FE - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the FirstEnergy Corp.

First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Meghan Beringer, Director, Investor Relations for FirstEnergy Corp. Ms. you, Thank Beringer.

begin. You may

Meghan Beringer

statements Brenda, and quarter and and forward-looking to you, risks prospects. morning. regarding and Earnings our current can are subject good our differ on call. Today, be first to These and earnings strategies various earnings, FirstEnergy's in from uncertainties. the cause based Information Web we on revenues, expectations Thank indicated those performance, Welcome are Investors will statements to that results could of site found the under by link Factors section filings. actual materially such SEC make statements

and a will non-GAAP which Participants discussion. include non-GAAP Officer; financial and We the to supports financial Chuck Vice and room who be President in Strah, can between are with found on Senior question-and-answer GAAP Web executives certain the presentation discuss participate measures Chief the Relations Jones, Officer; FirstEnergy call today's in Chief measures. Financial available Steve also session. Investor Reconciliations along today's Executive in and site other several President

the would over to turn call I Now, to Chuck like Jones.

Charles E. Jones

fully GAAP Thanks, company. strong share for morning, everyone. a time had of first are We and earnings earnings $X.XX with of Good earnings that $X.XX FirstEnergy first operating as the quarter reporting a represent share. Megan. we Today, regulated per per

operating and nuclear associated deconsolidation of the FirstEnergy billion FirstEnergy with earnings of GAAP gain Our all its from a subsidiaries $X.X benefited solutions, company.

that are our help more reliable our intends the regulated than intend damage these $X of and power pleased more generation that under groups integrated of the of of to regional believe customers including approved or jobs ensure be have Act attributes Pennsylvania these Chapter many in key FES' entities and our March have or million do we personally to to hard three subsidiaries. with announcement an that a uncertainty are on advocate to economic recent to benefits you I recognize the infrastructure, still difficult Supply FirstEnergy long-term our two for not filings nuclear the challenging principle we sell been know, to emergency these for markets. policies and these generating stable, an continue deactivate Today two the that creditors. solutions, application one distribution, years ad supply. that to and nation's regulatory preserve will baseload our FES units legislative utility for employees. are FES's Power we're economy worked and surrounding Therefore, I in plants voice importance recognize pushing or generation, plants to of steady understand As plants XX reached announce agreement to exposed customers I next the that We XXst. power recognize have secure filing of have that competitive transmission, FES decision-making. also for a in these it during continue They extremely and events, continue including for Federal Energy for fuel Boards and to doing hoc order or Ohio in a community the to provide. the the Allegheny We FENOC The Directors include

business assurances unsecured facility, majority million assistance of and FES FirstEnergy. It the Among matters, settlement continue intercompany million and a their certain on and funded the them related and agreement provides its representing while provides for debt process. credit the guarantees affirms certain and substantial secured FES previously employee a including guarantee. of at holders. rail all also other subsidiaries, and second FES key which outstanding include claims restructuring employee support majority benefits The of pension $XXX by Bruce obligations, $XXX announced certificate Mansfield the unfunded first The FENOC surety and waiver of and from held secured FirstEnergy

significant and this introduced disclosed, we guarantees have and February process, elements In best Supply, the after its would currently their Supply earnings assurances designed operating settle fully million all million as committee purchase; the as when the towards against long-term which and previously prefiling FES the payment parties; of million Energy the at other a related $XX the par full to official that from and guidance FirstEnergy the prevailing up for to the the unsecured and creditors; a and note a the so Station, of rate well plan. any FENOC, execution from addition, worthless FirstEnergy NOL a creditors, tax value that remaining the other by which of subject of FES agreed claims may by Boards of growth bearing terms The transfer the treasury to right December trade FirstEnergy met. as rate issued; owned is at hoc of of is threshold a the on we Court as $XXX certain of value XXth. FES includes deduction key key interest ultimately agreement of is that is effective benefit join an and and to The well efforts ad This the the approval note efforts emerging bankruptcy XX, release XXXX FirstEnergy, FirstEnergy also of Allegheny FES group emergence XXXX issue the the use other stock of include: agreements assumptions $XXX includes in and June reversal step represents subsidiaries, creditors agreement. the cash to by to Directors major capture settlement the a approval recoveries creditors in a to Energy Power due of at agreed-upon conditions. is which of estimated share the the in definitive Pleasants restructuring agreement and bankruptcy Allegheny Bankruptcy focus from its

we long-term projection operating operating [ph]. our to to as $X.XX also next So this growth well on of very earnings XXXX XXXX point. as our affirming XX% guidance I’d through earnings like be $X.XX are share, of clear per

We $XXX in have additional plans no annual XXXX. investment employee continue to million plans and through benefit the beyond for equity

In addition, we expect this agreement to in principle credit positive. be

to introducing earnings We range operating $X.XX -- second are also a of per quarter earnings share. guidance $X.XX

we going than pipeline Energizing in a Let's for now program. implement to In the XXX regulated our underway our fully as turn business, the to or transmission Future business More XXXX. our investment either utility. continue projects forward

transmission track with announced consistent invest February. on are system in the plans we year capital to We $X.X this in our billion

equipment late be and well as plants the these $XX new One last frequency new June service will help region. expected duration ahead between which existing a service in project year, townships, XX substations is project outages. deadline. volt includes that of retirement Keating the line million in completed in The in help miles is X, maintain as the a transmission by that and about transmission Pennsylvania McKean mid-May to Bradford following power of XXX,XXX to of of project, reduce generating began extends reliability County, This XXXX

that project transmission in nearing service during project maintain XXX,XXX of Ohio is reliability peak completion a Erie needed volt is Another Sandusky periods and to in mile XX new counties demand.

transmission in agreement for line energize May. We in expect our FERC rates settlement late approved JCP&L's to new February. the

weather June retroactive in offers ruling and for settlement in expect XXXX. agreement to the spending matched more FERC rates October This effective distribution at load detail. JCP&L filed New Steve adjusted our discuss opportunity our In effective XXXX. The the in as first we quarter to and the rates expectations, remains will X quarter closely forward-looking were of are results second the in XXXX. business, January file to X, formula be MAIT also

the utility challenging conditions. proud Restoration During result those of outages. Jersey for to miles storms to than JCP&L response dispatchers hardest service preparation and and more utility with the is these high winds contractors. nearly electrical review and the that during more March, heavy and brought more of A Utility both storm caused our poles the know make and New for we're X,XXX three power responders difficult customers storms. we We're of our extensive efforts restoration contractors, resulted our In people in storms Jersey than hazard the efficiently than workers, with repairs for first replaced XX of system. outages millions and a events We effort working crews, the portion million as trees series to Commissions without to wet and in employees, a safely experienced of at job and in Pennsylvania and line in Collectively by XXX being outside cleared two customers involve our wire, alone, New locations forestry total of snow X,XXX Met-Ed these Northeast. and eastern of X.X FirstEnergy damage Nor'easters territories hit. our outages for assessors, crews

Ohio While experience In pending a the than Investment restoration monitoring customers our case system plan commitments, a against identify more and Pennsylvania. enhance New during our recovery. $XX of of Ohio, $XX we're by and help we under on these efforts million application in Elsewhere, conditions, remains work system, million million our confident adverse our midyear help New include and strengthen Maryland all, implement enhance for plan of O&M the with filing a the X-year Commissions spend conditions. was the future $XXX grid million Jersey of million during PUCO. second Platform for $XXX total, quarter, the the we which real-time being modernize and best Approximately met In request Jersey's in Commission's at customers to with we including any remote rate total that our filing that system to anticipate practices our additional half Infrastructure $XXX deferred the can in Modernization year. power in distribution performance approval JCP&L situations. redesign of the of this allowing our our the program for utilities first for the but faster, Distribution portions $XXX million will restore utilities The weather and plans

of turn other over it new I to financial first us developments. and a Now time quarter review who in Chief his the Steve, first the joins for as Officer Financial for will role

Steven E. Strah

my morning, Good today. everyone. pleasure to join It’s you

to items of first presentation housekeeping couple discuss quarter I with a Before we discuss of earnings. our to regard have results,

activities substantially of Competitive operations as and of our as and previously This corporate our in -- First, are a now are our for segment of other operating of Bay other the from in Energy to which were from agreements for the Hydroelectric deconsolidation purchase purposes. and completed resulted our asset the earnings comprised sale FES segment Services XXXX item. sale all for operations are Shore Supply's and both in special excluded presented discontinued business that FENOC, and XXXX, remaining AE plants. reporting plan the The included Pleasants pending County plants related the and Supply's primarily the other corporate competitive AE gas Bath and

we was its Pleasants year. As discuss will later, flat be some quarter in our earnings, the from first results but to we for expect there impact

mentioned we approximately equity our February, site. are and We impacts posted this being the a of in other showing provide consolidated available of basis. includes Reconciliations as and on the of are information preferred issued to converted fully report detailed or a in to shares, on for Web financial with diluted along quarter January believe the dividends. is Second, the all our way performance. results comparative the XXX presented you million This our excluding our operating projections best is fully about in community, with items which as view

this $X.XX our quarter per mentioned, Distribution GAAP $X.XX results basis compared operating On first increased of segments. than on and quarter only segment, Chuck of in as from including to first down X%, earnings increase On while the share billion first subsidiaries with gain result diluted $X.X Ohio deconsolidation colder effect fully quarter, in first in residential $X.XX primarily year As X% the regulated of into a reflecting higher an than transmission, $X.XX results share. per In and earnings XXXX, late XXXX, as first as same distribution, share regulated FENAC. January compared late to the drove a per included slightly quarter the an and were earnings the less $X.XX XXXX a to deliveries a operating for deliveries the first weather share were in quarter first -- DCR. of of were of This per XXXX I'm increase weather were the quarter of as These GAAP and our continuing basis, well operations the Heating-degree-days FES, compared in its total the new other of went XX% X% a XXXX. compared impact corporate residential in normal XXXX, of of a sorry, period X% but up. basis, distribution sector the Pennsylvania XXXX commercial commercial that quarter adjusted increase sales. deliveries rates in earnings

business, at the sales, quarterly as of first Other quarter expecting effective I’m tax margin first sectors. the Looking earnings higher settlement This and offset by year. will Future I continued quarter first FERC XXXX. ATSI also Corporate higher as results to a be note marks to reflect in the expect our for operating to be wholesale program, JCP&L partially shale the quarter the investment base as -- I industrial segment, the trend steel the industrial by that for earlier, increase compared MAIT consolidated the well interest the from year in in higher mentioned Chuck but earnings prices Energizing revenues its continue with as increased the the lower to we This of result of earlier. due our in Pleasants, primarily of shield. compared Xth nearly rate to rate mentioned higher neutral continued higher commodity the Transmission XXXX, to In and as about at the positive to driven X% first last our tax contribution and for consecutive year, that that the gas XX% and sales. growth was At sorry, due expense at XX% quarter we're

to continue moment about process. savings a questions reform Finally, approach passing tax we receive customers, I'll so discuss our to take to this to

in liability for not guidance does that we the that our reiterate benefit regulatory each our XXXX through work taxes. is regulatory began until jurisdictions. uniquely as addressed any a will amounts me we of X, regulatory jurisdiction. include be a each these process for deferring On of issue in This Let complex January

already in the tax to proactively $XX have the of we DMR DCR rate tax the implemented saving customers filed We million. for reform nearly change and the where Ohio to reflect impact lower

also by they’re that are will the May the of Our annual because about distribution impacted tax rate Act filed base comments Ohio across effect our In rates we through the estimate not Tax rate $XXX of be that frozen net Pennsylvania, utilities utilities. XXXX. changes, combined million four

deferred of And and single to back issued tax regarding is in continue going comments PUC to the otherwise benefits taxes effect million will and six rate tax rates to filed in XX, earliest April been provided rate-making JCP&L Tax as impact is increase base May for rider BPU of tax JCP&L approximately to be subject a companies final through be reduced by file would would lower Potomac impact by quarter authority proposing date the the commission decision go to BPU third XXXX estimated rider by arguments proceeding that the temporary excess are months million reform XXXX of Our issue order the tax a interim reform BPU not will than X, of rate reform savings. review million expected tax of including change. customers, during necessary. next Maryland, a support the for be case liability regulatory on reconcilable PUC X. The Potomac $XX.X case. Act XXXX the In appropriate $X Virginia, treatment base presenting related realized the July rates would the be These will reflect make a March $X the by final where implementing rate seeking rate have that was making savings. all to treatment forward testimony in West defer to file Mon Power Edison of rates, while Edison an XX, of and XX for until potentially the the order. for rates days customers annually

rate XX order on Penn, March the case changes true-up file utilities list normal side, corporate rate. revisions settlement reflect the rates FERC process. Edison required on rates utilities stated rate West to issued and ATSI, to because those MAIT, included recent others federal already to many tax and part took at of to XX, adjust transmission transmission account the the impacts. stated PATH as of show the transmission addressed and in and TrAILCo, On Potomac likely XXXX Power, was JCP&L's into rates annual directing effective a cause JCP&L not the with tax Mon propose

our commissions the Thank jurisdictions for continue the to regulatory our your for of appropriate We you customers. will work in each with to time. determine approach

Now questions. let's your take

Operator

line Instructions] with first Our [Operator of ahead. Wolfe Steve question Research. comes Please Fleishman from go

Steven Fleishman

Hi. Good morning.

Charles E. Jones

Steve. Hey,

Steven Fleishman

Hi.

to I couple give majority So agreement, and we percent any of respect with could -- just of think of should the more sense questions kind said any a known that anticipate? us a creditor you support of on specifics -- the of opposition creditors, just you

Charles E. Jones

the of tell the Well, to I specifics on both have of were in signed you can't give percentages that creditors. I XXX% these ad you agreements. on hoc can this, creditors total groups

groups said within signatories And ad so on they’ve get us as other opposition June to I in by there committed my to all was the hoc no with work the remarks, XX. and

Steven Fleishman

to reaction and said just credit more overall same plan -- Okay, agencies of mentioned great. equity. color color per this? is any be just should kind the little on Maybe I know earnings you And and you positive, of terms growth then your credit the overall metrics on look still the on in a on the -- your their share how more

Charles E. Jones

my that be speak my tell them, both this. going comments Steve. to Well, belief we about settlement this you I through it will which of reviewed credit We’ve are evolve the we with would will The themselves, themselves metrics let positive. But led move to process. as for them

the expect all I the of to think within both well -- of agencies. we rating that guidelines be major

Steven Fleishman

great. Okay, Congratulations.

Charles E. Jones

Steve. Thanks,

Operator

next your go And with question with comes our go questions. -- Please Please ahead Of Dumoulin-Smith. with the Bank line ahead your from Julien of America.

Julien Dumoulin-Smith

Hi, good morning. Congratulations.

Charles E. Jones

Thanks, Julien.

Julien Dumoulin-Smith

Yes.

perhaps that to debt a this positive forma So, to FFO comment where for credit Steve's nature pro to the exactly be prior seem of the little to expectations? on changing bit here follow-up bit how respect can and terms know but your precisely, items the two the key the largely thoughts? the you would watch versus period in little forecast through XXX more would your and on note see the me up It question tax with settlement, let evolution, ends a you this of your

James F. Pearson

Hey Julien, is Jim. this

in here. into S&P we planning our range, jump When metrics to get which me the and solidly our Let in XX% we post XX% out Moody's credit well being emergence, period is threshold. above see the

So we feel good about very that.

million second note the the yes, planning of point, have plus that right, within million $XXX On about, we the we that was but our $XXX talked you're well parameters tax period. the

note As treasury free which impact have be million, FFO. on is emergence, at until due XX, which say that's that’s risk financing, December essentially will rate would the what you time will so of the minimal a tax that not $XXX see, our at I XXXX, the prevailing

within the and that range. plan what So, is we all in all, we're well still going confident guidelines be that our within to was very feel it of

Julien Dumoulin-Smith

being you these make New filings and range you code? cetera. just put get infrastructure of then upcoming distribution or zip were kind earlier, feel you would you, alluded you And range the that Ohio, within to Excellent. about sure respect in where do it. Jersey, if et talked to just same the filings about the to CapEx Got with to we're How

James F. Pearson

in Ohio end. If probably New that and we that would put the suggest would would what’s us Jersey, in I upper get

Julien Dumoulin-Smith

Got it. both. Excellent. you Thank

Operator

question with next the And Please Arnold from line our Deutsche of comes ahead. Bank. Jonathan go

Jonathan Arnold

guys. morning, Good

Charles E. Jones

Jonathan. Hi,

Jonathan Arnold

Hi.

that that significance a process of a quick as to date just date particular part this Just targeting? first, of XX, you're June one the or there is any bankruptcy is that

Charles E. Jones

agreement of a get we just it clearly date. this is and it's principle onto significancy, in rest the No, step forward, is creditors major the no target can but a also. There hopefully

Jonathan Arnold

if hold But does XX? you the achieve that by June don’t agreement

Charles E. Jones

Yes.

Jonathan Arnold

Okay.

time no intact there's or to So resolve keep you particular frame would to have agreement this …? is whereby there

Charles E. Jones

No.

Jonathan Arnold

the tax as what the are anything to do just then Okay. you benefit make in to right. on right reform. I And to a saying it’s -- sure tax you guidance freeze for rate have tax Ohio se, wanted but I separately I you benefit a the said consider that, piece be that of you so you lower you in revisit benefit that slide, from that have where Am therefore of just freeze, or haven't in understand included the you rate that the then deferring want aren't per I and part not

James F. Pearson

everything Jonathan, this point. we’re deferring at

in Chuck authorization all So mentioned to as I have adjustments have those until make the we’re we say deferrals we're to not that from also earlier, and deferring going what final Ohio, would any and Steve Commissions.

Jonathan Arnold

So Ohio guidance and piece first both also then quarter as of well as defer those -- the everything earnings else?

James F. Pearson

That's correct.

Charles E. Jones

correct. That’s

Jonathan Arnold

Thanks that. Great. for clarifying

Operator

with Evercore And question line Greg Gordon comes next go ahead. the our Please of ISI. from

Gregory Gordon

Thanks. morning. Good

Charles E. Jones

Hi, Greg.

Gregory Gordon

follow-ups, just of in of you the and $XXX are did so this questions associated $X couple other that as function with I guys equity exercise part not that’s or number are year other a of there recent that raise change a The to million of that? the update and make that want thorough pension pension to funding most -- as costs, lower billion. was that your sure aspects earlier of part postretirement the So closer just with in far. pretty

James F. Pearson

executive comp, think be bit consistent incentive little well deferred a as Greg, vacation post our of I pension about that as in the range the made pretty banked up long-term million that's $XXX would [ph] of and know, the You we’ve that benefits been employment pension and program. other always

some guarantees your a gets there, -- to million, about in you which so also right probably think $XXX was we I billion incorporated $X that range.

Gregory Gordon

Okay, my bad.

about that. Sorry

got creditors Pleasants. million, the you’re you transferring terms deal, is tax at money to about of as the Second the look FES question, this note, I $XXX new

they opportunity sort with a ultimately to participate So some this the definitively bonds, of $X.XX, value you get recovery fair agree FES is with dollar, having $X.XX than other on guys if in the is break more clean the you optionality of they summary? the to if that above than for a

Charles E. Jones

fair I summary. that’s think a very

think figured got I you it out.

Gregory Gordon

Thank you, Okay. guys.

Operator

the Please Glenrock And line go Paul Associates. of with from ahead. Patterson our next question comes

Paul Patterson

are how you Hi, doing?

Charles E. Jones

Paul. Good,

Paul Patterson

Greg sort emergence or to just question. I after payments benefits of support any to of be anything the asked -- expect bankruptcy, in my generation make or to guess, sure, else company? going to do cash to you of so be terms employee providing the assistance ongoing Corp. for FirstEnergy any

Charles E. Jones

agreed provide other support the reimbursed restructuring will support services through entire process, some part to the the this we've the FES, -- support of than some be be the the What’s deconsolidated to intend provide We FES. that books of be creditors will process. settlement governmental will affairs business, and through No. done don't filing on and by the arrangement Those anymore process to shared with we through it. restructuring all that

Paul Patterson

Okay, great. Thanks lot. a

Operator

the question comes line ahead. Mehta next go Please of our Praful And from with Citigroup.

Praful Mehta

Thanks so guys. much. Hi

growth, wanted that clarify earnings, to X% like that’s right? XXXX, the still the earnings DMR, earnings of the the to X.XX, is Just off X% on so -- excluding

Charles E. Jones

Correct.

Praful Mehta

billion, terms billion think And came release. down then the that debt. $X.X debt billion saw bit, $X versus parent little you. of last I in Got parent secondly, I $X.X a

there wanted happen that check Just anything deleveraging? specific parent at of terms to level is the in

James F. Pearson

we been it. when that level of notes, parent but we term should've the the of the extent equity, that took know I Praful. some out the issued isn't, there No,

then with Our by above the Also $XXX debt revolving million what say short-term a up some consolidated FES debt and of changes drawn we would $X the type be any pension was our $XXX because little contribution associated credit more that $XXX of billion, may million in storm is. drew went the primary of that’s probably cost. I than about that’s that, parent and facility But made. we had down in down the are range million

Praful Mehta

to Thanks. plan it is And near-term further borrow that or there any remain you. at the or as this to expected level pay level kind of needed? in Got down is

James F. Pearson

about that’s I going in would the period over say range. stay planning to that

Praful Mehta

Great. guys. Thanks,

James F. Pearson

Thank you.

Operator

Byrd Please our line from Morgan the question And next with ahead. of Stanley. comes Stephen go

Stephen Byrd

Hi. Good morning.

James F. Pearson

morning. Good

Stephen Byrd

on just is touch current think been we what about as thinking you otherwise, your you’ve as I or potential think should cuts to we any terms know at I on there -- structure of in just based about cutting be there? the level about costs, of wanted parents and but working costs cost initiatives further potential or further just

James F. Pearson

Well, Stephen, I think about process the to we the year-ago. a we what started think of FE about it Tomorrow call way

We the of this to last anticipation implementing parent the changes in over have been process. already year restructuring

to sense full are as do in going a just we're as forward going think for those are doing I regulated there. interest here try committed we that we We to move to resizing we're in we're give to can recovery to cost our best that don't a makes we corporate to manner -- going not disclose dollar that. dollar center I that's that to operations that match the business. and have what that this, our of can tell

Stephen Byrd

you’ve Understood. cost-cutting a you’re that that been high of efforts? level, terms by the And, of making progress encouraged generally sort Chuck, in just at

Charles E. Jones

think confident some Yes, going confident are I'm to I'm And set we I we’re very and we encouraged. exceed that I’m meet targets those going targets. also to

impact we the deliver that You'll growth projected. it see on the we rates on as

Stephen Byrd

it's payables. note, to is equal I benefits your benefit going view realize. the that’s in In I guess then gears tax that $XXX basically to just to is before other is guess, due tax cash fair million, would say, And you're great. But shifting it realize I the those you sized on the that note guess That's know will the the from up maturity need you or of to before come cash will I flow we pay is that ultimately but you that FE fair think benefit that ultimately, to words might think some maybe should then designed the of that? off. really to how and cash note But note, would about

Charles E. Jones

we that’s so to prior note that. to that receive those off without And pay also allows decided. penalty Stephen, the Yes, We early if could correct. us funds any

Stephen Byrd

in in could sharing Okay, excluded? on that element those that perfect. FirstEnergy extent a generation recoveries. support something in for I be could And think baseload is kinds payments be of there agreement thinking then provision potentially just the the where there's that or with one I was share just lastly, federal principle, to be of FE support about

Charles E. Jones

say really are for for would something We're that’s and generating get mistake country to in, share wanted have there. I just those would to the I because -- biggest that employees we but support be communities concern for assets motivated a could to The it our be highly potentially close. clear. them

of we the why generating keep potentially interest those As creditors. in do. the than in point facilities plants, it's that you no support it yes, gets weeks the fighting for to commercial some doing of a ago, we’ve settlement in where the that's got I’m just couple because we would with for we’re thing then, If going share remaining threshold with this have exceeds it to right to to what not that, but agreement creditors, referred other these it.

Stephen Byrd

you. Understood. That’s Thank I all have.

Operator

Thank you.

Our with your Lapides question comes Sachs. Goldman with from next Michael Please questions. of the line ahead go

Michael Lapides

the on kudos. this a bit but today's know -- cost, lot FE with cask a of meaning on would the creditor nuclear the announcement. new question that of liability road, maintain the that the decommissioning long if so Congrats follow-up One you about to plants doesn't of retirement of Does owners plants guys. Corp. storage little been cost, the the announced, a progress, Hey, made as dry new that actually it's fall the I all and though. mean plants? the the any retire then associated group

Charles E. Jones

That's correct.

Michael Lapides

if distribution is that. this up this that housekeeping know revenues that. well? don't wanted O&M of check passed on I a the One look just all item. a and good year-over-year. for just It looking I in like is or I’m business stuff and is was that see Just and more to Okay. that through -- thing, misreading gets appreciate other bit one maybe one as

Jason J. Lisowski

cost being Chief reduced, and contribution is is Officer. O&M was $X.XX made pension This of the in There year-over-year. actually Jason lot benefit return asset of that the about Hey, is Michael. January. back because higher OPEB cost and the the through Accounting benefit a Lisowski, a Actually

Michael Lapides

you that, misread follow-up have may again, Once guys I I guys. congratulations will offline. it. Got with

Charles E. Jones

get question. to nice It's a distribution

Operator

with question line from next Fishman ahead. go Morningstar. of comes Please our Charles the And

Charles Fishman

reluctantly Yes. sheet in in in Exhibit want term my FE, was as X-K unsecured I Chuck, reading leaseholders creditors just what of become, that that expert that there make this you no memorialize obligation $XXX sure not A filed is Mansfield morning. is the bankruptcy to the being that of tune correct. of, All the correct? to the have FES the to million, does

Charles E. Jones

Correct.

Charles Fishman

have. question you. the I That's only Thank

Operator

our ahead your muted. the And Shar go from check with Guggenheim. question is next of with Pourreza your Please line you’re if comes Please live. line questions. Shar,

Shahriar Pourreza

that. about guys. morning, Good Sorry

Charles E. Jones

Shar. Hi,

Shahriar Pourreza

answered, also of activities -- -- relate, there the of potentially the if you language can place ask up the me does were that assets. was most one the decommissioning questions work Does and in was my terms let with tax note of in of mitigated or fossil Just a somewhat but be is there of sale note, some note? of tax sale sort process a tax on be that of or for is how sale draft, there there sort could whether the partial nuclear the the

James F. Pearson

plant tax deduction agreement our what is work say, turn stock tax in that FE deactivate through from is means with intended that to the the them What if to, sharing that's or and mitigate. that's sell were pays that reduced, they really intercompany and note

Shahriar Pourreza

it. got Okay,

the you to of So sale decommissioning as down? plants shut it's the not related potential activities

James F. Pearson

No.

Shahriar Pourreza

in sell process the a place to there Is activities? decommissioning

Charles E. Jones

You the would talk creditors and that to to one. about have FES

Shahriar Pourreza

Chuck, then, distribution you me Okay, question. And a great. let ask

tax and of potentially at have of sort you of of of like back much look how deferred balance about as So been you opportunity income think you that the the sort is about accumulated reform you portion, later out some an about versus of but tax deferred, you as of And higher credit sort know as think has base that thought sooner rate unprotected? guys I about protected unprotected of you there sort the and than opportunities? or is have stuff broken sort that think have, guys sort

James F. Pearson

focused is I haven't I’m that know that the would said piece on had an in point, point. you we unprotected insignificant before this we field, I a was on this relatively be lying not. which that question much to so at I if I attention expert at

Shahriar Pourreza

Thanks. guys. Congrats, were answered. Okay, My great. questions

James F. Pearson

you. Thank

Operator

Storozynski question line go Macquarie ahead And Instructions] Please with from Angie the comes our next [Operator of questions. Capital. your with

Angieszka Storozynski

you. Thank

to have a this So on X% question I so issued was before. X% EPS that CAGR,

You so creditors, knew how with much sense. money you we’ve will need FES to a really now settle

settlement? difference give to in I’m the that And offset place within me range with is associated the you range? those an in and costs Thank not can So between to potential there's X% roughly hence what X% the the that basically if incremental any driving same if idea you.

Charles E. Jones

that already when we the assumptions in of X% discussions we're with what cost Angie, and that you into middle creditors reach an So, might the our agreement be. in to about February, to built gave X%

this So adjust to and included time. it there's it's already X% in no to X% for the need at

Angieszka Storozynski

of fees So so the growth is as and X% just the -- to function attrition O&M X% purely maybe delta a low or CapEx well?

Charles E. Jones

to the X%. X% to delta no There's

Angieszka Storozynski

understand. I a an What’s EPS biggest What driver no, CAGR? say versus me X% what to I’m No, EPS gave is CAGR X% could the here? trying

Charles E. Jones

investments us investment end. the what as More the infrastructure would New or investment towards Ohio platform, distribution Jersey. be More top modernization drive in would such the in

Angieszka Storozynski

Thank Okay. you.

Operator

of go Please our And question with Sachs. Michael line comes Lapides next from ahead. the Goldman

Michael Lapides

bit under where appendix little to ask make about Hey, it's I the Pennsylvania going business. the utilities into guys. healthy like that the talk ones go trajectory fix they’re that ROEs In and two that your the plan Can slide questions I’m Actually, you've distribution slide Chuck, think the that I’m when about utilities we earning before more going XX you are look about to you are day, to earning? Pennsylvania, the to earning. please, talk you and a under Ohio. got What’s

James F. Pearson

would well whether be load our back we at our is sit be I a go then and or will to investments from we and projected degradation filing. we'll what going we in always say for look capital as what do growth Yes, as what decision should are Michael, standpoint, make a

at the right, through expected But should additional to are, distribution that the you time. that of within make returns back it. and latter look recovery that what But I You’re part flow to to going a whether are in a I some of and a We're and this universally utilities down in would point higher do for couple the Maryland. we there, have a we to approach companies, X.X% what the starting at plan allow in range we them expenditures doesn’t decision our making say proceeding that magnified is that’s there ROEs there's below DISC think slightly in have … we’ve spend that. on see think all got or bring whatever -- we’re going we on and year of -- us that's what rate go is, can But our then revenues way this planning just at to filing a the I our

Michael Lapides

Got it. And …

James F. Pearson

what strategically say below … is when fatigue. to We go make rate immediately decision that’s those the get on -- at slightly and a I'd make look filings. timing in to optimal we what into don’t

Michael Lapides

We of the M&A to announcement where costs rate companies of a it. And this process four eventually somewhere question. occurring today cut or had costs efficient. via are industry including Those companies more regulated more the back case road, among M&A. in kind be an makes three -- customers Got flow more down able may made years strategic via companies then to

than it's landscape rather you curious like think How about what and get you the FES for if FirstEnergy's that and once M&A landscape, role Just happening sooner looks later. in result any. it

Charles E. Jones

achieve am benchmark benchmark O&M of against events. those synergies our have we well And So of across states lowest we competition. pretty of we’re say think those that transactions a is that types all would in they end proud costs us to result very that. much rates the helped lower, that that I of three when that of product The the I the of you our serve. our have utilities,

of when to it think I’m cost perspective to the benefit customers. premium difficult our makes the to and from given things in we’ve a cost type the about to M&A of So deliver you of the regulatory today achieve dividends those little a because short-term. transactions customers high tentative

now X top I customers investors with for dividend across million policy a appropriate good to -- X% be think That come. X% to states. is to we’ve for a of going our an story growth ourselves time on five positioned long

Michael Lapides

Thank it. you, guys. Chuck. Much appreciated, Got

Charles E. Jones

as for you and Okay. your for Well, always support. your you thank your questions and time thank

and for forward, in to quarter. an talk I move next think this was important we call we'll as us you

Operator

concludes teleconference. This today’s

and thank You for time, lines may participation. disconnect at your your this you

FirstEnergy (FE) 23 Apr 182018 Q1 Earnings call transcript