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 7, 2013 | |
99.2 | Consolidated Report to the Financial Community, dated May 7, 2013 |
FIRSTENERGY CORP. | |
Registrant | |
By: | /s/ K. Jon Taylor |
K. Jon Taylor Vice President, Controller and Chief Accounting Officer |
GAAP to Non-GAAP* Reconciliation | ||||||
First Quarter | Full Year | |||||
2013 | 2012 | 2013 | ||||
Basic Earnings Per Share (GAAP) | $0.47 | $0.73 | $2.37 - $2.67 | |||
Excluding Special Items: | ||||||
Mark-To-Market Adjustments | 0.01 | (0.06) | — | |||
Regulatory Charges | 0.04 | 0.01 | 0.06 | |||
Trust Securities Impairment | 0.01 | 0.01 | 0.01 | |||
Income Tax - Legislative Changes | — | 0.02 | — | |||
Merger Transaction/Integration Costs | — | 0.01 | — | |||
Impact of Non-Core Asset Sales/Impairments | 0.01 | 0.01 | 0.08 | |||
Plant Deactivation Costs | 0.01 | 0.05 | 0.01 | |||
Restructuring Costs | — | — | 0.01 | |||
Merger Accounting - Commodity Contracts | 0.03 | 0.04 | 0.08 | |||
Debt Redemption Costs | 0.18 | — | 0.23 | |||
Basic Earnings Per Share (Non-GAAP*) | $0.76 | $0.82 | $2.85 - $3.15 |
HIGHLIGHTS | After-Tax EPS Variance Analysis | 1st Qtr. | |||
1Q 2012 Basic EPS - GAAP | $0.73 | ||||
• Normalized non-GAAP* earnings, excluding special items, were $0.76 per basic share for the first quarter of 2013, compared with first quarter 2012 normalized non-GAAP earnings of $0.82 per basic share. GAAP earnings for the first quarter of 2013 were $0.47 per basic share, compared with first quarter 2012 earnings of $0.73 per basic share. | Special Items - 2012 | 0.09 | |||
1Q 2012 Normalized Basic EPS - Non-GAAP* | $0.82 | ||||
Distribution Deliveries | 0.07 | ||||
Commodity Margin | (0.14) | ||||
Regulated Transmission | (0.02) | ||||
O&M Expenses | 0.01 | ||||
Depreciation | (0.02) | ||||
General Taxes | 0.01 | ||||
Effective Income Tax Rate | 0.03 | ||||
1Q 2013 Normalized Basic EPS - Non-GAAP* | $0.76 | ||||
Special Items - 2013 | (0.29) | ||||
1Q 2013 Basic EPS - GAAP | $0.47 | ||||
• | Distribution Deliveries - Higher distribution delivery revenues increased earnings by $0.07 per share. Electric distribution deliveries increased 979,000 MWH, or 3%, primarily due to the impact of weather as heating-degree-days were 30% higher than the same period last year, and 2% above normal. Residential deliveries increased 862,000 MWH, or 6%, commercial deliveries increased 65,000 MWH, or 0.6%, and industrial deliveries increased 52,000 MWH, or 0.4%. |
• | Competitive Energy Services (CES) EPS Summary |
Commodity Margin EPS - 1Q13 vs 1Q12 | Rate | Volume | Total | |||||||||||
(a) Contract Sales | ||||||||||||||
- Direct Sales (LCI & MCI) | $ | (0.06 | ) | $ | 0.07 | $ | 0.01 | |||||||
- Governmental Aggregation Sales | (0.05 | ) | 0.12 | 0.07 | ||||||||||
- Mass Market Sales | (0.01 | ) | 0.06 | 0.05 | ||||||||||
- POLR Sales | (0.03 | ) | (0.08 | ) | (0.11 | ) | ||||||||
- Structured Sales | (0.01 | ) | 0.08 | 0.07 | ||||||||||
Subtotal - Contract Sales | $ | (0.16 | ) | $ | 0.25 | $ | 0.09 | |||||||
(b) Wholesale Sales | — | (0.02 | ) | (0.02 | ) | |||||||||
(c) PJM Capacity, FRR Auction Revenues | (0.18 | ) | (0.01 | ) | (0.19 | ) | ||||||||
(d) REC Sales | — | (0.01 | ) | (0.01 | ) | |||||||||
(e) Fuel Expense | (0.01 | ) | (0.07 | ) | (0.08 | ) | ||||||||
(f) Purchased Power | (0.05 | ) | (0.03 | ) | (0.08 | ) | ||||||||
(g) Capacity Expense | 0.23 | (0.03 | ) | 0.20 | ||||||||||
(h) Net MISO - PJM Transmission Cost | (0.02 | ) | (0.03 | ) | (0.05 | ) | ||||||||
Net Increase / (Decrease) | $ | (0.19 | ) | $ | 0.05 | $ | (0.14 | ) | ||||||
(a) | Contract Sales - CES' contract sales increased by 3 million MWH, or 12%, and increased earnings by $0.09 per share. The total number of retail customers was 2.7 million as of March 31, 2013, an increase of 800,000 customers, or 42%, since March 2012. |
• | Governmental aggregation sales increased by 1.4 million MWH, or 36%, primarily due to expansion in Illinois. |
• | Structured sales increased 1.1 million MWH, or 92%, due to increased municipal, cooperative, and bilateral sales. |
• | Mass market sales increased by 560,000 MWH, or 46%, primarily in Pennsylvania and Ohio. |
• | Direct sales to large and medium commercial/industrial customers increased by 835,000 MWH, or 7%, primarily in central and southern Ohio. |
• | In line with CES' strategy to realign its sales portfolio, POLR generation sales decreased by 962,000 MWH, or 18%. |
CES Contract Sales - 1Q13 vs 1Q12 | |||||||||||||||
(thousand MWH) | Retail | Non-Retail | |||||||||||||
Direct | Aggr. | Mass Market | POLR | Structured | Total | ||||||||||
Contract Sales Increase / (Decrease) | 835 | 1,420 | 560 | (962 | ) | 1,134 | 2,987 | ||||||||
Planning Period | RTO | ATSI | |||||
Price Per Megawatt-Day | BR | FRR | |||||
June 2011 - May 2012 | $110.00 | $108.89 | |||||
June 2012 - May 2013 | $16.46 | $20.46 | |||||
June 2013 - May 2014 | $27.73 | N/A | |||||
(e) | Fuel Expense - Total generation output increased 902,000 MWH, or 4%. Increased fuel expense decreased earnings by $0.08 per share. Fossil generation output increased by 1.6 million MWH resulting from increased capacity factors across the fleet. Nuclear generation output decreased by 677,000 MWH, as the Perry Plant began its scheduled refueling outage on March 18, 2013 (there were no refueling outages in the first quarter of 2012).** |
• | Regulated Transmission - Decreased revenues principally due to lower PJM network service revenues for American Transmission Systems, Incorporated (ATSI) and the Utilities and a lower rate base for Trans-Allegheny Interstate Line Company (TrAIL) decreased earnings by $0.02 per share. |
• | O&M Expenses - Lower O&M expenses increased earnings by $0.01 per share due to: |
(a) | Lower Regulated Distribution expenses increased earnings by $0.04 per share, due to a greater focus on capital work during the first quarter of 2013 and cost savings initiatives, including staffing reductions and benefit plan changes, implemented in 2012. |
(b) | Lower lease costs resulting from the repurchase of leasehold interests in Beaver Valley Unit 2 and the Bruce Mansfield Plant in 2012 increased earnings by $0.02 per share. |
(c) | Higher CES O&M expenses decreased earnings by $0.05 per share, due to increased planned outages at the fossil plants in the first quarter of 2013 compared to the same period last year, as well as expenses associated with the Perry Plant refueling outage in the first quarter of 2013.** |
• | Depreciation - Higher depreciation expense reduced earnings by $0.02 per share, due to an increased asset base and the absence of a credit from a 2012 settlement with the Department of Energy (DOE) regarding storage of spent nuclear fuel. |
• | General Taxes - Lower general taxes increased earnings by $0.01 per share, due to lower business and occupation taxes in West Virginia and lower revenue-related taxes, partially offset by higher property taxes.** |
• | Effective Income Tax Rate - A lower effective income tax rate (37.4% in Q1 2013 vs 39.9% in Q1 2012) increased earnings by $0.03 per share, principally due to a change in state income tax allocation factors. |
• | Special Items - The following special items were recognized during the first quarter of 2013: |
Special Items | EPS | ||||||
Mark-to-market adjustments | $ | 0.01 | |||||
Regulatory charges | 0.04 | ||||||
Trust securities impairment | 0.01 | ||||||
Impact of non-core asset sales/impairments | 0.01 | ||||||
Plant deactivation costs | 0.01 | ||||||
Merger accounting - commodity contracts | 0.03 | ||||||
Debt redemption costs | 0.18 | ||||||
Total | $ | 0.29 | |||||
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 |
Three Months Ended March 31 | |||||||||||||||||
2013 | 2012 | Change | |||||||||||||||
Revenues | |||||||||||||||||
(1 | ) | Regulated distribution | $ | 2,212 | $ | 2,354 | $ | (142 | ) | ||||||||
(2 | ) | Regulated transmission | 176 | 186 | (10 | ) | |||||||||||
(3 | ) | Competitive energy services | 1,630 | 1,787 | (157 | ) | |||||||||||
(4 | ) | Other and reconciling adjustments | (289 | ) | (337 | ) | 48 | ||||||||||
(5 | ) | Total Revenues | 3,729 | 3,990 | (261 | ) | |||||||||||
Expenses | |||||||||||||||||
(6 | ) | Fuel | 630 | 541 | 89 | ||||||||||||
(7 | ) | Purchased power | 943 | 1,259 | (316 | ) | |||||||||||
(8 | ) | Other operating expenses | 884 | 818 | 66 | ||||||||||||
(9 | ) | Provision for depreciation | 294 | 279 | 15 | ||||||||||||
(10 | ) | Amortization of regulatory assets, net | 59 | 75 | (16 | ) | |||||||||||
(11 | ) | General taxes | 265 | 272 | (7 | ) | |||||||||||
(12 | ) | Total Expenses | 3,075 | 3,244 | (169 | ) | |||||||||||
(13 | ) | Operating Income | 654 | 746 | (92 | ) | |||||||||||
Other Income (Expense) | |||||||||||||||||
(14 | ) | Loss on debt redemptions | (119 | ) | — | (119 | ) | ||||||||||
(15 | ) | Investment income | 18 | 11 | 7 | ||||||||||||
(16 | ) | Interest expense | (256 | ) | (246 | ) | (10 | ) | |||||||||
(17 | ) | Capitalized interest | 15 | 17 | (2 | ) | |||||||||||
(18 | ) | Total Other Expense | (342 | ) | (218 | ) | (124 | ) | |||||||||
(19 | ) | Income Before Income Taxes | 312 | 528 | (216 | ) | |||||||||||
(20 | ) | Income taxes | 116 | 222 | (106 | ) | |||||||||||
(21 | ) | Net Income | $ | 196 | $ | 306 | $ | (110 | ) | ||||||||
(22 | ) | Earnings Per Share of Common Stock | |||||||||||||||
(23 | ) | Basic | $ | 0.47 | $ | 0.73 | $ | (0.26 | ) | ||||||||
(24 | ) | Diluted | $ | 0.47 | $ | 0.73 | $ | (0.26 | ) | ||||||||
(25 | ) | Weighted Average Number of | |||||||||||||||
(26 | ) | Common Shares Outstanding | |||||||||||||||
(27 | ) | Basic | 418 | 418 | — | ||||||||||||
(28 | ) | Diluted | 419 | 420 | (1 | ) | |||||||||||
Three Months Ended March 31, 2013 | |||||||||||||||||||||||
Competitive | Other & | ||||||||||||||||||||||
Regulated | Regulated | Energy | Reconciling | FirstEnergy | |||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Adjustments (d) | Consolidated | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
(1 | ) | Electric sales | $ | 2,155 | $ | 176 | $ | 1,330 | $ | (31 | ) | $ | 3,630 | ||||||||||
(2 | ) | Other | 57 | — | 84 | (42 | ) | 99 | |||||||||||||||
(3 | ) | Internal | — | — | 216 | (216 | ) | — | |||||||||||||||
(4 | ) | Total Revenues | 2,212 | 176 | 1,630 | (289 | ) | 3,729 | |||||||||||||||
Expenses | |||||||||||||||||||||||
(5 | ) | Fuel | 87 | — | 543 | — | 630 | ||||||||||||||||
(6 | ) | Purchased power | 875 | — | 284 | (216 | ) | 943 | |||||||||||||||
(7 | ) | Other operating expenses | 415 | 30 | 529 | (90 | ) | 884 | |||||||||||||||
(8 | ) | Provision for depreciation | 144 | 28 | 111 | 11 | 294 | ||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 58 | 1 | — | — | 59 | ||||||||||||||||
(10 | ) | General taxes | 182 | 12 | 60 | 11 | 265 | ||||||||||||||||
(11 | ) | Total Expenses | 1,761 | 71 | 1,527 | (284 | ) | 3,075 | |||||||||||||||
(12 | ) | Operating Income | 451 | 105 | 103 | (5 | ) | 654 | |||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||
(13 | ) | Loss on debt redemptions | — | — | (119 | ) | — | (119 | ) | ||||||||||||||
(14 | ) | Investment income | 18 | — | 16 | (16 | ) | 18 | |||||||||||||||
(15 | ) | Interest expense | (135 | ) | (23 | ) | (71 | ) | (27 | ) | (256 | ) | |||||||||||
(16 | ) | Capitalized interest | 2 | — | 10 | 3 | 15 | ||||||||||||||||
(17 | ) | Total Other Expense | (115 | ) | (23 | ) | (164 | ) | (40 | ) | (342 | ) | |||||||||||
(18 | ) | Income (Loss) Before Income Taxes | 336 | 82 | (61 | ) | (45 | ) | 312 | ||||||||||||||
(19 | ) | Income taxes (benefits) | 126 | 31 | (23 | ) | (18 | ) | 116 | ||||||||||||||
(20 | ) | Net Income (Loss) | $ | 210 | $ | 51 | $ | (38 | ) | $ | (27 | ) | $ | 196 | |||||||||
(a) | Revenues are primarily derived from the delivery of electricity within FirstEnergy Corp.'s (FirstEnergy) 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 affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs. | ||||||||||||||||||||||
(b) | Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads. | ||||||||||||||||||||||
(c) | Revenues are primarily derived from supplying 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. | ||||||||||||||||||||||
(d) | Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions. | ||||||||||||||||||||||
Three Months Ended March 31, 2012 | ||||||||||||||||||||||||
Competitive | Other & | |||||||||||||||||||||||
Regulated | Regulated | Energy | Reconciling | FirstEnergy | ||||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Adjustments (d) | Consolidated | ||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
(1 | ) | Electric sales | $ | 2,304 | $ | 186 | $ | 1,443 | $ | (34 | ) | $ | 3,899 | |||||||||||
(2 | ) | Other | 50 | — | 76 | (37 | ) | 89 | ||||||||||||||||
(3 | ) | Internal | — | — | 268 | (266 | ) | 2 | ||||||||||||||||
(4 | ) | Total Revenues | 2,354 | 186 | 1,787 | (337 | ) | 3,990 | ||||||||||||||||
Expenses | ||||||||||||||||||||||||
(5 | ) | Fuel | 39 | — | 502 | — | 541 | |||||||||||||||||
(6 | ) | Purchased power | 1,082 | — | 443 | (266 | ) | 1,259 | ||||||||||||||||
(7 | ) | Other operating expenses | 467 | 27 | 409 | (85 | ) | 818 | ||||||||||||||||
(8 | ) | Provision for depreciation | 141 | 30 | 100 | 8 | 279 | |||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 75 | — | — | — | 75 | |||||||||||||||||
(10 | ) | General taxes | 190 | 12 | 61 | 9 | 272 | |||||||||||||||||
(11 | ) | Total Expenses | 1,994 | 69 | 1,515 | (334 | ) | 3,244 | ||||||||||||||||
(12 | ) | Operating Income | 360 | 117 | 272 | (3 | ) | 746 | ||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||
(13 | ) | Loss on debt redemptions | — | — | — | — | — | |||||||||||||||||
(14 | ) | Investment income | 23 | — | 6 | (18 | ) | 11 | ||||||||||||||||
(15 | ) | Interest expense | (134 | ) | (23 | ) | (65 | ) | (24 | ) | (246 | ) | ||||||||||||
(16 | ) | Capitalized interest | 3 | — | 11 | 3 | 17 | |||||||||||||||||
(17 | ) | Total Other Expense | (108 | ) | (23 | ) | (48 | ) | (39 | ) | (218 | ) | ||||||||||||
(18 | ) | Income Before Income Taxes | 252 | 94 | 224 | (42 | ) | 528 | ||||||||||||||||
(19 | ) | Income taxes | 93 | 36 | 83 | 10 | 222 | |||||||||||||||||
(20 | ) | Net Income | $ | 159 | $ | 58 | $ | 141 | $ | (52 | ) | $ | 306 | |||||||||||
(a) | Revenues are primarily derived from the delivery of electricity within FirstEnergy 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 affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs. | |||||||||||||||||||||||
(b) | Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads. | |||||||||||||||||||||||
(c) | Revenues are primarily derived from supplying 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. | |||||||||||||||||||||||
(d) | Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions. | |||||||||||||||||||||||
Three Months Ended March 31, 2013 vs. Three Months Ended March 31, 2012 | ||||||||||||||||||||||||
Competitive | Other & | |||||||||||||||||||||||
Regulated | Regulated | Energy | Reconciling | FirstEnergy | ||||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Adjustments (d) | Consolidated | ||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
(1 | ) | Electric sales | $ | (149 | ) | $ | (10 | ) | $ | (113 | ) | $ | 3 | $ | (269 | ) | ||||||||
(2 | ) | Other | 7 | — | 8 | (5 | ) | 10 | ||||||||||||||||
(3 | ) | Internal revenues | — | — | (52 | ) | 50 | (2 | ) | |||||||||||||||
(4 | ) | Total Revenues | (142 | ) | (10 | ) | (157 | ) | 48 | (261 | ) | |||||||||||||
Expenses | ||||||||||||||||||||||||
(5 | ) | Fuel | 48 | — | 41 | — | 89 | |||||||||||||||||
(6 | ) | Purchased power | (207 | ) | — | (159 | ) | 50 | (316 | ) | ||||||||||||||
(7 | ) | Other operating expenses | (52 | ) | 3 | 120 | (5 | ) | 66 | |||||||||||||||
(8 | ) | Provision for depreciation | 3 | (2 | ) | 11 | 3 | 15 | ||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | (17 | ) | 1 | — | — | (16 | ) | |||||||||||||||
(10 | ) | General taxes | (8 | ) | — | (1 | ) | 2 | (7 | ) | ||||||||||||||
(11 | ) | Total Expenses | (233 | ) | 2 | 12 | 50 | (169 | ) | |||||||||||||||
(12 | ) | Operating Income (Expense) | 91 | (12 | ) | (169 | ) | (2 | ) | (92 | ) | |||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||
(13 | ) | Loss on debt redemptions | — | — | (119 | ) | — | (119 | ) | |||||||||||||||
(14 | ) | Investment income | (5 | ) | — | 10 | 2 | 7 | ||||||||||||||||
(15 | ) | Interest expense | (1 | ) | — | (6 | ) | (3 | ) | (10 | ) | |||||||||||||
(16 | ) | Capitalized interest | (1 | ) | — | (1 | ) | — | (2 | ) | ||||||||||||||
(17 | ) | Total Other Expense | (7 | ) | — | (116 | ) | (1 | ) | (124 | ) | |||||||||||||
(18 | ) | Income (Loss) Before Income Taxes | 84 | (12 | ) | (285 | ) | (3 | ) | (216 | ) | |||||||||||||
(19 | ) | Income taxes (benefits) | 33 | (5 | ) | (106 | ) | (28 | ) | (106 | ) | |||||||||||||
(20 | ) | Net Income (Loss) | $ | 51 | $ | (7 | ) | $ | (179 | ) | $ | 25 | $ | (110 | ) | |||||||||
(a) | Revenues are primarily derived from the delivery of electricity within FirstEnergy 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 affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs. | |||||||||||||||||||||||
(b) | Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads. | |||||||||||||||||||||||
(c) | Revenues are primarily derived from supplying 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. | |||||||||||||||||||||||
(d) | Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions. | |||||||||||||||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
As of | As of | ||||||||||
Assets | Mar. 31, 2013 | Dec. 31, 2012 | |||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 67 | $ | 172 | |||||||
Receivables | 1,858 | 1,929 | |||||||||
Other | 1,574 | 1,667 | |||||||||
Total Current Assets | 3,499 | 3,768 | |||||||||
Property, Plant and Equipment | 33,286 | 32,903 | |||||||||
Investments | 3,215 | 3,194 | |||||||||
Deferred Charges and Other Assets | 10,424 | 10,541 | |||||||||
Total Assets | $ | 50,424 | $ | 50,406 | |||||||
Liabilities and Capitalization | |||||||||||
Current Liabilities: | |||||||||||
Currently payable long-term debt | $ | 2,296 | $ | 1,999 | |||||||
Short-term borrowings | 2,150 | 1,969 | |||||||||
Accounts payable | 982 | 1,599 | |||||||||
Other | 1,704 | 2,038 | |||||||||
Total Current Liabilities | 7,132 | 7,605 | |||||||||
Capitalization: | |||||||||||
Total equity | 13,000 | 13,093 | |||||||||
Long-term debt and other long-term obligations | 15,814 | 15,179 | |||||||||
Total Capitalization | 28,814 | 28,272 | |||||||||
Noncurrent Liabilities | 14,478 | 14,529 | |||||||||
Total Liabilities and Capitalization | $ | 50,424 | $ | 50,406 | |||||||
General Information | ||||||||||
Three Months Ended March 31 | ||||||||||
2013 | 2012 | |||||||||
Debt redemptions | $ | (956 | ) | $ | (16 | ) | ||||
New long-term debt issues | $ | 1,800 | $ | — | ||||||
Short-term borrowings increase | $ | 181 | $ | 1,075 | ||||||
Property additions | $ | 826 | $ | 517 | ||||||
Adjusted Capitalization | ||||||||||||||||
As of March 31 | As of December 31 | |||||||||||||||
2013 | % Total | 2012 | % Total | |||||||||||||
Total Equity (GAAP) | $ | 13,000 | 36 | % | $ | 13,093 | 38 | % | ||||||||
Long-term Debt and Other Long-term Obligations | 15,814 | 44 | % | 15,179 | 43 | % | ||||||||||
Currently Payable Long-term Debt | 2,296 | 7 | % | 1,999 | 6 | % | ||||||||||
Short-term Borrowings | 2,150 | 6 | % | 1,969 | 6 | % | ||||||||||
Adjustments: | ||||||||||||||||
Operating Lease Debt Equivalent* | 1,538 | 4 | % | 1,538 | 4 | % | ||||||||||
Post-Retirement Benefit Obligations** | 1,886 | 5 | % | 1,865 | 5 | % | ||||||||||
Other | 120 | — | 120 | — | ||||||||||||
Less Securitization Debt | (718 | ) | (2 | )% | (736 | ) | (2 | )% | ||||||||
Adjusted capitalization (Non-GAAP) | $ | 36,086 | 100 | % | $ | 35,027 | 100 | % | ||||||||
* Present value of future operating lease payments using a discount rate of 7% | ||||||||||||||||
** After-tax unfunded Pension/OPEB PBO Liability | ||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
Three Months Ended | ||||||||||
March 31 | ||||||||||
2013 | 2012 | |||||||||
Cash flows from operating activities | ||||||||||
Net income | $ | 196 | $ | 306 | ||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||
Depreciation and deferral / amortization of regulatory assets, net | 353 | 354 | ||||||||
Nuclear fuel and lease amortization | 53 | 58 | ||||||||
Deferred purchased power and other costs | (25 | ) | (107 | ) | ||||||
Deferred income taxes and investment tax credits, net | 134 | 265 | ||||||||
Investment impairments | 7 | 4 | ||||||||
Deferred rents and lease market valuation liability | 37 | (23 | ) | |||||||
Retirement benefits | (64 | ) | (39 | ) | ||||||
Commodity derivative transactions, net | 4 | (64 | ) | |||||||
Pension trust contribution | — | (600 | ) | |||||||
Cash collateral, net | (1 | ) | (28 | ) | ||||||
Loss on debt redemptions | 119 | — | ||||||||
Change in working capital and other | (763 | ) | (539 | ) | ||||||
Cash flows provided from (used for) operating activities | 50 | (413 | ) | |||||||
Cash flows provided from financing activities | 772 | 819 | ||||||||
Cash flows used for investing activities | (927 | ) | (534 | ) | ||||||
Net change in cash and cash equivalents | $ | (105 | ) | $ | (128 | ) | ||||
Liquidity position as of April 30, 2013 | ||||||||||
Company | Type | Maturity | Amount | Available | ||||||
FirstEnergy(1) | Revolving | May 2017 | $2,000 | $518 | ||||||
FES / AE Supply | Revolving | May 2017 | 2,500 | 2,498 | ||||||
FirstEnergy Transmission, LLC (FET)(2) | Revolving | May 2017 | 1,000 | — | ||||||
Allegheny Generating Company (AGC) | Revolving | Dec. 2013 | 50 | 20 | ||||||
(1) FirstEnergy Corp. and subsidiary borrowers | Subtotal: | $5,550 | $3,036 | |||||||
(2) Includes FET, American Transmission Systems, Incorporated (ATSI), and Trans-Allegheny Interstate Line Company, (TrAIL) | Cash: | — | 44 | |||||||
Total: | $5,550 | $3,080 | ||||||||
Electric Distribution Deliveries | Three Months Ended March 31 | |||||||||||
(MWH in thousand) | 2013 | 2012 | Change | |||||||||
Ohio | - Residential | 4,617 | 4,500 | 2.6 | % | |||||||
- Commercial | 3,748 | 3,746 | 0.1 | % | ||||||||
- Industrial | 5,146 | 5,069 | 1.5 | % | ||||||||
- Other | 84 | 82 | 2.4 | % | ||||||||
Total Ohio | 13,595 | 13,397 | 1.5 | % | ||||||||
Pennsylvania | - Residential | 5,459 | 5,049 | 8.1 | % | |||||||
- Commercial | 3,136 | 3,087 | 1.6 | % | ||||||||
- Industrial | 5,114 | 5,185 | -1.4 | % | ||||||||
- Other | 31 | 31 | 0.0 | % | ||||||||
Total Pennsylvania | 13,740 | 13,352 | 2.9 | % | ||||||||
New Jersey | - Residential | 2,253 | 2,147 | 4.9 | % | |||||||
- Commercial | 2,156 | 2,151 | 0.2 | % | ||||||||
- Industrial | 601 | 603 | -0.3 | % | ||||||||
- Other | 21 | 22 | -4.5 | % | ||||||||
Total New Jersey | 5,031 | 4,923 | 2.2 | % | ||||||||
Maryland | - Residential | 990 | 879 | 12.6 | % | |||||||
- Commercial | 518 | 511 | 1.4 | % | ||||||||
- Industrial | 389 | 458 | -15.1 | % | ||||||||
- Other | 4 | 4 | 0.0 | % | ||||||||
Total Maryland | 1,901 | 1,852 | 2.6 | % | ||||||||
West Virginia | - Residential | 1,637 | 1,519 | 7.8 | % | |||||||
- Commercial | 891 | 889 | 0.2 | % | ||||||||
- Industrial | 1,373 | 1,256 | 9.3 | % | ||||||||
- Other | 7 | 8 | -12.5 | % | ||||||||
Total West Virginia | 3,908 | 3,672 | 6.4 | % | ||||||||
Total Residential | 14,956 | 14,094 | 6.1 | % | ||||||||
Total Commercial | 10,449 | 10,384 | 0.6 | % | ||||||||
Total Industrial | 12,623 | 12,571 | 0.4 | % | ||||||||
Total Other | 147 | 147 | 0.0 | % | ||||||||
Total Distribution Deliveries | 38,175 | 37,196 | 2.6 | % | ||||||||
Weather | Three Months Ended March 31 | |||||||||||
2013 | 2012 | Normal | ||||||||||
Composite Heating-Degree-Days | 2,841 | 2,192 | 2,774 | |||||||||
Composite Cooling-Degree-Days | — | 12 | 2 | |||||||||
Shopping Statistics (Based Upon MWH) | Three Months Ended March 31 | |||||
2013 | 2012 | |||||
OE | 77% | 73% | ||||
Penn | 63% | 61% | ||||
CEI | 85% | 84% | ||||
TE | 75% | 74% | ||||
JCP&L | 52% | 48% | ||||
Met-Ed | 62% | 55% | ||||
Penelec | 68% | 62% | ||||
MP | N/A | N/A | ||||
PE(1) | 43% | 43% | ||||
WP | 60% | 56% | ||||
(1) Represents Maryland only. | ||||||
Competitive Operating Statistics | Three Months Ended March 31 | ||||||
2013 | 2012 | ||||||
Ongoing Generation Capacity Factors: | |||||||
Nuclear | 92% | 99% | |||||
Fossil - Baseload | 73% | 65% | |||||
Fossil - Load Following | 54% | 24% | |||||
Ongoing Generation Fuel Rate: | |||||||
Nuclear | $7.76 | $7.42 | |||||
Fossil | $28 | $27 | |||||
Total Fleet | $21 | $20 | |||||
Ongoing Generation Output Mix: | |||||||
Nuclear | 33% | 38% | |||||
Fossil - Baseload | 54% | 53% | |||||
Fossil - Load Following | 8% | 5% | |||||
Peaking/CT/Hydro | 5% | 4% | |||||
Competitive Energy Services - Sources and Uses (MWH in thousands) | |||||||||||||
Three Months Ended March 31 | |||||||||||||
Contract Sales | 2013 | 2012 | Change | ||||||||||
POLR | |||||||||||||
- OH | 1,276 | 1,855 | (579 | ) | |||||||||
- PA | 2,299 | 2,786 | (487 | ) | |||||||||
- MD | 879 | 775 | 104 | ||||||||||
Total POLR | 4,454 | 5,416 | (962 | ) | |||||||||
Structured Sales | |||||||||||||
- Bilaterals | 1,389 | 784 | 605 | ||||||||||
- Muni/Co-op | 974 | 445 | 529 | ||||||||||
Total Structured Sales | 2,363 | 1,229 | 1,134 | ||||||||||
Direct - LCI | |||||||||||||
- OH | 7,260 | 6,248 | 1,012 | ||||||||||
- PA | 3,703 | 3,945 | (242 | ) | |||||||||
- NJ | 201 | 338 | (137 | ) | |||||||||
- MI | 710 | 552 | 158 | ||||||||||
- IL | 564 | 726 | (162 | ) | |||||||||
- MD | 188 | 151 | 37 | ||||||||||
Total Direct - LCI | 12,626 | 11,960 | 666 | ||||||||||
Direct - MCI | |||||||||||||
- OH | 600 | 568 | 32 | ||||||||||
- PA | 347 | 251 | 96 | ||||||||||
- IL | 41 | — | 41 | ||||||||||
Total Direct - MCI | 988 | 819 | 169 | ||||||||||
Aggregation | |||||||||||||
- OH | 4,226 | 3,936 | 290 | ||||||||||
- IL | 1,160 | 30 | 1,130 | ||||||||||
Total Aggregation | 5,386 | 3,966 | 1,420 | ||||||||||
Mass Market | |||||||||||||
- OH | 533 | 344 | 189 | ||||||||||
- PA | 1,184 | 872 | 312 | ||||||||||
- IL | 19 | 4 | 15 | ||||||||||
- MD | 44 | — | 44 | ||||||||||
Total Mass Market | 1,780 | 1,220 | 560 | ||||||||||
Total Contract Sales | 27,597 | 24,610 | 2,987 | ||||||||||
Wholesale Sales | |||||||||||||
- Spot | 235 | 740 | (505 | ) | |||||||||
Total Wholesale Sales | 235 | 740 | (505 | ) | |||||||||
Purchased Power | |||||||||||||
- Bilaterals | 598 | 528 | 70 | ||||||||||
- Spot | 4,175 | 2,427 | 1,748 | ||||||||||
Total Purchased Power | 4,773 | 2,955 | 1,818 | ||||||||||
Generation Output | |||||||||||||
- Fossil | 16,418 | 14,839 | 1,579 | ||||||||||
- Nuclear | 7,922 | 8,599 | (677 | ) | |||||||||
Total Generation Output | 24,340 | 23,438 | 902 | ||||||||||
Competitive | |||||||||||||||||||||||
Regulated | Regulated | Energy | |||||||||||||||||||||
Special Items - Three Months Ended March 31, 2013 | Distribution | Transmission | Services | Other | Consolidated | ||||||||||||||||||
GAAP Net Income | $ | 210 | $ | 51 | $ | (38 | ) | $ | (27 | ) | $ | 196 | |||||||||||
Pre-Tax Items: | |||||||||||||||||||||||
Regulatory charges (a) | 12 | — | 16 | — | 28 | ||||||||||||||||||
Trust securities impairment (b) | — | — | 7 | — | 7 | ||||||||||||||||||
Merger transaction/integration costs (c) | — | — | 1 | — | 1 | ||||||||||||||||||
Impact of non-core asset sales/impairments (b) | — | — | 6 | — | 6 | ||||||||||||||||||
Mark-to-market adjustments (d) | — | — | 4 | — | 4 | ||||||||||||||||||
Merger accounting - commodity contracts (e) | — | — | 19 | — | 19 | ||||||||||||||||||
Plant deactivation costs (f) | 2 | — | 8 | — | 10 | ||||||||||||||||||
Debt redemption costs (g) | — | — | 119 | — | 119 | ||||||||||||||||||
Subtotal | 14 | — | 180 | — | 194 | ||||||||||||||||||
Income taxes | (5 | ) | — | (68 | ) | — | (73 | ) | |||||||||||||||
After-Tax Effect | 9 | — | 112 | — | 121 | ||||||||||||||||||
Non - GAAP Net Income | $ | 219 | $ | 51 | $ | 74 | $ | (27 | ) | $ | 317 | ||||||||||||
(a) | $25 million included in "Other operating expenses"; $1 million included in Revenues; $1 million included in "Amortization of regulatory assets, net"; $1 million included in "Purchased power". | ||||||||||||||||||||||
(b) | Included in "Investment income". | ||||||||||||||||||||||
(c) | Included in "Fuel". | ||||||||||||||||||||||
(d) | Included in "Other operating expenses". | ||||||||||||||||||||||
(e) | $8 million included in "Revenues", $12 million included in "Fuel", ($1) million included in "Other operating expenses". | ||||||||||||||||||||||
(f) | $6 million included in "Fuel", $2 million included in "Other operating expenses"; $2 million included in "General Taxes". | ||||||||||||||||||||||
(g) | Included in "Loss on debt redemptions". |
Competitive | |||||||||||||||||||||||
Regulated | Regulated | Energy | |||||||||||||||||||||
Special Items - Three Months Ended March 31, 2012 | Distribution | Transmission | Services | Other | Consolidated | ||||||||||||||||||
GAAP Net Income | $ | 159 | $ | 58 | $ | 141 | $ | (52 | ) | $ | 306 | ||||||||||||
Pre-Tax Items: | |||||||||||||||||||||||
Regulatory charges (a) | 6 | — | — | — | 6 | ||||||||||||||||||
Trust securities impairment (b) | 1 | — | 3 | — | 4 | ||||||||||||||||||
Merger transaction/integration costs (a) | 1 | — | 1 | — | 2 | ||||||||||||||||||
Impact of non-core asset sales/impairments (a) | — | — | 5 | — | 5 | ||||||||||||||||||
Mark-to-market adjustments (a) | — | — | (39 | ) | — | (39 | ) | ||||||||||||||||
Merger accounting - commodity contracts (c) | 4 | — | 26 | — | 30 | ||||||||||||||||||
Plant deactivation costs (d) | 5 | — | 31 | — | 36 | ||||||||||||||||||
Subtotal | 17 | — | 27 | — | 44 | ||||||||||||||||||
Income tax legislative changes | 6 | — | — | 2 | 8 | ||||||||||||||||||
Income taxes | (12 | ) | — | (10 | ) | 8 | (14 | ) | |||||||||||||||
After-Tax Effect | 11 | — | 17 | 10 | 38 | ||||||||||||||||||
Non - GAAP Net Income | $ | 170 | $ | 58 | $ | 158 | $ | (42 | ) | $ | 344 | ||||||||||||
(a) | Included in "Other operating expenses" | ||||||||||||||||||||||
(b) | Included in "Investment income" | ||||||||||||||||||||||
(c) | $10 million included in "Fuel"; $20 million included in "Revenues" | ||||||||||||||||||||||
(d) | ($4) million included in "Revenues", $41 million included in "Fuel", ($25) million included in Purchased Power, $22 million included in "Other operating expenses"; and $2 million included in General Taxes. |
Earnings Per Share (EPS) | ||||||||||||||
(Reconciliation of GAAP to Non-GAAP) | ||||||||||||||
Three Months Ended | Estimate | |||||||||||||
March 31 | for Year | |||||||||||||
2013 | 2012 | 2013 | ||||||||||||
Basic EPS (GAAP basis) | $ | 0.47 | $ | 0.73 | $2.37 - $2.67 | |||||||||
Excluding Special Items: | ||||||||||||||
Mark-to-market adjustments | 0.01 | (0.06 | ) | — | ||||||||||
Regulatory charges | 0.04 | 0.01 | 0.06 | |||||||||||
Trust securities impairment | 0.01 | 0.01 | 0.01 | |||||||||||
Income tax legislative changes | — | 0.02 | — | |||||||||||
Merger transaction/integration costs | — | 0.01 | — | |||||||||||
Impact of non-core asset sales/impairments | 0.01 | 0.01 | 0.08 | |||||||||||
Plant deactivation costs | 0.01 | 0.05 | 0.01 | |||||||||||
Restructuring costs | — | — | 0.01 | |||||||||||
Merger accounting - commodity contracts | 0.03 | 0.04 | 0.08 | |||||||||||
Debt redemption costs | 0.18 | — | 0.23 | |||||||||||
Basic EPS (Non-GAAP basis) | $ | 0.76 | $ | 0.82 | $2.85 - $3.15 | |||||||||