FirstEnergy : First Quarter 2025 Strategic and Financial Highlights

Published: 2025-04-23 16:54:05 ET FE

Focused on Our Future

1Q 2025 Strategic & Financial Highlights

Published April 23, 2025

Non-GAAP Financial Matters

This presentation contains references to certain financial measures including Baseline O&M and Core Earnings per share ("Core EPS") as "non-GAAP financial measures," which are not calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") and exclude the impact of "special items," from earnings attributable to FirstEnergy Corp. for Core EPS.

Management uses these non-GAAP financial measures to evaluate the company's and its segments' performance, and manage its operations and references these non-GAAP financial measures in its decision-making, using them to facilitate historical and ongoing performance comparisons. Management believes that the non-GAAP financial measures of Baseline O&M and Core EPS, including by segment, provide consistent and comparable measures of performance of its businesses on an ongoing basis. Management also believes that such measures are useful to shareholders and other interested parties to understand performance trends and evaluate the company against its peer group by presenting period-over-period operating results, excluding the impacts described above, that may not be consistent or comparable across periods or across the company's peer group. These non-GAAP financial measures are intended to complement, and are not considered as alternatives to, the most directly comparable GAAP financial measures, which for Baseline O&M is Other Operating Expenses and for Core EPS is EPS attributable to FirstEnergy Corp. Also, such non-GAAP financial measures may not be comparable to similarly titled measures used by other entities.

Special items represent charges incurred or benefits realized that management believes are not indicative of, or may obscure, trends useful in evaluating the company's ongoing core activities and results of operations, or otherwise warrant separate classification. Core EPS is calculated based on the weighted average number of common shares outstanding in the respective period.

A reconciliation of forward-looking non-GAAP measures, including 2025 Baseline O&M, 2025 Core EPS, and Core EPS compound annual growth rate projections, to the most directly comparable GAAP measures is not provided because comparable GAAP measures are not available without unreasonable efforts due to the inherent difficulty in forecasting and quantifying measures that would be necessary for such reconciliation. Specifically, management cannot, without unreasonable effort, predict the impact of these special items in the context of Core EPS guidance, or Core EPS growth rate projections because these items, which could be significant, are difficult to predict and may be highly variable. In addition, the Company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors. These special items are uncertain, depend on various factors and may have a material impact on our future GAAP results.

Strategic & Financial Highlights - Published April 23, 2025

Focus of Today's Call

Brian X. Tierney - President, Chief Executive Officer, and Board Chair

■

Overview of 1Q25 financial results and key highlights

■

Review of recent regulatory and legislative activity

■

Growth opportunities in our footprint

■

FirstEnergy's strong outlook for regulated growth

K. Jon Taylor - Senior Vice President, Chief Financial Officer

■

Review of 1Q25 Core EPS drivers

■

Executing on our 2025 financial plans

■

Delivering strong 2025 financial performance on key metrics

Strategic & Financial Highlights - Published April 23, 2025

Executive Overview

1Q24 vs. 1Q25 Results

2024

2025

$0.62

$0.67

$0.44

$0.49

GAAP EPS(1)

Core EPS(2)

Key Drivers

New base rates in

Normal weather

Strong financial discipline

PA, WV, and NJ

vs. Mild 1Q24

in line with plan

$0.9

$1.0

Capital Investments ($B)

1st Quarter 2025 Highlights

Delivered 1Q25 Core EPS of $0.67, in line with plan and

significantly higher than 1Q24

Executed $1.0B+ of 2025 Investment Plan ($5B), in line with plan and 15% higher than 1Q24

1Q25 Baseline O&M(2) of $340M, in line with plan and slightly below 1Q24; focused on continuous improvement and additional cost reductions

Declared increased dividend of $0.445/sh (payable June 1), consistent with guidance and represents ~5% growth vs. 2024

We are off to a strong start and on track to execute on our financial and strategic goals

Strategic & Financial Highlights - Published April 23, 2025

(1)

Basic Earnings Per Share Attributable to FE Corp.

(2)

See slides 20-24 for reconciliations between GAAP and Core EPS (Non-GAAP) and Baseline O&M.

Please see slide 3 for more information.

Regulatory and Legislative Updates

Ohio Base Rate Case

Ohio

Legislation:

HB15 & SB2

EnergizeNJ

In March, our Ohio companies and various intervenors filed responses to the Staff Report and Audit Report filed in late February as well as supplemental testimony

Settlement discussions began in April Hearings to begin May 5

Expect the Legislature to send a bill to the Governor in May/June timeframe with a regulatory framework that will provide transparency and predictability

Expect key provisions to include elimination of ESPs and creation of multi-year rate plans with forward test years

Our focus is on ensuring a reasonable transition to the new regulatory framework

On April 23, received approval of settlement; $335M(1) investments over 3.5 year period (2H25-2028)

Settlement is in line with our investment plan over the period and supports continued focus on reliability enhancements

Strategic & Financial Highlights - Published April 23, 2025

(1) Includes $202.5M of investments recovered through formula rider mechanism and $132M of

investments recovered through base rates.

Growth Opportunities in Our Footprint

(1)

Valley Link is a joint venture between FirstEnergy (~1/3 ownership interest), Dominion and AEP and

Strategic & Financial Highlights - Published April 23, 2025

will be accounted for as an equity method investment. Investments will be funded by Valley Link.

(2)

FirstEnergy Transmission is owned by FirstEnergy (50.1%) and Brookfield (49.9%)

Strong Outlook for Regulated Growth

■ Reaffirming 2025 Core EPS guidance range of $2.40-$2.60

Targeting upper half of the range

■ Reaffirming 6-8% Core EPS CAGR (2025-2029)

Combined with current dividend yield represents a total shareholder return

proposition of 10-12%, with potential for upside through P/E expansion

- Reaffirming 2025-2029 base investment plan of $28B

Minimal exposure to tariffs representing less than 0.2% on our base

Balanced Jurisdictions

2025F FE-Owned Rate Base ($B, year-end)

Integrated

$5.3,

19% $5.2,

NJ19%

WV/MD

$6.9, PA

$27.7B

$5.7,

25%

20%

investment plan

■ Remain focused on meeting or exceeding our commitments to

shareholders

$4.6,

17%

Distribution

Stand-Alone Transmission

Our team is laser focused on executing our strategy, delivering value and driving results

Strategic & Financial Highlights - Published April 23, 2025

1Q 2025 Earnings Summary

Earnings Drivers Summary

Distribution: New rates in PA and normal weather vs. 1Q24

Integrated: New rates in WV & NJ, transmission rate base growth, and normal weather vs. 1Q24

Stand-AloneTransmission: ~10% rate base growth more than offset by FET dilution

Corporate: Lower interest expense

Strong 1st Quarter performance, in line with plan

37% Core EPS growth

$0.67

$0.10

-$0.04

$0.02

$0.62

-$0.05

$0.05

$0.49

$0.10

$0.44

Rates & Investments

Net Financing Costs

+$0.09

+$0.08

+$0.01

+$0.03

Customer Demand

Dilution from

Income Taxes & Other

+$0.05

+$0.04

FET 30% Sale

-$0.01

O&M

-$0.04

$0.39

$0.38

$0.29

---

+$0.02

(closed 3/25/24)

Net Financing Costs

Int

$0.24

Int

$0.23

Int

$0.14

Int

$0.14

Other OpEx

-$0.01

$0.14

$0.15

$0.18

-$0.02

-$0.06

Corp ($0.14)

Corp ($0.12)

Net Financing Costs

Corp ($0.10)

Corp ($0.13)

Income Taxes & Other

+$0.01

-$0.02

Income Taxes & Other

+$0.01

1Q24

Special

1Q24

Distribution

Integrated

Stand-Alone

Corp /

1Q25

Special

1Q25

GAAP EPS

Items

Core EPS

Transmission

Other

Core EPS

Items

GAAP EPS

PA rate case impact of $0.04/sh(1)

WV/NJ rate case impact of $0.02/sh(1)

Strategic & Financial Highlights - Published April 23, 2025

See slides 20-24 for GAAP to Non-GAAP reconciliations and a description of special items

Executing on Our 2025 Financial Plan

Core EPS Guidance

Investment

Plan

Financing

Plan

O&M

Discipline

Strategic & Financial Highlights - Published April 23, 2025

Disclaimer

FirstEnergy Corporation published this content on April 23, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 23, 2025 at 20:53 UTC.