Summary
This 8-K filing from FirstEnergy Corp. on January 26, 2012, primarily announces a change in its accounting method for pension and other post-employment benefit plans. This change, along with related financial adjustments, is detailed in accompanying documents and has been made retroactively. Investors should note that the company is also presenting non-GAAP financial measures, specifically basic non-GAAP earnings per share, which exclude "special items" to provide a view of ongoing operational performance. Management believes these non-GAAP measures are useful for evaluating performance trends and comparing with industry peers, but they should be considered alongside, and not as a replacement for, GAAP measures.
Key Highlights
- 1FirstEnergy Corp. is changing its accounting method for pension and other post-employment benefit plans.
- 2The accounting change has been applied retroactively, with related materials available on the company's investor relations website.
- 3The company is providing information through a Letter to the Investment Community and a news release.
- 4Key financial information is presented using non-GAAP measures, specifically basic non-GAAP earnings per share.
- 5Non-GAAP earnings exclude "special items" which are defined as events not considered routine or related to discontinued businesses.
- 6Management views non-GAAP measures as beneficial for assessing ongoing business results and for peer comparisons.
- 7All non-GAAP information should be considered in addition to, and not as a substitute for, GAAP financial measures.
Frequently Asked Questions
The main purpose of this 8-K filing is to announce FirstEnergy Corp.'s change in its accounting method for pension and other post-employment benefit plans and to provide related financial information to investors.
"Special items" are defined as events that are not considered routine or that may be related to discontinued businesses. These items are excluded from the calculation of basic non-GAAP earnings per share.
FirstEnergy is presenting non-GAAP financial measures, such as basic non-GAAP earnings per share, because management believes they provide a useful perspective for investors in evaluating the ongoing results of the company's businesses and allow for better comparisons to the operating performance of other companies in the energy sector.
No, the non-GAAP financial measures are not calculated in accordance with Generally Accepted Accounting Principles (GAAP). They exclude the impact of "special items." Investors are advised to consider these non-GAAP measures in addition to, and not as a substitute for, the most directly comparable GAAP financial measures. They may also not be comparable to similarly titled measures used by other entities.