FirstEnergy(US:FE)2021-10-29 19:14Financial Data and Key Metrics Changes - The company reported third quarter 2021 GAAP earnings of $0.85 per share and operating earnings of $0.82 per share, exceeding the top end of the guidance range [7][23] - For the first nine months of 2021, operating earnings were $2.10 per share compared to $2.07 per share in the same period of 2020, driven by ongoing investments and lower expenses [29] - Year-to-date adjusted cash from operations reached $2.4 billion, an increase of $600 million compared to the previous year, with an expected total of approximately $2.8 billion for the year [30] Business Line Data and Key Metrics Changes - In the distribution business, results reflected the absence of Ohio decoupling and lost distribution revenue, totaling $0.04 per share, partially offset by higher revenues from capital investment programs [24] - Weather-adjusted residential sales were flat compared to the third quarter of 2020, but nearly 6% higher than pre-pandemic levels in the third quarter of 2019 [26] - Weather-adjusted commercial deliveries increased by 3% and industrial load was up nearly 4% compared to the third quarter of 2020, with increases in sectors like steel and chemicals [27] Market Data and Key Metrics Changes - The company continues to see benefits from higher transmission investments at its MAIT and ATSI subsidiaries as part of the Energizing the Future program, although offset by higher interest from debt issuance [28] - The company is engaged in settlement discussions in Ohio, aiming to resolve pending cases and promote stability and predictability in the market [8][40] Company Strategy and Development Direction - The company is focused on modernizing its transmission network and embracing renewable energy, with plans for utility-scale solar generation in West Virginia [19][16] - A new integrated risk management platform is being developed to enhance ethics, compliance, and risk functions [10] - The company is considering a minority asset sale to raise equity capital, with strong interest and preliminary indications supportive of financial goals [34][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing recovery of residential loads and the gradual return of commercial and industrial loads to pre-pandemic levels [38] - The company is optimistic about achieving a 13% FFO-to-debt ratio, which will provide a cushion for future financial flexibility [33] - Management emphasized the importance of maintaining a strong balance sheet and the ongoing quest to improve credit ratings [32][70] Other Important Information - The company announced a new Vice President of Rates and Regulatory Affairs to enhance its leadership team [13] - The company is committed to rebuilding stakeholder trust and ensuring compliance and integrity are central to its operations [12] Q&A Session Summary Question: Current results and operations - Management noted that residential loads have increased and are expected to continue as the company adjusts to the new normal [38] Question: Ohio settlement discussions - Management is encouraged by the progress in Ohio and aims to remove investor uncertainty [40][41] Question: 2022 guidance and long-term outlook - Management prefers to provide guidance after clarity on Ohio settlement discussions [43] Question: Minority asset sale and equity needs - Management confirmed strong interest in the minority asset sale and is considering various options for raising equity capital [44][48] Question: Dividend growth potential - Management indicated that the dividend payout range remains at 55% to 65%, with ongoing discussions with the Board [69] Question: Transmission CapEx and investment opportunities - Management believes there are opportunities to ramp up transmission investments while maintaining financial flexibility [87]