FirstEnergy(FE) - 2024 Q4 - Annual Results

Financial Overview - Total assets of FirstEnergy are $52 billion, serving over 6 million customers across a service territory of 65,000 square miles[9]. - FirstEnergy achieved$450 million in annual revenue increases from base rate cases approved since Q4 2023, representing a $14 billion rate base[17]. - The company has resolved several legacy issues and completed obligations under a Deferred Prosecution Agreement with the U.S. Department of Justice[17]. - The company anticipates a load growth of 2.4$2.40 and $2.60, with a 6-8$2.40 and $2.60, with segment distributions of$1.29-$1.37 for Integrated,$0.91-$0.97 for Stand-Alone Transmission, and$0.57-$0.59 for Corp/Other[36]. - The 2024 operating earnings per share (Non-GAAP) for FirstEnergy is projected at$2.63, excluding special items[136]. - The 2023 operating earnings per share (Non-GAAP) for FirstEnergy is reported at $1.20, excluding special items[138]. - The 2022 core earnings per share (Non-GAAP) for FirstEnergy was$1.78, after adjustments for special items[140]. Investment Plans - The company plans a $28 billion base investment plan from 2025 to 2029, with 75$7.4 billion for distribution, $10.9 billion for integrated operations, and$9.5 billion for stand-alone transmission[24]. - The investment plan totals $10.8 billion for the 2025-2029 period, with approximately 45$900 million in transmission projects from 2025 to 2029 to meet growing data center demand[43]. - FirstEnergy's distribution segment is focused on enhancing customer experience and reliability, with a rate base investment plan of $4.4 billion in Ohio[67]. Dividend Policy - The company has committed to a dividend payout ratio of 60-70$1.70 per share and a payout ratio of 72% in 2024[35]. - The dividend yield is currently at 4%, with plans for continued growth subject to board approval[35]. Financial Discipline - FirstEnergy's financial discipline is reflected in a target of ~14%+ FFO/Debt and a commitment to maintaining a BBB credit profile[14]. - FirstEnergy Corp. maintains an investment-grade credit profile with ratings of BBB- from S&P, Baa3 from Moody's, and BBB from Fitch[58]. - The company is committed to maintaining a balance sheet with a target FFO/Debt ratio of 15% by 2023[59]. Rate Base and Growth - Rate base growth is expected to be 9% CAGR from 2025 to 2029, with a total rate base of $31.8 billion projected for 2025[29]. - The average rate base is expected to grow at a CAGR of 11$6.9 billion, with a 6% CAGR growth expected from 2025 to 2029[72]. Operating Expenses - Total Operating Expenses (GAAP) for 2023 are reported at $3,594 million, projected to increase to$4,159 million in 2024[145]. - Special items for 2023 total $247 million, expected to rise to$433 million in 2024, impacting overall financial performance[145]. - Baseline O&M (non-GAAP) remains relatively stable, with $1,280 million in 2023 and a slight increase to$1,283 million in 2024[145]. Regulatory and Compliance - The allowed return on equity (ROE) for Ohio operations is filed at 10.8%, with a debt/equity ratio of approximately 45%/55%[74]. - The allowed return on equity (ROE) for transmission investments is set at 9.6%[98]. - Forward-looking statements indicate potential risks from government investigations and regulatory changes that could impact financial performance[146]. Revenue Increases - A net annual revenue increase of $85 million was approved in the New Jersey base rate case settlement on February 14, 2024[94]. - The West Virginia base rate case settlement approved on March 26, 2024, will result in a net annual revenue increase of$105 million[101].