10-QPeriod: Q1 FY2009

FIRSTENERGY CORP Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 7, 2009For Securities:FE

Summary

FirstEnergy Corp. reported a net income of $115 million, or $0.39 per share, for the first quarter of 2009, a significant decrease from $277 million, or $0.91 per share, in the same period of 2008. This decline was primarily attributed to substantial regulatory charges related to the implementation of the Ohio Companies’ Amended ESP. While the energy delivery services segment experienced a net loss of $42 million, largely due to an asset impairment, the competitive energy services segment saw a notable increase in net income to $155 million from $87 million year-over-year, driven by higher generation margins. The company also reported progress on regulatory matters in Ohio and Pennsylvania, with approvals for rate increases and energy efficiency programs. Liquidity remained sufficient, supported by a revolving credit facility and strong cash generation from operations, though short-term borrowings were substantial.

Financial Highlights

43 data points
Beta

Revenue

$3.33B

Net Income

$119.00M

3.6% Net Margin

EPS (Diluted)

$0.39

Total Assets

$33.56B

Cash & Equivalents

$399.00M

Free Cash Flow

$462.00M

Financial Statements
Beta
Revenue$3.33B
Operating Expenses$2.99B
Operating Income$346.00M
Net Income$119.00M
EPS (Basic)$0.39
EPS (Diluted)$0.39
Shares Outstanding (Basic)304.00M
Shares Outstanding (Diluted)306.00M

Key Highlights

  • 1Net income for Q1 2009 was $115 million ($0.39/share), down from $277 million ($0.91/share) in Q1 2008.
  • 2The decrease in earnings was primarily due to regulatory charges of $168 million after-tax in Q1 2009.
  • 3The Energy Delivery Services segment reported a net loss of $42 million, a significant drop from a $179 million net income in the prior year, primarily due to regulatory asset impairment in Ohio.
  • 4The Competitive Energy Services segment saw net income increase to $155 million from $87 million, driven by improved generation margins.
  • 5FirstEnergy's liquidity remained sufficient, with substantial cash from operations and access to credit facilities.
  • 6Regulatory updates from Ohio and Pennsylvania indicate progress on key initiatives, including rate adjustments and energy efficiency programs.
  • 7Total revenues across all segments increased slightly to $3.33 billion from $3.28 billion in the prior year.

Frequently Asked Questions

The primary reason for the decrease was significant regulatory charges totaling $168 million after-tax, primarily related to the implementation of the Ohio Companies' Amended Electric Security Plan (ESP).

The Energy Delivery Services segment experienced a net loss of $42 million, largely due to a regulatory asset impairment. In contrast, the Competitive Energy Services segment showed strong performance with net income increasing to $155 million from $87 million in the prior year, driven by improved generation margins.

FirstEnergy's liquidity is considered sufficient, supported by cash generated from operations and access to a $2.75 billion revolving credit facility that expires in August 2012. As of May 1, 2009, the company had approximately $1.96 billion in available liquidity.

Yes, FirstEnergy reported progress on regulatory matters in Ohio with the PUCO approving the Ohio Companies' Amended ESP, which includes provisions for competitive bidding for generation supply and rate freezes. In Pennsylvania, Act 129 mandates energy efficiency and conservation programs, with costs recoverable from customers.