EXHIBIT 99.1
FirstEnergy Corp. For Release: May 7, 2004
76 South Main Street
Akron, Ohio 44308
www.firstenergycorp.com
News Media Contact: Investor Contact:
Kristen Baird Kurt Turosky
(330) 761-4261 (330) 384-5500
FIRSTENERGY REPORTS FIRST QUARTER EARNINGS
FirstEnergy Corp. (NYSE: FE) today reported that first quarter 2004
earnings on a non-GAAP(*) basis were $212.3 million, or basic and diluted
earnings per share of common stock of $0.65. These results exclude incremental
replacement power and operating and maintenance expenses associated with the
extended outage at the Davis-Besse Nuclear Power Station, which returned to
service last month. Including Davis-Besse costs, earnings on a GAAP basis were
$174.0 million, or basic and diluted earnings of $0.53 per share.
That compares with first quarter 2003 earnings on a non-GAAP basis of
$166.6 million, or basic and diluted earnings per share of $0.57, before
incremental Davis-Besse costs, discontinued operations and the cumulative effect
of an accounting change resulting from the adoption of a new accounting standard
for asset retirement obligations. Including those items, 2003 first quarter net
income was $218.5 million, or basic and diluted earnings of $0.74 per share, on
a GAAP basis.
First Quarter 2004 Non-GAAP Earnings Reconciliation - After-Tax Amounts
Basic
Amount in Millions Earnings Per Share
------------------ ------------------
Earnings Before Davis-Besse Impact $212.3 $0.65
Davis-Besse Impact (38.3) (0.12)
------ -----
Net Income $174.0 $0.53
First Quarter 2003 Non-GAAP Earnings Reconciliation - After-Tax Amounts
Basic
Amount in Millions Earnings Per Share
------------------ ------------------
Earnings Before Davis-Besse
Impact, Cumulative Effect of
Accounting Change and
Discontinued Operations $166.6 $0.57
Davis-Besse Impact (52.2) (0.18)
Discontinued Operations 2.0 -----
Cumulative Effect of
Accounting Change 102.1 0.35
------ -----
Net Income $218.5 $0.74
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"Our strong first quarter results reflect the success from ongoing
initiatives to enhance our operational and financial performance," said
President and Chief Executive Officer Anthony J. Alexander. "With the restart of
Davis-Besse behind us, and what we believe to be a strong case for the approval
of our Ohio Rate Stabilization Plan, we're better positioned to achieve
continued success in 2004 and in the years ahead."
FirstEnergy's improved non-GAAP earnings included higher sales margins from
a four-percent increase in total generation sales, principally from wholesale
transactions, and a decline in financing costs resulting from the company's
ongoing debt reduction and refinancing activities.
GAAP results for the first quarter of 2004 included Davis-Besse replacement
power costs, which totaled $64 million for the quarter, and the negative impact
of last year's decision in the Jersey Central Power & Light (JCP&L) rate case.
Total revenues for the first quarter of 2004 were $3.18 billion, compared
with $3.22 billion in the year-earlier quarter. The slight decline in revenues
reflects increased shopping for alternative suppliers by customers of
FirstEnergy's Ohio electric companies, milder weather, and the impact of the
JCP&L rate decision.
FirstEnergy continued making progress in its effort to improve its
financial flexibility through debt reduction and refinancings, which reduced
interest charges by $34 million, compared with the first quarter of 2003.
Financing activities during the quarter, including $256 million in refinancings
and repricings, will produce annualized savings of $6 million.
FirstEnergy's Consolidated Report to the Financial Community - which
provides highlights on company developments and financial results for the first
quarter of 2004 - is posted on the company's Internet site -
www.firstenergycorp.com/ir. To access the report, click on Consolidated Report
to the Financial Community.
FirstEnergy is a registered public utility holding company headquartered in
Akron, Ohio. Its subsidiaries and affiliates are involved in the generation,
transmission and distribution of electricity; exploration and production of oil
and natural gas; transmission and marketing of natural gas; and energy
management and other energy-related services.
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(*) This news release contains non-GAAP financial measures. Generally, a
non-GAAP financial measure is a numerical measure of a company's historical or
future financial performance, financial position, or cash flows that either
excludes or includes amounts that are not normally excluded or included in the
most directly comparable measure calculated and presented in accordance with
accounting principles generally accepted in the United States.
Forward-Looking Statements: This news release includes forward-looking
statements based on information currently available to management. Such
statements are subject to certain risks and uncertainties. These statements
typically contain, but are not limited to, the terms "anticipate", "potential",
"expect", "believe", "estimate" and similar words. Actual results may differ
materially due to the speed and nature of increased competition and deregulation
in the electric utility industry, economic or weather conditions affecting
future sales and margins, changes in markets for energy services, changing
energy and commodity market prices, replacement power costs being higher than
anticipated or inadequately hedged, maintenance costs being higher than
anticipated, legislative and regulatory changes (including revised environmental
requirements), adverse regulatory or legal decisions and the outcome of
governmental investigations (including revocation of necessary licenses or
operating permits), availability and cost of capital, the continuing
availability and operation of generating units, the inability to accomplish or
realize anticipated benefits of strategic goals, the ability to improve electric
commodity margins and to experience growth in the distribution business, the
ability to access the public securities markets, further investigation into the
causes of the August 14, 2003, regional power outage and the outcome, cost and
other effects of present and potential legal and administrative proceedings and
claims related to that outage, a denial of or material change to the Company's
Application related to its Rate Stabilization Plan, the risks and other factors
discussed from time to time in FirstEnergy's Securities and Exchange Commission
filings, including its annual report on Form 10-K for the year ended December
31, 2003 and other similar factors. FirstEnergy expressly disclaims any current
intention to update any forward-looking statements contained in this document as
a result of new information, future events, or otherwise.
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