10-KPeriod: FY2015

FIRSTENERGY CORP Annual Report, Year Ended Dec 31, 2015

Filed February 16, 2016For Securities:FE

Summary

FirstEnergy Corp. (FE) reported revenues of $15.03 billion and net income of $578 million for the year ended December 31, 2015. The company continues its strategic focus on regulated operations, particularly transmission investments, with its "Energizing the Future" plan. This plan aims to modernize its transmission system through an initial $4.2 billion investment from 2014 to 2017, with $2.4 billion already spent through 2015 and $1 billion projected for 2016. FirstEnergy is also managing its competitive energy services (CES) segment through a conservative hedging strategy. Regulatory initiatives across its utility footprint are a key focus, including the pending ESP IV in Ohio, which proposes an eight-year term and aims to balance customer benefits with the preservation of baseload power plants. The company's financial performance saw a significant improvement in net income compared to 2014, driven by stronger results in the regulated segments and a reduction in pension and OPEB mark-to-market adjustments. However, the CES segment experienced lower revenues due to a strategic reduction in contract sales volume, aligning with the company's goal to reduce exposure to weather-sensitive loads and pursue higher-margin sales.

Financial Highlights

46 data points
Beta

Revenue

$15.03B

Net Income

$578.00M

3.8% Net Margin

EPS (Diluted)

$1.37

Total Assets

$52.09B

Cash & Equivalents

$131.00M

Free Cash Flow

$3.46B

Financial Statements
Beta
Revenue$15.03B
Operating Expenses$12.73B
Operating Income$2.29B
Interest Expense$1.13B
Net Income$578.00M
EPS (Basic)$1.37
EPS (Diluted)$1.37
Shares Outstanding (Basic)422.00M
Shares Outstanding (Diluted)424.00M

Key Highlights

  • 1Total revenues for 2015 were $15.03 billion, with net income of $578 million, a substantial increase from $299 million in 2014.
  • 2The company is investing $4.2 billion from 2014-2017 in its "Energizing the Future" transmission expansion plan, with $2.4 billion invested by the end of 2015.
  • 3FirstEnergy is navigating complex regulatory environments, particularly with the Ohio Companies' ESP IV, which includes an eight-year term and aims to ensure continued availability of critical baseload generating assets.
  • 4The Competitive Energy Services (CES) segment saw a decrease in revenues due to a strategic shift towards reducing exposure to weather-sensitive load and focusing on higher-margin sales.
  • 5Significant capital expenditures were made in 2015, totaling $3.02 billion, primarily directed towards Regulated Distribution and Regulated Transmission segments.
  • 6FirstEnergy's liquidity remains strong, with $4.1 billion in available liquidity under its credit facilities as of January 31, 2016.

Frequently Asked Questions

FirstEnergy's primary strategic focus is on its regulated operations, particularly investments in its transmission and distribution infrastructure. This is exemplified by the "Energizing the Future" transmission expansion plan, which involves significant capital investments aimed at modernizing the system to enhance customer service, reliability, grid security, and operational flexibility. The company is also managing its competitive energy services segment through a conservative hedging strategy.

FirstEnergy experienced a significant improvement in its financial performance in 2015 compared to 2014. Net income increased substantially from $299 million in 2014 to $578 million in 2015. This improvement was driven by stronger results in the regulated segments (Distribution and Transmission) and a reduction in pension and OPEB mark-to-market adjustments. While the Competitive Energy Services (CES) segment saw lower revenues due to strategic sales adjustments, the overall company performance was bolstered by the regulated businesses.

FirstEnergy is actively engaged in several key regulatory initiatives across its service territories. In Ohio, the company is focused on the ESP IV (Expedited Strategic Plan IV), which includes an eight-year term and aims to balance customer benefits with the operational needs of baseload power plants. Additionally, new rates were implemented in Pennsylvania for several subsidiaries, and new rates were approved in West Virginia for MP and PE to support reliability investments and environmental compliance. Regulatory approvals for the transfer of transmission assets to MAIT are also a significant ongoing initiative.