With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

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Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

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The electric utility corporation's subsidiaries and affiliates are involved in the distribution, transmission, and generation of electricity.

This year's Fortune 500 marks the 66th running of the list.

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FirstEnergy owns 10 energy companies that generate and supply energy to customers across the Mid-Atlantic and Midwest.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

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This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

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FirstEnergy was formed in 1997 through the merger of Ohio Edison and Centerior Energy. Together with its subsidiaries, FirstEnergy is engaged in the transmission, distribution, and generation of electricity in the U.S., serving customers across Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York. It operates through three business segments: distribution, integrated, and stand-alone transmission.

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FirstEnergy (FE): Company Profile, Stock Price, News, Rankings

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FirstEnergy

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Hello, welcome to the FirstEnergy Corp. First Quarter twenty twenty five 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 FirstEnergy's first quarter twenty twenty five 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/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 FirstEnergy. 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 twenty twenty five, the company delivered GAAP earnings of $0.62 per share compared to $0.44 per share in 2024. Core earnings for the first quarter of this year were $0.67 per share, a significant improvement over $0.49 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 and 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 $1,000,000,000 in our system through our Energize three sixty five capital program. This is an increase of 15% compared to last year. We remain confident in our plan to deploy $5,000,000,000 of customer focused investments this year, an 11% increase compared to 2024 as well as the $28,000,000,000 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 FirstEnergy 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 $0.04 $45 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 5 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 two. 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 $335,000,000 over three point five years, of which approximately $2.00 $2,000,000 have formula break treatment. It includes capital investments in grid modernization, system resiliency and substation modernization work, work that is designed to upgrade JCP and 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 ten 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 $800,000,000 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 nine gigawatts of load. 11 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 twenty twenty five, the PJM Board approved approximately $3,000,000,000 of investment for the ValleyLink joint venture between FirstEnergy, 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 FirstEnergy 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 $300,000,000 recently approved by first for FirstEnergy subsidiaries represents a new total company investment opportunity of approximately $800,000,000 Turning to slide eight. Today, we are reaffirming our 2025 core EPS guidance range of $2.4 to $2.6 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 $28,000,000,000 capital investment program through 2029. As you would expect in a fully regulated domestic business, our tariff exposure is de minimis, representing less than 02% on our $28,000,000,000 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'm 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.

Thanks, Brian, good morning, everyone. We feel very good about the start to the year and our ability to deliver on our commitments with all of our key financial metrics through Q1 in line with or in some cases better than our plan. You can find more details on our results, including reconciliations for core earnings in the strategic and financial highlights document we posted to the IR website yesterday afternoon. Looking at our first quarter results, core earnings of $0.67 a share is a 37% improvement from $0.49 a share in the first quarter of last year. Our solid results reflect strong top line revenue growth and financial discipline as a result of the capital investments we are deploying on behalf of our customers.

Our rates and investment strategy significantly impacted our Q1 results, mainly from updated base rates in Pennsylvania together with the full year impact of new base rates in New Jersey and West Virginia, which went into effect during the middle to latter part of Q1 of last year. Additionally, as I'll speak to in a minute, we continue to see the benefits of our strong formula rate investment program, reflecting solid regulatory outcomes that not only contribute to meaningful customer focused investments, but also provide for solid regulated returns for our investors. This winter weather impacts were on balance consistent with our normal expectations. By contrast, in 2024, temperatures were significantly milder than normal with heating degree days 15% below normal. The return to a more typical winter in the first quarter of this year resulted in much stronger customer demand as compared to last year, with total customer demand increasing more than 4% led by a 10% increase in the high margin residential sector.

On operating expenses, O and M was in line with our plan and 3.5% lower than last year, largely due to our continuous improvement and cost saving initiatives across the company. Turning to our segment results for the first quarter. In our distribution business, core earnings increased $0.10 a share, reflecting new rates in Pennsylvania and stronger customer demand. As a reminder, December, new base rates in Pennsylvania were approved for a net annual increase of $225,000,000 beginning in January, which includes the recovery of deferred costs and additional maintenance expenses. In our integrated segment, core earnings also increased zero one zero dollars this year resulting from approved base rates in New Jersey and West Virginia in Q1 of last year, strong rate base growth of 19% in formula rate transmission programs, higher customer demand and lower O and M.

In the standalone transmission business, core earnings were zero one four dollars a share compared to $0.18 a share in the first quarter of twenty twenty four. Rate base increased 10% year over year resulting from our Energized three sixty five investment program, but this was offset by the final quarter of dilution from the 30% interest sale of FirstEnergy Transmission to Brookfield, which closed in March of twenty twenty four. Finally, our corporate segment, results improved $02 a share compared to the first quarter of twenty twenty four due to lower financing costs associated with lower holding company long term debt of approximately $760,000,000 and lower average revolver borrowings of $450,000,000 Overall, we feel very good about execution against our plan, which resulted in an improvement in our consolidated ROE of 40 basis points since Q4, up to 9.8% on a trailing twelve month basis. Looking at the full year, we are reaffirming our 2025 core earnings guidance of $2.4 to $2.6 a share and targeting the upper half of the range. Our $20.25 dollars 5,000,000,000 investment plan is on track with capital deployment of over $1,000,000,000 in the first quarter.

This is 15% above last year with the majority of the increase in formula rate programs. Our investment program is funded with internally generated cash flow and utility debt issuances. As discussed on our Q4 call, we plan to issue approximately $3,600,000,000 of debt, of which $2,000,000,000 is new money to fund our capital programs. We completed the first of these transactions earlier this month, pricing $600,000,000 of five year senior unsecured notes for Trans Allegheny Interstate Line Company or Trail at a coupon of 5%, representing a 100 basis point spread to the five year treasury rate. We continue to see strong investor demand for our debt offerings reflected the attractive profile of our fully regulated diversified business combined with our strong balance sheet.

And on financial discipline, as Brian mentioned, the team is very focused on driving more efficiencies and cost reductions compared to our $1,365,000,000 base O and M plan for 2025. These opportunities include lower back office spending through the use of existing and new technology, optimizing our maintenance costs through more targeted capital investments and through various supply chain initiatives. We are building this type of continuous improvement thinking into our culture and into the expectations of leaders across the organization. All of our leaders are highly engaged in ensuring that our operating costs support and enable the long term objectives of the company. So to close out our prepared remarks, we're happy with the start to the year with solid execution against our regulated strategies, our investment plan and with financial discipline.

Our earnings and financial performance across our key metrics are where we expect them to be or even better. Our first quarter core EPS of $0.67 a share is aligned with our plan and significantly stronger than last year. With over $1,000,000,000 in capital investments during the quarter, we're on track with our plan and 15% above Q1 last year. Our base O and M of $340,000,000 reflects strong financial discipline and is in line with our plan and improvement to the first quarter of last year. And first quarter cash flow of $637,000,000 is better than our plan and significantly better than our results from Q1 twenty twenty four.

This is the type of performance that supports our value proposition, including the total shareholder return opportunity that we are focused on delivering for our shareholders. Thank you for your time this morning. We are highly focused on delivering on our commitments to all of our stakeholders. Now let's open the call to your Q and A.

Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Michael Lonigan with Evercore ISI. Please proceed with your question.

Hi, good morning. Thanks for taking my questions. Just wondering how you would characterize the settlement discussions in Ohio with the hearing starting May 5. Do you feel like you're close to reaching an agreement? And what are the key areas that remain up for debate between the parties?

Yeah. Thank you for the question, Michael. I'd characterize the settlement discussions as productive and constructive. We began them. We had a number of parties who are engaged.

The key parties were engaged in the discussions. Those discussions will continue. And they're focused on the type of things that you would anticipate: cap structure, ROE and the like. So nothing that's unusual or surprising. And I think the parties came to the table interested in discussion in settlement and hoping that we'd be able to get there.

We're looking forward to the hearings beginning on May 5 and believe that will lead us to an expeditious outcome for the base rate case and look forward to continuing the settlement discussions through the pendency of the case.

Great. Thank you. And then you talked about a significant increase in large load studies since the last call and you highlighted no slowdown. The prior disclosure based on the data center pipeline was, you know, for $350,000,000 of incremental CapEx through '29. And beyond '29, you had highlighted 300,000,000 to $400,000,000 of incremental spending opportunity.

Just wondering, as we stand today, what would you say the upside is to these numbers?

Yeah. Michael, I'd say it's about the same. So in terms of people seeing in other areas data centers and hyperscalers and the like pulling back, we actually had the announcement from Meta of the Toledo data center that they specifically have said is associated with being ready for their AI complement. So people are not in our service territory pulling back from that, but continuing forward. And I'd just say there's no change to that long term outlook for CapEx at this point.

Thank you. Our next question comes from the line of Shar Pourreza with Guggenheim Securities. Please proceed with your question.

Hey, good morning everyone. It's actually Alex on for Shar.

Good morning. So just wanna touch on the Ohio legislation.

So you mentioned, you know, you expect the bill to be sent to the governor, in the May, June time frame. Obviously, a lot of positive momentum behind these bills. But do you see one bill being favored over another? Or do you see the bills getting combined into one or more, as more of a likely scenario? And just sort of how should we be thinking about the overall process going forward?

Yeah. I can't say at this point, Shar. I think they are both moving forward. They've both been voted out of their respective chambers. And how leadership decides to handle that going forward, we still don't have any particular insight into.

I think the key provisions of both bills that are of importance to us, things like the multiyear rate cases with forward looking test years, are things that are in both. And our focus now is on moving from the current framework that we have that has base rate cases and EPS to the new framework that has the multiyear base rate cases with forward looking test years and trying to make that transition as smoothly as possible.

Great. Thanks. And just as a follow-up, should the legislation pass as is and assuming you remain an ESP4, if the cap isn't unfrozen, how should we think about the timing of your next base rate case? And can you just talk about the different levers you can pull on to offset the potential impact of not having the cap lifted in the near term? Thanks.

Thank you for that, Alex. So there are a couple of things that could play out there. One is, of course, we would go back and try and seek to get the cap lifted. If that doesn't happen, we have opportunities to shift CapEx around both within Ohio and the other jurisdictions until we can get in for a new base rate case. And then I anticipate that we'd be going in for a new base rate case under the new framework as early as the first of twenty twenty six.

And we'd expect rates to be in effect for that as early as oneonetwenty seven. So a number of levers that we can pull between now and then. We're not giving up on the cap persisting in ESP4, but we have a number of levers to pull as we get our way into that new framework.

Great. Thanks. I'll leave it there. Thanks for

Thank you. Our next question comes from the line of Nick Campanella with Barclays. Please proceed with your question.

Hey, thanks for taking my questions. I just wanted to follow-up quick. Good to see you guys moving forward towards settlement. Is there just any chance that you could deal with ESP in that discussion? Or is that going to be more up to commission interpretation, you think, since we're still waiting on the legislation to be finalized?

I was just trying to see if there's a window where we can get more clarity on ESP sooner than later.

Yeah. Nick, I don't think it would be in that base rate case settlement. As you know, we have a current active open case for ESP six. And so we would try and handle as much of the base rate case issues as we could in those settlement discussions. And then I think there are the three other ways for things to play out around the ESP.

One is if there would be legislation that would direct the commission to have a smooth transition. Two, if not that, we still think that legislatively they would expect there to be a smooth transition between the current framework and the next one. And we think the commission would pick up on that and try and make that transition as smoothly as possible. And then as I discussed earlier in response to a question, if we're unsuccessful in those, I think there are opportunities for us to move CapEx around both within Ohio and in other jurisdictions and then get in as quickly as possible as we could for a new base rate case under the new framework. So a lot of levers for us to pull and we'll be pulling all of those as timely as we can and communicating the results of that to the investment community as quickly as possible.

At the end result on all this, Nick, we're looking at investment between the end of our current base rate period of May thirty first of last year and when we get new rates in effect. So if we have to go to a new base rate case under the new framework, there would be very little for the commission to review in time and magnitude. And at the very worst, there would be an incremental fifteen months or so on the regulatory lag that we would face potentially on a reduced amount given the actions we could take.

Hey, that's great. Sorry about my confusion there on the process. Thanks for the clarifications. Just as it relates to you're kind of talking about a lot of different levers to offset what seems to be kind of a shifting environment with this ESP. And you have you're at the high

guidance now. You have this 6% to eight percent long term EPS CAGR. So do you still kind of expect regardless of the outcome, do you expect to be able to offset that, be within the range and be able to kind of grow linearly here into 26%? Or how should we kind of think about that with this overhang?

Yes. So we do anticipate being able to offset that. And as we've talked about the growth, we're not haven't been talking about linear exactly year to year to year. We've been talking about a compound annual growth rate over the investment horizon in that six percent to 8% period, all the while within that 6% to 8%. So we're confident about our ability to stay in that range and deliver those results regardless of outcome around this the base rate case and how the leverage that we could pull in the ESP.

Thank you. Our next question comes from the line of Jeremy Tonet with JPMorgan. Please proceed with your question.

Maybe picking up on the last question if I couldn't appreciate the sensitive nature of it all. But is there any other color you could provide to frame, I guess, what you'd be looking to solve for if things kind of progress legislation as it is right now versus the size of the levers that you have? Just trying to get a sense of how manageable, easy or not easy, it is to kind of work around what these items could be?

Yes. So remember, we're just talking about the investment that we've made and are going to make since May thirty first of twenty twenty four. So it's a limited universe in a limited time frame. And so we had made assumptions about what would happen with ESP6. We've now modified those, not anticipating that would go forward, that we will be in ESP4.

And then we'll be modifying how we do this going forward. So it's a modest and manageable amount of dollars in a modest and manageable amount of time.

Jeremy, I would say, I mean, would be looking to move capital around. We have plenty of opportunities to do that. We have the Grid Mod two CapEx that we could accelerate into 2026. We have the PAL tip where we could move some of the Ohio base capital into that CapEx program. We have opportunities in Maryland and West Virginia with transmission CapEx.

So we have a lot of opportunities to redeploy capital if and when we need to do that. And if you go back and look at the history of what we've done over the last two years with our capital program, I mean, we've moved a couple $300,000,000 of capital around in a given year. So that's not something that we're overly concerned about at this point in time.

As we're talking to legislators and policymakers in Ohio, we see there is a strong desire to move from the current framework to the new framework. We're not seeing a signal from them that they don't want investment in Ohio and that lends itself to a smooth transition either through raising the caps in the SP4 or some other mechanism. So the signals we aren't getting is not don't invest in Ohio, it's we're changing how we're doing regulation in Ohio and we've heard from everyone that they expect a smooth transition.

Got it. That's very helpful there. And then kind of shifting gears towards settlement talks going back there. Again, appreciate the sensitive nature to it all, but just wondering if you can frame it all, I guess, which parties, are involved in the settlement conversations such as staff or just who's more receptive, who's less receptive? Any color in general you could provide in the parties would be helpful.

Yes. So Jeremy, we really can't talk it with any specificity around that. But we'll say that all the parties were involved initially. We felt that the discussion tone and tenor was productive and constructive. And along that vein, we're going to continue the dialogue.

You'll remember during Grid Mod two discussions, we did file a partial settlement that was ultimately approved and we think that's an avenue that's open to us in this instance as well.

Thank you. Our next question comes from the line of David Arcaro with Morgan Stanley. Please proceed with your question.

I was wondering if you could give a perspective on New Jersey and the recent commission efforts to look at cost efficiencies and the affordability considerations there. Wondering your latest perspective on what strategy might be possible to address any affordability concerns in the state?

David, are you referring specifically to the PJM capacity auction?

That seems to be the driving factor behind what looked like a specific effort from the New Jersey Commission to look for cost efficiencies among the utilities. But yeah, think stemming from the increase in the capacity auction pricing.

So look, I think commissions as well as FirstEnergy are very concerned about the coming price increases associated with the capacity auction. It would be one thing if the capacity auction pricing that we're facing were was bringing new capacity, new dispatchable capacity to the market and the customers were actually getting some value out of that. We don't see that as being the case. So we think that commissions and the company are going to do everything that we can to try and mitigate that impact on our customers. The commission yesterday in New Jersey asked us to go back and take a look with our in state peers about how we could postpone the impact of those capacity auction price increases for the next four months.

For the first four months, we're going to do that and we're going to be as constructive and productive as we can in trying to make that happen. These price increases are real and they have real impact on our customers and we're so concerned about that. Again, if it was addressing the problem, we could be supportive, but it's not bringing new capacity to the market. This is what I would say David is you always want to do good things. And to the degree you have good things to do, do more of those.

If there are things that are harmful, stop doing the things that are harmful. We think a continuation of these extremely high priced capacity auctions that don't bring new capacity to the market are harmful and that harmful impact should be either mitigated or stopped on a prospective basis.

Absolutely. I appreciate that color. And maybe along those same lines, how has the conversation evolved? We've also got Pennsylvania looking at the same issues this week as well in terms of the future of resource adequacy in the PJM market. How are you thinking about the potential solutions?

Or how has that conversation evolved, whether it's contracted generation, utility owned generation? Have any options bubbled to the surface in terms of getting more likely, or more support among the different stakeholders?

Look. I I I think something that, faces a lot of opposition wherever you you raise it is a specter of reregulation, putting the genie back in the bottle. I don't think that's a winner anywhere, and I think there are ways that you can address the resource adequacy problem without having to do that. Certain states have other models that we pointed to that work for adding new types of generation. New York has done that with NYSERDA and NYPA.

You've seen Texas do that with their generation loading program. You've seen California do it for certain types of generation that they've added. So I think there are a number of models out there that work. I think the only way these problems are going to be resolved is by the states taking action themselves to address the problems for their own states. So I've recently spoken with Governor Shapiro in Pennsylvania and applaud his efforts to keep prices lower in the state of Pennsylvania.

I see that Governor Murphy in New Jersey has also asked FERC to take action on this. And I think it's leadership by the governors in the states that are going to address this problem most directly, and I applaud those two governors' efforts.

Okay. Great. Very helpful. Thanks so much.

Thank you. Our next question comes from the line of Carly Davenport with Goldman Sachs. Please proceed with your question.

Hey, good morning. Thanks so much for taking the questions. Maybe to start, just as you think about the current macro environment and potential for an economic slowdown, is there anything that you're seeing or hearing from your industrial customers in particular that you think could pose potential risk or is worth watching around that 2% load growth forecast that's embedded in the plan?

It's a great question, Carly. I was just watching on CNBC earlier today Beth Hammack from the Cleveland Fed talking about issues these issues. And from a macro standpoint, she's saying, look, the tariffs add a fair amount of uncertainty to what's going on in the economy, and that makes it difficult for people to make incremental investments and know that those investments are going to be either supported by tariffs or undercut by tariffs. So we're seeing that from a macro standpoint. Across our footprint, we're not seeing a huge impact yet.

What we have seen is some steel manufacturers have been slowing some of their production related to automotive demand that has come down somewhat in the near term and we're watching that. I would also remind you that Industrial load is a much smaller portion of our margin than Residential is. And we have generally demand type pricing on the Industrial load. So we don't anticipate significant impact from an income standpoint in the near term associated with the near term uncertainty that we're dealing with. But the quicker there's certainty from an investment cycle standpoint, I think the quicker we'll be able to see people be able to make those investment decisions and get on with investing in their business, whatever the answer is from a tariff standpoint.

Great. That's helpful. Thank you. And then maybe just a high level question on the earnings guidance targeting the top half of the 25% range and you mentioned in the slides cash flow tracking above plan as well to start the year. Can you just talk a little bit about what's driving that to give you confidence at this point in the year to sort of target the top end of the range?

Yes, Carly. This is John. So I think we've laid out our base O and M plan for the year. We are targeting lower O and M performance relative to that target. We have teams in place and leadership in place that are driving towards a slightly lower number to give us flexibility around our operating costs.

And so that's what the team is working on and that's what's going to give us the flexibility as we think about targeting the upper half of the range.

FirstEnergy (FE) Q1 2025 Earnings Call Transcript

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