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 1, 2012
|
|
99.2
|
Consolidated Report to the Financial Community, dated May 1, 2012
|
FIRSTENERGY CORP.
|
||
Registrant
|
||
By:
|
||
Harvey L. Wagner
Vice President, Controller and
Chief Accounting Officer
|
Exhibit 99.1 | ||
FirstEnergy Corp. | For Release: May 1, 2012 | |
76 South Main Street | ||
Akron, Ohio 44308 | ||
www.firstenergycorp.com | ||
News Media Contact: | Investor Contact: | |
Tricia Ingraham | Irene Prezelj | |
(330) 384-5247 | (330) 384-3859 |
GAAP to Non-GAAP* Reconciliation | |||||||
First Quarter | |||||||
2012 | 2011 | ||||||
Basic Earnings Per Share (GAAP)
|
$0.73
|
$0.15
|
|||||
Excluding Special Items:
|
|||||||
Regulatory Charges
|
0.01
|
0.04
|
|||||
Trust Securities Impairment
|
0.01
|
0.01
|
|||||
Income Tax Charge–Retiree Drug Change
|
0.02
|
--
|
|||||
Merger Transaction/Integration Costs
|
0.01
|
0.43
|
|||||
Impact of Non-Core Asset Sales/Impairments
|
0.01
|
0.06
|
|||||
Mark-To-Market Adjustments
|
(0.06)
|
0.02
|
|||||
Plant Closing Costs
|
0.05
|
--
|
|||||
Merger Accounting-Commodity Contracts
|
0.04
|
0.04
|
|||||
Basic Earnings Per Share (Non-GAAP*)
|
$0.82
|
$0.75
|
Consolidated Report to the Financial Community | ||||
First Quarter 2012 | ||||
(Released May 1, 2012) (Unaudited) | ||||
|
||||
HIGHLIGHTS |
After-Tax EPS Variance Analysis
|
1st.Qtr.
|
||
1Q 2011 Basic EPS – GAAP
|
$0.15
|
|||
Special Items – 2011
|
0.60
|
|||
● | Normalized non-GAAP* earnings, excluding special items, were |
1Q 2011 Normalized Basic EPS – Non-GAAP *
|
$0.75
|
|
$0.82 per basic share for the first quarter of 2012, compared with |
Distribution Deliveries
|
(0.05)
|
||
first quarter 2011 earnings of $0.75 per basic share. GAAP earnings |
Commodity Margin
|
(0.02) | ||
for the first quarter of 2012 were $0.73 per basic share, compared with | O&M Expenses |
0.08
|
||
first quarter 2011 earnings of $0.15 per basic share. |
Interest Expense
|
0.02
|
||
General Taxes | 0.01 | |||
Increased Shares Outstanding
|
(0.14)
|
|||
In December 2011, FirstEnergy Corp. adopted a change in the method |
Allegheny Companies (a)
|
0.17
|
||
of accounting for pension plans and other post-employment benefits | 1Q 2012 Normalized Basic EPS – Non-GAAP * | $0.82 | ||
(OPEB). The change was retroactively applied to prior years. Results | Special Items - 2012 | (0.09) | ||
for the first quarter of 2011 have been revised to include the impact of | 1Q 2012 Basic EPS – GAAP | $0.73 | ||
the accounting change and a purchase accounting measurement | ||||
adjustment identified in the fourth quarter of 2011, as shown below. | (a) Reflects Allegheny results for three months in 2012 and one | |||
month in 2011. | ||||
1Q11
|
|||||||||
Basic EPS
|
GAAP
|
Special Items
|
Non-GAAP
|
||||||
As Originally Reported
|
$0.15
|
$0.54
|
$0.69
|
||||||
Adjustments:
|
|||||||||
Pension / OPEB Accounting
|
0.06
|
0.00
|
0.06
|
||||||
Purchase Accounting
|
(0.06)
|
0.06
|
0.00
|
||||||
As Revised
|
$0.15
|
$0.60
|
$0.75
|
||||||
● |
|
Distribution Deliveries – Lower distribution delivery revenues decreased earnings by $0.05 per share. Electric distribution deliveries decreased 1 million MWH, or 4%, primarily due to the impact of warmer than normal weather. Heating-degree-days were 25% lower than the same period last year and 22% below normal. Residential deliveries decreased 844,000 MWH or 8%, while commercial deliveries decreased 129,000 MWH, or 2%. Industrial deliveries were relatively flat.
|
● |
|
Commodity Margin EPS Summary
|
Commodity Margin EPS - 1Q12 vs 1Q11 | Rate | Volume | Total | ||||||||
Contracted Sales
|
|||||||||||
- Direct Sales
|
($0.07)
|
$0.24
|
$0.17
|
||||||||
- Governmental Aggregation Sales
|
($0.01)
|
($0.02)
|
($0.03)
|
||||||||
- Mass Market Sales
|
$0.01
|
$0.10
|
$0.11
|
||||||||
- POLR Sales
|
($0.03)
|
($0.27)
|
($0.30)
|
||||||||
- Structured Sales
|
$0.03
|
$0.06
|
$0.09
|
||||||||
Subtotal - Contracted Sales
|
($0.07)
|
$0.11
|
$0.04
|
||||||||
Wholesale Sales
|
$0.00
|
($0.04)
|
($0.04)
|
||||||||
PJM Capacity, FRR Auction
|
($0.02)
|
$0.13
|
$0.11
|
||||||||
REC Activity, Net
|
($0.02)
|
($0.02)
|
($0.04)
|
||||||||
Fuel Expense
|
($0.02)
|
$0.12
|
$0.10
|
||||||||
Purchased Power
|
$0.09
|
($0.20)
|
($0.11)
|
||||||||
Capacity Expense
|
$0.07
|
($0.20)
|
($0.13)
|
||||||||
Net Financial Sales and Purchases
|
($0.05)
|
$0.00
|
($0.05)
|
||||||||
Net MISO - PJM Transmission
|
$0.14
|
($0.04)
|
$0.10
|
||||||||
Total Increase / (Decrease)
|
$0.12
|
($0.14)
|
($0.02)
|
||||||||
(a)
|
Contracted Sales – FirstEnergy Solutions Corp.’s (FES) contracted sales increased by 1.8 million MWH, or 9%, and increased earnings by $0.04 per share.
|
Consolidated Report to the Financial Community - 1st Quarter 2012 |
2
|
FES Contracted Sales - 1Q12 vs.1Q11
|
||||||||||||||||
(thousand MWH) |
Retail
|
Non-Retail | ||||||||||||||
Direct | Aggr. | Mass Market | POLR | Structured | Total | |||||||||||
Contracted Sales Increase / (Decrease)
|
2,720
|
(156)
|
1,032
|
(2,758)
|
945
|
1,783
|
||||||||||
(b)
|
Wholesale Sales – FES wholesale electricity sales decreased by 964,000 MWH, or 98%, and decreased earnings by $0.04 per share.
|
(c)
|
PJM Capacity, Fixed Resource Requirement (FRR) Auction – Higher capacity revenues increased earnings by $0.11 per share, with FES receiving capacity revenues
beginning in June 2011 in connection with transitioning the ATSI zone from MISO to PJM.
|
(d)
|
Renewable Energy Credit (REC) Sales – Net REC activity decreased earnings by $0.04 per share.
|
(e)
|
Fuel Expenses – Lower fuel expenses increased earnings by $0.10 per share, as ongoing competitive generation output for the quarter decreased by 2.4 million MWH, or 13%.
|
(f)
|
Purchased Power – Economic power purchases increased by 3.1 million MWH, or 88%, and decreased earnings by $0.11 per share.
|
FES Purchased Power - 1Q12 vs. 1Q11
|
||||||||||
(thousand MWH)
|
Bilaterals
|
Spot
|
Total
|
|||||||
Purchased Power Increase / (Decrease)
|
(337)
|
3,416
|
3,079
|
|||||||
(g)
|
Capacity Expenses – Higher capacity expenses decreased earnings by $0.13 per share as a result of FES serving more retail load.
|
(h)
|
Net Financial Sales and Purchases – Net financial hedges associated with FES’ sales and generation portfolio decreased earnings by $0.05 per share.
|
(i)
|
Net MISO-PJM Transmission Expenses – The Competitive Energy Services segment’s net MISO-PJM transmission costs increased earnings by $0.10 per share due primarily to lower congestion, network, and transmission line loss expense in PJM.
|
●
|
O&M Expenses – Lower O&M expenses increased earnings by $0.08 per share, primarily due to the absence of a nuclear refueling outage in the first quarter of 2012 and lower fossil O&M expenses.
|
Consolidated Report to the Financial Community - 1st Quarter 2012 |
3
|
●
|
Interest Expense – Lower interest expense increased earnings by $0.02 per share.
|
●
|
General Taxes – Lower kilowatt-hour excise and sales taxes increased earnings by $0.01 per share.
|
●
|
Increased Shares Outstanding – The increase in shares outstanding, resulting from the merger with Allegheny Energy, reduced earnings by $0.14 per share.
|
●
|
Allegheny Companies – The Allegheny Companies contributed $0.17 per share in earnings (full quarter in 2012 compared to one month of Allegheny results included in March 2011).
|
●
|
Special Items – The following special items were recognized during the first quarter of 2012:
|
Special Items
|
EPS
|
||||||
Income taxes (retiree prescription drug subsidy)
|
$0.02
|
||||||
Regulatory charges
|
0.01
|
||||||
Plant closing costs
|
0.05
|
||||||
Impact of non-core asset sales / impairments
|
0.01
|
||||||
Trust securities impairments
|
0.01
|
||||||
Mark-to-market adjustments
|
(0.06)
|
||||||
Merger transaction / integration costs
|
0.01
|
||||||
Merger accounting - commodity contracts
|
0.04
|
||||||
Total
|
$0.09
|
||||||
For additional information, please contact:
|
Irene M. Prezelj
|
Meghan G. Beringer
|
Rey Y. Jimenez
|
Vice President, Investor Relations
|
Director, Investor Relations
|
Manager, Investor Relations
|
(330) 384-3859
|
(330) 384-5832
|
(330) 761-4239
|
Consolidated Report to the Financial Community - 1st Quarter 2012 |
4
|
Three Months Ended March 31
|
||||||||||||||
2012
|
2011
|
Change
|
||||||||||||
Revenues
|
||||||||||||||
(1 | ) |
Regulated distribution
|
$ | 2,383 | $ | 2,268 | $ | 115 | ||||||
(2 | ) |
Competitive energy services
|
1,875 | 1,597 | 278 | |||||||||
(3 | ) |
Regulated independent transmission
|
109 | 67 | 42 | |||||||||
(4 | ) |
Other and reconciling adjustments
|
(289 | ) | (356 | ) | 67 | |||||||
(5 | ) |
Total Revenues
|
4,078 | 3,576 | 502 | |||||||||
Expenses
|
||||||||||||||
(6 | ) |
Fuel
|
541 | 453 | 88 | |||||||||
(7 | ) |
Purchased power
|
1,347 | 1,186 | 161 | |||||||||
(8 | ) |
Other operating expenses
|
812 | 993 | (181 | ) | ||||||||
(9 | ) |
Provision for depreciation
|
285 | 225 | 60 | |||||||||
(10 | ) |
Amortization of regulatory assets, net
|
75 | 132 | (57 | ) | ||||||||
(11 | ) |
General taxes
|
272 | 237 | 35 | |||||||||
(12 | ) |
Total Expenses
|
3,332 | 3,226 | 106 | |||||||||
(13 | ) |
Operating Income
|
746 | 350 | 396 | |||||||||
Other Income (Expense)
|
||||||||||||||
(14 | ) |
Investment income
|
11 | 21 | (10 | ) | ||||||||
(15 | ) |
Interest expense
|
(246 | ) | (231 | ) | (15 | ) | ||||||
(16 | ) |
Capitalized interest
|
17 | 18 | (1 | ) | ||||||||
(17 | ) |
Total Other Expense
|
(218 | ) | (192 | ) | (26 | ) | ||||||
(18 | ) |
Income Before Income Taxes
|
528 | 158 | 370 | |||||||||
(19 | ) |
Income taxes
|
222 | 111 | 111 | |||||||||
(20 | ) |
Net Income
|
306 | 47 | 259 | |||||||||
(21 | ) |
Loss attributable to noncontrolling interest
|
- | (5 | ) | 5 | ||||||||
(22 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | 306 | $ | 52 | $ | 254 | ||||||
(23 | ) |
Earnings Per Share of Common Stock
|
||||||||||||
(24 | ) |
Basic
|
$ | 0.73 | $ | 0.15 | $ | 0.58 | ||||||
(25 | ) |
Diluted
|
$ | 0.73 | $ | 0.15 | $ | 0.58 | ||||||
(26 | ) |
Weighted Average Number of
|
||||||||||||
Common Shares Outstanding
|
||||||||||||||
(27 | ) |
Basic
|
418 | 342 | 76 | |||||||||
(28 | ) |
Diluted
|
420 | 343 | 77 | |||||||||
Consolidated Report to the Financial Community - 1st Quarter 2012 |
5
|
Three Months Ended March 31, 2012
|
||||||||||||||||||||||
Competitive
|
Regulated
|
Other &
|
||||||||||||||||||||
Regulated
|
Energy
|
Independent
|
Reconciling
|
FirstEnergy
|
||||||||||||||||||
Distribution (a)
|
Services (b)
|
Transmission (c)
|
Adjustments (d)
|
Consolidated
|
||||||||||||||||||
Revenues
|
||||||||||||||||||||||
(1 | ) |
Electric sales
|
$ | 2,270 | $ | 1,531 | $ | - | $ | - | $ | 3,801 | ||||||||||
(2 | ) |
Other
|
113 | 76 | 109 | (23 | ) | 275 | ||||||||||||||
(3 | ) |
Internal
|
- | 268 | - | (266 | ) | 2 | ||||||||||||||
(4 | ) |
Total Revenues
|
2,383 | 1,875 | 109 | (289 | ) | 4,078 | ||||||||||||||
Expenses
|
||||||||||||||||||||||
(5 | ) |
Fuel
|
39 | 502 | - | - | 541 | |||||||||||||||
(6 | ) |
Purchased power
|
1,082 | 531 | - | (266 | ) | 1,347 | ||||||||||||||
(7 | ) |
Other operating expenses
|
427 | 409 | 15 | (39 | ) | 812 | ||||||||||||||
(8 | ) |
Provision for depreciation
|
159 | 100 | 18 | 8 | 285 | |||||||||||||||
(9 | ) |
Amortization of regulatory assets, net
|
75 | - | - | - | 75 | |||||||||||||||
(10 | ) |
General taxes
|
192 | 61 | 10 | 9 | 272 | |||||||||||||||
(11 | ) |
Total Expenses
|
1,974 | 1,603 | 43 | (288 | ) | 3,332 | ||||||||||||||
(12 | ) |
Operating Income
|
409 | 272 | 66 | (1 | ) | 746 | ||||||||||||||
Other Income (Expense)
|
||||||||||||||||||||||
(13 | ) |
Investment income
|
24 | 6 | - | (19 | ) | 11 | ||||||||||||||
(14 | ) |
Interest expense
|
(145 | ) | (65 | ) | (12 | ) | (24 | ) | (246 | ) | ||||||||||
(15 | ) |
Capitalized interest
|
3 | 11 | - | 3 | 17 | |||||||||||||||
(16 | ) |
Total Other Expense
|
(118 | ) | (48 | ) | (12 | ) | (40 | ) | (218 | ) | ||||||||||
(17 | ) |
Income Before Income Taxes
|
291 | 224 | 54 | (41 | ) | 528 | ||||||||||||||
(18 | ) |
Income taxes
|
108 | 83 | 20 | 11 | 222 | |||||||||||||||
(19 | ) |
Net Income
|
183 | 141 | 34 | (52 | ) | 306 | ||||||||||||||
(20 | ) |
Loss attributable to noncontrolling interest
|
- | - | - | - | - | |||||||||||||||
(21 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | 183 | $ | 141 | $ | 34 | $ | (52 | ) | $ | 306 | |||||||||
(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 and the deferral and amortization of certain fuel costs.
|
|||||||||||||||||||||
(b)
|
Supplies electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
|
|||||||||||||||||||||
(c)
|
Revenues are primarily derived from formulaic rates that recover costs and provide a return on investment 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. Its results reflect the net 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 2012 |
6
|
Three Months Ended March 31, 2011
|
||||||||||||||||||||||
Competitive
|
Regulated
|
Other &
|
||||||||||||||||||||
Regulated
|
Energy
|
Independent
|
Reconciling
|
FirstEnergy
|
||||||||||||||||||
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
|
- | 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
|
360 | 632 | 18 | (17 | ) | 993 | ||||||||||||||
(8 | ) |
Provision for depreciation
|
121 | 88 | 10 | 6 | 225 | |||||||||||||||
(9 | ) |
Amortization of regulatory assets, net
|
129 | - | 3 | - | 132 | |||||||||||||||
(10 | ) |
General taxes
|
176 | 44 | 8 | 9 | 237 | |||||||||||||||
(11 | ) |
Total Expenses
|
1,989 | 1,511 | 39 | (313 | ) | 3,226 | ||||||||||||||
(12 | ) |
Operating Income (Loss)
|
279 | 86 | 28 | (43 | ) | 350 | ||||||||||||||
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
|
173 | 24 | 19 | (58 | ) | 158 | ||||||||||||||
(18 | ) |
Income taxes
|
64 | 9 | 7 | 31 | 111 | |||||||||||||||
(19 | ) |
Net Income
|
109 | 15 | 12 | (89 | ) | 47 | ||||||||||||||
(20 | ) |
Loss attributable to noncontrolling interest
|
- | - | - | (5 | ) | (5 | ) | |||||||||||||
(21 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | 109 | $ | 15 | $ | 12 | $ | (84 | ) | $ | 52 | |||||||||
(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 and the deferral and amortization of certain fuel costs.
|
|||||||||||||||||||||
(b)
|
Supplies electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
|
|||||||||||||||||||||
(c)
|
Revenues are primarily derived from formulaic rates that recover costs and provide a return on investment 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. Its results reflect the net 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 2012 |
7
|
Three Months Ended March 31, 2012 vs. Three Months Ended March 31, 2011
|
||||||||||||||||||||||
Energy
|
Competitive
|
Regulated
|
Other &
|
|||||||||||||||||||
Delivery
|
Energy
|
Independent
|
Reconciling
|
FirstEnergy
|
||||||||||||||||||
Services (a)
|
Services (b)
|
Transmission (c)
|
Adjustments (d)
|
Consolidated
|
||||||||||||||||||
Revenues
|
||||||||||||||||||||||
(1 | ) |
Electric sales
|
$ | 95 | $ | 369 | $ | - | $ | - | $ | 464 | ||||||||||
(2 | ) |
Other
|
20 | (16 | ) | 42 | 22 | 68 | ||||||||||||||
(3 | ) |
Internal revenues
|
- | (75 | ) | - | 45 | (30 | ) | |||||||||||||
(4 | ) |
Total Revenues
|
115 | 278 | 42 | 67 | 502 | |||||||||||||||
Expenses
|
||||||||||||||||||||||
(5 | ) |
Fuel
|
15 | 73 | - | - | 88 | |||||||||||||||
(6 | ) |
Purchased power
|
(97 | ) | 213 | - | 45 | 161 | ||||||||||||||
(7 | ) |
Other operating expenses
|
67 | (223 | ) | (3 | ) | (22 | ) | (181 | ) | |||||||||||
(8 | ) |
Provision for depreciation
|
38 | 12 | 8 | 2 | 60 | |||||||||||||||
(9 | ) |
Amortization of regulatory assets
|
(54 | ) | - | (3 | ) | - | (57 | ) | ||||||||||||
(10 | ) |
General taxes
|
16 | 17 | 2 | - | 35 | |||||||||||||||
(11 | ) |
Total Expenses
|
(15 | ) | 92 | 4 | 25 | 106 | ||||||||||||||
(12 | ) |
Operating Income
|
130 | 186 | 38 | 42 | 396 | |||||||||||||||
Other Income (Expense)
|
||||||||||||||||||||||
(13 | ) |
Investment income
|
(1 | ) | - | - | (9 | ) | (10 | ) | ||||||||||||
(14 | ) |
Interest expense
|
(13 | ) | 13 | (3 | ) | (12 | ) | (15 | ) | |||||||||||
(15 | ) |
Capitalized interest
|
2 | 1 | - | (4 | ) | (1 | ) | |||||||||||||
(16 | ) |
Total Other Expense
|
(12 | ) | 14 | (3 | ) | (25 | ) | (26 | ) | |||||||||||
(17 | ) |
Income Before Income Taxes
|
118 | 200 | 35 | 17 | 370 | |||||||||||||||
(18 | ) |
Income taxes
|
44 | 74 | 13 | (20 | ) | 111 | ||||||||||||||
(19 | ) |
Net Income
|
74 | 126 | 22 | 37 | 259 | |||||||||||||||
(20 | ) |
Loss attributable to noncontrolling interest
|
- | - | - | 5 | 5 | |||||||||||||||
(21 | ) |
Earnings Available to FirstEnergy Corp.
|
$ | 74 | $ | 126 | $ | 22 | $ | 32 | $ | 254 | ||||||||||
(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 competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
|
|||||||||||||||||||||
(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 2012 |
8
|
Condensed Consolidated Balance Sheets
|
|||||||||
As of
|
As of
|
||||||||
Assets
|
Mar. 31, 2012
|
Dec. 31, 2011
|
|||||||
Current Assets:
|
|||||||||
Cash and cash equivalents
|
$ | 74 | $ | 202 | |||||
Receivables
|
1,735 | 1,794 | |||||||
Other
|
1,668 | 1,359 | |||||||
Total Current Assets
|
3,477 | 3,355 | |||||||
Property, Plant and Equipment
|
30,566 | 30,337 | |||||||
Investments
|
3,482 | 3,522 | |||||||
Deferred Charges and Other Assets
|
10,166 | 10,112 | |||||||
Total Assets
|
$ | 47,691 | $ | 47,326 | |||||
Liabilities and Capitalization
|
|||||||||
Current Liabilities:
|
|||||||||
Currently payable long-term debt
|
$ | 1,772 | $ | 1,621 | |||||
Short-term borrowings
|
1,075 | - | |||||||
Accounts payable
|
918 | 1,174 | |||||||
Other
|
2,008 | 2,060 | |||||||
Total Current Liabilities
|
5,773 | 4,855 | |||||||
Capitalization:
|
|||||||||
Total equity
|
13,339 | 13,299 | |||||||
Long-term debt and other long-term obligations
|
15,527 | 15,716 | |||||||
Total Capitalization
|
28,866 | 29,015 | |||||||
Noncurrent Liabilities
|
13,052 | 13,456 | |||||||
Total Liabilities and Capitalization
|
$ | 47,691 | $ | 47,326 | |||||
General Information
|
|||||||||
Three Months Ended March 31
|
|||||||||
2012
|
2011
|
||||||||
Debt redemptions
|
$ | (16 | ) | $ | (359 | ) | |||
New long-term debt issues
|
$ | - | $ | 217 | |||||
Short-term borrowings increase (decrease)
|
$ | 1,075 | $ | (214 | ) | ||||
Property additions
|
$ | 589 | $ | 449 | |||||
Adjusted Capitalization
|
|||||||||||||||||
As of March 31
|
As of December 31
|
||||||||||||||||
2012
|
% Total
|
2011
|
% Total
|
||||||||||||||
Total equity (GAAP)
|
$ | 13,339 | 42 | % | $ | 13,299 | 43 | % | |||||||||
Long-term debt and other long-term obligations
|
15,527 | 48 | % | 15,716 | 51 | % | |||||||||||
Currently payable long-term debt
|
1,772 | 6 | % | 1,621 | 5 | % | |||||||||||
Short-term borrowings
|
1,075 | 3 | % | - | - | ||||||||||||
Adjustments:
|
|||||||||||||||||
Sale-leaseback net debt equivalents
|
1,305 | 4 | % | 1,278 | 4 | % | |||||||||||
Securitization debt and cash
|
(884 | ) | -3 | % | (971 | ) | -3 | % | |||||||||
Adjusted capitalization (Non-GAAP)
|
$ | 32,134 | 100 | % | $ | 30,943 | 100 | % | |||||||||
Consolidated Report to the Financial Community - 1st Quarter 2012 |
9
|
Condensed Consolidated Statements of Cash Flows
|
|||||||||
Three Months Ended March 31 | |||||||||
2012
|
2011
|
||||||||
Cash flows from operating activities
|
|||||||||
Net income
|
$ | 306 | $ | 47 | |||||
Adjustments to reconcile net income to net cash from operating activities:
|
|||||||||
Depreciation and amortization of regulatory assets, net
|
360 | 357 | |||||||
Nuclear fuel and lease amortization
|
58 | 47 | |||||||
Deferred purchased power and other costs
|
(107 | ) | (58 | ) | |||||
Deferred income taxes and investment tax credits
|
265 | 204 | |||||||
Deferred rents and lease market valuation liability
|
(23 | ) | (15 | ) | |||||
Accrued compensation and retirement benefits
|
(162 | ) | (53 | ) | |||||
Commodity derivative transactions, net
|
(64 | ) | (25 | ) | |||||
Pension trust contribution
|
(600 | ) | (157 | ) | |||||
Asset impairments
|
4 | 31 | |||||||
Cash collateral paid, net
|
(28 | ) | (28 | ) | |||||
Change in working capital and other
|
(422 | ) | 141 | ||||||
Cash flows provided from (used for) operating activities
|
(413 | ) | 491 | ||||||
Cash flows provided from (used for) financing activities
|
819 | (550 | ) | ||||||
Cash flows provided from (used for) investing activities*
|
(534 | ) | 141 | ||||||
Net change in cash and cash equivalents
|
$ | (128 | ) | $ | 82 | ||||
*Includes $590 million of cash received in the Allegheny merger in 2011.
|
|||||||||
Liquidity position as of March 31, 2012
|
||||||
Company
|
Type
|
Maturity
|
Amount (M)
|
Available (M)
|
||
FirstEnergy(1)
|
Revolving
|
Jun. 2016
|
$2,000
|
$895
|
||
FES / AES
|
Revolving
|
Jun. 2016
|
$2,500
|
$2,498
|
||
TrAIL
|
Revolving
|
Jan. 2013
|
$450
|
$450
|
||
AGC
|
Revolving
|
Dec. 2013
|
$50
|
$0
|
||
|
Subtotal:
|
$5,000
|
$3,843
|
|||
(1) FirstEnergy Corp. and subsidiary borrowers |
Cash:
|
$0 |
$54
|
|||
Total:
|
$5,000
|
$3,897
|
||||
Consolidated Report to the Financial Community - 1st Quarter 2012 |
10
|
Electric Sales Statistics (MWh thousands)
|
||||||||||||||
Electric Distribution Deliveries
|
Three Months Ended March 31
|
|||||||||||||
Pre-Merged Companies
|
2012
|
2011
|
Change
|
|||||||||||
Ohio
|
- Residential
|
4,500 | 4,846 | -7.1 | % | |||||||||
- Commercial
|
3,746 | 3,835 | -2.3 | % | ||||||||||
- Industrial
|
5,069 | 4,928 | 2.9 | % | ||||||||||
- Other
|
82 | 88 | -6.8 | % | ||||||||||
Total Ohio
|
13,397 | 13,697 | -2.2 | % | ||||||||||
Pennsylvania
|
- Residential
|
3,147 | 3,439 | -8.5 | % | |||||||||
- Commercial
|
1,904 | 1,937 | -1.7 | % | ||||||||||
- Industrial
|
3,148 | 3,304 | -4.7 | % | ||||||||||
- Other
|
19 | 20 | -5.0 | % | ||||||||||
Total Pennsylvania
|
8,218 | 8,700 | -5.5 | % | ||||||||||
New Jersey
|
- Residential
|
2,147 | 2,353 | -8.8 | % | |||||||||
- Commercial
|
2,151 | 2,157 | -0.3 | % | ||||||||||
- Industrial
|
603 | 609 | -1.0 | % | ||||||||||
- Other
|
22 | 22 | 0.0 | % | ||||||||||
Total New Jersey
|
4,923 | 5,141 | -4.2 | % | ||||||||||
Total Residential
|
9,794 | 10,638 | -7.9 | % | ||||||||||
Total Commercial
|
7,801 | 7,929 | -1.6 | % | ||||||||||
Total Industrial
|
8,820 | 8,841 | -0.2 | % | ||||||||||
Total Other
|
123 | 130 | -4.9 | % | ||||||||||
Total Pre-Merged Companies Distribution Deliveries
|
26,538 | 27,538 | -3.6 | % | ||||||||||
AYE Companies*
|
||||||||||||||
Pennsylvania
|
5,135 | 1,755 | ||||||||||||
West Virginia
|
3,672 | 1,198 | ||||||||||||
Maryland
|
1,852 | 587 | ||||||||||||
Total AYE Distribution Deliveries
|
10,659 | 3,540 | ||||||||||||
Total Distribution Deliveries
|
37,197 | 31,078 | 19.7 | % | ||||||||||
* Represents 3 months in 2012 and 1 month in 2011
|
||||||||||||||
Weather | Three Months Ended March 31 | |||||||||
2012 | 2011 | Normal | ||||||||
Composite Heating-Degree-Days
|
2,189
|
2,910
|
2,832
|
|||||||
Composite Cooling-Degree-Days
|
12
|
0
|
1
|
|||||||
Shopping Statistics(1) | Three Months Ended March 31 | |||||||
2012
|
2011
|
|||||||
OE
|
73%
|
70%
|
||||||
PP
|
61%
|
52%
|
||||||
CEI
|
84%
|
79%
|
||||||
TE
|
74%
|
70%
|
||||||
JCP&L
|
48%
|
41%
|
||||||
Met-Ed
|
52%
|
37%
|
||||||
Penelec
|
62%
|
43%
|
||||||
MP
|
N/A
|
N/A
|
||||||
PE(2)
|
34%
|
38%
|
||||||
WP
|
59%
|
45%
|
||||||
(1)Based upon average quarterly MWH
|
||||||||
(2) Represents Maryland only.
|
||||||||
Competitive Operating Statistics* | Three Months Ended March 31 | |||||||||
2012
|
2011
|
|||||||||
Capacity Factors:
|
||||||||||
Nuclear
|
99%
|
91%
|
||||||||
Fossil - Baseload
|
62%
|
68%
|
||||||||
Fossil - Load Following
|
16%
|
61%
|
||||||||
Generation Output:
|
||||||||||
Nuclear
|
37%
|
37%
|
||||||||
Fossil - Baseload
|
54%
|
43%
|
||||||||
Fossil - Load Following
|
5%
|
18%
|
||||||||
Peaking/Hydro
|
4%
|
2%
|
||||||||
* Includes data for AYE's unregulated generating plants for 3months in 2012 and 1 month in 2011
|
Consolidated Report to the Financial Community - 1st Quarter 2012 |
11
|
Summary of Sales, Power Purchases and Generation Output (MWh in thousands)
|
|||||||||||||||
Pre-Merged Companies
|
Three Months Ended Mar 31
|
||||||||||||||
FES Generation Sales
|
2012
|
2011
|
Change
|
||||||||||||
POLR
|
|||||||||||||||
- OH
|
1,516 | 2,866 | (1,350 | ) | |||||||||||
- PA
|
1,441 | 2,849 | (1,408 | ) | |||||||||||
Total POLR
|
2,957 | 5,715 | (2,758 | ) | |||||||||||
Structured Sales
|
|||||||||||||||
- Bilaterals
|
760 | 128 | 632 | ||||||||||||
- Muni/Co-op
|
313 | - | 313 | ||||||||||||
Total Structured Sales
|
1,073 | 128 | 945 | ||||||||||||
Direct - LCI
|
|||||||||||||||
- OH
|
6,248 | 4,825 | 1,423 | ||||||||||||
- PA
|
3,574 | 2,872 | 702 | ||||||||||||
- NJ
|
338 | 374 | (36 | ) | |||||||||||
- MI
|
552 | 417 | 135 | ||||||||||||
- IL
|
726 | 601 | 125 | ||||||||||||
- MD
|
134 | 127 | 7 | ||||||||||||
Total Direct - LCI
|
11,572 | 9,216 | 2,356 | ||||||||||||
Direct - MCI
|
|||||||||||||||
- OH
|
568 | 343 | 225 | ||||||||||||
- PA
|
251 | 112 | 139 | ||||||||||||
Total Direct - MCI
|
819 | 455 | 364 | ||||||||||||
Aggregation
|
|||||||||||||||
- OH
|
3,936 | 4,122 | (186 | ) | |||||||||||
- IL
|
30 | - | 30 | ||||||||||||
Total Aggregation
|
3,966 | 4,122 | (156 | ) | |||||||||||
Mass Market
|
|||||||||||||||
- OH
|
344 | 145 | 199 | ||||||||||||
- PA
|
872 | 43 | 829 | ||||||||||||
- IL
|
4 | - | 4 | ||||||||||||
Total Mass Market
|
1,220 | 188 | 1,032 | ||||||||||||
Total Contracted Sales
|
21,607 | 19,824 | 1,783 | ||||||||||||
Wholesale Sales
|
|||||||||||||||
- Spot
|
21 | 985 | (964 | ) | |||||||||||
Total Wholesale Sales
|
21 | 985 | (964 | ) | |||||||||||
Purchased Power
|
|||||||||||||||
- Bilaterals
|
454 | 791 | (337 | ) | |||||||||||
- Spot
|
6,117 | 2,701 | 3,416 | ||||||||||||
Total Purchased Power
|
6,571 | 3,492 | 3,079 | ||||||||||||
Ongoing Generation Output
|
|||||||||||||||
- Fossil
|
7,374 | 10,554 | (3,180 | ) | |||||||||||
- Nuclear
|
8,599 | 7,849 | 750 | ||||||||||||
Total Ongoing Generation Output
|
15,973 | 18,403 | (2,430 | ) | |||||||||||
Allegheny Companies*
|
|||||||||||||||
Three Months Ended Mar 31
|
|||||||||||||||
AE Supply Contracted Sales
|
2012 | 2011 |
Change
|
||||||||||||
POLR
|
2,459 | 812 | 1,647 | ||||||||||||
Structured Sales
|
44 | 19 | 25 | ||||||||||||
Direct - LCI
|
388 | 145 | 243 | ||||||||||||
Muni/Co-op
|
112 | 284 | (172 | ) | |||||||||||
Total Contracted Sales
|
3,003 | 1,260 | 1,743 | ||||||||||||
Wholesale Sales
|
3,517 | 1,376 | 2,141 | ||||||||||||
Purchased Power
|
78 | 41 | 37 | ||||||||||||
Ongoing Generation Output - Competitive
|
6,569 | 2,672 | 3,897 | ||||||||||||
*Represents 3 months in 2012 and 1 month in 2011
|
|||||||||||||||
Consolidated Report to the Financial Community - 1st Quarter 2012 |
12
|
Competitive
|
Regulated
|
||||||||||||||||||||
Regulated
|
Energy
|
Independent
|
|||||||||||||||||||
Special Items - Three Months Ended March 31, 2012
|
Distribution
|
Services
|
Transmission
|
Other
|
Consolidated
|
||||||||||||||||
Pre-Tax Items:
|
|||||||||||||||||||||
Regulatory charges
|
$ | (6 | ) | $ | - | $ | - | $ | - | $ | (6 | ) | |||||||||
Trust securities impairment
|
(1 | ) | (3 | ) | - | - | (4 | ) | |||||||||||||
Merger transaction/integration costs
|
(1 | ) | (1 | ) | - | - | (2 | ) | |||||||||||||
Non-core asset sales/impairments
|
- | (5 | ) | - | - | (5 | ) | ||||||||||||||
Mark-to-market adjustments -
|
|||||||||||||||||||||
Pensions/OPEB actuarial assumptions
|
- | - | - | - | - | ||||||||||||||||
Other
|
- | 39 | - | - | 39 | ||||||||||||||||
Merger accounting - commodity contracts
|
(4 | ) | (26 | ) | - | - | (30 | ) | |||||||||||||
Generating plant charges
|
(5 | ) | (31 | ) | - | - | (36 | ) | |||||||||||||
Subtotal
|
(17 | ) | (27 | ) | - | - | (44 | ) | |||||||||||||
Income tax charge (retiree drug subsidy)
|
(6 | ) | - | - | (2 | ) | (8 | ) | |||||||||||||
Income taxes
|
12 | 10 | - | (8 | ) | 14 | |||||||||||||||
After-Tax Effect
|
$ | (11 | ) | $ | (17 | ) | $ | - | $ | (10 | ) | $ | (38 | ) | |||||||
Competitive
|
Regulated
|
||||||||||||||||||||
Regulated
|
Energy
|
Independent
|
|||||||||||||||||||
Special Items - Three Months Ended March 31, 2011
|
Distribution
|
Services
|
Transmission
|
Other
|
Consolidated
|
||||||||||||||||
Pre-Tax Items:
|
|||||||||||||||||||||
Regulatory charges
|
$ | (21 | ) | $ | - | $ | - | $ | (4 | ) | $ | (25 | ) | ||||||||
Trust securities impairment
|
(1 | ) | (5 | ) | - | - | (6 | ) | |||||||||||||
Merger transaction/integration costs
|
(66 | ) | (87 | ) | (3 | ) | (1 | ) | (157 | ) | |||||||||||
Non-core asset sales/impairments
|
- | (14 | ) | - | (11 | ) | (25 | ) | |||||||||||||
Mark-to-market adjustments -
|
|||||||||||||||||||||
Pensions/OPEB actuarial assumptions
|
- | (12 | ) | - | - | (12 | ) | ||||||||||||||
Other
|
- | - | - | - | - | ||||||||||||||||
Merger accounting - commodity contracts
|
- | (24 | ) | - | - | (24 | ) | ||||||||||||||
Generating plant charges
|
- | - | - | - | - | ||||||||||||||||
Subtotal
|
(88 | ) | (142 | ) | (3 | ) | (16 | ) | (249 | ) | |||||||||||
Income tax charge (retiree drug subsidy)
|
- | - | - | - | - | ||||||||||||||||
Income taxes
|
33 | 53 | 1 | (49 | ) | 37 | |||||||||||||||
After-Tax Effect
|
$ | (55 | ) | $ | (89 | ) | $ | (2 | ) | $ | (65 | ) | $ | (212 | ) | ||||||
Consolidated Report to the Financial Community - 1st Quarter 2012 |
13
|
Special Items | ||||||||||||
Three Months Ended March 31 | ||||||||||||
2012
|
2011
|
|||||||||||
Pre-tax Items - Income Increase (Decrease)
|
||||||||||||
Regulatory charges (a)
|
$ | (6 | ) | $ | (25 | ) | ||||||
Trust securities impairment (b)
|
(4 | ) | (6 | ) | ||||||||
Merger transaction/integration costs (c)
|
(2 | ) | (157 | ) | ||||||||
Non-core asset sales/impairments (d)
|
(5 | ) | (25 | ) | ||||||||
Mark-to-market adjustments (e)
|
39 | (12 | ) | |||||||||
Merger accounting - commodity contracts (f)
|
(30 | ) | (24 | ) | ||||||||
Plant closings (g)
|
(36 | ) | - | |||||||||
Total-Pretax Items
|
$ | (44 | ) | $ | (249 | ) | ||||||
Income tax charge/Income tax resolution
|
$ | (6 | ) | $ | (37 | ) | ||||||
EPS Effect
|
$ | (0.09 | ) | $ | (0.60 | ) | ||||||
(a)
|
For YTD 2012 $6 million included in "Other operating expenses". For YTD 2011 $13 million included in "Amortization of regulatory assets"; $12 million included in "Other operating expenses".
|
|||||||||||
(b)
|
Included in "Investment income"
|
|||||||||||
(c)
|
For YTD 2012 $2 million Included in "Other operating expenses". For YTD 2011 $151 million Included in "Other operating expenses"; $6 million included in "Fuel".
|
|||||||||||
(d)
|
For YTD 2012 & 2011 included in "Other operating expenses".
|
|||||||||||
(e)
|
For YTD 2012 & 2011 included in "Other operating expenses".
|
|||||||||||
(f)
|
For YTD 2012 $10 million included in "Fuel"; $20 million included in Revenues. For YTD 2011 $10 million included in "Fuel"; $8 million included in Revenues - "Competitive energy services"; $6 million included in "Other operating expenses".
|
|||||||||||
(g)
|
For YTD 2012 ($4) million in "Revenue", $41 million in "Fuel", ($25) million in Purchased Power, $22 million in "Other operating expenses", and $2 million in General Taxes.
|
|||||||||||
Earnings Per Share (EPS) | ||||||||||
(Reconciliation of GAAP to Non-GAAP) | ||||||||||
Three Months Ended March 31 | Estimate for Year | Estimate for Year | ||||||||
2012
|
2011
|
2012
|
2013
|
|||||||
Basic EPS (GAAP basis)
|
$ 0.73
|
$ 0.15
|
$2.85 - $3.15
|
$2.92 - $3.22
|
||||||
Excluding Special Items:
|
||||||||||
Regulatory charges
|
0.01
|
0.04
|
0.04
|
0.05
|
||||||
Trust securities impairment
|
0.01
|
0.01
|
0.01
|
-
|
||||||
Income tax charge - retiree prescription drug subsidy
|
0.02
|
-
|
0.08
|
-
|
||||||
Merger transaction/integration costs
|
0.01
|
0.43
|
0.01
|
-
|
||||||
Impact of non-core asset sales/impairments
|
0.01
|
0.06
|
0.03
|
0.03
|
||||||
Mark-to-market adjustments
|
(0.06)
|
0.02
|
(0.06)
|
-
|
||||||
Plant closing costs
|
0.05
|
-
|
0.19
|
-
|
||||||
Merger accounting - commodity contracts
|
0.04
|
0.04
|
0.15
|
0.10
|
||||||
Basic EPS (Non-GAAP basis) | $ 0.82 |
$ 0.75
|
$3.30 - $3.60
|
$3.10 - $3.40
|
||||||
Consolidated Report to the Financial Community - 1st Quarter 2012 |
14
|
Consolidated Report to the Financial Community - 1st Quarter 2012 |
15
|
·
|
Freezing current base distribution rates through May 31, 2016
|
·
|
Continuing to provide economic development and assistance to low-income customers for the two-year extension period at the levels established in the existing ESP
|
·
|
Providing Percentage of Income Payment Plan customers with a 6 percent generation rate discount
|
·
|
Continuing to provide capacity to shopping and non-shopping customers at a market-based price set through an auction process, and
|
·
|
Continuing Rider DCR that allows continued investment in the distribution system for the benefit of customers.
|
·
|
Securing generation supply over a longer duration of time to mitigate any potential price spikes for FirstEnergy Ohio utility customers who do not switch to a competitive generation supplier; and
|
·
|
Extending the recovery period for costs associated with purchasing renewable energy credits mandated by Senate Bill 221 through the end of the new ESP period. This will reduce the monthly renewable energy charge for all FirstEnergy Ohio utility customers.
|
Consolidated Report to the Financial Community - 1st Quarter 2012 |
16
|
Consolidated Report to the Financial Community - 1st Quarter 2012 |
17
|