10-QPeriod: Q1 FY2007

FIRSTENERGY CORP Quarterly Report for Q1 Ended Mar 31, 2007

Filed May 9, 2007For Securities:FE

Summary

FirstEnergy Corp. reported a strong first quarter of 2007, with net income increasing to $290 million ($0.92 per share) from $221 million ($0.67 per share) in the prior year's first quarter. This growth was primarily driven by higher electric sales revenues, which more than offset increased fuel and purchased power costs. The company also continued its share repurchase program, buying back approximately 14.4 million shares in March 2007, demonstrating a commitment to returning value to shareholders. Additionally, FirstEnergy announced its intention to pursue a sale and leaseback transaction for Bruce Mansfield Unit 1, expecting proceeds of approximately $1.2 billion to reduce debt. Operationally, the Perry Nuclear Power Plant was returned to routine agency oversight by the NRC after demonstrating sufficient corrective actions. The company is also managing significant environmental compliance expenditures, with an estimated $1.8 billion for environmental compliance from 2007 through 2011, including substantial capital investments related to the W. H. Sammis Plant New Source Review litigation. Regulatory matters across Ohio, Pennsylvania, and New Jersey continue to be actively managed, with rate filings and compliance updates being key focus areas.

Key Highlights

  • 1FirstEnergy reported a 31% increase in net income for Q1 2007 ($290 million) compared to Q1 2006 ($221 million).
  • 2Earnings per share (EPS) grew significantly to $0.92 in Q1 2007 from $0.67 in Q1 2006.
  • 3The company completed an accelerated share repurchase of approximately 14.4 million shares in March 2007.
  • 4FirstEnergy announced plans for a sale and leaseback transaction of Bruce Mansfield Unit 1, expecting $1.2 billion in proceeds.
  • 5The Perry Nuclear Power Plant was returned to routine NRC oversight.
  • 6Significant capital expenditures are planned for environmental compliance, estimated at $1.8 billion from 2007-2011.
  • 7The company is actively managing various regulatory proceedings in Ohio, Pennsylvania, and New Jersey.

Frequently Asked Questions

FirstEnergy reported a net income of $290 million, or $0.92 per diluted share, for the first quarter of 2007, a significant increase from $221 million, or $0.67 per diluted share, in the first quarter of 2006. This improvement was driven primarily by higher electric sales revenues.

The company repurchased approximately 14.4 million shares of its common stock in March 2007 as part of its share repurchase program. Additionally, FirstEnergy announced its intention to pursue a sale and leaseback transaction for Bruce Mansfield Unit 1, anticipating approximately $1.2 billion in proceeds, which are expected to be used to repay debt.

Yes, the Perry Nuclear Power Plant was returned to routine NRC oversight. The company also highlighted ongoing significant environmental compliance expenditures and active management of regulatory matters in Ohio, Pennsylvania, and New Jersey, including rate filings and compliance updates.

FirstEnergy estimates approximately $1.8 billion in capital expenditures for environmental compliance from 2007 through 2011. This includes significant investments related to the W. H. Sammis Plant New Source Review litigation, estimated at $1.5 billion, with $400 million expected in 2007.