FirstEnergy(FE) - 2025 Q3 - Quarterly Results

Executive Summary & Key Financial Highlights Third Quarter 2025 Financial Overview FirstEnergy reported strong third-quarter 2025 financial results, with increased GAAP and Core Earnings per share and higher revenue Third Quarter 2025 Key Financials | Metric | Q3 2025 | Q3 2024 | YoY Change | | :--- | :--- | :--- | :--- | | GAAP Earnings per share | $0.76 | $0.73 | +$0.03 | | Core Earnings (non-GAAP) per share | $0.83 | $0.76 | +9% | | Revenue | $4.1 billion | $3.7 billion | +$0.4 billion | Year-to-Date 2025 Financial Overview FirstEnergy achieved significant year-to-date 2025 GAAP and Core Earnings per share growth, with Core Earnings up 15% YoY Year-to-Date 2025 Key Financials (First Nine Months) | Metric | 9M 2025 | 9M 2024 | YoY Change | | :--- | :--- | :--- | :--- | | GAAP Earnings per share | $1.85 | $1.25 | +$0.60 | | Core Earnings (non-GAAP) per share | $2.02 | $1.76 | +15% | | Revenue | $11.3 billion | $10.3 billion | +$1.0 billion | Strategic Capital Investments & Growth Outlook FirstEnergy narrowed 2025 Core EPS guidance, increased capital investments, and affirmed 6-8% annual Core EPS growth through 2029 Capital Investment and Earnings Growth Targets | Metric | Value | | :--- | :--- | | Full-year 2025 Core Earnings guidance | $2.50 to $2.56 per share (narrowed from $2.40-$2.60) | | 2025 Capital Investment Program | Increased by 10% to $5.5 billion (from $5.0 billion) | | Capital Investments Deployed (through Sept 2025) | Over $4 billion | | Compounded Annual Core Earnings Growth Rate (2025-2029) | 6-8% | | Energize365 Capital Investment Plan (2025-2029) | $28 billion | CEO Commentary CEO highlighted strong results, increased capital, and the transformative impact of data centers on transmission investment - CEO Brian X. Tierney emphasized strong results and being ahead of plan on key financial metrics, enabling a 10% increase in the 2025 capital program[4] - The proliferation of large data center load is transforming the electric industry, particularly in FirstEnergy's region, driving a strong need for additional transmission capital investments[5] Projected Transmission Investment Growth | Metric | Projection | | :--- | :--- | | Increase in total transmission investments (next 5-year capital plan) | 30% | | Compound transmission rate base growth | Up to 18% | - FirstEnergy is pursuing a project to add 1.2 gigawatts of dispatchable combined-cycle generation in West Virginia, expected to be operational around 2031, increasing its current regulated generation portfolio by 35%[6] Detailed Financial Performance Third Quarter Segment Results Q3 2025 Core Earnings benefited from new base rates and transmission growth, partially offset by higher planned operating expenses - Third quarter 2025 Core Earnings benefited from new base rates in Pennsylvania and growth in transmission rate base under formula rate programs[7] - These benefits were partially offset by higher planned operating expenses, including work accelerated into 2025[7] Distribution Segment Distribution segment Core Earnings increased $0.03 per share YoY, driven by new Pennsylvania base rates and higher load Distribution Segment Q3 2025 Performance | Metric | Change | | :--- | :--- | | Core Earnings increase (YoY) | $0.03 per share | | Primary Drivers | New base rates in Pennsylvania (effective Jan 1, 2025), higher residential and commercial load | | Offset | Higher planned operating expenses | Integrated Segment Integrated segment Core Earnings benefited from transmission rate base growth but were offset by higher tax rates and operating expenses Integrated Segment Q3 2025 Performance | Metric | Value/Impact | | :--- | :--- | | Transmission rate base growth | 16% | | Earnings benefit from rate base growth | $0.03 per share | | Offsets | Higher effective tax rate, lower distribution demand from commercial customers, higher planned operating expenses | Stand-Alone Transmission Segment Stand-Alone Transmission segment Core Earnings increased $0.08 per share YoY, driven by rate base growth and lower tax rates Stand-Alone Transmission Segment Q3 2025 Performance | Metric | Change | | :--- | :--- | | Core Earnings increase (YoY) | $0.08 per share | | Primary Drivers | 9% increase in rate base (from capital investments), lower effective tax rate | Corporate/Other Corporate/Other segment results remained flat compared to the third quarter of the previous year - Corporate/Other segment results were flat compared to the third quarter of 2024[11] Year-to-Date Core Earnings Drivers Year-to-Date Core Earnings growth driven by regulated investments and new base rates, offset by higher expenses and financing costs - Year-to-date Core Earnings growth reflects the continued success of the company's regulated investment strategy[14] - Growth was also driven by the impact of new base rates in Pennsylvania, West Virginia, and New Jersey, and higher weather-related distribution sales[14] - These positive factors were offset by higher planned operating expenses (including accelerated work), increased financing costs, and dilution from the FET equity interest transaction that closed in March 2024[14] Non-GAAP Financial Measures & Reconciliation GAAP to Core EPS Reconciliation FirstEnergy provides a detailed reconciliation of GAAP Earnings to Core EPS for Q3 and YTD 2025 and 2024, detailing special items Consolidated GAAP Earnings Per Share (EPS) to Core (Non-GAAP) EPS Reconciliation | | Three Months Ended Sept. 30, | | Nine Months Ended Sept. 30, | | | --- | --- | --- | --- | --- | | | 2025 | 2024 | 2025 | 2024 | | Earnings Attributable to FirstEnergy Corp. (GAAP) - $M | $441 | $419 | $1,069 | $717 | | Basic EPS (GAAP) | $0.76 | $0.73 | $1.85 | $1.25 | | Excluding Special Items: | | | | | | Net Pension/OPEB credits | (0.01) | (0.03) | (0.04) | (0.07) | | Signal Peak earnings impact | — | (0.06) | — | (0.13) | | ARO regulatory change | — | — | — | 0.28 | | Debt-related costs | — | — | 0.03 | 0.12 | | Enhanced employee retirement and other related costs | — | 0.01 | — | 0.01 | | FE Forward cost to achieve | — | 0.08 | — | 0.09 | | Investigation and other related costs | 0.05 | 0.03 | 0.09 | 0.10 | | Regulatory charges | 0.01 | — | 0.01 | 0.03 | | Reorganization costs | — | — | 0.06 | — | | Strategic transaction charges | 0.02 | — | 0.02 | 0.08 | | Total Special Items | 0.07 | 0.03 | 0.17 | 0.51 | | Core EPS (Non-GAAP) | $0.83 | $0.76 | $2.02 | $1.76 | Definition and Use of Non-GAAP Measures Core EPS is a non-GAAP measure excluding special items, used by management to evaluate performance and provide consistent business insights - Core Earnings (non-GAAP) per share ("Core EPS") are non-GAAP financial measures that exclude the impact of "special items" from earnings attributable to FirstEnergy Corp[16] - Management uses these non-GAAP measures to evaluate company and segment performance, manage operations, and facilitate historical and ongoing performance comparisons[17] - Special items represent charges or benefits that management believes are not indicative of, or may obscure trends useful in evaluating, the company's ongoing core activities and results of operations[19] Forward-Looking Non-GAAP Measures No quantitative reconciliation for forward-looking non-GAAP measures is provided due to unpredictable special items and to avoid misleading precision - A quantitative reconciliation of forward-looking non-GAAP measures (e.g., 2025 Core EPS guidance, growth rate projections) to GAAP measures is not provided[20] - This is due to the inherent difficulty in forecasting and quantifying the impact of special items, which are significant, difficult to predict, and highly variable[20] - The company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors[20] Additional Information Investor Materials and Teleconference Investor materials and a live webcast of the financial analyst teleconference are available on FirstEnergy's Investor Information website - FirstEnergy's Strategic and Financial Highlights presentation is available on the company's Investor Information website (www.firstenergycorp.com/ir)[21](index=21&type=chunk) - A live webcast of the teleconference for financial analysts, including an overview of financial results and a Q&A session, will be held at 9:00 a.m. EDT[22] - The webcast and presentation will be archived on the Investor Information website[22] Company Overview FirstEnergy is a major U.S. investor-owned electric system serving over 6 million customers across six states with extensive transmission lines - FirstEnergy's electric distribution companies form one of the nation's largest investor-owned electric systems[23] - The company serves more than 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York[23] - FirstEnergy's transmission subsidiaries operate over 24,000 miles of transmission lines connecting the Midwest and Mid-Atlantic regions[23] Forward-Looking Statements This section cautions against undue reliance on forward-looking statements, outlining risks that could cause actual results to differ materially - This news release includes forward-looking statements based on management's current information, beliefs, and expectations, subject to certain risks and uncertainties[24] - Readers are cautioned not to place undue reliance on these statements, as actual results may differ materially due to various factors[24] - Key risks include government investigations (e.g., HB 6), litigation, changes in economic conditions, weather variations, legislative and regulatory developments, ability to access capital markets, cyber-attacks, and challenges in achieving strategic and financial goals[24][25]