Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 2002 and Ending December 31, 2002
--------------- ------------------------
TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
FIRSTENERGY SERVICE COMPANY
--------------------------------
(Exact Name of Reporting Company)
A Subsidiary Service Company
-------------------------------------
("Mutual" or "Subsidiary")
Date of Incorporation October 11, 2001
----------------
If not Incorporated, Date of Organization
----------
State or Sovereign Power under which Incorporated or Organized Ohio
----
Location of Principal Executive Offices of Reporting Company:
76 S. Main St., Akron, OH 44308
-------------------------------
Name, title, and address of officer to whom correspondence concerning this
report should be addressed:
300 Madison Avenue
P. R. Chatman Assistant Controller Morristown, NJ 07962
-------------------------------------------------------------------------------
(Name) (Title) (Address)
Name of Principal Holding Company Whose Subsidiaries are served by Reporting
Company:
FIRSTENERGY CORP. (File No. 070-09793)
--------------------------------------
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1
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing. - Rule 94 provides that on or before the first day of
May in each calendar year, each mutual service company and each subsidiary
service company as to which the Commission shall have made a favorable finding
pursuant to Rule 88, and every service company whose application for approval or
declaration pursuant to Rule 88 is pending shall file with the Commission an
annual report on Form U-13-60 and in accordance with the Instructions for that
form.
2. Number of Copies. - Each annual report shall be filed in duplicate.
The company should prepare and retain at least one extra copy for itself in case
correspondence with reference to the report become necessary.
3. Period Covered by Report. - The first report filed by any company
shall cover the period from the date the Uniform System of Accounts was required
to be made effective as to that company under Rules 82 and 93 to the end of that
calendar year. Subsequent reports should cover a calendar year.
4. Report Format. - Reports shall be submitted on the forms prepared by
the Commission. If the space provided on any sheet of such form is inadequate,
additional sheets may be inserted of the same size as a sheet of the form or
folded to such size.
5. Money Amounts Displayed. - All money amounts required to be shown in
financial statements may be expressed in whole dollars, in thousands of dollars
or in hundred thousands of dollars, as appropriate and subject to provisions of
Regulation S-X (S210.3-01(b)).
6. Deficits Displayed. - Deficits and other like entries shall be
indicated by the use of either brackets or a parenthesis with corresponding
reference in footnotes. (Regulation S-X, S210.3-01(c))
7. Major Amendments or Corrections. - Any company desiring to amend or
correct a major omission or error in a report after it has been filed with the
Commission shall submit an amended report including only those pages, schedules,
and entries that are to be amended or corrected. A cover letter shall be
submitted requesting the Commission to incorporate the amended report changes
and shall be signed by a duly authorized officer of the company.
8. Definitions. - Definitions contained in Instruction 01-8 to the
Uniform System of Accounts for Mutual Service Companies and Subsidiary Service
Companies, Public Utility Holding Company Act of 1935, as amended February 2,
1979 shall be applicable to words or terms used specifically within this Form
U-13-60.
9. Organization Chart. - The service company shall submit with each
annual report a copy of its current organization chart.
10. Methods of Allocation. - The service company shall submit with each
annual report a listing of the currently effective methods of allocation being
used by the service company and on file with the Securities and Exchange
Commission pursuant to the Public Utility Holding Company Act of 1935.
11. Annual Statement of Compensation for Use of Capital Billed. - The
service company shall submit with each annual report a copy of the annual
statement supplied to each associate company in support of the amount of
compensation for use of capital billed during the calendar year.
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2
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LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS Page
--------------------------------------------- Number
--------------------------------------------------------------------------------------------------------------
Description of Schedules and Accounts Schedule or Account
Number
--------------------------------------------------------------------------------------------------------------
COMPARATIVE BALANCE SHEET Schedule I 4-5
-------------------------
SERVICE COMPANY PROPERTY Schedule II 6-7
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY Schedule III 8
INVESTMENTS Schedule IV 9
ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES Schedule V 10-10A
FUEL STOCK EXPENSES UNDISTRIBUTED Schedule VI 11
STORES EXPENSE UNDISTRIBUTED Schedule VII 12
MISCELLANEOUS CURRENT AND ACCRUED ASSETS Schedule VIII 13
MISCELLANEOUS DEFERRED DEBITS Schedule IX 14
RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES Schedule X 15
PROPRIETARY CAPITAL Schedule XI 16
LONG-TERM DEBT Schedule XII 17
CURRENT AND ACCRUED LIABILITIES Schedule XIII 18-18A
NOTES TO FINANCIAL STATEMENTS Schedule XIV 19
COMPARATIVE INCOME STATEMENT Schedule XV 20
----------------------------
ANALYSIS OF BILLING - ASSOCIATE COMPANIES Account 457 21
ANALYSIS OF BILLING - NONASSOCIATE COMPANIES Account 458 22
ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE
AND NONASSOCIATE COMPANIES Schedule XVI 23
SCHEDULE OF EXPENSE BY DEPARTMENT OR
SERVICE FUNCTION Schedule XVII 24-25
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 26
OUTSIDE SERVICES EMPLOYED Account 923 27-27D
EMPLOYEE PENSIONS AND BENEFITS Account 926 28
GENERAL ADVERTISING EXPENSES Account 930.1 29-29A
MISCELLANEOUS GENERAL EXPENSES Account 930.2 30
RENTS Account 931 31
TAXES OTHER THAN INCOME TAXES Account 408 32
DONATIONS Account 426.1 33-33A
OTHER DEDUCTIONS Account 426.5 34
NOTES TO STATEMENT OF INCOME Schedule XVIII 35
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3
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LISTING OF INSTRUCTIONAL FILING REQUIREMENTS Page
-------------------------------------------- Number
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Description of Reports or Statements
ORGANIZATION CHART 36
------------------
METHODS OF ALLOCATION 37
---------------------
ANNUAL STATEMENT OF COMPENSATION FOR USE 38
----------------------------------------
OF CAPITAL BILLED
-----------------
NOTE: Dollar figures in this report are shown in thousands unless otherwise
noted.
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4
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
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SCHEDULE I - COMPARATIVE BALANCE SHEET
--------------------------------------
Give balance sheet of the Company as of December 31 of the current and prior
year.
--------------------------------------------------------------------------------------------------------------
ACCOUNT ASSETS AND OTHER DEBITS As of December 31
------- ------------------------ --------------------------
CURRENT PRIOR
----------- --------
SERVICE COMPANY PROPERTY
101 Service Company property (Schedule II) $ 207,739 $ 207,348
107 Construction work in progress (Schedule II) 115,050 28,989
-------- --------
Total Property 322,789 236,337
108 Less accumulated provision for depreciation
and amortization of service company
property (Schedule III) 92,077 66,810
-------- -------
Net Service Company Property 230,712 169,527
-------- -------
INVESTMENTS
123 Investments in associate companies (Schedule IV) - -
124 Other investments (Schedule IV) 275,093 289,775
-------- -------
Total Investments 275,093 289,775
-------- -------
CURRENT AND ACCRUED ASSETS
131 Cash (320,577) (351,990)
134 Special deposits - -
135 Working funds 203 185
136 Temporary cash investments (Schedule IV) 5,790 11,965
141 Notes receivable from associate companies 204 -
143 Accounts Receivable 12,987 15,228
144 Accumulated Provision For Uncollectible (797) (504)
Accounts receivable
146 Accounts receivable from associate
companies (Schedule V) 552,400 682,792
152 Fuel stock expenses undistributed (Schedule VI) - (20)
154 Materials and supplies - 117
163 Stores expenses undistributed (Schedule VII) - -
165 Prepayments 10,588 10,811
171 Interest Receivable 1,206 807
174 Miscellaneous current and accrued assets
(Schedule VIII) - -
------- -------
Total Current and Accrued Assets 262,004 369,391
------- -------
DEFERRED DEBITS
181 Umamortized debt expense - -
184 Clearing accounts 224 197
186 Miscellaneous deferred debits (Schedule IX) 43,244 23,012
188 Research, development, or demonstration
expenditures (Schedule X) - -
190 Accumulated deferred income taxes - -
------- -------
Total Deferred Debits 43,468 23,209
------- -------
TOTAL ASSETS AND OTHER DEBITS $811,277 $851,902
======= =======
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5
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
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SCHEDULE I - COMPARATIVE BALANCE SHEET
--------------------------------------------------------------------------------------------------------------
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL As of December 31
------- ----------------------------------- ---------------------
CURRENT PRIOR
------- -----
PROPRIETARY CAPITAL
-------------------
201 Common stock issued (Schedule XI) $ 1 $ 1
211 Miscellaneous paid-in-capital (Schedule XI) 10,515 28,815
215 Retained earnings / Accumulated other
comprehensive income /(loss) (Schedule XI) - -
216 Unappropriated retained earnings (Schedule XI) 2,595 2,595
------ ------
Total Proprietary Capital 13,111 31,411
------ ------
LONG-TERM DEBT
--------------
223 Advances from associate companies (Schedule XII) - -
224 Other long-term debt (Schedule XII) 36,297 33,865
225 Unamortized premium on long-term debt - -
226 Unamortized discount on long-term debt-debit - -
------ ------
Total Long-term Debt 36,297 33,865
------ ------
CURRENT AND ACCRUED LIABILITIES
-------------------------------
231 Notes payable - -
232 Accounts payable 45,782 35,498
233 Notes payable to associate
companies (Schedule XIII) 88,769 50,972
234 Accounts payable to associate
companies (Schedule XIII) 479,273 603,791
236 Taxes accrued (62,158) (51,657)
237 Interest accrued 629 376
238 Dividends declared - -
241 Tax collections payable (995) 70
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 17,503 25,400
------- -------
Total Current and Accrued Liabilities 568,803 664,450
------- -------
DEFERRED CREDITS
----------------
253 Other deferred credits 228,059 92,979
255 Accumulated deferred investment tax credit - -
------- -------
Total Deferred Credits 228,059 92,979
------- -------
282 ACCUMULATED DEFERRED INCOME TAXES (34,993) 29,197
------- -------
TOTAL LIABILITIES AND PROPRIETARY $811,277 $851,902
======= =======
CAPITAL
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6
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
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SCHEDULE II - SERVICE COMPANY PROPERTY
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BALANCE AT RETIREMENTS OTHER BALANCE AT
BEGINNING ADDITIONS OR CHANGES 1/ CLOSE OF
DESCRIPTION OF YEAR SALES - YEAR
--------------------------------------------------------------------------------------------------------------
SERVICE COMPANY PROPERTY
------------------------
Account
-------
301 ORGANIZATION $ - $ - $ - $ - $ -
303 MISCELLANEOUS
INTANGIBLE PLANT 65,481 8,658 (5) - 74,134
304 LAND & LAND RIGHT 686 - - - 686
305 STRUCTURES AND
IMPROVEMENTS 18,243 61 (29) - 18,275
306 LEASEHOLD
IMPROVEMENTS - - - - -
307 EQUIPMENT 2/ 41,548 83 (951) (2) 40,678
-
308 OFFICE FURNITURE
AND EQUIPMENT 81,390 1,508 (7,272) (1,660) 73,966
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT - 1,875 (1,875) - -
310 AIRCRAFT AND
AIRPORT EQUIPMENT - - - - -
311 OTHER SERVICE
COMPANY PROPERTY 3/ - - - - -
- ------------------------------------------------------------------------
SUB-TOTAL 207,348 12,185 (10,132) (1,662) 207,739
------------------------------------------------------------------------
107 CONSTRUCTION WORK
IN PROGRESS 4/ 28,989 89,402 - (3,341) 115,050
-
------------------------------------------------------------------------------------------------------------
TOTAL $236,337 $101,587 $(10,132) $ 5,003) $322,789
========================================================================
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7
SCHEDULE II - CONTINUED
--------------------------------------------------------------------------------------------------------------
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
-
N/A
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2/ SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE SERVICE
- COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS DURING
THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:
BALANCE AT
SUBACCOUNT DESCRIPTION ADDITIONS CLOSE OF
YEAR
COMMUNICATIONS EQUIPMENT (MICROWAVE & TELEPHONE) $ 83 $40,678
------ ------
TOTAL $ 83 $40,678
====== ======
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3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
-
N/A
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4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
-
GENERAL BUILDING
SAP SYSTEM
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8
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
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SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
--------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED OTHER CHANGES CLOSE OF
DESCRIPTION OF YEAR TO RETIREMENTS ADD (DEDUCT)1/ YEAR
ACCOUNT 403 -
--------------------------------------------------------------------------------------------------------------
Account
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE PLANT 26,924 23,354 (5) 66 50,339
304 LAND& LAND RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS 5,097 389 (29) (77) 5,380
306 LEASEHOLD
IMPROVEMENTS - - - - -
307 EQUIPMENT 21,368 2,443 (951) (252) 22,608
308 OFFICE FURNITURE
AND FIXTURES 13,421 7,944 (7,272) (343) 13,750
309 AUTOMOBILES, OTHER - - (1,875) 1,875 -
VEHICLE AND RELATED
GARAGE EQUIPMENT
310 AIRCRAFT AND
AIRPORT EQUIPMENT - - - - -
311 OTHER SERVICE
COMPANY PROPERTY - - - - -
--------------------------------------------------------------------------
$66,810 $34,130 $(10,132) $1,269 $92,077
==========================================================================
--------------------------------------------------------------------------------------------------------------
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
-
N/A
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9
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
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SCHEDULE IV - INVESTMENTS
--------------------------------------------------------------------------------
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124, "Other Investments", state each
investment separately, with description, including, the
name of issuing company, number of shares or principal
amount, etc.
Under Account 136, "Temporary Cash Investments", list
each investment separately.
--------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
--------------------------------------------------------------------------------
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES
NONE
ACCOUNT 124 - OTHER INVESTMENTS
INVESTMENTS HELD IN TRUST - DEFERRED
COMPENSATION PLAN $174,940 $196,816
EMPLOYEE STOCK OPTION PLAN 97,227 78,277
PENSIONS 17,608 -
------- -------
TOTAL $289,775 $275,093
======= =======
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
BANK CERTIFICATE OF DEPOSIT $11,865 $ 5,690
SHORE BANK CD 100 100
------ -------
TOTAL $11,965 $ 5,790
====== =======
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10
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
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SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
--------------------------------------------------------------------------------
INSTRUCTIONS: Complete the following schedule listing accounts
receivable from each associate company. Where the service
company has provided accommodation or convenience payments
for associate companies, a separate listing of total
payments for each associate company by subaccount should
be provided.
--------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
--------------------------------------------------------------------------------
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES
ADVANCED TECHNOLOGIES DEVELOPMENT CORP. $ 448 $ 187
AMERICAN TRANSMISSION SYST - 7,010
BAY SHORE POWER COMPANY 30 -
CENTERIOR ENERGY SERVICES, INC. 35 148
CLEVELAND ELECTRIC ILLIUMINATING COMPAN 2,151 18,230
FELHC, INC. 23 -
FIBER VENTURE EQUITY, INC. 9 2
FIRSTENERGY CORP. 637,915 439,651
FIRSTENERGY FACILITIES SERVICES GROUP, LLC 199 -
FIRSTENERGY GENERATION CORP. 13,105 11,764
FIRSTENERGY NUCLEAR OPERATING CO 7,113 23,460
FIRSTENERGY PROPERTIES, INC. 419 68
FIRSTENERGY SOLUTIONS CORP. 8,077 8,501
FIRSTENERGY TELECOMMUNICATIONS CORP. 519 715
FIRSTENERGY VENTURES CORP. 152 373
GPU SERVICE, INC. - 10,706
GPU TELCOM SERVICES, INC. - 5,910
MARBEL ENERGY CORP. 10,648 105
PENN POWER ENERGY, INC. 2 -
PENNYSYLVANIA POWER COMPANY - 1,591
TOLEDO EDISON COMPANY 1,929 23,920
WARRENTON RIVER TERMINAL, LTD. 18 59
------- -------
TOTAL $682,792 $552,400
======= =======
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10A
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
--------------------------------------------------------------------------------
INSTRUCTIONS: Complete the following schedule listing accounts receivable from
each associate company. Where the service company has provided
accommodation or convenience payments for associate companies, a
separate listing of total payments for each associate company by
subaccount should be provided.
--------------------------------------------------------------------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: TOTAL
PAYMENTS
--------
ADVANCED TECHNOLOGIES DEVELOPMENT CORP. $ 5,892
AMERICAN TRANSMISSION SYSTEMS, INC. 176,671
BAY SHORE POWER COMPANY 431
CENTERIOR ENERGY SERVICES, INC. 26,944
CENTERIOR FUNDING CORP. 1,217
CLEVELAND ELECTRIC ILLIUMINATING COMPANY 2,109,993
FELHC, INC. 29
FIBER VENTURE EQUITY, INC. 5,217
FIRSTENERGY CORP. 1,058,631
FIRSTENERGY FACILITIES SERVICES GROUP, LLC 15,830
FIRSTENERGY GENERATION CORP. 1,540,094
FIRSTENERGY NUCLEAR OPERATING CO. 793,131
FIRSTENERGY PROPERTIES, INC. 3,178
FIRSTENERGY SOLUTIONS CORP. 3,316,764
FIRSTENERGY TELECOMMUNICATIONS CORP. 257
FIRSTENERGY VENTURES CORP. 474
GPU ADVANCED RESOURCES, INC. 614
GPU TELCOM SERVICES, INC. 47,053
OHIO EDISON COMPANY 2,560,949
PENN POWER ENERGY, INC. 2
PENNSYLVANIA POWER COMPANY 556,673
OES CAPITAL, INC. 115,940
OES FINANCE, INC. 403
OES FUEL, INC. 157,908
OES NUCLEAR, INC. 15,182
OES VENTURES, INC. 257
TOLEDO EDISON CAPITAL CORP. 14
TOLEDO EDISON COMPANY 1,317,596
WARRENTON RIVER TERMINAL, LTD 1,864
----------
TOTAL PAYMENTS $13,829,208
==========
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11
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
--------------------------------------------------------------------------------
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
fuel stock expenses during the year and indicate amount
attributable to each associate company. Under the section headed
"Summary" listed below give an overall report of the fuel
functions performed by the service company.
--------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
--------------------------------------------------------------------------------
ACCOUNT 152 -FUEL STOCK EXPENSES UNDISTRIBUTED
NONE
----- ----- ----
TOTAL $ - $ - $ -
===== ===== ====
SUMMARY:
--------------------------------------------------------------------------------
12
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
--------------------------------------------------------------------------------
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
stores expense during the year and indicate amount attributable
to each associate company.
--------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
--------------------------------------------------------------------------------
ACCOUNT 163 - STORES EXPENSE UNDISTRIBUTED
NONE
----- ----- ------
TOTAL $ - $ - $ -
===== ===== ======
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13
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped, showing the number of items in each group.
--------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
--------------------------------------------------------------------------------
ACCOUNT 174 - MISCELLANEOUS CURRENT AND ACCRUED
ASSETS
NONE
------ ------
TOTAL $ - $ -
====== ======
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14
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE IX - MISCELLANEOUS DEFERRED DEBITS
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped by class showing the number of items in each
class.
--------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
--------------------------------------------------------------------------------
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
EXECUTIVE DEFERRED COMPENSATION PLAN $ 9,943 $23,426
QUALIFIED PENSION PLAN - 9,942
RESTRICTED STOCK AWARDS 3,673 3,127
SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM 2,984 2,494
DISTRIBUTED OVERHEADS 904 1,424
OTHER DEFERRED DEBITS 851 1,027
DEFERRED EXPENSES FROM SALE OF ASSETS 168 855
ACQUISITION COSTS - NEW COMPANIES 4,691 532
NEW VENTURE DEVELOPMENT (413) (388)
CONTRACT WORK & ENGINEERING (31) 285
MAINTENANCE ACTIVITIES & VEHICLES 201 206
SYSTEM CAPACITY DESIGN - 164
MANAGEMENT ACTIVITIES 1 51
TECHNICAL SUPPORT - 48
COMMUNICATION SERVICES 2 13
OTHER (19 under $10,000) 38 38
------ -------
TOTAL $23,012 $43,244
====== =======
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15
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE X
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide a description of each material research, development, or
demonstration project, which incurred costs by the service
corporation during the year.
--------------------------------------------------------------------------------
DESCRIPTION AMOUNT
-------------------------------------------------------------------------------
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES
PROGRAMS FUNDED WITHIN ELECTRIC POWER RESEARCH INSTITUTE (EPRI):
- FUNDAMENTAL DISTRIBUTED RESOURCES TECHNOLOGY ASSESSMENTS $44
- DISTRIBUTED RESOURCES PREMIUM POWER SOLUTIONS 67
- MICROTURBINES AND MINI-STORAGE 80
- FUEL CELLS 80
- DISTRIBUTED RESOURCES INTERCONNECTION HARDWARE 53
- DISTRIBUTED RESOURCES DEPLOYMENT 44
- DISTRIBUTED RESOURCES IN ELECTRIC DISTRIBUTION SYSTEMS 44
- OTHER DISTRIBUTED RESOURCES PROJECTS 49
MICROTURBINE DEMONSTRATION PROJECT & DEVELOPMENT OF NEW STORAGE
TECHNOLOGY (CO-FUNDED WITH EPRI) 17
MICROTURBINE DEVELOPMENT / DEMONSTRATION PROJECTS FOR USE AT
FIRSTENERGY FACILITY SITES 45
BILLED TO OPERATING COMPANIES (523)
-----
TOTAL $ -
=====
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16
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
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SCHEDULE XI - PROPRIETARY CAPITAL
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD
ACCOUNT NUMBER CLASS OF STOCK SHARES VALUE ------------------------------
AUTHORIZED PER SHARE NO. OF SHARES TOTAL AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
201 COMMON STOCK ISSUED 850 $ 0* 1 $ 1,000*
------
TOTAL $ 1,000*
======
INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the general nature of transactions
which gave rise to the reported amounts.
------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL
EXECUTIVE DEFERRED COMPENSATION PLAN (6,095)
EMPLOYEE STOCK OPTION PLAN 45,527
EQUITY COMPENSATION PLAN (19,744)
QUALIFIED PENSION PLAN (47,238)
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (2,473)
TAXES 40,538
-------
TOTAL $ 10,515
=======
ACCOUNT 215 - RETAINED EARNINGS /ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS): NONE
INSTRUCTIONS: Give particulars concerning net income or (loss) during the year, distinguishing between compensation for the
use of capital owed or net loss remaining from servicing nonassociates per the General Instructions of the
Uniform System of Accounts. For dividends paid during the year in cash or otherwise, provide rate
percentage, amount of dividend, date declared and date paid.
------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT NET INCOME BALANCE AT
D E S C R I P T I O N BEGINNING OR DIVIDENDS CLOSE OF
OF YEAR (LOSS) PAID YEAR
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT 216 - UNAPPROPRIATED RETAINED EARNINGS 2,595 - - 2,595
NONE
----- ----- ----- -----
TOTAL $2,595 $ - $ - $2,595
===== ===== ===== =====
* In whole dollars.
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17
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ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XII- LONG-TERM DEBT
------------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and advances on open
account. Names of associate companies from which advances were received shall be shown under the class and series
of obligation column. For Account 224 - Other long term debt provide the name of creditor company or
organization, terms of the obligation, date of maturity, interest rate, and the amount authorized and
outstanding.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TERMS OF OBLIG DATE BALANCE AT BALANCE AT
NAME OF CREDITOR CLASS & SERIES OF INTEREST AMOUNT BEGINNING 1/ CLOSE
OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS DEDUCTIONS- OF YEAR
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT 223 - ADVANCES FROM ASSOCIATE
COMPANIES:
NONE
------------------------------------------------------------------------------------------------------------------------------------
ACCOUNT 224 - OTHER LONG-TERM DEBT:
EMPLOYEE DEFERRED COMPENSATION PROGRAM $26,676 $1,755 - $28,431
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 7,189 677 - 7,866
------ ------ ------
TOTAL $33,865 $2,432 $36,297
====== ===== ======
------------------------------------------------------------------------------------------------------------------------------------
1/ GIVE AN EXPLANATION OF DEDUCTIONS:
NONE
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18
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current and
accrued liabilities. Items less than $10,000 may be grouped,
showing the number of items in each group.
--------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR OF YEAR
--------------------------------------------------------------------------------
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
FIRSTENERGY CORP. $ - $34,271
FIRSTENERGY NUCLEAR OPERATING CO. 1,985 8,650
FIRSTENERGY PROPERTIES, INC. 23,932 24,420
FIRSTENERGY VENTURES CORP. 25,055 21,428
------ ------
TOTAL $50,972 $88,769
====== ======
--------------------------------------------------------------------------------
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
AMERICAN TRANSMISSION SYSTEMS, INC. $ 7,038 $ -
CENTERIOR FUNDING CORP. - 571
FELHC, INC. - 73
FIRSTENERGY FACILITIES SERVICES GROUP, LLC - 787
GPU SERVICE, INC. 593 -
OHIO EDISON COMPANY 594,442 477,816
PENNSYLVANIA POWER COMPANY 1,678 -
TOLEDO EDISON CAPITAL CORP. 40 26
------- -------
TOTAL $603,791 $479,273
======= =======
--------------------------------------------------------------------------------
18A
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current and
accrued liabilities. Items less than $10,000 may be grouped,
showing the number of items in each group.
--------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
--------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED
LIABILITIES
DISTRIBUTED PAYROLL ACCRUAL $ 2 $ -
FIRSTENERGY STOCK OPTIONS 9 -
MSG CUSTOMER DEPOSITS 250 250
OTHER CURRENT LIABILITIES 9,198 (586)
PAYROLL DEDUCTIONS (31) (189)
PROVISION FOR ESTIMATED COST OF VACATION 5,972 18,030
TELECOM-ADVANCED BILLING AND PAYMENT - (2)
------ ------
TOTAL $25,400 $17,503
====== ======
--------------------------------------------------------------------------------
19
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
--------------------------------------------------------------------------------
On November 7, 2001, FirstEnergy Corp. (FirstEnergy), merged with GPU,
Inc., a registered holding company under the Public Utility Holding Company Act
of 1935 (the 1935 Act). FirstEnergy is the surviving company in the merger. On
November 7, 2001, upon completion of the merger, FirstEnergy filed with the SEC
a Notification of Registration on Form U-5A, thereby registering as a holding
company pursuant to the provisions of Section 5(a) under the 1935 Act.
As part of the Merger Order, FirstEnergy was granted interim approval to
provide services to all its affiliates after the Merger under FirstEnergy
Service Company. The Merger Order further required a separate application
seeking authorization to consolidate the functions performed by FirstEnergy
Service Company and GPU Service Company. On October 15, 2002, FirstEnergy filed
with the SEC requesting authorization to consolidate all common corporate
services under FirstEnergy Service Company, not later than June 1, 2003. Full
compliance by FirstEnergy Service Company under section 13 of the Act and the
rules under the Act will be required upon consolidation.
--------------------------------------------------------------------------------
20
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE XV
STATEMENT OF INCOME
--------------------------------------------------------------------------------
ACCOUNT DESCRIPTION CURRENT YEAR PRIOR YEAR
--------------------------------------------------------------------------------
INCOME
------
457 Services rendered to associate companies $665,800 -
458 Services rendered to nonassociate
companies - -
421 Miscellaneous income or loss 1,942 -
------- -------
Total Income $667,742 -
------- -------
EXPENSE
-------
920 Salaries and wages 128,585 -
921 Office supplies and expenses 240,178 -
922 Administrative expense transferred -
credit - -
923 Outside services employed 32,106 -
924 Property insurance 408 -
925 Injuries and damages 2,043 -
926 Employee pensions and benefits 178,371 -
928 Regulatory commission expense 2,728 -
930.1 General advertising expenses 1,634 -
930.2 Miscellaneous general expenses 13,193 -
931 Rents 8,801 -
932 Maintenance of structures and equipment - -
403 Depreciation and amortization expense 34,154 -
408 Taxes other than income taxes 11,370 -
409 Income taxes (3,726) -
410 Provision for deferred income taxes (2,402) -
411 Provision for deferred income taxes -
credit - -
411.5 Investment tax credit - -
426.1 Donations 2,627 -
426.5 Other deductions 9,862 -
427 Interest on long-term debt 2,783 -
430 Interest on debt to associate companies 2,391 -
431 Other interest expense 2,636 -
------- -------
Total Expense $667,742 -
------- -------
Net Income or (Loss) $ - $ -
======= =======
--------------------------------------------------------------------------------
21
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
---------------------------------------------------------------------------------------------------------
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
---------------------------------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
------- ------- ----------
457-1 457-2 457-3
---------------------------------------------------------------------------------------------------------
ADVANCED TECHNOLOGIES DEVELOPMENT CORP. $ - $ 1,886 $ - $ 1,886
AMERICAN TRANSMISSION SYSTEMS, INC. 3,131 16,499 - 19,630
BAY SHORE POWER COMPANY - 575 - 575
CLEVELAND ELECTRIC ILLUMINATING COMPANY 57 74,025 - 74,082
FIBER VENTURE EQUITY, INC. - 266 - 266
FIRSTENERGY CORP. 44,483 40,837 - 85,320
FIRSTENERGY FACILITIES SERVICES GROUP, LLC - 1,886 - 1,886
FIRSTENERGY GENERATION CORP. 160 60,290 - 60,450
FIRSTENERGY NUCLEAR OPERATING CO. 688 92,323 - 93,011
FIRSTENERGY PROPERTIES, INC. - 835 - 835
FIRSTENERGY SOLUTIONS CORP. 60 65,602 - 65,662
FIRSTENERGY TELECOMMUNICATIONS CORP. - 379 - 379
FIRSTENERGY VENTURES CORP. - 681 - 681
GPU DIVERSIFIED HOLDINGS, LLC - 10 - 10
GPU POWER, INC. - 38 - 38
GPU SERVICE, INC. - 24,630 - 24,630
GPU TELCOM SERVICES, INC. - 21,145 - 21,145
MARBEL ENERGY CORP. - 844 - 844
MYR GROUP, INC. - 28 - 28
OHIO EDISON COMPANY 220 165,748 - 165,968
PENN POWER ENERGY, INC. - (9) - (9)
PENNSYLVANIA POWER COMPANY 7 11,922 - 11,929
TOLEDO EDISON COMPANY 68 36,448 - 36,516
WARRENTON RIVER TERMINAL, LTD. - 38 - 38
------ ------- ---- -------
TOTAL $48,874 $616,926 $ - $665,800
====== ======= ==== =======
---------------------------------------------------------------------------------------------------------
22
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
---------------------------------------------------------------------------------------------------------
ANALYSIS OF BILLING
-------------------
NONASSOCIATE COMPANIES
ACCOUNT 458
---------------------------------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION EXCESS
COSTS COSTS FOR USE OR
NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL DEFICIENCY TOTAL
------- ------- ---------- TOTAL --------- AMOUNT
458-1 458-2 458-3 COST 458-4 BILLED
---------------------------------------------------------------------------------------------------------
NONE
----- --- --- ----- ----- -----
TOTAL $ - $ - $ - $ - $ - $ -
===== === === ===== ===== =====
---------------------------------------------------------------------------------------------------------
INSTRUCTION: Provide a brief description of the services rendered to each nonassociated company:
N/A
---------------------------------------------------------------------------------------------------------
23
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
-----------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
-----------------------------------------------------------------------------------------------------------------------------
ASSOCIATE COMPANY CHARGES NONASSOCIATE COMPANY CHARGES
------------------------- ----------------------------
DIRECT INDIRECT DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL
-----------------------------------------------------------------------------------------------------------------------------
920 SALARIES AND WAGES $ 39,063 $ 89,522 $128,585 - - -
921 OFFICE SUPPLIES & EXPENSES 18 240,160 240,178 - - -
922 ADMINISTRATIVE EXPENSE TRANSFERRED - - - -
CREDIT
923 OUTSIDE SERVICES EMPLOYED 32,106 32,106 - - -
924 PROPERTY INSURANCE 408 408 - - -
925 INJURIES AND DAMAGES 2,043 2,043 - - -
926 EMPLOYEE PENSIONS AND BENEFITS 178,371 178,371 - - -
928 REGULATORY COMMISSION EXPENSE 2,728 2,728 - - -
930.1 GENERAL ADVERTISING EXPENSES 1,634 1,634 - - -
930.2 MISCELLANEOUS GENERAL EXPENSES 13,193 13,193 - - -
931 RENTS 8,801 8,801 - - -
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT - - -
403 DEPRECIATION AND AMORTIZATION EXPENSE 34,154 34,154 - - -
408 TAXES OTHER THAN INCOME TAXES 11,370 11,370 - - -
409 INCOME TAXES (3,726) (3,726) - - -
410 PROVISION FOR DEFERRED INCOME TAXES (2,402) (2,402) - - -
411 PROVISION FOR DEFERRED INCOME TAXES - - - -
CREDIT
426.1 DONATIONS 2,627 2,627 - - -
426.5 OTHER DEDUCTIONS 9,862 9,862 - - -
427 INTEREST ON LONG-TERM DEBT 2,783 2,783 - - -
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 2,391 2,391 - - -
431 OTHER INTEREST EXPENSE 2,636 2,636 - - -
-----------------------------------------------------------------------------------------------------------------------------
INSTRUCTION: Total cost of service will equal
for associate and nonassociate
companies the total amount billed
under their separate analysis of
billing schedules.
-----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 48,874 618,868 667,742 - - -
--------------------------------------------------------------------
COMPENSATION FOR USE OF EQUITY CAPITAL
430 INTEREST ON DEBT TO ASSOC CO - - - - - -
--------------------------------------------------------------------
TOTAL COST OF SERVICE $ 48,874 $618,868 $667,742 - - -
====================================================================
--------------------------------------------------------------------------------------------
TOTAL CHARGES FOR SERVICE
-------------------------
DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL
--------------------------------------------------------------------------------------------
920 SALARIES AND WAGES $ 39,063 $ 89,522 $128,585
921 OFFICE SUPPLIES & EXPENSES 18 240,160 240,178
922 ADMINISTRATIVE EXPENSE TRANSFERRED -
CREDIT
923 OUTSIDE SERVICES EMPLOYED 32,106 32,106
924 PROPERTY INSURANCE 408 408
925 INJURIES AND DAMAGES 2,043 2,043
926 EMPLOYEE PENSIONS AND BENEFITS 178,371 178,371
928 REGULATORY COMMISSION EXPENSE 2,728 2,728
930.1 GENERAL ADVERTISING EXPENSES 1,634 1,634
930.2 MISCELLANEOUS GENERAL EXPENSES 13,193 13,193
931 RENTS 8,801 8,801
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT
403 DEPRECIATION AND AMORTIZATION EXPENSE 34,154 34,154
408 TAXES OTHER THAN INCOME TAXES 11,370 11,370
409 INCOME TAXES (3,726) (3,726)
410 PROVISION FOR DEFERRED INCOME TAXES (2,402) (2,402)
411 PROVISION FOR DEFERRED INCOME TAXES -
CREDIT
426.1 DONATIONS 2,627 2,627
426.5 OTHER DEDUCTIONS 9,862 9,862
427 INTEREST ON LONG-TERM DEBT 2,783 2,783
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 2,391 2,391
431 OTHER INTEREST EXPENSE 2,636 2,636
--------------------------------------------------------------------------------------------
INSTRUCTION: Total cost of service will equal
for associate and nonassociate
companies the total amount billed
under their separate analysis of
billing schedules.
--------------------------------------------------------------------------------------------
TOTAL EXPENSES 48,874 618,868 667,742
-------------------------------------
COMPENSATION FOR USE OF EQUITY CAPITAL
430 INTEREST ON DEBT TO ASSOC CO - - -
-------------------------------------
TOTAL COST OF SERVICE $ 48,874 $618,868 $667,742
=====================================
24
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
-----------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVII
-------------
SCHEDULE OF EXPENSE DISTRIBITION
BY
DEPARTMENT OR SERVICE FUNCTION
-----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
-------------------------------------------------------------------
ENERGY
DELIVERY &
BUSINESS CUSTOMER FIRSTENERGY
DESCRIPTION OF ITEMS CEO & COO DEVELOPMENT SERVICE TECHNOLOGIES
-----------------------------------------------------------------------------------------------------------------------------------
920 SALARIES AND WAGES $ 2,394 $ 1,165 $ 43,747 $ 661
921 OFFICE SUPPLIES AND EXPENSES 28,862 1,011 84,374 607
922 ADMINISTRATIVE EXPENSE TRANSFERRED -
CREDIT
923 OUTSIDE SERVICES EMPLOYED 513 10
924 PROPERTY INSURANCE 97
925 INJURIES AND DAMAGES (1) 31
926 EMPLOYEE PENSIONS AND BENEFITS (135) (15) 188 2
928 REGULATORY COMMISSION EXPENSE 2 1 1,157 1
930.1 GENERAL ADVERTISING EXPENSES
930.2 MISCELLANEOUS GENERAL EXPENSES 11 6 588 339
931 RENTS
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT
403 DEPRECIATION AND AMORTIZATION EXPENSE 1
408 TAXES OTHER THAN INCOME TAXES 2 (6) 38 1
409 INCOME TAXES
410 PROVISION FOR DEFERRED INCOME TAXES
411 PROVISION FOR DEFERRED INCOME TAXES -
CREDIT
426.1 DONATIONS
426.5 OTHER DEDUCTIONS 38 4 56 2
427 INTEREST ON LONG-TERM DEBT
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 9
431 OTHER INTEREST EXPENSE (34) (17) (735) (11)
INSTRUCTION: Indicate each department or service function. (See
Instruction 01-3 General Structure of Account System:
Uniform System Account)
-------------------------------------------------------------------
TOTAL EXPENSES $ 31,749 $ 2,149 $ 129,464 $ 1,602
===================================================================
-----------------------------------------------------------------------------------------------
DEPARTMENT OF SERVICE FUNCTION
------------------------------
FEDERAL
GOVERNMENTAL
DESCRIPTION OF ITEMS AFFAIRS FINANCE
-----------------------------------------------------------------------------------------------
920 SALARIES AND WAGES $ 61 $16,356
921 OFFICE SUPPLIES AND EXPENSES 188 12,448
922 ADMINISTRATIVE EXPENSE TRANSFERRED -
CREDIT
923 OUTSIDE SERVICES EMPLOYED 717 2,278
924 PROPERTY INSURANCE 311
925 INJURIES AND DAMAGES (2,771)
926 EMPLOYEE PENSIONS AND BENEFITS 1 200
928 REGULATORY COMMISSION EXPENSE 17
930.1 GENERAL ADVERTISING EXPENSES
930.2 MISCELLANEOUS GENERAL EXPENSES 1 377
931 RENTS
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT
403 DEPRECIATION AND AMORTIZATION EXPENSE 34,153
408 TAXES OTHER THAN INCOME TAXES 11,270
409 INCOME TAXES (3,726)
410 PROVISION FOR DEFERRED INCOME TAXES (2,402)
411 PROVISION FOR DEFERRED INCOME TAXES -
CREDIT
426.1 DONATIONS
426.5 OTHER DEDUCTIONS 1,221 18,704
427 INTEREST ON LONG-TERM DEBT
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 2,365
431 OTHER INTEREST EXPENSE (4) (238)
INSTRUCTION: Indicate each department or service function. (See
Instruction 01-3 General Structure of Account System:
Uniform System Account)
-------------------------
TOTAL EXPENSES $ 2,185 $89,342
=========================
-----------------------------------------------------------------------------------------------
25
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------------------------------------------------------
SCHEDULE XVII
-------------
SCHEDULE OF EXPENSE DISTRIBITION
BY
DEPARTMENT OR SERVICE FUNCTION
--------------------------------------------------------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
----------------------------------------------------------------
HR, COMM,
CORP AFFAIRS, INFORMATION
COMMUNITY, SERVICES SUPPLY
DESCRIPTION OF ITEMS ADMIN SVCS DEPARTMENT LEGAL CHAIN
--------------------------------------------------------------------------------------------------------------------------------
920 SALARIES AND WAGES $ 23,136 $ 29,648 $ 2,103 $ 8,348
921 OFFICE SUPPLIES AND EXPENSES 32,804 63,860 1,921 10,332
922 ADMINISTRATIVE EXPENSE TRANSFERRED -
CREDIT
923 OUTSIDE SERVICES EMPLOYED 6 10 27,450 3
924 PROPERTY INSURANCE
925 INJURIES AND DAMAGES 3,499 32 1,244 8
926 EMPLOYEE PENSIONS AND BENEFITS 177,445 578 11 90
928 REGULATORY COMMISSION EXPENSE 175 130 1,232 11
930.1 GENERAL ADVERTISING EXPENSES 1,634
930.2 MISCELLANEOUS GENERAL EXPENSES 9,739 619 1,289 59
931 RENTS 8,801
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT
403 DEPRECIATION AND AMORTIZATION EXPENSE
408 TAXES OTHER THAN INCOME TAXES 14 38 2 10
409 INCOME TAXES
410 PROVISION FOR DEFERRED INCOME TAXES
411 PROVISION FOR DEFERRED INCOME TAXES -
CREDIT
426.1 DONATIONS 2,627
426.5 OTHER DEDUCTIONS (11,417) 1 12 1
427 INTEREST ON LONG-TERM DEBT 2,783
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 4 10 1 2
431 OTHER INTEREST EXPENSE 4,660 (739) (40) (186)
INSTRUCTION: Indicate each department or service function. (See
Instruction 01-3 General Structure of Account System:
Uniform System Account)
-----------------------------------------------------------------
TOTAL EXPENSES $ 255,910 $ 94,187 $ 35,225 $ 18,678
=================================================================
DEPARTMENT OR SERVICE FUNCTION
-----------------------------------
STATE TECHNOLOGY
GOVERNMENTAL SUPPORT
DESCRIPTION OF ITEMS AFFAIRS SERVICES
--------------------------------------------------------------------------------------------------
920 SALARIES AND WAGES $ 53 $ 913
921 OFFICE SUPPLIES AND EXPENSES 409 3,362
922 ADMINISTRATIVE EXPENSE TRANSFERRED -
CREDIT
923 OUTSIDE SERVICES EMPLOYED 1,119
924 PROPERTY INSURANCE
925 INJURIES AND DAMAGES 1
926 EMPLOYEE PENSIONS AND BENEFITS 1 5
928 REGULATORY COMMISSION EXPENSE 1 1
930.1 GENERAL ADVERTISING EXPENSES
930.2 MISCELLANEOUS GENERAL EXPENSES 1 164
931 RENTS
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT
403 DEPRECIATION AND AMORTIZATION EXPENSE
408 TAXES OTHER THAN INCOME TAXES 1
409 INCOME TAXES
410 PROVISION FOR DEFERRED INCOME TAXES
411 PROVISION FOR DEFERRED INCOME TAXES -
CREDIT
426.1 DONATIONS
426.5 OTHER DEDUCTIONS 730 510
427 INTEREST ON LONG-TERM DEBT
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES
431 OTHER INTEREST EXPENSE (5) (15)
INSTRUCTION: Indicate each department or service function.
(See Instruction 01-3 General Structure of
Account Systems: Uniform System Account)
--------------------------------
TOTAL EXPENSES $ 2,309 $ 4,942
================================
--------------------------------------------------------------------------------------------------
26
-----------------------------------------------------------------------------------------------------------------------------------
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
------------------------------------------------------------------------------------------------------------------------------
DEPARTMENTAL SALARY EXPENSE NUMBER
-------------------------------------------------------
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO NUMBER
------------------ -------------------------------------- PERSONNEL
Indicate each department TOTAL PARENT OTHER NON END OF
or service function. AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
------------------------------------------------------------------------------------------------------------------------------
CEO & COO $ 2,394 $1,111 $ 1,283 $ - 26
Business Development 1,165 - 1,165 - 13
Energy Delivery & Customer 43,747 752 42,995 - 555
Service
FirstEnergy Technologies 661 - 661 - 8
Federal Governmental Affairs 61 - 61 - 3
Finance 16,356 280 16,076 - 180
Human Resources, Communications, 23,136 68 23,068 - 211
Corporate Affairs and Community
Involvement, Corporate, Real
Estate, and Administrative Services
Information Services Department 29,648 2,052 27,596 - 558
Legal 2,103 - 2,103 - 30
Supply Chain 8,348 120 8,228 - 140
State Governmental Affairs 53 - 53 - 4
Technology Support Services 913 - 913 - 11
------- ----- ------- --- -----
TOTAL $128,585 $4,383 $124,202 $ - 1,739
======= ===== ======= === =====
-------------------------------------------------------------------------------------------------------------------------------
27
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
----------------------------------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee
and included within one subaccount is less than $100,000, only the aggregate number and amount of all such
payments included within the subaccount need be shown. Provide a subtotal for each type of service.
----------------------------------------------------------------------------------------------------------------------------------
RELATIONSHIP
--------------
"A"= ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE/LARGEST INVOICE "NA"= NON AMOUNT
ASSOCIATE
----------------------------------------------------------------------------------------------------------------------------------
Legal
-----
Akin,Gump, Strauss, Hauer & Legal services related to Davis Besse N/A $1,814
Feld LLP Nozzle Besse Matter - NRC
Babst, Calland, Clements and Legal Services related to N/A 244
Zomnir Chenot Litigation
Bailey ,Riley, Buch, & Harman Legal services related to the West N/A 122
Virginia Asbestos Litigation
Balch & Bingham LLP Legal services related to FERC Notice N/A 533
Of Proposed Rulemakings and other
FERC Matters.
Barley ,Snyder, Senft & Legal services related to Pennsylvania N/A 132
Colen LLC Sales and Use Tax Matters.
Black McCuskey Souers & Legal services related to the review N/A 104
Arbaugh of New Venture Projects.
Brattle Group Legal services related to the N/A 578
New Source Review litigation.
Brouse & McDowell Legal services related to Facility N/A 908
Services / Emcor / Project Ivy For
Real Estate
Brown Raysman Millstein Legal services related to R. A. Katz N/A 158
Technology Licensing Litigation.
Calfee Halter & Griswold Legal services related to the Bayshore N/A 2,179
Power Company Issues
Carter Ledyard & Milburn Legal services related to the N/A 230
FirstEnergy and GPU Merger Issues
CPM Technical Solutions Inc Legal services related to the Foster N/A 138
Wheeler Claim Support Services
Holland & Knight LLP Legal services related to the Clean N/A 214
Air Act Regulatory Matter
Hunton & Williams Legal services related to the Joint N/A 1,454
Defense Work Assessment for the
New Source Review Litigation.
----------------------------------------------------------------------------------------------------------------------------------
27A
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
----------------------------------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee
and included within one subaccount is less than $100,000, only the aggregate number and amount of all such
payments included within the subaccount need be shown. Provide a subtotal for each type of service.
----------------------------------------------------------------------------------------------------------------------------------
RELATIONSHIP
--------------
"A"= ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE/LARGEST INVOICE "NA"= NON AMOUNT
ASSOCIATE
----------------------------------------------------------------------------------------------------------------------------------
Legal (continued)
-----
Ikon Office Solutions Services related to the Bayshore N/A 942
Power Company Issues.
Jones Day Reavis & Pogue Legal services related to Ohio N/A 465
Regulatory Commission Line Extensions
Program
Kirkpatrick & Lockhart LLP Legal services related to Real Estate N/A 169
Tax Assessment Appeals
Lowenstein Sandler PC Legal services related to the Muise & N/A 570
Tzannetakis vs. JCP&L Litigation
Maxey Flatts Site IRP LLC Legal services related to the Maxie N/A 264
Flats Site Assessment
Morgan Lewis & Bockius LLP Legal services related to the Davis N/A 227
Besse Reactor Nozzle Issues - NRC
Pa Consulting Group Consulting services related to N/A 201
the New Source Review Litigation
Pillsbury Winthrop LLP Legal services related to Corporate N/A 463
Finances
Porter Wright Morris & Arthur Legal services related to the New N/A 4,278
Source Review Litigation
Reed Smith Shaw & McClay Legal services related to the Weaver N/A 120
vs. GPU Litigation.
Riker, Danzig, Scherer, Hyland Legal services related to the N/A 134
& Perretti LLP representation of JCP&L in the matter
of Verizon New Jersey Inc., Public
Service Electric & Gas, and United
Water New Jersey vs. Borough of Hillsdale
Roderick Linton Legal services related to the Mitcham N/A 100
vs. CEI Litigation.
Roetzel & Andress Legal services related to the Johnston N/A 1,327
Pump Inc. Litigation
Ruprecht Hart & Weeks LLP Legal services related to the Reep N/A 165
Inc. vs JCP&L Litigation
----------------------------------------------------------------------------------------------------------------------------------
27B
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
------------------------------------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
------------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee
and included within one subaccount is less than $100,000, only the aggregate number and amount of all such
payments included within the subaccount need be shown. Provide a subtotal for each type of service.
------------------------------------------------------------------------------------------------------------------------------------
RELATIONSHIP
--------------
"A"= ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE/LARGEST INVOICE "NA"= NON AMOUNT
ASSOCIATE
------------------------------------------------------------------------------------------------------------------------------------
Legal (continued)
-----
Ryan Russell Ogden & Seltzer Legal services related to the PJM N/A 1,043
Capacity Investigation
Saul Ewing Legal services related to the N/A 648
Rochester Gas & Electric Litigation
Shaw Pittman Potts Legal services related to Nuclear N/A 281
Waste Claims.
Squire Sanders & Dempsey LLP Legal services related to SAP N/A 535
agreements
Stanton Hughes Dianna Cerra Legal services related to Labor N/A 134
Matters
Stevens & Lee Legal services related to Labor N/A 550
Matters - Race Discrimination Class
Action Litigation
Swidler Berlin Shereff Fried Legal services related to the PJM N/A 690
Capacity Investigation
Thelen Reid & Priest LLP Legal services related to the JCP&L N/A 1,951
Base Rate Case
Thompson Hine & Flory LLP Legal Services for Federal Appeals N/A 337
Protest
Weiner Lesniak Legal services related to New Jersey N/A 104
State Regulatory Matters.
Wilkerson and Associates Co. Legal services related to the Robert N/A 103
Ranallo v FirstEnergy Corp. Litigation
148 Others (Under $100,000) 1,006
------
Sub-total $25,615
------
----------------------------------------------------------------------------------------------------------------------------------
27C
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
----------------------------------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee
and included within one subaccount is less than $100,000, only the aggregate number and amount of all such
payments included within the subaccount need be shown. Provide a subtotal for each type of service.
----------------------------------------------------------------------------------------------------------------------------------
RELATIONSHIP
--------------
"A"= ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE/LARGEST INVOICE "NA"= NON AMOUNT
ASSOCIATE
----------------------------------------------------------------------------------------------------------------------------------
Other Professional Services
---------------------------
#1 Media Community and Neighborhood N/A $ 128
Outreach Program
Arthur Andersen LLP PUHCA Compliance Project N/A 2,455
AUS Consultants Professional Services/Reviews N/A 132
Of FERC and State Regulatory
Proposals
BearingPoint, Inc. Professional Fees and Services N/A 492
Related To The Budgeting and
Forecasting Improvement Project
Blank Rome Comisky & Consulting services related to N/A 100
McCauley New Jersey Regulatory Matters
Deloitte & Touche LLP Overhead Cost Analysis Project N/A 516
Gradient Corporation Consulting services related to the N/A 273
Rochester Gas MGP Matter.
Integrated Economic Solutions Consulting service related to the N/A 140
environmental insurance recovery
Market Reach Strategies LLC Consulting Service to Acquire N/A 470
& Retain Customers For
Expanded Services
McKinsey & Company Strategic Planning Diagnosis N/A 671
Rosemary Chiavetta Esq. Consulting services related to N/A 107
Pennsylvania regulatory matters
----------------------------------------------------------------------------------------------------------------------------------
27D
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
----------------------------------------------------------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee
and included within one subaccount is less than $100,000, only the aggregate number and amount of all such
payments included within the subaccount need be shown. Provide a subtotal for each type of service.
----------------------------------------------------------------------------------------------------------------------------------
RELATIONSHIP
--------------
"A"= ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE/LARGEST INVOICE "NA"= NON AMOUNT
ASSOCIATE
----------------------------------------------------------------------------------------------------------------------------------
Other Professional Services (continued)
---------------------------
Stone & Webster Tax Consulting for Perry N/A 173
Station Real Property Protest
Williams & Jensen Consulting services related to N/A 130
Federal Regulatory Matters
64 Others (Under $100,000) 704
-----
Sub-total $ 6,491
------
Grand Total $32,106
======
----------------------------------------------------------------------------------------------------------------------------------
28
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of each pension plan and benefit program
provided by the service company. Such listing should be limited
to $25,000.
--------------------------------------------------------------------------------
DESCRIPTION AMOUNT
--------------------------------------------------------------------------------
EDUCATIONAL ASSISTANCE $ 254
EMPLOYEE SAVINGS PLAN (7,302)
EMPLOYEE STOCK OPTION PLAN 30,207
GROUP LIFE INSURANCE 5,940
HEALTH, SURGICAL, MEDICAL, & DENTAL INSURANCE 127,883
INCENTIVE COMPENSATION 835
LONG TERM DISABILITY 1,386
PENSION PLANS 9,672
SEVERANCE 3,346
UNPRODUCTIVE TIME 320
OTHER BENEFITS 5,830
-------
TOTAL $178,371
=======
--------------------------------------------------------------------------------
29
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses", classifying the items according
to the nature of the advertising and as defined in the account
definition. If a particular class includes an amount in excess of
$3,000 applicable to a single payee, show separately the name of
the payee and the aggregate amount applicable thereto.
--------------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
--------------------------------------------------------------------------------
NEWSPAPERS, PERIODICALS, AMERICAN PRINTING INC $ 61
BILLBOARDS, RADIO, ETC. NORTH JERSEY MEDIA GROUP 24
ROHRICH CORP. 22
GANNETT NJ NEWSPAPERS 19
WYSE ADVERTISING INC 17
THE STAR-LEDGER 17
#1 MEDIA 15
MORNING CALL 12
CUMULUS BROADCASTING INC 11
LEBHAR-FRIEDMAN INC 9
THE TIMES 8
TRADE PRESS PUBLISHING CORP 8
REED BUSINESS INFORMATION 8
PETER LI EDUCATION GROUP 7
BURLINGTON COUNTY TIMES 7
GROUP C COMMUNICATIONS INC. 7
YORK NEWSPAPER COMPANY 7
THE MERCURY 7
BUSINESS NEWS PUBLISHING COMPANY 6
NEWS HERALD*WILLOUGHBY,OH 5
PATRIOT NEWS COMPANY 5
DAILY RECORD INC 5
LIVE PUBLISHING CO 5
WEWS TV 5
UTILITY WORKERS UNION OF AMERICA 5
EASTON PUBLISHING COMPANY 5
CRAIN COMMUNICATIONS INC 5
FOREVER BROADCASTING NWPA 4
CLEAR CHANNEL BROADCASTING 4
READING EAGLE COMPANY 4
MIKE WILKES PHOTOGRAPHY INC 4
--------------------------------------------------------------------------------
29A
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses", classifying the items according
to the nature of the advertising and as defined in the account
definition. If a particular class includes an amount in excess of
$3,000 applicable to a single payee, show separately the name of
the payee and the aggregate amount applicable thereto.
--------------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
--------------------------------------------------------------------------------
THE NETWORK OF CITY BUSINESS JOURNALS 4
INTELLIGENCER RECORD 4
DAILY LOCAL NEWS 4
WXKR-FM*CUMULUS BROADCASTING 3
OTHER (61 payees under $3,000) 64
FEES AND EXPENSES OF WASHINGTON SQUARE FILMS 229
ADVERTISING AGENCIES AND ARTISTS INC. 37
COMMERCIAL ARTISTS BOB GOLD ADVERTISING 35
AMERICAN PRINTING INC 26
TRIAD RESEARCH GROUP 25
IMR STRATEGIC MARKETING SERVICES 20
IMR INC 17
WYSE ADVERTISING INC 13
NJN FOUNDATION 10
RIS PAPER COMPANY 8
ROHRICH CORP 8
OTHER (9 payees under $3,000) 7
SPONSORSHIPS LAKEWOOD BLUECLAWS 400
GPU STADIUM 250
CLEVELAND CAVALIERS 105
CLEVELAND INDIANS BASEBALL 12
THE UNIVERSITY OF TOLEDO 10
WAPS 91.3FM 5
KENT STATE UNIVERSITY-ATHLETIC 4
UNIVERSITY OF AKRON 4
OTHERS (2 payees under $3,000) 2
-----
TOTAL $1,634
=====
--------------------------------------------------------------------------------
30
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses", classifying such expenses
according to their nature. Payments and expenses permitted by
Section 321 (b) (2) of the Federal Election Campaign Act, as
amended by Public Law 94-283 in 1976 (2 U.S.C.S. 441 (b) (2)
shall be separately classified.
--------------------------------------------------------------------------------
DESCRIPTION AMOUNT
--------------------------------------------------------------------------------
DUES AND EXPENSES $ 6,589
LOCAL AREA DEVELOPMENT 1,326
TRUSTEE & TRANSFER AGENT FEES & EXPENSES 1,301
MAINTENANCE - LEASED STRUCTURES 1,085
MAINTENANCE - OWNED STRUCTURES 1,052
RESEARCH AND EXPERIMENTAL WORK 1,026
MAINTENANCE OF COMMUNICATION EQUIPMENT 590
DIRECTORS' FEES & EXPENSES 181
MAINTENANCE OF OFFICE FURNITURE & EQUIPMENT 43
------
TOTAL $13,193
======
--------------------------------------------------------------------------------
31
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
RENTS
ACCOUNT 931
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 931, "Rents",
classifying such expenses by major groupings of property, as
defined in the account definition of the Uniform System of
Accounts.
--------------------------------------------------------------------------------
TYPE OF PROPERTY AMOUNT
--------------------------------------------------------------------------------
BUILDINGS $8,477
PENNSYLVANIA WAREHOUSE 240
SERVICE BUILDINGS 84
-----
TOTAL $8,801
=====
--------------------------------------------------------------------------------
32
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
-------------- -----------------------------------------------------------------
INSTRUCTION: Provide an analysis of Account 408, "Taxes Other Than Income
Taxes". Separate the analysis into two groups: (1) other than
U.S. Government taxes, and (2) U.S. Government taxes. Specify
each of the various kinds of taxes and show the amounts thereof
Provide a subtotal for each class of tax.
--------------------------------------------------------------------------------
T Y P E O F T A X AMOUNT
--------------------------------------------------------------------------------
(1) OTHER THAN U.S. GOVERNMENT TAXES
PROPERTY TAXES
- OHIO $ 2,363
UNEMPLOYMENT INSURANCE
- OHIO 204
- PENNSYLVANIA 20
FRANCHISE TAXES
- OHIO 104
-----
SUB TOTAL 2,691
-----
(2) TAXES - U.S. GOVERNMENT
FEDERAL UNEMPLOYMENT INSURANCE 106
FICA 8,573
-----
SUB TOTAL 8,679
------
TOTAL $11,370
======
--------------------------------------------------------------------------------
33
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
DONATIONS
ACCOUNT 426.1
--------------------------------------------------------------------------------
INSTRUCTION: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000 may
be shown in lieu of details.
--------------------------------------------------------------------------------
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
--------------------------------------------------------------------------------
CLEVELAND HOUSING NETWORK COMMUNITY CHARITIES $ 473
SALVATION ARMY COMMUNITY CHARITIES 236
OHIO EDISON PROJECT REACH COMMUNITY CHARITIES 199
ASHTABULA COUNTY COMMUNITY COMMUNITY CHARITIES 186
EAST AKRON NEIGHBORHOOD DEV COMMUNITY CHARITIES 173
GROUND LEVEL SOLUTIONS INC COMMUNITY CHARITIES 120
NEIGHBORHOOD HOUSING SERVICES COMMUNITY CHARITIES 104
YOUNGSTOWN AREA COMMUNITY COMMUNITY CHARITIES 97
WSOS COMMUNITY ACTION COMMISSION COMMUNITY CHARITIES 85
OHIO ENERGY PROJECT COMMUNITY CHARITIES 65
UNIVERSITY OF AKRON EDUCATION 51
ST VINCENT DEPAUL SOCIETY COMMUNITY CHARITIES 49
TRUMBULL COUNTY COMMUNITY ACTION COMMUNITY CHARITIES 24
MRM TOAP INC COMMUNITY CHARITIES 21
LORAIN COUNTY COMMUNITY ACTION COMMUNITY CHARITIES 21
CLINTON COUNTY COMMUNITY ACTION COMMUNITY CHARITIES 19
MANSFIELD RICHLAND MORROW TOTAL COMMUNITY CHARITIES 18
KENT STATE UNIVERSITY FOUNDATION EDUCATION 17
SUMMIT COUNTY DEPT OF COMMUNITY COMMUNITY CHARITIES 15
MARCH OF DIMES COMMUNITY CHARITIES 12
OHIO HEARTLAND COMMUNITY ACTION COMMUNITY CHARITIES 11
NAACP COMMUNITY CHARITIES 11
TRUMBULL COMMUNITY ACTION PROGRAM COMMUNITY CHARITIES 11
COMMUNITY ACTION COUNCIL-PORTAGE COMMUNITY CHARITIES 10
AFFORDABLE COMFORT INC COMMUNITY CHARITIES 10
CANCER RESEARCH FOUNDATION COMMUNITY CHARITIES 10
CATHOLIC DIOCESE OF CLEVELAND FDN COMMUNITY CHARITIES 10
EXECUTIVE LEADERSHIP COUNCIL COMMUNITY CHARITIES 10
FREEDOM HOUSE FOUNDATION INC COMMUNITY CHARITIES 10
SUMMA HEALTH SYSTEM FOUNDATION HEALTH SERVICES/HOSPITALS 10
AMERICAN PRINTING INC COMMUNITY CHARITIES 9
NEW JERSEY CONFERENCE OF MAYORS COMMUNITY CHARITIES 8
URBAN LEAGUE COMMUNITY CHARITIES 8
AMERICAN RED CROSS COMMUNITY CHARITIES 8
NORTHWEST OHIO COMMUNITY ACTION COMMUNITY CHARITIES 8
CARON FOUNDATION COMMUNITY CHARITIES 8
COLLEGE FUND/UNCF COMMUNITY CHARITIES 8
READING BERKS EMERGENCY SHELTER COMMUNITY CHARITIES 8
JUNIOR ACHIEVEMENT COMMUNITY CHARITIES 7
UNITED WAY COMMUNITY CHARITIES 7
TOLEDO AREA CHAMBER OF COMMERCE COMMUNITY CHARITIES 6
BOY SCOUTS OF AMERICA COMMUNITY CHARITIES 6
180 COMMUNITY CHARITIES 6
FAMILY SERVICES COMMUNITY CHARITIES 5
--------------------------------------------------------------------------------
33A
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
DONATIONS
ACCOUNT 426.1
--------------------------------------------------------------------------------
INSTRUCTION: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000 may
be shown in lieu of details.
--------------------------------------------------------------------------------
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
--------------------------------------------------------------------------------
OCEAN COUNTY COLLEGE FOUNDATION EDUCATION 5
JERSEY BATTERED WOMEN'S SERVICE COMMUNITY CHARITIES 5
CUYAHOGA COMMUNITY COLLEGE EDUCATION 5
MARION POPCORN FESTIVAL COMMUNITY CHARITIES 5
YWCA COMMUNITY CHARITIES 5
AKRON GENERAL WOMEN'S BOARD COMMUNITY CHARITIES 5
COMMUNITY THEATRE COMMUNITY CHARITIES 5
COUNCIL ON CHEMICAL ABUSE COMMUNITY CHARITIES 5
GREATER CLEVELAND SPORTS COMM COMMUNITY CHARITIES 5
HEART TO HEART COMMUNICATIONS COMMUNITY CHARITIES 5
INTERNATIONAL SERVICES CENTER COMMUNITY CHARITIES 5
REBUILDING TOGETHER WITH CHRISTMAS COMMUNITY CHARITIES 5
ROCK AND ROLL HALL OF FAME COMMUNITY CHARITIES 5
SENECA VALLEY SCHOOL DISTRICT EDUCATION 5
VISITING HEALTH SERVICE OF MORRIS COMMUNITY CHARITIES 5
NATIONAL MULTIPLE SCLEROSIS HEALTH SERVICES/HOSPITALS 5
S GROUP INC. COMMUNITY CHARITIES 4
STAN HYWET HALL AND GARDENS COMMUNITY CHARITIES 4
GREAT LAKES SCIENCE CENTER EDUCATION 4
YORK COUNTY CHAMBER OF COMMERCE COMMUNITY CHARITIES 4
AMERICAN CANCER SOCIETY HEALTH SERVICES/HOSPITALS 4
GIRL SCOUTS COMMUNITY CHARITIES 4
BRITE HOUSE ELECTRICIANS COMMUNITY CHARITIES 4
MONMOUTH UNIVERSITY EDUCATION 4
YOUNGSTOWN STATE UNIVERSITY EDUCATION 4
AMERICAN HEART ASSOCIATION HEALTH SERVICES/HOSPITALS 4
ANTI-DEFAMATION LEAGUE COMMUNITY CHARITIES 4
CLEVELAND SPORTS STARS FOUNDATION COMMUNITY CHARITIES 4
COLUMBIANA COUNTY COMM ACTION COMMUNITY CHARITIES 3
COUNTY CORNER COMMUNITY CHARITIES 3
MONMOUTH CONSERVATION FOUDATION COMMUNITY CHARITIES 3
AKRON AREA COOKS & CHEFS ASSOC COMMUNITY CHARITIES 3
CHILDRENS HOME OF EASTON COMMUNITY CHARITIES 3
FAIRLEIGH DICKINSON UNIVERSITY EDUCATION 3
MID-ATLANTIC AIR MUSEUM COMMUNITY CHARITIES 3
PORT CLINTON PERFORMING ARTS CTR COMMUNITY CHARITIES 3
SOMERSET COUNTY CHAMBER OF COMM COMMUNITY CHARITIES 3
TOLEDO SYMPHONY ORCHESTRA COMMUNITY CHARITIES 3
TOLEDO ZOO COMMUNITY CHARITIES 3
TWENTY UNDER 40 COMMUNITY CHARITIES 3
UNITED BLACK FUND OF GRTR CLEVE COMMUNITY CHARITIES 3
VARIOUS ORGANIZATIONS COMMUNITY CHARITIES, 270
(UNDER $3,000) EDUCATION, & HEALTH SERVICES
-----
TOTAL $2,627
=====
--------------------------------------------------------------------------------
34
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
OTHER DEDUCTIONS
ACCOUNT 426.5
--------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 426.5, "Other
Deductions", classifying such expenses according to their nature.
--------------------------------------------------------------------------------
D E S C R I P T I O N NAME OF PAYEE AMOUNT
--------------------------------------------------------------------------------
INSURANCE COMPANY-OWNED LIFE EMPLOYEE-RELATED EXPENSES $ 6,948
LOBBYING EXPENSES PRIMARILY EMPLOYEE WAGES 2,224
AND EXPENSES
EMPLOYEE DUES & ASSESSMENTS EMPLOYEE-RELATED EXPENSES 190
MISCELLANEOUS VARIOUS 500
-----
TOTAL $9,862
=====
--------------------------------------------------------------------------------
35
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
--------------------------------------------------------------------------------
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
--------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
statement of income or any account thereof. Furnish particulars
as to any significant increase in services rendered or expenses
incurred during the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
--------------------------------------------------------------------------------
On November 7, 2001, FirstEnergy Corp. (FirstEnergy), merged with GPU,
Inc., a registered holding company under the Public Utility Holding Company Act
of 1935 (the 1935 Act). FirstEnergy is the surviving company in the merger. On
November 7, 2001, upon completion of the merger, FirstEnergy filed with the SEC
a Notification of Registration on Form U-5A, thereby registering as a holding
company pursuant to the provisions of Section 5(a) under the 1935 Act.
As part of the Merger Order, FirstEnergy was granted interim approval to
provide services to all its affiliates after the Merger under FirstEnergy
Service Company. The Merger Order further required a separate application
seeking authorization to consolidate the functions performed by FirstEnergy
Service Company and GPU Service Company. On October 15, 2002, FirstEnergy filed
with the SEC requesting authorization to consolidate all common corporate
services under FirstEnergy Service Company, not later than June 1, 2003. Full
compliance by FirstEnergy Service Company under section 13 of the Act and the
rules under the Act will be required upon consolidation.
--------------------------------------------------------------------------------
36
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
ORGANIZATION CHART
------------------------------------------------------------------------------
|----------------------------------------------------------|
| BOARD OF DIRECTORS |
|----------------------------------------------------------|
| CEO, FirstEnergy Service Company |
----------------------------------------------------------|
| Senior Vice President & General Counsel |
|-------------------------------------------------------|
| Senior Vice President & Chief Financial Officer |
|-------------------------------------------------------|
| | Vice President & Controller |
| |-------------------------------------------------|
| | Treasurer |
| |-------------------------------------------------|
| | Vice President & Chief Risk Officer |
| |-------------------------------------------------|
| | Vice President, Investor Relations |
| |-------------------------------------------------|
| | Director, Internal Audit |
| |-------------------------------------------------|
| | Director, Rates & Regulatory Affairs |
| |-------------------------------------------------|
| | Director, Investment Management |
| |-------------------------------------------------|
| | Director, Performance Planning |
|-------------------------------------------------------|
| Senior Vice President, Technology & Support Services |
|-------------------------------------------------------|
| Senior Vice President, Human Resources, |
| Communications, Corporate Affairs and Community |
| Involvement, Corporate, Real Estate, and |
| Administrative Services |
|-------------------------------------------------------|
| | Vice President, Corporate Affairs & Community |
| | Involvement |
| |-------------------------------------------------|
| | Vice President, Human Resources |
| |-------------------------------------------------|
| | Vice President, Communications |
| |-------------------------------------------------|
| | Vice President, Corporate, Real Estate, and |
| | Administrative Services |
|-------------------------------------------------------|
| President & COO, FirstEnergy Service Company |
-------------------------------------------------------|
| Director, FirstEnergy Technologies |
|-------------------------------------------------|
| Senior Vice President, Energy Delivery & |
| Customer Service |
|-------------------------------------------------|
| Vice President, Business Development |
|-------------------------------------------------|
| Vice President, Federal Governmental Affairs |
|-------------------------------------------------|
| Vice President, State Governmental Affairs |
|-------------------------------------------------|
| Vice President & CIO, Information Technology |
|-------------------------------------------------|
| Vice President & Chief Procurement Officer |
|-------------------------------------------------|
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
37
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
METHODS OF ALLOCATION
--------------------------------------------------------------------------------
1. Number of Employees Ratio:
-------------------------
A ratio based on number of employees benefiting from the performance of a
service to total number of employees.
2. Number of Customers Ratio:
-------------------------
A ratio based on the number of customers benefiting from a service to total
number of customers.
3. Net Revenue and Assets Ratio:
----------------------------
Revenue dollars per kWh and dollar value of assets by operating company as
a percent of total dollar value for all operating companies.
4. Departmental Charge Ratio:
-------------------------
Specific departmental ratio based on factors such as labor hours, labor
dollars, headcount, square footage utilized, etc., reflecting the causal
relationship between costs and benefit to the customer serviced.
--------------------------------------------------------------------------------
38
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
--------------------------------------------------------------------------------
NONE
--------------------------------------------------------------------------------
ANNUAL REPORT OF FIRSTENERGY SERVICE COMPANY
For the Year Ended December 31, 2002
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935 and the rules and regulations of the Securities and Exchange Commission
issued thereunder, the undersigned Company has duly caused this report to be
signed on its behalf by the undersigned officer thereunto duly authorized.
FIRSTENERGY SERVICE COMPANY
-------------------------------------------
(Name of Reporting Company)
By: /s/ P. R. Chatman
----------------------------------------
(Signature of Signing Officer)
P. R. Chatman, Assistant Controller
-------------------------------------------
(Printed Name and Title of Signing Officer)
Date: April 30, 2003