8-KEarnings & ResultsRegulation FDExhibits & Filings

FIRSTENERGY CORP 8-K Report, Financial Results (Jul 27, 2005)

Filed July 27, 2005For Securities:FE

Summary

FirstEnergy Corp. (FE) filed an 8-K on July 27, 2005, primarily to update its financial guidance and provide information on its results of operations. The company announced its intention to use and provide non-GAAP (Generally Accepted Accounting Principles) financial measures, specifically "normalized earnings per share" and "free cash flow," to offer investors a clearer view of ongoing operational performance. Management believes these non-GAAP metrics are useful for evaluating the company's performance relative to industry peers and for making internal comparisons. Key updates include raised earnings and cash flow guidance for 2005 and newly issued guidance for 2006. For 2005, the company anticipates non-GAAP earnings per share to be between $2.85 and $3.00, and non-GAAP free cash flow to be approximately $535 million. Looking ahead to 2006, FirstEnergy projects non-GAAP earnings per share in the range of $3.40 to $3.60, with non-GAAP free cash flow estimated between $280 million and $380 million. The company also noted its current unawareness of specific unusual items that would create material GAAP vs. non-GAAP differences in 2006.

Key Highlights

  • 1FirstEnergy Corp. announced updated and new financial guidance for 2005 and 2006, respectively, via public announcements.
  • 2The company is utilizing non-GAAP financial measures, including "normalized earnings per share" and "free cash flow," to present performance.
  • 3Management believes these non-GAAP measures provide useful insights into ongoing business results and allow for better comparisons with industry peers.
  • 4Raised 2005 non-GAAP earnings per share guidance is $2.85 to $3.00.
  • 52005 non-GAAP free cash flow guidance is approximately $535 million.
  • 6Issued 2006 non-GAAP earnings per share guidance of $3.40 to $3.60.
  • 72006 non-GAAP free cash flow is projected to be between $280 million and $380 million.

Frequently Asked Questions

Non-GAAP financial measures are financial metrics that exclude or include amounts not normally accounted for under Generally Accepted Accounting Principles (GAAP). FirstEnergy is using measures like "normalized earnings per share" and "free cash flow" to provide investors with a view of the company's ongoing operational performance, excluding "unusual items" that are not routine or may relate to discontinued businesses. Management believes these measures help investors compare FirstEnergy's performance to other companies in the energy sector.

FirstEnergy has raised its earnings and cash flow guidance for 2005. The company now expects its non-GAAP earnings per share for 2005 to be in the range of $2.85 to $3.00, and anticipates non-GAAP free cash flow of approximately $535 million.

FirstEnergy has issued its financial guidance for 2006. The company projects non-GAAP earnings per share to be between $3.40 and $3.60. Non-GAAP free cash flow for 2006 is estimated to range from $280 million to $380 million. The company currently does not foresee any specific unusual charges or credits that would significantly impact the difference between GAAP and non-GAAP earnings for 2006.

The 8-K filing states that quantitative reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided within the "Press Release" and "Consolidated Report to the Financial Community" (for 2005 guidance) and "Press Release" and "Letter to the Investment Community" (for 2006 guidance) that were issued on July 27, 2005, and attached as exhibits to this 8-K filing.