Firstenergy Corp. · NYSE:FE
Firstenergy — Barclays CEO Power-Energy Conference 2015
16 slides from Firstenergy's conference presentation, Sep 10, 2015
Slide 1: Barclays CEO Power-Energy Conference
Barclays CEO Power-Energy Conference James F. Pearson Executive Vice President and Chief Financial Officer New York, NY • September 10, 2015
Slide 2: Forward-Looking Statement
2 Forward-Looking Statement This presentation 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 expectat
Slide 3: Non-GAAP Financial Matters
3 Non-GAAP Financial Matters This presentation contains references to non-GAAP financial measures including, among others, Operating earnings, Adjusted EBITDA, Adjusted Debt, Adjusted Capitalization, Funds from Operations (FFO) and Free Cash Flow. In addition, Basic EPS and Basic EPS- Operating, eac
Slide 4: Today's Agenda
4 Today’s Agenda ■ Company Overview ■ Executing 2015 Key Initiatives – Ohio ESP IV – PJM Capacity Market Reforms – Cash Flow Improvement Project ■ Setting the Stage for the Future September 10, 2015 Barclays CEO Power-Energy Conference
Slide 5: FirstEnergy Overview: Strength in Our Diversity and Scale
5 FirstEnergy Overview Strength in Our Diversity and Scale OH VA WV PA MD NJ MI IN IL Utilities ■ Approximately 6M customers ■ One of the largest contiguous service territories in the U.S. covering 65,000 square miles Transmission ■ One of the largest transmission systems in PJM ■ 24,000+ transmissi
Slide 6: Executing 2015 Key Initiatives
6 Executing 2015 Key Initiatives ■ Continue Ohio ESP IV regulatory process Creating value for shareholders through customer-focused regulated growth and risk mitigation Executing 2nd year of Energizing the Future program Formed MAIT – Seeking approval to transfer transmission assets of JCP&L, Met
Slide 7: Ohio ESP IV
7 Ohio ESP IV Barclays CEO Power-Energy Conference September 10, 2015 Davis-Besse 908 MW 740 Employees WH Sammis 2,220 MW 396 Employees Market Revenues Wholesale Sell Capacity, Energy and Ancillary Services into the Wholesale Market Capacity, Energy and Ancillary Services OVEC 116 MW 467 OH Employee
Slide 8: PJM Capacity Market Reforms: Update on Recent Auctions
8 PJM Capacity Market Reforms: Update on Recent Auctions ■ 16/17 Transitional Auction: – All available generation units cleared – 2016F CES Adjusted EBITDA increases to $950M to $1,050M ■ 17/18 Transitional Auction: – All available generation units cleared ■ 18/19 Base Residual Auction: – All major
Slide 9: Cash Flow Improvement Plan
9 Cash Flow Improvement Plan ■ Background – In May, announced targets of $50M in cash savings in 2015, $150M in 2016 and reaching a run-rate of $200M by 2017 – Over twelve-week timeframe, a team of senior executives led by Donny Schneider, President of FES, committed to identify projects leading to
Slide 10: Setting the Stage for the Future
10 Setting the Stage for the Future ■ Strong focus on customer-service driven regulated growth ■ Operational excellence across FirstEnergy – Utilities, transmission operations and generation fleet ■ Implement cash flow improvements – Expenses and capital expenditures ■ Solid financial performance –
Slide 11: Appendix
Appendix Barclays CEO Power-Energy Conference New York, NY • September 10, 2015
Slide 12: 2016F CES Adjusted EBITDA
12 2016F CES Adjusted EBITDA Closed Open Total M MWH Rate $M M MWH Rate $M M MWH Rate $M Sales: LCI/MCI/MM 14.6 $57 $830 14.6 $57 $830 GA & POLR 21.2 $63 $1,325 21.2 $63 $1,325 Structured & Muni 7.9 $44 $345 7.9 $44 $345 Wholesale 14.0 $37 $515 22.5 $36.70 $825 36.5 $36.75 $1,340 Other 2.6 2.6 Capac
Slide 13: 2016 CES Adjusted EBITDA Notes
13 2016 CES Adjusted EBITDA Notes ■ Sales: – Volume in all channels, with the exception of wholesale, is subject to fluctuations due to weather and customer behavior. – Portions of “Closed” GA revenues are not fixed as they are indexed to the utility price-to-compare (PTC). – When wholesale volumes
Slide 14: Competitive Operations Net Income (Loss) to Adjusted EBITDA Reconciliation
14 Competitive Operations Net Income (Loss) to Adjusted EBITDA* Reconciliation Barclays CEO Power-Energy Conference September 10, 2015 * Adjusted EBITDA represents GAAP net income adjusted for the special items listed on slide 15 and the addition of Income Taxes; Interest Expense, net; Depreciation,
Slide 15: Competitive Operations – Special Items
15 Competitive Operations – Special Items Barclays CEO Power-Energy Conference September 10, 2015 As of July 25, 2014 ($ Millions) 2014A 2015F 2016F Pre-tax items Trust Securities Impairment $33 $22 $ – Merger Accounting – Commodity Contracts 42 40 – 45 40 – 45 Non-Core Asset Sales/Impairments (122)
Slide 16: PJM Capacity Position
16 PJM Capacity Position ■ Legacy Obligation: – The MW reflect net commitments from the PJM Base Residual Auction, incremental auctions and bilateral transactions related to the previous PJM capacity construct – Units that were sold/transferred are excluded ■ CP Obligation: – The MW reflect results
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