EXHIBIT 13.5

                      JERSEY CENTRAL POWER & LIGHT COMPANY

                        2001 ANNUAL REPORT TO STOCKHOLDERS



        Jersey Central Power & Light Company is a wholly owned electric  utility
operating  subsidiary of FirstEnergy  Corp. It engages in the  distribution  and
sale of electric  energy in an area of  approximately  3,300 square miles in New
Jersey. It also engages in the sale, purchase and interchange of electric energy
with  other  electric  companies.  The  area  it  serves  has  a  population  of
approximately 2.7 million.

        In August 2000, FirstEnergy entered into an agreement to merge with GPU,
Inc.,  under which  FirstEnergy  would acquire all of the outstanding  shares of
GPU, Inc.'s common stock for approximately  $4.5 billion in cash and FirstEnergy
common  stock.  The merger  became  effective  on  November 7, 2001 and is being
accounted for by the purchase method. Prior to that time, Jersey Central Power &
Light Company was a wholly owned subsidiary of GPU, Inc.






Contents                                                                Page
--------                                                                ----

Selected Financial Data...........................................       1
Management's Discussion and Analysis..............................      2-8
Consolidated Statements of Income.................................       9
Consolidated Balance Sheets.......................................      10
Consolidated Statements of Capitalization.........................      11
Consolidated Statements of Common Stockholder's Equity............      12
Consolidated Statements of Preferred Stock........................      12
Consolidated Statements of Cash Flows.............................      13
Consolidated Statements of Taxes..................................      14
Notes to Consolidated Financial Statements........................     15-23
Reports of Independent Public Accountants.........................     24-25

<PAGE>
<TABLE>

                                      JERSEY CENTRAL POWER & LIGHT COMPANY

                                             SELECTED FINANCIAL DATA

<CAPTION>
                                                                              Years Ended December 31,
                                          Nov. 7 -     Jan. 1 -    -----------------------------------------------
                                       Dec. 31, 2001 Nov. 6, 2001     2000         1999        1998       1997
------------------------------------------------------------------------------------------------------------------
                                                                    (Dollars in thousands)

<S>                                     <C>          <C>          <C>          <C>         <C>         <C>
Operating Revenues..................... $  282,902 | $ 1,838,638  $1,979,297   $2,018,209  $2,069,648  $2,093,972
                                        ========== | ===========  ==========   ==========  ==========  ==========
                                                   |
Operating Income....................... $   43,666 | $   292,847  $  283,227   $  277,420  $  297,614  $  324,850
                                        ========== | ===========  ==========   ==========  ==========  ==========
                                                   |
Income Before Extraordinary Item....... $   30,041 | $    34,467  $  210,812   $  172,380  $  222,442  $  212,014
                                        ========== | ===========  ==========   ==========  ==========  ==========
                                                   |
Net Income ............................ $   30,041 | $    34,467  $  210,812   $  172,380  $  222,442  $  212,014
                                        ========== | ===========  ==========   ==========  ==========  ==========
                                                   |
Earnings on Common Stock............... $   29,343 | $    29,920  $  203,908   $  162,862  $  212,377  $  200,638
                                        ========== | ===========  ==========   ==========  ==========  ==========
                                                   |
Total Assets........................... $8,039,998 |              $6,009,054   $5,587,677  $4,382,073  $4,459,306
                                        ========== |              ==========   ==========  ==========  ==========
                                                   |
Capitalization:                                    |
Common Stockholder's Equity............ $3,163,701 |              $1,459,260   $1,385,367  $1,557,073  $1,540,121
Preferred Stock-                                   |
   Not Subject to Mandatory Redemption.     12,649 |                  12,649       12,649      37,741      37,741
   Subject to Mandatory Redemption.....     44,868 |                  51,500       73,167      86,500      91,500
Company-Obligated Mandatorily                      |
   Redeemable Preferred Securities.....    125,250 |                 125,000      125,000     125,000     125,000
Long-Term Debt.........................  1,224,001 |               1,093,987    1,133,760   1,173,532   1,173,304
                                        ---------- |              ----------   ----------  ----------  ----------
Total Capitalization................... $4,570,469 |              $2,742,396   $2,729,943  $2,979,846  $2,967,666
                                        ========== |              ==========   ==========  ==========  ==========
                                                   |
Capitalization Ratios:                             |
Common Stockholder's Equity............       69.2%|                    53.2%        50.7%       52.2%       51.9%
Preferred Stock-                                   |
   Not Subject to Mandatory Redemption.        0.3 |                     0.5          0.5         1.3         1.3
   Subject to Mandatory Redemption.....        1.0 |                     1.9          2.7         2.9         3.1
Company-Obligated Mandatorily                      |
   Redeemable Preferred Securities.....        2.7 |                     4.5          4.6         4.2         4.2
Long-Term Debt.........................       26.8 |                    39.9         41.5        39.4        39.5
                                             ----- |                   -----        -----       -----       -----
Total Capitalization...................      100.0%|                   100.0%       100.0%      100.0%      100.0%
                                             ===== |                   =====        =====       =====       =====
                                                   |
Transmission and Distribution                      |
Kilowatt-Hour Deliveries (Millions):               |
Residential............................      1,428 |       7,042       8,087        7,978       7,551       7,256
Commercial.............................      1,330 |       6,787       7,706        7,624       7,259       6,974
Industrial.............................        474 |       2,670       3,307        3,289       3,474       3,536
Other..................................         17 |          66          82           81          81          79
                                             ----- |      ------      ------      -------      ------      ------
Total Retail...........................      3,249 |      16,565      19,182       18,972      18,365      17,845
Total Wholesale........................        295 |       1,780       2,161        1,622       1,690       1,063
                                             ----- |      ------      ------      -------      ------      ------
Total..................................      3,544 |      18,345      21,343       20,594      20,055      18,908
                                             ===== |      ======      ======       ======      ======      ======
                                                   |
Transmission and Distribution Deliveries           |
Customers Served:                                  |
Residential............................    909,494 |                 896,629      883,930     872,134     859,747
Commercial.............................    109,985 |                 107,479      107,210     105,611     104,183
Industrial.............................      2,785 |                   2,835        2,965       3,014       3,054
Other..................................      1,484 |                   1,551        1,648       1,635       1,618
                                         --------- |               ---------    ---------     -------     -------
Total..................................  1,023,748 |               1,008,494      995,753     982,394     968,602
                                         ========= |               =========      =======     =======     =======

                                       1

</TABLE>

<PAGE>

                      JERSEY CENTRAL POWER & LIGHT COMPANY

                   Management's Discussion and Analysis of
                Results of Operations and Financial Condition


        This discussion includes forward-looking statements based on information
currently  available  to  management  that  is  subject  to  certain  risks  and
uncertainties.  Such 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,  legislative and
regulatory   changes  (including  revised   environmental   requirements),   the
availability and cost of capital,  ability to accomplish or realize  anticipated
benefits from strategic initiatives and other similar factors.


Results of Operations
---------------------

        Earnings on common stock  decreased  70.9% to $59.3 million in 2001 from
$203.9 million in 2000.  Results in 2001 were affected by an after-tax charge of
$177.5 million to reduce  deferred costs in accordance  with the  Stipulation of
Settlement  related to the merger of FirstEnergy and GPU, Inc. Also contributing
to lower earnings were higher purchased power costs.  Partially offsetting these
were lower  nuclear and other  operating  costs and greater  revenues.  In 2000,
earnings on common stock  increased  25.2% to $203.9 million from $162.9 million
in 1999, primarily due to a gain for the reversal of certain  deferred taxes and
realization  of an investment tax credit related to the sale of the Oyster Creek
Nuclear  Generating  Station  and the  absence  of a charge  resulting  from the
Summary  Order  issued by the New Jersey  Board of Public  Utilities  (NJBPU) in
1999.  Lower nuclear and other operating costs also positively  affected results
for 2000.

        Operating revenues increased by $142.2 million in 2001 following a $38.9
million  decrease  in 2000.  The sources of the  changes in  operating  revenues
during  2001 and 2000,  as compared to the prior  year,  are  summarized  in the
following table.

            Sources of Revenue Changes                    2001     2000
            -------------------------------------------------------------
                 Increase (Decrease)                      (In millions)

            Change in kilowatt-hour sales due
               to level of retail customers
               shopping for generation service..........$  67.3  $(108.7)
            Change in other retail kilowatt-hour sales..   38.4    (74.0)
            Increase in wholesale sales.................   44.1     24.0
            Provision for rate refunds..................    --     112.2
            All other changes...........................   (7.6)     7.6
            ------------------------------------------------------------

            Net Increase (Decrease) in Operating
               Revenues................................. $142.2  $ (38.9)
            ==============================================================

Electric Sales

        In 2001, a major  source of the  increase in operating  revenues was the
increase  in retail  generation  kilowatt-hour  sales  due to a large  number of
customers  returning to us in 2001 as full service  customers,  after  receiving
their power from alternate  suppliers in 2000.  Residential and commercial sales
increased  while  industrial  sales  decreased.  The majority of the increase in
residential  sales was  weather-related,  whereas a greater number of commercial
customers  and  higher  usage  contributed  almost  evenly  to the  increase  in
commercial sales. Industrial sales were lower than the previous year due to both
a decrease in the number of customers and lower usage.

        A large decrease in operating revenues occurred in 2000, as compared to
1999, as customers took  advantage of the first full year of customer  choice in
New Jersey.  In 2000, sales of electric  generation  provided by other suppliers
accounted for 11.7% of total energy  delivered as compared to only 0.2% in 1999.
Partially  offsetting the overall decrease in operating revenues was an increase
due to our obligation to refund revenues to customers in 1999 as a result of the
NJBPU's  Restructuring  Summary Order. The Order required us to refund customers
5% from rates in effect as of April 30, 1997. Changes in kilowatt-hour  sales by
customer class in 2001 and 2000 are summarized in the following table:

                                       2
<PAGE>

            Changes in Kilowatt-hour Sales  2001         2000
            -------------------------------------------------
               Increase (Decrease)

            Residential..................   4.7%         1.4%
            Commercial...................   5.3%         1.1%
            Industrial...................  (4.9)%        0.5%
            -------------------------------------------------

            Total Retail.................   3.3%         1.1%
            Wholesale....................  (4.0)%       33.2%
            -------------------------------------------------

            Total Sales..................   2.6%         3.6%
            -------------------------------------------------

Operating Expenses and Taxes

        Total operating expenses and taxes increased $89.0 million in 2001 after
decreasing  $44.7 million in 2000,  compared to the preceding year. In both 2000
and 2001,  greater  purchased power costs  accounted for the largest  increases,
offset by lower nuclear and other operating costs. Depreciation and amortization
expenses also decreased in 2000 from 1999.

        Fuel  and  purchased  power  costs  increased  $177.6  million  in 2001,
compared to 2000.  The increase was primarily  attributed to greater  amounts of
power purchased through both two-party agreements and through the PJM Power Pool
as a result  of the sale of  Oyster  Creek  and  higher  customer  demand.  Also
contributing  to the  increase  was a higher  average  cost of  two-party  power
purchases in 2001 than in 2000.  These increases were partially  offset by lower
fuel costs due to the sale of Oyster Creek.

        In 2000, fuel and purchased power costs increased $39.9 million from the
preceding  year  due to the  need  to  purchase  more  power  through  two-party
agreements  and the PJM Power Pool after the sale of our fossil fuel  generating
facilities  and Unit 1 of the  Three  Mile  Island  Nuclear  Plant in 1999.  The
average cost of these two-party  purchases was also higher in 2000 than in 1999.
Additionally,  the amortization of non-utility generation (NUG) buyout costs was
greater in 2000 than in 1999.  Partially  offsetting  these increases were lower
fuel costs since Oyster Creek was owned for only part of 2000.

        With the sale of Oyster  Creek in  August  2000,  we no longer  have any
nuclear  operating  costs,  which were $78.5 million in 2000. The sale of Oyster
Creek was also responsible for the $71.3 million  decrease in nuclear  operating
costs in 2000, compared to 1999.

        In 2001,  other  operating  expenses  decreased  $25.2  million from the
previous year due to lower bad debt expense and pension  costs.  The sale of our
generating  stations in 1999 was  primarily  responsible  for the $29.8  million
decrease  in  2000  other   operating   costs  from  the  preceding  year.  Also
contributing  to the  reduction  in costs was the  receipt  of  additional  cash
distributions  in 2000,  compared  to 1999,  related  to Oyster  Creek  property
insurance.

Other Income

        Other  income  decreased  $199.8  million  in 2001 from the  prior  year
primarily due to a charge of $300 million  ($177.5 million net of tax) to reduce
deferred costs in accordance with the  Stipulation of Settlement  related to the
merger  between  FirstEnergy  and GPU. In 2000,  other  income  increased  $26.1
million from 1999. The increase was primarily due to higher  interest income and
the reversal of an estimated 1999 tax penalty.

Net Interest Charges

          Net interest charges decreased by $0.2 million in 2001 following a
decrease of $6.5 million in 2000 as compared to the prior year. In 2001, the
slight decrease was attributed to greater deferred interest income offset by
interest expense on $150 million of senior notes issued in May, and higher
average short-term debt levels. The decrease in 2000 was primarily due to
greater deferred interest income and lower interest expense as a result of the
redemption of $40 million of first mortgage bonds (FMB).

Preferred Stock Dividend Requirements

      Preferred  stock  dividend  requirements  decreased  $1.7 million and $1.8
million in 2001 and 2000,  respectively,  due to the  redemption  of  cumulative
preferred stock pursuant to mandatory and optional sinking fund provisions.


Capital Resources and Liquidity
-------------------------------

        We had approximately $31.4 million of cash and temporary investments and
$18.1  million of  short-term  indebtedness  on December 31, 2001. We may borrow
from our affiliates on a short-term basis. We will not issue FMBs

                                       3
<PAGE>

other than as  collateral  for senior  notes,  since our senior note  indentures
prohibit  (subject  to certain  exceptions)  us from  issuing  any debt which is
senior to the senior notes.  As of December 31, 2001,  we had the  capability to
issue $257 million of additional senior notes based upon FMB collateral. At year
end 2001,  based upon  applicable  earnings  coverage tests and our charter,  we
could issue $4.6 billion of preferred  stock  (assuming no  additional  debt was
issued).

        At the end of 2001, our common equity as a percentage of  capitalization
stood at 69%, as compared to 53% at the end of 2000. This increase resulted from
the allocation of the purchase price in the merger between FirstEnergy and GPU.

        Following  approval of the merger of FirstEnergy and GPU by the NJBPU on
September 26, 2001,  Standard and Poor's  adjusted our  corporate  credit rating
from A/A1 to  BBB/A-2,  our senior  secured  debt rating from A+ to BBB+ and our
preferred  stock  rating  from BBB+ to BB+.  The lower  credit  ratings  reflect
Standard & Poor's consolidated rating methodology, which resulted in essentially
the same  corporate  credit  rating for all of  FirstEnergy's  electric  utility
operating  companies.  The credit  rating  outlook of both Standard & Poor's and
Moody's is stable.

        Our cash  requirements  in 2002  for  operating  expenses,  construction
expenditures,  scheduled debt  maturities and preferred  stock  redemptions  are
expected  to be  met  without  increasing  our  net  debt  and  preferred  stock
outstanding.   Major  contractual  obligations  for  future  cash  payments  are
summarized in the following table:

Contractual Obligations  2002  2003   2004   2005   2006  Thereafter  Total
---------------------------------------------------------------------------
                                        (In millions)

Long-term debt..........$  50  $150   $160  $  50   $240    $  596   $1,246
Mandatory preferred
  stock.................   11    11     11      2      2       139      176
Operating leases .......    2     4      2      2      2        74       86
Unconditional fuel and
  power purchases.......  861   535    468    458    455     2,202    4,979
---------------------------------------------------------------------------
                         $924  $700   $641   $512   $699    $3,011   $6,487
===========================================================================


        Our capital  spending  for the period  2002-2006 is expected to be about
$572 million, of which approximately $144 million applies to 2002.


Market Risk Information
-----------------------

        We use various market risk sensitive  instruments,  including derivative
contracts,  primarily to manage the risk of price fluctuations.  Our Risk Policy
Committee, comprised of FirstEnergy executive officers, exercises an independent
risk oversight  function to ensure  compliance  with  corporate risk  management
policies and prudent risk management practices.

Commodity Price Risk

        We  are  exposed  to  market  risk  primarily  due  to  fluctuations  in
electricity and natural gas prices.  To manage the volatility  relating to these
exposures,  we  use a  variety  of  derivative  instruments,  including  forward
contracts, options and futures contracts. These derivatives are used principally
for  hedging  purposes.  The  change in the fair value of  commodity  derivative
contracts  related to energy  production  during 2001 is summarized in the table
below:

   Increase (Decrease)in the Fair Value of Commodity Derivative Contracts
   ----------------------------------------------------------------------

                                    Nov. 7-Dec. 31  Jan. 1-Nov. 6
                                           2001         2001
   ----------------------------------------------------------------------
                                               (In millions)
   Outstanding as of beginning of
      period with SFAS 133
      cumulative adjustment............    $4.7        $23.4
   Contract value when entered.........     0.1          4.9
   Decrease in value of existing
      contracts........................    (3.2)       (12.9)
   Change in techniques/assumptions....     --         (10.6)
   Settled contracts...................    (0.1)        (0.1)
   ---------------------------------------------------------------------
   Outstanding as of end of period.....    $1.5         $4.7
   =====================================================================


        While the  valuation of  derivative  contracts is always based on active
market prices when they are available, longer-term contracts can require the use
of  model-based  estimates  of  prices  in later  years  due to the  absence  of
published  market prices.  Currently,  substantially  all of our derivatives are
valued based on active market prices.

                                       4
<PAGE>

        We perform  sensitivity  analyses to estimate our exposure to the market
risk of our  commodity  position.  A  hypothetical  10% adverse  shift in quoted
market prices in the near term on our derivative  instruments would not have had
a material  effect on our  consolidated  financial  position or cash flows as of
December 31, 2001.

Interest Rate Risk

        Our exposure to fluctuations in market interest rates is reduced since a
significant  portion of our debt has fixed interest rates, as noted in the table
below. We are subject to the inherent interest rate risks related to refinancing
maturing debt by issuing new debt securities. Changes in the market value of our
nuclear  decommissioning  trust  funds are  recognized  by making  corresponding
changes  to  the  decommissioning  liability,  as  described  in  Note  1 to the
consolidated financial statements.

Comparison of Carrying Value to Fair Value
--------------------------------------------------------------------------------
                                                          There-         Fair
                       2002  2003    2004   2005    2006   after  Total  Value
--------------------------------------------------------------------------------
                                       (Dollars in millions)
Investments other
  than Cash and
  Cash Equivalents:
Fixed Income..........  --    --      --     --      --     $187  $  187 $ 185
  Average interest
    rate..............                                       5.4%    5.4%
--------------------------------------------------------------------------------
________________________________________________________________________________
Liabilities
--------------------------------------------------------------------------------
Long-term Debt:
Fixed rate............ $ 50   $150   $160   $ 50    $240    $596  $1,246 $1,250
  Average interest
    rate..............  9.0%   6.4%   7.1%   6.8%    6.9%    7.8%    7.4%
Variable rate.........
  Average interest
    rate..............
Short-term
  Borrowings.......... $ 18   --      --      --      --      --  $   18 $   18
  Average interest
    rate..............  4.9%                                         4.9%
--------------------------------------------------------------------------------
Preferred Stock.....   $ 11   $ 11   $ 11   $  2    $  2    $139  $  176 $  180
  Average dividend
    rate..............  8.4%   8.4%   8.4%   7.5%    7.5%    8.5%    8.4%
--------------------------------------------------------------------------------


Outlook
-------

        Our industry continues to transition to a more competitive  environment.
Beginning in late 1999,  all of our customers  could select  alternative  energy
suppliers.  We continue  to deliver  power to homes and  businesses  through our
existing  distribution  system,  which remains  regulated.  To support  customer
choice,  rates were  restructured  into unbundled service charges and additional
non-bypassable  charges to recover  stranded  costs  (confirmed by a NJBPU Final
Decision and Order issued in March 2001). We have a continuing responsibility to
provide  power  to  those  customers  not  choosing  to  receive  power  from an
alternative  energy  supplier,  subject to certain limits,  referred to as Basic
Generation Service (BGS), until July 31, 2002.

Regulatory Matters

        For the  period  from  August  1, 2002 to July 31,  2003,  the NJBPU has
authorized the  auctioning of BGS to meet the electric  demands of customers who
have  not  selected  an  alternative  supplier.  The  auction  was  successfully
concluded on February 13, 2002,  thereby  eliminating  our obligation to provide
for the energy requirements of BGS during that period. Beginning August 1, 2003,
the  approach  to be taken in  procuring  the energy  needs for BGS has not been
determined.  The NJBPU recently  initiated a formal proceeding to decide how BGS
will be handled after the transition period.

        We are  permitted  to defer for future  recovery the amount by which our
reasonable  and  prudently  incurred  costs for  providing  BGS to  non-shopping
customers and costs  incurred  under NUG  agreements  exceed  amounts  currently
reflected in our BGS rate and market transition charge rate (for the recovery of
stranded  costs).  On  September  26,  2001,  the NJBPU  approved  the merger of
FirstEnergy  and  GPU  subject  to the  terms  and  conditions  set  forth  in a
settlement  agreement  with major  intervenors.  As part of the  settlement,  we
agreed to reduce our costs  deferred  for future  recovery by $300  million,  in
order to ensure that customers receive the benefit of future merger savings.  We
wrote off $300  million of deferred  costs in October  2001 upon  receipt of the
final regulatory approval for the merger, which occurred on October 29, 2001.

          On February 6, 2002, we received a Financing Order from the NJBPU with
authorization to issue $320 million of transition bonds to securitize the
recovery of bondable stranded costs associated with the previously divested
Oyster Creek. The Order grants us the right to charge a usage-based,
non-bypassable transition bond charge (TBC) and provided for the transfer of the
bondable transition property relating to the TBC to JCP&L Transition Funding LLC
(Transition Funding), a
                                       5

<PAGE>

wholly owned limited liability  corporation.  Transition  Funding is expected to
issue and sell up to $320 million of transition bonds that will be recognized on
our  Consolidated  Balance  Sheet in the second  quarter  of 2002,  with the TBC
providing  recovery of  principal,  interest and related fees on the  transition
bonds.

Supply Plan

        As part of our Restructuring Orders, we are obligated,  through July 31,
2002,  to  supply  electricity  to  customers  who do not  choose  an  alternate
supplier.  The total forecasted peak of this obligation is 5,400 megawatts (MW).
The successful BGS auction in New Jersey removed our BGS obligation for 5,100 MW
for the period from August 1, 2002 to July 31, 2003. In that auction FirstEnergy
Solutions Corp., an affiliated company, was a successful bidder to provide 1,700
MW during the same period to us and two other electric  utilities in New Jersey.
Our  current  supply  portfolio  contains  approximately  900  MW  of  long-term
purchases from NUGs and 266 MW of owned generation.  Our remaining obligation is
expected  to be met  through a mix of  short-term  forward  (less than one year)
purchases and spot market purchases.

Environmental Matters

        Various   environmental   liabilities   have  been   recognized  on  the
Consolidated  Balance  Sheet as of December 31, 2001,  based on estimates of the
total costs of cleanup, our proportionate  responsibility for such costs and the
financial ability of other nonaffiliated  entities to pay. We have been named as
a  "potentially  responsible  party"  (PRP) at waste  disposal  sites  which may
require cleanup under the Comprehensive Environmental Response, Compensation and
Liability  Act of 1980.  Allegations  of disposal  of  hazardous  substances  at
historical  sites, and the liability  involved,  are often  unsubstantiated  and
subject to dispute.  Federal law provides that all PRPs for a particular site be
held  liable  on a joint  and  several  basis.  In  addition,  we  have  accrued
liabilities for environmental  remediation of former  manufactured gas plants in
New Jersey;  these costs are being recovered  through a non-bypassable  societal
benefits charge. We have total accrued liabilities aggregating approximately $52
million as of December 31,  2001.  We do not believe  environmental  remediation
costs will have a material adverse effect on our financial condition, cash flows
or results of operations.

Legal Matters

        Various lawsuits,  claims and proceedings related to our normal business
operations are pending  against us, the most  significant of which are described
below.

        We have a 25%  ownership  interest  in Unit 2 of the Three  Mile  Island
Nuclear Plant (TMI-2),  which was damaged during a 1979 accident. As a result of
the  accident,  claims  for  alleged  personal  injury  were filed  against  us,
Metropolitan Edison Company,  Pennsylvania  Electric Company and GPU in the U.S.
District Court for the Middle  District of  Pennsylvania.  In 1996, the District
Court  granted  a  motion  for  summary  judgment  filed by the  defendants  and
dismissed  the ten initial  "test cases" which had been selected for a test case
trial, as well as all of the remaining  2,100 pending claims.  In November 1999,
the U.S.  Court of Appeals for the Third Circuit  affirmed the District  Court's
dismissal of the ten test cases,  but set aside the dismissal of the  additional
pending  claims,  remanding them to the District Court for further  proceedings.
Following  the  resolution  of  judicial  proceedings  dealing  with  admissible
evidence, we have again requested summary judgment of the remaining 2,100 claims
in the District  Court.  On January 15, 2002,  the  District  Court  granted our
motion.  On February 14, 2002, the  plaintiffs  filed a notice of appeal of this
decision (see Note 6 - Other Legal Proceedings).  Although unable to predict the
outcome of this  litigation,  we believe that any liability to which we might be
subject by reason of the TMI-2 accident will not exceed our financial protection
under the Price-Anderson Act.

        In July 1999, the  Mid-Atlantic  states  experienced a severe heat storm
which  resulted in power outages  throughout  the service areas of many electric
utilities,  including ours. In an  investigation  into the causes of the outages
and the reliability of the transmission and distribution systems of all four New
Jersey electric utilities,  the NJBPU concluded that there was not a prima facie
case demonstrating  that,  overall,  we provided unsafe,  inadequate or improper
service to our customers.  In July 1999, two class action lawsuits (subsequently
consolidated  into a single  proceeding)  were  filed  against  us and other GPU
companies  in New Jersey  Superior  Court,  seeking  compensatory  and  punitive
damages  arising  from  the  July  1999  service  interruptions  in our  service
territory.  In May 2001, the court denied  without  prejudice our motion seeking
decertification  of the class.  Discovery  continues in the class action, but no
trial date has been set. The judge has set a schedule  under which factual legal
discovery would conclude in March 2002, and expert reports would be exchanged by
June 2002. In October 2001,  the court held argument on the  plaintiffs'  motion
for  partial  summary  judgment,  which  contends  that we are bound to  several
findings of the NJBPU  investigation.  The plaintiffs'  motion was denied by the
Court in November  2001 and  plaintiffs'  motion  seeking  permission to file an
appeal on this denial of their motion was  rejected by the New Jersey  Appellate
Division.  We have also  filed a motion for  partial  summary  judgment  that is
currently  pending  before the  Superior  Court.  We are  unable to predict  the
outcome of these matters.

                                       6

<PAGE>

Significant Accounting Policies
-------------------------------

        We prepare our  consolidated  financial  statements in  accordance  with
accounting  principles  generally accepted in the United States.  Application of
these  principles  often  requires  a high  degree of  judgment,  estimates  and
assumptions that affect our financial results.  All of our assets are subject to
their own specific  risks and  uncertainties  and are  continually  reviewed for
impairment.  Assets related to the  application of the policies  discussed below
are  similarly  reviewed  with their risks and  uncertainties  reflecting  these
specific factors. Our more significant accounting policies are described below:

Purchase Accounting

          On November 7, 2001, the merger between FirstEnergy and GPU became
effective, and we became a wholly owned subsidiary of FirstEnergy. The merger
was accounted for by the purchase method of accounting, which requires judgment
regarding the allocation of the purchase price based on the fair values of the
assets acquired (including intangible assets) and the liabilities assumed. The
fair values of the acquired assets and assumed liabilities were based primarily
on estimates. The adjustments reflected in our records, which are subject to
adjustment in 2002 when finalized, primarily consist of: (1) revaluation of
certain property, plant and equipment; (2) adjusting preferred stock subject to
mandatory redemption and long-term debt to estimated fair value; (3) recognizing
additional obligations related to retirement benefits; and (4) recognizing
estimated severance and other compensation liabilities. The excess of the
purchase price over the estimated fair values of the assets acquired and
liabilities assumed was recognized as goodwill, which will be reviewed for
impairment at least annually. As of December 31, 2001, we had recorded goodwill
of approximately $1.9 billion related to the merger.

Regulatory Accounting

        We are  subject  to  regulation  that  sets the  prices  (rates)  we are
permitted to charge our customers  based on costs that the  regulatory  agencies
determine we are permitted to recover.  At times,  regulators  permit the future
recovery through rates of costs that would be currently charged to expense by an
unregulated  company.  This  rate-making  process  results in the  recording  of
regulatory assets based on anticipated  future cash inflows.  As a result of the
changing regulatory  framework in New Jersey, a significant amount of regulatory
assets have been recorded.  As of December 31, 2001, we had regulatory assets of
$3.3  billion.  We  continually  review these  assets to assess  their  ultimate
recoverability  within  the  approved  regulatory  guidelines.  Impairment  risk
associated  with  these  assets  relates  to  potentially  adverse  legislation,
judicial or regulatory actions in the future.

Derivative Accounting

        Determination  of appropriate  accounting  for  derivative  transactions
requires the involvement of management representing operations, finance and risk
assessment.  In order to determine the  appropriate  accounting  for  derivative
transactions,  the  provisions of the contract need to be carefully  assessed in
accordance  with  the  authoritative   accounting  literature  and  management's
intended use of the derivative.  New authoritative  guidance  continues to shape
the  application  of  derivative  accounting.   Management's   expectations  and
intentions  are key factors in  determining  the  appropriate  accounting  for a
derivative  transaction and, as a result,  such expectations and intentions must
be documented. Derivative contracts that are determined to fall within the scope
of Statement of Financial Accounting Standards (SFAS) No. 133, as amended,  must
be recorded at their fair value.  Active market prices are not always  available
to  determine  the fair value of the later years of a contract,  requiring  that
various  assumptions  and estimates be used in their  valuation.  We continually
monitor our derivative  contracts to determine if our activities,  expectations,
intentions,  assumptions  and  estimates  remain  valid.  As part of our  normal
operations we enter into  commodities  contracts,  which  increase the impact of
derivative accounting judgments.

Revenue Recognition

        We follow the accrual  method of accounting  for  revenues,  recognizing
revenue for  kilowatt-hours  that have been delivered but not yet billed through
the end of the year. The determination of unbilled revenues requires  management
to make various estimates including:

     -    Net energy purchased or generated for retail load
     -    Losses of energy over distribution lines
     -    Mix of kilowatt-hour  usage by residential,  commercial and industrial
          customers
     -    Kilowatt-hour   usage  of   customers   receiving   electricity   from
          alternative suppliers


Recently Issued Accounting Standards
------------------------------------

        The  Financial  Accounting  Standards  Board (FASB)  approved  SFAS 141,
"Business  Combinations," and SFAS 142, "Goodwill and Other Intangible  Assets,"
on June 29, 2001. SFAS 141 requires that all business combinations

                                       7

<PAGE>

initiated after June 30, 2001 be accounted for using purchase accounting. The
provisions of the new standard relating to the determination of goodwill and
other intangible assets have been applied to our 2001 merger, which was
accounted for as a purchase transaction. Under SFAS 142, amortization of
existing goodwill will cease January 1, 2002. Instead, goodwill will be tested
for impairment at least on an annual basis, and no impairment of goodwill is
anticipated as a result of a preliminary analysis. We did not have any goodwill
prior to our 2001 merger, and we did not amortize goodwill associated with the
merger under the provisions of the new standard.

        In July 2001, the FASB issued SFAS 143, "Accounting for Asset Retirement
Obligations."  The new statement  provides  accounting  standards for retirement
obligations  associated with tangible  long-lived assets, with adoption required
by January 1, 2003.  SFAS 143 requires that the fair value of a liability for an
asset  retirement  obligation be recorded in the period in which it is incurred.
The associated  asset  retirement  costs are capitalized as part of the carrying
amount of the long-lived  asset. Over time the capitalized costs are depreciated
and the present value of the asset retirement liability increases,  resulting in
a period expense.  Upon retirement,  a gain or loss will be recorded if the cost
to settle the retirement  obligation  differs from the carrying  amount.  We are
currently  assessing the new standard and have not yet  determined the impact on
our financial statements.

        In  September  2001,  the FASB  issued  SFAS  144,  "Accounting  for the
Impairment or Disposal of  Long-Lived  Assets."  SFAS 144  supersedes  SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of." The Statement  also  supersedes  the  accounting  and reporting
provisions of APB 30. Our adoption of this Statement, effective January 1, 2002,
will  result in our  accounting  for any  future  impairments  or  disposals  of
long-lived  assets  under the  provisions  of SFAS 144,  but will not change the
accounting   principles  used  in  previous  asset   impairments  or  disposals.
Application of SFAS 144 is not  anticipated to have a major impact on accounting
for impairments or disposal  transactions  compared to the prior  application of
SFAS 121 or APB 30.

                                       8

<PAGE>
<TABLE>

                                        JERSEY CENTRAL POWER & LIGHT COMPANY

                                         CONSOLIDATED STATEMENTS OF INCOME


<CAPTION>

                                                                  Nov 7 -       Jan. 1 -    For the Years Ended Dec. 31,
                                                              Dec. 31, 2001   Nov. 6, 2001        2000        1999
-----------------------------------------------------------------------------------------------------------------------
                                                                                  (In thousands)

<S>                                                            <C>             <C>             <C>          <C>
OPERATING REVENUES........................................     $  282,902  |   $1,838,638      $1,979,297   $2,018,209
                                                               ----------  |   ----------      ----------   ----------
                                                                           |
OPERATING EXPENSES AND TAXES:                                              |
   Fuel and purchased power...............................        136,123  |      932,300         890,812      850,880
   Nuclear operating costs................................           -     |         -             78,487      149,739
   Other operating costs..................................         40,670  |      237,513         303,353      333,134
                                                               ----------  |   ----------      ----------   ----------
     Total operation and maintenance expenses.............        176,793  |    1,169,813       1,272,652    1,333,753
   Provision for depreciation and amortization............         35,124  |      205,918         235,001      241,842
   General taxes..........................................          8,919  |       56,582          64,398       76,824
   Income taxes...........................................         18,400  |      113,478         124,019       88,370
                                                               ----------  |   ----------      ----------   ----------
     Total operating expenses and taxes...................        239,236  |    1,545,791       1,696,070    1,740,789
                                                               ----------  |   ----------      ----------   ----------
                                                                           |
OPERATING INCOME..........................................         43,666  |      292,847         283,227      277,420
                                                                           |
OTHER INCOME (EXPENSE)....................................          1,186  |     (176,875)         24,146       (1,957)
                                                               ----------  |   ----------      ----------   ----------
                                                                           |
INCOME BEFORE NET INTEREST CHARGES........................         44,852  |      115,972         307,373      275,463
                                                               ----------  |   ----------      ----------   ----------
                                                                           |
NET INTEREST CHARGES:                                                      |
   Subsidiaries' preferred stock dividend requirements....          1,605  |        9,095          10,700       10,700
   Interest on long-term debt.............................         14,234  |       77,205          85,220       87,196
   Allowance for borrowed funds used during                                |
     construction.........................................            135  |       (1,665)         (1,287)      (1,775)
   Deferred interest income...............................         (2,243) |      (12,557)         (7,951)      (1,817)
   Other interest expense.................................          1,080  |        9,427           9,879        8,779
                                                               ----------- |   ----------     -----------  -----------
     Net interest charges.................................         14,811  |       81,505          96,561      103,083
                                                               ----------  |   ----------      ----------   ----------
                                                                           |
NET INCOME................................................         30,041  |       34,467         210,812      172,380
                                                                           |
PREFERRED STOCK DIVIDEND                                                   |
   REQUIREMENTS...........................................            698  |        4,547           6,904        8,670
                                                                           |
LOSS ON PREFERRED STOCK                                                    |
   REACQUISITION..........................................           -     |         -               -             848
                                                               ----------  |   ----------      ----------    ---------
                                                                           |
EARNINGS ON COMMON STOCK..................................    $    29,343  |  $    29,920      $  203,908   $  162,862
                                                              ===========  |  ===========      ==========   ==========

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

</TABLE>
                                       9

<PAGE>

<TABLE>

                                JERSEY CENTRAL POWER & LIGHT COMPANY

                                     CONSOLIDATED BALANCE SHEETS
<CAPTION>
As of December 31,                                                                        2001             2000
------------------------------------------------------------------------------------------------------------------
                                                                                              (In thousands)
                                         ASSETS
UTILITY PLANT:
<S>                                                                                    <C>              <C>
   In service...................................................................       $3,431,823   |   $3,282,987
   Less-Accumulated provision for depreciation..................................        1,313,259   |    1,212,784
                                                                                       ----------   |   ----------
                                                                                        2,118,564   |    2,070,203
                                                                                       ----------   |   ----------
   Construction work in progress-                                                                   |
     Electric plant.............................................................           60,482   |       75,201
                                                                                       ----------   |   ----------
                                                                                        2,179,046   |    2,145,404
                                                                                       ----------   |   ----------
OTHER PROPERTY AND INVESTMENTS:                                                                     |
   Nuclear plant decommissioning trusts.........................................          114,899   |      115,311
   Nuclear fuel disposal trust..................................................          137,098   |      126,336
   Long-term notes receivable from associated companies.........................           20,333   |       20,333
   Other........................................................................            6,643   |        6,343
                                                                                       ----------   |   ----------
                                                                                          278,973   |      268,323
                                                                                       ----------   |   ----------
CURRENT ASSETS:                                                                                     |
   Cash and cash equivalents....................................................           31,424   |        2,021
   Receivables-                                                                                     |
     Customers (less accumulated provisions of $12,923,000 and $21,479,000                          |
       respectively, for uncollectible accounts)................................          226,392   |      237,222
     Associated companies.......................................................            6,412   |        8,520
     Other......................................................................           20,729   |       38,107
   Materials and supplies, at average cost......................................            1,348   |          508
   Prepayments and other........................................................           16,569   |       96,914
                                                                                       ----------   |   ----------
                                                                                          302,874   |      383,292
                                                                                       ----------   |   ----------
DEFERRED CHARGES:                                                                                   |
   Regulatory assets............................................................        3,324,804   |    3,185,072
   Goodwill.....................................................................        1,926,526   |         -
   Other........................................................................           27,775   |       26,963
                                                                                       ----------   |   ----------
                                                                                        5,279,105   |    3,212,035
                                                                                       ----------   |   ----------
                                                                                       $8,039,998   |   $6,009,054
                                                                                       ==========   |   ==========
                           CAPITALIZATION AND LIABILITIES                                           |
                                                                                                    |
CAPITALIZATION (See Consolidated Statements of Capitalization):                                     |
   Common stockholder's equity..................................................       $3,163,701   |   $1,459,260
   Preferred stock-                                                                                 |
     Not subject to mandatory redemption........................................           12,649   |       12,649
     Subject to mandatory redemption............................................           44,868   |       51,500
   Company-obligated mandatorily redeemable preferred securities................          125,250   |      125,000
   Long-term debt...............................................................        1,224,001   |    1,093,987
                                                                                       ----------   |   ----------
                                                                                        4,570,469   |    2,742,396
                                                                                       ----------   |   ----------
CURRENT LIABILITIES:                                                                                |
   Currently payable long-term debt and preferred stock.........................           60,848   |       50,847
   Short-term borrowings (Note 5)-                                                                  |
     Associated companies.......................................................           18,149   |         -
     Other......................................................................             -      |       29,200
   Accounts payable-                                                                                |
     Associated companies.......................................................          171,168   |       98,526
     Other......................................................................           89,739   |       87,261
   Accrued  taxes...............................................................           35,783   |        8,836
   Accrued interest.............................................................           25,536   |       23,625
   Other........................................................................           79,589   |       38,168
                                                                                       ----------   |   ----------
                                                                                          480,812   |      336,463
                                                                                       ----------   |   ----------
DEFERRED CREDITS:                                                                                   |
   Accumulated deferred income taxes............................................          514,216   |      666,047
   Accumulated deferred investment tax credits..................................           13,490   |       17,087
   Power purchase contract loss liability ......................................        1,968,823   |    1,699,473
   Nuclear fuel disposal costs..................................................          163,377   |      156,959
   Nuclear plant decommissioning costs..........................................          137,424   |      135,835
   Other........................................................................          191,387   |      254,794
                                                                                       ----------   |   ----------
                                                                                        2,988,717   |    2,930,195
                                                                                       ----------   |   ----------
COMMITMENTS AND CONTINGENCIES                                                                       |
   (Notes 3 and 6)..............................................................
                                                                                       ----------   |   ----------
                                                                                       $8,039,998   |   $6,009,054
                                                                                       ==========   |   ==========
The accompanying Notes to Consolidated Financial Statements are an integral part
of these balance sheets.

</TABLE>
                                       10
<PAGE>

<TABLE>

                                JERSEY CENTRAL POWER & LIGHT COMPANY

                              CONSOLIDATED STATEMENTS OF CAPITALIZATION


As of December 31,                                                                            2001         2000
-------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                            (Dollars in thousands, except per share amounts)

COMMON STOCKHOLDER'S EQUITY:
<S>                                                                                       <C>           <C>
   Common stock, par value $10 per share, authorized 16,000,000 shares                                |
     15,371,270 shares outstanding..............................................          $   153,713 | $   153,713
   Other paid-in capital........................................................            2,981,117 |     510,769
   Accumulated other comprehensive loss (Note 4F).............................                 (472)|          (8)
   Retained earnings (Note 4A)..................................................               29,343 |     794,786
                                                                                          ----------- | -----------
     Total common stockholder's equity..........................................            3,163,701 |   1,459,260
                                                                                          ----------- | -----------
<CAPTION>
                                               Number of Shares           Optional
                                                  Outstanding          Redemption Price
                                               ----------------      --------------------
                                               2001        2000      Per Share  Aggregate
                                               ----        ----      ---------  ---------
PREFERRED STOCK (Note 4B):
Cumulative, without par value-
Authorized 125,000 shares
<S>                                           <C>         <C>      <C>         <C>        <C>           <C>
   Not Subject to Mandatory Redemption:
        4%   Series.....................      125,000     125,000  $   106.50  $  13,313       12,649 |      12,649
                                                                                                      |
   Subject to Mandatory Redemption (Note 4C):                                                         |
     8.65% Series J.....................      250,001     333,334      101.30  $  25,325       26,750 |      33,333
     7.52% Series K.....................      265,000     290,000      103.76     27,496       28,951 |      29,000
     Redemption Within One Year.........                                                      (10,833)|     (10,833)
                                             --------    --------              ---------  ----------- | -----------
       Total Subject to Mandatory                                                                     |
         Redemption.....................      515,001     623,334              $  52,821       44,868 |      51,500
                                             ========    ========              =========  ----------- | -----------

<CAPTION>
COMPANY  OBLIGATED  MANDATORILY REDEEMABLE
PREFERRED  SECURITIES OF SUBSIDIARY LIMITED
PARTNERSHIP HOLDING SOLELY COMPANY
SUBORDINATED DEBENTURES (NOTE 4D):
   Cumulative, $25 par value -
   Authorized 5,000,000 shares
     Subject to Mandatory Redemption:
<S>                                                                                       <C>           <C>
       8.56% due 2044...........................................................              125,250 |     125,000
                                                                                                      |
LONG-TERM DEBT (Note 4E):                                                                             |
   First mortgage bonds:                                                                              |
     6.450% due 2001............................................................                -     |      40,000
     9.000% due 2002............................................................               50,000 |      50,000
     6.375% due 2003............................................................              150,000 |     150,000
     7.125% due 2004............................................................              160,000 |     160,000
     6.780% due 2005............................................................               50,000 |      50,000
     6.850% due 2006............................................................               40,000 |      40,000
     8.250% due 2006............................................................               50,000 |      50,000
     7.900% due 2007............................................................               40,000 |      40,000
     7.125% due 2009............................................................                6,300 |       6,300
     7.100% due 2015............................................................               12,200 |      12,200
     9.200% due 2021............................................................               50,000 |      50,000
     8.320% due 2022............................................................               40,000 |      40,000
     8.550% due 2022............................................................               30,000 |      30,000
     8.820% due 2022............................................................               12,000 |      12,000
     8.850% due 2022............................................................               38,000 |      38,000
     7.980% due 2023............................................................               40,000 |      40,000
     7.500% due 2023............................................................              125,000 |     125,000
     8.450% due 2025............................................................               50,000 |      50,000
     6.750% due 2025............................................................              150,000 |     150,000
                                                                                          ----------- | -----------
       Total first mortgage bonds...............................................            1,093,500 |   1,133,500
                                                                                          ----------- | -----------
                                                                                                      |
   Secured notes:                                                                                     |
     6.450% due 2006............................................................              150,000 |       -
                                                                                          ----------- | -----------
   Unsecured notes:                                                                                   |
     7.69% due 2039.............................................................                2,998 |       3,012
                                                                                          ----------- | -----------
   Net unamortized premium / (discount) on debt.....................................           27,518 |      (2,511)
                                                                                          ----------- | -----------
   Long-term debt due within one year...............................................          (50,015)|     (40,014)
                                                                                          ----------- | -----------
       Total long-term debt.........................................................        1,224,001 |   1,093,987
                                                                                          ----------- | -----------
                                                                                                      |
TOTAL CAPITALIZATION................................................................      $ 4,570,469 | $ 2,742,396
                                                                                          =========== | ===========

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
                                       11

<PAGE>
<TABLE>


                                JERSEY CENTRAL POWER & LIGHT COMPANY

                        CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
<CAPTION>


                                                                 Common Stock                 Accumulated
                                                              -------------------    Other       Other
                                               Comprehensive    Number      Par     Paid-In  Comprehensive  Retained
                                                   Income     of Shares    Value    Capital  Income (Loss)  Earnings
                                               -------------  ----------  -------   -------  -------------  --------
                                                                       (Dollars in thousands)

<S>                                                 <C>       <C>         <C>      <C>         <C>         <C>
Balance, January 1, 1999.......................               15,371,270  $153,713 $  510,769  $  (425)    $ 893,016
   Net income..................................     $172,380                                                 172,380
   Net unrealized gains on investments.........            7                                         7
   Minimum pension liability...................          425                                       425
                                                    --------
   Comprehensive income........................      172,812
                                                    --------
   Loss on preferred stock reacquisition......                                                                  (848)
   Cash dividends on preferred stock...........                                                               (8,670)
   Cash dividends on common stock..............                                                             (335,000)
--------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999.....................               15,371,270   153,713    510,769        7       720,878
   Net income..................................      210,812                                                 210,812
   Minimum pension liability...................          (15)                                      (15)
                                                    --------
   Comprehensive income........................      210,797
                                                    --------
   Cash dividends on preferred stock...........                                                               (6,904)
   Cash dividends on common stock..............                                                             (130,000)
--------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000.....................               15,371,270   153,713    510,769       (8)      794,786
   Net income..................................       34,467                                                  34,467
   Net unrealized gains on investments.........            2                                         2
   Net unrealized gain on derivative instruments         768                                       768
                                                    --------
   Comprehensive income........................       35,237
                                                    --------
   Cash dividends on preferred stock...........                                                               (4,547)
   Cash dividends on common stock  ............                                                             (175,000)
--------------------------------------------------------------------------------------------------------------------
Balance, November 6, 2001......................               15,371,270   153,713    510,769      762       649,706
   Purchase accounting fair value adjustment...                                     2,470,348     (762)     (649,706)
____________________________________________________________________________________________________________________
Balance, November 7, 2001......................               15,371,270   153,713  2,981,117     -             -
   Net income..................................       30,041                                                 30,041
   Net unrealized gain (loss)
     on derivative instruments.................         (472)                                     (472)
                                                    --------
   Comprehensive income........................     $ 29,569
                                                    --------
   Cash dividends on preferred stock...........                                                                 (698)
--------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2001.....................               15,371,270  $153,713 $2,981,117  $  (472)    $  29,343
====================================================================================================================


                                 CONSOLIDATED STATEMENTS OF PREFERRED STOCK
<CAPTION>
                                                          Not Subject to            Subject to
                                                      Mandatory Redemption     Mandatory Redemption
                                                      --------------------    ---------------------
                                                       Number     Carrying     Number      Carrying
                                                      of Shares     Value     of Shares      Value
                                                      ---------   --------    ---------    --------
                                                                   (Dollars in thousands)

<S>                                                   <C>        <C>          <C>          <C>
             Balance, January 1, 1999............      375,000   $ 37,741     5,890,000    $214,000
               Redemptions-
                 7.88% Series  ..................     (250,000)   (25,092)
                 7.52% Series  ..................                               (50,000)     (5,000)
             ---------------------------------------------------------------------------------------
             Balance, December 31, 1999..........      125,000     12,649     5,840,000     209,000
               Redemptions-
                 7.52% Series  ..................                               (50,000)     (5,000)
                 8.65% Series  ..................                              (166,666)    (16,667)
             ---------------------------------------------------------------------------------------
             Balance, December 31, 2000..........      125,000     12,649     5,623,334     187,333
               Redemptions-
                 7.52% Series  ..................                               (25,000)     (2,500)
                 8.65% Series  ..................                               (83,333)     (8,333)
                 Purchase accounting fair
                    value adjustment.............                                             4,451
             ---------------------------------------------------------------------------------------
             Balance, December 31, 2001..........      125,000   $ 12,649     5,515,001    $180,951
             =======================================================================================



The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

</TABLE>
                                       12
<PAGE>

<TABLE>

                                        JERSEY CENTRAL POWER & LIGHT COMPANY

                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                                      Nov. 7 -     Jan. 1 -  For the Years Ended Dec. 31,
                                                                  Dec. 31, 2001  Nov. 6, 2001    2000        1999
------------------------------------------------------------------------------------------------------------------------
                                                                                      (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                  <C>         <C>           <C>         <C>
Net Income...........................................................$ 30,041 |  $  34,467     $ 210,812   $ 172,380
Adjustments to reconcile net income to net                                    |
   cash from operating activities:                                            |
     Provision for depreciation and amortization.....................  35,124 |    205,918       235,001     241,842
     Nuclear fuel and lease amortization.............................    -    |       -           11,472      29,507
     Other amortization..............................................   1,360 |     23,025        34,563      30,441
     NJBPU restructuring rate order..................................    -    |       -             -        115,000
     Deferred costs, net............................................. (25,471)|    (29,312)     (229,321)    (37,841)
     Deferred income taxes, net......................................   5,609 |    (58,132)      270,479     (78,072)
     Investment tax credits, net.....................................    (540)|     (3,057)      (15,027)    (18,111)
     Receivables.....................................................   7,050 |     27,177        11,766     (84,364)
     Materials and supplies..........................................       2 |       (842)         (268)     46,023
     Accounts payable................................................  (5,060)|    (44,498)       51,633      21,788
     Other...........................................................  20,563 |     66,328      (230,100)    (65,161)
                                                                     -------- |  ---------     ---------   ---------
       Net cash provided from operating activities...................  68,678 |    221,074       351,010     373,432
                                                                     -------- |  ---------     ---------   ---------
                                                                              |
CASH FLOWS FROM FINANCING ACTIVITIES:                                         |
New Financing-                                                                |
     Long-term debt..................................................    -    |    148,796          -           -
     Short-term borrowings, net......................................    -    |       -           29,200        -
Redemptions and Repayments-                                                   |
     Preferred stock.................................................    -    |     10,833        21,667      30,940
     Long-term debt..................................................  40,000 |       -           40,000          12
     Short-term borrowings, net......................................   1,851 |      9,200          -        122,344
     Capital lease payments..........................................    -    |       -           48,516      27,347
Dividend Payments-                                                            |
     Common stock....................................................    -    |    175,000       130,000     335,000
     Preferred stock.................................................     698 |      4,547         7,065       7,468
                                                                     -------- |  ---------     ---------   ---------
       Net cash used for financing activities........................  42,549 |     50,784       218,048     523,111
                                                                     -------- |  ---------     ---------   ---------
                                                                              |
CASH FLOWS FROM INVESTING ACTIVITIES:                                         |
Property additions...................................................  21,487 |    141,030       144,389     140,915
Contributions to decommissioning trusts..............................     202 |      1,004       130,444      59,175
Sale of investments..................................................    -    |       -          (74,797)   (413,753)
Other................................................................   1,078 |      2,215           624       2,162
                                                                     -------- |  ---------     ---------   ---------
       Net cash used for (provided from) investing activities........  22,767 |    144,249       200,660    (211,501)
                                                                     -------- |  ---------     ---------   ---------
Net increase (decrease) in cash and cash equivalents.................   3,362 |     26,041       (67,698)     61,822
Cash and cash equivalents at beginning of period.....................  28,062 |      2,021        69,719       7,897
                                                                     -------- |  ---------     ---------   ---------
Cash and cash equivalents at end of period...........................$ 31,424 |  $  28,062     $   2,021   $  69,719
                                                                     ======== |  =========     =========   =========
                                                                              |
SUPPLEMENTAL CASH FLOWS INFORMATION:                                          |
Cash Paid During the Year-                                                    |
     Interest (net of amounts capitalized)...........................$  4,787 |  $  95,509     $  99,961   $ 104,924
                                                                     ======== |  =========     =========   =========
     Income taxes (refund)...........................................$ 20,586 |  $  19,365     $ (50,105)  $ 189,304
                                                                     ======== |  =========     =========   =========

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

</TABLE>
                                       13
<PAGE>

<TABLE>
                                         JERSEY CENTRAL POWER & LIGHT COMPANY

                                          CONSOLIDATED STATEMENTS OF TAXES

<CAPTION>
                                                                      Nov. 7 -     Jan. 1 -  For the Years Ended Dec.31,
                                                                  Dec. 31, 2001  Nov. 6, 2001    2000        1999
-----------------------------------------------------------------------------------------------------------------------
                                                                                      (In thousands)
GENERAL TAXES:
<S>                                                                <C>           <C>          <C>         <C>
Real and personal property......................................... $     283  |  $    3,589  $    4,093  $    4,668
State gross receipts...............................................     1,269  |        -           -           -
Social security and unemployment...................................        (1) |           7        -             95
NJ TEFA............................................................     6,765  |      42,418      47,521      58,831
Other..............................................................       603  |      10,568      12,784      13,230
                                                                   ----------  |  ----------  ----------  ----------
       Total general taxes......................................... $   8,919  |  $   56,582  $   64,398  $   76,824
                                                                    =========  |  ==========  ==========  ==========
                                                                               |
PROVISION FOR INCOME TAXES:                                                    |
Currently payable-                                                             |
   Federal......................................................... $  11,827  |  $   41,826  $ (109,572) $  147,586
   State...........................................................     3,205  |      19,415     (26,005)     49,567
                                                                    ---------  |   ---------  ----------  ----------
                                                                       15,032  |      61,241    (135,577)    197,153
                                                                    ---------  |   ---------  ----------- ----------
Deferred, net-                                                                 |
   Federal.........................................................     4,268  |     (36,210)    209,127     (54,760)
   State...........................................................     1,341  |     (21,922)     61,352     (23,312)
                                                                    ---------  |   ---------  ----------  ----------
                                                                        5,609  |     (58,132)    270,479     (78,072)
                                                                    ---------  |  ----------  ----------  -----------
Investment tax credit amortization.................................      (540) |      (3,057)    (15,027)    (18,111)
                                                                    ---------  |  ----------  ----------  ----------
       Total provision for income taxes............................ $  20,101  |  $       52  $  119,875  $  100,970
                                                                    =========  |  ==========  ==========  ==========
                                                                               |
INCOME STATEMENT CLASSIFICATION                                                |
OF PROVISION FOR INCOME TAXES:                                                 |
Operating income................................................... $  18,400  |  $  113,478  $  124,019  $   88,370
Other income.......................................................     1,701  |    (113,426)     (4,144)     12,600
                                                                    ---------  |  ----------  ----------  ----------
       Total provision for income taxes............................ $  20,101  |  $       52  $  119,875  $  100,970
                                                                    =========  |  ==========  ==========  ==========
                                                                               |
RECONCILIATION OF FEDERAL INCOME TAX                                           |
EXPENSE AT STATUTORY RATE TO TOTAL                                             |
PROVISION FOR INCOME TAXES:                                                    |
Book income before provision for income taxes...................... $  50,142  |  $   34,519  $  330,688  $  273,349
                                                                    =========  |  ==========  ==========  --========
Federal income tax expense at statutory rate....................... $  17,550  |  $   12,082  $  115,741  $   95,672
Increases (reductions) in taxes resulting from-                                |
   Amortization of investment tax credits..........................      (540) |      (3,057)    (15,027)    (12,481)
   Depreciation....................................................       226  |       3,563       3,230       2,684
   State income tax, net of federal tax............................     3,077  |       4,355      21,987      16,232
   Allocated share of consolidated tax savings.....................     --     |      (8,509)      --         (2,421)
   Sale of generation assets.......................................     --     |       --         (6,239)      --
   Other, net......................................................      (212) |      (8,382)        183       1,284
                                                                    ---------- |  ----------  ----------  -----------
       Total provision for income taxes............................ $  20,101  |  $       52  $  119,875  $  100,970
                                                                    =========  |  ==========  ==========  ==========
                                                                               |
ACCUMULATED DEFERRED INCOME TAXES AT                                           |
DECEMBER 31:                                                                   |
Property basis differences......................................... $ 288,255  |              $  302,476  $  403,250
Nuclear decommissioning............................................    59,716  |                  97,817       2,264
Deferred sale and leaseback costs..................................   (16,240) |                 (15,605)    (15,429)
Purchase accounting basis difference...............................   (71,900) |                   --          --
Sale of generation assets..........................................   202,485  |                 235,923       --
Regulatory transition charge.......................................   123,042  |                  99,930       --
Provision for rate refund..........................................   (46,942) |                 (46,942)    (46,942)
Customer receivables for future income taxes.......................    16,749  |                  33,234      29,073
Other..............................................................   (40,949) |                 (40,786)    (17,232)
                                                                    ---------  |              ----------  ----------
       Net deferred income tax liability........................... $ 514,216  |              $  666,047  $  354,984
                                                                    =========  |              ==========  ==========


The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

</TABLE>
                                       14
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          The consolidated financial statements include Jersey Central Power &
Light Company (Company) and its wholly owned subsidiaries. All significant
intercompany transactions have been eliminated. The Company is a wholly owned
subsidiary of FirstEnergy Corp. FirstEnergy also holds directly all of the
issued and outstanding common shares of Ohio Edison Company (OE), The Cleveland
Electric Illuminating Company (CEI), The Toledo Edison Company (TE), American
Transmission Systems, Inc. (ATSI), Metropolitan Edison Company (Met-Ed) and
Pennsylvania Electric Company (Penelec). The Company, Met-Ed and Penelec were
formerly wholly owned subsidiaries of GPU, Inc., which merged with FirstEnergy
on November 7, 2001. Pre-merger period and post-merger period financial results
are separated by a heavy black line.

        The Company follows the accounting policies and practices  prescribed by
the New  Jersey  Board  of  Public  Utilities  (NJBPU)  and the  Federal  Energy
Regulatory  Commission  (FERC).  The  preparation  of  financial  statements  in
conformity with accounting  principles  generally  accepted in the United States
(GAAP)  requires  management to make periodic  estimates  and  assumptions  that
affect the reported  amounts of assets,  liabilities,  revenues and expenses and
disclosure of contingent  assets and  liabilities.  Actual  results could differ
from these  estimates.  Certain  prior year  amounts have been  reclassified  to
conform with the current year presentation.


     REVENUES-

        The  Company's  principal  business  is  providing  electric  service to
customers in New Jersey.  The Company's  retail customers are metered on a cycle
basis.  Revenue is recognized for unbilled  electric  service through the end of
the year.

        Receivables from customers include sales to residential,  commercial and
industrial  customers  and sales to wholesale  customers.  There was no material
concentration  of receivables  as of December 31, 2001 or 2000,  with respect to
any particular segment of the Company's customers.


     REGULATORY PLAN-

          New Jersey is evolving to a competitive electric utility marketplace.
In March 2001, the NJBPU issued a Final Decision and Order (Final Order) with
respect to the Company's rate unbundling, stranded cost and restructuring
filings, which superseded its 1999 Summary Order. The Final Order confirms rate
reductions set forth in the Summary Order, which remain in effect at increasing
levels through July 2003 with rates after July 31, 2003 to be determined in a
rate case commencing in 2002. The Final Order also confirms the right of
customers to select their generation suppliers effective August 1, 1999, and
includes the deregulation of electric generation service costs. The Final Order
confirms the establishment of a non-bypassable societal benefits charge to
recover costs which include nuclear plant decommissioning and manufactured gas
plant remediation, as well as a non-bypassable market transition charge (MTC)
primarily to recover stranded costs; however, the NJBPU deferred making a final
determination of the net proceeds and stranded costs related to prior generating
asset divestitures until the Company's request for an Internal Revenue Service
(IRS) ruling regarding the treatment of associated federal income tax benefits
is acted upon. Should the IRS ruling support the return of the tax benefits to
ratepayers, the Company would need to record a corresponding charge to income of
approximately $25 million, plus interest.

          The Company has an obligation to provide basic generation service
(BGS), that is, it must act as provider of last resort to non-shopping customers
as a result of the NJBPU's restructuring plans. The Company obtains its supply
of electricity to meet its BGS obligation to non-shopping customers almost
entirely from contracted and open market purchases. The Company is permitted to
defer for future collection from customers the amounts by which its costs of
supplying BGS to non-shopping customers and costs incurred under non-utility
generation agreements exceed amounts collected through BGS and MTC rates. As of
December 31, 2001, the accumulated deferred cost balance totaled approximately
$300 million, after giving effect to the reduction discussed below. The Final
Order provided for the ability to securitize stranded costs associated with the
divested Oyster Creek Nuclear Generation Station. In February 2002, the Company
received NJBPU authorization to issue $320 million of transition bonds to
securitize the recovery of these costs. The NJBPU order also provides for a
usage-based non-bypassable transition bond charge and for the transfer of the
bondable transition property to another entity. The Company plans to sell
transition bonds in the second quarter of 2002, which will be recognized on the
Consolidated Balance Sheet. The Final Order also allows for additional
securitization of the Company's deferred balance to the extent permitted by law
upon application by the Company and a determination by the NJBPU that the
conditions of the New Jersey restructuring legislation are met. There can be no
assurance as to the extent, if any, that the NJBPU will permit such
securitization.

        In June  2001,  the four  incumbent  New  Jersey  electric  distribution
companies,  including the Company, filed a joint proposal seeking NJBPU approval
of a competitive  bidding process to procure supply for the provision of BGS for
the period  August 1, 2002 through July 31, 2003.  In December  2001,  the NJBPU
authorized the auctioning of BGS to meet

                                       15
<PAGE>

the  electric  demands of all  customers  who have not  selected an  alternative
supplier. BGS for all four companies,  for the period August 1, 2002 to July 31,
2003, was simultaneously  put out for bid. The auction,  which ended on February
13,  2002 and was  approved  by the NJBPU on  February  15,  2002,  removed  the
Company's BGS  obligation of 5,100  megawatts for the period from August 1, 2002
to July  31,  2003.  The  auction  represents  a  transitional  mechanism  and a
different  model for the  procurement  of BGS  commencing  August 1, 2003 may be
adopted.

        On September 26, 2001, the NJBPU approved the merger between FirstEnergy
and GPU, (see Note 2 - Merger)  subject to the terms and conditions set forth in
a Stipulation  of  Settlement  which had been signed by the major parties in the
merger discussions. Under this Stipulation of Settlement,  FirstEnergy agreed to
reduce the Company's  regulatory assets by $300 million, in order to ensure that
customers  receive the benefit of future merger  savings.  The Company wrote off
$300 million of its deferred costs upon receipt of the final regulatory approval
for the merger, which occurred on October 29, 2001.

        The application of Statement of Financial  Accounting  Standards  (SFAS)
No.  71,  "Accounting  for the  Effects  of Certain  Types of  Regulation,"  was
discontinued in 1999 with respect to the Company's  generation  operations.  The
Company  subsequently  divested  substantially all of its generating assets. The
Securities and Exchange Commission issued interpretive  guidance regarding asset
impairment  measurement,  concluding that any supplemental  regulated cash flows
such as a Competitive  Transition  Charge should be excluded from the cash flows
of assets in a portion of the  business  not  subject to  regulatory  accounting
practices.   If  those  assets  are  impaired,  a  regulatory  asset  should  be
established if the costs are  recoverable  through  regulatory  cash flows.  Net
assets  included  in utility  plant  relating  to the  operations  for which the
application  of SFAS 71 was  discontinued  were $46 million as of  December  31,
2001.  All of the  Company's  regulatory  assets are  expected to continue to be
recovered under provisions of the Company's regulatory orders.


     PROPERTY, PLANT AND EQUIPMENT-

          As a result of the merger, certain of the Company's property, plant
and equipment have been adjusted to reflect fair value. The majority of the
Company's property, plant and equipment is reflected at original cost since
such assets remain subject to rate regulation on a historical cost basis. In
addition to its wholly owned facilities, the Company holds a 50% ownership
interest in Yards Creek Pumped Storage Facility, and its net book value was
approximately $21.5 million as of December 31, 2001.

        The  Company  provides  for  depreciation  on a  straight-line  basis at
various rates over the estimated lives of property included in plant in service.
The annualized  composite rate was approximately  3.4% in 2001, 3.3% in 2000 and
2.9% in 1999.

        Annual depreciation expense in 2001 included approximately $27.1 million
for future decommissioning costs applicable to the Company's ownership in Unit 2
of the Three Mile Island Nuclear Plant (TMI-2), a demonstration  nuclear reactor
owned by a wholly owned  subsidiary of the Company (in  conjunction  with Met-Ed
and Penelec) and decommissioning liabilities for its previously divested nuclear
generating  units. The Company's share of the future  obligation to decommission
these units is approximately $130.1 million in current dollars and (using a 4.0%
escalation rate) approximately  $214.1 million in future dollars.  The estimated
obligation  and the  escalation  rate  were  developed  based  on site  specific
studies.  Decommissioning of the demonstration nuclear reactor is expected to be
completed in 2003;  payments for  decommissioning of TMI-2 are expected to begin
in 2014, when actual  decommissioning work is expected to begin. The Company has
recovered  approximately  $33 million for  decommissioning  through its electric
rates from customers  through December 31, 2001. The Company has also recognized
an estimated liability of approximately $12.1 million related to decontamination
and  decommissioning  of nuclear  enrichment  facilities  operated by the United
States Department of Energy, as required by the Energy Policy Act of 1992.

        In July 2001,  the Financial  Accounting  Standards  Board (FASB) issued
SFAS 143,  "Accounting  for Asset  Retirement  Obligations."  The new  statement
provides  accounting  treatment  for  retirement   obligations  associated  with
tangible  long-lived  assets with adoption  required as of January 1, 2003. SFAS
143  requires  that  the  fair  value of a  liability  for an  asset  retirement
obligation  be recorded in the period in which it is  incurred.  The  associated
asset  retirement  costs are  capitalized as part of the carrying  amount of the
long-lived  asset.  Over  time the  capitalized  costs are  depreciated  and the
present value of the asset retirement liability increases, resulting in a period
expense. Upon retirement, a gain or loss will be recorded if the costs to settle
the  retirement  obligation  differs  from the  carrying  amount.  Under the new
standard,  additional  assets and  liabilities  relating  principally to nuclear
decommissioning obligations will be recorded, the pattern of expense recognition
will change and income from the external decommissioning trusts will be recorded
as investment  income.  The Company is currently  assessing the new standard and
has not yet quantified the impact on its financial statements.


     INCOME TAXES-

        Details  of the  total  provision  for  income  taxes  are  shown on the
Consolidated  Statements  of Taxes.  Deferred  income  taxes  result from timing
differences  in the  recognition of revenues and expenses for tax and accounting
purposes.  Investment tax credits,  which were deferred when utilized, are being
amortized over the recovery period of the related property. The liability method
is used to account for deferred  income taxes.  Deferred  income tax liabilities
related

                                       16
<PAGE>

to tax and accounting  basis  differences are recognized at the statutory income
tax rates in effect when the  liabilities  are expected to be paid.  Results for
the period  January 1, 2001  through  November 6, 2001 are included in the final
consolidated  federal  income  tax  return of GPU,  and  results  for the period
November 7, 2001 through  December 31, 2001 are included in  FirstEnergy's  2001
consolidated  federal income tax return.  In both cases,  the  consolidated  tax
liability  is  allocated  on a  "stand-alone"  company  basis,  with the Company
recognizing  the tax benefit for any tax losses or credits it contributed to the
consolidated return.


     RETIREMENT BENEFITS-

          Effective December 31, 2001, the Company's defined benefit pension
plan was merged into FirstEnergy's defined benefit pension plan. FirstEnergy's
trusteed, noncontributory defined benefit pension plan covers almost all of the
Company's full-time employees. Upon retirement, employees receive a monthly
pension based on length of service and compensation. On December 31, 2001, the
GPU pension plans were merged with the FirstEnergy plan. FirstEnergy uses the
projected unit credit method for funding purposes. The assets of the pension
plan consist primarily of common stocks, United States government bonds and
corporate bonds. The FirstEnergy and GPU postretirement benefit plans are
currently separately maintained; the information shown below is aggregated as of
December 31, 2001. Costs for the year 2001 include the former GPU companies'
pension and other postretirement benefit costs for the period November 7, 2001
through December 31, 2001.

        The Company provides a minimum amount of noncontributory  life insurance
to retired employees in addition to optional contributory insurance. Health care
benefits,  which include certain employee  deductibles and copayments,  are also
available  to  retired   employees,   their   dependents   and,   under  certain
circumstances,  their survivors.  The Company pays insurance premiums to cover a
portion of these benefits in excess of set limits;  all amounts up to the limits
are paid by the Company.  The Company  recognizes the expected cost of providing
other  postretirement  benefits to employees and their beneficiaries and covered
dependents  from the time  employees  are hired  until they  become  eligible to
receive those benefits.

        The  following  sets  forth the funded  status of the plans and  amounts
recognized on FirstEnergy's Consolidated Balance Sheet as of December 31, 2001:

                                                                Other
                                       Pension Benefits  Postretirement Benefits
                                       ----------------  -----------------------
                                                   (In millions)
         Change in benefit obligation:
         Benefit obligation as
           of January 1.................    $1,506.1            $752.0
         Service cost...................        34.9              18.3
         Interest cost..................       133.3              64.4
         Plan amendments................         3.6               --
         Actuarial loss.................       123.1              73.3
         Voluntary early retirement
           program......................         --                2.3
         GPU acquisition................     1,878.3             716.9
         Benefits paid..................      (131.4)            (45.6)
         -----------------------------------------------------------------------
         Benefit obligation as of
           December 31..................     3,547.9           1,581.6
         -----------------------------------------------------------------------

         Change in plan assets:
         Fair value of plan assets
           as of January 1..............     1,706.0              23.0
         Actual return on plan assets...         8.1              12.7
         Company contribution...........         --               43.3
         GPU acquisition................     1,901.0             462.0
         Benefits paid..................      (131.4)             (6.0)
         -----------------------------------------------------------------------
         Fair value of plan assets
           as of December 31............     3,483.7             535.0
         -----------------------------------------------------------------------

         Funded status of plan..........       (64.2)         (1,046.6)
         Unrecognized actuarial
           loss (gain)..................       222.8             212.8
         Unrecognized prior
           service cost.................        87.9              17.7
         Unrecognized net transition
           obligation (asset)...........         --              101.6
         -----------------------------------------------------------------------
         Prepaid (accrued) benefit cost.    $  246.5          $ (714.5)
         =======================================================================

         Assumptions used as
           of December 31, 2001:
         Discount rate..................        7.25%             7.25%
         Expected long-term return
           on plan assets...............       10.25%            10.25%
         Rate of compensation
           increase.....................        4.00%             4.00%

                                       17
<PAGE>

        FirstEnergy's net pension and other postretirement benefit costs for the
year ended December 31, 2001 were computed as follows:

                                                                Other
                                        Pension Benefits Postretirement Benefits
                                        ---------------- -----------------------
                                                   (In millions)
         Service cost...................    $   34.9             $18.3
         Interest cost..................       133.3              64.4
         Expected return on
           plan assets..................      (204.8)             (9.9)
         Amortization of transition
           obligation (asset)...........        (2.1)              9.2
         Amortization of prior
           service cost.................         8.8               3.2
         Recognized net actuarial
           loss (gain)..................         --                4.9
         Voluntary early retirement
           program......................         6.1               2.3
         -----------------------------------------------------------------------
         Net benefit cost...............     $ (23.8)            $92.4
         =======================================================================

        The composite health care trend rate assumption is approximately  10% in
2002,  9% in 2003 and 8% in 2004,  trending  to  4%-6% in later  years.  Assumed
health care cost trend rates have a significant  effect on the amounts  reported
for the health care plan.  An increase in the health care trend rate  assumption
by one percentage point would increase  FirstEnergy's total service and interest
cost components by $14.6 million and the  postretirement  benefit  obligation by
$151.2 million.  A decrease in the same assumption by one percentage point would
decrease the total service and interest cost components by $12.7 million and the
postretirement benefit obligation by $131.3 million.

Pre-Merger

        As of December 31, 2000, the Company's  balance sheet  included  accrued
benefit costs of $1.8 million and $0.1 million, respectively, related to pension
and other postretirement  benefit obligations.  In addition,  for the year ended
December 31, 2000, the Company recognized in income net benefit  costs/(credits)
of $(0.5)  million  and  $0.04  million,  respectively,  for  pension  and other
postretirement  benefits,  and for the year ended December 31, 1999, the Company
recognized  net  benefit  costs/(credits)  of $0.2  million  and $0.05  million,
respectively.


     TRANSACTIONS WITH AFFILIATED COMPANIES-

        During the three years ended  December 31, 2001,  GPU Service,  Inc., an
affiliated company, provided legal, accounting,  financial and other services to
the Company. In addition,  prior to the sales of the Company's generating assets
in 2000 and 1999,  affiliated  companies GPU Nuclear,  Inc. and GPU  Generation,
Inc. conducted generation operations for the company. The total cost of services
rendered by affiliates  was $279 million,  $464 million and $580 million for the
years 2001, 2000 and 1999,  respectively.  Of these amounts,  $141 million, $259
million and $393  million  were  charged to income for the years 2001,  2000 and
1999, respectively.


     SUPPLEMENTAL CASH FLOWS INFORMATION-

        All temporary cash  investments  purchased  with an initial  maturity of
three  months  or less are  reported  as cash  equivalents  on the  Consolidated
Balance Sheets at cost, which approximates their fair market value.

        All borrowings with initial maturities of less than one year are defined
as financial instruments under GAAP and are reported on the Consolidated Balance
Sheets at cost, which  approximates  their fair market value. The following sets
forth the  approximate  fair  value and  related  carrying  amounts of all other
long-term debt,  preferred stock subject to mandatory redemption and investments
other than cash and cash equivalents as of December 31:

                                          2001                  2000
        -------------------------------------------------------------------
                                   Carrying   Fair        Carrying   Fair
                                     Value   Value          Value    Value
        -------------------------------------------------------------------
                                                (In millions)
         Long-term debt..........  $1,246   $1,250         $1,134    $1,125
         Preferred stock.........  $  176   $  180         $  187    $  188
         Investments other
           than cash and
           cash equivalents......  $  253   $  252         $  243    $  243
        -------------------------------------------------------------------
                                   $1,675   $1,682         $1,564    $1,556
        ===================================================================


        The fair  values of  long-term  debt and  preferred  stock  reflect  the
present value of the cash  outflows  relating to those  securities  based on the
current  call  price,  the yield to  maturity  or the  yield to call,  as deemed
appropriate at the end of each respective year. The yields assumed were based on
securities  with similar  characteristics  offered by  corporations  with credit
ratings  similar to the Company's  ratings.  Long-term debt and preferred  stock
subject to mandatory redemption were recognized at fair value in connection with
the merger.

        The fair  value of  investments  other  than  cash and cash  equivalents
represent cost (which  approximates fair value) or the present value of the cash
inflows based on the yield to maturity. The yields assumed were based on

                                       18

<PAGE>

financial instruments with similar characteristics and terms.  Investments other
than  cash and  cash  equivalents  include  decommissioning  trust  investments.
Unrealized gains and losses applicable to the  decommissioning  trusts have been
recognized  in  the  trust  investment  with  a  corresponding   change  to  the
decommissioning  liability.  The  Company  has no  securities  held for  trading
purposes.

        On  January 1, 2001,  the  Company  adopted  SFAS 133,  "Accounting  for
Derivative  Instruments  and  Hedging  Activities,"  as  amended  by  SFAS  138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities --
an  amendment  of  FASB  Statement  No.  133."  The  adoption  resulted  in  the
recognition of derivative assets on the Consolidated Balance Sheet as of January
1, 2001 in the amount of $21.8  million  with  offsetting  amounts,  net of tax,
recorded in Accumulated  Other  Comprehensive  Income,  of $5.1 million,  and in
Regulatory Assets, of $13 million.

        The Company is exposed to financial risks resulting from the fluctuation
of  commodity  prices,  including  electricity  and  natural  gas. To manage the
volatility relating to these exposures, the Company uses a variety of derivative
instruments,  including forward contracts,  options and futures contracts. These
derivatives are used  principally for hedging  purposes.  FirstEnergy has a Risk
Policy Committee comprised of executive officers, which exercises an independent
risk oversight  function to ensure  compliance  with  corporate risk  management
policies and prudent risk management practices.

          The Company uses derivatives to hedge the risk of price fluctuations.
The Company's primary ongoing hedging activity involves cash flow hedges of
electricity and natural gas purchases. The majority of the Company's forward
commodity contracts are considered "normal purchases and sales," as defined by
SFAS 138, and are therefore excluded from the scope of SFAS 138. The forward
contracts, options and futures contracts determined to be within the scope of
SFAS 133 are accounted for as cash flow hedges and expire on various dates
through 2002. Gains and losses from hedges of commodity price risks are included
in net income when the underlying hedged commodities are delivered. There is
currently a net deferred loss of $0.5 million included in Accumulated Other
Comprehensive Loss as of December 31, 2001 related to derivative hedging
activity, which will be reclassified to earnings during the next twelve months
as hedged transactions occur.


     REGULATORY ASSETS-

        The Company recognizes,  as regulatory assets,  costs which the FERC and
NJBPU have  authorized  for recovery from customers in future  periods.  Without
such authorization, the costs would have been charged to income as incurred. All
regulatory  assets are expected to continue to be recovered from customers under
the  Company's  regulatory  plan.  The  Company  continues  to bill and  collect
cost-based rates for its transmission  and distribution  services,  which remain
regulated;  accordingly,  it is  appropriate  that  the  Company  continues  the
application of SFAS 71 to those operations.

        Net regulatory  assets on the Consolidated  Balance Sheets are comprised
of the following:

                                                        2001         2000
        -------------------------------------------------------------------
                                                          (In millions)

        Regulatory transition charge.........        $2,844.7     $2,592.7
        Societal benefits charge.............           166.6        206.6
        Property losses and unrecovered
          plant costs........................           104.1        119.2
        Customer receivables for
          future income taxes................            52.4         87.6
        Employee postretirement
          benefit costs......................            36.5         39.8
        Loss on reacquired debt..............            19.3         21.3
        Spent fuel disposal costs............            20.2         26.1
        Other................................            81.0         91.8
        -------------------------------------------------------------------
            Total                                    $3,324.8     $3,185.1
        ===================================================================


2.   MERGER:

        On November 7, 2001, the merger of FirstEnergy and GPU became  effective
pursuant to the Agreement and Plan of Merger,  dated August 8, 2000. As a result
of the merger,  GPU's former wholly owned  subsidiaries,  including the Company,
became wholly owned subsidiaries of FirstEnergy.

          The merger was accounted for by the purchase method of accounting. The
assets acquired and liabilities assumed were recorded at estimated fair values
as determined by FirstEnergy's management based on information currently
available and on current assumptions as to future operations. Merger purchase
accounting adjustments recorded in the records of the Company primarily consist
of: (1) revaluation of certain property, plant and equipment; (2) adjusting
preferred stock subject to mandatory redemption and long-term debt to estimated
fair value; (3) recognizing additional obligations related to retirement
benefits; and (4) recognizing estimated severance and other compensation
liabilities. Other assets and liabilities were not adjusted since they remain
subject to rate regulation on a historical cost

                                       19
<PAGE>

basis. The excess of the purchase price over the estimated fair values of the
assets acquired and liabilities assumed was recognized as goodwill, which will
not be amortized but will be reviewed for impairment at least annually. As of
December 31, 2001, the Company had recorded goodwill of approximately $1.9
billion related to the merger.

3.   LEASES:

        Consistent  with  regulatory  treatment,  the  rentals  for  capital and
operating  leases  are  charged  to  operating   expenses  on  the  Consolidated
Statements  of Income.  Prior to the sale of its nuclear  generating  facilities
(completed in 2000), the Company's capital lease  obligations  related primarily
to nuclear fuel lease agreements with  nonaffiliated fuel trusts for the plants.
In 2000,  total  rentals  related to these  capital  leases were $13.0  million,
comprised  of an  interest  element  of $1.5  million  and other  costs of $11.5
million. The Company's most significant  operating lease relates to the sale and
leaseback of a portion of its ownership  interest in the Merrill Creek Reservoir
project.  The interest  element  related to this lease was $1.2 million and $0.4
million for the years 2001 and 2000, respectively.

        As of  December  31,  2001,  the future  minimum  lease  payments on the
Company's Merrill Creek operating lease, net of reimbursements  from sublessees,
are: $2.3 million, $3.8 million, $1.8 million, $2.3 million and $2.2 million for
the years 2002 through  2006,  and $73.4 million for the years  thereafter.  The
Company is recovering its Merrill Creek lease payments,  net of  reimbursements,
through distribution rates.


4.   CAPITALIZATION:

     (A)  RETAINED EARNINGS-

        The  merger  purchase  accounting  adjustments  included  resetting  the
retained earnings balance to zero as of the November 7, 2001 merger date.

        In general,  the Company's first mortgage bond (FMB) indentures restrict
the payment of dividends or  distributions  on or with respect to the  Company's
common stock to amounts credited to earned surplus since  approximately the date
of its indenture. At such date, the Company had a balance of $1.7 million in its
earned  surplus  account,  which would not be available  for  dividends or other
distributions.  As of December  31,  2001,  the Company  had  retained  earnings
available  to pay  common  stock  dividends  of $27.6  million,  net of  amounts
restricted under the Company's FMB indentures.


     (B)  PREFERRED AND PREFERENCE STOCK-

        The Company's 7.52% Series K of preferred stock has a restriction  which
prevents early  redemption  prior to June 2002. All other preferred stock may be
redeemed by the Company, in whole or in part, with 30-90 days' notice.


     (C)  PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION-

        Annual sinking fund provisions for the Company's  preferred stock are as
follows:

                                          Redemption
                                          Price Per
               Series         Shares         Share
               -------------------------------------
               8.65% J        83,333          100
               7.52% K        25,000          100
               -------------------------------------

        Annual  sinking  fund  requirements  for the next  five  years are $10.8
million in each year 2002 through  2004,  and $2.5 million in each year 2005 and
2006.


     (D)  COMPANY-OBLIGATED   MANDATORILY  REDEEMABLE  PREFERRED  SECURITIES  OF
          LIMITED PARTNERSHIP HOLDING SOLELY COMPANY SUBORDINATED DEBENTURES-

        JCP&L Capital, L.P. is a special-purpose  limited partnership in which a
subsidiary of the Company is the sole general partner.  The limited  partnership
invested the gross  proceeds from the sale of $125.0 million at 8.56% of monthly
income  preferred  securities  (MIPS) in $128.9  million of the Company's  8.56%
subordinated  debentures.  The sole assets of the limited  partnership are these
subordinated  debentures,  which  have the same  rate and  maturity  date as the
preferred   securities.   The  Company  has  effectively  provided  a  full  and
unconditional guarantee of its obligations under its limited partnership's MIPS,
to the extent that there is sufficient  cash on hand to permit such payments and
funds legally available therefor, and payments on liquidation or redemption with
respect  to the  MIPS.  Distributions  on the  limited  partnership's  MIPS (and
interest on the  subordinated  debentures)  may be deferred for up to 60 months,
but the  Company  may not pay  dividends  on, or redeem or  acquire,  any of its
cumulative preferred or common stock until

                                       20

<PAGE>

deferred  payments on its subordinated  debentures are paid in full. The limited
partnership's  MIPS, which mature in 2044 and have a liquidation value of $25.00
per  security,  are  redeemable  at the  option of the  Company at 100% of their
principal amount.


     (E)  LONG-TERM DEBT-

        The first mortgage indentures and their supplements, which secure all of
the Company's FMBs,  serve as direct first mortgage liens on  substantially  all
property and franchises, other than specifically excepted property, owned by the
Company.

        Based  on the  amount  of bonds  authenticated  by the  Trustee  through
December  31,  2001,  the  Company's   annual  sinking  and   improvement   fund
requirements  for all bonds issued under the mortgage  amount to $16.1  million.
The Company  expects to fulfill its sinking and  improvement  fund obligation by
providing retired bonds to the Trustee.

        Sinking  fund   requirements  for  FMBs  and  maturing   long-term  debt
(excluding capital leases) for the next five years are:

                                         (In millions)
                              -----------------------
                              2002........  $ 50.0
                              2003........   150.0
                              2004........   160.3
                              2005........    50.3
                              2006........   240.3
                             ------------------------

     (F)  COMPREHENSIVE INCOME-

        Comprehensive income includes net income as reported on the Consolidated
Statements of Income and all other changes in common stockholder's equity except
those resulting from  transactions with the Company's parent. As of December 31,
2001,  accumulated  other  comprehensive  loss consisted of unrealized losses on
derivative instrument hedges of $0.5 million.


5.   SHORT-TERM BORROWINGS:

        The Company may borrow from its affiliates on a short-term  basis. As of
December 31, 2001, the Company had total short-term  borrowings of $18.1 million
from its affiliates with a weighted average interest rate of approximately 4.9%.


6.   COMMITMENTS, GUARANTEES AND CONTINGENCIES:

     CAPITAL EXPENDITURES-

        The Company's  current forecast  reflects  expenditures of approximately
$572 million for property  additions and improvements  from 2002-2006,  of which
approximately $144 million is applicable to 2002.


     NUCLEAR INSURANCE-

        The  Price-Anderson Act limits the public liability relative to a single
incident at a nuclear  power plant to $9.5  billion.  The amount is covered by a
combination  of private  insurance  and an industry  retrospective  rating plan.
Based on its present ownership interest in TMI-2, the Company is exempt from any
potential assessment under the industry retrospective rating plan.

        The Company is also  insured as to its  interest in TMI-2 under a policy
issued to the operating company for the plant.  Under this policy,  $150 million
is provided for property damage and decontamination  and decommissioning  costs.
Under this policy,  the Company can be assessed a maximum of approximately  $0.2
million for incidents at any covered nuclear facility  occurring during a policy
year which are in excess of  accumulated  funds  available  to the  insurer  for
paying losses.

        The  Company  intends to maintain  insurance  against  nuclear  risks as
described above as long as it is available.  To the extent that property damage,
decontamination,  decommissioning,  repair and replacement  costs and other such
costs  arising from a nuclear  incident at TMI-2 exceed the policy limits of the
insurance in effect with respect to that plant, to the extent a nuclear incident
is determined not to be covered by the Company's insurance  policies,  or to the
extent such  insurance  becomes  unavailable  in the future,  the Company  would
remain at risk for such costs.

                                       21

<PAGE>

     ENVIRONMENTAL MATTERS-

        Various   environmental   liabilities   have  been   recognized  on  the
Consolidated  Balance  Sheet as of December 31, 2001,  based on estimates of the
total costs of cleanup,  the  Company's  proportionate  responsibility  for such
costs and the  financial  ability of other  nonaffiliated  entities to pay.  The
Company  has been  named as a  "potentially  responsible  party"  (PRP) at waste
disposal sites which may require cleanup under the  Comprehensive  Environmental
Response,  Compensation  and Liability Act of 1980.  Allegations  of disposal of
hazardous substances at historical sites, and the liability involved,  are often
unsubstantiated and subject to dispute. Federal law provides that all PRPs for a
particular  site be held liable on a joint and several basis.  In addition,  the
Company  has  accrued  liabilities  for  environmental   remediation  of  former
manufactured gas plants in New Jersey; these costs are being recovered through a
non-bypassable   societal  benefits  charge.   The  Company  has  total  accrued
liabilities  aggregating  approximately $52 million as of December 31, 2001. The
Company does not believe  environmental  remediation  costs will have a material
adverse effect on its financial condition, cash flows or results of operations.


     OTHER LEGAL PROCEEDINGS-

        Various lawsuits, claims and proceedings related to the Company's normal
business  operations are pending  against the Company,  the most  significant of
which are described below.

        TMI-2, which was damaged during a 1979 accident, is jointly owned by the
Company, Met-Ed and Penelec, with the Company having a 25% ownership percentage.
Claims for alleged personal injury against the Company,  Met-Ed, Penelec and GPU
(the defendants)  were filed in the U.S.  District Court for the Middle District
of  Pennsylvania.  In 1996,  the  District  Court  granted a motion for  summary
judgment  filed by the  defendants  and  dismissed  the ten initial "test cases"
which had been  selected for a test case trial,  as well as all of the remaining
2,100 pending claims.  In November 1999, the U.S. Court of Appeals for the Third
Circuit affirmed the District Court's dismissal of the ten "test cases," but set
aside the dismissal of the  additional  pending  claims,  remanding  them to the
District Court for further proceedings.  In September 2000, the defendants filed
for a summary judgment in the District Court. Meanwhile, the plaintiffs appealed
to the Third  Circuit  for a review of the  District  Court's  decision  placing
limitations on the remaining  plaintiffs' suit. In April 2001, the Third Circuit
affirmed the District  Court's  decision.  In July 2001, the defendants  renewed
their  motion  for a  summary  judgment  on the  remaining  2,100  claims in the
District  Court. On January 15, 2002, the District Court granted the defendants'
amended motion for summary  judgment.  On February 14, 2002,  plaintiffs filed a
notice of appeal to the United States Court of Appeals for the Third Circuit. In
addition to the  approximately  2,100 claims for which summary judgment has been
granted,  there is other pending  litigation  arising out of the TMI-2 accident.
This litigation consists of the following: eight personal injury cases that were
not consolidated with the above-referenced approximately 2,100 claims; two class
actions brought on behalf of plaintiffs  alleging  additional injuries diagnosed
after the filing of the complaints in the above-referenced case; a case alleging
exposure  during the  post-accident  cleanup of the TMI-2  plant;  and claims by
individual  businesses  for economic  loss  resulting  from the TMI-2  accident.
Although unable to predict the outcome of this litigation,  the Company believes
that any liability to which it might be subject by reason of the TMI-2  accident
will not exceed its financial protection under the Price-Anderson Act.

          In July 1999, the Mid-Atlantic states experienced a severe heat storm
which resulted in power outages throughout the service territories of many
electric utilities, including the Company's territory. In an investigation into
the causes of the outages and the reliability of the transmission and
distribution systems of all four New Jersey electric utilities, the NJBPU
concluded that there was not a prima facie case demonstrating that, overall, the
Company provided unsafe, inadequate or improper service to its customers. In
July 1999, two class action lawsuits (subsequently consolidated into a single
proceeding) were filed against the Company and other GPU companies in New Jersey
Superior Court, seeking compensatory and punitive damages arising from the July
1999 service interruptions in the Company's service territory. In May 2001, the
court denied without prejudice the Company's motion seeking decertification of
the class. Discovery continues in the class action, but no trial date has been
set. The judge has set a schedule under which factual legal discovery would
conclude in March 2002, and expert reports would be exchanged by June 2002. In
October 2001, the court held argument on the plaintiffs' motion for partial
summary judgment, which contends that the Company is bound to several findings
of the NJBPU investigation. The plaintiffs' motion was denied by the Court in
November 2001 and plaintiffs' motion to file an appeal of this decision was
denied by the New Jersey Appellate Division. The Company has also filed a motion
for partial summary judgement that is currently pending before the Superior
Court. The Company is unable to predict the outcome of these matters.
                                       22

<PAGE>

7.   SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED):

        The  following  summarizes  certain  consolidated  operating  results by
quarter for 2001 and 2000.
<TABLE>
<CAPTION>
                                     Three Months Ended
                                -----------------------------
                                March 31, June 30,   Sept. 30,  Oct.1-Nov. 6 Nov. 7-Dec. 31
                                 2001       2001       2001        2001          2001
-------------------------------------------------------------------------------------------
                                                   (In millions)
<S>                              <C>       <C>        <C>         <C>           <C>
Operating Revenues............   $461.7    $521.0     $672.2    $ 183.7    |   $282.9
Operating Expenses and Taxes..    388.2     451.7      554.0      151.9    |    239.2
---------------------------------------------------------------------------|---------------
Operating Income..............     73.5      69.3     118.2        31.8    |     43.7
Other Income (Expense)........      1.2       2.3      (2.7)     (177.7)   |      1.2
Net Interest Charges..........     23.3      25.6      24.3         8.3    |     14.8
---------------------------------------------------------------------------|---------------
Net Income (Loss).............  $  51.4   $  46.0   $  91.2     $(154.2)   |  $  30.1
===========================================================================|===============
Earnings on Common Stock......  $  50.0   $  44.7   $  89.8     $(154.5)   |  $  29.3
===========================================================================================
</TABLE>


                                 March 31,  June 30, September 30,December 31,
Three Months Ended                 2000       2000       2000        2000
------------------------------------------------------------------------------
                                                (In millions)
Operating Revenues............   $452.7     $490.2    $605.0      $431.4
Operating Expenses and Taxes..    384.8      420.0     509.3       382.0
------------------------------------------------------------------------------
Operating Income..............     67.9       70.2      95.7        49.4
Other Income (Expense)........      2.4       (2.6)     21.8         2.5
Net Interest Charges..........     24.8       23.1      24.7        23.9
------------------------------------------------------------------------------
Net Income....................  $  45.5    $  44.5   $  92.8     $  28.0
==============================================================================
Earnings on Common Stock......  $  43.1    $  42.8   $  91.4     $  26.6
==============================================================================

                                       23
<PAGE>

Report of Independent Public Accountants


To the Stockholders and Board of Directors of
Jersey Central Power & Light Company:

We have audited the  accompanying  consolidated  balance sheet and  consolidated
statement  of  capitalization  of Jersey  Central  Power & Light  Company (a New
Jersey  corporation  and  wholly  owned  subsidiary  of  FirstEnergy  Corp.) and
subsidiaries as of December 31, 2001 (post-merger), and the related consolidated
statements of income, common stockholder's  equity,  preferred stock, cash flows
and taxes for the period from  January 1, 2001 to November 6, 2001  (pre-merger)
and the period from November 7, 2001 to December 31, 2001  (post-merger).  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit. The financial  statements of Jersey Central Power & Light Company and
subsidiary  as of December  31, 2000 and for each of the two years in the period
ended  December  31, 2000  (pre-merger),  were audited by other  auditors  whose
report  dated  January  31,  2001,  expressed  an  unqualified  opinion on those
statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Jersey Central Power & Light
Company and subsidiaries as of December 31, 2001 (post-merger),  and the results
of their  operations and their cash flows for the period from January 1, 2001 to
November 6, 2001  (pre-merger)  and the period from November 7, 2001 to December
31, 2001  (post-merger),  in conformity  with  accounting  principles  generally
accepted in the United States.



Arthur Andersen LLP

Cleveland, Ohio,
   March 18, 2002.

                                       24

<PAGE>

                        Report of Independent Accountants


To the Board of Directors and Stockholder of
Jersey Central Power & Light Company:

In our opinion,  the consolidated  balance sheet as of December 31, 2000 and the
related  consolidated  statements of income,  and cash flows for each of the two
years in the period ended December 31, 2000 (appearing on the accompanying index
of the Jersey  Central Power & Light Company 2001 Annual Report to  Stockholders
incorporated  by reference in this Form 10-K)  present  fairly,  in all material
respects, the financial position, results of operations and cash flows of Jersey
Central  Power & Light Company and  Subsidiary  Company at December 31, 2000 and
for each of the two years in the period ended  December 31, 2000,  in conformity
with accounting  principles  generally accepted in the United States of America.
These financial  statements are the responsibility of the Company's  management;
our responsibility is to express an opinion on these financial  statements based
on our audits.  We conducted our audits of these  statements in accordance  with
auditing  standards  generally  accepted in the United States of America,  which
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.



PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
January 31, 2001

                                       25