FirstEnergy Corp.

Hello, and welcome to First Energy Corp's fourth quarter 2025 earnings 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 year-end 2025 earnings review. Our earnings release, presentation slides, and related financial information are available on our website at firstenergycorp.com. 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 the 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. Our Chairman, President, and Chief Executive Officer Brian Tierney will lead our call today. He is joined by John Taylor, our Senior Vice President and Chief Financial Officer. 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. 2025 was a transformative year for our company. We executed on our plan, achieved several important milestones and position first energy for long-term success in one of the most dynamic periods in our industry's history we delivered strong financial results across all of our key metrics we advanced key regulatory strategies in ohio and we reinforced our foundation for sustainable financial growth resulting in a positive ratings action at s p in addition we are announcing a $36 billion five-year capital investment program focused on improving customer reliability and grid resiliency. This positions the company to deliver a core earnings per share compounded annual growth rate near the top end of 6% to 8% from 2026 to 2030. We are also pursuing significant incremental investment opportunities over the planning horizon. These include new generation investments that will provide meaningful benefits to customers in West Virginia and additional regional transmission investments that are critical to maintaining grid stability. Today we are reporting 2025 GAAP earnings of $1.77 per share compared to $1.70 per share in 2024. Core earnings were $2.55 per share at the top end of our revised and increased guidance range for the year and an increase of 7.6% compared to 2024. We deployed $5.6 billion in customer focused capital investments in 2025, an increase of nearly 25% versus last year and approximately 12% higher than our original plan for the year. Our distribution reliability metrics improved 10% across the system compared to 2024. Notably, this includes significant year over year improvement and our New Jersey and Pennsylvania service territories where we have commission approved investment programs. Finally, we declared quarterly dividends totaling $1.78 per share, a 5% increase from 2024. This growth is consistent with our plan of providing a solid dividend yield and an attractive total shareholder return. We are pleased with our performance in 2025 and we are committed to building on this success as we deliver on our long-term financial plan. Our $36 billion capital program represents a nearly 30% increase from our previous five-year plan. It requires only modest amounts of equity to fund growth, which John will talk about later. This capital program was designed through a coordinated approach that aligns enterprise strategy with insights from our five business units. It addresses state mandated policies and local needs, and it reflects our commitment to affordability while meeting customer expectations for reliable service. The updated plan includes $19 billion of total transmission investments across our standalone transmission and integrated segments, a 35% increase from our previous plan. Company-wide, we expect our updated investment plan to translate into 10% rate-based growth over the planning period. Our strategy, focused on prioritizing investments for our customers and supported by constructive regulatory jurisdictions, positions us well to deliver a core earnings CAGR near the top end of 6% to 8% through 2030. Turning to slide seven, we see opportunities for incremental investments that will further support our customers in the region. This includes our planned generation investment in West Virginia. Last week, we filed our request for the 1.2 gigawatt combined cycle natural gas generating facility, which will be located in Maidsville, West Virginia. We ran the build-own-transfer RFP and considered that option against our self-build engineering procurement and construction plant. From that analysis, we determined using an EPC approach is the most prudent and cost-effective solution for our West Virginia customers. We anticipate receiving approval in the second half of the year, and we expect the new facility to be operational in 2031. Once approved by the West Virginia Public Service Commission, we will include this $2.5 billion investment in our financial plan. This will increase our consolidated rate-based CAGR from 10 to 11%. When we announced this investment last November, Governor Morrissey challenged us to do more. I accept that challenge. And with approval of this project, we will seek to add additional generation in the state to support growing data center activity. Moving to slide eight, we also see incremental opportunities in our transmission business. Our transmission operations are among the largest in PJM and encompass critical interconnections with strategic high voltage corridors and will require ongoing investment to support load growth. We began our transmission investment program in 2014. Over the last 12 years we've deployed $17 billion to replace aging equipment and upgrade the health of the system. This work has addressed about one third of our transmission lines and major substation assets. Substantial investment will be required as approximately 70% of the lines and 30% of substation assets are expected to reach end of life over the next decade. Additionally, we have an ongoing opportunity for growth associated with the regulatory required projects, such as investments awarded to First Energy as part of the most recent PJM open window process. Since 2022, our standalone transmission and integrated segments have been awarded approximately $5 billion in competitive transmission projects. Our ideally situated transmission system and our transmission planning expertise position us to continue our success with the competitive open window process. We expect the upcoming 2026 open window solicitation will be similar in scope and scale to what we have seen in the past years. We expect the PJM Board to vote and approve the next round of projects in the first quarter of 2027. At that time, we will update our investment plan to include any awards. Turning to slide nine. As we make the necessary investments in reliable and resilient grid that drives economic growth for our communities, we are actively addressing affordability. On average, we control just 32% of the total customer electric bill in our deregulated states. The generation component represents about 60% of the total bill. Across these states, our customer bills are approximately 20% below the in-state peer average, and remain at or below 2.5% of our customer's share of wallet. In fact, with our capital plan, by the time we get to 2030, our bills are expected to remain below the current rates of our in-state peers. We're proud of the value we provide and affordability is top of mind. We're committed to doing what we can to manage customer bill impacts. This includes continued discipline and controllable costs. which is reflected in our baseline O&M savings of 15% or over $200 million since 2022. We're also working with state regulators and leaders to identify opportunities to mitigate bill increases. We are advocating for initiatives to ensure generation supply better aligns with customer demand, and we're reviewing all programs that can provide relief to customers. In Ohio, A recent legislative change reduces property tax assessments for our utilities by about $100 million in 2027, which will have a positive impact on customer bills in our upcoming three-year rate plan. As we make critical investments to provide reliable and resilient service, we are committed to ensuring our rates remain affordable. I am confident in our plan, our management team, and our ability to deliver on our commitment. Our execution in 2025 was strong, and we are focused on continuing that momentum. Now I'll turn the call over to John.