10-QPeriod: Q3 FY2021

FIRSTENERGY CORP Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 28, 2021For Securities:FE

Summary

FirstEnergy Corp. reported increased revenues and net income for the nine months ended September 30, 2021, compared to the same period in 2020, driven by growth in both its Regulated Distribution and Regulated Transmission segments. The company successfully navigated significant regulatory and legal challenges, including the resolution of a deferred prosecution agreement with the U.S. Attorney's Office and ongoing efforts to enhance its compliance and ethics programs. Significant management changes were implemented to strengthen corporate governance. Financially, the company secured new revolving credit facilities totaling $4.5 billion, enhancing liquidity. While capital expenditures remain robust, particularly in transmission infrastructure, the company has discontinued providing long-term earnings growth rate guidance due to regulatory uncertainties in Ohio and ongoing investigations.

Financial Highlights

44 data points
Beta

Revenue

$3.12B

Net Income

$463.00M

14.8% Net Margin

EPS (Diluted)

$0.85

Total Assets

$43.85B

Cash & Equivalents

$577.00M

Free Cash Flow

$757.00M

Financial Statements
Beta
Revenue$3.12B
Operating Expenses$2.49B
Operating Income$631.00M
Interest Expense$283.00M
Net Income$463.00M
EPS (Basic)$0.85
EPS (Diluted)$0.85
Shares Outstanding (Basic)544.00M
Shares Outstanding (Diluted)545.00M

Key Highlights

  • 1Total revenues increased by 3% to $8.47 billion for the nine months ended September 30, 2021.
  • 2Net income rose by 2% to $856 million for the nine months ended September 30, 2021.
  • 3FirstEnergy entered into a Deferred Prosecution Agreement (DPA) with the U.S. Attorney's Office, resolving investigations into lobbying activities concerning HB 6, which included a $230 million penalty.
  • 4The company implemented significant changes to its compliance and ethics programs, including management terminations and enhanced training.
  • 5FirstEnergy secured new revolving credit facilities totaling $4.5 billion, enhancing its liquidity position.
  • 6Capital expenditures remain strong, with significant investments planned for Regulated Distribution ($6.6 billion from 2020-2023) and Regulated Transmission ($5.15 billion from 2020-2023).

Frequently Asked Questions

For the nine months ended September 30, 2021, FirstEnergy reported total revenues of $8.47 billion, a 3% increase from the prior year, and a net income of $856 million, a 2% increase. This performance was driven by growth in both its Regulated Distribution and Regulated Transmission segments.

FirstEnergy resolved investigations into its lobbying activities concerning HB 6 through a Deferred Prosecution Agreement (DPA) with the U.S. Attorney's Office, which involved a $230 million penalty. The company has also undertaken significant internal reforms, including leadership changes and enhanced compliance training, to address issues related to its control environment and tone at the top.

FirstEnergy secured new revolving credit facilities totaling $4.5 billion, which significantly enhances its liquidity. The company is also exploring options to raise equity, including a potential sale of a minority interest in its transmission holding company, FET, to support its balance sheet and investment plans.

FirstEnergy plans substantial capital investments in its core businesses, with approximately $6.6 billion planned for Regulated Distribution from 2020 to 2023 and $5.15 billion for Regulated Transmission during the same period. These investments are focused on improving reliability and modernizing infrastructure.