FirstEnergy Amends Financial Reports for 2002, First Half of 2003
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Sep 12, 2003 - Knight Ridder Tribune Business News
Author(s): Mary-Beth Mclaughlin
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Sep. 12--Troubled FirstEnergy Corp., parent company of Toledo Edison, yesterday filed revised financial reports because of what it called tens of millions of dollars in "typographical and minor computational errors."
The Akron utility, which has been under fire in recent weeks for last month's major power outage that plunged seven states and southern Canada into blackness, amended U.S. Securities and Exchange Commission financial filings for 2002 and for its first two quarters this year.
The filings were necessary, said spokesman Kristen Baird, because mistakes were made when the company and its independent auditors had less than three weeks in August to file restated results for all of last year and the first quarter of this year. The company had previously announced it would restate the 2000 and 2001 earnings of two of its subsidiaries.
The revisions, revealed to be coming last month, were done after a discussion with accountants from PricewaterhouseCoopers about how the company reported costs pertaining to Ohio's move toward a competitive energy market.
FirstEnergy corrected more than 20 items in report for the second quarter this year, including "income taxes for regulated services, competitive services and other" to a table for "cash earnings."
In one note, the company says income before discontinued operations and certain accounting changes should be $107 million and a loss of $44 million, instead of $118 million and a loss of $45 million as previously reported.
"We're not happy any time a correction needs to be made," Ms. Baird said.
The errors are the latest in a string of bad news for the Ohio utility. Some members of Congress this month blasted FirstEnergy for its actions during the Aug. 14 major blackout, with some outside experts indicating problems within the company's territory as the likely start of the power failure.
The company also has spent nearly two years -- and suffered $500 million in lost revenues -- readying its Davis-Besse nuclear power plant near Oak Harbor for a restart. The plant was shutdown for routine maintenance in February 2002, but the subsequent discovery of a corroded reactor head has kept it shuttered.
The utility also has been plagued by high debt, prompting the firm this month to say it would issue more stock to raise money to pay off some of its debt.
FirstEnergy's stock closed down 73 cents yesterday at $31.10 a share on New York Stock Exchange.
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