FirstEnergy Corp. Statement from Chief Executive Officer Charles E. Jones
On July 27, 2020, FirstEnergy Corp. CEO Charles E. Jones provided clarifications following a conference call about the company's Q2 financial results. The statement addressed the separation from FirstEnergy Solutions (FES), noting that FirstEnergy leadership no longer influenced FES after it filed for bankruptcy in March 2018. Jones emphasized FirstEnergy's commitment to ethical business practices while clarifying that the company was not running external affairs for FES post-separation. He reiterated that integrity and transparency are foundational principles for FirstEnergy.
- Clear commitment to ethical business practices helps build trust with stakeholders.
- Independence from FES post-bankruptcy may allow FirstEnergy to focus on its core operations.
- Separation from FES and its bankruptcy may continue to affect FirstEnergy's reputation.
- Potential risks associated with external affairs management as FES operates independently.
AKRON, Ohio, July 27, 2020 /PRNewswire/ -- FirstEnergy Corp. (NYSE: FE) today issued the following statement from Chief Executive Officer Charles E. Jones:
On Friday morning, July 24, 2020, FirstEnergy Corp. (FirstEnergy) hosted a conference call and live webcast to discuss our second quarter financial results with investors and analysts. Following the call, there were some additional questions that led me to believe it might be beneficial to clarify several points that I made.
The first relates to details of the separation of FirstEnergy and FirstEnergy Solutions (FES), which began when FirstEnergy announced a strategic review of competitive generation in November of 2016. Also, in November, the FES board was replaced with two independent board members and three new board members from the competitive generation business. FirstEnergy and FES independently engaged legal and financial advisors to help guide each of us through the complicated strategic review. At that point, I and other members of FirstEnergy leadership no longer had any decision-making power regarding the strategic direction of FES. This fell under the purview of the FES board. Leaders at FirstEnergy, me included, had frequent discussions with FES leadership and its board about the strategic review and, as it progressed, numerous matters related to FES, including employee impacts and shared services. As events unfolded, FES' focus turned increasingly to bankruptcy as the sole alternative, culminating with the bankruptcy filing in March 2018. Immediately after, FES was deconsolidated from FirstEnergy's financial statements.
The second clarification I'd like to make is regarding FirstEnergy making decisions under the shared services agreement with respect to external affairs. During the call, a question was asked as to whether we were "running external affairs" for FES following our separation. As I responded at the time, this was not the case. While FES received support from FirstEnergy's External Affairs team to varying degrees, that support decreased over time, particularly, as the FES bankruptcy approached. FES made its own decisions after its new board was in place with respect to its external affairs strategy.
This third clarification, while perhaps unnecessary, is related to my statement that in every interaction with political leaders, I talked about FirstEnergy's obligations to conduct its business transparently, ethically, and professionally. While those responsibilities are central to my actions, I did not mean to suggest that I express that responsibility literally in every single communication.
As I have said many times, conducting our business ethically and acting with integrity and honesty are foundational principles for the entire FirstEnergy family as well as me personally. These high standards have fostered the trust of our employees, customers, and the financial community.
Forward-Looking Statements: This statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on information currently available to management. Unless the context requires otherwise, as used herein, references to "we", "us", "our", and "FirstEnergy" refer to FirstEnergy Corp. Forward-looking 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 extent and duration of the novel coronavirus (known as COVID-19) and the impacts to our business, operations and financial condition resulting from the outbreak of COVID-19 including, but not limited to, disruption of businesses in our territories, volatile capital and credit markets, legislative and regulatory actions, the effectiveness of our pandemic and business continuity plans, the precautionary measures we are taking on behalf of our customers and employees, our customers' ability to make their utility payment and the potential for supply-chain disruptions; mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets, including, but not limited to, risks associated with the decommissioning of TMI-2; the ability to accomplish or realize anticipated benefits from strategic and financial goals, including, but not limited to, executing our transmission and distribution investment plans, controlling costs, improving our credit metrics, strengthening our balance sheet and growing earnings; legislative and regulatory developments including, but not limited to, matters related to rates, compliance and enforcement activity; economic and weather conditions affecting future operating results, such as significant weather events and other natural disasters, and associated regulatory events or actions; changes in assumptions regarding 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; changes in customers' demand for power, including, but not limited to, the impact of climate change or energy efficiency and peak demand reduction mandates; changes in national and regional economic conditions affecting us and/or our major industrial and commercial customers or others with which we do business; the risks associated with cyber-attacks and other disruptions to our 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 comply with applicable reliability standards and energy efficiency and peak demand reduction mandates; changes to environmental laws and regulations, including, but not limited to, those related to climate change; changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts and other trust funds, or causing us to make contributions sooner, or in amounts that are larger, than currently anticipated; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings; labor disruptions by our unionized workforce; changes to significant accounting policies; any changes in tax laws or regulations, , 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, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions; actions that may be taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity; 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 our common stock during any period may in the aggregate vary from prior periods due to circumstances considered by our 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 Annual Report on Form 10-K and Quarterly Report on Form 10-Q together with any subsequent Quarterly Reports on Form 10-Q and 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. FirstEnergy expressly disclaims 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.
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SOURCE FirstEnergy Corp.
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