Greetings and welcome to the FirstEnergy Corp. Fourth Quarter 2015 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Meghan Beringer, Director of Investor Relations for FirstEnergy Corp. Thank you. You may begin.

Thank you, Adam, and good morning. Welcome to FirstEnergy's fourth quarter earnings call. We will make various forward-looking statements today regarding revenues, earnings, performance, strategies and prospects. These statements are based on current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by such statements can be found on the Investor section of our website under the Earnings Information link and in our SEC filings. We will also discuss certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures are also available on our website. Please note that on the Investor Relations page of our website we have also included a slide presentation that will follow this morning's discussions. Participating in today's call are Chuck Jones, President and Chief Executive Officer; Jim Pearson, Executive Vice President and Chief Financial Officer; Leila Vespoli, Executive Vice President, Markets and Chief Legal Officer; Donnie Schneider, President of FirstEnergy Solutions; Jon Taylor, Vice President, Controller and Chief Accounting Officer; Steve Staub, Vice President and Treasurer and Irene Prezelj, Vice President, Investor Relations. Now I'd like to turn the call over to Chuck Jones. Charles E. Jones - President, Chief Executive Officer & Director: Thanks, Meghan. Good morning, everyone. I'm glad you're able to join us. I'm excited to share the results from an important and productive year for FirstEnergy. In 2015 we made tremendous progress on major initiatives across our company. We put a number of obstacles behind us and completed critical work necessary to implement our regulated growth strategy going forward. At the same time, we consistently met our financial commitments to you. Last night we reported operating earnings of $0.58 per share for the fourth quarter and $2.71 per share for the year. These results, which reflect improved operations at…

Thank you, ladies and gentlemen. We will now be conducting a question-and-answer session. Our first question comes from the line of Stephen Byrd from Morgan Stanley. Please go ahead. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Hi. Good morning. Charles E. Jones - President, Chief Executive Officer & Director: Good morning. Stephen Calder Byrd - Morgan Stanley & Co. LLC: I wanted to discuss transmission spending opportunities. In your fact book I think it's slide 45, you talk about a review of the reliability in your ATSI system. And maybe that should be phrased more broadly, but just wanted to check-in in terms of as you assess transmission needs, replacement of 69-kV lines, 138-kV lines, what is your sense in terms of the potential for additional spending to enhance reliability in transmission in particular? Charles E. Jones - President, Chief Executive Officer & Director: Well, Stephen, we've talked about this a little bit in the past. Our team has identified in excess of $15 billion worth of projects that we could execute, all on our existing 24,000 miles of transmission lines. And that's our focus. And what we do with those projects is we prioritize them in the best way to drive benefits for customers. And my view is the best investments we can make are the ones that customers are willing to pay for and that you all are willing to invest in. So the opportunity is there for us to make these kind of investments for a long time; the ability to add on an annual basis to that is a little bit challenged by the availability of a transmission construction work force in our country. So I wouldn't expect that you would see a huge increase on an annual basis, but you could extrapolate out…

Thank you. Our next question comes from the line of Gregg Orrill from Barclays. Please go ahead.

Yeah. Thank you. Two questions. The first one is regarding the Competitive business guidance for 2016. And I guess it was the same as it was in the third quarter look, despite the fact that wholesale power prices are down. Could you talk about what the drivers there were? Donald R. Schneider - President, FirstEnergy Solutions (FES), FirstEnergy Solutions Corp.: Sure, Gregg. This is Donnie. If you take a look at our slide 104 of the fact book you can see the EBITDA guidance. And as you clearly indicated, the fall-off in prices, we reflected that in our open position. We're down about $3 there. But we've also lowered our costs, especially our fossil fuel. We went back and took another hard look at some of the things we'd done in CFIP. We were able to lower that. Net of those two things, the lower revenue from the decline in the open position, net of what we've been able to do on the cost side, our commodity margin's only down about $15 million, which is well in the range of our EBITDA.

Okay, thanks. And then regarding the equity needs, can you talk about your thoughts there in light of some of the write-offs and funding needs that you have? Charles E. Jones - President, Chief Executive Officer & Director: Well, I've said pretty consistently that we have set a goal of strengthening our balance sheet and getting to where we need to get with the rating agencies without having to use any equity to do that. And I just don't believe that that is the intent of shareholder equity. We've worked very hard this past year. I talked about the results of CFIP. We've also made improvements in other parts of our operation, and then we've got the entire Ohio ESP to get a resolution on before I think we're in any position to talk about what future equity needs might be. We talked about $245 million of incremental investment in Pennsylvania distribution. Under the Ohio ESP there's an extension of the DCR rider plus potential opportunities to invest in increasing the smart distribution network in Ohio. Along with transmission with ATSI, transmission with MAIT, what we need to do and what we plan to do is communicate to you what type of regulated growth rate we're going to strive for going forward, once we have these last remaining questions done. And then any equity needs are going to be driven off of that. They are not going to be driven off of a need for equity to deal with any of the financial issues that we've been trying to wrestle to the ground this last year. They will only be used for growth, and that's our intent.

Thank you.

Thank you. Our next question comes from the line of Paul Ridzon from KeyBanc. Please go ahead.

What's your current thinking around when the Ohio Commission will rule, and kind of what's your outlook for potential that – that schedule getting delayed? And if it were delayed beyond the PJM auction, how would it impact your bidding behavior? Charles E. Jones - President, Chief Executive Officer & Director: Well, as I said in my comments, we're expecting an answer from the Ohio Commission in March. And so I don't think it's going to affect our bidding behavior one way or another. Our Competitive generating business bids in our Competitive fleet. We have regulated generation in West Virginia already that is bid by a regulated generation group. The two do not talk, as required by FERC's Standards of Conduct. This generation will get bid in by one of those two groups, depending on which side of the fence it's on.

Can you remind us what the original investment in Signal Peak was? James F. Pearson - Executive Vice President & Chief Financial Officer: We made an original cash contribution, about $150 million.

And you sold a piece for what, you said $230 million? James F. Pearson - Executive Vice President & Chief Financial Officer: Yes. That's – we sold 50% of our interest and we had a cash proceeds of about $234 million.

Okay. Thank you very much. I'm good.

Thank you. Our next question comes from the line of Dan Eggers from Credit Suisse. Please go ahead. Daniel L. Eggers - Credit Suisse Securities (USA) LLC (Broker): Hey. Good morning, guys. Charles E. Jones - President, Chief Executive Officer & Director: Hey, Dan. Daniel L. Eggers - Credit Suisse Securities (USA) LLC (Broker): First question just on – a couple of cash flow questions for you guys, first off. How should we think about bonus depreciation affecting kind of the cash flows coming back in? And how does that get treated at the different utilities/transmission assets as far as adjusting rate base? James F. Pearson - Executive Vice President & Chief Financial Officer: Dan, this is Jim. Bonus depreciation, we were already in a large NOL position through the 2018 and 2019 period, so this is just going to extend that beyond 2021. Obviously these years will change somewhat with the approval of the PPA scenario. On the earnings side, it's really a modest impact from a rate base reduction. We'll see a little bit on the transmission side and certain of our other jurisdictions that have formula like rate recovery such as the DCR in Ohio. But I would say the impact to our earnings rate base is going to be minimal. Daniel L. Eggers - Credit Suisse Securities (USA) LLC (Broker): So should we assume – what kind of cash tax rate are you guys assuming through 2021? Are you at an AMT or sub-AMT level then? K. Jon Taylor - Chief Accounting Officer, VP & Controller: Hey, Dan. This is Jon Taylor. We're at the AMT level. Daniel L. Eggers - Credit Suisse Securities (USA) LLC (Broker): Okay. Got it. And then I guess on the pension side, did I read it correctly from the last…

Thank you. Our next question comes from the line of Julien Dumoulin-Smith from UBS. Please go ahead.

Hi. Good morning. Can you hear me? Leila L. Vespoli - Executive Vice President, Markets & Chief Legal Officer: Yeah. Charles E. Jones - President, Chief Executive Officer & Director: Yeah. We can here you.

Excellent. So let me just follow up on what Dan was asking there. First, on the bonus depreciation point, can you elaborate a little bit more on the earnings impact rather than the cash flow? And think about what it does separately to the Transmission and the Distribution side as you think about perhaps the next round of rate case and/or FERC filing? James F. Pearson - Executive Vice President & Chief Financial Officer: At this point, Julien, I would say that the impact on each of the segments would just be pennies. It would not be material at all.

Got it. Could you elaborate why that would be, just be clear, just as you think about? Is that principally because you haven't filed, or you don't necessary have a meaningful distribution case contemplated? James F. Pearson - Executive Vice President & Chief Financial Officer: Yeah. At this point on the Distribution side, it would only impact the utilities that we have formula-like rates considering the DCR in Ohio. We have rates that are in effect in all of our other jurisdictions will likely be looking to go in for rates in New Jersey and Pennsylvania, but that will not be – we won't see changes to our rates probably until the 2017 timeframe at this point, but we'll give you more clarification on that when we have our Analyst Day Meeting.

And just to clarify Analyst Day expectations, if there is indeed an issue at FERC, I suppose a, you would expect to host your Analyst Day would be in terms of providing guidance, should we continue to expect EBITDA guidance kind of status quo as you laid out? If the 206 is successful. Charles E. Jones - President, Chief Executive Officer & Director: Yes. Well, I think here's where we're at. We're going to wait till we get the outcome in Ohio. Once we have that then we're going to give you a little clearer guidelines on what we're expecting in terms of our Analyst Meeting. One way or another we're going to be giving you guidance for 2016 that includes the ESP or doesn't include the ESP based on where we're at, at that point in time.

Got it. And then lastly on the Signal Peak assets, what's the situation in terms of the servicing the debt, just the guarantee there? If you can just elaborate in terms of the assets itself? James F. Pearson - Executive Vice President & Chief Financial Officer: Okay, Julien. This is Jim. From servicing the debt, the mine continues to service that debt. The only time that we would have a change there is if we become more of a full-time owner of the mine if we would have control of over 50% of that. The first step we would have to do is likely consolidate that debt on to our balance sheet. Right now it's not consolidated because we're only a 33% owner. And then ultimately if there was a capital call that the other owners were not able to fulfill that would also likely require us to make that capital call. At the end, of that $300 million, $100 million is purely ours because we own a 33% interest in that and once we understand fully what happens to the mine, if it would happen to shut down then we would be responsible to fill that obligation to the banks.

The balance of the obligation. James F. Pearson - Executive Vice President & Chief Financial Officer: That's correct.

Great. Thank you so much.

Thank you. Our next question comes from the line of Paul Patterson from Glenrock Associates. Please go ahead.

Good morning. How are you? Charles E. Jones - President, Chief Executive Officer & Director: Good morning.

Just on, a quick question here. In terms of the PPA associated generation, how much of that if you could remind me, cleared in the 2018/2019 auction? Donald R. Schneider - President, FirstEnergy Solutions (FES), FirstEnergy Solutions Corp.: This is Donny, Paul. So Sammis and Beaver Valley it all cleared in the 2018/2019 auction. I'm sorry, Sammis and Davis-Besse, it all cleared in the 2018/2019 auction.

Okay. And then you guys brought up sort of an interesting issue here in terms of how your generation in the PPA would be similar to regulated generation, et cetera. And I don't recall when the Harrison Plant acquisition by the regulated affiliate in Virginia was – or West Virginia, excuse me, was being purchased, this much of an issue in terms of opposition, et cetera, from generators, et cetera. Why do you think in this case it's being so much more of an issue than it would be in the Harrison case when it sounds to me, and correct me if I'm wrong, the economics would kind of be similar in terms of the impact on the market? Charles E. Jones - President, Chief Executive Officer & Director: I am at a complete loss for why it is such a big issue for others, because I do think it is financially the same as what happened with Harrison. These units will no longer supply retail load. They will no longer supply polar load. They are not going to influence the competitive market in any way. So I'm at a complete loss for why it has generated such adamant opposition other than potentially misery loves company.

Okay. Leila L. Vespoli - Executive Vice President, Markets & Chief Legal Officer: And if I could add on just a little bit to that. So if you think about the parade of horribles that EPSA and others highlighted in their complaint to FERC, they talked about if you let these generating units look regulated, have in effect what they called an out of market subsidy, that would crash the marketplace. Well, if you think about PJM, as Chuck alluded to earlier, 20% of PJM is already regulated. And that doesn't even include the FRR entities. And if you think about what they were talking about, the bidding aspect of this, it's public information that prior to capacity performance three-quarters, so 75% of the megawatts in the PJM capacity auctions bid at zero. So they bid at price takers. And after CP it was about roughly half. But if you think about it with the new penalty, that what you associated with that penalty should kind of be your new zero. So I would suggest that the new price takers is actually even higher than 50%. So what that would suggest is some of the generators who actually filed this and complained so loudly saying that it was going to crash the market, they themselves actually bid into the capacity market at zero.

Okay. Fair enough. And then just on the... James F. Pearson - Executive Vice President & Chief Financial Officer: Hey, Paul, and just to be clear on the capacity, I said it all cleared. In actuality when you look at our fact book on slide 119, you'd see that there were 525-megawatts in ATSI that did not clear. And...

I'm sorry. Go ahead. James F. Pearson - Executive Vice President & Chief Financial Officer: A slice of that may be at Sammis and Davis-Besse, but essentially it all cleared.

What do you – why would a slice of it not (44:20), I guess? James F. Pearson - Executive Vice President & Chief Financial Officer: Well, to the degree we bid all of our units on a curve, there could be a slice that didn't clear.

Okay. That would be Sammis and Davis-Besse? James F. Pearson - Executive Vice President & Chief Financial Officer: Yeah, generally we bid all of our units on a curve, Paul.

Okay. But I mean I guess what I'm wondering, though, is that of the PPA-affiliated plants, some of it may have cleared and some of it may not have cleared. Is that correct? James F. Pearson - Executive Vice President & Chief Financial Officer: It would not look any different than the rest of our unregulated plants, Paul.

Okay. Just to get back to Julien's question on the – just to make sure I understand on the Global Holding guarantee, the $300 million. It wasn't clear to me exactly how much on the hook you guys are if the Signal Peak mine becomes uneconomic or unable to – and you don't get the capital calls from third parties. How much would be the total risk that you guys may or may not have? I'm just – it wasn't clear completely. James F. Pearson - Executive Vice President & Chief Financial Officer: The total amount would be $300 million, less any types of proceeds that we could get from the sale of the mine. So if we cannot sell the mine for anything, the maximum would be $300 million.

Okay. James F. Pearson - Executive Vice President & Chief Financial Officer: Assuming that there is some value to the mine, we would be able to use those proceeds to reduce that amount of exposure.

Great. Thanks so much.

Thank you. Our next question comes from the line of Anthony Crowdell from Jefferies. Please go ahead.

Hey. Good morning. Just two quick questions I guess on the PPA is first, do you think FERC rules before the May PJM auction? And second, you had mentioned the waiver earlier, that you have a waiver between your utility and competitive generation. Is the waiver unique to a particular PPA or is it I guess for any PPA that goes between your utility and competitive businesses? Leila L. Vespoli - Executive Vice President, Markets & Chief Legal Officer: This is Leila. So it covers all the transactions between the utilities and the affiliates. And again, the basis upon which it was granted, the circumstances haven't changed. The Commission still retains the ability to protect customers. And I apologize, I forgot your first question?

Just do you think FERC rules before the auction in May? Leila L. Vespoli - Executive Vice President, Markets & Chief Legal Officer: Oh, whether it will rule, I'm sorry. Yes. Nothing's carved in stone and they don't have to. EPSA asked for expedited treatment, but most people believe that they will act before the auction and probably act on the filed paper as opposed to holding a hearing. That would be my best guess.

Just quickly then, has FERC ever reversed policy and revoked a waiver? Leila L. Vespoli - Executive Vice President, Markets & Chief Legal Officer: I don't know the entire history, but I could tell you what FERC has done with regard to captive customers and shopping. FERC on several occasions has been asked to kind of look behind the curtain and opine whether a state's particular flavor of retail choice is what they would agree with or not. And FERC has consistently said no, as long as they're not captive customers, as long as they can shop, then we're not going to try and second guess what commissions do.

Great. Thanks for taking my questions.

Thank you. Our next question comes from the line of Praful Mehta from Citigroup. Please go ahead.

Thanks. Hi, guys. Charles E. Jones - President, Chief Executive Officer & Director: Good morning.

Hi. Sorry to go on the PPA question again, but I'm just trying to understand the other side. And I know this is clearly not the preferred path, but if the PPA does get cancelled for whichever partner or how it gets cancelled, I'm just trying to paint a picture first from an equity needs perspective and also from a strategic fit perspective. As in, if you do see the PPA getting cancelled, is there any view on how the equity need requirement changes, especially to support the credit? And secondly, strategically do you see this business as still a fit within FE? Or do you look to do an exit in some form at some point? Charles E. Jones - President, Chief Executive Officer & Director: Well, first off we have not communicated any earnings guidance for full year 2016, whether the PPA gets done or not, and I'm not going to do that here this morning. What I've said is we will deal with that outcome when we have it, and we will communicate at that time what our earnings guidance for 2016 is, what our future growth plans for the utilities are, what our future equity needs might be, if anything, to support that growth. So I think you're just going to have to be patient and wait for the outcome, and then we'll tell you where we're at at that point in time. And beyond that I've consistently said I think that Generation, Transmission and Distribution are all critical assets in terms of serving customers. And right now I don't see any strategic change there for us.

Fair enough. And on the second question, if I look at the generation of the Competitive business and I look at the... Charles E. Jones - President, Chief Executive Officer & Director: And I would remind you that in my remarks I told you that this business is generating positive EBITDA, positive cash flow through 2018 without any benefit from the Energy Security Plan.

Gotcha. And that's a great lead-in actually to my second question which is, as I think about that positive free cash flow, I guess an important part of that is just the different channels that you sell your generation through. And LCI looks like an important piece of that puzzle. The range that you generally provide for LCI is in the zero to 20-terawatt hours of sales in that LCI direct. 2017 looks like it's just at 5 terawatt hours right now. And clearly it's early days and you're waiting for the PPA. But is there – the reason why I'm focused on it is, the LCI price versus the spot price, there's like almost a $20 per megawatt hour difference. So I'm just trying to put a lower bound on that LCI sale, as in, at a minimum what level do you see achieving at LCI or LCI channel sales in the 2016/2017 timeframe? Donald R. Schneider - President, FirstEnergy Solutions (FES), FirstEnergy Solutions Corp.: So this is Donny. I think actually if you look at slide 104 in the fact book it shows LCI, MCI and mass market we've got 16.4 terawatt hours closed already for 2016 delivery.

No, I'm looking at 2017 and LCI for 2017 is 5 terawatt hours which is what I'm looking at. Donald R. Schneider - President, FirstEnergy Solutions (FES), FirstEnergy Solutions Corp.: Oh, yeah sure. Yeah. We've got a ways to go there. LCI customers generally are shorter terms contracts compared to government aggregation for example. So it would not be unusual to be able to close 10 terawatt hours or 15 terawatt hours in a year prior to the delivery year.

Got you. And do you expect those prices to be at similar levels to where you currently cleared which is around $54 per megawatt hour, $55 per megawatt hour? Donald R. Schneider - President, FirstEnergy Solutions (FES), FirstEnergy Solutions Corp.: That's more difficult to say, because what you got to keep in mind embedded in that price is the price of capacity. So a customer in ATSI in the 2015/2016 timeframe is going to look different than a RTO customer and that's going to look different than a customer in the 2017/2018 timeframe. So it's very hard for us to say kind of what price we would end up locking those in at. What I would tell you is we would have consistent margins.

Got you. That's very helpful. Thank you.

Thank you. Our next question comes from the line of Charles Fishman from Morningstar. Please go ahead.

Good morning. This will be quick I think. In comparing the fact sheets, it looks like the transmission spend you're projecting a little up for 2016, lower in 2017. But nothing has changed with respect to Energizing the Future. I mean the overall project is pretty much on track from the way you initially set it up a couple of years ago, correct? Charles E. Jones - President, Chief Executive Officer & Director: That's correct.

That's the only question I had. Thank you. Charles E. Jones - President, Chief Executive Officer & Director: All right. Charles E. Jones - President, Chief Executive Officer & Director: Okay, well there are no more questions in the queue. I'd just like to thank you all for your continued support. I look forward to getting our answer from Ohio here in a few weeks and then look forward to meeting you all face to face at the Analyst Meeting following that. Thank you.

Thank you, ladies and gentlemen. This does conclude our teleconference for today. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.