Firstenergy Corp. · NYSE:FE
Firstenergy — Investor Presentation (February 2018)
28 slides from Firstenergy's investor presentation, Feb 20, 2018
Slide 1: 2018 – 2021 Financial Plan
Published February 20, 2018 2018 – 2021 Exhibit 99.3
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements: This presentation includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties and readers are cautioned not to place undue reliance on these forward-l
Slide 3: Non-GAAP Financial Matters
Non-GAAP Financial Matters Published February 20, 2018 3 This presentation contains references to non-GAAP financial measures including, among others, Operating earnings (losses). In addition, Basic Earnings (Loss) Per Share – Operating, calculated on a segment basis, and Regulated operating (non-GA
Slide 4: 2018 – 2021 Financial Summary
2018 – 2021 Financial Summary
Slide 5: 2018-2021 Financial Plan
2018-2021 Financial Plan ■ In January 2018, announced transformational $2.5B equity investment that supports the transition to a fully regulated utility company – Strengthens balance sheet and positions FE for sustained investment-grade credit metrics – Expected to satisfy equity needs through at le
Slide 6: Enhanced Focus on Regulated Growth Opportunities
Enhanced Focus on Regulated Growth Opportunities Published February 20, 2018 6 The scale and diversity of our regulated operations position FirstEnergy for sustained growth into the future Scale & Diversity 2018F-2021F 6-8% Regulated Operating EPS* CAGR (excl. DMR) 2018F-2021F Distribution Cap-ex: $
Slide 7: 2016-2017 Overview of EPS
Adjust 2017 actual to include full impact of dilution from $2.5B equity issuance in Jan. 2018 to provide apples- to-apples comparison between 2017 and 2018F 2017 Illustrative 2016-2017 Overview of EPS* Regulated Distribution + Regulated Transmission + Corp/Other Published February 20, 2018 7 $1.53 $
Slide 8: 2018 Regulated Operating EPS Guidance
Adjust 2017 actual to include full impact of dilution from $2.5B equity issuance in Jan. 2018 to provide apples-to-apples comparison between 2017 and 2018F 2017 Illustrative 8 2018 Regulated Operating EPS* Guidance (based on fully diluted shares) Regulated Distribution + Regulated Transmission + Cor
Slide 9: 2018-2021 Regulated Operating EPS Growth Target
9 2018F Guidance Midpoint (excluding Ohio DMR) 536M Fully Diluted Shares 2021F 545M Avg. Shares Outstanding Growth (excludes Ohio DMR) 2018-2021 Regulated Operating EPS* Growth Target (based on fully diluted shares) Regulated Distribution + Regulated Transmission + Corp/Other * Does not include Comp
Slide 10: Capital Expenditures Forecast Summary
$10B – $12B in capital investments 2018-2021 ~55% based on formula rates Capital Expenditures Forecast Summary Published February 20, 2018 10 Regulated Transmission (~80% formula rates) $1,000-$1,200 $1,000-$1,200 $1,000-$1,200 $1,000-$1,200 Stated Rate $270 $260 $200 $215 Formula Rate $730-$930 $74
Slide 11: Financing Plan (2018-2021)
Financing Plan (2018-2021) Regulated Transmission Year Entity Amount Purpose 2018F MAIT $450M New IssuanceATSI $200M New Issuance 2019F MAIT $150M New Issuance 2020F MAIT $225M New Issuance FET $150M New Issuance ATSI $175M New Issuance 2021F FET $300M New Issuance MAIT $125M New Issuance ATSI $100M
Slide 12: Pension/OPEB Overview
Pension/OPEB Overview Qualified Pension Plan ■ 2017 investment return of 16.1% ■ $1,250M cash contributions in Jan. 2018 ■ No required contributions through 2020 – Expect a required contribution of $80M in 2021 ■ Key assumptions – Expected return on assets: 7.50% – Discount rates at year-end: – 2017
Slide 13: Regulated Distribution Support
Regulated Distribution Support
Slide 14: 2018 Regulated Distribution Guidance Sensitivities
2018 Regulated Distribution Guidance Sensitivities Published February 20, 2018 14 Estimated Impact of Annual Retail Sales Volumes + / - 1% Change in Residential Deliveries ~$0.02/share + / - 1% Change in Commercial Deliveries ~$0.01/share + / - 1% Change in Industrial Deliveries ~$0.004/share Weathe
Slide 15: Regulated Distribution Capital Plan (2018-2021)
Regulated Distribution Capital Plan (2018-2021) $ Millions 2018F 2019F 2020F 2021F Ohio $345 - $365 $360 - $470 $370 – $490 $385 – $535 Stated 70 70 70 70 Formula 275 – 295 290 – 400 300 – 420 315 – 465 Pennsylvania $615 - $655 $530 - $565 $495 - $505 $485 - $490 Stated 395 420 430 420 Formula 220 –
Slide 16: Regulated Distribution Rate Base Growth (2018-2021)
Regulated Distribution Rate Base Growth (2018-2021) $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 2018F 2019F 2020F 2021F MD WV NJ PA OH $M 16Published February 20, 2018 Expected CAGR assumes capital expenditures at mid-point of range
Slide 17: Smart Meter Overview
Smart Meter Overview Other States MD: No current smart meter activity NJ: No current smart meter activity WV: No current smart meter activity OH: Grid Modernization Plan discussed on next slide 17 Pennsylvania 2013 – 2016Actual 2017 Actual 2018 Forecast 2019 Forecast 2020 Forecast 2021 Forecast Mete
Slide 18: Ohio Grid Modernization
Ohio Grid Modernization ■ Business plan filed in February 2016 with PUCO includes three scenarios that provide opportunity for significant investments over time: – Full AMI deployment – Different levels of DA/VVC deployment – Net benefits to customers ■ Filed in December 2017: addresses plans to red
Slide 19: Regulatory Summary
Regulatory Summary State Last Base Rate Change Examples of Riders Near Term / Future Activities Ohio 2009 Distribution Capital Recovery: annual cap increases of • $30M June 1, 2016 to May 31, 2019 • $20M June 1, 2019 to May 31, 2022 • $15M June 1, 2022 to May 31, 2024 Demand Side Management and Ener
Slide 20: Weather-Adjusted Distribution Deliveries
Weather-Adjusted Distribution Deliveries Commercial Industrial M MWH 2018F 2019F 2020F 2021F 2018F-2021F CAGR % Sub-Total 43.0 42.9 42.7 42.4 -0.5% OH 15.3 15.3 15.3 15.2 -0.2% PA 12.8 12.8 12.7 12.6 -0.5% WV 3.8 3.8 3.8 3.8 0.0% NJ 9.0 8.9 8.8 8.7 -1.1% MD 2.1 2.1 2.1 2.1 0.0% M MWH 2018F 2019F 202
Slide 21: Regulated Transmission Support
Regulated Transmission Support
Slide 22: Regulated Transmission Capital Deployment Plan
ATSI $1,495M - $1,905M | ~38% JCP&L Tx $565M | ~13% MAIT $1,425M - $1,815M | ~37% WPP, MP, PE $380M | ~9% TrAIL Co. $135M | ~3% 20B+ FUTURE OPPORTUNITIES beyond 2021… $ $4.0 - $4.8B $1,000 - $1,200M CapEx per year 2018-2021 Regulated Transmission Capital Deployment Plan 22Published February 20, 2018
Slide 23: Regulated Transmission Capital Plan (2018-2021)
Regulated Transmission Capital Plan (2018-2021) $ Millions 2018F 2019F 2020F 2021F WPP, MP, PE $115 $75 $95 $95 ATSI 330 – 425 380 - 490 390 - 490 395 - 500 TrAIL Co. 55 30 25 25 MAIT 345 - 450 330 – 420 385 - 485 365 - 460 JCP&L 155 185 105 120 Regulated Transmission – Total $1,000 - $1,200 $1,000
Slide 24: Regulated Transmission Rate Base Growth (2018-2021)
Regulated Transmission Rate Base Growth (2018-2021) Formula Rate Transmission Companies $0 $1,500 $3,000 $4,500 $6,000 $7,500 2018F 2019F 2020F 2021F TrAIL MAIT ATSI $M 24Published February 20, 2018 Expected CAGR assumes capital expenditures at mid-point of range
Slide 25: GAAP to Operating (Non-GAAP) Reconciliations and IR Contacts
GAAP to Operating (Non-GAAP) Reconciliations and IR Contacts
Slide 26: 2016A GAAP to Operating (Non-GAAP) Earnings Reconciliation
2016A GAAP to Operating (Non-GAAP) Earnings(1) Reconciliation Published February 20, 2018 26 2016 Actual (In $M, except per share amounts) FirstEnergy Consolidated Regulated Distribution Regulated Transmission Regulated Distribution and Transmission Subtotal Corporate/ Other Regulated Distribution,
Slide 27: 2017 Actual GAAP to Operating (Non-GAAP) Earnings Reconciliation
2017 Actual (In $M, except per share amounts) FirstEnergy Consolidated Regulated Distribution Regulated Transmission Regulated Distribution and Transmission Subtotal Corporate/ Other Regulated Distribution, Transmission and Corporate/Other Subtotal Competitive Energy Services Net Income (Loss) – GAA
Slide 28: FirstEnergy Investor Relations Contacts
FirstEnergy Investor Relations Contacts For our e-mail distribution list, please contact: Linda M. Nemeth, Executive Assistant to Vice President nemethl@FirstEnergyCorp.com 330-384-2509 Shareholder Inquiries: Irene M. Prezelj, Vice President prezelji@FirstEnergyCorp.com 330-384-3859 Shareholder Serv