FirstEnergy Corp.

Greetings and welcome to the First Energy Corp fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Irene Prezell, Vice President and Best Relations and Communications for First Energy Corp. Thank you. Ms. Prezell, you may begin.

Thank you. Welcome to our fourth quarter and full year 2022 earnings call. Today we will make various forward-looking statements regarding revenues, earnings, performance, strategies, prospects, and other matters. These statements are based on current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by these statements can be found on the investor section of our website under the earnings information link and in our SEC filings. We will also discuss certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures, the presentation that supports today's discussion, and other detailed information about the quarter and year can be found in the strategic and financial highlights document on the investor section of our website. We'll begin today's call with presentations from John Sommerhalder, our board chair and interim president and chief executive officer, and John Taylor, our Senior Vice President and Chief Financial Officer. Several other executives will be available for the Q&A session. Now I'll turn the call over to John Somerhalder.

Thanks, Irene. Good morning, everyone. Thanks for joining us. We had a strong year in 2022, and we are excited to make even more progress on our goals in 2023. Our full year 2022 GAAP earnings are 71 cents per share, and operating earnings are $2.41 per share, which is slightly above the midpoint of our guidance range. Before I get started today, I would like to take a minute to say thank you to all of our employees for their efforts over the past year. I'm proud of what they've accomplished and the company we have become. Our progress this past year is due to the efforts of our 12,000 employees who are serving our customers and working to make this company better for the long term. Thank you. With that, we have a lot of ground to cover today, so let's get started. Two years ago, we were taking some of the first steps to transform First Energy. In 2022, we hit full stride, stretching ourselves to strengthen and enhance nearly every aspect of our organization. The scope and pace of these changes have been remarkable. just to touch on a few of the highlights. First, we made significant improvements in our financial position. This includes deploying proceeds from the billion dollar common equity issuance that closed in late 2021, together with the $2.4 billion, 19.9% interest sale in First Energy Transmission LLC that closed mid-year to reduce debt by nearly $3 billion in 2022 most of which was at FE Corp. As a result, we lowered holding company debt as a percentage of total debt to 24% from 33% at the end of 2021. On the operational front, we transitioned to a new five-state operating model and engaged in more than 175 projects across the company to modernize the way we work and deliver a superior customer experience as part of our FE Forward program. At the same time, we continue to enrich our culture with an unwavering commitment to our core values. As a result of this work, we're entering 2023 as a more innovative, efficient, and forward-thinking organization where employees are sharing ideas and working to move the company forward. This year, we intend to build on our momentum. We're working to be a premier electric company with a strong foundation and a customer-centered focus that is enabling the clean energy transition. Earlier this month, we announced an agreement to sell an additional 30% interest in First Energy Transmission, LLC, to Brookfield Supercore Infrastructure Partners for $3.5 billion. This transaction, which is expected to close in early 2024, supports our plans to improve our balance sheet and for approximately $1 billion of incremental capital investments, which we believe will drive long-term value for all our stakeholders. And as John will discuss, our regulatory calendar will address the critical investments that support reliability and smarter and cleaner electric grid. We are introducing 2023 guidance of $2.44 to $2.64 per share. The midpoint of this range represents a 6% growth from our original 2022 midpoint of $2.40 per share, and it offsets the pension impacts we discussed last year. We are also introducing first quarter 2023 guidance of 56 cents to 66 cents per share. In addition, we are affirming our targeted 6% to 8% annual operating earnings growth rate, which represents year-over-year growth based off of the prior year guidance midpoint. I'd like to spend a moment to provide an update on the CEO search process, and I realize there is much interest in this important topic. Late last year, we shared the broad criteria that we were looking for a strong track record of executive leadership within the utility industry. a demonstrated ability to execute on the regulatory front, leading operational and financial discipline, and impeccable credibility with external stakeholders. And we always anticipated a three- to six-month timeline. I can share that interest has been strong. The process has been quite active since the beginning of the year, and discussions among the board and select candidates continue. The board is committed to selecting the right individual to lead our talented team, and we trust you will respect the process through its conclusion. We look forward to sharing the announcement when the board completes its work. In the meantime, we continue to execute on the strategy we have in place. The board and the management team are fully committed to this path, and the expectation is that the new CEO, once named, will be as well. It's an exciting time for First Energy as we're poised to leverage our many strengths, from our diverse assets to the transformation that has taken place since 2020 to the talented employees who are making the company stronger with their drive, passion, and ingenuity. I appreciate your continued support. We are concentrating our efforts on long-term stability and success as a leading utility. We will continue to navigate our path with the same determined focus you've seen over the last few years. Now, I'll turn the call over to John Taylor.