FirstEnergy CEO Jones Addresses ShareholdersCompany announces preliminary results from 2018 Annual Meeting
AKRON, Ohio, May 15, 2018 -- FirstEnergy (NYSE: FE) President and Chief Executive Officer Charles E. Jones told shareholders today the company is taking aggressive steps to make its regulated energy delivery system smarter and more resilient in the years ahead.
Speaking to shareholders gathered for FirstEnergy's annual meeting, Jones said the theme of this year's event, "Building a Brighter Future," reflects the company's mission statement and captures the spirit of what it hopes to accomplish. Earlier this year, FirstEnergy announced plans to spend more than $10 billion in capital investments throughout its transmission and distribution system over the next three years. These investments are expected to support a projected annual operating earnings (non-GAAP) growth rate of 6 to 8 percent in FirstEnergy's regulated businesses through 2021*.
More important, Jones said, the investments will fund a number of improvements designed to make the company's electric system more secure and responsive to the growing energy needs of customers.
"Through our multibillion-dollar Energizing the Future initiative, we're keeping pace with customer demand for electricity by upgrading and modernizing our transmission system," Jones said. "We plan to invest up to $4.8 billion from 2018 through 2021 on these improvements – including nearly 1,200 smart grid projects that are designed to make our system more robust, secure and resistant to extreme weather events. Many of these projects take advantage of new technologies that minimize the threat of physical and cyberattacks. All of them are important to providing customers with the power they need, when they need it."
Jones said FirstEnergy's transition to becoming a fully regulated company – one that's better positioned to provide enhanced service to customers while delivering stable, long-term value to shareholders – was accelerated by the recent Chapter 11 filings of FirstEnergy Solutions, its subsidiaries and FirstEnergy Nuclear Operating Company. The Chapter 11 filings did not include FirstEnergy or its distribution, transmission, regulated generation or Allegheny Energy Supply subsidiaries.
"I'm confident that FirstEnergy will emerge from this process even stronger – with the resources we need to deliver greater value to shareholders and provide customers with the safe, reliable and affordable service they expect and deserve," Jones said.
A transcript of Jones' prepared remarks can be found here.
Preliminary Voting Results
FirstEnergy also announced preliminary voting results from its 2018 Annual Meeting. Shareholders reelected each of the 12 nominees to the company's Board of Directors and ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm. On an advisory basis, shareholders also approved named executive officer compensation.
Based on preliminary results, the management proposals to amend the company's governing documents to replace existing supermajority voting requirements with a majority voting power threshold, implement majority voting for uncontested director elections and implement proxy access each failed to receive the requisite vote.
A non-binding shareholder proposal requesting a reduction in the threshold to call special shareholder meetings also failed to receive the requisite vote.
All preliminary voting results are subject to final certification.
The following directors were elected to one-year terms:
- Paul T. Addison, retired managing director of Salomon Smith Barney (Citigroup)
- Michael J. Anderson, chairman and retired chief executive officer of The Andersons, Inc.
- Steven J. Demetriou, chairman and chief executive officer and director of Jacobs Engineering Group Inc.
- Julia L. Johnson, president of NetCommunications, LLC
- Charles E. Jones, president and chief executive officer of FirstEnergy Corp.
- Donald T. Misheff, retired managing partner of the Northeast Ohio offices of Ernst & Young LLP
- Thomas N. Mitchell, retired president, chief executive officer and director of Ontario Power Generation Inc.
- James F. O'Neil III, former partner, Western Commerce Group
- Christopher D. Pappas, president, chief executive officer and director of Trinseo S.A.
- Sandra Pianalto, retired president and chief executive officer of the Federal Reserve Bank of Cleveland.
- Luis A. Reyes, retired regional administrator of the U.S. Nuclear Regulatory Commission
- Dr. Jerry Sue Thornton, chief executive officer of Dream Catcher Educational Consulting, retired president and president emeritus of Cuyahoga Community College.
FirstEnergy is dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. The company's transmission subsidiaries operate more than 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions. Follow FirstEnergy on Twitter @FirstEnergyCorp or online at www.firstenergycorp.com.
*FirstEnergy's management team cannot estimate on a forward-looking basis the impact of special items in the context of operating earnings (loss) per share growth projections because special items, which could be significant, are difficult to predict and may be highly variable. Consequently, FirstEnergy is unable to reconcile operating earnings (loss) per share growth projections to a GAAP measure without reasonable effort.
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 ability to successfully execute an exit of commodity-based generation that minimizes cash outflows and associated liabilities, including, without limitation, the losses, guarantees, claims and other obligations of FirstEnergy Corp., together with its consolidated subsidiaries (FirstEnergy) as such relate to the entities previously consolidated into FirstEnergy, including FirstEnergy Solutions Corp.(FES), its subsidiaries and FirstEnergy Nuclear Operating Company (FENOC), which have recently filed for bankruptcy protection; the potential for litigation and demands for payment against FirstEnergy by FES and FENOC or certain of their creditors; the risks associated with the bankruptcy cases of FES, its subsidiaries and FENOC, including, but not limited to, third-party motions in the cases that could adversely affect FirstEnergy, its liquidity or results of operations; the ability to experience growth in the Regulated Distribution and Regulated Transmission segments and the effectiveness of our strategy to operate as a fully regulated business; the accomplishment of our regulatory and operational goals in connection with our transmission and distribution investment plans, including, but not limited to, our planned transition to forward-looking formula rates; changes in assumptions regarding economic conditions within our territories, assessment of the reliability of our transmission and distribution system, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities; the ability to accomplish or realize anticipated benefits from strategic and financial goals, including, but not limited to, the ability to grow earnings in our regulated businesses, continue to reduce costs and to successfully execute our financial plans designed to improve our credit metrics and strengthen our balance sheet; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings; the uncertainties associated with the deactivation of our remaining commodity-based generating units, including the impact on vendor commitments, and as it relates to the reliability of the transmission grid, the timing thereof; costs being higher than anticipated and the success of our policies to control costs; the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including New Source Review litigation, or potential regulatory initiatives or rulemakings; changes in customers' demand for power, including, but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates; economic and weather conditions affecting future sales, margins and operations, such as significant weather events, and all associated regulatory events or actions; changes in national and regional economic conditions affecting FirstEnergy and/or our major industrial and commercial customers, and other counterparties with which we do business; the impact of labor disruptions by our unionized workforce; the risks associated with cyber-attacks and other disruptions to our information technology system that may compromise our generation, transmission and/or distribution services and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information regarding our business, employees, shareholders, customers, suppliers, business partners and other individuals in our data centers and on our networks; the impact of the regulatory process and resulting outcomes on the matters at the federal level and in the various states in which we do business, including, but not limited to, matters related to rates; the impact of the federal regulatory process on Federal Energy Regulatory Commission (FERC) regulated entities and transactions, in particular FERC regulation of PJM Interconnection, L.L.C. (PJM) wholesale energy and capacity markets and cost-of-service rates, as well as FERC's compliance and enforcement activity, including compliance and enforcement activity related to North American Electric Reliability Corporation's mandatory reliability standards; the uncertainties of various cost recovery and cost allocation issues resulting from American Transmission Systems, Incorporated's realignment into PJM; the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates; other legislative and regulatory changes, including the federal administration's required review and potential revision of environmental requirements, including, but not limited to, the effects of the United States Environmental Protection Agency's Clean Power Plan, Coal Combustion Residuals, Cross-State Air Pollution Rule and Mercury and Air Toxics Standards programs, including our estimated costs of compliance, Clean Water Act (CWA) waste water effluent limitations for power plants, and CWA 316(b) water intake regulation; changing market conditions that could affect the measurement of certain liabilities and the value of assets held in our pension trusts and other trust funds, and cause us and/or our subsidiaries to make additional contributions sooner, or in amounts that are larger, than currently anticipated; the impact of changes to significant accounting policies; the impact of any changes in tax laws or regulations, including the Tax Cuts and Jobs Act, adopted December 22, 2017, or adverse tax audit results or rulings; 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 and our subsidiaries; further actions that may be taken by credit rating agencies that could negatively affect us and/or our subsidiaries' access to financing, increase the costs thereof, letters of credit and other financial guarantees, and the impact of these events on the financial condition and liquidity of FirstEnergy Corp. and/or its subsidiaries; issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business; and the risks and other factors discussed from time to time in our United States Securities and Exchange Commission (SEC) filings, and other similar factors. Dividends declared from time to time on FirstEnergy Corp.'s common stock, and thereby on FirstEnergy Corp.'s preferred 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 our filings with the SEC, including but not limited to the most recent Quarterly Report on Form 10-Q, which such risk factors supersede the risk factors contained in the Annual Report on Form 10-K, and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. 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 our 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. We expressly disclaim any obligation to update or revise, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.
CONTACT: News Media Contact: Tricia Ingraham, (330) 384-5247; Investor Contact: Irene Prezelj, (330) 384-3859