FirstEnergy Corp.

Hello, and welcome to the First Energy Corp First Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Karen Saget, Vice President of Investor Relations. Please go ahead, Karen.

Thank you. Good morning, everyone, and welcome to First Energy's First Quarter 2025 Earnings Review. Our Chair, President, and Chief Executive Officer, Brian Tierney, will lead our call today. and he will be joined by John Taylor, our Senior Vice President and Chief Financial Officer. Our earnings release, presentation slides, and related financial information are available on our website at firstenergycorp.com slash IR. Today's discussion will include the use of non-GAAP financial measures and forward-looking statements, which are subject to risks and uncertainties. Factors discussed in our earnings news release during today's conference call and in our SEC filings could cause our actual results to differ materially from these forward-looking statements. The appendix of today's presentation includes supplemental information along with reconciliation of non-GAAP financial measures. Please read our cautionary statement and discussion of non-GAAP financial measures on slides two and three of the presentation. Now it's my pleasure to turn the call over to Brian.

Thank you, Karen. Good morning, everyone. Thank you for joining us today and for your interest in First Energy. We're off to a strong start this year with results that reflect solid execution on our regulated strategies, robust capital investments, and financial discipline. We're on track to meet our 2025 core earnings guidance we provided in the fourth quarter call. Today, we will review our financial performance and highlights for the quarter, provide updates on regulatory and legislative matters, detail some growth opportunities, and review the value proposition we offer shareholders. For the first quarter of 2025, the company delivered gap earnings of 62 cents per share, compared to 44 cents per share in 2024. Core earnings for the first quarter of this year were 67 cents per share, a significant improvement over 49 cents in the first quarter of last year. Core earnings benefited from execution across our regulated businesses, including the impact of base rate cases that were approved last year in Pennsylvania West Virginia, and New Jersey, as well as a return to more normal weather for the first quarter of this year. In addition, the team did a nice job of managing operating expenses in the first quarter. O&M is in line with our plan, slightly lower than last year, and leadership continues to pursue further cost reductions. Consistent with our plan, we implemented organizational design changes in the first quarter aimed at creating a more sustainable and efficient operating structure that moves management and decision-making closer to our customers, employees, and regulators. These changes, which allowed us to reduce headcount, involve flattening layers of management, consolidating functions, and better aligning work across the company. We are focused on becoming an agile and effective organization with continuous improvement as a part of our DNA going forward. John will provide more details later in the call. Our investment program is on track, and we are making positive impact on system reliability and resiliency. In the first quarter, we invested more than a billion dollars in our system through our energized 365 capital program. This is an increase of 15% compared to last year. We remain confident in our plan to deploy $5 billion of customer-focused investments this year an 11% increase compared to 2024, as well as the $28 billion of investments in our plan through 2029. We are pleased to make these investments that will deliver value and reliability improvements to our customers. Our refreshed and experienced leadership team is now in place, and they are bringing new energy to the company. Together, we are committed to executing our strategies, meeting our commitments, and making First Energy a premier electric company. Reflecting our confidence, last month the Board approved a 4.7% increase in our quarterly dividend. Subject to continued Board approval, the new quarterly payment of 44.5 cents per share equates to an annual rate of $1.78 per share. This represents an increase of 11% in annual declared dividends since 2023. Moving to slide six, I'll discuss current regulatory and legislative activity. First, in Ohio, we are pleased that our base rate case is progressing. Last month, our Ohio companies and various interveners filed responses to the independent audit report that was published in late February, and public hearings were held earlier this month. We initiated settlement discussions in the base rate case and hope to continue those through the pendency of the case. Hearings are scheduled to begin on May 5th, and we look forward to the case proceeding expeditiously. On the legislative front, there has been a tremendous amount of activity in Ohio with House Bill 15 and Senate Bill 2. We expect legislation to be sent to the governor in the May or June timeframe that will provide a transparent and predictable regulatory structure for Ohio utilities. Key provisions of the House and Senate bills include establishing multi-year rate plans with forward test years, which we view as constructive. We have been in active discussions with the governor, legislators, and other policymakers to offer perspective on certain aspects of the legislation. As it makes its way to being a final bill, our focus is on ensuring a reasonable transition to the new regulatory framework. In New Jersey, we recently reached a settlement in our infrastructure investment program, Energize New Jersey, which was approved by the BPU yesterday. The plan includes investments of $335 million over three and a half years, of which approximately $202 million have formula break treatment. It includes capital investments in grid modernization, system resiliency, and substation modernization work. work that is designed to upgrade JCP&L's distribution grid in targeted neighborhoods with an expansion of smart grid technology. We are pleased to move forward with these investments, which are included in our capital plan. Turning to slide seven, there are a number of opportunities for continued growth in our regulated footprint. In West Virginia, we are preparing our integrated resource plan, which is due by the end of this year. The IRP covers a 10-year period and includes new load forecasts for the state, as well as our proposals to address West Virginia's future generation needs. As we prepare for this filing, we continue exploring options to build new dispatchable generation in the state, which would allow for expanded growth and economic development. West Virginia's fully integrated regulatory framework provides it with a competitive advantage for economic development and a path for investment in new dispatchable generation. Under the existing regulatory framework, we would be prepared to make these investments to meet West Virginia's economic development aspirations. As I discussed in our last call, we remain excited about the data center development we are seeing across our footprint. Our plan through 2029 includes 2.6 gigawatts of data center demand that is active or contracted with more in the project pipeline that would be incremental to our base plan. Earlier this month, Meta announced an investment of more than $800 million to build their new Bowling Green data center in our Toledo Edison service territory and is expected to come online by the end of the year. This data center will be optimized for Meta's AI workloads. The transmission CapEx associated with this facility is included in the current capital plan. In the first quarter of this year, we received 15 large load study requests for data centers representing approximately 9 gigawatts of load. Eleven of these studies are for locations in Pennsylvania and Ohio. We have not experienced any slowdown of data center interest in our service territory. We are also excited about the significant growth opportunities for transmission investment. During the first quarter of 2025, the PJM Board approved approximately $3 billion of investment for the Valley Link joint venture between First Energy, AEP, and Dominion. We believe this innovative collaboration will enhance our competitiveness in future open windows. Our investment in ValleyLink, which will be owned by First Energy Transmission, recently filed for a forward-looking transmission rate at FERC, requesting a 10.9% base ROE with a 50 basis point incentive and a capital structure targeting 60% equity. The ValleyLink investment, when combined with another $300 million recently approved for First Energy subsidiaries, represents a new total company investment opportunity of approximately $800 million. Turning to slide eight. Today, we are reaffirming our 2025 core EPS guidance range of $2.40 to $2.60 per share, and we continue to target the top half of that range. This growth, when combined with our current dividend yield, represents a total annual shareholder return proposition of 10 to 12% with potential upside through PE expansion. We are also reaffirming our 6 to 8% core earnings compound annual growth rate based on our $28 billion capital investment program through 2029. As you would expect in a fully regulated domestic business, our tariff exposure is de minimis, representing less than two-tenths of a percent on our $28 billion capital investment program. Proactive management of our supply chain since COVID has resulted in a diversified supplier base with little exposure to single source suppliers. In addition, the majority of our operations and maintenance expense is labor, which has no tariff exposure. We expect any meaningful increases in our CapEx program to be driven by increased investment opportunity rather than supply chain pricing. We are off to a good start in 2025 and we remain steadfast on delivering on our commitments with stable growth fueled by our strong organic investment program. I am excited about the progress we are making to become a more efficient and customer-focused organization. We are committed to executing our strategy, delivering value, and driving results. With that, I will turn the call over to John.