Commission
|
Registrant; State of Incorporation;
|
I.R.S. Employer
|
||
File Number
|
Address; and Telephone Number
|
Identification No.
|
||
333-21011
|
FIRSTENERGY CORP.
|
34-1843785
|
||
(An Ohio Corporation)
|
||||
76 South Main Street
|
||||
Akron, OH 44308
|
||||
Telephone (800)736-3402
|
||||
(d)
|
Exhibits
|
Exhibit No.
|
Description
|
|
99.1
|
Press release issued by FirstEnergy Corp., dated May 2, 2011
|
|
99.2
|
Consolidated Report to the Financial Community, dated May 2, 2011
|
FIRSTENERGY CORP.
|
||
Registrant
|
||
By:
|
||
Harvey L. Wagner
Vice President, Controller and
Chief Accounting Officer
|
Exhibit 99.1 | ||
FirstEnergy Corp. | For Release: May 2, 2011 | |
76 South Main Street | ||
Akron, Ohio 44308 | ||
www.firstenergycorp.com | ||
News Media Contact: | Investor Contact: | |
Tricia Ingraham | Ron Seeholzer | |
(330) 384-5247 | (330) 384-5415 |
GAAP to Non-GAAP* Reconciliation
|
|||
First Quarter
|
|||
2011
|
2010
|
||
Basic Earnings Per Share (GAAP)
|
$0.15
|
$0.51
|
|
Excluding Special Items:
|
|||
Merger-Related Costs
|
0.37
|
0.03
|
|
Regulatory Charges
|
0.04
|
0.08
|
|
Trust Securities Impairment
|
0.01
|
0.02
|
|
Income Tax Charge–Retiree Drug Change
|
--
|
0.04
|
|
Non-Core Asset Sales/Impairments
|
0.06
|
0.02
|
|
Mark-To-Market Adjustments
|
0.02
|
0.11
|
|
Merger Accounting-Commodity Contracts
|
0.04
|
--
|
|
Basic Earnings Per Share (Non-GAAP*)
|
$0.69
|
$0.81
|
Estimated Earnings Per Share, GAAP to Non-GAAP* Reconciliation
|
|||||||
2011
|
2012
|
2013 | |||||
Basic Earnings Per Share (GAAP)
|
$2.88 - 3.18
|
$3.03 - $3.33
|
$3.07 - $3.37 | ||||
Excluding Special Items:
|
|||||||
Merger-Related Costs
|
0.35 | 0.01 | 0.01 | ||||
Regulatory Charges
|
0.05 | 0.01 | 0.02 | ||||
Trust Securities Impairment
|
0.01 | -- | -- | ||||
Non-Core Asset Sales/Impairments
|
(0.38) | -- | -- | ||||
Mark-To-Market Adjustments
|
0.02 | -- | -- | ||||
Debt Redemption Premiums
|
0.07 | -- | -- | ||||
Merger Accounting-Commodity Contracts
|
0.20 | 0.15 | 0.10 | ||||
Basic Earnings Per Share (Non-GAAP*)
|
$3.20 - $3.50 | $3.20 - $3.50 | $3.20 - $3.50 |
HIGHLIGHTS |
After-Tax EPS Variance Analysis
|
1st.Qtr.
|
||
1Q 2010 Basic EPS – GAAP Basis
|
$0.51
|
|||
Special Items – 2010
|
0.30
|
|||
● | Normalized non-GAAP* earnings, excluding special items, were $0.69 per share for the |
1Q 2010 Normalized Earnings – Non-GAAP Basis*
|
$0.81
|
|
first quarter of 2011, compared with $0.81 per share for the first quarter of 2010. GAAP
|
Distribution Deliveries
|
0.01
|
||
earnings for the first quarter of 2011 were $0.15 per share, compared with $0.51 per |
Commodity Margin
|
(0.02) | ||
share for the first quarter of 2010. | O&M Expenses |
|
||
- Generation | (0.05) | |||
- Energy Delivery | (0.01) | |||
Q1 2011 Results vs. Q1 2010 (FE Pre-Merger) |
Depreciation
|
(0.01)
|
||
General Taxes | (0.03) | |||
The following explanations reflect variances for FirstEnergy on a stand-alone basis. March 2011 | Capitalized Interest |
(0.04)
|
||
revenues and expenses associated with the Allegheny Companies are noted separately. |
Increased Common Shares Outstanding
|
(0.09)
|
||
Allegheny Companies - March 2011
|
0.13
|
|||
Other | (0.01) | |||
● | Higher distribution revenues increased earnings by $0.01 per share. Electric distribution | 1Q 2011 Normalized Earnings – Non-GAAP Basis* | $0.69 | |
deliveries increased by 650,000 MWH, or 2%, due to the improving economy and colder | Special Items - 2011 | (0.54) | ||
weather. Heating-degree-days were 7% higher than the same period last year and 4% | 1Q 2011 Basic EPS – GAAP Basis | $0.15 | ||
above normal. Residential deliveries increased by 183,000 MWH, or 2%, while | ||||
commercial deliveries decreased slightly. Industrial deliveries increased by 490,000 MWH, or 6%, due mostly to increased usage in the steel industry. | ||||
● | Lower commodity margin decreased earnings by $0.02 per share, due primarily to the combination of higher generation sales, offset by higher transmission expenses | |||
and lower Renewable Energy Credit (REC) sales. |
Commodity Margin EPS - 1Q11 vs 1Q10
|
Rate
|
Volume
|
Total
|
|||||||
Generation Sales
|
||||||||||
- Direct Sales
|
($0.01)
|
$0.40
|
$0.39
|
|||||||
- Government Aggregation Sales
|
$0.02
|
$0.17
|
$0.19
|
|||||||
- Mass Market Sales
|
$0.00
|
$0.01
|
$0.01
|
|||||||
- POLR Sales
|
$0.12
|
($0.46)
|
($0.34)
|
|||||||
|
Subtotal - Generation Sales
|
$0.13
|
$0.12
|
$0.25
|
||||||
Wholesale Sales
|
($0.04)
|
$0.01
|
($0.03)
|
|||||||
PJM RPM Capacity Auction
|
$0.02
|
$0.00
|
$0.02
|
|||||||
REC Sales
|
($0.01)
|
($0.05)
|
($0.06)
|
|||||||
Fuel Expense
|
$0.05
|
($0.06)
|
($0.01)
|
|||||||
Purchased Power
|
$0.05
|
($0.04)
|
$0.01
|
|||||||
Capacity Expense
|
($0.02)
|
$0.00
|
($0.02)
|
|||||||
Net MISO - PJM Transmission
|
($0.01)
|
($0.17)
|
($0.18)
|
|||||||
Total Increase / (Decrease)
|
$0.17
|
($0.19)
|
($0.02)
|
|||||||
FES Generation Sales - 1Q11 vs. 1Q10
|
||||||||||||
(thousand MWH)
|
Retail
|
Non-Retail
|
||||||||||
Direct
|
Aggr.
|
Mass Market
|
POLR
|
Total
|
||||||||
Generation Sales Increase / (Decrease)
|
3,817
|
1,507
|
71
|
(4,859)
|
536
|
|||||||
FES - Wholesale Sales - 1Q11 vs. 1Q10 | |||||||||
(thousand MWH)
|
Bilaterals
|
Spot
|
Total
|
||||||
Wholesale Sales Increase / (Decrease)
|
(340)
|
555
|
215
|
||||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
2
|
Generation Output - 1Q11 vs. 1Q10
|
|||||||||
(thousand MWH)
|
Fossil
|
Nuclear
|
Total
|
||||||
Generation Output Increase / (Decrease)
|
1,054
|
(60)
|
994
|
||||||
FES - Purchased Power - 1Q11 vs. 1Q10
|
|||||||||
(thousand MWH)
|
Bilaterals
|
Spot
|
Total
|
||||||
Purchased Power Increase / (Decrease)
|
(139)
|
529
|
390
|
||||||
●
|
Higher O&M expenses reduced earnings by $0.06 per share. The majority of the increase in O&M expenses is associated with timing differences in cost recognition
for incentive compensation programs in the first quarter of 2011 compared to the same period last year.
|
●
|
Higher depreciation expense decreased earnings by $0.01 per share, primarily due to the placement of Sammis Air Quality Control projects in-service at the end of
2010, partially offset by the absence of depreciation expense associated with the Burger and Lake plants, which were retired and impaired, respectively, in the second
half of 2010.
|
●
|
Higher general taxes decreased earnings by $0.03 per share, primarily due to higher property and payroll taxes, as well as higher Ohio KWH taxes and Pennsylvania
gross receipts taxes.
|
●
|
Lower capitalized interest decreased earnings by $0.04 per share.
|
●
|
The increase in shares outstanding, resulting from the merger with Allegheny Energy, reduced earnings by $0.09 per share.
|
Consolidated Report to the Financial Community - 1st Quarter 2011 |
3
|
●
|
The Allegheny Companies contributed $0.13 per share in earnings during March 2011.
|
●
|
The effective income tax rate, excluding special items, was 37.9% in the first quarter of 2011 compared with 37.4% in the first quarter of 2010.
|
●
|
The following special items were recognized during the first quarter of 2011:
|
Special Items
|
EPS
|
||||
Regulatory Charges
|
($0.04)
|
||||
Trust Securities Impairment
|
($0.01)
|
||||
Merger Transaction / Integration Costs
|
($0.37)
|
||||
Non-Core Asset Impairments
|
($0.06)
|
||||
Mark-to-Market Adjustments
|
($0.02)
|
||||
Merger Accounting - Commodity Contracts
|
($0.04)
|
||||
Total
|
($0.54)
|
||||
For additional information, please contact:
|
Ronald E. Seeholzer
|
Irene M. Prezelj | Rey Y. Jimenez |
Vice President, Investor Relations
|
Director, Investor Relations | Manager, Investor Relations |
(330) 384-5415
|
(330) 384-3859 | (330) 761-4239 |
Consolidated Report to the Financial Community - 1st Quarter 2011 |
4
|
Three Months Ended March 31
|
||||||||||||||
2011
|
2010
|
Change
|
||||||||||||
Revenues
|
||||||||||||||
(1 | ) |
Regulated distribution
|
$ | 2,268 | $ | 2,484 | $ | (216 | ) | |||||
(2 | ) |
Competitive energy services
|
1,597 | 1,393 | 204 | |||||||||
(3 | ) |
Regulated independent transmission
|
67 | 57 | 10 | |||||||||
(4 | ) |
Other corporate & intersegment revenues
|
(356 | ) | (635 | ) | 279 | |||||||
(5 | ) |
Total Revenues
|
3,576 | 3,299 | 277 | |||||||||
Expenses
|
||||||||||||||
(6 | ) |
Fuel
|
453 | 334 | 119 | |||||||||
(7 | ) |
Purchased power
|
1,186 | 1,238 | (52 | ) | ||||||||
(8 | ) |
Other operating expenses
|
1,033 | 701 | 332 | |||||||||
(9 | ) |
Provision for depreciation
|
220 | 193 | 27 | |||||||||
(10 | ) |
Amortization of regulatory assets
|
132 | 212 | (80 | ) | ||||||||
(11 | ) |
General taxes
|
237 | 205 | 32 | |||||||||
(12 | ) |
Total Expenses
|
3,261 | 2,883 | 378 | |||||||||
(13 | ) |
Operating Income
|
315 | 416 | (101 | ) | ||||||||
Other Income (Expense)
|
||||||||||||||
(14 | ) |
Investment income
|
21 | 16 | 5 | |||||||||
(15 | ) |
Interest expense
|
(231 | ) | (213 | ) | (18 | ) | ||||||
(16 | ) |
Capitalized interest
|
18 | 41 | (23 | ) | ||||||||
(17 | ) |
Total Other Expense
|
(192 | ) | (156 | ) | (36 | ) | ||||||
(18 | ) |
Income Before Income Taxes
|
123 | 260 | (137 | ) | ||||||||
(19 | ) |
Income taxes
|
78 | 111 | (33 | ) | ||||||||
(20 | ) |
Net Income
|
45 | 149 | (104 | ) | ||||||||
(21 | ) |
Loss attributable to noncontrolling interest
|
(5 | ) | (6 | ) | 1 | |||||||
(22 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | 50 | $ | 155 | $ | (105 | ) | |||||
(23 | ) |
Earnings Per Share of Common Stock
|
||||||||||||
(24 | ) |
Basic
|
$ | 0.15 | $ | 0.51 | $ | (0.36 | ) | |||||
(25 | ) |
Diluted
|
$ | 0.15 | $ | 0.51 | $ | (0.36 | ) | |||||
(26 | ) |
Weighted Average Number of
|
||||||||||||
Common Shares Outstanding
|
||||||||||||||
(27 | ) |
Basic
|
342 | 304 | 38 | |||||||||
(28 | ) |
Diluted
|
343 | 306 | 37 | |||||||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
5
|
Three Months Ended March 31, 2011
|
||||||||||||||||||||||
Competitive
|
Regulated
|
Other &
|
||||||||||||||||||||
Regulated
|
Energy
|
Independent
|
Reconciling
|
|||||||||||||||||||
Distribution (a)
|
Services (b)
|
Transmission (c)
|
Adjustments (d)
|
Consolidated
|
||||||||||||||||||
Revenues
|
||||||||||||||||||||||
(1 | ) |
Electric sales
|
$ | 2,175 | $ | 1,162 | $ | - | $ | - | $ | 3,337 | ||||||||||
(2 | ) |
Other
|
93 | 92 | 67 | (45 | ) | 207 | ||||||||||||||
(3 | ) |
Internal revenues
|
- | 343 | - | (311 | ) | 32 | ||||||||||||||
(4 | ) |
Total Revenues
|
2,268 | 1,597 | 67 | (356 | ) | 3,576 | ||||||||||||||
Expenses
|
||||||||||||||||||||||
(5 | ) |
Fuel
|
24 | 429 | - | - | 453 | |||||||||||||||
(6 | ) |
Purchased power
|
1,179 | 318 | - | (311 | ) | 1,186 | ||||||||||||||
(7 | ) |
Other operating expenses
|
386 | 648 | 17 | (18 | ) | 1,033 | ||||||||||||||
(8 | ) |
Provision for depreciation
|
116 | 88 | 10 | 6 | 220 | |||||||||||||||
(9 | ) |
Amortization of regulatory assets
|
129 | - | 3 | - | 132 | |||||||||||||||
(10 | ) |
General taxes
|
176 | 44 | 8 | 9 | 237 | |||||||||||||||
(11 | ) |
Total Expenses
|
2,010 | 1,527 | 38 | (314 | ) | 3,261 | ||||||||||||||
(12 | ) |
Operating Income
|
258 | 70 | 29 | (42 | ) | 315 | ||||||||||||||
Other Income (Expense)
|
||||||||||||||||||||||
(13 | ) |
Investment income
|
25 | 6 | - | (10 | ) | 21 | ||||||||||||||
(14 | ) |
Interest expense
|
(132 | ) | (78 | ) | (9 | ) | (12 | ) | (231 | ) | ||||||||||
(15 | ) |
Capitalized interest
|
1 | 10 | - | 7 | 18 | |||||||||||||||
(16 | ) |
Total Other Expense
|
(106 | ) | (62 | ) | (9 | ) | (15 | ) | (192 | ) | ||||||||||
(17 | ) |
Income Before Income Taxes
|
152 | 8 | 20 | (57 | ) | 123 | ||||||||||||||
(18 | ) |
Income taxes
|
56 | 3 | 7 | 12 | 78 | |||||||||||||||
(19 | ) |
Net Income
|
96 | 5 | 13 | (69 | ) | 45 | ||||||||||||||
(20 | ) |
Loss attributable to noncontrolling interest
|
- | - | - | (5 | ) | (5 | ) | |||||||||||||
(21 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | 96 | $ | 5 | $ | 13 | $ | (64 | ) | $ | 50 | |||||||||
(a)
|
Revenues are primarily derived from the delivery of electricity within FirstEnergy’s service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from FES and AE Supply and from non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
|
|||||||||||||||||||||
(b)
|
Supplies electric power to end-use customers through retail and wholesale arrangements, including associated company power sales to meet all or a portion of the POLR and default service requirements of FirstEnergy's Ohio and Pennsylvania utility subsidiaries and competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey.
|
|||||||||||||||||||||
(c)
|
Revenues are primarily derived from the formula rate recovery of costs and a return on debt and equity for capital expenditures in connection with TrAIL, PATH and other projects and revenues from providing transmission services to electric energy providers, power marketers and receiving transmission-related revenues from operation of a portion of the FirstEnergy transmission system (ATSI). Its results reflect the net PJM and MISO transmission expenses related to the delivery of the respective generation loads.
|
|||||||||||||||||||||
(d)
|
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
|
|||||||||||||||||||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
6
|
Three Months Ended March 31, 2010
|
||||||||||||||||||||||
Competitive
|
Regulated
|
Other &
|
||||||||||||||||||||
Regulated
|
Energy
|
Independent
|
Reconciling
|
|||||||||||||||||||
Distribution (a)
|
Services (b)
|
Transmission (c)
|
Adjustments (d)
|
Consolidated
|
||||||||||||||||||
Revenues
|
||||||||||||||||||||||
(1 | ) |
Electric sales
|
$ | 2,398 | $ | 669 | $ | - | $ | - | $ | 3,067 | ||||||||||
(2 | ) |
Other
|
86 | 50 | 57 | (28 | ) | 165 | ||||||||||||||
(3 | ) |
Internal revenues
|
- | 674 | - | (607 | ) | 67 | ||||||||||||||
(4 | ) |
Total Revenues
|
2,484 | 1,393 | 57 | (635 | ) | 3,299 | ||||||||||||||
Expenses
|
||||||||||||||||||||||
(5 | ) |
Fuel
|
- | 334 | - | - | 334 | |||||||||||||||
(6 | ) |
Purchased power
|
1,395 | 450 | - | (607 | ) | 1,238 | ||||||||||||||
(7 | ) |
Other operating expenses
|
359 | 352 | 14 | (24 | ) | 701 | ||||||||||||||
(8 | ) |
Provision for depreciation
|
104 | 77 | 9 | 3 | 193 | |||||||||||||||
(9 | ) |
Amortization of regulatory assets
|
209 | - | 3 | - | 212 | |||||||||||||||
(10 | ) |
General taxes
|
154 | 37 | 7 | 7 | 205 | |||||||||||||||
(11 | ) |
Total Expenses
|
2,221 | 1,250 | 33 | (621 | ) | 2,883 | ||||||||||||||
(12 | ) |
Operating Income (Loss)
|
263 | 143 | 24 | (14 | ) | 416 | ||||||||||||||
Other Income (Expense)
|
||||||||||||||||||||||
(13 | ) |
Investment income
|
26 | 1 | - | (11 | ) | 16 | ||||||||||||||
(14 | ) |
Interest expense
|
(125 | ) | (56 | ) | (5 | ) | (27 | ) | (213 | ) | ||||||||||
(15 | ) |
Capitalized interest
|
1 | 23 | - | 17 | 41 | |||||||||||||||
(16 | ) |
Total Other Expense
|
(98 | ) | (32 | ) | (5 | ) | (21 | ) | (156 | ) | ||||||||||
(17 | ) |
Income Before Income Taxes
|
165 | 111 | 19 | (35 | ) | 260 | ||||||||||||||
(18 | ) |
Income taxes
|
62 | 42 | 7 | - | 111 | |||||||||||||||
(19 | ) |
Net Income
|
103 | 69 | 12 | (35 | ) | 149 | ||||||||||||||
(20 | ) |
Loss attributable to noncontrolling interest
|
- | - | - | (6 | ) | (6 | ) | |||||||||||||
(21 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | 103 | $ | 69 | $ | 12 | $ | (29 | ) | $ | 155 | |||||||||
(a)
|
Revenues are primarily derived from the delivery of electricity within FirstEnergy’s service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from FES and AE Supply and from non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
|
|||||||||||||||||||||
(b)
|
Supplies electric power to end-use customers through retail and wholesale arrangements, including associated company power sales to meet all or a portion of the POLR and default service requirements of FirstEnergy's Ohio and Pennsylvania utility subsidiaries and competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey.
|
|||||||||||||||||||||
(c)
|
Revenues are primarily derived from the formula rate recovery of costs and a return on debt and equity for capital expenditures in connection with TrAIL, PATH and other projects and revenues from providing transmission services to electric energy providers, power marketers and receiving transmission-related revenues from operation of a portion of the FirstEnergy transmission system (ATSI). Its results reflect the net PJM and MISO transmission expenses related to the delivery of the respective generation loads.
|
|||||||||||||||||||||
(d)
|
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
|
|||||||||||||||||||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
7
|
Three Months Ended March 31, 2011 vs. Three Months Ended March 31, 2010
|
||||||||||||||||||||||
Energy
|
Competitive
|
Regulated
|
Other &
|
|||||||||||||||||||
Delivery
|
Energy
|
Independent
|
Reconciling
|
|||||||||||||||||||
Services (a)
|
Services (b)
|
Transmission (c)
|
Adjustments (d)
|
Consolidated
|
||||||||||||||||||
Revenues
|
||||||||||||||||||||||
(1 | ) |
Electric sales
|
$ | (223 | ) | $ | 493 | $ | - | $ | - | $ | 270 | |||||||||
(2 | ) |
Other
|
7 | 42 | 10 | (17 | ) | 42 | ||||||||||||||
(3 | ) |
Internal revenues
|
- | (331 | ) | - | 296 | (35 | ) | |||||||||||||
(4 | ) |
Total Revenues
|
(216 | ) | 204 | 10 | 279 | 277 | ||||||||||||||
Expenses
|
||||||||||||||||||||||
(5 | ) |
Fuel
|
24 | 95 | - | - | 119 | |||||||||||||||
(6 | ) |
Purchased power
|
(216 | ) | (132 | ) | - | 296 | (52 | ) | ||||||||||||
(7 | ) |
Other operating expenses
|
27 | 296 | 3 | 6 | 332 | |||||||||||||||
(8 | ) |
Provision for depreciation
|
12 | 11 | 1 | 3 | 27 | |||||||||||||||
(9 | ) |
Amortization of regulatory assets
|
(80 | ) | - | - | - | (80 | ) | |||||||||||||
(10 | ) |
General taxes
|
22 | 7 | 1 | 2 | 32 | |||||||||||||||
(11 | ) |
Total Expenses
|
(211 | ) | 277 | 5 | 307 | 378 | ||||||||||||||
(12 | ) |
Operating Income (Loss)
|
(5 | ) | (73 | ) | 5 | (28 | ) | (101 | ) | |||||||||||
Other Income (Expense)
|
||||||||||||||||||||||
(13 | ) |
Investment income (loss)
|
(1 | ) | 5 | - | 1 | 5 | ||||||||||||||
(14 | ) |
Interest expense
|
(7 | ) | (22 | ) | (4 | ) | 15 | (18 | ) | |||||||||||
(15 | ) |
Capitalized interest
|
- | (13 | ) | - | (10 | ) | (23 | ) | ||||||||||||
(16 | ) |
Total Other Income
|
(8 | ) | (30 | ) | (4 | ) | 6 | (36 | ) | |||||||||||
(17 | ) |
Income (Loss) Before Income Taxes
|
(13 | ) | (103 | ) | 1 | (22 | ) | (137 | ) | |||||||||||
(18 | ) |
Income taxes (benefits)
|
(6 | ) | (39 | ) | - | 12 | (33 | ) | ||||||||||||
(19 | ) |
Net Income (Loss)
|
(7 | ) | (64 | ) | 1 | (34 | ) | (104 | ) | |||||||||||
(20 | ) |
Loss attributable to noncontrolling interest
|
- | - | - | 1 | 1 | |||||||||||||||
(21 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | (7 | ) | $ | (64 | ) | $ | 1 | $ | (35 | ) | $ | (105 | ) | ||||||
(a)
|
Revenues are primarily derived from the delivery of electricity within FirstEnergy’s service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from FES and AE Supply and from non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
|
|||||||||||||||||||||
(b)
|
Supplies electric power to end-use customers through retail and wholesale arrangements, including associated company power sales to meet all or a portion of the POLR and default service requirements of FirstEnergy's Ohio and Pennsylvania utility subsidiaries and competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey.
|
|||||||||||||||||||||
(c)
|
Revenues are primarily derived from the formula rate recovery of costs and a return on debt and equity for capital expenditures in connection with TrAIL, PATH and other projects and revenues from providing transmission services to electric energy providers, power marketers and receiving transmission-related revenues from operation of a portion of the FirstEnergy transmission system (ATSI). Its results reflect the net PJM and MISO transmission expenses related to the delivery of the respective generation loads.
|
|||||||||||||||||||||
(d)
|
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
|
|||||||||||||||||||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
8
|
Condensed Consolidated Balance Sheets
|
|||||||
As of
|
As of
|
||||||
Assets
|
Mar. 31, 2011
|
Dec. 31, 2010
|
|||||
Current Assets:
|
|||||||
Cash and cash equivalents
|
$ | 1,101 | $ | 1,019 | |||
Receivables
|
1,865 | 1,568 | |||||
Other
|
1,680 | 1,111 | |||||
Total Current Assets
|
4,646 | 3,698 | |||||
Property, Plant and Equipment
|
29,635 | 19,788 | |||||
Investments
|
3,081 | 3,002 | |||||
Deferred Charges and Other Assets
|
10,504 | 8,317 | |||||
Total Assets
|
$ | 47,866 | $ | 34,805 | |||
Liabilities and Capitalization
|
|||||||
Current Liabilities:
|
|||||||
Currently payable long-term debt
|
$ | 1,385 | $ | 1,486 | |||
Short-term borrowings
|
486 | 700 | |||||
Accounts payable
|
1,080 | 872 | |||||
Other
|
2,211 | 1,640 | |||||
Total Current Liabilities
|
5,162 | 4,698 | |||||
Capitalization:
|
|||||||
Total equity
|
12,689 | 8,513 | |||||
Long-term debt and other long-term obligations
|
17,535 | 12,579 | |||||
Total Capitalization
|
30,224 | 21,092 | |||||
Noncurrent Liabilities
|
12,480 | 9,015 | |||||
Total Liabilities and Capitalization
|
$ | 47,866 | $ | 34,805 | |||
General Information
|
||||||
Three Months Ended March 31
|
||||||
2011
|
2010
|
|||||
Debt redemptions
|
$ | (359 | ) | $ | (109 | ) |
New long-term debt issues
|
$ | 217 | $ | - | ||
Short-term borrowings decrease
|
$ | (214 | ) | $ | (295 | ) |
Property additions
|
$ | 449 | $ | 508 | ||
Adjusted Capitalization
|
||||||||||||||||
As of March 31 | As of December 31 | |||||||||||||||
2011
|
% Total | 2010 | % Total | |||||||||||||
Total equity (GAAP)*
|
$ | 12,689 | 40 | % | $ | 8,513 | 36 | % | ||||||||
Long-term debt and other long-term obligations
|
17,535 | 56 | % | 12,579 | 55 | % | ||||||||||
Currently payable long-term debt
|
1,385 | 4 | % | 1,486 | 6 | % | ||||||||||
Short-term borrowings
|
486 | 2 | % | 700 | 3 | % | ||||||||||
Adjustments:
|
||||||||||||||||
Sale-leaseback net debt equivalents
|
1,329 | 4 | % | 1,357 | 6 | % | ||||||||||
Securitization debt and cash
|
(1,882 | ) | -6 | % | (1,295 | ) | -6 | % | ||||||||
Adjusted capitalization (Non-GAAP)
|
$ | 31,542 | 100 | % | $ | 23,340 | 100 | % | ||||||||
*Includes $(1,518) million and $(1,539) million, respectively, of Accumulated Other Comprehensive Loss
|
||||||||||||||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
9
|
Condensed Consolidated Statements of Cash Flows
|
|||||||
Three Months Ended March 31
|
|||||||
2011
|
2010
|
||||||
Cash flows from operating activities
|
|||||||
Net income
|
$ | 45 | $ | 149 | |||
Adjustments to reconcile net income to net cash from operating activities:
|
|||||||
Depreciation and amortization of regulatory assets
|
352 | 405 | |||||
Nuclear fuel and lease amortization
|
47 | 41 | |||||
Deferred purchased power and other costs
|
(58 | ) | (77 | ) | |||
Deferred income taxes and investment tax credits
|
171 | 59 | |||||
Deferred rents and lease market valuation liability
|
(15 | ) | (17 | ) | |||
Accrued compensation and retirement benefits
|
(13 | ) | (81 | ) | |||
Commodity derivative transactions, net
|
(25 | ) | 33 | ||||
Pension trust contribution
|
(157 | ) | - | ||||
Asset impairments
|
31 | 12 | |||||
Cash collateral paid, net
|
(28 | ) | (46 | ) | |||
Change in working capital and other
|
141 | 28 | |||||
Cash flows provided from operating activities
|
491 | 506 | |||||
Cash flows used for financing activities
|
(550 | ) | (594 | ) | |||
Cash flows provided from (used for) investing activities*
|
141 | (476 | ) | ||||
Net change in cash and cash equivalents
|
$ | 82 | $ | (564 | ) | ||
*Includes $590 million of cash received in the Allegheny merger in 2011.
|
|||||||
Deferrals and Amortization
|
Three Months Ended March 31
|
|||||||||||
2011
|
2010
|
Change
|
||||||||||
Ohio Amended ESP Amortizations (Deferrals)
|
||||||||||||
Uncollectible customer accounts
|
$ | - | $ | (2 | ) | $ | 2 | |||||
Economic development costs & interest
|
(13 | ) | (4 | ) | (9 | ) | ||||||
Generation cost rider true-up & interest
|
(15 | ) | 5 | (20 | ) | |||||||
Distribution reliability costs (RDD/NDD)
|
84 | 49 | 35 | |||||||||
Ohio Transmission Amortization
|
||||||||||||
MISO transmission costs
|
- | (11 | ) | 11 | ||||||||
Ohio Other Amortizations (Deferrals)
|
||||||||||||
Generation related deferrals
|
(46 | ) | (23 | ) | (23 | ) | ||||||
Distribution related deferrals
|
4 | 44 | (40 | ) | ||||||||
All Other
|
- | 42 | (42 | ) | ||||||||
Pennsylvania Amortizations (Deferrals)
|
||||||||||||
PJM transmission costs
|
(32 | ) | 4 | (36 | ) | |||||||
NUG costs
|
52 | 15 | 37 | |||||||||
All Other
|
26 | 24 | 2 | |||||||||
New Jersey Amortizations (Deferrals)
|
||||||||||||
NUG costs
|
76 | 68 | 8 | |||||||||
All Other
|
6 | 1 | 5 | |||||||||
Allegheny Amortizations (Deferrals)*
|
||||||||||||
All other deferrals
|
(10 | ) | N/A | (10 | ) | |||||||
Total Amortizations (Deferrals)
|
$ | 132 | $ | 212 | $ | (80 | ) | |||||
*Represents data for March 2011 only.
|
||||||||||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
10
|
Electric Sales Statistics (kWh in millions)
|
|||||||||||||
Electric Distribution Deliveries
|
Three Months Ended March 31
|
||||||||||||
Pre-Merged Companies
|
2011
|
2010
|
Change
|
||||||||||
Ohio
|
- Residential
|
4,846 | 4,760 | 1.8 | % | ||||||||
- Commercial
|
3,835 | 3,785 | 1.3 | % | |||||||||
- Industrial
|
4,928 | 4,656 | 5.8 | % | |||||||||
- Other
|
88 | 87 | 1.1 | % | |||||||||
Total Ohio
|
13,697 | 13,288 | 3.1 | % | |||||||||
Pennsylvania - Residential
|
3,439 | 3,373 | 2.0 | % | |||||||||
- Commercial
|
1,937 | 1,936 | 0.1 | % | |||||||||
- Industrial
|
3,304 | 3,073 | 7.5 | % | |||||||||
- Other
|
20 | 20 | 0.0 | % | |||||||||
Total Pennsylvania
|
8,700 | 8,402 | 3.5 | % | |||||||||
New Jersey - Residential
|
2,353 | 2,322 | 1.3 | % | |||||||||
- Commercial
|
2,157 | 2,232 | -3.4 | % | |||||||||
- Industrial
|
609 | 622 | -2.1 | % | |||||||||
- Other
|
22 | 22 | 0.0 | % | |||||||||
Total New Jersey
|
5,141 | 5,198 | -1.1 | % | |||||||||
Total Residential
|
10,638 | 10,455 | 1.8 | % | |||||||||
Total Commercial
|
7,929 | 7,953 | -0.3 | % | |||||||||
Total Industrial
|
8,841 | 8,351 | 5.9 | % | |||||||||
Total Other
|
130 | 129 | 0.8 | % | |||||||||
Total Pre-Merged Companies Distribution Deliveries
|
27,538 | 26,888 | 2.4 | % | |||||||||
AYE Companies*
|
|||||||||||||
Pennsylvania
|
1,755 | N/A | |||||||||||
West Virginia
|
1,198 | N/A | |||||||||||
Maryland
|
587 | N/A | |||||||||||
Total AYE Distribution Deliveries
|
3,540 | N/A | |||||||||||
Total Distribution Deliveries
|
31,078 | 26,888 | 15.6 | % | |||||||||
* Represents data for March 2011 only.
|
|||||||||||||
Weather |
Three Months Ended March 31
|
|||||||||
2011
|
2010
|
Normal
|
||||||||
Composite Heating-Degree-Days
|
2,910
|
2,769
|
2,812
|
|||||||
Composite Cooling-Degree-Days
|
-
|
-
|
1
|
|||||||
Shopping Statistics(1) | Three Months Ended March 31 | |||||
2011
|
2010
|
|||||
OE
|
70%
|
49%
|
||||
PP
|
52%
|
50%
|
||||
CEI
|
79%
|
55%
|
||||
TE
|
70%
|
60%
|
||||
JCP&L
|
41%
|
32%
|
||||
Met-Ed
|
37%
|
-
|
||||
Penelec
|
43%
|
3%
|
||||
MP
|
N/A
|
N/A
|
||||
PE(2)
|
38%
|
N/A
|
||||
WP
|
45%
|
N/A
|
||||
(1)Based upon average quarterly MWH, except for MP, PE and WP which is based upon
March MWH.
|
||||||
(2) Represents Maryland only.
|
Competitive Operating Statistics* | Three Months Ended March 31 | |||||
2011
|
2010
|
|||||
Capacity Factors:
|
||||||
Nuclear
|
91%
|
92%
|
||||
Fossil - Baseload
|
68%
|
57%
|
||||
Fossil - Load Following
|
61%
|
59%
|
||||
Generation Output:
|
||||||
Nuclear
|
37%
|
46%
|
||||
Fossil - Baseload
|
43%
|
32%
|
||||
Fossil - Load Following
|
18%
|
22%
|
||||
Peaking/Hydro
|
2%
|
-
|
||||
* Includes data for AYE's unregulated generating plants for March 2011 only.
|
Consolidated Report to the Financial Community - 1st Quarter 2011 |
11
|
Summary of Sales, Power Purchases and Generation Output (kWh in millions) | ||||||||||
Pre-Merged Companies
|
Three Months Ended March 31
|
|||||||||
FES Generation Sales
|
2011
|
2010
|
Change
|
|||||||
POLR
|
||||||||||
- OH
|
2,866
|
4,948
|
(2,082)
|
|||||||
- PA
|
2,848
|
5,625
|
(2,777)
|
|||||||
Total POLR
|
5,714
|
10,573
|
(4,859)
|
|||||||
Direct - LCI
|
||||||||||
- OH
|
4,825
|
3,493
|
1,332
|
|||||||
- PA
|
2,872
|
1,003
|
1,869
|
|||||||
- NJ
|
374
|
306
|
68
|
|||||||
- MI
|
417
|
261
|
156
|
|||||||
- IL
|
601
|
473
|
128
|
|||||||
- MD
|
127
|
57
|
70
|
|||||||
Total Direct - LCI
|
9,216
|
5,593
|
3,623
|
|||||||
Direct - MCI
|
||||||||||
- OH
|
343
|
255
|
88
|
|||||||
- PA
|
112
|
6
|
106
|
|||||||
Total Direct - MCI
|
455
|
261
|
194
|
|||||||
Aggregation
|
||||||||||
- OH
|
4,122
|
2,615
|
1,507
|
|||||||
Total Aggregation
|
4,122
|
2,615
|
1,507
|
|||||||
Mass Market
|
||||||||||
- OH
|
145
|
98
|
47
|
|||||||
- PA
|
43
|
19
|
24
|
|||||||
Total Mass Market
|
188
|
117
|
71
|
|||||||
Total Generation Sales
|
19,695
|
19,159
|
536
|
|||||||
Wholesale Sales
|
||||||||||
- Bilaterals
|
128
|
468
|
(340)
|
|||||||
- Spot
|
985
|
430
|
555
|
|||||||
Total Wholesale Sales
|
1,113
|
898
|
215
|
|||||||
Purchased Power
|
||||||||||
- Bilaterals
|
791
|
930
|
(139)
|
|||||||
- Spot
|
2,701
|
2,172
|
529
|
|||||||
Total Purchased Power
|
3,492
|
3,102
|
390
|
|||||||
Generation Output
|
||||||||||
- Fossil
|
10,554
|
9,500
|
1,054
|
|||||||
- Nuclear
|
7,849
|
7,909
|
(60)
|
|||||||
Total Generation Output
|
18,403
|
17,409
|
994
|
|||||||
Allegheny Companies
|
|||||
AS Generation Sales
|
2011*
|
||||
POLR
|
1,096
|
||||
Direct - LCI
|
145
|
||||
Total Generation Sales
|
1,241
|
||||
Wholesale Sales
|
1,395
|
||||
Purchased Power
|
41
|
||||
Generation Output - Competitive
|
2,673
|
||||
*Represents data for March 2011 only.
|
|||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
12
|
Special Items
|
||||||||||
Three Months Ended March 31 | ||||||||||
2011
|
2010
|
|||||||||
Pre-tax Items - Income Increase (Decrease)
|
||||||||||
Regulatory charges (a)
|
$ | (25 | ) | $ | (40 | ) | ||||
Trust securities impairment (b)
|
(6 | ) | (10 | ) | ||||||
Merger transaction/integration costs (c)
|
(157 | ) | (14 | ) | ||||||
Non-core asset sales/impairments (d)
|
(25 | ) | (9 | ) | ||||||
Mark-to-market adjustments (e)
|
(12 | ) | (52 | ) | ||||||
Merger accounting - commodity contracts (f)
|
(24 | ) | - | |||||||
Total-Pretax Items
|
$ | (249 | ) | $ | (125 | ) | ||||
Income tax charge/Income tax resolution
|
$ | (17 | ) | $ | (13 | ) | ||||
EPS Effect
|
$ | (0.54 | ) | $ | (0.30) | |||||
(a)
|
For YTD 2011 $13 million included in "Amortization of regulatory assets"; $12 million included in "Other operating expenses". For YTD 2010, $35 million included in "Amortization of regulatory assets"; $5 million included in "Other operating expenses".
|
|||||||||
(b)
|
Included in "Investment income"
|
|||||||||
(c)
|
For YTD 2011 $151 million Included in "Other operating expenses"; $6 million included in "Fuel". For YTD 2010 included in "Other operating expenses".
|
|||||||||
(d)
|
For YTD 2011 included in "Other operating expenses". For YTD 2010, $7 million included in "Depreciation"; $2 million included in Revenues - "Competitive energy services".
|
|||||||||
(e)
|
For YTD 2011 included in "Other operating expenses". For YTD 2010 included in "Purchased power".
|
|||||||||
(f)
|
For YTD 2011 $10 million included in "Fuel"; $8 million included in Revenues - "Competitive energy services"; $6 million included in "Other operating expenses".
|
|||||||||
Earnings Per Share (EPS)
|
|||||||||||
(Reconciliation of GAAP to Non-GAAP)
|
|||||||||||
Three Months Ended March 31 | Estimate for Year | ||||||||||
2011
|
2010
|
2011
|
|||||||||
Basic EPS (GAAP basis)
|
$ | 0.15 | $ | 0.51 | $ | 2.88 - $3.18 | |||||
Excluding Special Items:
|
|||||||||||
Regulatory charges
|
0.04 | 0.08 | 0.05 | ||||||||
Trust securities impairment
|
0.01 | 0.02 | 0.01 | ||||||||
Income tax charge - retiree drug change
|
- | 0.04 | - | ||||||||
Merger transaction/integration costs
|
0.37 | 0.03 | 0.35 | ||||||||
Non-core asset sales/impairments
|
0.06 | 0.02 | (0.38 | ) | |||||||
Mark-to-market adjustments
|
0.02 | 0.11 | 0.02 | ||||||||
Debt redemption premiums
|
- | - | 0.07 | ||||||||
Merger accounting - commodity contracts
|
0.04 | - | 0.20 | ||||||||
Basic EPS (Non-GAAP basis)
|
$ | 0.69 | $ | 0.81 | $ | 3.20 - $3.50 | |||||
Liquidity position as of April 25, 2011
|
|||||||
|
Company
|
Type | Maturity | Amount (M) | Available (M) | ||
FirstEnergy(1)
|
Revolving
|
Aug. 2012
|
$2,750
|
$1,983
|
|||
AYE
|
Revolving
|
Apr. 2013
|
$250
|
$247
|
|||
AYE Supply(2)
|
Revolving
|
Various
|
$1,050
|
$1,000
|
|||
FE Utilities & TrAIL
|
Revolving
|
2013
|
910
|
475
|
|||
(1) FirstEnergy Corp. and subsidiary borrowers
|
Subtotal:
|
$4,960
|
$3,705
|
||||
(2) Includes $50 million for Allegheny Generating Company
|
Cash:
|
-
|
1,134
|
||||
Total:
|
$4,960
|
$4,839
|
|||||
Consolidated Report to the Financial Community - 1st Quarter 2011 |
13
|
Consolidated Report to the Financial Community - 1st Quarter 2011 |
14
|
Consolidated Report to the Financial Community - 1st Quarter 2011 |
15
|
Consolidated Report to the Financial Community - 1st Quarter 2011 |
16
|
Consolidated Report to the Financial Community - 1st Quarter 2011 |
17
|