Firstenergy Corp. · NYSE:FE
Firstenergy — Q4 2019 Earnings Presentation
22 slides from Firstenergy's earnings presentation, Feb 7, 2020
Slide 1: 4Q 2019 Strategic & Financial Highlights
Exhibit 99.2 4Q 2019 Strategic & Financial Highlights Charles E. Jones, President and CEO Steven E. Strah, SVP and CFO February 7, 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: Financial Overview
Financial Overview 2019 Results ■ Reported GAAP earnings of $1.70 per basic share ($1.68 diluted) Five years ■ Reported Operating (non-GAAP) earnings of $2.58 per share(1) of consistently meeting or exceeding the midpoint – At the top end of revised 2019 earnings guidance range of $2.50 - $2.60 of t
Slide 4: Business Updates
Business Updates TSR Performance FE EEI Index 60% ■ 2019 Total Shareholder Return (TSR) of ~34%; top quartile of EEI Index 40% 71% 20% 34% 26% 30% ■ 2018-2019 TSR of ~71%; #1 in EEI Index 0% 2019 2018-2019 Rating Agency Update Fitch Upgrades Moody’s Upgrades FE Corp MP ATSI OE ■ Ratings agencies hav
Slide 5: Business Updates (continued) - Ohio Updates
Business Updates (continued) Ohio Updates ■ In January, received PUCO approval to implement decoupling for our residential and commercial customers – Provides transparency and stability for these Ohio customers, while providing revenue certainty to our Ohio companies – Distribution rates for 2019 an
Slide 6: Business Updates (continued) - PA LTIIPs
Business Updates (continued) PA LTIIPs ■ Completed initial phase of our original $350M, Long-Term Infrastructure Improvement Plan (LTIIP) in 2019 ■ In January, PA PUC approved our 5-year, $572M LTIIP II for 2020-2024 – Investments include replacing older poles, lines and fuses; installing new substa
Slide 7: Business Updates (continued) - New Disclosures and Earnings Guidance
Business Updates (continued) New Disclosures ■ Last November, published Corporate Responsibility Report and Strategic Plan to our website – These reports are an important element of our commitment to provide transparency and enhanced engagement with our stakeholders – Plan to refresh our Corporate R
Slide 8: 4Q19 vs. 4Q18 EPS Variance
(GAAP) (Non-GAAP) 4Q19 vs. 4Q18 EPS Variance Basic EPS Operating EPS(1) 4Q 2019 Earnings Results Regulated Distribution ($0.02) --- Quarter-over-Quarter: Basic EPS / Operating EPS(1) Regulated Transmission $0.02 $0.03 Corporate / Other ($0.45) $0.02 FE Consolidated ($0.45) $0.05 ■ As always, reconci
Slide 9: Financial Updates
Financial Updates Pension Update ■ 2019 Pension return on assets of 20.3%, coupled with a discount rate of 3.34%, produced two outcomes: – 2019 after-tax, non-cash Pension/OPEB mark-to-market adjustment of ($478M) – At the lower end of the ($400M) – ($1,000M) range we provided in October – Pension f
Slide 10: Earnings Supplement to the Financial Community
Earnings Supplement to the Financial Community TABLE OF CONTENTS (Slide) 11. 4Q Earnings Summary and Reconciliation 12. YTD Earnings Summary and Reconciliation 13. 4Q Earnings Drivers by Segment 14. Special Items Descriptions 15. 4Q 2019 Earnings Results 16. 4Q 2018 Earnings Results 17. Quarter-over
Slide 11: Quarterly Summary
Quarterly Summary 4Q 2019 4Q 2018 Change GAAP Earnings (Loss) Per Basic Share $(0.20) $0.25 $(0.45) Special Items $0.75 $0.25 $0.50 Operating (Non-GAAP) Earnings Per Share $0.55 $0.50 $0.05 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 Per Basic Share $1.70 $1.99 $(0.29) Special Items $0.88 $0.60 $0.28 Operating (Non-GAAP) Earnings Per Share $2.58 $2.59 $(0.01) Year-to-Date Reconciliation FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions, except
Slide 13: Earnings Drivers: 4Q 2019 vs. 4Q 2018
Earnings Drivers: 4Q 2019 vs. 4Q 2018 Regulated Distribution (RD) ▪ Distribution Deliveries: Total distribution deliveries increased earnings $0.01 per share due to incremental rider revenues in Ohio and Pennsylvania, partially offset by lower weather-related usage. Q-o-Q Weather-Adjusted Distributi
Slide 14: Special Items Descriptions
Special Items Descriptions ▪ Mark-to-market adjustments - Pension/OPEB actuarial assumptions: Primarily reflects the change in fair value of plan assets and net actuarial gains and losses associated with the company's pension and other postemployment benefit plans. ▪ Regulatory charges: Primarily re
Slide 15: 4th Quarter 2019 Earnings Results
4th 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 $2,238 $ 420 $ (32) $ 2,626 $ — $ — $ — $ — $2,238 $ 420 $ (32) $ 2,626 (2) Other 59 3 (15) 47 ——— — 59 3 (15) 47 (3) Total Revenues 2,297
Slide 16: 4th Quarter 2018 Earnings Results
4th 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 $ 2,354 $ 339 $ (29) $ 2,664 $ — $ — $ — $ — $ 2,354 $ 339 $ (29) $ 2,664 (2) Other 55 4 (13) 46 — —— — 55 4 (13) 46 (3) Total Revenues 2,
Slide 17: 4th Quarter 2019 vs 4th Quarter 2018
4th Quarter 2019 vs 4th 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 $ (116) $ 81 $ (3) $ (38) $ — $ — $ — $ — $ (116) $ 81 $ (3) $ (38) (2) Other 4 (1) (2) 1 — — — — 4 (1) (2) 1 (3) Tota
Slide 18: YTD December 2019
YTD December 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 $ 9,452 $ 1,510 $ (128) $10,834 $ — $ — $ — $ — $ 9,452 $ 1,510 $ (128) $ 10,834 (2) Other 246 16 (61) 201 — —— — 246 16 (61) 201 (3) Tot
Slide 19: YTD December 2018
YTD December 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 $ 9,851 $ 1,335 $ (136) $11,050 $ — $ — $ — $ — $ 9,851 $ 1,335 $ (136) $ 11,050 (2) Other 252 18 (59) 211 — —— — 252 18 (59) 211 (3) Tot
Slide 20: YTD December 2019 vs YTD December 2018
YTD December 2019 vs YTD December 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 $ (399) $ 175 $ 8 $ (216) $ — $ — $ — $ — $ (399) $ 175 $ 8 $ (216) (2) Other (6) (2) (2) (10) — — — — (6) (2) (2) (
Slide 21: 2020F GAAP to Operating (Non-GAAP) Earnings Reconciliation
2020F GAAP to Operating (Non-GAAP) Earnings(1) Reconciliation 2020 Forecast Q1 of 2020 (In $M, except per share amounts) RD RT Corp FE FE 2020F Net Income (Loss) - GAAP $890 - $1,230 $460 - $485 ($450 - $305) $900 - $1,410 ($75) - $380 2020F Earnings (Loss) Per Share $1.64 - $2.27 $0.85 - $0.89 ($0.
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