EX-99.2 3 exhibit99_2.htm CONSOLIDATED REPORT TO THE FINANCIAL COMMUNITY, DATED FEBRUARY 11, 2010 exhibit99_2.htm
 
Exhibit 99.2
 
Consolidated Report to the Financial Community                                 
Fourth Quarter 2009                                                              
(Released February 11, 2010)
     
HIGHLIGHTS
 After-Tax EPS Variance Analysis
    
4th   Qtr.
 
   
     4Q 2008 Basic EPS – GAAP Basis 
    
      $1.09
  
   
 Special Items – 2008
    
0.12
  
  ■
 Normalized non-GAAP* earnings, excluding special items, were $0.77 per share for
 4Q 2008 Normalized Earnings – Non-GAAP Basis*
    
      $1.21
  
  the fourth quarter of 2009, compared with $1.21 per share for the fourth quarter of 2008.              Distribution Deliveries     (0.06)  
  GAAP earnings for the fourth quarter of 2009 were $0.78 per share compared with $1.09
 Ohio Utilities Distribution Rate Increase 
    
0.04
  
  per share for the fourth quarter of 2008.
 Ohio Delivery Service Improvement Rider
              0.05  
      
 Ohio Transition Cost Recovery Margin
    
    (0.16)   
  
 ■ Normalized non-GAAP* earnings for 2009, excluding special items, were $3.77 per      Generation Gross Margin         (0.40)  
  share, near the top end of our earnings guidance of $3.70 to $3.80 per share.      Nuclear O&M         (0.07)  
  Normalized non-GAAP earnings for 2008, excluding special items, were $4.57 per share.      O&M Reductions          0.21  
   GAAP earnings for 2009 were $3.31 per share, compared with $4.41 per share in 2008.              Deferred Distribution Costs - OH (2008)     (0.05)  
   
         Pension Costs
    
(0.11)
  
    4Q 2009 Results vs. 4Q 2008
 Depreciation
    
(0.02)
  
   
 General Taxes
    
0.03
  
 ■ Lower distribution delivery revenues (excluding the impact of the Ohio distribution rate
 Investment Income - NDT and COLI
    
0.01
  
  changes noted below) reduced earnings by $0.06 per share.  Electric distribution      Financing Costs             (0.01)  
  deliveries declined 797,000 megawatt-hours (MWH), or 3%, due to the economic downturn      Effective Income Tax Rate          0.11  
  and mild weather in the FirstEnergy companies' service territories.  Heating-degree days      Other        (0.01)  
  were 7% lower than the same period last year and 3% below normal.  Industrial deliveries          4Q 2009 Normalized Earnings - Non-GAAP Basis*           $0.77  
  
decreased 278,000 MWH, or 3%, primarily related to reduced usage by steel and              Special Items - 2009              0.01  
  automotive customers.  Commercial deliveries declined 295,000 MWH, or 3%, while          4Q 2009 Basic EPS - GAAP Basis           $0.78  
  residential deliveries decreased 220,000 MWH, or 2%.          
 
■
The distribution rate increase implemented in 2009 for the three Ohio utilities increased earnings by $0.04 per share in the fourth quarter and the Ohio delivery service improvement rider, effective in April 2009, increased earnings by $0.05 per share.
 
■
In accordance with the Ohio Rate Certainty Plan (RCP), recovery of transition revenues for Ohio Edison Company (OE) and The Toledo Edison Company (TE) ended in December 2008, while recovery for The Cleveland Electric Illuminating Company (CEI) will extend through December 2010. Lower transition revenues in the fourth quarter of 2009 reduced earnings by $0.29 per share. This was partially offset by lower transition cost amortization in the fourth quarter of 2009, which increased earnings by $0.13 per share.
    
 
 
 
■
Generation gross margin reduced earnings by $0.40 per share, as the result of several factors.
 
Consolidated electric generation sales decreased 3.8 million MWH, or 12%. Retail generation sales decreased 2.1 million MWH, or 8%, while wholesale sales were down 1.7 million MWH, or 27%, compared to the same period last year. (A Summary of Generation Sales and Power Purchases can be found on page 15.)
 
 
FirstEnergy Solutions Corp. (FES)-supplied retail generation and wholesale sales decreased 3.9 million MWH, or 18%. FES retail sales declined 2.2 million MWH, or 13%, primarily due to FES supplying less of the Ohio retail load in the fourth quarter of 2009 compared to nearly 100% of the Ohio load in the same period last year. As of December 31, 2009, FES supplied 77% of the Ohio retail load. FES-supplied wholesale electricity sales decreased 1.7 million MWH, or 41%, primarily due to lower available economic generation during the fourth quarter of 2009.
 
 
Lower generation margins at the Ohio utilities, Metropolitan Edison Company (Met-Ed) and Pennsylvania Electric Company (Penelec) in the fourth quarter of 2009 reduced earnings by $0.05 per share due to the expiration in 2008 of favorably-priced power supply agreements. FES-supplied retail generation sales reduced earnings by $0.19 per share as lower volumes, primarily in the Ohio franchise territory, more than offset higher unit prices. The combination of the above items reduced retail generation revenues by $0.24 per share.
 
 
Wholesale revenues were slightly lower than the same period last year. Lower FES wholesale sales ($61 million), were substantially offset by higher PJM Reliability Pricing Model (RPM) capacity revenues at Met-Ed & Penelec ($44 million) and FES ($16 million).
 
 
Lower fuel expenses, primarily due to reduced generation output, increased earnings by $0.16 per share. Generation output in the fourth quarter of 2009 was 15.7 million MWH, a reduction of 5.2 million MWH, or 25%, compared to the same period last year, primarily due to economic factors in the fourth quarter of 2009.
 
 
Higher purchased power costs reduced earnings by $0.32 per share. Higher FES energy purchases ($53 million) reduced earnings by $0.11 per share. The increase in energy purchases, primarily in PJM, was attributable to wind contracts and the Beaver Valley Unit 2 refueling outage in the fourth quarter of 2009. Higher PJM RPM capacity expenses at FES ($52 million) and Met-Ed & Penelec ($50 million) reduced earnings by $0.21 per share.
 
 
Generation Gross Margin EPS Summary
 
 
EPS
Revenues
 
 
Expenses
Total
FES Generation Sales
Utilities
Retail
Wholesale Sales
Fuel
Purchased Power
 POLR
Retail
Energy
Capacity
Energy
Capacity
Rate
Volume
$0.01
$0.04
($0.05)
($0.01)
$0.12
($0.04)
$0.01
($0.21)
($0.13)
($0.69)
$0.45
  
($0.11)
  
$0.20
($0.12)
  
($0.27)
    Total
($0.68)
$0.49
($0.05)
($0.12)
$0.12
$0.16
($0.11)
($0.21)
($0.40)
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
2
 

 
 
 
 
 
■
The refueling outage at Beaver Valley Unit 2 in the fourth quarter of 2009 reduced earnings by $0.07 per share. There was no comparable nuclear refueling outage in the same period last year.
 

 
■
Continued O&M cost reductions increased earnings by $0.21 per share ($102 million) in the fourth quarter of 2009. The majority of the O&M reductions were realized from lower labor costs; reduced non-pension employee benefits; use of fewer contractors; and general company-wide cost control measures. O&M reductions at the distribution and generation subsidiaries (including allocated savings from Corporate Shared Services) were approximately $0.15 per share ($70 million) and $0.06 per share ($32 million), respectively. For 2009, O&M reductions totaled approximately $0.69 per share ($344 million).  Distribution subsidiaries accounted for approximately $0.42 per share ($206 million) while the generation subsidiaries accounted for approximately $0.27 per share ($138 million).
 

 
■
Under the RCP, the Ohio utilities were permitted to defer up to $150 million per year in distribution reliability expenses through December 2008. The absence of these deferrals in the fourth quarter of 2009 reduced earnings by $0.05 per share compared to the same period last year.
 

 
■
Higher pension expense in the fourth quarter of 2009 reduced earnings by $0.11 per share. Reduced pension plan asset value, due to market performance during 2008, resulted in a decrease in the plan’s funded status, leading to increased expense in 2009.
 

 
■
Incremental property additions increased depreciation expense by $0.02 per share.
 

 
■
Lower general taxes increased earnings by $0.03 per share, primarily due to lower kilowatt-hour taxes in Ohio.
 

 
■
Higher investment income from corporate-owned life insurance (COLI) increased earnings by $0.05 per share, while lower nuclear decommissioning trust income reduced earnings by $0.04 per share.
 

 
■
Net financing costs reduced earnings by $0.01 per share. Higher interest expense reduced earnings by $0.05 per share, primarily due to interest associated with the issuance of first mortgage bonds (FMBs) and senior notes by the regulated companies and FES in 2009. Higher capitalized interest related to the construction program increased earnings by $0.04 per share.
 

 
■
A lower effective income tax rate increased earnings by $0.11 per share. This reduction reflects the reversal of after-tax interest related to several tax positions that were settled during the fourth quarter of 2009. The after-tax interest that was reversed was charged to earnings in prior years and was not normalized as a special item in any period. Excluding tax adjustments, this year's fourth quarter effective income tax rate was 37.0% compared with 38.0% in last year's fourth quarter.
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
3

 
 
 
 
■
Several special items were recognized during the fourth quarter of 2009:
 
o
    $0.49 per share increase in earnings from favorable settlements of uncertain tax positions
 
o
    $0.42 per share decrease in earnings due to the mark-to-market adjustment of a legacy purchased power contract
 
o
    $0.05 per share reduction in earnings from the impairment of securities held in trust for future nuclear decommissioning activities, and
 
o
    $0.01 per share reduction in earnings from early redemption of debt
 
 
2010 Earnings Guidance 
 
Normalized non-GAAP* earnings guidance for 2010, excluding special items, is $3.50 to $3.70 per share.  At this time, the company cannot estimate the potential impact of any
special items that may create a difference between earnings on a non-GAAP and GAAP basis.
 
 
* The 2009 GAAP to non-GAAP reconciliation statements can be found on page 17 of this report and all GAAP to non-GAAP reconciliation statements are available on the Investor Information section of FirstEnergy Corp.'s Web site at www.firstenergycorp.com/ir.
 
 
 
 
 
 
 
 
 
For additional information, please contact:
 
 
 Ronald E. Seeholzer
  Irene M. Prezelj  Rey Y. Jimenez
 Vice President, Investor Relations
  Director, Investor Relations  Manager, Investor Relations
 (330) 384-5415
  (330) 384-3859  (330) 761-4239
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
4
 
 
 
 
 
 
FirstEnergy Corp.
Consolidated Statements of Income
 (In millions, except for per share amounts)
 
 
     
Three Months Ended Dec. 31
    
Twelve Months Ended Dec. 31
  
     
2009
    
2008
    
Change
    
2009
    
2008
    
Change
  
   
Revenues
                                  
(1 )
Electric utilities
 $ 2,388     $ 2,814     $ (426 )   $ 11,139     $ 12,061     $ (922 )
(2 )
Unregulated businesses
   566       387       179       1,828       1,566       262  
(3 )
Total Revenues
   2,954       3,201       (247 )     12,967       13,627       (660 )
                                                   
   
Expenses
                                              
(4 )
Fuel
   263       340       (77 )     1,153       1,340       (187 )
(5 )
Purchased power
   1,250       915       335       4,730       4,291       439  
(6 )
Other operating expenses
   594       671       (77 )     2,697       3,045       (348 )
(7 )
Provision for depreciation
   186       177       9       736       677       59  
(8 )
Amortization of regulatory assets
   252       258       (6 )     1,155       1,053       102  
(9 )
Deferral of new regulatory assets
   -       (55 )     55       (136 )     (316 )     180  
(10 )
General taxes
   166       182       (16 )     753       778       (25 )
(11 )
Total Expenses
   2,711       2,488       223       11,088       10,868       220  
                                                   
(12 )
Operating Income
   243       713       (470 )     1,879       2,759       (880 )
                                                   
   
Other Income (Expense)
                                              
(13 )
Investment income (loss)
   (3 )     (14 )     11       204       59       145  
(14 )
Interest expense
   (223 )     (195 )     (28 )     (978 )     (754 )     (224 )
(15 )
Capitalized interest
   34       16       18       130       52       78  
(16 )
Total Other Expense
   (192 )     (193 )     1       (644 )     (643 )     (1 )
                                                   
(17 )
Income Before Income Taxes
   51       520       (469 )     1,235       2,116       (881 )
(18 )
Income taxes (benefits)
   (185 )     192       (377 )     245       777       (532 )
(19 )
Net Income
   236       328       (92 )     990       1,339       (349 )
(20 )
Less: Noncontrolling interest loss
   (2 )     (4 )     2       (16 )     (3 )     (13 )
(21 )
Earnings Available to FirstEnergy Corp.
 $ 238     $ 332     $ (94 )   $ 1,006     $ 1,342     $ (336 )
(22 )
Earnings Per Share of Common Stock
                                              
(23 )
Basic
 $ 0.78     $ 1.09     $ (0.31 )   $ 3.31     $ 4.41     $ (1.10 )
(24 )
Diluted
 $ 0.78     $ 1.09     $ (0.31 )   $ 3.29     $ 4.38     $ (1.09 )
(25 )
Weighted Average Number of
                                              
   
Common Shares Outstanding
                                              
(26 )
Basic
   304       304       -       304       304       -  
(27 )
Diluted
   306       306       -       306       307       (1 )
                                                   
 
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
5
 
 
 
 
 
FirstEnergy Corp.
Consolidated Income Segments
 (In millions)
 
 
 
                 
       
                                       Three Months Ended December 31, 2009
    
                             
                             
       
Energy
    
Competitive
    
Other &
        
       
Delivery
    
Energy
    
Reconciling
        
   
 
    Services (a)    
Services (b)
    
Adjustments (c)
    
Consolidated
  
       Revenues                                
  (1 )
Electric sales
   $ 2,263     $ 518     $ -     $ 2,781  
  (2 )
Other
     126       41       (11 )     156  
  (3 )
Internal revenues*
     -       494       (477 )     17  
  (4 )
Total Revenues
     2,389       1,053       (488 )     2,954  
                                       
     
Expenses
                                
  (5 )
Fuel
     -       263       -       263  
  (6 )
Purchased power
     1,282       445       (477 )     1,250  
  (7 )
Other operating expenses
     235       356       3       594  
  (8 )
Provision for depreciation
     114       69       3       186  
  (9 )
Amortization of regulatory assets
     252       -       -       252  
  (10 )
Deferral of new regulatory assets
     -       -       -       -  
  (11 )
General taxes
     155       24       (13 )     166  
  (12 )
Total Expenses
     2,038       1,157       (484 )     2,711  
  (13 )
Operating Income (Loss)
     351       (104 )     (4 )     243  
                                       
     
Other Income (Expense)
                                
  (14 )
Investment income (loss)
     28       (15 )     (16 )     (3 )
  (15 )
Interest expense
     (129 )     (60 )     (34 )     (223 )
  (16 )
Capitalized interest
     -       18       16       34  
  (17 )
Total Other Expense
     (101 )     (57 )     (34 )     (192 )
  (18 )
Income Before Income Taxes
     250       (161 )     (38 )     51  
  (19 )
Income taxes (benefits)
     100       (64 )     (221 )     (185 )
  (20 )
Net Income
     150       (97 )     183       236  
  (21 )
Less: Noncontrolling interest loss
     -       -       (2 )     (2 )
  (22 )
Earnings Available to FirstEnergy Corp.
   $ 150     $ (97 )   $ 185     $ 238  
                                       
  *  
Consistent with the accounting for the effects of certain types of regulation, internal revenues, representing sales of
  
     
Renewable Energy Credits by FES to the Ohio Companies, are not fully eliminated.
                  
                                       
               (a)
  
Consists of regulated transmission and distribution operations, including transition cost recovery, and provider of last resort
  
     
generation service for FirstEnergy's electric utility subsidiaries.
                  
               (b)
  
Consists of unregulated generation and commodity operations, including competitive electric sales, and generation sales to
  
     
affiliated electric utilities.
                                
              (c)
  
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses
  
     
and elimination of intersegment transactions.
                          
                                       
 
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
6
 
 
 
 
 
 
FirstEnergy Corp.
Consolidated Income Segments
 (In millions)
 
 
                 
       
                                       Three Months Ended December 31, 2008
    
                             
                             
       
Energy
    
Competitive
    
Other &
        
       
Delivery
    
Energy
    
Reconciling
        
       
Services (a)
    
Services (b)
    
Adjustments (c)
    
Consolidated
  
   
Revenues
                        
  (1 )
Electric sales
   $ 2,651     $ 339     $ -     $ 2,990  
  (2 )
Other
     163       68       (20 )     211  
  (3 )
Internal revenues
     -       702       (702 )     -  
  (4 )
Total Revenues
     2,814       1,109       (722 )     3,201  
                                       
     
Expenses
                                
  (5 )
Fuel
     1       339       -       340  
  (6 )
Purchased power
     1,486       131       (702 )     915  
  (7 )
Other operating expenses
     466       236       (31 )     671  
  (8 )
Provision for depreciation
     108       64       5       177  
  (9 )
Amortization of regulatory assets
     258       -       -       258  
  (10 )
Deferral of new regulatory assets
     (55 )     -       -       (55 )
  (11 )
General taxes
     151       27       4       182  
  (12 )
Total Expenses
     2,415       797       (724 )     2,488  
  (13 )
Operating Income
     399       312       2       713  
                                       
     
Other Income (Expense)
                                
  (14 )
Investment income (loss)
     37       (33 )     (18 )     (14 )
  (15 )
Interest expense
     (105 )     (36 )     (54 )     (195 )
  (16 )
Capitalized interest
     1       14       1       16  
  (17 )
Total Other Expense
     (67 )     (55 )     (71 )     (193 )
  (18 )
Income Before Income Taxes
     332       257       (69 )     520  
  (19 )
Income taxes (benefits)
     133       102       (43 )     192  
  (20 )
Net Income
     199       155       (26 )     328  
  (21 )
Less: Noncontrolling interest loss
     -       -       (4 )     (4 )
  (22 )
Earnings Available to FirstEnergy Corp.
   $ 199     $ 155     $ (22 )   $ 332  
                                       
           (a)
  
Consists of regulated transmission and distribution operations, including transition cost recovery, and provider of last resort
  
     
generation service for FirstEnergy's electric utility subsidiaries.
                  
               (b)
  
Consists of unregulated generation and commodity operations, including competitive electric sales, and generation sales to
  
     
affiliated electric utilities.
                                
              (c)
  
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses
  
     
and elimination of intersegment transactions.
                          
                                       
 
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
7

 
 
 
FirstEnergy Corp.
Consolidated Income Segments
 (In millions)
 
 
           
       
Three Months Ended Dec. 31, 2009 vs. Three Months Ended Dec. 31, 2008
  
                             
                             
       
Energy
    
Competitive
    
Other &
        
       
Delivery
    
Energy
    
Reconciling
        
       
Services (a)
    
Services (b)
    
Adjustments (c)
    
Consolidated
  
   
Revenues
                        
  (1 )
Electric sales
   $ (388 )   $ 179     $ -     $ (209 )
  (2 )
Other
     (37 )     (27 )     9       (55 )
  (3 )
Internal revenues*
     -       (208 )     225       17  
  (4 )
Total Revenues
     (425 )     (56 )     234       (247 )
                                       
     
Expenses
                                
  (5 )
Fuel
     (1 )     (76 )     -       (77 )
  (6 )
Purchased power
     (204 )     314       225       335  
  (7 )
Other operating expenses
     (231 )     120       34       (77 )
  (8 )
Provision for depreciation
     6       5       (2 )     9  
  (9 )
Amortization of regulatory assets
     (6 )     -       -       (6 )
  (10 )
Deferral of new regulatory assets
     55       -       -       55  
  (11 )
General taxes
     4       (3 )     (17 )     (16 )
  (12 )
Total Expenses
     (377 )     360       240       223  
  (13 )
Operating Income
     (48 )     (416 )     (6 )     (470 )
                                       
     
Other Income (Expense)
                                
  (14 )
Investment income (loss)
     (9 )     18       2       11  
  (15 )
Interest expense
     (24 )     (24 )     20       (28 )
  (16 )
Capitalized interest
     (1 )     4       15       18  
  (17 )
Total Other Expense
     (34 )     (2 )     37       1  
  (18 )
Income Before Income Taxes
     (82 )     (418 )     31       (469 )
  (19 )
Income tax benefits
     (33 )     (166 )     (178 )     (377 )
  (20 )
Net Income
     (49 )     (252 )     209       (92 )
  (21 )
Less: Noncontrolling interest income
     -       -       2       2  
  (22 )
Earnings Available to FirstEnergy Corp.
   $ (49 )   $ (252 )   $ 207     $ (94 )
                                       
  *  
Consistent with the accounting for the effects of certain types of regulation, internal revenues, representing sales of
  
     
Renewable Energy Credits by FES to the Ohio Companies, are not fully eliminated.
                  
                                       
              (a)
  
Consists of regulated transmission and distribution operations, including transition cost recovery, and provider of last resort
  
     
generation service for FirstEnergy's electric utility subsidiaries.
                  
              (b)
  
Consists of unregulated generation and commodity operations, including competitive electric sales, and generation sales to
  
     
affiliated electric utilities.
                                
               (c)
  
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses
  
     
and elimination of intersegment transactions.
                          
                                       
 
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
8
 
 
 
 
 
FirstEnergy Corp.
Consolidated Income Segments
(In millions)
 
                 
       
                                        Twelve Months Ended December 31, 2009
    
                             
                             
       
Energy
    
Competitive
    
Other &
        
       
Delivery
    
Energy
    
Reconciling
        
         Services (a)    
Services (b)
      Adjustments (c)    
Consolidated
  
   
Revenues
                        
  (1 )
Electric sales
   $ 10,585     $ 1,447     $ -     $ 12,032  
  (2 )
Other
     559       441       (82 )     918  
  (3 )
Internal revenues*
     -       2,843       (2,826 )     17  
  (4 )
Total Revenues
     11,144       4,731       (2,908 )     12,967  
                                       
     
Expenses
                                
  (5 )
Fuel
     -       1,153       -       1,153  
  (6 )
Purchased power
     6,560       996       (2,826 )     4,730  
  (7 )
Other operating expenses
     1,424       1,357       (84 )     2,697  
  (8 )
Provision for depreciation
     445       270       21       736  
  (9 )
Amortization of regulatory assets
     1,155       -       -       1,155  
  (10 )
Deferral of new regulatory assets
     (136 )     -       -       (136 )
  (11 )
General taxes
     641       108       4       753  
  (12 )
Total Expenses
     10,089       3,884       (2,885 )     11,088  
  (13 )
Operating Income
     1,055       847       (23 )     1,879  
                                       
     
Other Income (Expense)
                                
  (14 )
Investment income (loss)
     139       121       (56 )     204  
  (15 )
Interest expense
     (472 )     (166 )     (340 )     (978 )
  (16 )
Capitalized interest
     3       60       67       130  
  (17 )
Total Other Expense
     (330 )     15       (329 )     (644 )
  (18 )
Income Before Income Taxes
     725       862       (352 )     1,235  
  (19 )
Income taxes (benefits)
     290       345       (390 )     245  
  (20 )
Net Income
     435       517       38       990  
  (21 )
Less: Noncontrolling interest loss
     -       -       (16 )     (16 )
  (22 )
Earnings Available to FirstEnergy Corp.
   $ 435     $ 517     $ 54     $ 1,006  
                                       
  *  
Consistent with the accounting for the effects of certain types of regulation, internal revenues, representing sales of
  
     
Renewable Energy Credits by FES to the Ohio Companies, are not fully eliminated.  
                  
                                       
   (a)
  
Consists of regulated transmission and distribution operations, including transition cost recovery, and provider of last resort
  
     
generation service for FirstEnergy's electric utility subsidiaries.
                  
               (b)
  
Consists of unregulated generation and commodity operations, including competitive electric sales, and generation sales to
  
     
affiliated electric utilities.
                                
               (c)
  
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses
  
     
and elimination of intersegment transactions.
                          
                                       
 
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
9
 
 


 
FirstEnergy Corp.
Consolidated Income Segments
(In millions)
 
             
       
                                  Twelve Months Ended December 31, 2008
    
                             
                             
       
Energy
    
Competitive
    
Other &
        
       
Delivery
    
Energy
    
Reconciling
        
       
Services (a)
    
Services (b)
    
Adjustments (c)
    
Consolidated
  
   
Revenues
                        
  (1 )
Electric sales
   $ 11,360     $ 1,333     $ -     $ 12,693  
  (2 )
Other
     708       238       (12 )     934  
  (3 )
Internal revenues
     -       2,968       (2,968 )     -  
  (4 )
Total Revenues
     12,068       4,539       (2,980 )     13,627  
                                       
     
Expenses
                                
  (5 )
Fuel
     2       1,338       -       1,340  
  (6 )
Purchased power
     6,480       779       (2,968 )     4,291  
  (7 )
Other operating expenses
     2,022       1,142       (119 )     3,045  
  (8 )
Provision for depreciation
     417       243       17       677  
  (9 )
Amortization of regulatory assets
     1,053       -       -       1,053  
  (10 )
Deferral of new regulatory assets
     (316 )     -       -       (316 )
  (11 )
General taxes
     646       109       23       778  
  (12 )
Total Expenses
     10,304       3,611       (3,047 )     10,868  
  (13 )
Operating Income
     1,764       928       67       2,759  
                                       
     
Other Income (Expense)
                                
  (14 )
Investment income (loss)
     171       (34 )     (78 )     59  
  (15 )
Interest expense
     (411 )     (152 )     (191 )     (754 )
  (16 )
Capitalized interest
     3       44       5       52  
  (17 )
Total Other Expense
     (237 )     (142 )     (264 )     (643 )
  (18 )
Income Before Income Taxes
     1,527       786       (197 )     2,116  
  (19 )
Income taxes (benefits)
     611       314       (148 )     777  
  (20 )
Net Income
     916       472       (49 )     1,339  
  (21 )
Less: Noncontrolling interest loss
     -       -       (3 )     (3 )
  (22 )
Earnings Available to FirstEnergy Corp.
   $ 916     $ 472     $ (46 )   $ 1,342  
                                       
   (a)
  
Consists of regulated transmission and distribution operations, including transition cost recovery, and provider of last resort
  
     
generation service for FirstEnergy's electric utility subsidiaries.
                  
               (b)
  
Consists of unregulated generation and commodity operations, including competitive electric sales, and generation sales to
  
     
affiliated electric utilities.
                                
               (c)
  
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses
  
     
and elimination of intersegment transactions.
                          
                                       

 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
10
 
 
 
 
 
FirstEnergy Corp.
Consolidated Income Segments
(In millions)
 
 
           
       
Twelve Months Ended Dec. 31, 2009 vs. Twelve Months Ended Dec. 31, 2008
  
                             
                             
       
Energy
    
Competitive
    
Other &
        
       
Delivery
    
Energy
    
Reconciling
        
       
Services (a)
    
Services (b)
    
Adjustments (c)
    
Consolidated
  
   
Revenues
                        
  (1 )
Electric sales
   $ (775 )   $ 114     $ -     $ (661 )
  (2 )
Other
     (149 )     203       (70 )     (16 )
  (3 )
Internal revenues*
     -       (125 )     142       17  
  (4 )
Total Revenues
     (924 )     192       72       (660 )
                                       
     
Expenses
                                
  (5 )
Fuel
     (2 )     (185 )     -       (187 )
  (6 )
Purchased power
     80       217       142       439  
  (7 )
Other operating expenses
     (598 )     215       35       (348 )
  (8 )
Provision for depreciation
     28       27       4       59  
  (9 )
Amortization of regulatory assets
     102       -       -       102  
  (10 )
Deferral of new regulatory assets
     180       -       -       180  
  (11 )
General taxes
     (5 )     (1 )     (19 )     (25 )
  (12 )
Total Expenses
     (215 )     273       162       220  
  (13 )
Operating Income
     (709 )     (81 )     (90 )     (880 )
                                       
     
Other Income (Expense)
                                
  (14 )
Investment income (loss)
     (32 )     155       22       145  
  (15 )
Interest expense
     (61 )     (14 )     (149 )     (224 )
  (16 )
Capitalized interest
     -       16       62       78  
  (17 )
Total Other Expense
     (93 )     157       (65 )     (1 )
  (18 )
Income Before Income Taxes
     (802 )     76       (155 )     (881 )
  (19 )
Income taxes (benefits)
     (321 )     31       (242 )     (532 )
  (20 )
Net Income
     (481 )     45       87       (349 )
  (21 )
Less: Noncontrolling interest loss
     -       -       (13 )     (13 )
  (22 )
Earnings Available to FirstEnergy Corp.
   $ (481 )   $ 45     $ 100     $ (336 )
                                       
  *  
Consistent with the accounting for the effects of certain types of regulation, internal revenues, representing sales of
  
     
Renewable Energy Credits by FES to the Ohio Companies, are not fully eliminated.
                  
                                       
                (a)
  
Consists of regulated transmission and distribution operations, including transition cost recovery, and provider of last resort
  
     
generation service for FirstEnergy's electric utility subsidiaries.
                  
                (b)
  
Consists of unregulated generation and commodity operations, including competitive electric sales, and generation sales to
  
     
affiliated electric utilities.
                                
                (c)
  
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses
  
     
and elimination of intersegment transactions.
                          
                                       
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
11
 
 
 
 
 
 
FirstEnergy Corp.
Financial Statements
 (In millions)
 
 
           
  Condensed Consolidated Balance Sheets
          
           
   
As of
  
As of
  
  Assets
  
Dec. 31, 2009
  
Dec. 31, 2008
  
  Current Assets:
          
 Cash and cash equivalents
   $ 874   $ 545  
 Receivables
     1,397     1,471  
 Other
     1,049     1,037  
  Total Current Assets
     3,320     3,053  
               
  Property, Plant and Equipment
     19,164     17,723  
  Investments
     3,023     3,017  
  Deferred Charges and Other Assets
     8,797     9,728  
  Total Assets
   $ 34,304   $ 33,521  
               
  Liabilities and Capitalization
              
  Current Liabilities:
              
 Currently payable long-term debt
   $ 1,834   $ 2,476  
 Short-term borrowings
     1,181     2,397  
  Accounts payable
     829     794  
 Other
     1,444     1,431  
  Total Current Liabilities
     5,288     7,098  
               
  Capitalization:
              
 Total equity
     8,557     8,315  
 Long-term debt and other long-term obligations
     11,908     9,100  
  Total Capitalization
     20,465     17,415  
  Noncurrent Liabilities
     8,551     9,008  
  Total Liabilities and Capitalization
   $ 34,304   $ 33,521  
               
 
 
                         
  General Information
                        
     
Three Months Ended Dec. 31
    
Twelve Months Ended Dec. 31
  
     
2009
    
2008
    
2009
    
2008
  
  Debt redemptions
   $ (397 )   $ (301 )   $ (2,610 )   $ (1,034 )
  New long-term debt issues
   $ 481     $ 736     $ 4,632     $ 1,367  
  Short-term borrowings increase (decrease)
   $ (482 )   $ 5     $ (1,246 )   $ 1,494  
  Property additions (a)
   $ (628 )   $ (711 )   $ (2,203 )   $ (2,888 )
                                   
  (a)   Includes purchase of lessor equity interests in Beaver Valley Unit 2 and Perry in the twelve months ended  
 
December 31, 2008.
                                
                                   
 
 
                     
  Adjusted Capitalization
                    
   
As of December 31
  
   
2009
  
% Total
    
2008
  
% Total
  
  Total equity*
   $ 8,557     36 %   $ 8,315     36 %
  Long-term debt and other long-term obligations
     11,908     50 %     9,100     40 %
  Currently payable long-term debt
     1,834     8 %     2,476     11 %
  Short-term borrowings
     1,181     5 %     2,397     11 %
  Adjustments:
                            
     Sale-leaseback net debt equivalents
     1,391     6 %     1,428     6 %
    JCP&L securitization debt and cash
     (1,189 )   -5 %     (842 )   -4 %
  Total
   $ 23,682     100 %   $ 22,874     100 %
                             
  *Includes $(1,415) million and $(1,380) million, respectively, of Accumulated Other Comprehensive Loss
  
                             
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
12
 
 
 
 
FirstEnergy Corp.
Financial Statements
 (In millions)
 
 
 
                       
  Condensed Consolidated Statements of Cash Flows
                      
 
Three Months Ended Dec. 31
    
Twelve Months Ended Dec. 31
  
 
2009
    
2008
    
2009
    
2008
  
  Cash flows from operating activities
                      
  Net income
 $ 236     $ 328     $ 990     $ 1,339  
  Adjustments to reconcile net income to net cash from operating activities:
                          
Depreciation, amortization, and deferral of regulatory assets
   438       380       1,755       1,414  
Deferred purchased power and other costs
   (103 )     (88 )     (338 )     (226 )
Deferred income taxes and investment tax credits
   (37 )     88       384       366  
Deferred rents and lease market valuation liability
   (32 )     (33 )     (52 )     (95 )
Pension trust contribution
   -       -       (500 )     -  
Cash collateral, net
   115       (52 )     30       (31 )
Electric service prepayment programs
   -       (19 )     (10 )     (77 )
Commodity derivative transactions, net
   203       1       229       5  
 Loss on debt redemption
   4       -       146       -  
 Gain on investment securities held in trusts
   (4 )     (20 )     (176 )     (63 )
Change in working capital and other
   181       208       7       (408 )
  Cash flows provided from operating activities
   1,001       793       2,465       2,224  
  Cash flows provided from (used for) financing activities
   (568 )     264       49       1,175  
  Cash flows used for investing activities
   (397 )     (693 )     (2,185 )     (2,983 )
  Net increase in cash and cash equivalents
 $ 36     $ 364     $ 329     $ 416  
                               
 
 
                                   
  Deferrals and Amortizations
                                  
                                   
 
Three Months Ended Dec. 31
    
Twelve Months Ended Dec. 31
  
 
2009
    
2008
    
Change
    
2009
    
2008
    
Change
  
  Ohio Rate Certainty Plan Amortizations (Deferrals)
                                
Ohio transition costs
 $ -     $ 71     $ (71 )   $ 70     $ 302     $ (232 )
Shopping incentives & interest
   37       28       9       265       97       168  
RCP distribution reliability costs and interest
   -       (24 )     24       (14 )     (154 )     140  
RCP fuel & interest
   (5 )     -       (5 )     (14 )     7       (21 )
                                               
  Ohio Amended ESP Amortizations (Deferrals)
                                              
Uncollectible customer accounts
 $ 7     $ -     $ 7     $ 5     $ -     $ 5  
Economic development costs & interest
   1       -       1       26       -       26  
Generation cost rider true-up & interest
   (3 )     -       (3 )     (16 )     -       (16 )
CEI fuel & interest
   -       -       -       (141 )     -       (141 )
Distribution reliability costs
   39       -       39       51       -       51  
                                               
  Ohio Transmission Amortization
                                              
MISO transmission costs
 $ 9     $ -     $ 9     $ 105     $ 43     $ 62  
                                               
  Pennsylvania Amortizations (Deferrals)
                                              
PJM transmission costs
 $ 49     $ 12     $ 37     $ 141     $ (71 )   $ 212  
NUG costs
   20       13       7       84       45       39  
                                               
  New Jersey Amortization
                                              
NUG costs
 $ 57     $ 60     $ (3 )   $ 255     $ 268     $ (13 )
                                               
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
13
 
 
 
 
FirstEnergy Corp.
Statistical Summary
 
 
                             
 
Electric Sales Statistics (kWh in millions)
                          
         
Three Months Ended Dec. 31
  
Twelve Months Ended Dec. 31
  
 
Electric Distribution Deliveries
  
2009
  
2008
  
Change
  
2009
  
2008
  
Change
  
                                 
 
Ohio
- Residential
  
              4,208
  
              4,266
  
-1.4%
  
             16,807
  
             17,380
  
-3.3%
  
     
- Commercial
  
              3,347
  
              3,452
  
-3.0%
  
             14,042
  
             14,834
  
-5.3%
  
     
- Industrial
  
              4,892
  
              5,038
  
-2.9%
  
             18,742
  
            22,232
  
-15.7%
  
     
- Other
  
                    90
  
                    93
  
-3.2%
  
                   351
  
                  370
  
-5.1%
  
     
Total Ohio
  
      12,537
  
      12,849
  
-2.4%
  
     49,942
  
      54,816
  
-8.9%
  
                               
 
Pennsylvania
- Residential
  
               2,917
  
              3,025
  
-3.6%
  
              11,553
  
              11,822
  
-2.3%
  
     
- Commercial
  
              2,688
  
              2,778
  
-3.2%
  
             10,954
  
              11,366
  
-3.6%
  
     
- Industrial
  
              2,232
  
               2,317
  
-3.7%
  
               8,712
  
             10,039
  
-13.2%
  
     
- Other
  
                    20
  
                     21
  
-4.8%
  
                     81
  
                    82
  
               -1.2%
  
     
Total Pennsylvania
  
       7,857
  
        8,141
  
-3.5%
  
      31,300
  
     33,309
  
-6.0%
  
                               
 
New Jersey
- Residential
  
              2,090
  
               2,144
  
-2.5%
  
               9,214
  
              9,667
  
-4.7%
  
     
- Commercial
  
              2,263
  
              2,363
  
-4.2%
  
              9,323
  
              9,707
  
-4.0%
  
     
- Industrial
  
                  593
  
                  640
  
-7.3%
  
              2,447
  
              2,773
  
-11.8%
  
     
- Other
  
                    22
  
                    22
  
                        -
  
                    87
  
                    88
  
                 -1.1%
  
     
Total New Jersey
  
       4,968
  
        5,169
  
-3.9%
  
      21,071
  
     22,235
  
-5.2%
  
                             
 
Total Residential
  
               9,215
  
              9,435
  
-2.3%
  
            37,574
  
            38,869
  
-3.3%
  
 
Total Commercial
  
              8,298
  
              8,593
  
-3.4%
  
             34,319
  
            35,907
  
-4.4%
  
 
Total Industrial
  
               7,717
  
              7,995
  
-3.5%
  
             29,901
  
            35,044
  
-14.7%
  
 
Total Other
    
                   132
  
                   136
  
-2.9%
  
                   519
  
                  540
  
-3.9%
  
 
Total Distribution Deliveries
  
     25,362
  
      26,159
  
-3.0%
  
    102,313
  
    110,360
  
-7.3%
  
 
Electric Sales Shopped
                          
 
Ohio
- Residential
  
               1,677
  
                   391
  
328.9%
  
               2,315
  
              2,007
  
15.3%
  
     
- Commercial
  
               1,857
  
                  602
  
208.5%
  
               2,581
  
               3,147
  
-18.0%
  
     
- Industrial
  
              2,546
  
                   491
  
418.5%
  
              3,793
  
              2,468
  
53.7%
  
     
Total Ohio
  
       6,080
  
        1,484
  
309.7%
  
       8,689
  
       7,622
  
14.0%
  
                                 
 
Pennsylvania
- Residential
  
                     51
  
                    37
  
37.8%
  
                   176
  
                   129
  
36.4%
  
     
- Commercial
  
                   196
  
                   193
  
1.6%
  
                   801
  
                   761
  
5.3%
  
     
- Industrial
  
                  469
  
                  459
  
2.2%
  
               1,688
  
              2,058
  
-18.0%
  
     
Total Pennsylvania
  
           716
  
          689
  
3.9%
  
       2,665
  
       2,948
  
-9.6%
  
                                 
 
New Jersey
- Commercial
  
                1,168
  
                   614
  
90.2%
  
               3,814
  
              2,464
  
54.8%
  
     
- Industrial
  
                  477
  
                  488
  
-2.3%
  
               1,908
  
               2,132
  
-10.5%
  
     
Total New Jersey
  
        1,645
  
        1,102
  
49.3%
  
       5,722
  
       4,596
  
24.5%
  
                                 
 
Total Electric Sales Shopped
  
        8,441
  
       3,275
  
157.7%
  
      17,076
  
      15,166
  
12.6%
  
 
Electric Generation Sales
                          
 
Retail - Regulated
  
              16,921
  
            22,884
  
-26.1%
  
            85,237
  
             95,194
  
-10.5%
  
 
Retail - Competitive
  
              6,209
  
               2,315
  
168.2%
  
             12,097
  
             10,938
  
10.6%
  
   
Total Retail
  
             23,130
  
             25,199
  
-8.2%
  
            97,334
  
           106,132
  
-8.3%
  
 
Wholesale
    
              4,588
  
               6,318
  
-27.4%
  
              21,126
  
            24,655
  
-14.3%
  
 
Total Electric Generation Sales
  
      27,718
  
      31,517
  
-12.1%
  
    118,460
  
    130,787
  
-9.4%
  
                                 
 
 
   
Operating Statistics
                            
             Three Months Ended Dec. 31        Twelve Months Ended Dec. 31      
           
2009
  
2008
      
2009
  
2008
      
   
Capacity Factors:
                            
     
Nuclear
    
81%
  
99%
      
84%
  
93%
      
     
Fossil - Baseload
  
65%
  
83%
      
72%
  
84%
      
     
Fossil - Load Following
30%
  
60%
      
31%
  
64%
      
   
Generation Output:
                          
     
Nuclear
    
46%
  
41%
      
45%
  
39%
      
     
Fossil - Baseload
  
41%
  
39%
      
43%
  
40%
      
     
Fossil - Load Following
13%
  
19%
      
12%
  
20%
      
     
Peaking
    
-
  
             1%
      
-
  
             1%
      
                                   
   
 
    
Three Months Ended Dec. 31
    
Twelve Months Ended Dec. 31
  
     Weather      
2009
  
2008
  
Normal
  
2009
  
2008
  
Normal
  
   
Composite Heating-Degree-Days
1,903
  
2,053
  
1,960
  
5,533
  
5,579
  
5,587
  
   
Composite Cooling-Degree-Days
2
  
5
  
13
  
736
  
887
  
900
  
                                   
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
14
 
 
 
 
 
 
FirstEnergy Corp.
Statistical Summary
 
 
Summary of Generation Sales and Power Purchases
 
 
Generation Sales
4Q 2009
4Q 2008
Change
(In thousands of MWH)
FES
3rd Party
Total
FES
3rd Party
Total
FES
3rd Party
Total
Retail Sales
                  
 
FES non-affiliated retail sales -
                  
 
     OH Franchise (shopping)
        4,363
  
        4,363
        1,431
  
        1,431
        2,932
  
        2,932
 
     Penn Power (shopping)
           449
  
           449
           383
  
           383
             66
  
             66
 
     Non-Franchise
        1,397
  
        1,397
           501
  
           501
           896
  
           896
 
Total FES retail sales
        6,209
  
        6,209
        2,315
  
        2,315
        3,894
  
        3,894
 
FES sales to affiliates -
                  
 
     Ohio Edison
        2,218
           872
        3,090
        5,106
                2
        5,108
      (2,888)
           870
      (2,018)
 
     CEI
        1,620
           598
        2,218
        4,098
                1
        4,099
      (2,478)
           597
      (1,881)
 
     Toledo Edison
           843
           306
        1,149
        2,161
                 -
        2,161
      (1,318)
           306
      (1,012)
 
          Subtotal - OH
        4,681
        1,776
        6,457
     11,365
                3
     11,368
      (6,684)
        1,773
      (4,911)
 
     Penn Power
                 -
           507
           507
           125
           405
           530
         (125)
           102
            (23)
 
     Penelec
        1,961
        1,373
        3,334
        1,567
        1,899
        3,466
           394
         (526)
         (132)
 
     Met-Ed
        1,922
        1,378
        3,300
        1,558
        1,897
        3,455
           364
         (519)
         (155)
 
          Subtotal - PA
        3,883
        3,258
        7,141
        3,250
        4,201
        7,451
           633
         (943)
         (310)
 
     JCPL
                 -
        3,323
        3,323
                 -
        4,065
        4,065
                 -
         (742)
         (742)
 
Total affiliated sales
        8,564
        8,357
     16,921
     14,615
        8,269
     22,884
      (6,051)
             88
      (5,963)
Total Retail Sales
     14,773
        8,357
     23,130
     16,930
        8,269
     25,199
      (2,157)
             88
      (2,069)
Wholesale Sales
                  
 
FES -
                  
 
     MISO
        2,019
  
        2,019
        2,746
  
        2,746
         (727)
  
         (727)
 
     PJM
           411
  
           411
        1,340
  
        1,340
         (929)
  
         (929)
 
Total FES
        2,430
  
        2,430
        4,086
  
        4,086
      (1,656)
  
      (1,656)
 
Met-Ed
  
           668
           668
  
           534
           534
  
           134
           134
 
Penelec
  
           870
           870
  
           765
           765
  
           105
           105
 
JCPL
  
           620
           620
  
           859
           859
  
         (239)
         (239)
 
Other
                 -
                 -
                 -
             74
                 -
             74
            (74)
                 -
            (74)
Total Wholesale Sales
        2,430
        2,159
        4,588
        4,160
        2,158
        6,318
      (1,730)
                 -
      (1,730)
 
Total Generation Sales
     17,203
     10,516
     27,718
     21,090
     10,427
     31,517
      (3,887)
             88
      (3,799)
 
 
Power Purchases
4Q 2009
4Q 2008
Change
(In thousands of MWH)
FES
3rd Party
Total
FES
3rd Party
Total
FES
3rd Party
Total
 
FES -
                  
 
     MISO
           104
  
           104
           349
  
           349
         (245)
  
         (245)
 
     PJM
        2,652
  
        2,652
        1,236
  
        1,236
        1,416
  
        1,416
 
Total FES
        2,756
  
        2,756
        1,585
  
        1,585
        1,171
  
        1,171
 
     Ohio Edison
  
           916
           916
  
                2
                2
  
           914
           914
 
     CEI
  
           628
           628
  
                1
                1
  
           627
           627
 
     Toledo Edison
  
           321
           321
  
                 -
                 -
  
           321
           321
 
          Subtotal - OH
  
        1,865
        1,865
  
                3
                3
  
        1,862
        1,862
 
     Penn Power
  
           545
           545
  
           426
           426
  
           119
           119
 
     Penelec
  
        2,221
        2,221
  
        2,758
        2,758
  
         (537)
         (537)
 
     Met-Ed
  
        2,018
        2,018
  
        2,526
        2,526
  
         (508)
         (508)
 
          Subtotal - PA
  
        4,784
        4,784
  
        5,710
        5,710
  
         (926)
         (926)
 
     JCPL
  
        4,215
        4,215
  
        5,227
        5,227
  
      (1,012)
      (1,012)
 
Total Power Purchases
        2,756
     10,864
     13,620
        1,585
     10,940
     12,525
        1,171
            (76)
        1,095
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
15
 
 
 
 
FirstEnergy Corp.
Statistical Summary
 
 
Summary of Generation Sales and Power Purchases
 
 
Generation Sales
Dec YTD 2009
Dec YTD 2008
Change
(In thousands of MWH)
FES
3rd Party
Total
FES
3rd Party
Total
FES
3rd Party
Total
Retail Sales
                  
 
FES non-affiliated retail sales -
                  
 
     OH Franchise (shopping)
        6,290
  
        6,290
        6,894
  
        6,894
         (604)
  
         (604)
 
     Penn Power (shopping)
        1,650
  
        1,650
        1,769
  
        1,769
         (119)
  
         (119)
 
     Non-Franchise
        4,157
  
        4,157
        2,275
  
        2,275
        1,882
  
        1,882
 
Total FES retail sales
     12,097
  
     12,097
     10,938
  
     10,938
        1,159
  
        1,159
 
FES sales to affiliates -
                  
 
     Ohio Edison
     13,883
        5,138
     19,021
     21,016
             10
     21,026
      (7,133)
        5,128
      (2,005)
 
     CEI
     10,579
        3,853
     14,432
     17,155
                3
     17,158
      (6,576)
        3,850
      (2,726)
 
     Toledo Edison
        5,742
        2,058
        7,800
        9,001
                6
        9,007
      (3,259)
        2,052
      (1,207)
 
          Subtotal - OH
     30,204
     11,049
     41,253
     47,172
             19
     47,191
    (16,968)
     11,030
      (5,938)
 
     Penn Power
           225
        1,838
        2,063
           821
        1,394
        2,215
         (596)
           444
         (152)
 
     Penelec
        7,601
        5,489
     13,090
        6,353
        7,555
     13,908
        1,248
      (2,066)
         (818)
 
     Met-Ed
        8,014
        5,467
     13,481
        6,697
        7,543
     14,240
        1,317
      (2,076)
         (759)
 
          Subtotal - PA
     15,840
     12,794
     28,634
     13,871
     16,492
     30,363
        1,969
      (3,698)
      (1,729)
 
     JCPL
                 -
     15,350
     15,350
                 -
     17,640
     17,640
                 -
      (2,290)
      (2,290)
 
Total affiliated sales
     46,044
     39,193
     85,237
     61,043
     34,151
     95,194
    (14,999)
        5,042
      (9,957)
Total Retail Sales
     58,141
     39,193
     97,334
     71,981
     34,151
   106,132
    (13,840)
        5,042
      (8,798)
Wholesale Sales
                  
 
FES -
                  
 
     MISO
     10,622
  
     10,622
        9,793
  
        9,793
           829
  
           829
 
     PJM
        1,955
  
        1,955
        4,814
  
        4,814
      (2,859)
  
      (2,859)
 
Total FES
     12,577
  
     12,577
     14,607
  
     14,607
      (2,030)
  
      (2,030)
 
Met-Ed
  
        2,291
        2,291
  
        2,290
        2,290
  
                1
              1
 
Penelec
  
        3,174
        3,174
  
        3,026
        3,026
  
           148
           148
 
JCPL
  
        3,083
        3,083
  
        4,287
        4,287
  
      (1,204)
      (1,204)
 
Other
                1
                 -
                1
           445
                 -
           445
         (444)
                 -
         (444)
Total Wholesale Sales
     12,578
        8,549
     21,126
     15,052
        9,603
     24,655
      (2,474)
      (1,055)
      (3,529)
 
Total Generation Sales
     70,719
     47,742
   118,460
     87,033
     43,754
   130,787
    (16,314)
        3,987
    (12,327)
 
 
Power Purchases
Dec YTD 2009
Dec YTD 2008
Change
(In thousands of MWH)
FES
3rd Party
Total
FES
3rd Party
Total
FES
3rd Party
Total
 
FES -
                  
 
     MISO
        1,511
  
        1,511
        4,347
  
        4,347
      (2,836)
  
      (2,836)
 
     PJM
        7,432
  
        7,432
        5,624
  
        5,624
        1,808
  
        1,808
 
Total FES
        8,943
  
        8,943
        9,971
  
        9,971
      (1,028)
  
      (1,028)
 
     Ohio Edison
  
        5,396
        5,396
  
             11
             11
  
        5,385
        5,385
 
     CEI
  
        4,046
        4,046
  
                3
                3
  
        4,043
        4,043
 
     Toledo Edison
  
        2,161
        2,161
  
                6
                6
  
        2,155
        2,155
 
          Subtotal - OH
  
     11,603
     11,603
  
             20
             20
  
     11,583
     11,583
 
     Penn Power
  
        1,943
        1,943
  
        1,464
        1,464
  
           479
           479
 
     Penelec
  
        8,792
        8,792
  
     10,960
     10,960
  
      (2,168)
      (2,168)
 
     Met-Ed
  
        7,906
        7,906
  
     10,211
     10,211
  
      (2,305)
      (2,305)
 
          Subtotal - PA
  
     18,641
     18,641
  
     22,635
     22,635
  
      (3,994)
      (3,994)
 
     JCPL
  
     19,572
     19,572
  
     23,315
     23,315
  
      (3,743)
      (3,743)
 
Total Power Purchases
        8,943
     49,816
     58,759
        9,971
     45,970
     55,941
      (1,028)
        3,846
        2,818
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
16
 
 
 
 
 
FirstEnergy Corp.
Special Items, EPS Reconciliations and Liquidity
 (In millions, except for per share amounts)
 
  Special Items  
         
Three Months Ended Dec. 31
    
Twelve Months Ended Dec. 31
    
         
2009
      
2008
    
2009
    
2008
    
   
Pre-tax Items - Income Increase (Decrease)
                            
   
Regulatory charges (a)
   $ -       $ -     $ (263 )   $ -    
   
Trust securities impairment (b)
     (23 )       (60 )     (45 )     (123 )  
   
Organizational restructuring/strike costs (c)
     1         -       (67 )     -    
   
Non-core assets sales/impairments (d)
     1         -       255       32    
   
Litigation settlement (d)
     -         -       -       15    
   
Debt call premium/hedge write-off (e)
     (4 )       -       (146 )     -    
   
Derivative mark-to-market adjustment (f)
     (205 )       -       (205 )     -    
     
Total-Pretax Items
   $ (230 )     $ (60 )   $ (471 )   $ (76 )  
   
Income tax resolution
   $ 148       $ -     $ 161     $ -    
   
EPS Effect
   $ 0.01       $ (0.12 )   $ (0.46 )   $ (0.16 )  
   
(a)
For the year, $216 million included in "Amortization
 
(d)
  
Included in "Revenues-Other"
          
      of regulatory assets"; $10 million included in        
(e)
  
Included in "Interest expense"
          
      "Purchased power"; $37 million included in "Other        
(f)
  
Included in "Purchased power"
          
      operating expenses"                                    
   
(b)
Included in "Investment income"
                                    
   
(c)
For the year, $65 million included in "Other operating
           
      expenses"; $2 million included in "General taxes"                                    
 
 
               
 
2009 Earnings Per Share (EPS)
  
 
(Reconciliation of GAAP to Non-GAAP)
  
     
     
ACTUAL 
Three Months
Ended Dec. 31
    
ACTUAL 
Twelve Months
Ended Dec. 31
  
               
 
Basic EPS (GAAP basis)
   $ 0.78     $ 3.31  
 
Excluding Special Items:
                
 
Regulatory charges
     -       0.55  
 
Trust securities impairment
     0.05       0.09  
 
Organizational restructuring/strike costs
     -       0.14  
 
Debt redemption premiums
     0.01       0.31  
 
Income tax resolution
     (0.49 )     (0.53 )
 
Non-core assets sales/impairments
     -       (0.52 )
 
Derivative mark-to-market adjustment
     0.42       0.42  
 
Basic EPS (Non-GAAP basis)
   $ 0.77     $ 3.77  
                   
 
 
Liquidity position as of January 31, 2010
          
             
 
Company
Type
Maturity
Amount (M)
Available (M)
  
 
  FirstEnergy(1)
Revolving
Aug. 2012
$2,750
$1,387
  
 
  FirstEnergy Solutions
Bank Line
Mar. 2011
100
-
  
 
  OH & PA Utilities
Receivables Financing
Various(2)
515
308
  
 
  (1) FirstEnergy Corp. and subsidiary borrowers
Subtotal:
$3,365
$1,695
  
 
  (2) $370M matures February 22, 2010; $145M matures December 17, 2010
Cash:
-
764
  
     
Total:
$3,365
$2,459
  
             
 
 
 
 
 
 
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
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Recent Developments
 
 
Financial Matters 

Financing Activities

On November 30, 2009, Penelec redeemed $35 million of 7.77% medium term notes, Series E, due August 1, 2010.
 
On December 1, 2009, FirstEnergy Generation Corp. (FGCO) extended a $98.9 million pollution control revenue bond (PCRB) letter of credit (LOC) while FirstEnergy Nuclear Generation Corp. (NGC) replaced a $28.5 million PCRB LOC, both with a termination date of 2012.
 
On December 15, 2009, American Transmission Systems, Incorporated (ATSI) issued $400 million of unsecured senior notes at 5.25% maturing in 2022. Proceeds were used to repay outstanding associated company notes of approximately $231 million and for construction expenditures.
 
On December 23, 2009, Bay Shore Power Company defeased $114.7 million of tax-exempt bonds series A and B, due September 1, 2020, through an early redemption.
 


Regulatory Matters 

Ohio Regulatory Update
 
Energy Efficiency
 
On December 10, 2009, rules went into effect setting out the manner in which electric utilities, including the Ohio Companies (OE, CEI and TE) will be required to comply with benchmarks contained in Senate Bill 221 (SB221) related to the employment of alternative energy resources, energy efficiency/peak demand reduction programs, as well as, greenhouse gas reporting and carbon dioxide control planning requirements and changes to long term forecast reporting requirements. The rules severely restrict the types of renewable energy resources, energy efficiency and peak reduction programs that may be included toward meeting the statutory goals, which is expected to significantly increase the cost of compliance for the Ohio Companies' customers. As a result of the rules going into effect in December 2009, and the Public Utilities Commission of Ohio’s (PUCO) failure to address certain energy efficiency applications submitted by the Ohio Companies throughout the year and the PUCO’s directive to postpone the launch of a Commission-approved energy efficiency program, the Ohio Companies, on October 27, 2009, submitted an application to reset their 2009 statutory energy efficiency benchmarks to zero. A waiver for the energy efficiency requirements was granted on January 7, 2010.
 
 
On December 15, 2009, the Ohio Companies filed three-year plans with the PUCO to offer energy efficiency programs to their customers. The filing outlined specific programs intended to help homeowners and businesses achieve greater energy efficiency and reduce peak energy use. The programs include: appliance turn-in, comprehensive home energy audits, compact fluorescent light bulbs, energy efficient products, direct load control thermostats, an efficient new homes program, and commercial and industrial efficiency improvements.
 
 
 
Renewable Energy Credits
In August and October 2009, the Ohio Companies conducted requests for proposals (RFPs) to secure Renewable Energy Credits (RECs). The RFPs included solar and other RECs, including those generated in Ohio. The RECs, which were successfully secured from these RFPs, will be used to help meet the renewable energy requirements established under SB221 for 2009, 2010 and 2011.  On December 7, 2009, the Ohio Companies filed an application with the PUCO seeking a force majeure determination regarding the Ohio Companies’ compliance
 
 
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with the 2009 solar energy resources benchmark, and seeking a reduction in the benchmark.  The PUCO has not yet ruled on that application.

Market Rate Offer
On October 20, 2009, the Ohio Companies filed a market rate offer (MRO) to procure electric generation service for the period beginning June 1, 2011. The proposed MRO would establish a competitive bid process (CBP) to secure generation supply for customers who do not shop with an alternative supplier and would be similar, in all material respects, to the CBP conducted in May 2009 in that it would procure energy, capacity and certain transmission services on a slice of system basis. Enhancements to the May 2009 CBP include multiple bidding sessions and multiple products with different delivery periods for generation supply, features which are designed to reduce potential price volatility, reduce supplier risk and encourage bidder participation. A technical conference was held on October 29, 2009, and the PUCO conducted hearings in the case on December 15-18 and 21-23. Hearing briefs were filed on January 8, 2010 and reply briefs were filed on January 15, 2010.

Pennsylvania Regulatory Update
 
Smart Meter Plan
On August 14, 2009, Pennsylvania Power Company (Penn), Met-Ed and Penelec (the Pennsylvania Companies) filed a Smart Meter Technology Procurement and Installation Plan with the Pennsylvania Public Utility Commission (PPUC) as required by Act 129. The plan included proposed tariff riders to recover the costs of implementation of the plan and an assessment period of twenty-four months to evaluate needs, select technology, secure vendors, train personnel, install and support test equipment and establish a detailed meter deployment schedule consistent with the requirements of Act 129. At the end of the assessment period, the Pennsylvania Companies proposed to submit to the PPUC a supplement to the plan to set forth in detail their proposal for the full scale deployment of smart meters. The Pennsylvania Companies requested that the PPUC approve, as part of the plan, both the proposed recovery mechanism and the recovery of costs expected during the assessment period, currently estimated to be $29.5 million, through such mechanism. On November 9 and November 16, 2009, rebuttal and surrebuttal testimony was filed at the PPUC. In addition, main briefs were filed on December 11, 2009, and reply briefs were filed on December 31, 2009. The Administrative Law Judge’s (ALJ) initial decision was issued on January 28, 2010.  The Pennsylvania Companies expect the PPUC to act on the plan in early 2010.

Energy Efficiency
On October 28, 2009, the PPUC issued an order approving the Pennsylvania Companies’ energy efficiency and conservation plans with modifications.  On December 2, 2009, the modified plans along with tariff revisions were filed with the PPUC, and corrections to that filing were submitted on December 23, 2009, and January 15, 2010.  The PPUC issued an order approving the modified plans with further revisions on January 28, 2010.  The Pennsylvania Companies filed final plans and tariff revisions on February 5, 2010, consistent with the minor revisions required by the PPUC.  The Commission is required to approve or reject the plans within 60 days.

Met-Ed and Penelec Transmission Service Charge (TSC)
On May 22, 2008, the PPUC approved the Met-Ed and Penelec annual updates to the TSC rider for the period June 1, 2008, through May 31, 2009. The TSCs included a component for under-recovery of actual transmission costs incurred during the prior period (Met-Ed - $144 million and Penelec - $4 million) and transmission cost projections for June 2008 through May 2009 (Met-Ed - $258 million and Penelec - $92 million). Met-Ed received PPUC approval for a transition approach that would recover past under-recovered costs plus carrying charges through the new TSC over thirty-one months and defer a portion of the projected costs ($92 million) plus carrying charges for recovery through future TSCs by December 31, 2010. Various intervenors filed complaints against those filings. In addition, the PPUC ordered an investigation to review the reasonableness of Met-Ed’s TSC, while at the same time allowing Met-Ed to implement the rider on June 1, 2008, subject to refund. On July 15, 2008, the PPUC directed the ALJ to consolidate the complaints against Met-Ed with its investigation and a litigation schedule was adopted. Hearings and briefing for both Met-Ed and Penelec have concluded. On August 11, 2009, the ALJ issued a Recommended Decision to the PPUC approving Met-Ed’s and Penelec’s TSCs as filed and dismissing all complaints. Exceptions by various interveners were filed and reply exceptions were filed by Met-Ed and Penelec.  On January 28, 2010, the PPUC adopted a motion which denies the recovery of marginal
 
Consolidated Report to the Financial Community - 4th Quarter 2009
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transmission losses through the TSC for the period of June 1, 2007 through March 31, 2008, and instructs Met-Ed and Penelec to work with the parties and file a petition to retain any over-collection, with interest, until 2011 for the purpose of providing mitigation of future rate increases starting in 2011 for their customers.  The Companies are now awaiting an order, which is expected to be consistent with the motion.  If so, the Companies plan to appeal such a decision to the Commonwealth Court of Pennsylvania and believe that the Companies should prevail. The Pennsylvania Companies are expecting to recover approximately $170.5 million ($138.7 million for Met-Ed and $31.8 million for Penelec) in marginal transmission losses for the period prior to January 1, 2011.

Met-Ed and Penelec Default Service Plan
On November 6, 2009, the PPUC issued a final order approving a unanimous settlement and adopting the position of Met-Ed and Penelec on the two reserved issues regarding their default service plan. The order was consistent with the ALJ’s recommended decision. The first procurement for Met-Ed and Penelec default service for power flow beginning January 2011 was conducted on January 19, 2010.

Pennsylvania Power Default Service Plan
On February 8, 2010, Penn filed a plan with the PPUC for securing the power supply for default service customers beginning June 2011 for a two-year period.  A PPUC order is expected in the fourth quarter of 2010.

New Jersey Regulatory Update
 
Solar Renewable Energy Credits
The New Jersey Board of Public Utilities (NJBPU) approved Jersey Central Power & Light Company’s (JCP&L) proposal to help increase the pace of solar energy project development in the state by establishing long-term agreements to purchase and sell Solar Renewable Energy Credits (SREC). The SREC provide a stable basis for financing solar generation projects. A total of 42 megawatts (MW) of solar generating capacity will be solicited for JCP&L to help meet New Jersey Renewable Portfolio Standards. The first solicitation was conducted in August 2009 and subsequent solicitations will occur over the next three years.  The costs of this program are expected to be fully recoverable through a per KWH rate approved by the NJBPU and applied to all customers. Bidder sessions were held on December 18, 2009 and January 13, 2009.  An RFP is expected to be issued in the first quarter of 2010.
 

 
Operational Matters 

Nuclear Outage
On November 27, 2009, Beaver Valley Unit 2 returned to service following a scheduled refueling and maintenance outage that began on October 12, 2009.  Beaver Valley Unit 2 had operated safely and reliably for 350 consecutive days before shutting down for the refueling and achieved a 99.8 percent capability factor in 2009. During the outage, 60 of the 157 fuel assemblies were exchanged and safety inspections were conducted.

Beaver Valley Power Station License Renewal
On November 5, 2009, FirstEnergy Nuclear Operating Company (FENOC) announced that the Nuclear Regulatory Commission (NRC) approved a 20-year license extension for the Beaver Valley Power Station Unit 1 and Unit 2 until 2036 and 2047, respectively.  The Beaver Valley Power Station is located in Shippingport, Pennsylvania and is capable of generating 1,815 MW.


Norton Energy Storage Project
On November 23, 2009, FGCO announced that it purchased the rights to develop a compressed-air electric generating plant on a 92-acre site in Norton, Ohio, from CAES Development Company, LLC. The transaction includes rights to a 600-acre underground cavern, formerly operated as a limestone mine, which the company believes is also suitable for energy storage technology. With 9.6 million cubic meters of storage, the Norton Energy Storage Project has the potential to be expanded to up to 2,700 MW of capacity. The Norton Energy
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
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Storage Project, when developed, will be part of FirstEnergy's overall environmental strategy, which includes continued investment in renewable and low-emitting energy resources.

Sumpter Plant Sale
On December 17, 2009, FirstEnergy announced that its FGCO subsidiary reached an agreement in principle to sell its 340 MW Sumpter Plant in Sumpter, Michigan, to Wolverine Power Supply Cooperative, Inc., for an undisclosed amount. The plant, built in 2002 by FGCO, consists of four 85 MW natural gas combustion turbines.  The sale is expected to close in the first quarter of 2010.

Labor Agreements
On December 7, 2009, FirstEnergy announced that employees of its FGCO subsidiary represented by the International Brotherhood of Electrical Workers (IBEW) Local 272 voted to ratify a thirty-nine month labor agreement that runs through February of 2013. IBEW Local 272 represents 374 of 513 employees at the Bruce Mansfield Plant in Shippingport, Pennsylvania.

PJM Regional Transmission Organization (RTO) Integration
In August 2009, FirstEnergy filed an application with the Federal Energy Regulatory Commission (FERC) to consolidate its transmission assets and operations into PJM Interconnection L.L.C. (PJM). Currently the company's transmission assets and operations are divided between PJM and the Midwest Independent Transmission System Operator, Inc. (MISO). The consolidation would move the transmission assets that are part of ATSI and the generation assets of FES, which are located within the footprint of the Ohio Companies and Penn, into PJM.  On December 17, 2009, a FERC order approving the integration and outlining the terms required for the move was issued, and on December 18, 2009, ATSI announced that it signed an agreement to join PJM. Consolidation provides customers with the benefits of a more fully developed retail choice market, and FirstEnergy and its Utilities with the operating efficiencies of a single RTO, with one set of rules, procedures and protocols.  FirstEnergy expects to complete the integration of its operations into PJM by June 1, 2011.

FirstEnergy Solutions Offers Economic Support Program
In September 2009, FES introduced Powering Our Communities, an innovative program that offers economic support to communities in the Ohio Companies’ service areas. The program provides up-front economic support to Ohio residents and businesses that agree to purchase discounted electric generation supply from FES through governmental aggregation programs. The discounts are based on the generation price customers would be charged if they purchased electric generation service from their local electric utility. Eligible residential customers receive a six percent discount and small businesses receive up to a four percent discount for an additional six years.  As of December 31, 2009, FES signed agreements with more than 180 area communities.

On December 2, 2009, FES and the Northeast Ohio Public Energy Council (NOPEC) entered into an agreement making FES the generation supplier for customers in the 126 Northeast Ohio communities served by NOPEC. The agreement extends from January 1, 2011, through December 31, 2019. In addition, FES and Gexa Energy, NOPEC's former generation supplier, have entered into an agreement making FES the supplier for NOPEC communities in 2010.


Legacy Contracts
During 2008, FES entered into purchased power contracts representing approximately 4.4 million MWH per year for MISO delivery in 2010 and 2011.  These contracts were intended to cover potential short positions that would have resulted if an Electric Security Plan (ESP) was established in Ohio in 2009 that would have obligated FES to serve 100% of the Ohio utilities’ load.  That obligation did not materialize, making the contracts unnecessary.  On December 31, 2009, these contracts were marked to market, reducing 2009 GAAP earnings by $129 million.  This represents $68 million attributable to 2010 power deliveries and $61 million for 2011 deliveries. These contracts were the last of the restructuring obligations in FirstEnergy’s transition to competitive generation markets.
 
 
Consolidated Report to the Financial Community - 4th Quarter 2009
21

 
 

 

Met-Ed and Penelec Partial Requirements Agreement with FES
On November 3, 2009, FES, Met-Ed, Penelec and Waverly (Buyers) restated their partial requirements power purchase agreement for 2010. The Fourth Restated Partial Requirements Agreement continues to limit the amount of capacity resources required to be supplied by FES to 3,544 MW, but requires FES to supply essentially all of the energy requirements (estimated 29 million MWH) for the Buyers in 2010. Under the new agreement, the Buyers assigned 1,300 MW of existing energy purchases to FES to assist it in supplying the Buyers’ power supply requirements and managing congestion expenses. Prices for the power sold by FES were increased to $42.77 and $44.42 respectively for Met-Ed and Penelec. In addition, FES agreed to reimburse Met-Ed and Penelec for congestion expenses and marginal losses in excess of $208 million and $79 million, respectively, as billed by PJM in 2010 and associated with delivery of power by FES under the Fourth Restated Partial Requirements Agreement. The Fourth Restated Partial Requirements Agreement terminates at the end of 2010.









Consolidated Report to the Financial Community - 4th Quarter 2009
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Forward-looking Statements:  This Consolidated Report to the Financial Community  includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management’s intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry and legislative and regulatory changes affecting how generation rates will be determined following the expiration of existing rate plans in Pennsylvania, the impact of the Public Utilities Commission of Ohio’s regulatory process on the Ohio utility subsidiaries associated with the distribution rate case, business and regulatory impacts from American Transmission System, Incorporated’s  realignment into PJM Interconnection L.L.C., economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices and availability, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of FirstEnergy’s regulated utilities to collect transition and other charges or to recover increased transmission costs, operating and maintenance costs being higher than anticipated, other legislative and regulatory changes, revised environmental requirements, including possible greenhouse gas emission regulations, the potential impacts of the U.S. Court of Appeals’ July 11, 2008 decision requiring revisions to the Clean Air Interstate Rules and the scope of any laws, rules or regulations that may ultimately take their place, the uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement FirstEnergy’s Air Quality Compliance Plan (including that such amounts could be higher than anticipated or that certain generating units may need to be shut down) or levels of emission reductions related to the Consent Decree resolving the New Source Review litigation or other similar potential regulatory initiatives or actions, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight) by the Nuclear Regulatory Commission, Met-Ed’s and Penelec’s transmission service charge filings with the PaPUC, the continuing availability of generating units and their ability to operate at or near full capacity, the ability to comply with applicable state and federal reliability standards, the ability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the ability to improve electric commodity margins and to experience growth in the distribution business, the changing market conditions that could affect the value of assets held in FirstEnergy’s nuclear decommissioning trusts, pension trusts and other trust funds, and cause it to make additional contributions sooner, or in an amount that is larger than currently anticipated, the ability to access the public securities and other capital and credit markets in accordance with FirstEnergy’s financing plan and the cost of such capital, changes in general economic conditions affecting the company, the state of the capital and credit markets affecting the company, interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy’s access to financing or its costs or increase its requirements to post additional collateral to support outstanding commodity positions, letters of credit and other financial guarantees, the continuing decline of the national and regional economy and its impact on the company’s major industrial and commercial customers, issues concerning the soundness of financial institutions and counterparties with which FirstEnergy does business, and the risks and other factors discussed from time to time in its SEC filings, and other similar factors.  The foregoing review of factors should not be construed as exhaustive.  New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy’s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.


 
 
 

 


Consolidated Report to the Financial Community - 4th Quarter 2009
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