Firstenergy Corp. · NYSE:FE
Firstenergy — Q3 2019 Earnings Presentation
22 slides from Firstenergy's earnings presentation, Nov 4, 2019
Slide 1: 3Q 2019 Strategic & Financial Highlights
Exhibit 99.2 3Q 2019 Strategic & Financial Highlights Charles E. Jones, President and CEO Steven E. Strah, SVP and CFO November 4, 2019
Slide 2: Non-GAAP Financial Matters
Non-GAAP Financial Matters This presentation contains references to non-GAAP financial measures including, among others, Operating earnings (loss), Operating earnings (loss) per share and Operating earnings (loss) per share by segment. Generally, a non-GAAP financial measure is a numerical measure o
Slide 3: 2019 Financial Summary
2019 Financial Summary 3Q 2019 Results ■ Reported GAAP earnings of $0.73 per basic share ($0.72 diluted) ■ Reported Operating (non-GAAP) earnings of $0.76 per share* – Exceeded the midpoint of 3Q earnings guidance range of $0.68 - $0.80 – Absence of the Ohio DMR fully offset by favorable weather-rel
Slide 4: 2020 & CAGR Guidance
2020 & CAGR Guidance 2020 Earnings Guidance ■ Initiating 2020 Operating (non-GAAP) earnings guidance of $2.40 - $2.60 per share* – Details provided on slide 56 of 3Q 2019 Investor FactBook 2020 Guidance Ranges by Segment Regulated Distribution $2.13 – $2.27 In line with 6% - 8% Long-Term Regulated T
Slide 5: Business Updates
Business Updates PA LTIIP Filings ■ In late August, each of our four Pennsylvania utilities filed new Long-Term Infrastructure Improvement Plans, or LTIIPs, to invest $572M over the 2020 - 2024 period – Expect to recover costs associated with LTIIP through the DSIC rider – Expect PA PUC approval by
Slide 6: Business Updates (continued)
Business Updates (continued) Ohio Updates ■ Beginning to implement our 3-year, $516M Grid Modernization program – Projects are expected to help reduce the number and duration of power outages, and allow our customers to make more informed decisions about their energy usage – Order also fully resolve
Slide 7: Business Updates (continued)
Business Updates (continued) FES Update ■ In mid-October, the bankruptcy court approved FES’s plan of reorganization – FES has stated that it plans to emerge by the end of 2019 New Disclosures ■ Plan to publish our new Corporate Responsibility Report and Strategic Plan on November 8, 2019 Corporate
Slide 8: 3Q 2019 Earnings Results
(GAAP) (Non-GAAP) 3Q 2019 Earnings Results 3Q19 vs. 3Q18 EPS Variance Basic EPS Operating EPS* Regulated Distribution ($0.14) ($0.09) Quarter-over-Quarter (Basic EPS / Operating EPS*) Regulated Transmission $0.01 $0.02 Corporate / Other $1.88 $0.03 3Q Results FE Consolidated $1.75 ($0.04) ■ Continue
Slide 9: Financial Updates
Financial Updates Pension/OPEB Update ■ It’s our custom to provide an estimate of the annual Pension/OPEB mark-to-market adjustment (non-cash) along with our 3Q call – Estimate the after-tax adjustment to be in the range of $400M – $1B; based on: – Discount rate of approximately 3.00% to 3.50% – Act
Slide 10: Earnings Supplement to the Financial Community
Earnings Supplement to the Financial Community TABLE OF CONTENTS (Slide) 11. 3Q Earnings Summary and Reconciliation 12. YTD Earnings Summary and Reconciliation 13. 3Q Earnings Drivers by Segment 14. Special Items Descriptions 15. 3Q 2019 Earnings Results 16. 3Q 2018 Earnings Results 17. Quarter-over
Slide 11: Quarterly Summary
Quarterly Summary 3Q 2019 3Q 2018 Change GAAP Earnings (Loss) Per Basic Share $0.73 $(1.02) $1.75 Special Items $0.03 $1.82 $(1.79) Operating (Non-GAAP) Earnings Per Share $0.76 $0.80 $(0.04) Quarterly Reconciliation FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in million
Slide 12: Year-to-Date Summary
Year-to-Date Summary 2019 2018 Change GAAP Earnings Per Basic Share $1.90 $1.76 $0.14 Special Items $0.14 $0.33 $(0.19) Operating (Non-GAAP) Earnings Per Share $2.04 $2.09 $(0.05) Year-to-Date Reconciliation FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions, except
Slide 13: Earnings Drivers: 3Q 2019 vs. 3Q 2018
Earnings Drivers: 3Q 2019 vs. 3Q 2018 Regulated Distribution (RD) ▪ Distribution Deliveries: Total distribution deliveries decreased earnings $0.02 per share primarily due to weather-related usage, partially offset by incremental rider revenues in Ohio and Pennsylvania. Q-o-Q Weather-Adjusted Distri
Slide 14: Special Items Descriptions
Special Items Descriptions ▪ Regulatory charges: Primarily reflects the impact of regulatory agreements or orders requiring certain commitments and/or disallowing the recoverability of costs, net of related credits. ▪ Tax reform: Primarily reflects charges and credits resulting from the Tax Cuts and
Slide 15: 3rd Quarter 2019
3rd Quarter 2019 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 2,571 $ 371 $ (33) $ 2,909 $ — $ — $ — $ — $ 2,571 $ 371 $ (33) $ 2,909 (2) Other 65 4 (15) 54 — —— — 65 4 (15) 54 (3) Total Revenues 2,
Slide 16: 3rd Quarter 2018
3rd Quarter 2018 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 2,698 $ 341 $ (30) $ 3,009 $ — $ — $ — $ — $ 2,698 $ 341 $ (30) $ 3,009 (2) Other 68 5 (18) 55 — —— — 68 5 (18) 55 (3) Total Revenues 2,
Slide 17: 3rd Quarter 2019 vs 3rd Quarter 2018
3rd Quarter 2019 vs 3rd Quarter 2018 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ (127) $ 30 $ (3) $ (100) $ — $ — $ — $ — $ (127) $ 30 $ (3) $ (100) (2) Other (3) (1) 3 (1) — — — — (3) (1) 3 (1) (3
Slide 18: YTD September 2019
YTD September 2019 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 7,214 $ 1,090 $ (96) $ 8,208 $ — $ — $ — $ — $ 7,214 $ 1,090 $ (96) $ 8,208 (2) Other 187 13 (46) 154 — —— — 187 13 (46) 154 (3) Total
Slide 19: YTD September 2018
YTD September 2018 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 7,497 $ 996 $ (107) $ 8,386 $ — $ — $ — $ — $ 7,497 $ 996 $ (107) $ 8,386 (2) Other 197 14 (46) 165 — —— — 197 14 (46) 165 (3) Total R
Slide 20: YTD September 2019 vs YTD September 2018
YTD September 2019 vs YTD September 2018 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ (283) $ 94 $ 11 $ (178) $ — $ — $ — $ — $ (283) $ 94 $ 11 $ (178) (2) Other (10) (1) — (11) — — — — (10) (1) — (
Slide 21: 2019F GAAP to Operating (Non-GAAP) Earnings Reconciliation
2019F GAAP to Operating (Non-GAAP) Earnings(1) Reconciliation 2019 Forecast (In $M, except per share amounts) RD RT Corp FE 2019F Net Income (Loss) attributable to Common Stockholders (GAAP) $720 - $1,085 $455 - $460 ($770) - ($525) $405 - $1,020 2019F Earnings (Loss) Per Share $1.35 - $2.03 $0.85 -
Slide 22: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements: This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on information currently available to management. Unless the context requires otherwise, as used herein, refer