Firstenergy Corp. · NYSE:FE
Firstenergy — Q2 2020 Earnings Presentation
23 slides from Firstenergy's earnings presentation, Jul 23, 2020
Slide 1: 2Q 2020 Strategic & Financial Highlights
2Q 2020 Strategic & Financial Highlights Charles E. Jones, CEO Steven E. Strah, President K. Jon Taylor, SVP and CFO July 24, 2020
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: Business Updates
Business Updates Commentary on House Bill 6 Investigation COVID-19 Summary ■ Our business strategy remains resilient; well-positioned to continue managing through the COVID-19 crisis – Continue making our planned investments and deploying capital across our system – Have not experienced any signific
Slide 4: Financial Summary
Financial Summary 2Q 2020 Results ■ Reported GAAP and Operating earnings of $0.57 per basic share – Results near the upper end of the operating earnings guidance ■ As expected, business model and rate structure provided a measure of stability during this period of pandemic and economic slowdown – Wh
Slide 5: Regulatory & Operational Updates
Regulatory & Operational Updates COVID-19 Updates ■ Utility commissions in West Virginia and New Jersey have both authorized deferral mechanisms for incremental expenses as a result of COVID-19 and the Pennsylvania PUC authorized a deferral mechanism for uncollectible expenses – In April, Maryland w
Slide 6: 2Q 2020 Earnings Results
(GAAP) (Non-GAAP) 2Q20 vs. 2Q19 EPS Variance Basic EPS Operating EPS(1) Regulated Distribution ($0.01) ($0.02) 2Q 2020 Earnings Results Regulated Transmission ($0.01) ($0.01) (1) Quarter-over-Quarter: Basic EPS / Operating EPS Corporate / Other $0.01 ($0.01) FE Consolidated ($0.01) ($0.04) ■ Reconci
Slide 7: Financial Updates: Pension Update
Financial Updates Pension Update ■ Pension plan continues to outperform the turbulent market – Asset return of 5.7% as of June 30 and as of today ~9%; tracking above our 7.5% annual target – Funded status remains at 77% Minimum Required Contributions PBO Funded YTD Discount There Assets 2020 2021 20
Slide 8: Financial Updates (Continued): Financing Updates
Financial Updates (Continued) Financing Updates ■ In June, completed the refinancing of $750M in FE Corp. debt at a blended rate of 2% ■ In June, also completed a $175M debt financing at Potomac Edison; and in July, completed a $250M debt financing at CEI ■ Our liquidity remains strong at $3.5B – Cr
Slide 9: Earnings Supplement to the Financial Community
Earnings Supplement to the Financial Community TABLE OF CONTENTS (Slide) 10. 2Q Earnings Summary and Reconciliation 11. YTD Earnings Summary and Reconciliation 12. 2Q Earnings Drivers by Segment 13. Special Items Descriptions 14. 2Q 2020 Earnings Results 15. 2Q 2019 Earnings Results 16. Quarter-over
Slide 10: Quarterly Summary
Quarterly Summary 2Q 2020 2Q 2019 Change GAAP Earnings (Loss) Per Basic Share $0.57 $0.58 $(0.01) Special Items $— $0.03 $(0.03) Operating (Non-GAAP) Earnings Per Share $0.57 $0.61 $(0.04) Quarterly Reconciliation FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions,
Slide 11: Year-to-Date Summary
Year-to-Date Summary 2020 2019 Change GAAP Earnings (Loss) Per Basic Share $0.71 $1.17 $(0.46) Special Items $0.52 $0.11 $0.41 Operating (Non-GAAP) Earnings Per Share $1.23 $1.28 $(0.05) Year-to-Date Reconciliation FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions,
Slide 12: Earnings Drivers: 2Q 2020 vs. 2Q 2019
Earnings Drivers: 2Q 2020 vs. 2Q 2019 Regulated Distribution (RD) ▪ Distribution Revenues: Distribution revenues increased earnings $0.10 per share, due to $0.05 per share from incremental rider revenues in Ohio and Pennsylvania, $0.04 per share benefit from a favorable mix of weather-adjusted sales
Slide 13: 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. ▪ Exit of competitive generation: Primarily reflects charges or credits resulting fr
Slide 14: 2nd Quarter 2020
2nd Quarter 2020 (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 $ 2,132 $ 380 $ (35) $ 2,477 $ — $ — $ — $ — $ 2,132 $ 380 $ (35) $ 2,477 (2) Other 56 4 (15) 45 — — — — 56 4 (15) 45 (3) Total Revenues 2
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 2020 vs 2nd Quarter 2019
2nd Quarter 2020 vs 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 $ 1 $ 13 $ (3) $ 11 $ — $ — $ — $ — $ 1 $ 13 $ (3) $ 11 (2) Other (5) (1) 1 (5) — — — — (5) (1) 1 (5) (3) Total Revenu
Slide 17: YTD June 2020
YTD June 2020 (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 $ 4,431 $ 777 $ (70) $ 5,138 $ — $ — $ — $ — $ 4,431 $ 777 $ (70) $ 5,138 (2) Other 115 8 (30) 93 — — — — 115 8 (30) 93 (3) Total Revenues 4,
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
Slide 19: YTD June 2020 vs YTD June 2019
YTD June 2020 vs 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 $ (212) $ 58 $ (7) $ (161) $ — $ — $ — $ — $ (212) $ 58 $ (7) $ (161) (2) Other (7) (1) 1 (7) — — — — (7) (1) 1 (7) (3) Tota
Slide 20: Condensed Consolidated Balance Sheets (GAAP)
Condensed Consolidated Balance Sheets (GAAP) (in millions) June 30, December 31, Assets 2020 2019 Current Assets: Cash, cash equivalents and restricted cash $ 165 $ 679 Receivables 1,232 1,294 Other 589 438 Current assets - discontinued operations — 33 Total Current Assets 1,986 2,444 Property plant
Slide 21: Condensed Consolidated Statements of Cash Flows (GAAP)
Condensed Consolidated Statements of Cash Flows (GAAP) (in millions ) For the Six Months Ended June 30, 2020 2019 Cash Flow from Operating Activities: Net Income $ 383 $ 632 Adjustments to reconcile net income to net cash from operating activities: Loss (gain) on disposal, net of tax (52) 39 Depreci
Slide 22: 2020F GAAP to Operating (Non-GAAP) Earnings Reconciliation
2020F GAAP to Operating (Non-GAAP) Earnings(1) Reconciliation 2020 Forecast 3Q20 Forecast (In $M, except per share amounts) RD RT Corp FE FE 2020F Net Income (Loss) attributable to Common Stockholders (GAAP) $1,000 - $1,075 $460 - $485 ($440) - ($430) $1,020 - $1,130 $395 - $450 2020F Earnings (Loss
Slide 23: 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. Such statements are subject to certain risks and uncertainti