FE - Earnings call transcript Q3 2018

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Operator

Greetings, and welcome to the FirstEnergy Corp.

Third Quarter 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Investor FirstEnergy President, Vice Prezelj, Relations Corp. for Irene you. Thank Ms. Prezelj, you begin. may

Irene Prezelj

strategies Quarter Welcome statements Today, performance, subject our statements our to to actual link and to Melissa. current can Earnings based regarding prospects. on are our earnings, the on risks be forward-looking Thanks, are materially that filings. various Third website Call. expectations These make we revenues, and and the those information from SEC of earnings under Factors in uncertainties. results indicated could and found investors cause differ by statements section such will

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

turn call Chuck. to the over I'll Now

Charles Jones

Thank on last we a everyone. successfully our a regulated complete and I'm carried progress several fully to quarter, and critical you Since initiatives. this We to August, utility. speak results morning, you, have and great pleased about chance transition the of steps our had call to Irene, in our our key good with to out have necessary

bankruptcy definitive important development exit court As positive and I'm agreement in our the This subsidiaries the FirstEnergy the know, competitive perhaps generation. most approved proceedings FENOC. XX, you marks of Chapter its from our Solutions, sure September on in settlement milestone XX very

effectively impact court. the affiliates, the they as work regulated in FES, and will we none our you FENOC bankruptcy occasionally clear, of ability to While our progress strategy. also be that execute this see We're organization expect impacted support implementing about total, in our shared of with may forward. news To going their workforce our align effort. and In of shared this cost Tomorrow regulated initiative, XXX our services were stages service to by final and structure efficiently businesses the FE positions which will our

accepted some utility the In we transition leaner opportunities XXX addition voluntary in employees positions, eliminated control. employees, reducing enhanced and package, of into XXX management nearly our created a open layers our to increasing retirement by business structure and flatter, spans nearly who

of there went As and are level Director services XXX manager quarter. leadership this into nearly changes in fewer and majority and positions effort, Vice during positions part streamlining organizational our including the effect XX% of supervisory XX these Director, President organization, third shared The positions. Executive

As part competitive of associated the our FE million of cost were our teams will identified that $XXX the operations. that Tomorrow effort, opportunities eliminate with

$XX addition, FES. the we expect depreciation, shared of In offset million systems to with common with associated fully

by O&M in provide million million. costs our savings The an month. labor additional We be on reflected and reductions Tomorrow initiative less savings effort our The reliance total an incremental been EEI functions. cash the and $XX has earnings FE capital of at expected and teams will will guidance, we contractor $XX work include in million also identified next for outstanding XXXX across interest, and of $XX corporate reductions in

organization within our operating industry. in of years that to expenses extremely focused employees' the with In support services our of business. proud year, regulated fully period of of to remain our in cost we we associated Past benchmark been this particular, and company. our on organization, ability confident a the change quartile execution our projected have two rapid I'm objectives. have and level are shared fact, a solely And our proper structure of top the

to the and posted in reported results strong through exceeded perform to largely weather continue summer September. is well. very our last saw night, third hot results due you that businesses of quarter As the the We we our lingered regulated end guidance,

addition earnings we industrial very in were our more discuss in saw residential quarter at pleased the same that usage. growth benefits but drivers quarter was of consecutive will And the weather compared from detail, that the a XXXX, adjusted usage up the marking time, the to of growth second X.X% We of quarter third in heat, class. we to ninth in

In And at customer XX. we million in Potomac $XXX execute The three the a the the a on request we hearings tax regulatory Edison PUCO. filing supplemented case the nearly base to for in voltage front, distribution, we modernization years. The plan filed On Maryland and continue August, pending by final rate this to In on week, our $X.X for first test provided our the we focus would the in addresses Service Public update investments plans. recovery XX year that of of is includes Ohio, full distribution January of control Maryland schedule request reliable preparing platform made The million to forecasted for related continued, application reform. evidentiary on with procedural safe partially year savings our plan to system grid federal order net XX, service. the is automation, and future. in expect Maryland have $XX.X beginning the The million we March our the Commission of months actual ensure data. XX distribution

the JCP&L grid the PUCO commission's investment the on $XXX pending we plan million focus Reliability believe is at infrastructure able In modernization is four year platform, issues. will our Now modernization Jersey, that distribution New to proceeding be powered BPU. the Plus complete, forward initiative and

of our system safety, in reliability As we resiliency New benefit customers Jersey. plan is quarter, discussed this of enhance last distribution for the to designed the the and

timely receive we the schedule approval by a will We that BPU. soon are to procedural hopeful facilitate

share, the section construction XXX-kilovolt future. existing as transmission line when this transmission This of mid-Atlantic line expansion the XXXX, the risk $X.XX summer, using annual the Troy of an allow OPEB to May, energizing Also to to range nine earnings subsidiary, range mark-to-market line bankruptcy million XXX-kilovolts updated We're and reliability to We've The share line XXX-kilovolt stretches year $X.XX of growth we the several in overloads substations part region. of Consistent remain pension to was and for a invest GAAP address our $XX This of the South XX.X-mile, and and with of interstate initiative, system Central right further this County could court-approved our second we earnings operating X% connect we're which and forecast earnings months our When in rebuild X% the a adjustments. deconsolidation XXXX. designed $X.XX complete guidance neighboring to project with that impact we it and County. and connect reflects a our Somerset weather in and across completed this our standards. With on we into of of Finally, County XXXX in year reliability Bradford million circuit through track settlement in transmission eastward project execute will XXX-kilovolt future this $XX previous estimate year, conditions continue raising and Pennsylvania. billion Towanda-South earlier East $X.X the performance FES strong the our service that existing and involve from construction new thermal first that an low-voltage rebuild in longer-term will full our $X.XX in per an is the rebuilding rebuilding project that impact footprint, nearing needed FENOC year, favorable through finished to operating share. away XXXX Pennsylvania. Bradford full X.X-mile span to our our to plans this per reaffirming $X.XX line to per on projection was $X.XX also XX.X-mile of year.

financial results third of our Steve our Now a developments. provide and will review strong quarter

Steven Strah

good It's great you with morning, and Chuck, everyone. Thanks, speak to today.

are quarter. very results straightforward Our this for

a So quarter we billion, the GAAP quick starting the to with the your of agreement FENOC cases. plenty the from a moved questions. discontinued transfer this under earnings results, we third This $X.X will with with obligations pretax to excluded plant per Plant quarter. due upcoming Pleasants Starting in operations $X.XX reflect our our the and expected current GAAP and a share. And be approval of that FES its court's yesterday, reported settlement, operating representing FES of bankruptcy for of to time loss discussion charge is third with to

that Before on of move I continue presenting a us earnings you to earnings as drivers, timing. conversion we the the operating fully and impact to projections on remind show shares I'll it fully discussion This eliminates of operating allows converted and preferred basis. diluted

the converted In end about reference as terms September of we your preferred of the issuance, equity remaining XX. preferred accordance majority with XXXX. been shares converted XX% of July, of the by For be had the shares the expect to of

posted detailed to information and investment consolidated reconciliations our on the and website. which As community, the always, provide our we is about report quarter

higher to quarter of higher days of lower quarter These weather year third distribution last than quarter in cooling $X.XX X.X% the and along end customers largely and related to above across Sales segments taxes. more deliveries XX% third operating of Our deliveries expenses, deliveries customer XX.X%, commodity measures share cost third of primarily was financing sector. all expense compared regulated than normal. of increased bulk weather distribution our top in cost earnings guidance to and to share were Pennsylvania, Total On by factors compared down The vegetation energy continued were to the business lower due increased in with up This last residential basis, were of with work compared XXXX. driving deliveries our to degree efficiency $X.XX per XX% that increase a increased per depreciation related the year. impact X.X%. general management adjusted the the higher decrease X.X% - benefited customers reflects margin. the offset while commercial Results higher surpassed XXXX. commercial to that

straight is continue positive we load. third sector, which the the the will form higher saw weather for that prior residential count, period. However, as usage increased deliveries sales industries, the customer class Paired we the industrial in promising over have our increased increase with to hospitals In weather-related. are shale from a improvement residential of residential the primarily uptick customer continued universities, in our was The X.X% steel we said where and these metrics XXXX total quarter cautiously customers of of This also demand but developments we year trend. consecutive optimistic in where Chuck quarters our seen a weather-adjusted to in gas adjusted X.X%. and third quarter in nine increases meaningful second came quarter modest see compared

segment, customer our made are revenues the in rate that results compared quarter ATSI higher year. reflects and This in JCP&L. impact $X.XX to base as same And lower then transmission at to increased our as the federal higher XXXX. on last of earnings business, compared subsidiaries per tax our higher to share third Moving well reflected expenses operating the rate period

a I update want liquidity quick our Finally, on facilities. give you to

regulated company XXXX. As have billion reduced we with improved risk a credit a from aggregate On requirements. stable, extended and and $X.X under revolving predictable with fully XX, we their cash earnings facilities lower commitments billion liquidity our maturity to dates much profile December October that comes $X flow, to

into We strong $X.XX term Tomorrow quarter had two our entered to expense with in initiative. changes billion reduced facility also credit our We borrowings. result. refinance excellent connection totaling revolver loans with interest an These financial new FE

committed on your We execution, upgrade and growth and to service our to grade by and our an including positioning and for oriented in also employees. milestones important stable, your you are focused We corporate S&P. very investment Thank in FirstEnergy benefit interest we for time customers shareholders, predictable customer transformation, FirstEnergy. remain to achieved

questions. Now your let's take

Operator

Instructions]. [Operator

from Dumoulin-Smith question of comes Julien first of from America Lynch. line Our Merrill the Bank

Julien Dumoulin-Smith

would external you you're a follow how savings whether about the on pursue opportunities, the So you additional own of latitude maybe from a because want Capex are litany call, you're budget, being through yourself external see debt or CapEx? because additional simply Can to balance budget? the potential the And to Capex the just described to of within up where to sheet kind finance given metrics in the additional additional the your already thinking ramifications perhaps of of to some position And here? Is ultimately FFO debt what that to perspective? funds to FFO raise financing increase if to you targeting? here, latitude you you cost trending What latitude? of talk wanted be

Charles Jones

right. All

but that's like questions on. five Julien, there So to will try I them in take one all

basically has execute of Tomorrow, cost, that which company. the supporting been that. we the drag our regulated business history So In plan, become the was our first, obvious on FE way, the deal a competitive objective ability first of to to accomplished a throughout none $XXX with shared services million of where our

systems Second accomplished with decimal be be that, credit capital, was the third will top the $XX to O&M to of that associated moving that. interest terms million It in we shared going $XX depreciation million of On of million common that $XX deal and metrics. place. with in with then of substantial of we our FES, and isn't down

guideline, So did it's in all? to future. difference. Where I XX%, XX% us not be Moody's expect the we the the XX% get big going to for and a which is we're S&P make keeps And guideline, X% targeting to there above foreseeable them

Julien Dumoulin-Smith

there's different or Is you here. CapEx already your away within from many But continue raising I chance means months a that opportunities you the know capital Well, a to ranges these you hitting articulated? few your contemplate will at committed there are budget some and than staying respect to with looking all that if markets what you've pursuing about external of living perhaps to the CapEx. of beyond materialize obviously, to ago, your just the any would financing? lot all reflect

Charles Jones

Okay.

of and in then, and point. at So new might that we all, now invest billion any infrastructure we've evaluate not XXXX. And be equity $X.X at through XXXX, said, it through but don't component, contemplate at first equities FirstEnergy. point, unnecessary some Between we'll we'll

X% have combined increasing I for time. and this per take number growth I X% to As don't see do see company. we our for that plan far I year an it CapEx The to as any reason generates that's planned above today, FirstEnergy not that, at it. appropriate think

Julien Dumoulin-Smith

quickly. I if clarify And it. Got can

As respect savings year-over-year will, that Just various identified, and about cost question. right? flowing rate the about pieces with of annualized you 'XX the onwards, if into or think you 'XX run timing think it's do more there, to a you how

Charles Jones

in it see beyond. 'XX We'll and

Julien Dumoulin-Smith

clear? be to 'XX, year full The

Charles Jones

Yes.

Steven Strah

And Julien, growth our in rate. X% this are would is also within in support savings Steve Strah. say, to those And and blended just I X%

Julien Dumoulin-Smith

- Right. an a that figure annual a 'XX that a the 'XX But which figure or you perhaps okay, factor extent there's not that's than more great. to will.... such of - annualizing I

Steven Strah

No.

Operator

the from Wolfe comes Steve of question Fleishman next Our line with Research.

Steven Fleishman

how the now? a you Could you're economy color next terms sales normalized on looks to seeing for little give local weather more year what and in of right and the

Charles Jones

some we XX,XXX weather the residential that news good and the warm quarter adjust most positive. this summer. XXXX positive had residential out third when Well, X.X% is, add did the we in seeing we developments customers between are growth today. the the new probably segment We of is

to said and think customers. kind remarks, in now, some in nine quarters So fuel growth it's and eroded things. thing. were growth, sectors. the we've that as industrial to I growth we growth were where that's But in we've the that and I gas X.X% other sector, switching second adding row the seen customers seen in where efficiency that's good my of in past seeing the contributing growth natural XX,XXX X.X% is quarter and We a new by a energy as opening

is what the we're So in natural starting FirstEnergy into growth I footprint. economy of the move seeing - national is think the to some

Steven Fleishman

Okay. it? any get the then any and reform addressing, that thoughts Ohio order in And earlier just this to flexibility on seems on tax week, thoughts

Charles Jones

the stated thoughts. In adjust to FERC sense the type the the we've a AYE adjustments us an I with, done tax settlement of be in and Maryland Pennsylvania. in the Public formula That make and case board. with Obviously, in for that, and only we the Ohio. New rate have down my years left them leaves a automatically. issue more there filed the as you Yes. done requested. parties. all appropriate We're We give in interested rates dealing case makes done West on Jersey. some We're with rates Ohio transmission, several resolve expect, rates for Commission been Virginia. deal frozen to to be across the sit I'll able there. of that for we'll work We'll Utilities reform done for with in is We're despite But

Steven Fleishman

upcoming miss equipment disclosures just just - are might And any at lastly, if Great. the providing? this or the then I Addison beginning, the what conference, at you

Charles Jones

guidance. the now plate Anything on right is XXXX

Operator

Our line Byrd next comes Stephen of the from question Morgan with Stanley.

Stephen Byrd

as, you increase wanted I generation and step well have have shutdowns amount I as the mix there's I number guess, legislation back to of guess, that talk it moving changes potential could about renewables pieces, in in a to of Ohio. possibility the of Ohio. you a numerous

terms from amount number of be If directly renewables that FirstEnergy an to this set additional there if grid opportunity a the about needed. of thinking both of overtime a the in possibility up. would I'm goes is target investing renewables, So changes in shutdowns,

of it's incremental might anything a I'd to on? term, what on to longer you Ohio like the involvement Just renewables, comment the that generally, terms spending, your else changes of grid but some incremental see or that require around in of might thinking

Charles Jones

Ohio, in and transmission now, fully a Right distribution regulated FirstEnergy company. is

no Ohio, this would any in law, longer, course changes or we be closures transmission and allowed capability and dealt regulatory perspective. are and point as there be would have time, from aren't in closures a utilities Ohio the competitive those. on system regulated process of networking additional our transmission Should to At customers invest focused the there's those any with generations. review process changes the what make we're ARTEP on under identify it a handle Those through of to in those necessary. generation, PJM to within needs We in - T&D

this at the about right Ohio We're in and serving point generation there. about worrying time any way infrastructure T&D spending customers the in not worried our I'm time. So

Stephen Byrd

terms cutting part effort, as and curious any progress your then your there. that cost And relative structure looks? to to peers? like of great relative structure neighboring just or on was just kind how in looks forma, what pro just curious I structure And of do benchmarking, could cost switching peer making cost did you provide if Understood. cost over utilities your your to of any commentary there's cost-cutting a

Charles Jones

office, benchmarks to including cost Steven. table and number assist with a high level this of brought us did, corporate work a the people the peers. But we me also our between drove leadership process, used We what the they That's of office. and to at like, the for layers us, with entire benchmarkings corporate Yes. reduction. management in things of And Accenture help of doing the in control the our to spans

said industry. my opening it's remarks, I As the cost within structure that all our in top now in are our done, corporate quartile

Stephen Byrd

Understood. level utility of your lack there whether units because the appreciated the scale high be I at Chuck, current level, it terms in noticeably And of drivers? you've massively. of at of are got pretty any are just - or your just the any that cost, cost down Just other in

sort any the having if a peers? a higher than bit stand curious of Just subsidiary as cost quite structure of that's out

Charles Jones

No.

there In just it's opposite. fact, - the

cost capital both top and generally and O&M, quartile levels. decile top for Our our benchmarked utility in CapEx the is structure even current at

Operator

question Our line Deutsche with next Bank. Arnold Jonathan comes of the

Jonathan Arnold

you Could of EEI XXXX? for rolling if be would just the If goes when through reasonable current to forward I not outlook, but your I'm expect the question. EEI, in terms think not wrong about to us

Charles Jones

at XXXX. see goes this beyond year you'll anything that think don't I EEI

Jonathan Arnold

of or you think, that is sort Chuck, more year to.... in sort next year-end your is later the you And year. with would This call do going something of

Charles Jones

it'll be later I in think XXXX. sometime

Jonathan Arnold

year before particularly what to Okay. I let's the can, are another say? And see you to if adding outlook waiting

Charles Jones

we're see. number of waiting there's a to Well, things

months in of fully see lot things regulated. trend terms on that two First in of want a a of growth to now make territory not. all, load our focus whether we've or I to we're got

think could that given nailed execute that is factor. to. give that have think, do the out be just outside years I I I that plans a and we I can to go years that of big we like bit down, proven And I on. little us to planning has four window you for four out, a And beyond think know what is

Jonathan Arnold

Okay. just that I comments have you any And - on do you order, on then recent transmission, FERC have rates realize settled. the

model. As you just potential of versus you're us you some that shift give the where do set to look of at earnings how think are? new the you would Can sort context

Charles Jones

how Well, at here's look I it.

are right set Our just - The X was fairly now. new formula rate return rates of recently. MAIT

for bodes rates that think, I well forward. those going

state down against to term, many compress in going work going other shift much ROEs, probably longer think, if FERC ROEs, money investment going towards our stimulate cases, them and to it's is I just done there's it's the this recent because FERC transmission not trying system change to to do it's from to in away what but and with transmission. case to

that of think decide But in ROE control be million on the a think the and make So something off move will and here's we it's I something going it. that impact rate is in track our even significant, way. they how us the is change X% forward, the rod That rest X% to a process. not is of to FirstEnergy's take about up can to $XX growth if any in kind from I a X.X% earnings. within plan about not

Operator

line Our Evercore comes the from with Gordon Greg next ISI. question of

Gregory Gordon

to and them all. we Julien just our actually questions all maybe ask think just email should I

help couldn't Julien, myself, talk later. Sorry, to you

am earnings. number. remembering rebase So of your XXXX, correctly? recall based and back I X% a to target just to I off Is conversation the If correctly, that go X% growth - know, is rebase around $X.XX you

Charles Jones

fully The XXXX DMR. number diluted ex

Gregory Gordon

a It's XXXX Right. number?

Charles Jones

Yes.

Gregory Gordon

Okay, just number. sure - I that's had make wanted to right, XXXX

like this you early at it confident to of look now plan of exiting. that? there're you've CapEx for I got would the X% you you cutting guidance were sort of books, within towards you load that this. at Or then point? where you to the is at X% maybe the be - feel And upper that in your ability were types solidified, end sort to discuss these or range to sort that don't want trending consistent, of you too Would the comment be growth if of the guidance range on cost midpoint - numbers are FES So if be in to or that

Charles Jones

I'm give number So XXXX until not EEI. one, guidance going to

So that X% X% a to a beyond you'll hear few And that, range. we in number, weeks. give

to of and or the bottom range, expect range. top We guide now that that we right be the don't within to

that you're think And to going I that affect assume we be a within factors should So somewhere range. of that. can lot

earlier, that that bit reaffirmed said be to throughout years that of the growth drive we've that. and two I range. over more move down. of confident trend I'm something takes top There's happens As to if months can might puts If something us end you going residential a X% a But to becomes will with count three FERC ROEs X% range on. that that, the and is growth little next

Gregory Gordon

dividend paid the since paid years it back. that it guys you And just cut rate at was the same several Great. you

Charles Jones

Yes.

Gregory Gordon

policy your and you to Can recommend a to ratio more give appropriate to both go that's board when payout us the as to terms comparable to think peers growth? it's some of guidance you in

Charles Jones

Yes.

we've a of all been the was month now since for So approved. about filing a fully regulated company

Gregory Gordon

you? keeping So what's

Charles Jones

We will our market be So I is, we moving. we're along, with and leadership to regulated might I've to discussions I on dividend yield our dividend if know board, think immediate is at me recommend nothing we ashamed see we expect to just to in began do future to keeping need X% some be need have what's and come, policy. time, going team It's in point peers our internally In to price the the the the the range on X.X% said it. of. all be treated what is to to in the patient, where a stock it like depending

Operator

of with Citigroup. Mehta question line next Our from comes Praful the

Praful Mehta

just and following that through DMR on see of doesn't come do about you going of up that see So to you earnings an with drop-off do what the extension, DMR How if kind positioned, in EPS away? side, the and thinking maybe terms the extension the DMR.

Charles Jones

DMR. given that earnings of So exclude we've all projections our you

the be that no next expect last positive, the it drop-off that of would a But be it it we If whatsoever case time. or roll there year, file we'll with years early answer the have negative. will happens for two So and regardless. year, the be to on commission can at hopeful next by DMR what end those of point cannot about only in extension

Praful Mehta

is, enough. I Yes, the what And guess is DMR you that let's do I other that's put going If fair the I the know, going it forward? way see get which it, where was then you for upside

Charles Jones

you us track if what that two I that years with taking can term see you we're That's would with Well, anything will be it doing it, we've it we continue. and taken that wouldn't worth. out calculate the us money of take why sharing off long now. that of can't numbers

Praful Mehta

balance sheet and core was Slide XX, which Got you. your $X looking credit debt enough. moving Fair I debt. whole gone to billion. the guess And I on the had up debt to side about total has and the at

well. process. as was loan to go core is like Just to like wanted restructuring whole through understand, of target debt you term as was taken you I what there would a have that noted there a this

wanted of percentage whole see So total debt you do as core little as debt on a context where the and going get to more well. just a that

Charles Jones

$X that No higher at than the billion now. it's right

Praful Mehta

you. Got balance will utility as reduce terms proportion Or guess, is your side? of And rest of that growth with target going of only total there debt be of I in it'll sheet, the grows what the forward? any the

Steven Strah

this Steve. Praful, is

be debt as around debt to holding down Over XX%. of time, will XX% it to total a company percentage So now, go to we expect right about XX%.

Praful Mehta

billion included include it the the Got not does recently term not loans you. it with XX, Is taken. And within that you $X to Slide billion? that it is just or On says clarify. the have $X

Steven Strah

company billion. to basically, time So over our be $X will debt about average holding

does the So be include loans. a it's term give-and-take, going to so it little

Operator

Michael Our next with the question Lapides line comes Goldman of Sachs. from

Michael Lapides

I'll ask orders. in for them

out the of that new back back Meaning, to that ops. all, I going accrued make associated FE, on FE? O&M kind FES the to capital I'm FE, First understand prep on for Slide something regulated or way there, of just the and that's does of that the Who trying emergence? Does actually what's million with come X happening $XXX sure benefit the benefit costs FE else? to? and competitive whether does Tomorrow, and

Charles Jones

been traditionally that it our It actual ability incurred services strategy. and the regulated did is allocations. deal to If our to shared have execute a that through It would FES shared support doesn't company it, we with services FENOC of Michael. past not have the anybody, our in benefit with our part shared them been drag costs we've the on

So the ultimately go don't goal these FES anymore. we them says, We services want make needed to was away. shared as

dollar-for-dollar So the elimination of to were drag a it's previously on FES, that ability that forward. built move so there's to no our costs basically

Michael Lapides

related whether inherent business to monetize FE guys of transmission that to or company, on that are kind follow-up A or the and yield you it. structure the FE your got a trades, if the value we you are Meaning, you the How where of the a value and than highlight doesn't regulated parts the question. value some the family? Chuck, the there a there think or possible? other recognize maybe you've that you within about little market? of bit pure-play correctly. of about Are Are accentuate discussions corporate stock the other trades that and ways the differently bit to assets great market transmission are thinking to perspective a of maybe changes talked Got strategic little kind having on thoughts board of the valuation it utilities. there

Charles Jones

the it, in me as CEO, over on been a it, and the going we regulated four focus were to being business, on about going fully on think one do my a exit and I as about exit we were now that. entire X% top probably the we're competitive I process. first having being growth how than more said Well, X% of valuable a you of on and a about it's Based as month it to the regulated how X/X and this to But lot dividend into what that, rate much of has able think a fully company. And is. said, it job company, to focus finally years

Now isn't X% want that time. on our perfectly I I point do I'm necessarily anything with we our at need X% think of A Strategically, to company. the side - with company, fully regulated structured. in to to able that to think restructure company it's we something to this growth focus

got transmission distribution and have subsequent We if states. We've for the that. rate, a shareholders to road, for utilities formula we the across But have. Allegheny down are that five in system, sense how all to for we we'll regimes be regulated it under investment now maximize makes rates, move three out what driven at we it's of customers growth about going formula look do investment transmission

Operator

Research. comes Charles next Morningstar the of question Fishman with Our from line

Charles Fishman

a quick base, $X.XX initiated shares 'XX. about housekeeping I XXX the thing. you talked When you just X% growing to of had the X% to in million

you're million Now we're XXX assume fully million just XXXX our talking XXX no through flat we diluted in for modeling? Should equity.

Steven Strah

each year. under that program No, is a issue shares we we Steve This have Strah. DRIP

equity So it's value. million about million to of $XX $XXX

on So you can that. calculation your do based

Operator

Our the of with comes line question Scotia next Andrew Weil. from Howard Weisel

Andrew Weisel

been pretty you deeply. drilled the of into One topics have

couple more I have a details - I wanted into. So to just dig

some on First, you weather XXXX favorable one on the accelerate able support XXXX that into a from just to O&Ms, were summer, guidance? might quick given timing, this O&Ms the

Charles Jones

we within that a the you one have executing in to maneuver. front budget budget, start was Penelec in extra in to that want complex fact, No. reliability team because we nine little and has. get some trying original and And O&M you plans on months There spent into issues, in focus operating it the what a the do and a none I than company, But business. of when year contractors people just regulated what of a very them. to keep around money It's execute this move takes of we

there none that So done. was of

Andrew Weisel

enough. two Fair Then on Okay. Capex. questions

around all, you the conversations IIP New of the and regulators, and how First extension Jersey DPM with Ohio? DMR describe in would interveners potential the of

Charles Jones

We're staff the and in commission procedural So on with interveners. a we're IIP waiting Jersey, discussions to both New having schedule. issue

year think, you little to be guidance stands. those able first where part it will of discussions next give throughout and go I on the a on will more

And IIP never the in in commission think, the reaction been Jersey. it or put favorably general, the New to place. obviously, favorable used in they has I

clarity will get into year. early I So but bodes it well, one think that next

on initiative a a as On now on the to their our going Ohio lot year time that's to DMP, we're in we conclusion. to I time they're think PowerForward this of that said, commission get that, focus done hopeful the spent have I filing, that and can

will expect two year for make goes. continued, to growth. X% and of haven't that should make and our DMR, we any case a Obviously, early we'll we built on where why years be that see to filing our the last - X% the So but into next in

Andrew Weisel

would I Okay.[indiscernible] heard [indiscernible] anything then if be incremental. that is My and correctly you [indiscernible] that understanding plan.

that? approved, they are we if should about think So

Charles Jones

voice was closer and Ask maybe get garbled your you the to phone. question your again,

Andrew Weisel

Sorry, current [indiscernible]. correctly upside apologies. you you have heard I Capex really that said the does not If spend potential

Charles Jones

to plan should you next as beyond CapEx for it the plan on we what three three next to is the it current if let then. the that, of think make I know you years, for count being CapEx think I decide and But can years. we'll it think the any you changes

Operator

[Operator Instructions].

next Our of with Fremont Paul comes line from Mizuho. the question

Paul Fremont

under a topic to Just request, covered general to need it before actually sort clarification the of guess off be under they on act make that your kick they're looking December early proceeding at? seems I of able quick that to determinations on PowerForward. that would Do looks like in which they're point

Charles Jones

at They're any request act on to free time. No. our

Paul Fremont

Okay.

move from yours work? And would independently scheduling when that you forward the will expect so you expect proceeding? How then that would -

Charles Jones

commission when a active time on the on think you give get not-too-distant now something an said, having has as can I'm in to it can't We're that order, it. optimistic date as we discussions staff Paul, expect I the future. focus but it. I I I on with done

Operator

we to come Jones for for the end turn to comments. final the questions. any Mr. Ladies our and time back I'll floor allowed have of gentlemen,

Charles Jones

to seeing look to of forward few We Take a thank like FirstEnergy. you support all your care. for I'd Well, weeks. Okay. in you at EEI the

Operator

concludes Thank you. teleconference. today's This

your lines your at may you You for Thank participation. time. disconnect this

FirstEnergy (FE) 26 Oct 182018 Q3 Earnings call transcript