FirstEnergy Corp., Akron, Ohio, U.S., announced on July 27, 2004, that it has reached an agreement that resolves all pending securities and derivative lawsuits filed against the company and certain of its officers and directors. The lawsuits alleged violations of federal securities laws and related state laws in connection with events related to FirstEnergy, including the extended outage at the Davis-Besse Nuclear Power Station; the Aug. 14, 2003, regional power outage; and financial restatements related to changed accounting treatments for transition assets being recovered in Ohio.

"While we believe our legal position is strong with respect to these cases, today's settlement represents a reasonable resolution of the issues, considering the cost and effort that would have been required to proceed through the courts," said FirstEnergy President and Chief Executive Officer Anthony J. Alexander. "With this behind us, we can continue focusing our efforts on providing our customers with reliable and affordable electric service, and building value for our shareholders."

The settlement agreement, which does not constitute any admission of wrongdoing and is subject to court approval, provides for a total settlement payment of US$89.9 million. Of that amount, the company's insurance carriers will pay $71.92 million, based on a contractual pre-allocation, and the company will pay $17.98 million, which will result in a charge against FirstEnergy's second quarter earnings of $0.03 per share of common stock.

The federal securities cases were consolidated into a single action, as were the federal derivative cases. Those actions are pending in federal court in Akron. Two state court derivative cases also are pending. The settlements are subject to final court approval.