Slide 1: 4Q 2022 Strategic & Financial Highlights
4Q 2022 Strategic & Financial Highlights John W. Somerhalder II, Interim President & CEO & Chair of the FE Board K. Jon Taylor, SVP & CFO
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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 uncertain
Slide 3: Non-GAAP Financial Matters
Non-GAAP Financial Matters 3 This presentation contains references to non-GAAP financial measures including, among others, Operating earnings (loss), Operating earnings (loss) per share (“EPS”), and Operating EPS by segment, and presents the impact of special items on the following measures, Total r
Slide 4: Transforming FirstEnergy into a Premier Utility
Strategic & Financial Highlights - Published February 13, 20234 Transforming FirstEnergy into a Premier Utility John W. Somerhalder II, Interim President & CEO & Chair of the FE Board Reported 4Q22 GAAP loss of ($0.71)/sh and Operating (non-GAAP) earnings of $0.50/sh Reported 2022 GAAP earnings of $
Slide 5: Progress on Our Transformation
Strategic & Financial Highlights - Published February 13, 20235 Progress on Our Transformation ■ Strengthening of our organization – financial, operational, and cultural ■ FirstEnergy Transmission, LLC (FET) 30% ownership interest sale further enhances financial position ■ Active regulatory calendar
Slide 6: Active Regulatory Calendar
Strategic & Financial Highlights - Published February 13, 20236 Active Regulatory Calendar Jon Taylor, SVP & CFO Regulatory Corner: Later in 1Q, launching new sub-page on our IR website to provide information on key filings, links to recent filings and docket numbers 2023 MD (1Q), NJ (1Q), WV (2Q) A
Slide 7: FET 30% Ownership Interest Sale
Strategic & Financial Highlights - Published February 13, 20237 FET 30% Ownership Interest Sale Additional information on the transaction: FET 30% Ownership Transaction (announced February 2, 2023) ■ On February 2, 2023, FE announced an agreement to sell an additional 30% ownership interest in First
Slide 8: 4Q 2022 Earnings Summary
4Q 2022 Earnings Summary Strategic & Financial Highlights - Published February 13, 20238 ■ Reported 4Q 2022 GAAP earnings (loss) of ($0.71) per share vs. $0.77 per share in 4Q21 – 4Q 2022 results include ($1.21) of special items, including strategic and transaction charges due to the non-cash tax ch
Slide 9: 2022 Earnings Summary
2022 Earnings Summary Strategic & Financial Highlights - Published February 13, 20239 ■ Reported 2022 GAAP earnings of $0.71 per share vs. $2.35 per share in 2021 – 2022 results include ($1.70) of special items, including strategic transaction charges ($1.23), debt-related costs ($0.25), regulatory
Slide 10: 2022 Results and 2023 Guidance Highlights
Strategic & Financial Highlights - Published February 13, 202310 ■ Achieved strong financial results in 2022 and plan to continue executing in 2023 and beyond – Generated $2.7B in Cash from Operations and executed on more than $3.2B in customer-focused investments – Met our 2022 FFO/Debt target, exe
Slide 11: Earnings Supplement to the Financial Community
Earnings Supplement to the Financial Community Strategic & Financial Highlights - Published February 13, 2023 12. 4Q Earnings Summary and Reconciliation 13. 4Q Earnings Drivers by Segment 14. FY Earnings Summary and Reconciliation 15. FY Earnings Drivers by Segment 16. Special Items Descriptions 17.
Slide 12: FirstEnergy EPS Variance Analysis: 4Q Earnings Summary and Reconciliation
FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions, except per share amounts) Distribution Transmission Other Consolidated 4Q 2021 Earnings (Loss) Attributable to FirstEnergy Corp. (GAAP) $285 $113 $29 $427 4Q 2021 Basic Earnings (Loss) Per Share - GAAP (avg. shares
Slide 13: Earnings Drivers: 4Q 2022 vs. 4Q 2021
Earnings Drivers: 4Q 2022 vs. 4Q 2021 Regulated Distribution (RD) ▪ Accounting policy changes ($0.02): Due to lower capitalization of corporate support costs; vegetation management accounting policy change was effective in 4Q21, resulting in no year-over-year impact ▪ Ohio rate credits ($0.03): Resu
Slide 14: FirstEnergy EPS Variance Analysis: FY
FirstEnergy EPS Variance Analysis Regulated Regulated Corporate / Corp. (in millions, except per share amounts) Distribution Transmission Other Consolidated 2021 Earnings (Loss) Attributable to FirstEnergy Corp. (GAAP) $1,288 $408 $(413) $1,283 2021 Basic Earnings (Loss) Per Share (avg. shares outst
Slide 15: Earnings Drivers: Full Year 2022 vs. Full Year 2021
Earnings Drivers: Full Year 2022 vs. Full Year 2021 Regulated Distribution (RD) ▪ Accounting policy changes ($0.17): Due to lower capitalization of vegetation management spend ($0.09) and corporate support costs ($0.08) ▪ Ohio rate credits ($0.11): Resulting from the 4Q21 unanimous settlement to pro
Slide 16: Special Items Descriptions
Special Items Descriptions ▪ Regulatory charges: Primarily reflects the impact of regulatory agreements, proceedings, audits, concessions or orders requiring certain commitments, refunds, and/or disallowing the recoverability of costs, net of related credits. ▪ Debt-related costs: Primarily reflects
Slide 17: 4th Quarter 2022
4th Quarter 2022 (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 $ 2,718 $ 470 $ (44) $ 3,144 $ — $ 1 (a) $ — $ 1 (2) Other 45 1 (13) 33 — — — — (3) Total Revenues 2,763 471 (57) 3,177 — 1 — 1 2,763 472
Slide 18: 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) Other 56 — (12) 44 — — — — (3) Total Revenues 2,324 385 (49) 2,660 — — — — 2,324 385 (49)
Slide 19: 4th Quarter 2022 vs 4th Quarter 2021
4th Quarter 2022 vs 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 $ 450 $ 85 $ (7) $ 528 $ — $ 1 $ — $ 1 (2) Other (11) 1 (1) (11) — — — — (3) Total Revenues 439 86 (8) 517 — 1 — 1 439
Slide 20: YTD December 2022
YTD December 2022 (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 $ 10,596 $ 1,863 $ (159) $ 12,300 $ — $ 62 (a) $ — $ 62 (2) Other 205 5 (51) 159 — — — — (3) Total Revenues 10,801 1,868 (210) 12,459 — 6
Slide 21: 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 (2) Other 213 10 (57) 166 — — — — (3) Total Revenues 9,711 1,618 (197) 11,132 28 —
Slide 22: YTD December 2022 vs YTD December 2021
YTD December 2022 vs 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 $ 1,098 $ 255 $ (19) $ 1,334 $ (28) $ 62 $ — $ 34 (2) Other (8) (5) 6 (7) — — — — (3) Total Revenues 1,090 250 (13)
Slide 23: Quarterly Support
Quarterly Support Strategic & Financial Highlights - Published February 13, 2023 24. 2022 Key Accomplishments 25. 2022 Key Accomplishments (continued) 26. On the Path to Premium Utility 27. 2023 Regulatory Calendar 28. TTM Actual Sales by Class 29. TTM Weather-Adjusted Sales 30. TTM Weather Impacts
Slide 24: 2022 Key Accomplishments
2022 Key Accomplishments 24 Accomplishments support transformation into a Premium Utility Financial Regulatory (1) See Slide 14 for GAAP to Non-GAAP earnings reconciliation (2) Includes ~$200M of nonrecurring disbursements/refunds in 2022 that are not anticipated in the future (i.e. OH rate refund,
Slide 25: 2022 Key Accomplishments (continued)
2022 Key Accomplishments (continued) 25 Accomplishments support transformation into a Premium Utility Governance Performance Excellence Aligned and centralized the organization into five strategic areas and consolidated ten distribution companies into five state-aligned business units which results
Slide 26: On the Path to Premium Utility
Strategic & Financial Highlights - Published February 13, 202326 ■ 14-15% FFO/Debt ■ Mid-BBB credit ratings ■ 6-8% annual EPS growth ■ Dividend growth (in line with policy) Key Financial Targets 19.9% FET Minority Interest Sale (closed May 2022) $2.4B 30% FET Minority Interest Sale (expect to close
Slide 27: 2023 Regulatory Calendar
Jurisdiction Regulatory Matter Key Dates Ohio • OH Grid Mod II • Electric Security Plan (ESP V) • HB6 Related Investigations • DCR Audit (includes vendor payments, naming rights and agreement disclosure review(1)) • Corporate Separation Audit • DMR Review Audit • Political and Charitable Spend Audit
Slide 28: TTM Actual Sales by Class
(MWh in thousands) 1Q21 1Q22 2Q21 2Q22 3Q21 3Q22 4Q21 4Q22 TTM 4Q21 TTM 4Q22 Residential 14,890 15,213 12,347 12,146 15,652 15,500 12,735 13,135 55,624 55,995 Commercial 8,631 9,291 8,590 8,716 9,785 9,662 8,594 8,649 35,599 36,317 Industrial 13,257 13,583 13,384 13,711 14,018 14,274 13,368 13,601 5
Slide 29: TTM Weather-Adjusted Sales
(MWh in thousands) 1Q21 1Q22 2Q21 2Q22 3Q21 3Q22 4Q21 4Q22 TTM 4Q21 TTM 4Q22 Residential 15,397 15,170 11,861 11,796 15,200 14,945 13,220 13,170 55,678 55,081 Commercial 8,853 9,265 8,466 8,627 9,672 9,514 8,753 8,617 35,744 36,024 Industrial 13,258 13,583 13,384 13,711 14,018 14,274 13,368 13,601 5
Slide 30: Weather Impacts
Weather Impacts Strategic & Financial Highlights - Published February 13, 2023 0 100 200 300 400 500 1,400 1,150 900 650 400 150 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 HDD CDD HDD Norm CDD Norm OH PA NJ WV MD Total Days % Days % Days % Days % Days % Days
Slide 31: Credit Ratings Summary
■ On February 10, 2023, S&P changed the outlook of FE and most subsidiaries to Positive ■ On September 13, 2022, Moody’s issued one-notch downgrades for CEI and TE and changed their outlook to Stable ■ On July 22, 2022, Fitch issued one-notch upgrades on FE, FET, and all subsidiaries. • All companie
Slide 32: Credit Profile
Credit Profile As of February 10, 2023 Strategic & Financial Highlights - Published February 13, 2023 (1) S&P could raise the ratings on FE over the next 12-24 months if: Upon close of the FET minority stake sale the company uses proceeds in a credit supportive manner, such that FFO to debt is consi