Slide 1: Focused on Our Future: 4Q 2021 Strategic & Financial Highlights
Focused on Our Future 4Q 2021 Strategic & Financial Highlights Steven E. Strah, President and CEO K. Jon Taylor, SVP, CFO & Strategy
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements: This presentation 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 uncertainti
Slide 3: Non-GAAP Financial Matters
Non-GAAP Financial Matters This presentation contains references to non-GAAP financial measures including, among others, Operating earnings (loss), Operating earnings (loss) per share (EPS), and Operating earnings (loss) per share (EPS) by segment. Generally, a non-GAAP financial measure is a numeri
Slide 4: Moving FirstEnergy Forward
Moving FirstEnergy Forward Steve Strah, President and CEO Strategic & Financial Highlights – Published February 10, 20224 ■ Our transformation – foundational changes ■ Key updates and priorities ■ Long-term, sustainable growth ■ Strong financial & operating results Focus for Today’s Call: Reported 4
Slide 5: The New FirstEnergy
The New FirstEnergy ■ We are building a culture where all of us feel valued and understand the importance of doing what is right – Ensuring the best interests of our customers, stakeholders and the environment – Developing an inclusive and safe culture where all employees feel empowered – Demonstrat
Slide 6: FE Forward: Transforming how we operate
FE Forward: Transforming how we operate ■ We are investing in innovation, digital tools and technologies to work more safely and efficiently, deliver an exceptional customer experience, and unlock growth opportunities embedded in the energy transition – Five-state operating model with centrally driv
Slide 7: Strategic Updates
Strategic Updates ■ In November, announced $3.4B transformational equity financing transactions – Strengthened credit profile and eliminates all non SIP/DRIP equity needs – Supports incremental investment opportunities that support the energy transition – Key catalyst for long-term, sustainable grow
Slide 8: Strategic Updates (continued)
Strategic & Financial Highlights – Published February 10, 20228 Strategic Updates (continued) ■ Continue to make substantial progress in resolving outstanding litigation ■ We announced yesterday that, in conjunction with the Special Litigation Committee of the Board of Directors, the company agreed
Slide 9: Additional Updates
Strategic & Financial Highlights – Published February 10, 20229 Additional Updates As we look to the future, I believe our company will emerge as a premier utility and a leader in our industry Continued Focus on Culture 2022 Regulatory Strategy ■ Focused on supporting key strategic initiatives ■ Pre
Slide 10: 4Q 2021 Earnings Summary
4Q 2021 Earnings Summary Jon Taylor, SVP, CFO and Strategy ■ Reported 4Q 2021 GAAP earnings of $0.77 per share vs. $0.45 per share in 4Q20 – 4Q 2021 results include $0.26 of special items, including mark-to-market gains – pension/OPEB actuarial assumptions +$0.47, exit of generation +$0.08, regulato
Slide 11: 2021 Earnings Summary
2021 Earnings Summary ■ Reported 2021 GAAP earnings of $2.35 per share vs. $1.99 per share in 2020 – 2021 results include ($0.25) of special items, including mark-to-market gains – pension/OPEB actuarial assumptions +$0.48, exit of generation +$0.19, investigation and other related costs ($0.58), re
Slide 12: Financial Updates
Financial Updates ■ In November 2021, outlined our financial plan through 2025 Strategic & Financial Highlights – Published February 10, 202212 ■ Redeemed $850M (1/20/2022) ■ $500M (expiring July 2022) Recapitalizing Ohio UtilitiesLowering FE Corp debt Further improvement ■ Considering additional op
Slide 13: Financial Updates (continued)
Financial Updates (continued) Strategic & Financial Highlights – Published February 10, 202213 Building a long-term, sustainable company and culture, centered on our core values ■ Continuing our focus on cash flow through FE Forward ■ Despite unprecedented supply chain challenges, investing in our s
Slide 14: Earnings Supplement to the Financial Community
Earnings Supplement to the Financial Community Strategic & Financial Highlights – Published February 10, 2022 15. 4Q Earnings Summary and Reconciliation 16. 4Q Earnings Drivers by Segment 17. Full Year Earnings Summary and Reconciliation 18. Full Year Earnings Drivers by Segment 19. Special Items De
Slide 15: FirstEnergy EPS Variance Analysis (4Q)
FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions, except per share amounts) Distribution Transmission Other Consolidated 4Q 2020 Net Income (Loss) (GAAP) $159 $118 $(35) $242 4Q 2020 Basic Earnings (Loss) Per Share - GAAP (avg. shares outstanding 543M) $0.29 $0.22
Slide 16: Earnings Drivers: 4Q 2021 vs. 4Q 2020
Earnings Drivers: 4Q 2021 vs. 4Q 2020 Regulated Distribution (RD) ▪ Rates & Investments: Implementation of the NJ distribution base rate case and higher rider revenue from capital investment programs increased earnings by $0.02 per share. ▪ Customer Demand: Lower weather-adjusted demand decreased ea
Slide 17: FirstEnergy EPS Variance Analysis (Full Year)
FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions, except per share amounts) Distribution Transmission Other Consolidated 2020 Net Income (Loss) (GAAP) $959 $464 $(344) $1,079 2020 Basic Earnings (Loss) Per Share (avg. shares outstanding 542M) $1.77 $0.86 $(0.64) $
Slide 18: Earnings Drivers: Full Year 2021 vs. Full Year 2020
Earnings Drivers: Full Year 2021 vs. Full Year 2020 Regulated Distribution (RD) ▪ Rates & Investments: The implementation of the NJ distribution base rate case and higher rider revenues from capital investment programs in OH and PA increased earnings by $0.11 per share. ▪ Customer Demand: Higher dem
Slide 19: Special Items Descriptions
Special Items Descriptions ▪ Regulatory charges: Primarily reflects the impact of regulatory agreements, concessions or orders requiring certain commitments and/or disallowing the recoverability of costs, net of related credits. ▪ Debt-related costs: Primarily reflects costs associated with the rede
Slide 20: 4th Quarter 2021
4th Quarter 2021 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 2,268 $ 385 $ (37) $ 2,616 $ — $ — $ — $ — $ 2,268 $ 385 $ (37) $ 2,616 (2) Other 56 — (12) 44 — — — — 56 — (12) 44 (3) Total Revenues 2
Slide 21: 4th Quarter 2020
4th Quarter 2020 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 2,099 $ 428 $ (34) $ 2,493 $ — $ — $ — $ — $ 2,099 $ 428 $ (34) $ 2,493 (2) Other 57 4 (17) 44 — — — — 57 4 (17) 44 (3) Total Revenues 2
Slide 22: 4th Quarter 2021 vs 4th Quarter 2020
4th Quarter 2021 vs 4th Quarter 2020 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 169 $ (43) $ (3) $ 123 $ — $ — $ — $ — $ 169 $ (43) $ (3) $ 123 (2) Other (1) (4) 5 — — — — — (1) (4) 5 — (3) Total
Slide 23: YTD December 2021
YTD December 2021 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 9,498 $ 1,608 $ (140) $ 10,966 $ 28 (a) $ — $ — $ 28 $ 9,526 $ 1,608 $ (140) $ 10,994 (2) Other 213 10 (57) 166 — — — — 213 10 (57) 166
Slide 24: YTD December 2020
YTD December 2020 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 9,130 $ 1,613 $ (139) $ 10,604 $ — $ — $ — $ — $ 9,130 $ 1,613 $ (139) $ 10,604 (2) Other 233 17 (64) 186 — — — — 233 17 (64) 186 (3) T
Slide 25: YTD December 2021 vs YTD December 2020
YTD December 2021 vs YTD December 2020 (in millions, except for per share amounts) GAAP Special Items Operating (Non-GAAP) RD RT Corp FE RD RT Corp FE RD RT Corp FE (1) Electric sales $ 368 $ (5) $ (1) $ 362 $ 28 $ — $ — $ 28 $ 396 $ (5) $ (1) $ 390 (2) Other (20) (7) 7 (20) — — — — (20) (7) 7 (20)
Slide 26: Condensed Consolidated Balance Sheets (GAAP)
Condensed Consolidated Balance Sheets (GAAP) (in millions) Assets December 31, 2021 December 31, 2020 Current Assets: Cash, cash equivalents and restricted cash $ 1,511 $ 1,801 Receivables 1,279 1,439 Other 447 474 Total Current Assets 3,237 3,714 Property plant and equipment 34,744 33,294 Investmen
Slide 27: Condensed Consolidated Statements of Cash Flows (GAAP)
Condensed Consolidated Statements of Cash Flows (GAAP) (in millions) For the Years Ended December 31, 2021 2020 Cash Flow from Operating Activities: Net Income $ 1,283 $ 1,079 Adjustments to reconcile net income to net cash from operating activities: Gain on disposal, net of tax (47) (76) Depreciati
Slide 28: Quarterly Support
Quarterly Support Strategic & Financial Highlights – Published February 10, 2022 29. 2022 Key Priorities 30. 2022 Regulatory Calendar 31. TTM RD ROEs – by State 32. TTM Actual Sales by Class 33. TTM Weather-Adjusted Sales 34. TTM Weather Impacts 35. Credit Ratings Summary 36. Credit Profile 37. Debt
Slide 29: 2022 Key Priorities
2022 Key Priorities Strategic & Financial Highlights – Published February 10, 2022 ■ Transform how we operate and enhance our organization – Simplify and implement best practices throughout our organization – Focus on customer experience – Improve organizational health and culture ■ Focus on perform
Slide 30: 2022 Regulatory Calendar
2022 Regulatory Calendar Select Proceedings Strategic & Financial Highlights – Published February 10, 2022 Jurisdiction Key Dates Ohio • DCR Audit (includes vendor payments, naming rights and agreement disclosure review(1)) • Corporate Separation Audit • DMR Review • Political and Charitable Spend V
Slide 31: RD Segment – State ROEs
RD Segment – State ROEs TTM 12/31/2021 Strategic & Financial Highlights – Published February 10, 202231 Rate base at 12/31/21 $4.0B $6.0B $2.9B $3.2B $0.5B Equity/Total Capitalization1 49% 51% 49% 45% 52% ROE EPS Sensitivity +/- 1% ~$0.03 ~$0.05 ~$0.03 ~$0.03 ~$0.01 Key Common Regulatory Adjustments
Slide 32: TTM Actual Sales by Class
(MWh in thousands) 1Q20 1Q21 2Q20 2Q21 3Q20 3Q21 4Q20 4Q21 TTM 4Q20 TTM 4Q21 Residential 13,204 14,890 12,764 12,347 16,091 15,652 12,919 12,735 54,978 55,624 Commercial 8,903 8,630 7,824 8,590 9,589 9,785 8,495 8,594 34,811 35,599 Industrial 13,548 13,258 12,010 13,384 13,560 14,018 12,916 13,368 5
Slide 33: TTM Weather-Adjusted Sales by Class
(MWh in thousands) 1Q20 1Q21 2Q20 2Q21 3Q20 3Q21 4Q20 4Q21 TTM 4Q20 TTM 4Q21 Residential 14,899 15,397 12,669 11,861 15,157 15,200 13,418 13,220 56,142 55,678 Commercial 9,399 8,853 7,823 8,466 9,360 9,672 8,631 8,753 35,213 35,744 Industrial 13,499 13,258 12,007 13,384 13,533 14,018 12,942 13,368 5
Slide 34: Weather Impacts
Weather Impacts Strategic & Financial Highlights – Published February 10, 202234 0 100 200 300 400 500 1,250 1,000 750 500 250 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 HDD HDD Norm CDD CDD Norm OH PA NJ WV MD Total Days % Days % Days % Days % Days % Days %
Slide 35: Credit Ratings
Credit Ratings As of February 7, 2022 Strategic & Financial Highlights – Published February 10, 2022 Most Recent Ratings Actions ■ On November 8, 2021, Moody’s changed FE’s outlook to Positive from Stable – Outlook changed at OE to Stable from Negative ■ On November 8, 2021, S&P issued one-notch upg
Slide 36: Credit Profile
Credit Profile As of February 7, 2022 Strategic & Financial Highlights – Published February 10, 2022 (1) S&P could raise the rating by one or more notches if the Company identifies long-term funding for the potential penalties/fines or resolves the remaining investigations and lawsuits against the C
Slide 37: Consolidated Long-Term Debt Maturities
Consolidated Long-Term Debt Maturities As of December 31, 2021 Strategic & Financial Highlights – Published February 10, 2022 $23.5B FACE VALUE AVG RATES FEU FET CORP 4.51% 4.01% 4.50% AVG LENGTH FEU FET CORP 12yrs 12yrs 11yrs $M 2 0 0 3 0 0 1 ,2 0 0 4 5 0 6 5 0 4 5 0 8 0 0 1 ,0 0 5 3 0 0 7 0 0 1 5
Slide 38: 2022F GAAP to Operating (Non-GAAP) Earnings Reconciliation
2022F GAAP to Operating (Non-GAAP) Earnings(1) Reconciliation Strategic & Financial Highlights – Published February 10, 202238 (1) Operating earnings exclude special items as described in the reconciliation table above and is a non-GAAP financial measure. Per share amounts for the special items abov