8-KEarnings & ResultsExhibits & Filings

FIRSTENERGY CORP 8-K Report, Financial Results (Jul 31, 2018)

Filed July 31, 2018For Securities:FE

Summary

This Form 8-K filing by FirstEnergy Corp. (FE) on July 31, 2018, primarily provides updates on the company's financial performance and future outlook for the second quarter and the full year 2018. Key to investors is the revision of GAAP earnings forecast for 2018, while affirming operating (non-GAAP) earnings guidance. The filing also includes forward-looking guidance for the third quarter of 2018. The report emphasizes the use of non-GAAP financial measures, such as 'Operating earnings' and 'Operating earnings per share,' which exclude 'special items' that management believes obscure underlying business trends. These non-GAAP measures are used for evaluating performance and making operational decisions. The company also details its use of 'Adjusted Equity,' 'Adjusted Debt,' and 'Adjusted Capitalization' for monitoring compliance with credit facility covenants. Investors should pay close attention to these non-GAAP metrics as they are presented as complementary to GAAP measures and may not be comparable to those of other companies.

Key Highlights

  • 1FirstEnergy Corp. (FE) filed an 8-K on July 31, 2018, providing financial updates for the period ending June 30, 2018.
  • 2The company revised its GAAP earnings forecast for the full year 2018.
  • 3FirstEnergy affirmed its operating (non-GAAP) earnings guidance for the full year 2018.
  • 4Forward-looking guidance for the third quarter of 2018 was also provided.
  • 5The filing highlights the extensive use of non-GAAP financial measures like 'Operating earnings' and 'Operating earnings per share' for performance evaluation.
  • 6Revisions were made to prior period disclosures to reflect the presentation of substantially all of the Competitive Energy Services segment as discontinued operations as of March 31, 2018.
  • 7Key non-GAAP metrics such as Adjusted Equity, Adjusted Debt, and Adjusted Capitalization are used to monitor compliance with credit facility covenants.

Frequently Asked Questions

The main purpose of this filing is to update investors on FirstEnergy Corp.'s financial results for the three and six months ended June 30, 2018, revise its GAAP earnings forecast for 2018, affirm its operating (non-GAAP) earnings guidance for 2018, and provide guidance for the third quarter of 2018. It also details the use of non-GAAP financial measures and their reconciliations.

FirstEnergy defines 'Operating earnings' as a non-GAAP measure that excludes 'special items' (charges or benefits management believes are not indicative of or may obscure trends in ongoing core activities). Management uses this measure to evaluate performance and manage operations, believing it provides consistent and comparable measures of performance on an ongoing basis, free from certain charges or benefits that may not be consistent across periods or peers.

As of March 31, 2018, substantially all operations of the Competitive Energy Services reportable operating segment were presented as discontinued operations. This change required a revision of prior period disclosures, including the presentation of non-GAAP financial measures, to conform to the current presentation of these operations as discontinued within Corporate/Other.

FirstEnergy provides non-GAAP measures to offer additional insights into the company's performance and operational trends, which management believes are useful for shareholders to understand performance trends and evaluate the company against its peers. Investors should carefully review the reconciliations provided within the referenced Press Release and Consolidated Report, understand that these measures are not GAAP-compliant, and may not be comparable to similarly titled measures used by other companies.