Results Include Gain on Sale of Non-Core Assets
AKRON, Ohio, Aug. 3 /PRNewswire-FirstCall/ -- FirstEnergy Corp. (NYSE: FE)
today reported second quarter 2009 net income of $408 million, or basic and
diluted earnings of $1.36 per share of common stock, on revenue of $3.27
billion. These results include a gain of $0.52 per share resulting from the
sale of FirstEnergy's 9 percent participation interest in the Ohio Valley
Electric Corporation. On a non-GAAP* basis, basic and diluted earnings were
$0.87 per share in the quarter.
In the second quarter of 2008, net income was $263 million, or basic
earnings of $0.86 per share ($0.85 diluted), on revenue of $3.25 billion. On
a non-GAAP basis, second quarter 2008 earnings were $0.87 per share ($0.86
diluted).
Second Quarter and Six Month Non-GAAP to GAAP* Reconciliation
Second Quarter Six Months
2009 2008 2009 2008
Basic Earnings Per Share (Non-GAAP*) $0.87 $0.87 $1.89 $1.75
Including Special Items:
Regulatory Charges -- -- (0.55) --
Trust Securities Impairment (0.01) (0.04) (0.08) (0.07)
Organizational Restructuring (0.01) -- (0.06) --
Debt Redemption Premiums/
Incremental Strike Costs (0.01) -- (0.01) --
Gain on Non-Core Asset Sale 0.52 -- 0.52 0.06
Litigation Settlement -- 0.03 -- 0.03
Income Tax Issue Resolution -- -- 0.04 --
Basic Earnings Per Share (GAAP) $1.36 $0.86 $1.75 $1.77
"While the economy continues to have a significant impact on electricity
sales, our results benefited from a corresponding reduction in our operating
costs, as well as reduced expenses related to enhanced efficiencies and other
changes we've made to our organization," said Anthony J. Alexander, president
and chief executive officer of FirstEnergy. "We will continue to focus on
operational excellence, strengthening our balance sheet and further reducing
our costs to ensure that we have a solid foundation for growth when the
economy recovers."
Total electric generation sales decreased 12 percent in the second quarter
of 2009 compared to the 2008 period. Sales to the wholesale market decreased
28 percent for the quarter, while retail sales were down 9 percent.
Total distribution deliveries from FirstEnergy's utilities decreased 9
percent compared to the second quarter of 2008, primarily a result of a 21
percent reduction in usage from industrial customers and milder weather.
In addition to lower sales, results were negatively affected by the
completion of transition cost recovery for Ohio Edison and Toledo Edison and
the absence of cost deferrals related to the end of the Ohio Rate Certainty
Plan, as well as higher pension and depreciation expenses.
For the first six months of 2009, net income was $523 million, or $1.75
per basic and diluted share of common stock, on revenue of $6.61 billion.
This compares to first-half 2008 net income of $540 million, or $1.77 per
basic share of common stock ($1.75 diluted), on revenue of $6.52 billion.
On a non-GAAP* basis, basic earnings per share of common stock for the
first half of 2009 were $1.89 ($1.88 diluted), compared to basic earnings of
$1.75 per share of common stock ($1.73 diluted) in the first half of 2008.
FirstEnergy's Consolidated Report to the Financial Community - which
provides highlights on company developments and financial results for the
second quarter and first six months of 2009 - is posted on the company's Web
site - www.firstenergycorp.com/ir. To access the report, click on Q2 2009
Consolidated Report to the Financial Community.
FirstEnergy is a diversified energy company headquartered in Akron, Ohio.
Its subsidiaries and affiliates are involved in the generation, transmission
and distribution of electricity, as well as energy management and other
energy-related services. Its seven electric utility operating companies
comprise the nation's fifth largest investor-owned electric system, based on
4.5 million customers served within a 36,100-square-mile area of Ohio,
Pennsylvania and New Jersey; and its generation subsidiaries control more than
14,000 megawatts of capacity.
(*) This news release contains non-GAAP financial measures. Generally, a
non-GAAP financial measure is a numerical measure of a company's historical or
future financial performance, financial position, or cash flows that either
excludes or includes amounts that are not normally excluded or included in the
most directly comparable measure calculated and presented in accordance with
accounting principles generally accepted in the United States (GAAP). These
non-GAAP financial measures are intended to complement, and not considered as
an alternative, to the most directly comparable GAAP financial measure. Also,
the non-GAAP financial measures may not be comparable to similarly titled
measures used by other entities.
Forward-Looking Statements: This news release includes forward-looking
statements based on information currently available to management. Such
statements are subject to certain risks and uncertainties. These statements
include declarations regarding our management's intents, beliefs and current
expectations. These statements typically contain, but are not limited to, the
terms "anticipate," "potential," "expect," "believe," "estimate" and similar
words. Forward-looking statements involve estimates, assumptions, known and
unknown risks, uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Actual results may differ materially due to the
speed and nature of increased competition in the electric utility industry and
legislative and regulatory changes affecting how generation rates will be
determined following the expiration of existing rate plans in Pennsylvania,
the impact of the PUCO's regulatory process on the Ohio Companies associated
with the distribution rate case, economic or weather conditions affecting
future sales and margins, changes in markets for energy services, changing
energy and commodity market prices and availability, replacement power costs
being higher than anticipated or inadequately hedged, the continued ability of
FirstEnergy's regulated utilities to collect transition and other charges or
to recover increased transmission costs, maintenance costs being higher than
anticipated, other legislative and regulatory changes, revised environmental
requirements, including possible greenhouse gas emission regulations, the
potential impacts of the U.S. Court of Appeals' July 11, 2008 decision
requiring revisions to the CAIR rules and the scope of any laws, rules or
regulations that may ultimately take their place, the uncertainty of the
timing and amounts of the capital expenditures needed to, among other things,
implement the AQC Plan (including that such amounts could be higher than
anticipated or that certain generating units may need to be shut down) or
levels of emission reductions related to the Consent Decree resolving the NSR
litigation or other potential regulatory initiatives, adverse regulatory or
legal decisions and outcomes (including, but not limited to, the revocation of
necessary licenses or operating permits and oversight) by the NRC, Met-Ed's
and Penelec's transmission service charge filings with the PPUC, the
continuing availability of generating units and their ability to operate at or
near full capacity, the ability to comply with applicable state and federal
reliability standards, the ability to accomplish or realize anticipated
benefits from strategic goals (including employee workforce initiatives), the
ability to improve electric commodity margins and to experience growth in the
distribution business, the changing market conditions that could affect the
value of assets held in FirstEnergy's nuclear decommissioning trusts, pension
trusts and other trust funds, and cause it to make additional contributions
sooner, or in an amount that is larger than currently anticipated, the ability
to access the public securities and other capital and credit markets in
accordance with FirstEnergy's financing plan and the cost of such capital,
changes in general economic conditions affecting the company, the state of the
capital and credit markets affecting the company, interest rates and any
actions taken by credit rating agencies that could negatively affect
FirstEnergy's access to financing or its costs and increase its requirements
to post additional collateral to support outstanding commodity positions,
letters of credit and other financial guarantees, the continuing decline of
the national and regional economy and its impact on FirstEnergy's major
industrial and commercial customers, issues concerning the soundness of
financial institutions and counterparties with which FirstEnergy does
business, and the risks and other factors discussed from time to time in its
SEC filings, and other similar factors. The foregoing review of factors should
not be construed as exhaustive. New factors emerge from time to time, and it
is not possible for management to predict all such factors, nor assess the
impact of any such factor on its business or the extent to which any factor,
or combination of factors, may cause results to differ materially from those
contained in any forward-looking statements. FirstEnergy expressly disclaims
any current intention to update any forward-looking statements contained
herein as a result of new information, future events, or otherwise.
SOURCE FirstEnergy Corp.
08/03/2009
CONTACT: Media, Tricia Ingraham, +1-330-384-5247; Investors, Ron
Seeholzer, +1-330-384-5415, both of FirstEnergy Corp.
