Reports full year 2023 GAAP earnings from
continuing operations of $1.96 per
share
Delivers 2023 Operating (non-GAAP) earnings of
$2.56 per share, above the midpoint
of guidance
Provides 2024 operating guidance of
$2.61 to $2.81 per share for the full year, a 7% increase
over the 2023 guidance mid-point, driven by robust regulated
growth
Introduces Energize365, a $26 billion capital investment plan from 2024 to
2028 to enhance the customer experience and support the energy
transition
Targeted 6-8% long-term annual operating
earnings per share growth with significantly improved earnings
quality
AKRON,
Ohio, Feb. 8, 2024 /PRNewswire/ -- FirstEnergy
Corp. (NYSE: FE) today reported full year 2023 GAAP earnings from
continuing operations of $1.123
billion, or $1.96 per basic
and diluted share, on revenue of $12.9
billion. This compares to 2022 GAAP earnings from continuing
operations of $406 million, or
$0.71 per basic and diluted share, on
revenue of $12.5 billion. Results for
both periods reflect the impact of special items listed below.
Driven by solid execution on capital deployment, cost discipline
and operating performance, FirstEnergy delivered 2023 Operating
(non-GAAP) earnings* of $2.56 per
share, which was above the midpoint of the company's guidance
range. In 2022, Operating (non-GAAP) earnings were $2.41 per share.
"Throughout 2023, FirstEnergy employees demonstrated innovation,
operational excellence and financial discipline to overcome
challenges, drive our strategy and deliver on our financial
commitments. It was pivotal year for FirstEnergy, in which we
strengthened our foundation and greatly accelerated our progress
toward our goal of becoming a premier utility," said
Brian X. Tierney, President and
Chief Executive Officer. "In 2024, we plan to continue this
transformation through customer-focused investments, financial and
operational excellence and a relentless focus on continuous
improvement."
Outlook
FirstEnergy provided a 2024 earnings guidance range of
$1.5 billion to $1.62 billion, or $2.61 to $2.81 per
share, representing robust growth in its regulated businesses with
significantly improved earnings quality from lower planned earnings
contributions from legacy investments. In addition, the company is
providing a guidance range of $275
million to $335 million, or
$0.48 to $0.58 per share for the first quarter of
2024.
The company affirmed its long-term, 6% to 8% targeted annual
operating earnings per share growth rate, which is based off the
previous year's operating earnings guidance midpoint and supported
by the company's refreshed and extended five-year capital
investment plan, released today. A centerpiece of the forecast is
Energize365, FirstEnergy's $26
billion systemwide capital investment program from 2024-2028
focused on investments in the electric grid to deliver the energy
customers depend on today, while also meeting the challenges and
opportunities of the clean energy transition.
"Through a series of successful strategic actions, FirstEnergy
is entering 2024 with a stronger, sustainable financial foundation
that supports a robust and comprehensive long-term capital plan
funded with strong cash from operations, regulated debt capital and
the previously announced sale of a 30% interest in FET LLC, which
is expected to close early this year. We are also pleased to
announce Energize365, which is designed to better serve our
customers by further enhancing our transmission and distribution
systems to reduce power outages, increase resiliency and enable a
smarter, cleaner energy future without compromising on
affordability," Tierney said.
Fourth Quarter Results
Fourth quarter 2023 GAAP earnings from continuing operations
were $175 million, or $0.30 per basic and diluted share, on revenue of
$3.2 billion. In the fourth quarter
of 2022, the company reported a GAAP loss of $(403) million, or $(0.71) per basic and diluted share, on revenue
of $3.2 billion. Results for both
periods include the special items listed below.
Operating (non-GAAP) earnings* were $0.62 per share in the fourth quarter of 2023,
above the midpoint of the company's guidance range. Operating
(non-GAAP) earnings in the fourth quarter of 2022 were $0.50 per share.
In the Regulated Distribution business, fourth quarter operating
earnings were flat compared to the fourth quarter of 2022. In 2023,
lower operating expenses, higher revenues related to utility
investment programs, lower Ohio
rate credits and new rates that went into effect in Maryland in October were offset by lower
weather-related demand, a lower pension credit and higher interest
expense from debt to fund the company's capital investment
programs.
Mild December temperatures drove a 1.3% decrease in total
distribution deliveries for the fourth quarter of 2023 compared to
the fourth quarter of 2022. Heating degree days during the quarter
were 11% below normal and the fourth quarter of 2022. Usage
decreased 4.9% among residential customers and 1.1% in the
commercial sector, while industrial sales increased 2%.
On a weather-adjusted basis, distribution deliveries increased
just over 1% in 2023 compared to the fourth quarter of 2022.
Weather-adjusted sales to residential customers decreased slightly,
while deliveries to commercial and industrial customers increased
2%.
In the Regulated Transmission business, fourth quarter 2023
operating results benefited from the company's ongoing investment
program and an adjustment associated with recovery of certain
costs. Rate base increased by more than 9% from the fourth quarter
of 2022.
In Corporate/Other, fourth quarter 2023 operating results
improved as compared to the fourth quarter of 2022, primarily as a
result of lower operating expenses and a lower consolidated
effective tax rate, partially offset by higher interest expense
primarily associated with the low-cost convertible debt offering in
the first half of 2023.
Full Year 2023 Results
Full year 2023 Operating (non-GAAP) earnings benefited from
lower operating expenses, continued growth from customer-focused
regulated investments, stronger weather-adjusted load and a lower
consolidated effective tax rate. These drivers offset the impact of
lower weather-related demand, lower pension credits and higher
financing costs.
Heating degree days in 2023 were 15% below normal and 14% below
2022, while cooling degree days were 15% below normal and 23% below
2022. This resulted in a 3% decrease in total distribution
deliveries in 2023. On a weather-adjusted basis, overall load
increased approximately 1% compared to 2022, comprising a 1.5%
increase in residential sales, a slight increase in commercial
deliveries and stronger industrial demand of nearly 1%.
FirstEnergy deployed $3.7 billion
in capital investment in 2023, surpassing its original capital
investment plan by $300 million
despite continuing supply chain challenges. These customer-focused
investments were aimed at modernizing and improving the reliability
and resiliency of the transmission and distribution systems.
|
|
Consolidated GAAP
Earnings (Losses) from Continuing Operations Per Share (EPS) to
Operating (Non-GAAP) EPS*
Reconciliation
|
|
|
|
Three Months Ended
Dec 31,
|
|
Year Ended Dec
31,
|
|
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
Earnings (Losses)
Attributable to FirstEnergy Corp. from
Continuing
Operations (GAAP) - $M
|
|
$175
|
$(403)
|
|
$1,123
|
$406
|
|
|
Basic – Continuing
Operations EPS (GAAP)
|
|
$0.30
|
$(0.71)
|
|
$1.96
|
$0.71
|
|
|
Excluding Special
Items*:
|
|
|
|
|
|
|
|
|
|
Debt-related
costs
|
|
—
|
0.02
|
|
0.05
|
0.25
|
|
|
|
Enhanced employee
retirement and other related costs
|
|
0.03
|
—
|
|
0.13
|
—
|
|
|
|
FE Forward cost to
achieve
|
|
0.01
|
0.01
|
|
0.09
|
0.03
|
|
|
|
Investigation and other
related costs
|
|
0.03
|
0.03
|
|
0.10
|
0.08
|
|
|
|
Mark-to-market
adjustments – Pension/OPEB actuarial
assumptions
|
|
0.12
|
(0.13)
|
|
0.05
|
(0.13)
|
|
|
|
Strategic transaction
costs
|
|
0.11
|
1.23
|
|
0.11
|
1.23
|
|
|
|
Regulatory
charges
|
|
0.02
|
0.03
|
|
0.05
|
0.21
|
|
|
|
State tax legislative
changes
|
|
—
|
0.01
|
|
—
|
0.01
|
|
|
|
Exit of
generation
|
|
—
|
0.01
|
|
0.02
|
0.02
|
|
|
|
Total Special
Items*
|
|
0.32
|
1.21
|
|
0.60
|
1.70
|
|
|
Operating EPS
(Non-GAAP)
|
|
$0.62
|
$0.50
|
|
$2.56
|
$2.41
|
|
|
Per share amounts for
the special items above are based on the after-tax effect of each
item divided by the number of shares outstanding for
the period. The
current and deferred income tax effect
was calculated by applying the subsidiaries' statutory tax rate to
the pre-tax amount if
deductible/taxable. The income tax rate
ranges from 21% to 29%. Basic
continuing operations EPS (GAAP) and Operating EPS
(Non-GAAP)
is based on 572 million and 571 million shares
for the Fourth Quarter and Full Year
2022, respectively, and 574 million and 573 million
shares
for the Fourth Quarter and Full Year 2023,
respectively.
|
Non-GAAP financial measures
* We refer to
certain financial measures, including Operating earnings (loss),
Operating earnings (loss) per share ("EPS"), including by segment,
as "non-GAAP financial measures," which are not calculated in
accordance with U.S. Generally Accepted Accounting Principles
(GAAP) and exclude the impact of "special items," as described
below. Management uses these non-GAAP financial measures to
evaluate the Company's and its segments' performance and manage its
operations and frequently references these non-GAAP financial
measures in its decision-making, using them to facilitate
historical and ongoing performance comparisons. Management believes
that the non-GAAP financial measures of Operating earnings (loss)
and Operating EPS, including by segment, provide consistent and
comparable measures of performance of its businesses on an ongoing
basis. Management also believes that such measures are useful to
shareholders and other interested parties to understand performance
trends and evaluate the Company against its peer group by
presenting period-over-period operating results without the effect
of certain special items that may not be consistent or comparable
across periods or across the Company's peer group. These non-GAAP
financial measures are intended to complement, and are not
considered as alternatives to, the most directly comparable GAAP
financial measures, which for Operating EPS is Continuing
Operations EPS (GAAP), as reconciled in the above table. Also, the
non-GAAP financial measures may not be comparable to similarly
titled measures used by other entities.
Special items represent charges incurred or benefits realized
that management believes are not indicative of, or may obscure
trends useful in evaluating the Company's ongoing core activities
and results of operations or otherwise warrant separate
classification. Operating EPS is calculated by dividing Operating
earnings (loss), which excludes special items as discussed above,
for the periods presented by the weighted average number of common
shares outstanding, which is 572 million shares for the fourth
quarter of 2022, 571 million shares for full year 2022, 574 million
shares for the fourth quarter of 2023, 573 million shares for the
full year 2023, 575 million shares in the first quarter of 2024 and
576 million shares for the full year 2024.
A reconciliation of forward-looking non-GAAP measures, including
2024 Operating EPS and long-term annual Operating EPS growth
projections, to the most directly comparable GAAP measures is not
provided because comparable GAAP measures for such measures are not
reasonably accessible or reliable due to the inherent difficulty in
forecasting and quantifying measures that would be necessary for
such reconciliation. Specifically, management cannot, without
reasonable effort, predict the impact of these special items in the
context of operating EPS guidance and long-term annual operating
EPS growth rate projections because these items, which could be
significant, are difficult to predict and may be highly variable.
In addition, the company believes such a reconciliation would imply
a degree of precision and certainty that could be confusing to
investors. These items are uncertain, depend on various factors and
may have a material impact on our future GAAP results.
Investor Materials and Teleconference
FirstEnergy's Strategic and Financial Highlights
presentation is posted on the company's Investor Information
website – www.firstenergycorp.com/ir. It can be accessed through
the Fourth Quarter 2023 Financial Results link.
The company invites investors, customers and other interested
parties to listen to a live webcast of its teleconference for
financial analysts and view presentation slides at 10:00 a.m. EST tomorrow. FirstEnergy management
will present an overview of the company's financial results
followed by a question-and-answer session. The teleconference and
presentation can be accessed on the website by selecting the
Fourth Quarter 2023 Earnings Webcast link. The webcast and
presentation will be archived on the website.
FirstEnergy is dedicated to integrity, safety, reliability and
operational excellence. Its electric distribution companies form
one of the nation's largest investor-owned electric systems,
serving more than six million customers in Ohio, Pennsylvania, New
Jersey, West Virginia,
Maryland and New York. The company's transmission
subsidiaries operate approximately 24,000 miles of transmission
lines that connect the Midwest and Mid-Atlantic regions. Follow
FirstEnergy online at www.firstenergycorp.com and on X,
formerly known as Twitter, @FirstEnergyCorp.
Forward-Looking Statements: This news release
includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 based on
information currently available to management. Such statements are
subject to certain risks and uncertainties and readers are
cautioned not to place undue reliance on these forward-looking
statements. These statements include declarations regarding
management's intents, beliefs and current expectations. These
statements typically contain, but are not limited to, the terms
"anticipate," "potential," "expect," "forecast," "target," "will,"
"intend," "believe," "project," "estimate," "plan" and similar
words. Forward-looking statements involve estimates, assumptions,
known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements, which may
include the following: the potential liabilities, increased costs
and unanticipated developments resulting from government
investigations and agreements, including those associated with
compliance with or failure to comply with the Deferred Prosecution
Agreement entered into July 21, 2021
with the U.S. Attorney's Office for the Southern District of
Ohio; the risks and uncertainties
associated with government investigations and audits regarding Ohio
House Bill 6, as passed by Ohio's
133rd General Assembly ("HB 6") and related matters, including
potential adverse impacts on federal or state regulatory matters,
including, but not limited to, matters relating to rates; the risks
and uncertainties associated with litigation, arbitration,
mediation, and similar proceedings, particularly regarding HB 6
related matters, including risks associated with obtaining
dismissal of the derivative shareholder lawsuits; changes in
national and regional economic conditions, including recession,
rising interest rates, inflationary pressure, supply chain
disruptions, higher energy costs, and workforce impacts, affecting
us and/or our customers and those vendors with which we do
business; weather conditions, such as temperature variations and
severe weather conditions, or other natural disasters affecting
future operating results and associated regulatory actions or
outcomes in response to such conditions; legislative and regulatory
developments, including, but not limited to, matters related to
rates, compliance and enforcement activity, cyber security, and
climate change; the risks associated with physical attacks, such as
acts of war, terrorism, sabotage or other acts of violence, and
cyber-attacks and other disruptions to our, or our vendors',
information technology system, which may compromise our operations,
and data security breaches of sensitive data, intellectual property
and proprietary or personally identifiable information; the ability
to meet our goals relating to employee, environmental, social and
corporate governance opportunities, improvements, and efficiencies,
including our greenhouse gas ("GHG") reduction goals; the ability
to accomplish or realize anticipated benefits through establishing
a culture of continuous improvement and our other strategic and
financial goals, including, but not limited to, overcoming current
uncertainties and challenges associated with the ongoing government
investigations, executing our Energize 365 transmission and
distribution investment plan, executing on our rate filing
strategy, controlling costs, improving our credit metrics, growing
earnings, strengthening our balance sheet, and satisfying the
conditions necessary to close the sale of additional membership
interests of FirstEnergy Transmission, LLC; changing market
conditions affecting the measurement of certain liabilities and the
value of assets held in our pension trusts may negatively impact
our forecasted growth rate, results of operations, and may also
cause us to make contributions to our pension sooner or in amounts
that are larger than currently anticipated; mitigating exposure for
remedial activities associated with retired and formerly owned
electric generation assets; changes to environmental laws and
regulations, including but not limited to those related to climate
change; changes in customers' demand for power, including but not
limited to, economic conditions, the impact of climate change ,
emerging technology, particularly with respect to electrification,
energy storage and distributed sources of generation; the
ability to access the public securities and other capital and
credit markets in accordance with our financial plans, the cost of
such capital and overall condition of the capital and credit
markets affecting us, including the increasing number of financial
institutions evaluating the impact of climate change on their
investment decisions; future actions taken by credit rating
agencies that could negatively affect either our access to or terms
of financing or our financial condition and liquidity; changes in
assumptions regarding factors such as economic conditions within
our territories, the reliability of our transmission and
distribution system, or the availability of capital or other
resources supporting identified transmission and distribution
investment opportunities; the potential of non-compliance with debt
covenants in our credit facilities; the ability to comply with
applicable reliability standards and energy efficiency and peak
demand reduction mandates; human capital management challenges,
including among other things, attracting and retaining
appropriately trained and qualified employees and labor disruptions
by our unionized workforce; changes to significant accounting
policies; any changes in tax laws or regulations, including, but
not limited to, the Inflation Reduction Act of 2022, or adverse tax
audit results or rulings; and the risks and other factors discussed
from time to time in our Securities and Exchange Commission ("SEC")
filings. Dividends declared from time to time on FirstEnergy
Corp.'s common stock during any period may in the aggregate vary
from prior periods due to circumstances considered by FirstEnergy
Corp.'s Board of Directors at the time of the actual declarations.
A security rating is not a recommendation to buy or hold securities
and is subject to revision or withdrawal at any time by the
assigning rating agency. Each rating should be evaluated
independently of any other rating. These forward-looking statements
are also qualified by, and should be read together with, the risk
factors included in FirstEnergy Corp.'s (a) Item 1A. Risk Factors,
(b) Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations, and (c) other factors
discussed herein and in FirstEnergy's other filings with the SEC.
The foregoing review of factors also should not be construed as
exhaustive. New factors emerge from time to time, and it is not
possible for management to predict all such factors, nor assess the
impact of any such factor on FirstEnergy Corp.'s business or the
extent to which any factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statements. FirstEnergy Corp. expressly disclaims
any obligation to update or revise, except as required by law, any
forward-looking statements contained herein or in the information
incorporated by reference as a result of new information, future
events or otherwise.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/firstenergy-announces-fourth-quarter-and-full-year-2023-financial-results-302058075.html
SOURCE FirstEnergy Corp.