10-K/APeriod: FY2002

FIRSTENERGY CORP Annual Report (Amendment), Year Ended Dec 31, 2002

Filed May 9, 2003For Securities:FE

Summary

This filing is an amendment to FirstEnergy Corp.'s 2002 Form 10-K, primarily addressing revisions to the Consolidated Statement of Income for the year ended December 31, 2002, specifically related to classification changes with no impact on net income or EPS. The company operates electric utility subsidiaries across Ohio, Pennsylvania, and New Jersey, providing generation, transmission, and distribution services. It also engages in other energy-related businesses. Key operational and financial aspects discussed include the company's business segments, divestitures of international operations and generating assets, and extensive details on utility regulation across its service territories. Significant attention is given to the impact of deregulation, transition costs, rate matters before state commissions (PUCO, NJBPU, PPUC), and wholesale rate regulation by FERC. The filing also outlines capital expenditure forecasts, debt maturities, nuclear operations, environmental matters, fuel supply, and competitive landscape. A notable event is the extended outage and subsequent significant costs associated with the Davis-Besse nuclear power plant, along with a substantial charge related to the divestiture of Argentine operations.

Key Highlights

  • 1Amendment primarily involves reclassification in the 2002 income statement, with no impact on net income or EPS.
  • 2FirstEnergy operates electric utilities in Ohio, Pennsylvania, and New Jersey, serving approximately 11.1 million people.
  • 3The company is navigating significant regulatory changes due to electric industry deregulation across its service territories, impacting rate structures and cost recovery mechanisms.
  • 4Significant costs and an extended outage were incurred at the Davis-Besse nuclear power plant due to reactor vessel head degradation, with an expected restart in mid-2003.
  • 5FirstEnergy recorded a substantial charge related to the divestiture of its Argentine operations in April 2003.
  • 6The company has outlined capital expenditure forecasts for 2003-2007 totaling over $3 billion, alongside significant long-term debt and preferred stock maturities.
  • 7Environmental regulations, particularly regarding air quality (SO2, NOx), pose ongoing compliance challenges and potential future costs.

Frequently Asked Questions

This amendment (Amendment No. 1) is primarily to revise certain classifications in the previously reported Consolidated Statement of Income for the year ended December 31, 2002. These revisions, as detailed in Note 2(L) to the financial statements, do not affect the previously reported net income or earnings per share.

FirstEnergy's core business involves its electric utility operating subsidiaries in Ohio (Ohio Edison, Cleveland Electric Illuminating, Toledo Edison, Pennsylvania Power), Pennsylvania (Metropolitan Edison, Pennsylvania Electric), and New Jersey (Jersey Central Power & Light). Additionally, it has other subsidiaries involved in energy solutions (FirstEnergy Solutions Corp.), facilities services, construction (MYR Group), natural gas, and international operations.

Key challenges include the ongoing impact of electric industry deregulation in its service territories, the extensive and costly extended outage at the Davis-Besse nuclear power plant due to reactor head issues, and significant charges associated with the divestiture of its Argentine operations. Environmental compliance and managing fuel supply also represent ongoing operational considerations.

The filing details significant capital expenditure forecasts for 2003-2007 totaling over $3 billion for various infrastructure improvements. It also outlines substantial maturities of long-term debt and preferred stock, totaling nearly $5 billion between 2003 and 2007, and discusses their strategies for meeting these obligations through operating cash flows, existing credit lines, and potential debt issuance.