 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ | 1,808,485 | $ | (59,365 | ) | a | $ | 1,749,120 | $ | (255,901 | ) | e | $ | 1,493,219 | ||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 78,072 | 78,072 | (36,698 | ) | f | 41,374 | ||||||||||||||||
Purchased power | 543,949 | 543,949 | (31,200 | ) | o | 512,749 | ||||||||||||||||
Nuclear operating costs | 117,091 | 117,091 | (117,091 | ) | g | - | ||||||||||||||||
Other operating costs | 272,303 | 272,303 | 272,303 | |||||||||||||||||||
Provision for depreciation | 131,854 | (30,920 | ) | b | 100,934 | (37,103 | ) | h | 63,831 | |||||||||||||
Amortization of regulatory assets | 196,501 | 196,501 | 196,501 | |||||||||||||||||||
Deferral of new regulatory assets | (117,466 | ) | (117,466 | ) | (117,466 | ) | ||||||||||||||||
General taxes | 146,276 | (8,255 | ) | c | 138,021 | (9,337 | ) | i | 128,684 | |||||||||||||
Income taxes | 111,996 | (8,332 | ) | p | 103,664 | (8,670 | ) | p | 94,994 | |||||||||||||
Total operating expenses and taxes | 1,480,576 | (47,507 | ) | 1,433,069 | (240,099 | ) | 1,192,970 | |||||||||||||||
OPERATING INCOME | 327,909 | (11,858 | ) | 316,051 | (15,802 | ) | 300,249 | |||||||||||||||
(12,364 | ) | j | ||||||||||||||||||||
14,675 | k | |||||||||||||||||||||
OTHER INCOME (net of income taxes) | 42,190 | 12,519 | d | 54,709 | 2,311 | 57,020 | ||||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 120,058 | 120,058 | 120,058 | |||||||||||||||||||
Allowance for borrowed funds used during construction | (5,110 | ) | (5,110 | ) | 2,583 | m | (2,527 | ) | ||||||||||||||
Other interest expense | 18,620 | 18,620 | (6,046 | ) | n | 12,574 | ||||||||||||||||
Net interest charges | 133,568 | - | 133,568 | (3,463 | ) | 130,105 | ||||||||||||||||
NET INCOME | 236,531 | 661 | 237,192 | (10,028 | ) | 227,164 | ||||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 7,008 | 7,008 | 7,008 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 229,523 | $ | 661 | $ | 230,184 | $ | (10,028 | ) | $ | 220,156 | |||||||||||
6
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the six month period ended June 30, 2005 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ | 881,920 | $ | (29,281 | ) | a | $ | 852,639 | $ | (95,282 | ) | e | $ | 757,357 | ||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 39,437 | 39,437 | (14,000 | ) | f | 25,437 | ||||||||||||||||
Purchased power | 281,726 | 281,726 | (15,600 | ) | o | 266,126 | ||||||||||||||||
Nuclear operating costs | 95,513 | 95,513 | (95,513 | ) | g | - | ||||||||||||||||
Other operating costs | 138,284 | 138,284 | 138,284 | |||||||||||||||||||
Provision for depreciation | 64,502 | (10,105 | ) | b | 54,397 | (19,766 | ) | h | 34,631 | |||||||||||||
Amortization of regulatory assets | 109,042 | 109,042 | 109,042 | |||||||||||||||||||
Deferral of new regulatory assets | (65,989 | ) | (65,989 | ) | (65,989 | ) | ||||||||||||||||
General taxes | 75,492 | (3,727 | ) | c | 71,765 | (4,511 | ) | i | 67,254 | |||||||||||||
Income taxes | 39,611 | (6,376 | ) | p | 33,235 | 23,161 | p | 56,396 | ||||||||||||||
Total operating expenses and taxes | 777,618 | (20,208 | ) | 757,410 | (126,229 | ) | 631,181 | |||||||||||||||
OPERATING INCOME | 104,302 | (9,073 | ) | 95,229 | 30,947 | 126,176 | ||||||||||||||||
(2,776 | ) | j | ||||||||||||||||||||
7,338 | k | |||||||||||||||||||||
OTHER INCOME (net of income taxes) | 13,574 | 6,596 | d | 20,170 | 4,562 | 24,732 | ||||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 56,362 | 56,362 | 56,362 | |||||||||||||||||||
Allowance for borrowed funds used during construction | (883 | ) | (883 | ) | 1,005 | m | 122 | |||||||||||||||
Other interest expense | 8,256 | 8,256 | (3,023 | ) | n | 5,233 | ||||||||||||||||
Net interest charges | 63,735 | - | 63,735 | (2,018 | ) | 61,717 | ||||||||||||||||
NET INCOME | 54,141 | (2,477 | ) | 51,664 | 37,527 | 89,191 | ||||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 2,918 | 2,918 | 2,918 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 51,223 | $ | (2,477 | ) | $ | 48,746 | $ | 37,527 | $ | 86,273 | |||||||||||
7
THE TOLEDO EDISON COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the year ended December 31, 2004 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ 1,008,112 | $ (14,988) | a | $ 993,124 | $ (143,241) | e | $ 849,883 | |||||||||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 50,892 | 50,892 | (20,051 | ) | f | 30,841 | ||||||||||||||||
Purchased power | 312,867 | 312,867 | 312,867 | |||||||||||||||||||
Nuclear operating costs | 168,401 | 168,401 | (91,444 | ) | g | 76,957 | ||||||||||||||||
Other operating costs | 152,879 | 152,879 | 152,879 | |||||||||||||||||||
Provision for depreciation | 57,948 | (5,245 | ) | b | 52,703 | (24,926 | ) | h | 27,777 | |||||||||||||
Amortization of regulatory assets | 123,858 | 123,858 | 123,858 | |||||||||||||||||||
Deferral of new regulatory assets | (38,696 | ) | (38,696 | ) | (38,696 | ) | ||||||||||||||||
General taxes | 54,142 | (3,261 | ) | c | 50,881 | (5,034 | ) | i | 45,847 | |||||||||||||
Income taxes | 32,746 | (2,675 | ) | p | 30,071 | (63 | ) | p | 30,008 | |||||||||||||
Total operating expenses and taxes | 915,037 | (11,181 | ) | 903,856 | (141,518 | ) | 762,338 | |||||||||||||||
OPERATING INCOME | 93,075 | (3,807 | ) | 89,268 | (1,723 | ) | 87,545 | |||||||||||||||
(9,524 | ) | j | ||||||||||||||||||||
8,301 | k | |||||||||||||||||||||
OTHER INCOME (net of income taxes) | 22,951 | 1,834 | d | 24,785 | (1,223 | ) | 23,562 | |||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 27,153 | 27,153 | 27,153 | |||||||||||||||||||
Allowance for borrowed funds used during construction | (3,696 | ) | (3,696 | ) | 1,941 | m | (1,755 | ) | ||||||||||||||
Other interest expense | 6,286 | 6,286 | (3,575 | ) | n | 2,711 | ||||||||||||||||
Net interest charges | 29,743 | - | 29,743 | (1,634 | ) | 28,109 | ||||||||||||||||
NET INCOME | 86,283 | (1,973 | ) | 84,310 | (1,312 | ) | 82,998 | |||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 8,844 | 8,844 | 8,844 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 77,439 | $ | (1,973 | ) | $ | 75,466 | $ | (1,312 | ) | $ | 74,154 | ||||||||||
8
THE TOLEDO EDISON COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the six month period ended June 30, 2005 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ | 500,864 | $ | (7,258 | ) | a | $ | 493,606 | $ | (57,870 | ) | e | $ | 435,736 | ||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 26,973 | 26,973 | (8,886 | ) | f | 18,087 | ||||||||||||||||
Purchased power | 152,456 | 152,456 | 152,456 | |||||||||||||||||||
Nuclear operating costs | 105,852 | 105,852 | (61,823 | ) | g | 44,029 | ||||||||||||||||
Other operating costs | 75,659 | 75,659 | 75,659 | |||||||||||||||||||
Provision for depreciation | 29,889 | (1,716 | ) | b | 28,173 | (13,108 | ) | h | 15,065 | |||||||||||||
Amortization of regulatory assets | 68,096 | 68,096 | 68,096 | |||||||||||||||||||
Deferral of new regulatory assets | (22,094 | ) | (22,094 | ) | (22,094 | ) | ||||||||||||||||
General taxes | 27,801 | (1,394 | ) | c | 26,407 | (1,835 | ) | i | 24,572 | |||||||||||||
Income taxes | 23,849 | (1,712 | ) | p | 22,137 | 12,772 | p | 34,909 | ||||||||||||||
Total operating expenses and taxes | 488,481 | (4,822 | ) | 483,659 | (72,880 | ) | 410,779 | |||||||||||||||
OPERATING INCOME | 12,383 | (2,436 | ) | 9,947 | 15,010 | 24,957 | ||||||||||||||||
(2,371 | ) | j | ||||||||||||||||||||
4,150 | k | |||||||||||||||||||||
OTHER INCOME (net of income taxes) | 5,890 | 917 | d | 6,807 | 1,779 | 8,586 | ||||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 8,743 | 8,743 | 8,743 | |||||||||||||||||||
Allowance for borrowed funds used during construction | 255 | 255 | 330 | m | 585 | |||||||||||||||||
Other interest expense | 1,234 | 1,234 | (3,494 | ) | n | (2,260 | ) | |||||||||||||||
Net interest charges | 10,232 | - | 10,232 | (3,164 | ) | 7,068 | ||||||||||||||||
NET INCOME | 8,041 | (1,519 | ) | 6,522 | 19,953 | 26,475 | ||||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 4,422 | 4,422 | 4,422 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 3,619 | $ | (1,519 | ) | $ | 2,100 | $ | 19,953 | $ | 22,053 | |||||||||||
9
PENNSYLVANIA POWER COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the year ended December 31, 2004 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ | 549,121 | $ | (20,256 | ) | a | $ | 528,865 | $ | (177,285 | ) | e | $ | 351,580 | ||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 22,894 | 22,894 | (22,865 | ) | f | 29 | ||||||||||||||||
Purchased power | 181,031 | 181,031 | 181,031 | |||||||||||||||||||
Nuclear operating costs | 106,659 | 106,659 | (106,659 | ) | g | - | ||||||||||||||||
Other operating costs | 51,180 | 51,180 | 51,180 | |||||||||||||||||||
Provision for depreciation | 14,134 | (4,335 | ) | b | 9,799 | (1,741 | ) | h | 8,058 | |||||||||||||
Amortization of regulatory assets | 40,012 | 40,012 | 40,012 | |||||||||||||||||||
General taxes | 23,607 | (742 | ) | c | 22,865 | (1,395 | ) | i | 21,470 | |||||||||||||
Income taxes | 48,824 | (6,293 | ) | p | 42,531 | (18,920 | ) | p | 23,611 | |||||||||||||
Total operating expenses and taxes | 488,341 | (11,370 | ) | 476,971 | (151,580 | ) | 325,391 | |||||||||||||||
OPERATING INCOME | 60,780 | (8,886 | ) | 51,894 | (25,705 | ) | 26,189 | |||||||||||||||
OTHER INCOME (net of income taxes) | 3,464 | 2,752 | d | 6,216 | 2,503 | k | 8,719 | |||||||||||||||
�� | ||||||||||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 8,250 | 8,250 | (3,155 | ) | l | 5,095 | ||||||||||||||||
Allowance for borrowed funds used during construction | (4,563 | ) | (4,563 | ) | 4,164 | m | (399 | ) | ||||||||||||||
Other interest expense | 1,481 | 1,481 | 1,481 | |||||||||||||||||||
Net interest charges | 5,168 | - | 5,168 | 1,009 | 6,177 | |||||||||||||||||
NET INCOME | 59,076 | (6,134 | ) | 52,942 | (24,211 | ) | 28,731 | |||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 2,560 | 2,560 | 2,560 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 56,516 | $ | (6,134 | ) | $ | 50,382 | $ | (24,211 | ) | $ | 26,171 | ||||||||||
10
PENNSYLVANIA POWER COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
for the six month period ended June 30, 2005 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-Nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
OPERATING REVENUES | $ | 268,766 | $ | (10,068 | ) | a | $ | 258,698 | $ | (76,107 | ) | e | $ | 182,591 | ||||||||
OPERATING EXPENSES AND TAXES: | ||||||||||||||||||||||
Fuel | 11,146 | 11,146 | (11,132 | ) | f | 14 | ||||||||||||||||
Purchased power | 89,706 | 89,706 | 89,706 | |||||||||||||||||||
Nuclear operating costs | 39,713 | 39,713 | (39,713 | ) | g | 0 | ||||||||||||||||
Other operating costs | 29,511 | 29,511 | 29,511 | |||||||||||||||||||
Provision for depreciation | 7,504 | (1,803 | ) | b | 5,701 | (1,073 | ) | h | 4,628 | |||||||||||||
Amortization of regulatory assets | 19,715 | 19,715 | 19,715 | |||||||||||||||||||
General taxes | 12,916 | (311 | ) | c | 12,605 | (560 | ) | i | 12,045 | |||||||||||||
Income taxes | 25,653 | (3,298 | ) | p | 22,355 | (10,271 | ) | p | 12,084 | |||||||||||||
Total operating expenses and taxes | 235,864 | (5,412 | ) | 230,452 | (62,749 | ) | 167,703 | |||||||||||||||
OPERATING INCOME | 32,902 | (4,656 | ) | 28,246 | (13,358 | ) | 14,888 | |||||||||||||||
OTHER INCOME (net of income taxes) | 74 | 1,376 | d | 1,450 | 1,252 | k | 2,702 | |||||||||||||||
NET INTEREST CHARGES: | ||||||||||||||||||||||
Interest on long-term debt | 5,106 | 5,106 | (1,578 | ) | l | 3,528 | ||||||||||||||||
Allowance for borrowed funds used during construction | (2,843 | ) | (2,843 | ) | 2,722 | m | (121 | ) | ||||||||||||||
Other interest expense | - | - | - | |||||||||||||||||||
Subsidiary's preferred stock dividend requirements | - | - | - | |||||||||||||||||||
Net interest charges | 2,263 | - | 2,263 | 1,144 | 3,407 | |||||||||||||||||
NET INCOME | 30,713 | (3,280 | ) | 27,433 | (13,250 | ) | 14,183 | |||||||||||||||
PREFERRED STOCK DIVIDEND REQUIREMENTS | 1,378 | 1,378 | 1,378 | |||||||||||||||||||
EARNINGS ON COMMON STOCK | $ | 29,335 | $ | (3,280 | ) | $ | 26,055 | $ | (13,250 | ) | $ | 12,805 | ||||||||||
11
Combined Explanatory Notes for the Pro Forma Consolidated Balance Sheets
a. | The transfer of non-nuclear generation plant in service to FGCO. |
b. | The transfer of the accumulated provision for depreciation on non-nuclear plant in service to FGCO. |
c. | The transfer of non-nuclear plant construction work in progress to FGCO. |
d. | The establishment of an associated company note receivable as consideration for the purchased assets and assumption of liabilities. |
e. | The transfer of other property and investments related to non-nuclear plant assets to FGCO. |
f. | The transfer of working cash funds used for expense advances at certain non-nuclear generation facilities to FGCO. |
g. | The transfer of materials and supplies for non-nuclear generation plant to FGCO. |
h. | The transfer of deferred property tax charges for non-nuclear generation plant to FGCO. |
i. | The distribution of the nuclear net assets spin as a dividend to the respective parent company. |
j. | To record in other paid-in capital the difference between the net book value and the purchase price, pursuant to the purchase option in the Master Lease, for the non-nuclear generation assets. |
k. | The transfer of unrealized gains and losses on decommissioning trust investments recorded as other comprehensive income to NGC. |
l. | The use of proceeds from the nuclear asset transfer to reduce associated company money pool debt. |
m. | The transfer of accumulated deferred income taxes for non-nuclear generation plant to FGCO. |
n. | The transfer of accumulated deferred investment tax credits for non-nuclear generation plant to FGCO. |
o. | The transfer of asset retirement obligations related to the non-nuclear generation plants to FGCO. |
p. | The transfer of deferred property taxes and accumulated deferred investment tax credits for non-nuclear generation plant to FGCO. |
q. | The transfer of nuclear plant in service and nuclear fuel in service to NGC. |
r. | The transfer of the accumulated provision for depreciation and amortization for nuclear plant in service and nuclear fuel in service to NGC. |
s. | The transfer of nuclear plant construction work in progress to NGC. |
t. | The transfer of nuclear fuel construction work in progress to NGC. |
u. | The transfer of nuclear plant decommissioning trusts to NGC. |
v. | The establishment of a parent company investment in NGC. |
w. | The transfer of materials and supplies for nuclear plant to NGC. |
x. | The reclassification of regulatory liabilities to regulatory assets related to the nuclear decommissioning trusts top-off. |
y. | The transfer of property taxes for nuclear generation plant to NGC. |
z. | The transfer of unamortized debt expense related to the pollution control revenue bonds transferred to NGC. |
aa. | The transfer of other deferred charges for nuclear plant to NGC. |
bb. | The reclassification of the nuclear decommissioning trusts top-off liability to an associated company note payable. |
cc. | The transfer of the long-term portion of pollution control revenue bonds related to nuclear generation plant to NGC. |
dd. | The transfer of the current portion of pollution control revenue bonds related to nuclear generation plant to NGC. |
ee. | The establishment of notes payable to associated companies to reflect the net liabilities transferred to NGC. |
ff. | The establishment of a nuclear decommissioning trusts top-off liability netted against note payment. |
gg. | The transfer of accrued interest for debt related to nuclear generation plant to NGC. |
hh. | The transfer of other current liabilities related to nuclear generation plant to NGC. |
ii. | The transfer of accumulated deferred income taxes for nuclear generation plant to NGC. |
jj. | The transfer of accumulated deferred investment tax credits for nuclear generation plant to NGC. |
kk. | The transfer of asset retirement obligations related to the nuclear generation plants to NGC. |
ll. | The transfer of other non-current liabilities related to nuclear generation plant to NGC. |
12
OHIO EDISON COMPANY | ||||||||||||||||||||||||||||
PRO FORMA CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||||
As of June 30, 2005 | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Transfer | ||||||||||||||||||||||||||||
Non-nuclear | Nuclear | Investment in | ||||||||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Subsidiary | Pro Forma | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
UTILITY PLANT: | ||||||||||||||||||||||||||||
In service | $ | 5,553,362 | $ | (2,254,640 | ) | a | $ | 3,298,722 | $ | (892,504 | ) | q | $ | 2,406,218 | ||||||||||||||
Less-Accumulated provision for depreciation | 2,770,924 | (1,316,543 | ) | b | 1,454,381 | (486,245 | ) | r | 968,136 | |||||||||||||||||||
2,782,438 | (938,097 | ) | 1,844,341 | (406,259 | ) | - | 1,438,082 | |||||||||||||||||||||
Construction work in progress- | - | |||||||||||||||||||||||||||
Electric plant | 226,124 | (344 | ) | c | 225,780 | (205,523 | ) | s | 20,257 | |||||||||||||||||||
Nuclear Fuel | - | - | - | |||||||||||||||||||||||||
226,124 | (344 | ) | 225,780 | (205,523 | ) | - | 20,257 | |||||||||||||||||||||
3,008,562 | (938,441 | ) | 2,070,121 | (611,782 | ) | - | 1,458,339 | |||||||||||||||||||||
OTHER PROPERTY AND INVESTMENTS: | - | |||||||||||||||||||||||||||
Investment in lease obligation bonds | 341,582 | 341,582 | 341,582 | |||||||||||||||||||||||||
Nuclear plant decommissioning trusts | 447,649 | 447,649 | (352,306 | ) | u | 95,343 | ||||||||||||||||||||||
Long-term notes receivable from associated companies | 207,430 | 1,159,779 | d | 1,367,209 | 489,994 | d | 1,857,203 | |||||||||||||||||||||
Other | 45,394 | (243 | ) | e | 45,151 | 78,410 | v | (78,410 | ) | i | 45,151 | |||||||||||||||||
1,042,055 | 1,159,536 | 2,201,591 | 216,098 | (78,410 | ) | 2,339,279 | ||||||||||||||||||||||
CURRENT ASSETS: | - | |||||||||||||||||||||||||||
Cash and cash equivalents | 1,283 | (24 | ) | f | 1,259 | 1,259 | ||||||||||||||||||||||
Receivables- | - | |||||||||||||||||||||||||||
Customers | 282,283 | 282,283 | 282,283 | |||||||||||||||||||||||||
Associated companies | 167,260 | 167,260 | 167,260 | |||||||||||||||||||||||||
Other | 10,549 | 10,549 | 10,549 | |||||||||||||||||||||||||
Notes receivable from associated companies | 598,151 | 598,151 | 598,151 | |||||||||||||||||||||||||
Materials and supplies, at average cost | 108,221 | (18,481 | ) | g | 89,740 | (89,740 | ) | w | - | |||||||||||||||||||
Prepayments and other | 20,324 | 20,324 | 20,324 | |||||||||||||||||||||||||
1,188,071 | (18,505 | ) | 1,169,566 | (89,740 | ) | - | 1,079,826 | |||||||||||||||||||||
DEFERRED CHARGES: | - | |||||||||||||||||||||||||||
Regulatory assets | 935,223 | 935,223 | 64,561 | x | 999,784 | |||||||||||||||||||||||
Property taxes | 61,419 | (2,535 | ) | h | 58,884 | (3,967 | ) | y | 54,917 | |||||||||||||||||||
Unamortized sale and leaseback costs | 57,670 | 57,670 | 57,670 | |||||||||||||||||||||||||
Other | 67,867 | 67,867 | (5,575 | ) | z,aa | 62,292 | ||||||||||||||||||||||
1,122,179 | (2,535 | ) | 1,119,644 | 55,019 | 1,174,663 | |||||||||||||||||||||||
$ | 6,360,867 | $ | 200,055 | $ | 6,560,922 | $ | (430,405 | ) | $ | (78,410 | ) | $ | 6,052,107 | |||||||||||||||
CAPITALIZATION AND LIABILITIES | ||||||||||||||||||||||||||||
CAPITALIZATION: | ||||||||||||||||||||||||||||
Common stockholder's equity- | ||||||||||||||||||||||||||||
Common stock, without par value | $ | 2,099,089 | $ | 167,038 | j | $ | 2,266,127 | $ | (10 | ) | $ | - | $ | 2,266,117 | ||||||||||||||
Accumulated other comprehensive loss | (57,125 | ) | (57,125 | ) | (9,012 | ) | k | (66,137 | ) | |||||||||||||||||||
Retained earnings | 367,734 | 367,734 | (78,410 | ) | i | 289,324 | ||||||||||||||||||||||
Total common stockholder's equity | 2,409,698 | 167,038 | 2,576,736 | (9,022 | ) | (78,410 | ) | 2,489,304 | ||||||||||||||||||||
Preferred stock | 60,965 | 60,965 | 60,965 | |||||||||||||||||||||||||
Preferred stock of consolidated subsidiary | 14,105 | 14,105 | 14,105 | |||||||||||||||||||||||||
Long-term debt and other long-term obligations | 1,104,584 | 1,104,584 | (239,631 | ) | cc | 864,953 | ||||||||||||||||||||||
3,589,352 | 167,038 | 3,756,390 | (248,653 | ) | (78,410 | ) | 3,429,327 | |||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||||||||
Currently payable long-term debt | 289,215 | 289,215 | (15,500 | ) | dd | 273,715 | ||||||||||||||||||||||
Short-term borrowings- | ||||||||||||||||||||||||||||
Associated companies | 82,389 | 82,389 | 141,995 | ee | 224,384 | |||||||||||||||||||||||
Other | 143,912 | 143,912 | 143,912 | |||||||||||||||||||||||||
Accounts payable- | ||||||||||||||||||||||||||||
Associated companies | 100,452 | 100,452 | 100,452 | |||||||||||||||||||||||||
Other | 12,824 | 12,824 | 12,824 | |||||||||||||||||||||||||
Notes payable to associated companies | - | |||||||||||||||||||||||||||
Accrued taxes | 172,478 | 172,478 | 172,478 | |||||||||||||||||||||||||
Accrued interest | 11,201 | 11,201 | (1,002 | ) | gg | 10,199 | ||||||||||||||||||||||
Other | 73,344 | 73,344 | (4,171 | ) | hh | 69,173 | ||||||||||||||||||||||
885,815 | - | 885,815 | 121,322 | - | 1,007,137 | |||||||||||||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||||||||||||||||
Accumulated deferred income taxes | 724,040 | 68,328 | m | 792,368 | (21,678 | ) | ii | 770,690 | ||||||||||||||||||||
Accumulated deferred investment tax credits | 55,800 | (23,326 | ) | n | 32,474 | (65 | ) | jj | 32,409 | |||||||||||||||||||
Asset retirement obligation | 350,387 | (9,096 | ) | o | 341,291 | (275,525 | ) | kk | 65,766 | |||||||||||||||||||
Retirement benefits | 314,543 | 314,543 | - | 314,543 | ||||||||||||||||||||||||
Other | 440,930 | (2,889 | ) | h | 438,041 | (5,806 | ) | y, ll | 432,235 | |||||||||||||||||||
1,885,700 | 33,017 | 1,918,717 | (303,074 | ) | - | 1,615,643 | ||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||||||||||
$ | 6,360,867 | $ | 200,055 | $ | 6,560,922 | $ | (430,405 | ) | $ | (78,410 | ) | $ | 6,052,107 | |||||||||||||||
13
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||
as of June 30, 2005 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
UTILITY PLANT: | ||||||||||||||||||||||
In service | $ | 4,497,877 | $ | (1,250,234 | ) | a | $ | 3,247,643 | $ | (1,242,239 | ) | q | $ | 2,005,404 | ||||||||
Less-Accumulated provision for depreciation | 2,000,871 | (827,608 | ) | b | 1,173,263 | (408,998 | ) | r | 764,265 | |||||||||||||
2,497,006 | (422,626 | ) | 2,074,380 | (833,241 | ) | 1,241,139 | ||||||||||||||||
Construction work in progress- | ||||||||||||||||||||||
Electric plant | 79,897 | (4,772 | ) | c | 75,125 | (51,078 | ) | s | 24,047 | |||||||||||||
Nuclear fuel | 4,330 | 4,330 | (4,330 | ) | t | - | ||||||||||||||||
84,227 | (4,772 | ) | 79,455 | (55,408 | ) | 24,047 | ||||||||||||||||
2,581,233 | (427,398 | ) | 2,153,835 | (888,649 | ) | 1,265,186 | ||||||||||||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||||||||||||||||
Investment in lessor notes | 564,172 | 564,172 | 564,172 | |||||||||||||||||||
Nuclear plant decommissioning trusts | 401,610 | 401,610 | (401,610 | ) | u | - | ||||||||||||||||
Long-term notes receivable from associated companies | 7,546 | 416,762 | d | 424,308 | 576,713 | d | 1,001,021 | |||||||||||||||
Other | 15,945 | (5,176 | ) | e | 10,769 | 10,769 | ||||||||||||||||
989,273 | 411,586 | 1,400,859 | 175,103 | 1,575,962 | ||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||
Cash and cash equivalents | 207 | 207 | 207 | |||||||||||||||||||
Receivables- | ||||||||||||||||||||||
Customers | 255,422 | 255,422 | 255,422 | |||||||||||||||||||
Associated companies | 29,279 | 29,279 | 29,279 | |||||||||||||||||||
Other | 11,109 | 11,109 | 11,109 | |||||||||||||||||||
Notes receivable from associated companies | 23,537 | 23,537 | 23,537 | |||||||||||||||||||
Materials and supplies, at average cost | 87,713 | (27,278 | ) | g | 60,435 | (60,435 | ) | w | - | |||||||||||||
Prepayments and other | 1,948 | 1,948 | 1,948 | |||||||||||||||||||
409,215 | (27,278 | ) | 381,937 | (60,435 | ) | 321,502 | ||||||||||||||||
DEFERRED CHARGES: | ||||||||||||||||||||||
Goodwill | 1,693,629 | 1,693,629 | 1,693,629 | |||||||||||||||||||
Regulatory assets | 902,137 | 902,137 | 902,137 | |||||||||||||||||||
Property taxes | 77,792 | (7,088 | ) | h | 70,704 | (9,591 | ) | y | 61,113 | |||||||||||||
Other | 36,471 | 36,471 | 36,471 | |||||||||||||||||||
2,710,029 | (7,088 | ) | 2,702,941 | (9,591 | ) | 2,693,350 | ||||||||||||||||
$ | 6,689,750 | $ | (50,178 | ) | $ | 6,639,572 | $ | (783,572 | ) | $ | 5,856,000 | |||||||||||
CAPITALIZATION AND LIABILITIES | ||||||||||||||||||||||
CAPITALIZATION: | ||||||||||||||||||||||
Common stockholder's equity- | ||||||||||||||||||||||
Common stock, without par value | $ | 1,356,983 | $ | - | $ | 1,356,983 | $ | - | $ | 1,356,983 | ||||||||||||
Other paid-in capital | - | (19,410 | ) | j | (19,410 | ) | (19,410 | ) | ||||||||||||||
Accumulated other comprehensive income | 16,212 | 16,212 | (37,963 | ) | k | (21,751 | ) | |||||||||||||||
Retained earnings | 480,957 | 480,957 | 480,957 | |||||||||||||||||||
Total common stockholder's equity | 1,854,152 | (19,410 | ) | 1,834,742 | (37,963 | ) | 1,796,779 | |||||||||||||||
Long-term debt and other long-term obligations | 1,948,083 | 1,948,083 | 1,948,083 | |||||||||||||||||||
3,802,235 | (19,410 | ) | 3,782,825 | (37,963 | ) | 3,744,862 | ||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||
Currently payable long-term debt | 75,694 | 75,694 | 75,694 | |||||||||||||||||||
Short-term borrowings- | ||||||||||||||||||||||
Associated companies | 404,290 | 404,290 | (404,290 | ) | l | - | ||||||||||||||||
Other | 155,000 | 155,000 | 155,000 | |||||||||||||||||||
Accounts payable- | ||||||||||||||||||||||
Associated companies | 191,959 | 191,959 | 191,959 | |||||||||||||||||||
Other | 5,733 | 5,733 | 5,733 | |||||||||||||||||||
Accrued taxes | 122,675 | 122,675 | 122,675 | |||||||||||||||||||
Accrued interest | 21,782 | 21,782 | 21,782 | |||||||||||||||||||
Lease market valuation liability | 60,200 | 60,200 | 60,200 | |||||||||||||||||||
Other | 43,841 | 43,841 | (1,500 | ) | hh | 42,341 | ||||||||||||||||
1,081,174 | - | 1,081,174 | (405,790 | ) | 675,384 | |||||||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||||||||||
Accumulated deferred income taxes | 543,554 | 223 | m | 543,777 | (33,866 | ) | ii | 509,911 | ||||||||||||||
Accumulated deferred investment tax credits | 58,241 | (21,151 | ) | n | 37,090 | (18,908 | ) | jj | 18,182 | |||||||||||||
Asset retirement obligation | 281,206 | (2,752 | ) | o | 278,454 | (277,454 | ) | kk | 1,000 | |||||||||||||
Retirement benefits | 84,428 | 84,428 | 84,428 | |||||||||||||||||||
Lease market valuation liability | 638,100 | 638,100 | 638,100 | |||||||||||||||||||
Other | 200,812 | (7,088 | ) | h | 193,724 | (9,591 | ) | y | 184,133 | |||||||||||||
1,806,341 | (30,768 | ) | 1,775,573 | (339,819 | ) | 1,435,754 | ||||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||||
$ | 6,689,750 | $ | (50,178 | ) | $ | 6,639,572 | $ | (783,572 | ) | $ | 5,856,000 | |||||||||||
14
THE TOLEDO EDISON COMPANY | ||||||||||||||||||||||
PRO FORMA CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||
as of June 30, 2005 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Non-nuclear | Nuclear | |||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | Pro Forma | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
UTILITY PLANT: | ||||||||||||||||||||||
In service | $ | 1,902,930 | $ | (250,831 | ) | a | $ | 1,652,099 | $ | (833,174 | ) | q | $ | 818,925 | ||||||||
Less-Accumulated provision for depreciation | 802,653 | (179,882 | ) | b | 622,771 | (261,751 | ) | r | 361,020 | |||||||||||||
1,100,277 | (70,949 | ) | 1,029,328 | (571,423 | ) | 457,905 | ||||||||||||||||
Construction work in progress- | ||||||||||||||||||||||
Electric plant | 52,465 | (2,688 | ) | c | 49,777 | (40,953 | ) | s | 8,824 | |||||||||||||
Nuclear Fuel | 4,063 | 4,063 | (4,063 | ) | t | - | ||||||||||||||||
56,528 | (2,688 | ) | 53,840 | (45,016 | ) | 8,824 | ||||||||||||||||
1,156,805 | (73,637 | ) | 1,083,168 | (616,439 | ) | 466,729 | ||||||||||||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||||||||||||||||
Investment in lessor notes | 178,797 | 178,797 | 178,797 | |||||||||||||||||||
Nuclear plant decommissioning trusts | 315,142 | 315,142 | (260,657 | ) | u | 54,485 | ||||||||||||||||
Long-term notes receivable from associated companies | 40,014 | 102,557 | d | 142,571 | 439,535 | d | 582,106 | |||||||||||||||
Other | 1,784 | (156 | ) | e | 1,628 | 1,628 | ||||||||||||||||
535,737 | 102,401 | 638,138 | 178,878 | 817,016 | ||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||
Cash and cash equivalents | 15 | (3 | ) | f | 12 | 12 | ||||||||||||||||
Receivables- | ||||||||||||||||||||||
Customers | 2,105 | 2,105 | 2,105 | |||||||||||||||||||
Associated companies | 19,373 | 19,373 | 19,373 | |||||||||||||||||||
Other | 3,182 | 3,182 | 3,182 | |||||||||||||||||||
Notes receivable from associated companies | 16,099 | 16,099 | 16,099 | |||||||||||||||||||
Materials and supplies, at average cost | 46,192 | (4,936 | ) | g | 41,256 | (41,256 | ) | w | - | |||||||||||||
Prepayments and other | 742 | 742 | 742 | |||||||||||||||||||
87,708 | (4,939 | ) | 82,769 | (41,256 | ) | 41,513 | ||||||||||||||||
DEFERRED CHARGES: | ||||||||||||||||||||||
Regulatory assets | 504,522 | 504,522 | 504,522 | |||||||||||||||||||
Goodwill | 330,192 | 330,192 | 330,192 | |||||||||||||||||||
Property taxes | 24,100 | (2,535 | ) | h | 21,565 | (3,967 | ) | y | 17,598 | |||||||||||||
Other | 39,189 | 39,189 | 39,189 | |||||||||||||||||||
898,003 | (2,535 | ) | 895,468 | (3,967 | ) | 891,501 | ||||||||||||||||
$ | 2,678,253 | $ | 21,290 | $ | 2,699,543 | $ | (482,784 | ) | $ | 2,216,759 | ||||||||||||
CAPITALIZATION AND LIABILITIES | ||||||||||||||||||||||
CAPITALIZATION: | ||||||||||||||||||||||
Common stockholder's equity- | ||||||||||||||||||||||
Common stock, $5 par value | $ | 195,670 | $ | 195,670 | $ | 195,670 | ||||||||||||||||
Other paid-in capital | 428,566 | 22,061 | j | 450,627 | 450,627 | |||||||||||||||||
Accumulated other comprehensive income | 18,646 | 18,646 | (23,073 | ) | k | (4,427 | ) | |||||||||||||||
Retained earnings | 184,678 | 184,678 | 184,678 | |||||||||||||||||||
Total common stockholder's equity | 827,560 | 22,061 | 849,621 | (23,073 | ) | 826,548 | ||||||||||||||||
Preferred stock not subject to mandatory redemption | 126,000 | 126,000 | 126,000 | |||||||||||||||||||
Long-term debt | 296,482 | 296,482 | 296,482 | |||||||||||||||||||
1,250,042 | 22,061 | 1,272,103 | (23,073 | ) | 1,249,030 | |||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||
Currently payable long-term debt | 90,950 | 90,950 | 90,950 | |||||||||||||||||||
Short-term borrowings | ||||||||||||||||||||||
Accounts payable- | ||||||||||||||||||||||
Associated companies | 34,806 | 34,806 | 34,806 | |||||||||||||||||||
Other | 3,117 | 3,117 | 3,117 | |||||||||||||||||||
Notes payable to associated companies | 333,136 | 333,136 | (250,000 | ) | l | 83,136 | ||||||||||||||||
Accrued taxes | 57,466 | 57,466 | 57,466 | |||||||||||||||||||
Lease market valuation liability | 24,600 | 24,600 | 24,600 | |||||||||||||||||||
Other | 25,802 | 25,802 | (1,125 | ) | hh | 24,677 | ||||||||||||||||
569,877 | - | 569,877 | (251,125 | ) | 318,752 | |||||||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||||||||||
Accumulated deferred income taxes | 235,448 | 10,233 | m | 245,681 | (22,571 | ) | ii | 223,110 | ||||||||||||||
Accumulated deferred investment tax credits | 24,024 | (6,813 | ) | n | 17,211 | (9,211 | ) | jj | 8,000 | |||||||||||||
Retirement benefits | 41,464 | 41,464 | 41,464 | |||||||||||||||||||
Asset retirement obligation | 200,867 | (1,656 | ) | o | 199,211 | (172,837 | ) | kk | 26,374 | |||||||||||||
Lease market valuation liability | 255,700 | 255,700 | 255,700 | |||||||||||||||||||
Other | 100,831 | (2,535 | ) | h | 98,296 | (3,967 | ) | y | 94,329 | |||||||||||||
858,334 | (771 | ) | 857,563 | (208,586 | ) | 648,977 | ||||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||||
$ | 2,678,253 | $ | 21,290 | $ | 2,699,543 | $ | (482,784 | ) | $ | 2,216,759 | ||||||||||||
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PENNSYLVANIA POWER COMPANY | ||||||||||||||||||||||||||||
PRO FORMA CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||||
as of June 30, 2005 | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Transfer | ||||||||||||||||||||||||||||
Non-nuclear | Nuclear | Investment | ||||||||||||||||||||||||||
As Reported | Adjustments | Pro Forma | Adjustments | in Subsidiary | Pro Forma | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
UTILITY PLANT: | ||||||||||||||||||||||||||||
In service | $ | 892,826 | $ | (253,637 | ) | a | $ | 639,189 | $ | (287,885 | ) | q | $ | - | $ | 351,304 | ||||||||||||
Less-Accumulated provision for depreciation | 371,569 | (129,881 | ) | b | 241,688 | (116,479 | ) | r | 125,209 | |||||||||||||||||||
521,257 | (123,756 | ) | 397,501 | (171,406 | ) | - | 226,095 | |||||||||||||||||||||
Construction work in progress- | ||||||||||||||||||||||||||||
Electric plant | 122,232 | (86 | ) | c | 122,146 | (119,325 | ) | s | �� | 2,821 | ||||||||||||||||||
Nuclear Fuel | - | - | - | - | ||||||||||||||||||||||||
122,232 | (86 | ) | 122,146 | (119,325 | ) | - | 2,821 | |||||||||||||||||||||
643,489 | (123,842 | ) | 519,647 | (290,731 | ) | - | 228,916 | |||||||||||||||||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||||||||||||||||||||||
Nuclear plant decommissioning trusts | 144,704 | 144,704 | (144,704 | ) | u | - | ||||||||||||||||||||||
Long-term notes receivable from associated companies | 32,795 | 125,047 | d | 157,842 | 162,436 | d | 320,278 | |||||||||||||||||||||
Other | 526 | (240 | ) | e | 286 | 78,410 | v | (78,410 | ) | i | 286 | |||||||||||||||||
178,025 | 124,807 | 302,832 | 96,142 | (78,410 | ) | 320,564 | ||||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||||||||
Cash and cash equivalents | 24 | (23 | ) | f | 1 | 1 | ||||||||||||||||||||||
Notes receivable from associated companies | 448 | 448 | 448 | |||||||||||||||||||||||||
Receivables- | ||||||||||||||||||||||||||||
Customers | 46,545 | 46,545 | 46,545 | |||||||||||||||||||||||||
Associated companies | 10,632 | 10,632 | 10,632 | |||||||||||||||||||||||||
Other | 939 | 939 | 939 | |||||||||||||||||||||||||
Materials and supplies, at average cost | 38,729 | (1,515 | ) | g | 37,214 | (37,214 | ) | w | - | |||||||||||||||||||
Prepayments and other | 17,184 | 17,184 | 17,184 | |||||||||||||||||||||||||
114,501 | (1,538 | ) | 112,963 | (37,214 | ) | - | 75,749 | |||||||||||||||||||||
DEFERRED CHARGES: | ||||||||||||||||||||||||||||
Regulatory assets | - | - | 27,673 | x | 27,673 | |||||||||||||||||||||||
Other | 9,915 | 9,915 | (2,296 | ) | aa | 7,619 | ||||||||||||||||||||||
9,915 | - | 9,915 | 25,377 | - | 35,292 | |||||||||||||||||||||||
$ | 945,930 | $ | (573 | ) | $ | 945,357 | $ | (206,426 | ) | $ | (78,410 | ) | $ | 660,521 | ||||||||||||||
CAPITALIZATION AND LIABILITIES | ||||||||||||||||||||||||||||
CAPITALIZATION: | ||||||||||||||||||||||||||||
Common stockholder's equity- | ||||||||||||||||||||||||||||
Common stock, $30 par value | $ | 188,700 | $ | - | $ | 188,700 | $ | - | $ | - | $ | 188,700 | ||||||||||||||||
Other paid-in capital | 65,035 | 1,655 | j | 66,690 | 66,690 | |||||||||||||||||||||||
Accumulated other comprehensive loss | (13,706 | ) | (13,706 | ) | (13,706 | ) | ||||||||||||||||||||||
Retained earnings | 109,030 | 109,030 | (78,410 | ) | i | 30,620 | ||||||||||||||||||||||
Total common stockholder's equity | 349,059 | 1,655 | 350,714 | - | (78,410 | ) | 272,304 | |||||||||||||||||||||
Preferred stock not subject to mandatory redemption | 14,105 | 14,105 | 14,105 | |||||||||||||||||||||||||
Long-term debt and other long-term obligations | 121,167 | 121,167 | (53,431 | ) | cc | 67,736 | ||||||||||||||||||||||
484,331 | 1,655 | 485,986 | (53,431 | ) | (78,410 | ) | 354,145 | |||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||||||||
Currently payable long-term debt | 25,774 | 25,774 | (10,300 | ) | dd | 15,474 | ||||||||||||||||||||||
Short-term borrowings- | ||||||||||||||||||||||||||||
Associated companies | 25,597 | 25,597 | 44,561 | ff | 70,158 | |||||||||||||||||||||||
Other | 20,000 | 20,000 | 20,000 | |||||||||||||||||||||||||
Accounts payable- | ||||||||||||||||||||||||||||
Associated companies | 25,282 | 25,282 | 25,282 | |||||||||||||||||||||||||
Other | 2,627 | 2,627 | 2,627 | |||||||||||||||||||||||||
Accrued taxes | 26,158 | 26,158 | 26,158 | |||||||||||||||||||||||||
Accrued interest | 1,988 | 1,988 | (845 | ) | gg | 1,143 | ||||||||||||||||||||||
Other | 8,712 | 8,712 | 8,712 | |||||||||||||||||||||||||
136,138 | - | 136,138 | 33,416 | - | 169,554 | |||||||||||||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||||||||||||||||
Accumulated deferred income taxes | 84,400 | 729 | m | 85,129 | (7,024 | ) | ii | 78,105 | ||||||||||||||||||||
Asset retirement obligation | 142,872 | (2,212 | ) | o | 140,660 | (140,660 | ) | kk | - | |||||||||||||||||||
Retirement benefits | 50,697 | 50,697 | 50,697 | |||||||||||||||||||||||||
Regulatory liabilities | 36,888 | 36,888 | (36,888 | ) | bb | - | ||||||||||||||||||||||
Other | 10,604 | (745 | ) | p | 9,859 | (1,839 | ) | ll | 8,020 | |||||||||||||||||||
325,461 | (2,228 | ) | 323,233 | (186,411 | ) | - | 136,822 | |||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||||||||||
$ | 945,930 | $ | (573 | ) | $ | 945,357 | $ | (206,426 | ) | $ | (78,410 | ) | $ | 660,521 | ||||||||||||||
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Forward-Looking Statements: 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 and commodity market prices, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of our regulated utilities to collect transition and other charges, maintenance costs being higher than anticipated, legislative and regulatory changes (including revised environmental requirements), the uncertainty of the timing and amounts of the capital expenditures (including that such amounts could be higher than anticipated) or levels of emission reductions related to the settlement agreement resolving the New Source Review litigation, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits, fines or other enforcement actions and remedies) of government investigations and oversight, including by the Securities and Exchange Commission, the United States Attorney’s Office and the Nuclear Regulatory Commission as disclosed in the registrants’ Securities and Exchange Commission filings, generally, and with respect to the Davis-Besse Nuclear Power Station outage and heightened scrutiny at the Perry Nuclear Power Plant in particular, the availability and cost of capital, the continuing availability and operation of generating units, the ability of generating units to continue to operate at, or near full capacity, the inability to accomplish or realize anticipated benefits of strategic goals (including the proposed transfer of nuclear generation assets), the ability to improve electric commodity margins and to experience growth in the distribution business, any decision of the Pennsylvania Public Utility Commission regarding the plan filed by Penn on October 11, 2005 to secure electricity supply for its customers at a set rate, the ability to access the public securities and other capital markets, the outcome, cost and other effects of present and potential legal and administrative proceedings and claims related to the August 14, 2003 regional power outage, the final outcome in the proceeding related to FirstEnergy's Application for a Rate Stabilization Plan (RSP) in Ohio, specifically, the Public Utilities Commission of Ohio's acceptance of the September 9, 2005 proposed supplement to the RSP, the risks and other factors discussed from time to time in the registrants' Securities and Exchange Commission filings, and other similar factors. Dividends from time to time during any annual period may in aggregate vary from the indicated amounts due to circumstances considered by the Board at the time of the actual declarations. The registrants expressly disclaim any current intention to update any forward-looking statements contained in this document as a result of new information, future events, or otherwise.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
October 24, 2005
FIRSTENERGY CORP. | |
Registrant | |
OHIO EDISON COMPANY | |
Registrant | |
THE CLEVELAND ELECTRIC | |
ILLUMINATING COMPANY | |
Registrant | |
THE TOLEDO EDISON COMPANY | |
Registrant | |
PENNSYLVANIA POWER COMPANY | |
Registrant |
_____ /s/__Harvey L. Wagner______________
Harvey L. Wagner
Vice President, Controller and
Chief Accounting Officer
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