FirstEnergy (FE) Q4 2012 earnings summary

Executive summary

• FY12 earnings available were $770M, or $1.85 basic EPS, versus $885M and $2.22 in 2011; lower competitive-segment results and weaker power markets weighed on performance.

• Q4 recorded a $148M net loss and $0.35 diluted loss per share; full-year results included substantial pension and OPEB mark-to-market charges.

Financial highlights

• FY12 revenue was $15.303B versus $16.147B; operating income rose to $2.176B from $1.698B, while net income declined to $771M from $869M.

• Q4 revenue was $3.500B, operating loss $34M, net loss $148M, and basic and diluted loss per share $0.35.

• Operating cash flow was $2.320B versus $3.063B; investing used $3.157B, while financing provided $807M in FY12.

• 2011 included a $569M pretax gain on the partial Signal Peak sale; 2011 also included $334M of pretax impairment tied to planned coal-plant deactivations.

Outlook and guidance

• FY13 distribution sales forecast: 148.5M MWh versus 146.6M in 2012; competitive generation output forecast: 93M MWh versus 92M.

• FY13 transmission revenue expected to decrease $35M, primarily from lower TRAIL rate base and reduced peak-load-based NITS revenue; competitive capacity revenue expected to decline $160M, primarily from auction results.

• FY13 O&M reductions targeted at $75M-$85M versus 2012; effective tax rate forecast at 38%-38.5%.

• FY13 capital expenditures forecast at $2.4B, excluding nuclear fuel; nuclear fuel investment expected at $205M.