Firstenergy Corp. · NYSE:FE
Firstenergy — EEI Financial Conference 2017
25 slides from Firstenergy's conference presentation, Nov 3, 2017
Slide 1: Unlocking the Value of the Regulated Businesses
FirstEnergy Unlocking the Value of the Regulated Businesses Charles E. Jones, President and CEO November 2017 EEI Financial Conference Lake Buena Vista, FL
Slide 2: Forward-Looking Statements
November 2017 Forward-Looking Statements EEI Financial Conference 2 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
Slide 3: Non-GAAP Financial Matters
Non-GAAP Financial Matters November 2017EEI Financial Conference 3 This presentation contains references to non-GAAP financial measures including Operating earnings (losses). In addition, Basic Earnings (Loss) Per Share - Operating, calculated on a segment basis, is also a non-GAAP financial measure
Slide 4: Agenda
Agenda ■ FirstEnergy Overview ■ Transition to a Regulated Utility ■ Regulated Businesses – Transmission – Distribution ■ Competitive Energy Services ■ Closing Remarks / Q&A November 2017EEI Financial Conference 4
Slide 5: FirstEnergy Overview
FirstEnergy Overview November 2017EEI Financial Conference 5 OH VA WV PA MD NJ MI INIL Jointly Owned Plant Regulated Plants Competitive Generating Plants 230, 345 and 500 kV Transmission Lines Competitive retail footprint Utility footprint OUR MISSION We are a forward-thinking electric utility power
Slide 6: FirstEnergy's Transition to a Regulated Model
FirstEnergy’s Transition to a Regulated Model November 2017EEI Financial Conference 6 Past 2011A Present 2016A Future Capacity Competitive | Regulated 22,810 MW 87% | 13% 16,952 MW 78% | 22% Regulated only CapEx ($M) CES Distribution Transmission $757 $1,127 $194 $550 $1,281 $1,001 – ~$1,300 per yea
Slide 7: Energizing the Future 2014 – 2017F
November 2017EEI Financial Conference 7 Energizing the Future 2014 – 2017F PROJECT FOCUSED Since EtF launched in 2014, we have completed more than 9,000 projects to repair or replace breakers, transformers, relays, transmission lines and other transmission components. EXPANDING WORKFORCE By 2020, we
Slide 8: Energizing the Future: Proven Sustainable Growth Delivering Long-Term Value
November 2017EEI Financial Conference 8 Energizing the Future Proven Sustainable Growth Delivering Long-Term Value Introduction/Theme • Thousands of miles of transmission lines connect generating plants to our homes and businesses, delivering the fuel that powers our lives and our economy. • First b
Slide 9: Energizing the Future: Focused Investments for Customer Reliability Improvement
Energizing the Future Focused Investments for Customer Reliability Improvement November 2017EEI Financial Conference 9 0.000 0.100 0.200 0.300 0.400 0.500 0.600 0.700 2012 2013 2014 2015 2016 T O F Transmission Outage Frequency Trend Realizing benefits by remaining focused on smaller-scale projects
Slide 10: Strong Platform for Future Transmission Growth
ATSI $1,160M - $1,960M | ~39% JCP&L Tx $510M | ~13% MAIT $1,040M - $1,840M | ~35% WPP, MP, PE $375M | ~10% TrAIL Co. $115M | ~3% Strong Platform for Future Transmission Growth Capital Plan 2018F-2021F November 2017EEI Financial Conference 10 20B+ FUTURE OPPORTUNITIES beyond 2021… $ $3.2 - $4.8B $800
Slide 11: Large Utility Footprint Providing Regulatory Diversity
Large Utility Footprint Providing Regulatory Diversity ■ Ohio ■ 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 ■ Ohio Distribution Modernization Rider (DMR) of $204M annually 2017-
Slide 12: The Scale of our Regulated Footprint Positions FirstEnergy for Sustained Growth
2016A Weather- Adjusted Operating EPS(1) 2019F Operating EPS Regulated Operating Earnings Growth The Scale of our Regulated Footprint Positions FirstEnergy for Sustained Growth November 2017EEI Financial Conference 12 Targeting 5% - 7% Compound Annual Growth Rate Incremental 3% with Ohio DMR $2.46 T
Slide 13: Competitive Energy Services: Progress Toward Becoming a Regulated Company
November 2017EEI Financial Conference 13 Competitive Energy Services Progress Toward Becoming a Regulated Company Parallel actions which may impact the value of Commodity Exposed Generation Strategic Review Announced Initial meetings between FES and FES creditor advisors Independent FES board member
Slide 14: Unlocking the Full Value of FirstEnergy for Investors
■ Committed to investment-grade credit ratings at all regulated entities and FE Corp. ■ $4.9B of available liquidity as of 9/30/17 ■ Expect at least $1.5B of equity through 2019 ■ 10 operating companies across 6 states ■ ~6M customers ■ Expected Rate Base CAGR of ~4%, 2016A-2019F Unlocking the Full
Slide 15: Appendix
November 2017EEI Financial Conference 15 Appendix
Slide 16: Regulated Transmission Capital Plan (2016A - 2021F)
Regulated Transmission Capital Plan (2016A - 2021F) November 2017EEI Financial Conference 16 $ Millions 2016A 2017F 2018F 2019F 2020F 2021F WPP, MP, PE $53 $90 $90 $95 $95 $95 ME, PN 55 - - - - - ATSI 487 420 270 - 470 290 - 490 300 - 500 300 - 500 TrAIL Co. 217 60 35 30 25 25 MAIT - 260 280 - 480 2
Slide 17: Regulated Transmission Rate Base Growth
Regulated Transmission Rate Base Growth Formula Rate Transmission Companies November 2017EEI Financial Conference 17 $M 2017F – 2021F assumes capital expenditures of ~$900M per year
Slide 18: Weather-Adjusted Distribution Deliveries
Weather-Adjusted Distribution Deliveries November 2017EEI Financial Conference 18 Residential Commercial Industrial M MWH 2016A 2017F 2018F 2019F 2016A-2019F CAGR % Sub-Total 43.1 42.9 43.0 42.9 -0.2% OH 15.4 15.1 15.3 15.3 -0.1% PA 13.0 12.9 12.8 12.8 -0.5% WV 3.7 3.7 3.8 3.8 1.0% NJ 9.0 9.0 9.0 8.
Slide 19: Guidance Sensitivities
Guidance Sensitivities November 2017EEI Financial Conference 19 Estimated Impact of Annual Retail Sales Volumes + / - 1% Change in Residential Deliveries ~$0.03/share + / - 1% Change in Commercial Deliveries ~$0.01/share + / - 1% Change in Industrial Deliveries ~$0.005/share Weather Impact on Reside
Slide 20: Ohio Grid Modernization: Incremental Opportunity
Ohio Grid Modernization: Incremental Opportunity ■ Business plan filed with PUCO in February 2016 and includes three scenarios that provide the opportunity for significant investments over time: – Full AMI deployment – Different levels of DA/VVC deployment – Net benefits to customers ■ Business plan
Slide 21: Regulated Distribution Capital Plan (2016A - 2017F)
Regulated Distribution Capital Plan (2016A - 2017F) November 2017EEI Financial Conference 21 $ Millions Stated Rate Formula Rate Total 2016A 2017F 2016A 2017F 2016A 2017F OH CEI $30 $30 $103 $95 $133 $125 OE 30 30 126 115 156 145 TE 10 10 34 35 44 45 Sub-total 70 70 263 245 333 315 NJ JCP&L 191 180
Slide 22: Regulated Distribution Rate Base Growth
Regulated Distribution Rate Base Growth November 2017EEI Financial Conference 22 $M
Slide 23: Earned vs. Allowed Distribution ROEs
Earned vs. Allowed Distribution ROEs OH: Significantly Excessive Earnings Test filed with 2016 ROE NJ: Base rate case update filed with 6/30/2016 ROE PA: PA PUC Bureau of the Technical Utility Services Report filed with 6/30/2017 ROE WV: Quarterly reports filed with 2016 ROE MD: Quarterly reports fi
Slide 24: 2016A GAAP to Operating (Non-GAAP) Earnings Reconciliation
November 2017EEI Financial Conference 24 2016A GAAP to Operating (Non-GAAP) Earnings1 Reconciliation (In millions, except per share amounts) Per share amounts for the special items and earnings drivers above and throughout these materials are based on the after-tax effect of each item divided by the
Slide 25: 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