Firstenergy Corp. · NYSE:FE
Firstenergy — Q2 2019 Earnings Presentation
22 slides from Firstenergy's earnings presentation, Jul 23, 2019
Slide 1: 2Q 2019 Strategic & Financial Highlights
Exhibit 99.2 2Q 2019 Strategic & Financial Highlights Charles E. Jones, President and CEO Steven E. Strah, SVP and CFO July 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: Financial and Business Updates
Financial and Business Updates 2Q 2019 Results ■ Reported GAAP earnings of $0.58 per share ■ Reported Operating (non-GAAP) earnings of $0.61 per share* – Slightly higher than the midpoint of our 2Q earnings guidance range of $0.55 - $0.65 ■ Continued execution of our customer service-oriented growth
Slide 4: Financial and Business Updates (Continued): PA and NJ Updates
Financial and Business Updates (Continued) PA and NJ Updates ■ On May 23, PA PUC approved modified Long-Term Infrastructure Investment Plans (LTIIPs) – Modification increases spend in 2019 by $85M – Includes acceleration of planned 2020 capital and additional capital to support enhanced reliability
Slide 5: Financial and Business Updates (Continued): Ohio Updates
Financial and Business Updates (Continued) Ohio Updates ■ On July 17, received PUCO decision on our supplemental stipulation on tax reform and grid modernization – Approved by a 5-0 vote – Order fully resolves the impact of the Tax Cuts and Jobs Act, with customers receiving 100% of the tax savings
Slide 6: Ohio Updates (cont.)
Financial and Business Updates (Continued) Ohio Updates (cont.) ■ On July 23, House Bill 6 was approved by the Ohio legislature – We believe this bill is good for customers – Contributes to Ohio’s economic success and the security and resiliency of the regional electric grid, while mitigating the po
Slide 7: Guidance Updates
Guidance Updates Earnings Guidance ■ Updating 2019 GAAP earnings forecast to $1.265B - $1.425B, or $2.34 - $2.64 per share based on 540 million shares outstanding ■ Affirming 2019 Operating (non-GAAP) earnings guidance of $2.45 - $2.75 per fully diluted share* – Excluding DMR benefit of ~$0.12 per s
Slide 8: 2Q 2019 Earnings Results
(GAAP) (Non-GAAP) 2Q 2019 Earnings Results 2Q19 vs. 2Q18 EPS Variance Basic EPS Operating EPS* Regulated Distribution ($0.31) ($0.06) Quarter-over-Quarter (Basic EPS / Operating EPS*) Regulated Transmission --- $0.03 Corporate / Other $0.61 $0.02 2Q Results FE Consolidated $0.30 ($0.01) ■ Continue t
Slide 9: Rating Agency Updates
Rating Agency Updates Rating Agencies ■ On July 23, Moody’s upgraded the credit ratings of several of our utilities Cleveland Electric Ohio Edison Toledo Edison Pennsylvania Power Illuminating Date 7/23/2019 Action Upgrade Upgrade Upgrade Upgrade Issuer Rating Change To Baa2 from Baa3 To A3 from Baa
Slide 10: Earnings Supplement to the Financial Community
Earnings Supplement to the Financial Community TABLE OF CONTENTS (Slide) 11. 2Q Earnings Summary and Reconciliation 12. YTD Earnings Summary and Reconciliation 13. 2Q Earnings Drivers by Segment 14. Special Items Descriptions 15. 2Q 2019 Earnings Results 16. 2Q 2018 Earnings Results 17. Quarter-over
Slide 11: Quarterly Summary
Quarterly Summary 2Q 2019 2Q 2018 Change GAAP Earnings (Loss) Per Basic Share $0.58 $0.28 $0.30 Special Items $0.03 $0.34 $(0.31) Operating (Non-GAAP) Earnings Per Share $0.61 $0.62 $(0.01) Quarterly Reconciliation FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions,
Slide 12: Year-to-Date Summary
Year-to-Date Summary 2019 2018 Change GAAP Earnings (Loss) Per Basic Share $1.17 $2.86 $(1.69) Special Items $0.11 $(1.57) $1.68 Operating (Non-GAAP) Earnings Per Share $1.28 $1.29 $(0.01) Year-to-Date Reconciliation FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in million
Slide 13: Earnings Drivers: 2Q 2019 vs. 2Q 2018
Earnings Drivers: 2Q 2019 vs. 2Q 2018 Regulated Distribution (RD) ▪ Distribution Deliveries: Total distribution deliveries decreased earnings $0.08 per share due to lower customer load, primarily driven by weather. Q-o-Q Weather-Adjusted Distribution Deliveries Q-o-Q Actual Distribution Deliveries (
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: 2nd Quarter 2019
2nd 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 $ 2,131 $ 367 $ (32) $ 2,466 $ — $ — $ — $ — $ 2,131 $ 367 $ (32) $ 2,466 (2) Other 61 5 (16) 50 — —— — 61 5 (16) 50 (3) Total Revenues 2,
Slide 16: 2nd Quarter 2018
2nd 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 $ 2,291 $ 336 $ (56) $ 2,571 $ — $ — $ — $ — $ 2,291 $ 336 $ (56) $ 2,571 (2) Other 61 5 (12) 54 — —— — 61 5 (12) 54 (3) Total Revenues 2,
Slide 17: 2nd Quarter 2019 vs 2nd Quarter 2018
2nd Quarter 2019 vs 2nd 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 $ (160) $ 31 $ 24 $ (105) $ — $ — $ — $ — $ (160) $ 31 $ 24 $ (105) (2) Other — — (4) (4) — — — — — — (4) (4) (3) Tota
Slide 18: YTD June 2019
YTD June 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 $ 4,643 $ 719 $ (63) $ 5,299 $ — $ — $ — $ — $ 4,643 $ 719 $ (63) $ 5,299 (2) Other 122 9 (31) 100 — —— — 122 9 (31) 100 (3) Total Revenues 4
Slide 19: YTD June 2018
YTD June 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 $ 4,799 $ 655 $ (77) $ 5,377 $ — $ — $ — $ — $ 4,799 $ 655 $ (77) $ 5,377 (2) Other 129 9 (28) 110 — —— — 129 9 (28) 110 (3) Total Revenues 4
Slide 20: YTD June 2019 vs YTD June 2018
YTD June 2019 vs YTD June 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 $ (156) $ 64 $ 14 $ (78) $ — $ — $ — $ — $ (156) $ 64 $ 14 $ (78) (2) Other (7) — (3) (10) — — — — (7) — (3) (10) (3) Total
Slide 21: 2019F GAAP to Operating (Non-GAAP) Earnings Reconciliation
2019F GAAP to Operating (Non-GAAP) Earnings(1) Reconciliation 2019 Forecast 3Q19 Forecast (In $M, except per share amounts) RD RT Corp FE FE 2019F Net Income (Loss) attributable to Common Stockholders (GAAP) $1,170 - $1,275 $435 - $480 ($340) - ($330) $1,265 - $1,425 $365 - $430 2019F Earnings (Loss
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