FE - Earnings call 3 2023 | FirstEnergy Corp.

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Operator

Greetings, and welcome to the FirstEnergy Corp.

Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Irene Prezelj, Vice President, Investor Relations and Communications for FirstEnergy Corp. you. Thank Ms. begin. may you Prezelj,

Irene Prezelj

you. Good Quarter to Third and morning, Earnings Review. everyone, XXXX welcome FirstEnergy's Thank

Our Chief by call Officer. today, Senior President lead President and will and Vice he'll Executive Officer, be Chief joined and Jon our Tierney, Taylor, Financial Brian our

website materially use Factors Our our differ of results these measures forward-looking slides statements. non-GAAP could be our available presentation discussion cause found to Today's release, SEC related financial financial firstenergycorp.com. earnings are statements can filings. will that our information from and on at include the in and

of includes today's The along appendix non-GAAP presentation with of the reconciliation information, measures. financial supplemental

pleasure turn it's call over to my to Brian. Now the

Brian Tierney

developments and Today, months morning, everyone. few Irene, the quarter and I'll our you, outlook and good the some over for last third Thank key future. discuss year-to-date results,

For per quarter, favorably of for at per $X.XX last upper at GAAP share Operating year. to share earnings third the versus $X.XX quarter the of earnings we and compared year. strong guidance range, were share the last third $X.XX delivered per our $X.XX end

was performance as to our system and plan operating reliability. capital financial as execution Our result of of well regulated and resiliency improve investment a discipline expenses,

for a XX% the the quarter on tax which year-to-date adjustment, previewed to as Also, a tax to in call, period. tax we second the realized benefit state related effective quarter reduced rate our

per by service compared very territory earnings temperatures last $X.XX share Our year. continued experience to to impacting mild

our Through essentially our long-term impacted higher program. remained strong flat. balances costs, as of primarily In investment by debt treasury by rate pension our borrowing financing higher fund to a addition, lower group, execution quarterly results credit consolidated were and used result capital

in earnings we reported $X.XX the per earnings share for last For X-month Operating year. share per the compared $X.XX were to period share XXXX. per versus $X.XX $X.XX year-to-date of period, GAAP

plan of headwinds our market know, you impact distribution the extremely XXXX the both pension we and conditions of As in the mild on from to have impact temperatures faced some sales.

by challenges these on meet our Examples our allowing Our control, employees commitments despite include us demonstrating things within focusing the headwinds. to have these to financial discipline. risen financial

employees by XX% able on continuous various plan levels. or on ahead initiatives. Employees XXXX base million in over increasing is O&M by mostly Our $XXX our year-over-year of executing were $XXX XX% reduce capital CapEx improvement transmission, million year-to-date, with which to executed

was and detail Our treasury on organization strategic pension. used retire in convertible more low executed debt fund Jon high-cost others a of that in debt just few drivers cost these discuss a capital, our minutes. and issuance to will

The key this takeaway to is reliability tremendous our that our meet culture our continue targets. intend to on operational to customers. and resiliency execution to us performance, for change We we've and improve had financial and allow build

share, quarter guidance a per $X.XX providing We of fourth assumes are $X.XX normal range which weather. to

We share are our share $X.XX per to range $X.XX $X.XX. per also $X.XX to from our narrowing XXXX share range to of operating original guidance per earnings

rate midpoint of prior we X% reaffirming addition, our long-term to In off year's X% the targeted original of growth guidance. are

I quarter, a to the in topics. want couple developments key to move of I other Before address

Ohio briefly Commission, subpoena. to Organized the want I First, address Crime Investigation

We cooperate to and at continue commission and address have new the their time, no update this with we questions. material

that Their the were agreement be nothing continues with prosecution to new. activities focus on detailed in deferred

ensure to those happen activities responsibility for taken has activities implemented never that of those full again. type and FirstEnergy corrective actions

top-performing OOCIC to FirstEnergy utility. on into strategy the as continue a to cooperate executing fulfilling with will We our vision our and focus transform we

before I subject is last we uniquely positioned current well are we rate on interest The believe the move for that environment.

the next the year majority XXXX full FET close. funded and to $X.X on close of the with billion at to We proceeds early receive expect transaction in

X% the debt in capital of next debt our billion on our are outstanding. $X.X positioning addition, robust for our $X.X capital investments, average, This over from we're This approximating light our track plan. of total year, on up In maturities original couple billion. supports of years, plan

investments This over $X.X the and planned rate capital serve brings transmission are $X.X billion reviewing capital customers. In supporting to investments billion. billion, distribution, investments investment over the respectively. is our total XXXX comprised and our X-year $XX to growth XX% we're our approximately and plan and base of XXXX, additional XX% capital This period X% period

Slide to Turning X.

our XX% of sets as Board continue the the growth stage long-term is year. earlier payments dividend we a by to operating September, of that our growth It XX% working share represents aligned quarterly to dividend of review per increase to future March payout recent Board ratio paid the increase with this to per share of work declared earnings $X.XX quarterly for The $X.XX our X. was -- This XXXX. since investors. key some Let's developments. with payable targeted In value December that we X% approved for a compared as corresponds continue enhance

the and experience. approved reliability, equity support X.X% Public customer quarter, to Service and of our base a distribution On achieved rate regulatory $XX that supports that equity of returns resiliency the of improve also XX, increase During October some important investing ratio Commission XX%. an million strategy revenue we case milestones Maryland including our the

dependable territory. customers us which and deliver service helps We the to our support Maryland electricity are Potomac affordable this in continued providing outcome, commitment investments Edison's to state and pleased with on in our

sites to first totaling generation megawatts Virginia, our We're of also solar forward the move utility-scale of capacity. excited X XX in West with

an August. another XX Service the West the Our solar proposal, Public with PSC Commission to small sites, Jon will Ohio representing the along additional megawatts the approval approved once construction proceedings to Virginia. making was including X build from surcharge in in and address New we're seek case reach our and items We other XX% West consolidation Jersey, threshold. subscriptions progress Pennsylvania plan the the by customer discuss regulatory and filings, with Virginia rate

regulated to closer enhance shifting and to -- the decision-making and energy systems customers. execute that our work from experience where necessary on is serve done customer the new in to focused opportunities the making businesses, our are systems employees create accountability We vision, are investments To being and we in and transition. the our

are to several structured We in execution organization key allow will level. executive the greater an fill be unit business at making to positions that progress

In will Utilities, the who near future, and companies. operational organization, In a we to expect operations performance. our and and as well a executives have our as unit FirstEnergy be direction transmission Operating P&L will as President, new the business regulatory unit will our accountable state outcomes as X for President, well business will announce Officer. oversee FirstEnergy executives, Chief lead Utilities, responsibility stand-alone

my lead Chief range I'm and than planning, operations, Officer, customer including group will Five the the The construction, compliance. system experience about ever a future excited months functions, FirstEnergy. into Operating of and of more role, safety T&D

We financial are building operational of a excellence. and strong foundation

system strengthened sheet and energy and our in reliability, our for our balance support using invest in of the people to are We resiliency transition.

and look next more these at of to us investors. we're many opportunity the you are the opportunities strong to forward company EEI month continue you making to a create poised for investment to today. progress about Conference FirstEnergy. and We on the joining talking grow I seeing at capitalize Thank for

Jon financial I call for to over detail. will Now the more turn

K. Taylor

continued We end temperatures excellence to work and offset near our Brian, mild of enabled deliver you, quarter, guidance. our financial morning, and operational service had showcased us everyone. to good the a discipline. impact the unseasonably strong territory operating and commitment top This Thank results across which our of

a which in review few minutes. In regulatory our in more also making detail initiatives, we're addition, I'll good progress on

start Let's a review with our financial performance. of

year-to-date and a and compares earnings earnings Brian a sales. mentioned As to share share $X.XX our operating third and weather-related to despite $X.XX share And a on earnings share. earlier, plan a significant $X.XX operating headwinds $X.XX basis, $X.XX of earnings quarter are third a quarter share a lower share. distribution were earnings were GAAP GAAP pension of XXXX in operating from This XXXX $X.XX compared

on branding expenses. basis, XXXX for operating a to that in the company-wide versus that and is across including the Our XX% O&M primarily we build year-to-date in will large reduction in of on in spending compared the is by with when just XXXX. expectation use months lower an we beyond, XX% a performance $X.XX few. full productivity related unique About XX% X XXXX, spending focus accelerated share nature, year a to is of And quarter upon results a the cost due and reduced entire reductions in advertising, operating of roughly Lower third first O&M XXXX our representing and on levels. sustainable a name XX% other improved the contractors to $X.XX and improved share organization, part to being our reduction intense

teams transmission businesses. our running spending operations events, XXXX original ahead plan as of increase planning resulted an need to our from and to of to investment capital $X.X more our severe supply in capital-intensive respond and and to our of billion forecasted billion. both across and well also $XXX in plan with nearly $X.X chain the Strong We're execution million capital distribution storm

distribution as for drivers the focus of Together, operating our structures. capital business weather lower costs, of impact with new helped financing the impact distribution credit, the formula to well rate mostly the associated for quarter. and third at diligent the from sales. expenses, mild Results our these and each programs now issuances pension on Looking on higher benefited investment offset business units in our a debt of rate

increase and by Mild nearly share due partially mild third of year. than customer third decrease to of a from demand XXXX to drove decrease XX% X% to decreased X% on XXXX offset a by $X.XX Sales compared weather-adjusted a the in impacted quarter to weather, last summer a and resulting a summer degree the residential the with cooling earnings X% customers compared temperatures normal quarter basis. lower X% X% days total below

In is higher the X% in class and usage about this about on higher the weather-adjusted just and over X% than in resulting over a than XXXX basis. decreased last levels. weather-adjusted forecast temperatures mild sector, X% customer our X%, a decline year, Year-to-date, demand but quarter-over-quarter pre-pandemic from commercial X% increased

usage year and flat is about lag X%. by weather-adjusted continues pre-pandemic last to to Year-to-date levels

flat to quarter levels. industrial were customers compared slightly and lower sales of than pre-pandemic remain Finally, XXXX, the third year-to-date and to periods

Energizing base associated Looking the our at increased our as of a growth Future rate program. third X% with investment business, result transmission results of quarter

above we transmission last XX% So deployed or year year, XX% $XXX our $XXX million far approximately nearly business, million billion of and capital of $X.X an increase this plan. or our versus in

system Ohio, few a service system of XXX resiliency. reliability a improve resiliency currently in transmission the and line power just Belmont and Counties larger rebuilding service is a which a accommodate in Highlighting the XX-mile enhance Harrison improve customer In Northeast and of rebuilding XX-mile of kV kV line underway, to Pennsylvania, XXX XX-mile we're projects phase in we're increasing reliability, to many project enhance demand. section third

in And the for Kingwood West in of Virginia, transmission service energy line reinforce against we're system in demands high-voltage transmission miles upgrading the Preston local to County severe X,XXX a of weather, X enhance meet future customers area. and region reliability power

reduced largely rate we transmission segment, the our third results of $X.X effective discussed call, expected For year, tax operating that we second year. which of under the reflect the of versus plan for on original benefit In full our just anticipate for tax formula the the billion over rate the loss net corporate from state $X.X billion. use quarter our quarter investments carryforwards, now our consolidated

first including normal. consistent our of weather-related distribution and headwinds growth share this cost than impact of XXXX, lower operational and and by has the results throughout and mentioned, from sales $X.XX tax more execution, benefits our X financing significant which control from investment financial the offset pension Brian other months versus the plan, impacted year for As per

proud I'm these our challenges employees all supported have our commitments. of how addressed and of

plan costing not plan this with is earlier over, now slightly debt financing of regulated company to complete, billion, While requirements year, billion debt of below FE Also of coupon voluntary average that to with an revolver long-term our coupon borrowings X XXXX allowed in X% minimum transactions is X.X%. our totaling our at $X.X more operating companies make pension X.XX%, XXXX with to refinance a of $X.X XXXX. than the debt X% and Corp. eliminate convertible a contribution issued funding

$XXX credit facilities revolving million Additionally, a XXXX month, at to FET date on KATCo. extended and $X.X maturity facility our earlier revolving October billion new $X X added credit we this including billion at and facilities, the facility LLC

of we forward, credit Moving billion increasing $X.XX will capital facilities support to have programs. our

borrowings million rate the the proceeds significant with plan. schedule which to majority notes We look X maturity debt asset high plan sale depending other repay will FET end remainder and/or over be will minimal funding stand-alone maturing the refinancings could provides closing, new anticipated flexibility utility be to requirements redeem transaction, the defer use to $X.X holdco the plus as the coupon debt of plan As remain XXXX used and decision our revolver we such our on received than debt at other as low debt outstanding, as from light to issuances. The to and of retire we utility our made XXXX, $XXX the financing at next before debt proceeds be debt financing XXXX. billion with debt, transmission convertible money years. XXX companies utility low-cost our issue environment since interest and is of which FET the costly these the

million holdco minimal we're sensitivity positioned to couple that increases next interest rate matures well for current as for Corp's the FE have we XXXX. in with over environment only uniquely of interest All And the $XXX that debt, years. said, rate earnings

turn let's other and activity. our update to Now an regulatory rate proceedings on

year, $X As X base. we cases we've discussed, billion more representing base rate of than earlier rate this filed

said, goals the demands population. in received Maryland Potomac energy base that growing case aligns continue rapidly the rate Edison's last order meeting an week, with our of As Brian we to

support capitalization in regulatory ratio infrastructure, XX% effect assets and rates the October also our resiliency recovery strong equity energy XX. and support The vehicle into reliability equity an return COVID electric of help with of strategy new both authorized of while order with associated of The transition. an of went X.X%, to providing

be entered on in the in parties Commission our consolidate settlement approved rate a with of $XXX and XX. in We're includes Pennsylvania, over with customers August, utilities in and The new for on our entity million associated of with set to progress revenue over to FERC we've X also March rates rates application into $XXX for effective Virginia year. cases. with our and include regulatory West rate customers. in the case and proposed West and hearing to happy New Jersey Other January recent our next is Virginia, million, New discussions increase base In our Public Pennsylvania late $XXX,XXX Jersey, agreement base the a expected savings share bill cost distribution income-eligible supports tracking includes settlement Utility filed on settlement Pennsylvania X the August years, with assistance unification to consolidation of mechanism certain time legal case the updates the

is strategy. to structure we the of the close With financing model and which final consolidation entity flexibility important XXXX. regulatory our the step of the our ALJ's early recommended with consolidation aligns efficiency simplify approval, state expect our legal is settlement, This operating approval and to an increase pending by

electric modern In supporting to emerging power, technologies. capital offering Grid $XXX December. Ohio, And fifth scheduled as riders reliable continued experiences customer our and customers, hearings generation work II our the plan vegetation million on delivering in which filing for non-shopping investments procurement This system, as are X-year for process hearings distribution our Mod scheduled investment energy are well will to security in support storm our Ohio begin plan and safe, November, programs. efficiency begin in management and supports

Our proposal vehicle incentives. and also customers low-income supports electric

Virginia, year. rate unanimous agreed-upon Virginia for we rates, an in depreciation approval increase requested have upon of depreciation million X settlement case, our with the effective those reached conclusion be West June case. West of effective rates next new in In ESP the base will We a $XX

we sites of the X in forward Public discussed, with construction to state. utility-scale approval August the Commission generation Virginia received first from Brian as solar Service And move West the in

year, to We investment service approximately first XXXX. be site total by X all And of of to in completed end the this end expect and the the cost sites be million. $XXX before of a at

all regulatory of as available reminder, on news website. summaries dockets are Just the of links filings a key releases our our Investor with section to together corner Relations and

to we XXXX. regulatory infrastructure active weeks. deliver focusing the building an We've can New and Looking none our by plan our the financial of unseasonable And and operational continuous to we second to growth. improvement. team for preparing of other in program we file solid control for has calendar this in performance. we're know, commitments, results weather you our on are a Jersey to to continued overcome foundation next commitment delivered been X as performance year. historic strong and the The track We've a We're on outstanding challenges investment first impact financial what few and through ahead, meet months of

time your today. you for Thank

Now the questions. your let's open call to

Brian Tierney

service before quick, some concerns APS released night. share growth to real with Jon, a are territories. last news happening we address still to and that to center reliability Based results, these but in data PJM on The move to recommendations anticipate TEAC from the I'd the our substantial Yesterday to the need like of late-breaking results its through of the preliminary year-end. process review Q&A, open projects. go and portion we load Board, PJM on window of track by evening, we gain Dominion

at further the chance it look the support our We to EEI, about we about that we've decade, a the significant until once half details. transmission and onshore the more bid to transition. projects highlights really talking to won't opportunity. opportunity build-out understand our this come excited wind fully project, anticipate these latter energy supports builds transmission While construction forward It Jersey's of New had to for fruition the on in footprint successful the we're offshore this

Now to questions. your move let's

Operator

Guggenheim with Pourreza line from Partners. Our Instructions] comes Shar [Operator first question the of

Shahriar Pourreza

a just side. on key the O&M I bill sort the the case how on of guess you're any this dictate I And I this remind ESP going sort of capital just driver still manage just Ohio sort side, true-ups? base, from be guess, get sense environment? rate the May. you of about what's neutral? being the on bit experiences that next I impact invested given of that costs, built thinking And me -- GRC? deferred approaching of want us end is on could how Let a to case we're up case proceeding Could little Obviously, to the regulatory

Brian Tierney

Yes. question, Shar. Thank the you for

really forward-looking. You're

II. the the in still we're V Grid So of ESP and the discussions midst Mod

fully of throes things as and interveners conclusions So doing that, have, prudently the riders in you to we're getting to the at -- going healthy year, to incurred all next you that base there. controversial be of financing that rates, expect trackers taking be our utility getting O&M, the costs, that be special staff regulated it, you'd then come all base to There's going that all that's rates doing. and have in nothing them regular are base, put out engaging with rate trying successful we're a and the the forward mentioned be in our to case we point. it's But and tree-trimming, base that storm what into with rate things that things moving updating some going we'll to about trackers costs, but

return right XX% be. earning are those We should found equity, in-state that well think to to Commission to we we're and going poised cognizant to Ohio. of that be we're about XX.X% normal and in a investments the need our supportive been We're things below peers. wires that what relative we're the continue investing over get very state of below in increased, now A return where our is making Ohio has on of X.X% authorized today time that look couple and rates One of forward case. and to to we

the the going it's be for impact too early always Shar, to ways is to what know bill you, honest minimize us be, So customers. to bill to we're looking for but impact with to

Shahriar Pourreza

of on guess, this material much Got $X.XX the is benefit it. just year-over-year. I assume very should with benefit we Perfect. And pension, how just is then and lastly me, of side sort tactical. for O&M

really maybe So much of versus it how perpetual. nature in short more term is

beyond. on the performance multiple carries and pension So that can put a if benefit And on then 'XX assume sense and it any year-to-date? we into

K. Taylor

for Shar, Thanks this is Jon. question. the

But in O&M would from $XXX if yes, reduction timing the from into which So doing XX% associated that contract that We sustainable items. look ourselves. of is other unique getting performance some we I spend. million, and XX% 'XX more you work and just relationships associated had the what associated with benefits terminations sponsorships just our accelerated we property of at intense and that items productivity tell we general you about year-over-year, than a contractors with work focus associated improvements, we that. bit 'XX with a had branding that some about with about is little real XXXX the incurred a savings business is just on XX% off

it So we'll say flat. kind say that savings other the sustainable build to of the into pension, half I pension With about would half I go performance is respect would unique. it of we about of year-to-date year. is the is next upon as

have our lot but rate that something So with is the interest term. we the about we think that that as into of associated is taking account eye on. environment, long that we're A

Shahriar Pourreza

all luck it. COO Perfect. the Appreciate I That's appreciate it I search had and with the and President. Brian guys. good for

Operator

of Tonet Jeremy question next line the comes JPMorgan. with from Our

Jeremy Tonet

on base, guess, financing Just the I touch bit wanted to plans here. a

you that refresh, SIP language at just DRIP could financing And was changed CapEx if needs and million messaging this point? like, except in see deck. in I the should equity prior quarter has this what's on your we expect anything front? for last $XXX clarify, needs It looks there, there that Given didn't guess, no what wondering about

K. Taylor

cash metrics to our XX% our if you where debt. Yes. about are projections, you relative Jeremy, flow and That's think FFO XX% I about case. still to the mean, if we think to

from meaningful our in the You coming think plan significant about impact FET next has on in a $X.X that billion sale, of proceeds financing way. year

plan. the And flexibility so we financial have a in of lot

have to And the do some the plans ability additional requirements new CapEx sheet so, debt. to out we holding plus balance company equity initiatives that improvement place take supports no in fully

there. no issues So

Jeremy Tonet

then just numbers kind some here, how 'XX along through And Got the it. there. through plan. the $XX at straight to helpful That's in billion, it 'XX run compares that on the billion the CapEx to front, 'XX 'XX had $XX looking want of by continuing through I but the of plan, the

might in have CapEx 'XX, $XX.X $X.X think billion spent looks billion 'XX. imply you $X.XX in prior might 'XX like for it I to billion your And plan 'XX.

And million should thinking CapEx numbers plan just so $XXX right was had I decreased were I know be current less. different if if to to there or or of those wanted here, the other moving subs? we any pieces about

K. Taylor

CapEx hasn't look it's billion million, been mean and if $X.X and going in decreased. it's you we're year, and $X.X I 'XX be billion, 'XX going to then $X.X what billion this respectively. at to spend

in 'XX of plans $XXX this fact, 'XX from we we year. 'XX capital increased So introduced in no February by and the And capital change in million. plan what back the in

Jeremy Tonet

helpful there. Got it. That's

if could. Just last I one,

forward incremental about coming disclosures could here. talked you that think I be business

thoughts you what be with see incremental Just wondering to there? regards if type might could offer to able any we information of

K. Taylor

Yes.

going looking I to more will forward. business the Street. what And going for it on plan a at frankly, reflect transparent manage little for for our going XXXX forward is reporting to making think simpler going and quite we're So segment doing we're the how and it us, and

not line it analysts to it that us, are us segments presentation to require just investors split cover for do not companies So going manage we're in results that segments of reconciliations have another interested makes with our is allow distribution, more to how simpler and the and us we that the the one, have will between business. in, and to and transmission to integrated to probably that will another, move

Operator

from Barclays. the Our next comes Campanella Nick of question with line

Nicholas Campanella

thanks for PJM previewing guess I the opportunity. So transmission

As we our back think this to how point? size of Or said you opportunity hundreds of of the into dollars. in I half plan? about of And rolling any idea millions at think that this the kind it models, is

Brian Tierney

be figure for the believe of late-breaking trying still through But Which out do We're us. last range. just We're still will $XXX got it the hundreds night. it's side in We today. millions news We Nick. of working of really, news million. to dollars that,

to be engineers working more We hope have at EEI. detail to We our able provide today. on on that it

Nicholas Campanella

we And of Great. of should lot just there's a here And COO to how do guidance search know think the fourth cadence the updates quarter? 'XX I I the on then guess, still et then, moving CapEx, resegmenting from expect fiscal because that and of some cetera? about pieces your the you with point, everything, financing

Brian Tierney

Yes.

next you We will call. be that what the forecast we're to reality. that going And report anticipate how to fourth guidance the we're we're some trying be manage doing months. over positions quarter several update we're for, to company is forward, we'll going to going the going But becomes what surprised. news that all we're there's comes is that. to forward. I'm on we But it and that's going it And that really the be updating -- provide as going so course, forecasting here news. the late-breaking going to the looking is be, people we're surprised to to all don't that nobody then look, as be want And And news by going of I in why becomes how available. news

Nicholas Campanella

Okay. in. I just And more if could one squeeze

give onetime Just fourth quarter, get the you How we'll I cetera? we could like in any be think of some future better more headwinds offset I to tax but kind those year, you get in there 'XX items you but would kind fiscal were guidance the the et item, do I prepared headwinds helpful. a of acknowledge comp XXXX up in just know pension the about know pension, guidance on next remarks. weather walk. that brought the

K. Taylor

this Nick, Jon. is So

about So I where we think the with I pension. -- you year. about if way guess are this I'm the thinking

year-over-year company proceeds. terms markets and impacts, and of the done has deployed opportunities debt with convertible look at offset look of low-cost how to advantage and If the what that the in we at capital you weather in that just you rates investments taking

that controls put If you we've in just the cost look tight place year-over-year. at

income that think benefits associated the overshadows with the I taxes.

-- year, we're normal so you a right, as think going right benefit and about to next weather. going beyond. It's back to get And you're from

cases have have flight. We in that the we rate

the our rate with as formula capital distribution our are programs formula We have as rate associated well on companies CapEx. that transmission a

think where if for cases we'll year. you the cases and the you that rate if so, for that where X about year, the look are we are the this returns filed file returns at next And

day of company. think the can the for going I earnings the terms what's do to carry you in math the of

Operator

from David comes of with Morgan Stanley. Our Arcaro next line the question

David Arcaro

give I you are the settlement of on mechanism, case. thoughts the latest normalization could coming rate New in on specifically maybe Jersey maybe was how Current potential and that optimistic the the pension status you through? wondering if the on

Brian Tierney

So with those stayed now take through allow to as having discussions without continue. to are and we're try know, settlement and interveners, to we're they've adjudication. that for -- conclusion working bring case to in still staff, successful you mentioned a all play, And it things you -- of the to schedule we're engaging still working that just and others

David Arcaro

Okay.

to well? at you forward Sounds is prospects on achieve into sitting feedback could right as give heading the latest good. debt to And how then as also investment-grade the going ratings now curious agencies the parent FFO XXXX and if you're from outlook rating

K. Taylor

Yes.

in going we some that our unseasonable of that will step associated one-off in I 'XX taken think of And we've contribution, retirement dialogue agencies. that we have this voluntary kind and back They continue we fact we've XX% to that a constructive I little have voluntary a of a severance a in Those with XX% our projections. It have weather, pension 'XX. we're be say the bit -- rating that to of of conversations. in clearly to the shows is the year with with because lot items the program. associated had the made performance terms been metrics.

XX% in year, going which if flight, to the whereas kind But what take mix, of XXX% cases to So out XX% mean, the rate range. going about proceeds risk XXXX. in of with that to that it to was XX% you going have in XXXX, now we're we of we're we're we next clearly, fact the adjusted of be terms FET those the get before, in get, I that

that. we'll an XX% to that be So we'll range to year. in shows next clearly XX% opportunity have all deploy It the

Operator

from the Storozynski of next Seaport Angie comes question with Our line Global.

Agnieszka Storozynski

up debt following to FFO that Just question. on

financials, the weak, your debt. X XX% improvement for waiting for but of to to even just FFO months. is. XX%, I explanation improvement, are hear And But at I particularly looking some first mean, the in that to hit I'm we thought looks some that the the the FFO not I So right, why

to this doesn't So that fair year. to for to XX doesn't now. trailing any And months Is the it seem warrant happen that have any will upgrades? say like seem it momentum upward

K. Taylor

year, Yes. have where Like back. the this a think taken trailing step little and I are we said, we XX of I months bit a

contribution. to we the planned was make that of Some wanted voluntary because pension

Some to items of X-year it it. was associated going think if really about such severance nonrecurring as that's a I the have with that mentioned, about payback you

next year. metrics So improve that will the

it, right, and weather in the of discount weather-related that what's terms the impact of done flow, to can't sales. cash you lower And

I to the we in metrics your We're very see question, plan. we'll rating very the that provided the in we confident So but where to. agencies, confident understand we're get and

Agnieszka Storozynski

to my obviously and what is outcome all much this now bigger pretty dividend we XXXX. It's the that contingent on what And in I and have bullish of growth we're you late EPS happens sort is until know the question case know distribution that there probably the plan. that Okay. won't Ohio, of beating and this very here,

that get with between now validation So how do of then? growth profile and we comfortable your

Brian Tierney

don't us. disagree things the debating 'XX. our how growth hit with we in rate that cases perform Just that just the we you signposts that. rate and are -- so at end to we're for all The look I long are all. going And Angie, of that think that before before how to I have you're

We Mod II. Ohio have ESP Grid the

able on case, and outcomes. the and to We we're Virginia we're you'll successful be with indication an have prosecuting the well West New interveners positive I And to to that if able you'll case. being be get in staff come cases, engaging see Jersey rate those, performing -- think

So no of until XXXX. need to wait end the

Agnieszka Storozynski

also tax mean, impact. headwinds trying I of the cash the reflecting then understand benefit on tax related? have And benefit, tax to and this address is O&M lastly Again, you're to this I benefits. the And you're lever. actually that year? you but weather expect lots just did year, big this I very the mean, it

K. Taylor

not beginning the rate at tax So XX% XX.X% we XX%, that the of did XX%. We effective year, in that anticipate the being range. being at anticipated it probably to

that but not the that the planned, up So team executed midyear and benefit on. year that we something some this came was of achieved

tax XX% you, would if be blended think our rate to probably XX% about though, Angie, this XX%, long XX% more longer a term, will normal going range. I tell you in rate, But be it's effective to year. it tax that term,

Agnieszka Storozynski

in And reflected growth already the plan? that's

K. Taylor

Correct.

Agnieszka Storozynski

additional in growth with you're and those costs plan. Along additional your that basically of COO, with EPS managers come the hiring right? will All reflected the for is utilities that those this

Brian Tierney

there, all in It's Angie.

Operator

from Jeremy comes Our JPMorgan. Tonet with the next of question line

Jeremy Tonet

me squeezing for here. Thanks back in

cadence should clarify, EEI. for prior updates Just some event? kind I as Just of on I the long-term revisions XQ -- as to color the XQ expecting if wanted far plan future I 'XX clarify or of wanted just to might of for the of comments be kind we guess, there. guess, that's of wondering updates be what when

Brian Tierney

going we're earnings on an to Yes, quarter provide fourth call. update the

at So we'll and specific capital 'XX, we'll do for also update guidance the time. plan that

Jeremy Tonet

or the include Got items just focus? really everything those EPS long-term this CAGR it. X And well could EPS as

Brian Tierney

be -- long-term change We're the EPS Yes. CAGR. going there's in to no

Operator

line the Securities. from Crowdell comes question of Anthony next Mizuho Our with

Anthony Crowdell

way? of could but you Do we on, Slide questions think in that one XX, decisions different could to I'm jurisdictions, the utilities your not kind maybe normalized do you opcos? see case coming in when quick X of on what target rate hopefully and earn have like Just you think the run a the guys earnings or across we're a you from trying

Brian Tierney

Yes.

that we XXs low terms think of earning in be can X.X% ROEs. range to in I

is base, you a rate what earnings in look ROEs lower adjusting updating our cases, having that's these slide. see you rates And can reflected rate current growth costs back of going so normal at if significant this, on than in component earned getting that is ROEs and getting higher

Anthony Crowdell

sorry. I guess answered my you've --

Brian Tierney

this normal do, recover finance. our we the do. hard Anthony. that work customers. that of reflected current benefit normal pale the And is invest you we us part operate, the to We get then It's recovery, doing we'll utilities be rates. expect stuff We that's go where and of the presentation No, what back for to our just then in in it's work the

Anthony Crowdell

Okay.

my think question. second answers that I actually

apologize the number. in earlier the I I one forgot think of I slides,

to to You guess about appreciate guys of to -- the And X% growth I -- the us curious long-term rate how give between of you it growth about detailed be growth this I spread rate thinking Jeremy's in there's base earnings going any base was they of rate growth X%. I because the growth, X%. improvement seems if earnings or the earlier question of of think but are like Am correctly? and ROE. I that lag aligned

Brian Tierney

Yes.

that and we levels. then up ahead So X%, do of And for more go to 'XX normal have add we're going was looking as to to what that. forward, this rate cases about that, have rate reflected with we're as We you we'll growth XX, associated getting growth we And base we forward. active now, get right? going said Slide to to on 'XX, be very some

active of rate. to our us investment, the for to So in foreseeable growth that X% benefit future X% continued for long-term of customers, a rate in rate all of cases combination invest growth base, that the put continuing will and

Anthony Crowdell

you I'm see EEI. at forward Great. to looking

Operator

Our with line Orrill of comes the next UBS. question Gregg from

Gregg Orrill

you how about where of do of And Are to the them are terms you secondly, see beyond to do you're more X that stand Brian, concerns And at Just, the that then just sort looking remain? investigations this point? that in moving you with already. key hires of thinking there? do? there I know legacy announced management come you

Brian Tierney

you, Gregg. appreciate that. I Thank

Utilities, In terms a senior get place, recruiting. sequentially. key and to some amount of spending and significant President recruit our the of team FE a us Utilities COO FE in we executive to and to there'll to need of people major help I I like be who hires, President are be the I'm those in this the reporting time feel to then need place, people running people of the businesses. do X going is our of spending here I'd our

those that So well. pool -- we're by interview not people. waiting proceeding for as sort on way, X to We're and a of candidate the ahead

at things we place to bring the we're right as quickly the in that We're of get sequentially, run do. active. same the time, of possible. skills to as we're people to the who businesses those making done But trying the get then all the for forward as much But and that right sure get our strong a that. very quickly Utilities, trying President that bear So X COO, It's on that moving getting possible. positions will FE we're people very the And for. candidate as those have people for pool trying to this seated next recruiting

in here make So announcements to and I'm the, is success. of to say, near be those to be shortly. hope it The going confident able timing term, we'll get I'd the in

Department lifting team updates our us, providing Board I done the we're There's been with the putting And lot and of behind the A active that, past the of And us litigation before Justice. anticipate with focused for had the by there, heavy terms engagement out unexpected what management got of don't to with In DPA behind we here. remaining but the OOCIC that strongly trying the hiccups pass on for put there. the settle then we're and that's can, I moving forward future. any that

Operator

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

Steven Fleishman

And like. schedule can utilities actually possible that talk Ohio, just the the cases filing, up. and know to other you? coming in you the Just the Is have Grid to been Mod the the of I ESPs have some and there settle ESP able for

Brian Tierney

Yes.

right is ESP case of We've V testimony. in So we're the flight. now. That in intervener's midst seen

to reason Monday. won't those comes as any settlement the I don't But trying the expect see would think a and testimony that. have settled I us do people discussions in able to out are staff actively in like on able do, that at. companies interveners to you we to engaged settlement the engage and similar hopeful cases, to to that staff positively be we'll to other other be think come what we

Steven Fleishman

separate? thing the of part that of then Grid same be And on Mod, kind would or the

Brian Tierney

we are Mod But well. hope the get get place and behind Grid controversial as base then and and and costs 'XX base until in rate that slightly It's the as to and that's in these. to out those of rates. in that to rate thing, cleared There's leave we'll those are we where those in Same normal able get the then business, reflected to in ESP update ESP, them we get try V. hopefully settle soon May course get Steve, be to nothing, reflected case as through trying riders, the

Operator

Thank this of gentlemen, A and website. for call session call Investor will question-and-answer Ladies concludes the concludes FirstEnergy's today. your participation. available you Relations our replay and be on our

may lines. now disconnect You your

FirstEnergy (FE) 27 Oct 232023 Q3 Earnings call transcript