SEC Company Response from FIRSTENERGY CORP (FE) (CIK 0001031296) (FE) — Dec 19, 2006
FIRSTENERGY CORP (FE) (CIK 0001031296)
Date: Dec. 19, 2006 · CIK: 0001031296 · Accession: 0001031296-06-000287
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-21011
Referenced dates: October 23, 2006
Letter
Division of Corporation Finance Securities and Exchange Commission Filed March 2, Forms 10-Q for Fiscal Quarters Ended March 31, 2006, June 30, 2006 and September 30, 2006 File No. 333-21011
Dear Mr. Allegretto:
This letter is in response to your further correspondence dated December 5, 2006 regarding your review of the filings by FirstEnergy Corp. on Form 10-K for the fiscal year ended December 31, 2005 (Form 10-K), and Forms 10-Q for the periods ended March 31, 2006, June 30, 2006 and September 30, 2006. Your additional comment is indicated below in italics, followed by our response.
Form 10-K for Fiscal Year Ended December 31, 2005
Exhibit
Management’s Discussion and Analysis of Results of Operations and Financial
Condition, page
Executive Summary, page 4
1.
We have reviewed your response to comment 1 in our letter dated October 23, 2006. Please be advised that using a non-GAAP measure requires substantive economic consequences such as allocating resources, determining compensation incentives or other management action that result in the use of cash or other assets based on the information conveyed by the non-GAAP measure. In this regard, please explain to us in greater detail how you use both “earnings before unusual items” and “cash earnings.” You may want to provide specific examples. In particular, we are interested to understand how you use such measures “as budgetary controls” and how “earnings before unusual items” “influences resource allocation issues.” Specifically tell us whether these measures are used in setting budgets or give us an example of how use of the measure affects resource allocation. Furthermore, we do not concur that disclosing the differences in the non-GAAP measure compensates for the limitation since removal of the non-GAAP statistic would accomplish the same result. You may want to revise your discussion or eliminate presenting non-GAAP measures.
Mr. Jim Allegretto
December 19,
Page
Furthermore, there is no proposed discussion of the "cash earnings" measure. Please note that Question 8 of our "Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures" applies to all non-GAAP performance measures that exclude any recurring items such as depreciation and amortization. As your non-GAAP performance measure "cash earnings" excludes recurring items, you should provide disclosure which fully discusses each bullet point of Question 8, regardless of whether the excluded items are identified as unusual or otherwise. Please show us how your revised disclosure will read in future filings.
Response: We continue to believe that we have historically complied with all applicable requirements for the presentation and use of non-GAAP financial measurres in our filings with the Commission. However, after careful consideration of the Staff's comments and upon further review of our continuing disclosure obligations, we have determined that FirstEnergy will not include non-GAAP measures in future Form 10-K and Form 10-Q filings with the Commission. We do intend to continue to use non-GAAP financial measures in future non-filed documents and will comply with all applicable requirements of Regulation G in that regard.
* * * *
FirstEnergy Corp. hereby acknowledges that:
·
FirstEnergy is responsible for the adequacy and accuracy of the disclosures relating to its annual report on Form 10-K for the year ended December 31, 2005 and its Forms 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006;
·
Staff comments or changes to disclosure in response to staff comments do not foreclose the Securities and Exchange Commission from taking any action with respect to the filing; and
·
FirstEnergy may not assert staff comments as a defense in any proceeding initiated by the Securities and Exchange Commission or any person under the federal securities laws of the United States.
Please feel free to call me (330-384-5296) or Jeffrey R. Kalata, Assistant Controller (330-374-6580) with any further questions you may have. I appreciate your assistance in ensuring our compliance with the Commission’s disclosure requirements.
Sincerely,
Harvey
L.
Wagner
Show Raw Text
CORRESP
1
filename1.htm
SEC Response Letter Dated 12-19-06
December
19,
2006
Mr.
Jim Allegretto
Senior
Assistant
Chief Accountant
Division
of
Corporation Finance
Securities
and
Exchange Commission
Mail
Stop
3561
100
F Street, N.E.
Washington,
D.C.
20549
Re:
FirstEnergy
Corp.
Form
10-K for
Fiscal Year Ended December 31, 2005
Filed
March 2,
2006
Forms
10-Q for
Fiscal Quarters Ended
March
31,
2006, June 30, 2006 and September 30, 2006
File
No.
333-21011
Dear
Mr.
Allegretto:
This
letter is in
response to your further correspondence dated December 5, 2006 regarding your
review of the filings by FirstEnergy Corp. on Form 10-K for the fiscal year
ended December 31, 2005 (Form 10-K), and Forms 10-Q for the periods ended
March 31, 2006, June 30, 2006 and September 30, 2006. Your additional
comment is indicated below in italics, followed by our response.
Form
10-K for
Fiscal Year Ended December 31, 2005
Exhibit
13
Management’s
Discussion and Analysis of Results of Operations and Financial
Condition,
page
4
Executive
Summary, page 4
1.
We
have
reviewed your response to comment 1 in our letter dated October 23,
2006.
Please be advised that using a non-GAAP measure requires substantive
economic consequences such as allocating resources, determining
compensation incentives or other management action that result in
the use
of cash or other assets based on the information conveyed by the
non-GAAP
measure. In this regard, please explain to us in greater detail how
you
use both “earnings before unusual items” and “cash earnings.” You may want
to provide specific examples. In particular, we are interested to
understand how you use such measures “as budgetary controls” and how
“earnings before unusual items” “influences resource allocation issues.”
Specifically tell us whether these measures are used in setting budgets
or
give us an example of how use of the measure affects resource allocation.
Furthermore, we do not concur that disclosing the differences in
the
non-GAAP measure compensates for the limitation since removal of
the
non-GAAP statistic would accomplish the same result. You may want
to
revise your discussion or eliminate presenting non-GAAP
measures.
Mr.
Jim
Allegretto
December
19,
2006
Page
2
Furthermore,
there is no proposed discussion of the "cash
earnings" measure. Please note that Question 8 of our
"Frequently Asked Questions Regarding the Use of Non-GAAP
Financial Measures" applies to all non-GAAP performance measures
that exclude any recurring items such as depreciation
and amortization. As your non-GAAP performance measure "cash earnings"
excludes recurring items, you should provide disclosure which fully
discusses each bullet point of Question 8, regardless of whether
the
excluded items are identified as unusual or otherwise. Please show
us how your revised disclosure will read in future
filings.
Response:
We continue to believe that we have historically complied
with
all applicable requirements for the presentation and use of non-GAAP
financial measurres in our filings with the Commission. However,
after careful consideration of the Staff's comments and upon further
review of our continuing disclosure obligations, we have determined
that
FirstEnergy will not include non-GAAP measures in future Form 10-K
and
Form 10-Q filings with the Commission. We do intend to continue to
use non-GAAP financial measures in future non-filed
documents and will comply with all applicable requirements
of
Regulation G in that regard.
*
* * *
FirstEnergy
Corp.
hereby acknowledges that:
·
FirstEnergy
is
responsible for the adequacy and accuracy of the disclosures relating
to
its annual report on Form 10-K for the year ended December 31, 2005
and
its Forms 10-Q for the quarters ended March 31, 2006, June 30, 2006
and
September 30, 2006;
·
Staff
comments
or changes to disclosure in response to staff comments do not foreclose
the Securities and Exchange Commission from taking any action with
respect
to the filing; and
·
FirstEnergy
may not assert staff comments as a defense in any proceeding initiated
by
the Securities and Exchange Commission or any person under the federal
securities laws of the United
States.
Please
feel free to
call me (330-384-5296) or Jeffrey R. Kalata, Assistant Controller (330-374-6580)
with any further questions you may have. I appreciate your assistance in
ensuring our compliance with the Commission’s disclosure
requirements.
Sincerely,
Harvey
L.
Wagner
Vice
President, Controller and
Chief
Accounting Officer
HLW:dlc
Attachment
cc:
Sarah
Goldberg
Staff
Accountant
Securities
and
Exchange Commission
Anthony
J.
Alexander
Richard
H.
Marsh
Leila
L.
Vespoli