Form 8-K Dated March 1, 2007 - ASR
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported) March 1, 2007
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Commission
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Registrant;
State of Incorporation;
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I.R.S.
Employer
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File
Number
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Address;
and Telephone Number
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Identification
No.
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333-21011
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FIRSTENERGY
CORP.
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34-1843785
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(An
Ohio Corporation)
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76
South Main Street
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Akron,
OH 44308
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Telephone
(800)736-3402
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2.):
[
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
On
March 2, 2007,
FirstEnergy Corp. repurchased approximately 14.4 million shares, or 4.5%, of
its
outstanding common stock at an initial price of $62.63 per share, or a total
initial purchase price of approximately $900 million, pursuant to an accelerated
share repurchase agreement, dated March 1, 2007, with Morgan Stanley & Co.
International Limited (MSIL).
The final
purchase price is subject to a contingent purchase price adjustment based on
the
volume weighted average price of the equivalent number of shares to be purchased
by MSIL over a subsequent purchase period of up to approximately one year,
as
well as other purchase price adjustments in the event of an extraordinary cash
dividend or other dilution events. The agreement may be terminated by MSIL
under
certain circumstances including a share de-listing event, certain merger events,
nationalization, insolvency or a distribution termination event as those terms
are described in the agreement. The agreement contains customary representations
and warranties, covenants and conditions and indemnification
provisions.
FirstEnergy
acquired
these shares under its previously announced authorization to repurchase up
to 16 million additional shares of its common stock. Under a prior authorized
program, FirstEnergy repurchased approximately 10.5 million shares of its
outstanding common stock on August 10, 2006, under an accelerated share
repurchase agreement, dated August 9, 2006, with another financial institution.
That financial institution provided its consent to FirstEnergy’s execution and
delivery of the new agreement with MSIL.
The
latest share
repurchase was funded with short-term borrowings, including a $250 million
90-day bridge loan facility, dated as of March 2, 2007, provided by Morgan
Stanley Senior Funding, Inc. (MSSF) to FirstEnergy. Concurrently, FirstEnergy’s
wholly owned subsidiary, FirstEnergy Solutions Corp. (FES), entered into a
substantially similar $250 million bridge loan facility with MSSF. FirstEnergy
provided a guaranty of FES’ bridge loan obligations until such time as FES has
provided the lender with notice that its senior unsecured debt is rated at
least
BBB- by Standard & Poor’s or Baa3 by Moody’s.
Loans
drawn under
each bridge loan facility will bear interest at a rate per annum based on one-,
two-, or three-month LIBOR plus 0.65% and must be repaid within 90 days, which
period may be extended for an additional 30 days at the option of the applicable
borrower. In addition, each bridge loan is required to be prepaid promptly
upon
the receipt of cash proceeds by any FirstEnergy subsidiary from the planned
sale
and leaseback transaction of the owned portion of Unit 1 of the Bruce Mansfield
Plant.
Except
as set forth
above, the facilities contain representations, warranties, terms and conditions
that are customary for facilities of this type and are substantially similar
to
those contained in the existing $2.75 billion syndicated revolving credit
facility, dated August 24, 2006, among FirstEnergy, certain of its subsidiaries
(including FES) and the banks named therein.
FirstEnergy,
FES and
certain of their affiliates maintain ordinary banking and investment banking
relationships with affiliates of MSIL and MSSF. MSSF is a lender under the
August 24, 2006 credit facility referred to above.
Attached
as Exhibit
99.1 is FirstEnergy’s press release issued March 2, 2007 regarding the execution
and delivery of the accelerated share repurchase agreement with
MSIL.
Item
9.01
Financial Statements and Exhibits
(d)
Exhibits.
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Exhibit
No.
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Description
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99.1
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Press
Release
issued by FirstEnergy Corp., dated March 2,
2007
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Forward-Looking
Statements:
This Form 8-K
includes forward-looking statements based on information currently available
to
management. Such statements are subject to certain risks and uncertainties.
These statements typically contain, but are not limited to, the terms
"anticipate," "potential," "expect," "believe," "estimate" and similar words.
Actual results may differ materially due to the speed and nature of increased
competition and deregulation in the electric utility industry, economic or
weather conditions affecting future sales and margins, changes in markets for
energy services, changing energy and commodity market prices, replacement power
costs being higher than anticipated or inadequately hedged, the continued
ability of the registrant’s regulated utilities to collect transition and other
charges or to recover increased transmission costs, maintenance costs being
higher than anticipated, legislative and regulatory changes (including revised
environmental requirements), and the legal and regulatory changes resulting
from
the implementation of the Energy Policy Act of 2005 (including, but not limited
to, the repeal of the Public Utility Holding Company Act of 1935), the
uncertainty of the timing and amounts of the capital expenditures needed to,
among other things, implement the Air Quality Compliance Plan (including that
such amounts could be higher than anticipated) or levels of emission reductions
related to the Consent Decree resolving the New Source Review litigation,
adverse regulatory or legal decisions and outcomes (including, but not limited
to, the revocation of necessary licenses or operating permits, fines or other
enforcement actions and remedies) of governmental investigations and oversight,
including by the Securities and Exchange Commission, the United States
Attorney’s Office, the Nuclear Regulatory Commission and the various state
public utility commissions as disclosed in the registrant’s Securities and
Exchange Commission filings, generally, and with respect to the Davis-Besse
Nuclear Power Station outage in particular, the timing and outcome of various
proceedings before the Public Utilities Commission of Ohio (including, but
not
limited to, the successful resolution of the issues remanded to the PUCO by
the
Ohio Supreme Court regarding the Rate Stabilization Plan) and the Pennsylvania
Public Utility Commission, including the transition rate plan filings for Met-Ed
and Penelec, the continuing availability and operation of generating units,
the
ability of generating units to continue to operate at, or near full capacity,
the inability to accomplish or realize anticipated benefits from strategic
goals
(including employee workforce initiatives), the anticipated benefits from
voluntary pension plan contributions, the ability to improve electric commodity
margins and to experience growth in the distribution business, the ability
to
access the public securities and other capital markets and the cost of such
capital, the outcome, cost and other effects of present and potential legal
and
administrative proceedings and claims related to the August 14, 2003 regional
power outage, the successful structuring and completion of a potential sale
and
leaseback transaction for Bruce Mansfield Unit 1 currently under consideration
by management, the successful completion of the share repurchase program
announced March 2, 2007, the risks and other factors discussed from time to
time
in the registrant’s Securities and Exchange Commission filings, including the
registrant’s annual report on Form 10-K for the year ended December 31, 2006,
and other similar factors. The registrant expressly disclaims any current
intention to update any forward-looking statements contained herein as a result
of new information, future events, or otherwise.
SIGNATURE
Pursuant
to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto
duly
authorized.
March
5,
2007
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FIRSTENERGY
CORP.
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Registrant
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By:
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/s/ Harvey
L. Wagner
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Harvey
L.
Wagner
Vice
President, Controller and
Chief
Accounting Officer
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