FE 10-K & 10-Q changes, risk factors and insider trading

We operate in a business environment that involves significant risks, many of which are beyond ourthe Registrants’ control. ManagementThe Registrants regularly evaluatesevaluate the most significant risks of itstheir businesses and reviewsreview those risks with thetheir FErespective Board and appropriate Committeesboards of thedirectors FEand, Board.if appropriate, committees of those boards of directors. The following risk factors and all other information contained in this report should be considered carefully when evaluating FirstEnergy.the Registrants, and unless a risk factor expressly excludes a Registrant or the context requires otherwise, references to “we,” “us,” and “our” refer to both Registrants. These risk factors could affect our financial results and cause such results to differ materially from those expressed in any forward-looking statements made by or on behalf of us. Below, we have identified risks we consider material. The risks that we face are not limited to those in this section. There may be additional risks and uncertainties (either currently unknown or not currently believed to be material) that could adversely affect our business, financial condition, results of operations, liquidity or cash flows. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. These risk factors should be read in conjunction with Item 1,1., "Business,” Item 7,7., "Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in other sections of this Form 10-K that include forward-looking and other statements involving risks and uncertainties that could impact our business, financial condition, results of operations, liquidity or cash flows.

Risks Associated with Damage to Our Reputation and HBSecurities 6 RelatedClass-Action Litigation and Investigations

HBSecurities 6-related investigations andclass-action litigation against us could have a material adverse effect on our reputation, business, financial condition, results of operations, our ability to access capital, liquidity or cash flows.

On July 21, 2021, weFE entered into a three-year DPA with the U.S. Attorney’s Office that, subject to court proceedings, resolves the previously disclosed U.S. Attorney’s Office investigation into us relating to our lobbying and governmental affairs activities concerning HB 6. Under the DPA, we paid a $230 million monetary penalty in 2021 and agreed to the filing of a criminal information charging FirstEnergy with one count of conspiracy to commit honest services wire fraud.

As of July 22, 2024, we successfully completed the obligations required within the three-year term of the DPA. Under the DPA, and until the conclusion of any related investigation, criminal prosecution and civil proceeding brought by the U.S. Attorney’s Office, we have an obligation to continue (i) publishing quarterly a list of all payments to 501(c)(4) entities and all payments to entities known by us to be operating for the benefit of a public official, either directly or indirectly; (ii) not making any statements that contradict the DPA; (iii) notifying the U.S. Attorney’s Office for the S.D. Ohio of any changes in FirstEnergy’s corporate form; and (iv) cooperating with the U.S. Attorney’s Office for the S.D. Ohio. In accordance with the DPA, these obligations will continue until the completion of any related investigation, criminal prosecution, and civil proceeding brought by the U.S. Attorney’s Office related to the conduct set forth in the DPA’s statement of facts, including the January 17, 2025 indictment against two former FirstEnergy senior officers, described below in “Outlook—Other Legal Proceeding – United States v. Larry Householder, et al.al.,” in Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations". Within 30 days of those matters concluding, and FirstEnergy’s successful completion of its remaining obligations, the U. S.U.S. Attorney’s Office will dismiss the criminal information. On February 26, 2025, the U.S. Attorney’s Office filed a status report confirming these commitments.

Following the announcement by the U.S. Attorney’s Office for the S.D. Ohio of the investigation surrounding HB 6 in July 2020, certain of ourFE’s stockholders and customers filed several lawsuits against us and certain current and former directors, officers and other employees, including the federal securities class action litigation In re FirstEnergy Corp. Securities Litigation (Federal District Court, S.D. Ohio). We believe that it is probable that FE will incur a loss in connection with the resolution of In re FirstEnergy Corp. Securities Litigation. Given the ongoing nature and complexity of such litigation, we cannot yet reasonably estimate a loss or range of loss that may arise from its resolution. However, if it is resolved against us substantial monetary damages could result and our reputation, business, financial condition, results of operations, liquidity or cash flows may be materially adversely affected.

TheThis securities class-action litigation related to HB 6 could divert management’s focus and have resulted in, and could continue to result in, substantial expenses, and the commitment of substantial corporate resources. The outcome, duration, scope, result or related costs of the in securities class action litigation In re: FirstEnergy Corp. Securities Litigation discussed above, are inherently uncertain. Therefore, any of these risks could impact us significantly beyond expectations. See Note 15,14, "Commitments, Guarantees and Contingencies"Contingencies,” of the Combined Notes to Consolidated Financial Statements of the Registrants and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates.”

These matters are likely to continue to have an adverse impact on the trading prices of our securities, which could be material. See Note 15,14., “Commitments, Guarantees and Contingencies,” of the Combined Notes to Consolidated Financial Statements,Statements of the Registrants, for additional details on the government investigations and subsequent litigation surrounding HB 6.

Our reputation is important.important towards maintaining new and ongoing positive relationships with customers, regulators, investors, and other stakeholders. Damage to our reputation could materially adversely affect our business, results of operations and financial condition. Such damage may arise from numerous sources further discussed generally within these risk factors. Any damage to our reputation, either generally or as a result ofof, among other things, changes in our service reliability, our rate affordability or negative outcomes in the foregoing,ongoing matters relating to HB 6, may lead to negative customer perception, which may make it difficult for us to compete successfully for new opportunities, or could adversely impact our ability to launch new sophisticated technology-driven solutions to meet our customer expectations. A damaged reputation could further result in FERC, the state public utility commissions, and other regulatory and legislative authorities being less likely to view us in a favorable light and could negatively impact the rates we charge customers or otherwise cause us to be susceptible to unfavorable legislative and regulatory outcomes, as well as increased regulatory oversight and more stringent legislative or regulatory requirements.

Risks Associated with the Execution of Our Strategic Initiatives and the Regulation of Our Distribution and Transmission Businesses

FirstEnergy is engaged in an ongoing effort to create a culture of continuous improvement to strategically reduce our operating expenditures and continually reinvest in a more diverse capital program in support of our long-term strategy. FirstEnergy leverages opportunities to reduce costs – such as filling only critical positions, implementing our facility optimization plans, deploying advanced technology, including but not limited to artificial intelligence, and exploring other additional, sustainable opportunities, such as reducing contractor spend. There can be no assurance that implementation of our continuous improvement culture will allow us to realize the anticipated benefits to our business, results of operations and financial condition in a timely manner, if at all.

OurThe abilitysuccess to capitalize on investment opportunities available toof our transmissiongrowth businessstrategy depends,will depend, in part, on the successful recoverygrowth of revenue resulting from our transmission investments.investments in line with our expectations. Factors that may affect rate recovery of our transmissionrevenue investmentsgrowth may include: (1) FERC’s timely approval of rates to recover such investments; (2) whether the investments are included in PJM's Regional Transmission Expansion PlanRTEP; (3) FERC's evolving policies with respect to incentive rates for transmission assets;investment (4) FERC's evolving policies with respect toassets, the calculation of the base ROE component of transmission rates, and the interconnection of AI data centers and transmission network upgrades supporting such large loads; (4) FERC’s potentially-evolving policies regarding whether certain classes of network transmission upgrade costs can be capitalized as part of transmission rates and whether such costs will be direct charged to the connecting customer; (5) consideration and potential impact of the objections of those who oppose such investments and their recovery; and (6) timely development, construction, and operation of the new facilities.

The retail rates for each of the Electric Companies are set by each of its respective regulatory agency for utilities in the state in which it operates - in Maryland by the MDPSC, in New Jersey by the NJBPU, in Ohio by the PUCO, in Pennsylvania by the PPUC, in West Virginia by the WVPSC and in New York by the NYPSC – through traditional, cost-based regulated utility ratemaking. As a result, any of the Electric Companies may not be permitted to recover its costs and, even if it is able to do so, there may be a significant delay between the time it incurs such costs and the time it is allowed to recover them. Factors that may affect outcomes in the distribution rate cases include, but are not limited to: (i) the value of plant in service; (ii) authorized rate of return; (iii) capital structure (including hypothetical capital structures); (iv) depreciation rates; (v) the allocation of shared costs, including consolidated deferred income taxes and income taxes payable across the Electric Companies; (vi) regulatory approval of rate recovery mechanisms for capital investment spending programs; and (vii) the accuracy of forecasts used for ratemaking purposes in "future test year" cases. Evolving legislation and executive actions related to our rates enacted by individual states, such as Ohio Senate Bill 2 of 2025 and Executive Order No. 2 of 2026 issued by the New Jersey governor on January 20, 2026, may also affect outcomes in distribution rate cases or could create uncertainty around our rate strategy.

FERC policy currently permits recovery of prudently incurred costs associated with cost-of-service-based wholesale power rates and the expansion and updating of transmission infrastructure within its jurisdiction. FERC’s policies on recovery of transmission costs continue to evolve, evidenced by ongoing proceedings to determine an appropriate ROE methodology to determine transmission ROEs, and to determine whether FERC’s existing policies on transmission rate incentives should be revised.revised, and to determine whether certain classes of network transmission upgrade costs can be recovered in transmission rates and whether such costs will be direct charged to the connecting customer. If FERC were to adopt a different policy regarding recovery of transmission costs or if there is any resulting delay in cost recovery, our strategy of investing in transmission could be adversely affected. If FERC were to lower the rate of return it has authorized for FirstEnergy's cost-based wholesale power rates or transmission investments and facilities, it could reduce future earnings and cash flows, and adversely impact our financial condition.

We could be subject to higher costs and/or penalties related to mandatory reliability standards set by NERC/FERCNERC, FERC, and RFC or changes in the rules of organized markets, which could have an adverse effect on our financial condition.

Owners,Our operations are subjected to audit by FERC, NERC and RFC, which may conduct routine or special audits and issue requests designed to ensure compliance with applicable rules, regulations, policies and procedures. Among other rules, regulations, policies and procedures, owners, operators, and users of the bulk electric system are subject to mandatory reliability standards promulgated by NERC and approved by FERC. The standards are based on the functions that need to be performed to ensure that the bulk electric system operates reliably. NERC, RFC and FERC can be expected to continue to refine existing reliability standards as well as develop and adopt new reliability standards. The reliability standards address operation, planning, and security of the bulk electricity system, including requirements with respect to real-time transmission operations, emergency operations, vegetation management, critical infrastructure protection, and personnel training. Compliance with modified or new reliability standards may subject us to higher operating costs and/or increased investments.capital expenditure. If we were found not to be in compliance with one or more of the mandatory reliability standards, we and/or our subsidiaries could be subject to sanctions, including substantial monetary penalties. For example, FERC has the authority under the FPA to impose penalties up to and including $1.5 million per dayday, subject thereafter to annual adjustments for inflation, for failure to comply with these mandatory electric reliability standards. Potential non-monetary sanctions include imposing limitations on the violator’s activities or operations.

Recent industry projections reflect the potential for significant growth in energy demand over the next decade. This could be exacerbated if additional generation resources are not available to meet increased demand in the future. For example, data centers have substantially larger load requirements than typical residential or commercial users. New data centers or increase in demand for existing data centers located in our service territories could increase load requirements substantially over the next several years, thereby increasing the aggregate load obligations of the Electric Companies. A need to serve the load obligations of these data centers, which could be up to 5,57516,985 MWs through 2029,2035, has the potential to adversely impact our business, results of operations, financial condition, or cash flows. At the same time, our planning could be adversely affected if electricity usage by data centers is ultimately lower than projected, which could reduce anticipated load growth.

The hazards described above, along with other safety hazards associated with our operations, can cause significant personal injury or loss of life, severe damage to and destruction of property, plant and equipment,PP&E, contamination of, or damage to, the environment and suspension of operations. The occurrence of any one of these events may result in our being named as a defendant in lawsuits asserting claims for substantial damages, environmental cleanup costs, personal injury and fines and/or penalties.

Weather conditions directly influence the demand for electric power. Demand for power generally peaks during the summer and winter months, with market prices also typically peaking at that time. Overall operating results may fluctuate based on weather conditions. In addition, we have historically sold less power, and consequently received less revenue, when seasonal weather conditions are milder. For example, in 2024, heating degree days in 2024 were 1% below 2023 and 15% below normal.

Cyber-attacks, electronic or physical data security breaches and other disruptions to our information technology systems, or those of third parties we are connected to or do business with, could compromise our business operations, critical and proprietary information and employee and customer data, which could have a material adverse effect on our business, results of operations, financial condition and reputation.

ForWe rely on complex information technology systems to operate our generation, transmission and distribution networks and to store sensitive business, employee and customer data. Increasingly sophisticated cyber-attacks, ransomware, and other security breaches—whether targeting us or third parties with whom we do business—could disrupt operations, compromise confidential information, and result in significant financial, legal, and reputational harm. Cybersecurity threats, including those that exploit advances in technologies such as artificial intelligence, continue to grow in frequency and sophistication, and the security controls we implement may not fully prevent or detect all such threats or incidents. Emerging artificial intelligence technologies may be used to develop new hacking tools, obscure malicious activities, exploit vulnerabilities, and increase the difficulty of thesedetecting reasons,threats. anyDespite ongoing investments in cybersecurity, we cannot guarantee prevention or timely detection of all threats, which continue to evolve and may be amplified by interconnected systems. A successful attack or breach could lead to service interruptions, regulatory penalties, litigation, remediation costs, and loss of customer trust. Any such cyber incident could result in significant lost revenue, the inability to conduct critical business functions and serve customers for a significant period of time, the loss of confidential, sensitive and proprietary information, including but not limited to personal information of our customers, employees, suppliers, vendors and other third parties, the use of significant management resources, legal claims or proceedings, regulatory penalties, significant remediation costs, increased regulation, increased capital costs, increased insurance costs, increased protection costs for enhanced cyber securitycybersecurity systems or personnel, and/or damage to our reputation, all of which could materially adversely affect our business, results of operations, financial condition and reputation.

Economic conditions, including those that may arise from government fiscal policy, tariffs, recessions, inflationary and interest rate pressures, may impact the demand for electricity and, therefore, any decline in economic conditions could lead to declines in the demand for electricity, which would reduce our revenues. Prices for equipment, materials, supplies, employee labor contractor services, together with the cost of variable-rate debt, have increased in recent years and could continue to increase in 20252026 and beyond. Inflation and broader economic conditions have continued to drive up the price of the cost of essential components used in the construction of transmission infrastructure, such as electrical equipment, steel and aluminum, and we may experience supply chain disruptions and long lead times for critical equipment. Long-term inflationary pressures may result in such prices continuing to increase more quickly than expected. Inflation increases costs for labor, materials and services, and we may be unable to secure these resources on economically acceptable terms or offset such costs with increased revenues, operating efficiencies, or cost savings, which may adversely impact our financial condition, results of operations, liquidity, and cash flows.

Continued supplySupply chain disruptions could have an adverse effect on our results of operations, cash flow and financial condition.

We continuehave toin the past and may in the future experience supply chain challenges due to economic conditions that developed during the COVID-19 pandemic and have continued in the years since, with order lead times increasing across numerous material categories, some of which remained elevated through 2024 and into 2025.categories. The situation is fluid and a prolonged continuation or further increase in supply chain disruptions could have an adverse effect on FirstEnergy’s results of operations, cash flow and financial condition. Our operations and corporate strategy may also be adversely affected by supply chain disruptions and inflation, including shortages and delays in key materials, equipment and contractor services. Such disruptions could be exacerbated by unstable or uncertain macroeconomic conditions, including inflationary pressures. Any significant disruption or increased costs arising from these pressures on our suppliers may inhibit our access to, or require us to spend more money to source, certain products or that we use in our operations.

Furthermore, change or uncertainty in U.S. policies or the policies of other countries and regions in which our suppliers do business, including any changes or uncertainty with respect to U.S. or international trade policies or tariffs, could also disrupt our key suppliers’ operations. The presidential administration has takentook action in 2025 to impose substantial new or increased tariffs. Any widespread imposition of new or increased tariffs could have an adverse effect on our results of operations, cash flow and financial condition. New or increased tariffs could also negatively affect U.S. national or regional economies, which also could negatively impact our business and results of operations. The supply chain of goods and services we rely on could be impacted by sanctions, tariffs, manufacturing labor shortages and domestic and international shipping constraints, which could increase our costs and delay delivery of critical materials.

Our business follows economic cycles. The regional economy in which ourthe Electric Companies operate is influenced by conditions in industries in our business territories, e.g., data centers, shale gas, automotive, chemical, steel and other heavy industries, and as these conditions and resultant demand of those industries for electricity generation changes, our revenues will be impacted.

WeFirstEnergy areis subject to risks arising from the operation of ourits powerelectric plantsgeneration facilities and transmission and distribution equipment which could reduce revenues, increase expenses and have a material adverse effect on our business, financial condition and results of operations.

Operation of generation, transmission and distribution facilitiesfacilities, and in the case of MP, electric generation facilities, involves risk, including the risk of potential breakdown or failure of equipment or processes due to aging infrastructure, fuel supply or transportation disruptions, accidents, labor disputes or work stoppages by employees, human error in operations or maintenance, acts of terrorism or sabotage, cyber-attacks, construction delays or cost overruns, shortages of or delays in obtaining equipment, material and labor, operational restrictions resulting from environmental requirements and governmental interventions, and operational performance below expected levels. In addition, weather-related incidents and other natural disasters can disrupt generation, transmission and distribution delivery systems. Because our transmission facilities are interconnected with those of third parties, the operation of our facilities could be adversely affected by unexpected or uncontrollable events occurring on the systems of such third parties.

OurFirstEnergy’s Energize365 business plan calls for extensive capital investments totaling approximately $28$36 billion from 20252026 through 2029, including but not limited to our transmission expansion program and our distribution grid modernization, resiliency and reliability programs.2030. We may be exposed to the risk of substantial price increases in, or the adequacy or availability of, the costs of labor and materials used in construction, nonperformance of equipment and increased costs due to inflation, interest rates or other macroeconomic forces, delays, including delays relating to the procurement of permits or approvals, adverse weather or environmental matters. We engage numerous contractors and enter into a large number of construction agreements to acquire the necessary materials and/or obtain the required construction-related services. As a result, we are also exposed to the risk that these contractors and other counterparties could breach their obligations to us. Such risk could include our contractors’ inabilities to procure sufficient skilled labor as well as potential work stoppages by that labor force. Should the counterparties to these arrangements fail to perform, we may be forced to enter into alternative arrangements at then-current market prices that may exceed our contractual prices, with resulting delays in those and other projects. Although our agreements are designed to mitigate the consequences of a potential default by the counterparty, our actual exposure may be greater than these mitigation provisions. Also, because we enter into construction agreements for the necessary materials and to obtain the required construction related services, any cancellation by FirstEnergy of a construction agreement could result in significant termination payments or penalties. Any delays, increased costs or losses, or cancellation of a construction project could adversely affect our business and results of operations, particularly if we are not permitted to recover any such costs in rates.

As a result of the continued threat of physical acts of war, terrorism, sabotage or other attacks in the United States, our electric generation, fuel storage, transmission and distribution facilities and other infrastructure, including powerelectric plants,generation facilities, transformer and high voltage lines and substations, or the facilities or other infrastructure of an interconnected company, could be direct targets of, or indirect casualties of, an act of war, terrorism, sabotage or other attack, which could result in disruption of our ability to generate, purchase, transmit or distribute electricity for a significant period of time, otherwise disrupt our customer operations and/or result in incidents that could result in harmful effects on the environment and human health, including loss of life. Any such disruption or incident could result in a significant decrease in revenue, significant additional capital and operating costs, including costs to implement additional security systems or personnel to purchase electricity and to replace or repair our assets over and above any available insurance reimbursement, higher insurance deductibles, higher premiums and more restrictive insurance policies, legal claims or proceedings, greater regulation with higher attendant costs, generally, and significant damage to our reputation, which could have a material adverse effect on our business, results of operations, cash flows and financial condition.

We are committed to providing safe and reliable service and equipment in our franchised service territories. Meeting this commitment requires the expenditure of significant capital resources. However, ourOur employees, contractors and the general public may be exposed to dangerous environments due to the nature of our operations. Failure to provide safe and reliable service and equipment due to various factors, including cyber or physical attacks, equipment failure, accidents, human error, weather or natural disasters, could result in serious injury or loss of life that may harm our business reputation and adversely affect our operating results through reduced revenues, increased capital and operating costs, litigation or the imposition of penalties/fines or other adverse regulatory outcomes.

We are involved in a number of litigation, arbitration, mediation, and similar proceedings, including with respect to asbestos claims. These and other matters may divert financial and management resources that would otherwise be used to benefit our operations. Further, no assurances can be given that the resolution of these matters will be favorable to us. If certain matters were ultimately resolved unfavorably to us, our results of operations and financial condition could be materially adversely impacted. See Note 15.14., “Commitments, Guaranties and ContingenciesContingencies,” of the Combined Notes to Consolidated Financial Statements for a summary of suchthe matters.Registrants.

Additionally, a significant number of our physical workforce are represented by unions. While we believe that our relations with our employees are generally fair, weWe cannot provide assurances that the company will be completely free of labor disruptions such as work stoppages, work slowdowns, union organizing campaigns, strikes, lockouts or that any labor disruption will be favorably resolved. Mitigating these risks could require additional financial commitments and the failure to prevent labor disruptions and retain and/or attract trained and qualified labor could have an adverse effect on our business.

We continually focus on limiting and reducing where possible, our operation and maintenance expenses. However, we expect to continue to face increased cost pressures related to operation and maintenance expenses, including in the areas of health care and pension costs. We have experienced health care cost inflation in recent years, and we expect our cash outlay for health care costs, including prescription drug coverage, to continue to increase despite measures that we have taken requiring employees and retirees to bear a higher portion of the costs of their health care benefits. The measurement of our expected future health care and pension obligations and costs is highly dependent on a variety of assumptions, many of which relate to factors beyond our control. These assumptions include investment returns, interest rates, discount rates, health care cost trends, benefit design changes, salary increases, the demographics of plan participants and regulatory requirements. See “Management’sItem 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates—Pension and OPEB Accounting.” While we anticipate that our operation and maintenance expenses will continue to increase, if actual results differ materially from our assumptions, our costs could be significantly higher than expected which could adversely affect our results of operations, financial condition and liquidity.

Traditionally, electricity is generated at large, central station generation facilities distributed by our systems. This method results in economies of scale and lower unit costs than newer generation technologies such as fuel cells, microturbines, windmills and photovoltaic solar cells. It is possible that advances in newer generation technologies will make newer generation technologies more cost-effective, or that legislation addressing climate change at the federal or state level together with changes in regulatory policy will create incentives or benefits that otherwise make these newer generation technologies even more competitive with central station electricity production. To the extent that newer generation technologies are connected directly to load, bypassing the transmission and distribution systems, potential impacts could include decreased transmission and distribution revenues, stranded assets and increased uncertainty in load forecasting and integrated resource planning and could adversely affect our business and results of operations.

Energy companies, including the Electric Companies and Transmission Companies, have been the subject of criticism on matters including the affordability and reliability of theirour distribution or transmission services and systems and the speed with which they are able to respond to power outages, such as those caused by storm damage. Adverse publicity of this nature, as well as negative publicity associated with the operation of coal-fired generation or proceedings seeking regulatory recoveries may cause less favorable legislative and regulatory outcomes and damage our reputation, which could have an adverse impact on our business and financial condition.

Forward-Looking Statements: This Form 10-K includes forward-looking statements based on information currently available to management.the Registrants’ management and unless the context requires otherwise, references to “we,” “us,” “our” and “FirstEnergy” refer to the Registrants collectively. Such statements are subject to certain risks and uncertainties and readers are cautioned not to place undue reliance on these forward-looking statements. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” "forecast," "target," "will," "intend," “believe,” "project," “estimate," "plan" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following (see Glossary of Terms for definitions of capitalized terms):

•The potential liabilities, increased costs and unanticipated developments resulting from government investigations and agreements, including those associated with compliance with or failure to comply with the DPA, and settlements with the OAG's office and SEC.the SEC;

•The risks and uncertainties associated with litigation, including the securities class-action lawsuit, regulatory proceedings, arbitration, mediation and similar proceedings, particularly regarding HB 6 related matters.proceedings;

•Changes in national and regional economic conditions, including recession, volatile interest rates, inflationary pressure, supply chain disruptions, higher fuel costs, and workforce impacts, affecting us and/or our customers and thosethe vendors with which we do business.business;

•Variations in weather, such as mild seasonal weather variations and severe weather conditions (including events caused, or exacerbated, by climate change, such as wildfires, hurricanes, flooding, droughts, high wind events and extreme heat events) and other natural disasters, which may result in increased storm restoration expenses or material liability and negatively affect future operating results.results;

•The potential liabilities and increased costs arising from regulatory actions or outcomes in response to severe weather conditions and other natural disasters.disasters;

•Legislative and regulatory developments, and executive orders, including, but not limited to, matters related to rates, energygeneration regulatoryresource policies,adequacy, co-location of generation and large loads, and compliance and enforcement activity, cyber security, climate change, and diversity, equity and inclusion.activity;

•The ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions, and the loss of ourFE’s status as a well-known seasoned issuer.issuer;

•Changes in assumptions regarding factors such as economic conditions within our territories, the reliability of our transmission and distribution system, our generation resource planning,planning in West Virginia, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities.opportunities;

•Human capital management challenges, including among other things, attracting and retaining appropriately trained and qualified employeesemployees, and labor disruptions by our unionized workforce.workforce;

•AnyChanges changesto in taxenvironmental laws orand regulations, including, but not limited to, thefederal IRAand ofstate 2022,rules orrelated adverseto taxclimate auditchange, results or rulingsCCRs, and potential changes to such laws and regulations as a result of the new U.S. presidential administration.;

Dividends declared from time to time on ourFE’s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by the FE Board at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.

These forward-looking statements are also qualified by, and should be read together with, the risk factors included in (a) Item 1A.1A., "Risk Factors,Factors", (b) Item 7.7., "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and (c) other factors discussed herein and in FirstEnergy'sthe Registrants’ other filings with the SEC. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. We expressly disclaim any obligation to update or revise, except as required by law, any forward-looking statements contained herein or in the information incorporated by reference as a result of new information, future events or otherwise.

Forward-looking and other statements in this Annual Report on Form 10-K regarding ourFirstEnergy’s Climate Strategy, including ourFirstEnergy’s GHG emission reduction goals, are not an indication that these statements are necessarily material to investors or required to be disclosed in ourFE’s filings with the SEC. In addition, historical, current and forward-looking statements regarding climate matters, including GHG emissions, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future.

FirstEnergy is dedicated to integrity, safety, reliability and operational excellence and is principally involved in the transmission, distribution and generation of electricity through its reportable segments: Distribution, Integrated and Stand-Alone Transmission. Its electric distribution companies form one of the nation's largest investor-owned electric systems, serving over six6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. FirstEnergy’s transmission subsidiaries operate more than 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions and two regional transmission operation centers. AsIn ofaddition, DecemberMP 31, 2024,and AGC and MP control 3,6043,610 MWs of net maximumtotal generation capacity.

TheFirstEnergy's Distribution segment, which consists of the Ohio Companies and FE PA, representing $11$11.1 billion in rate base as of December 31, 2024,2025, distributes electricity through FirstEnergy’s electric operating companies in Ohio and Pennsylvania. The Distribution segment serves approximately 4.3 million customers in Ohio and Pennsylvania across its distribution footprint and purchases power for its providerdefault ofservice last resort, SOS,or standard service offer and default service requirements. The segment’s results reflect the costs of securing and delivering electric generation to customers, including the deferral and amortization of certain costs.

TheFirstEnergy's Integrated segment includes the distribution and transmission operations underof JCP&L, MP and PE, as well as MP’s regulated generation operations, representing $9.6$10.2 billion in rate base as of December 31, 2024.2025. The Integrated segment distributes electricity to approximately 2 million customers in New Jersey, West Virginia and Maryland across its distribution footprint; provides transmission infrastructure in New Jersey, West Virginia, Maryland and Virginia to transmit electricity and operates 3,6043,610 MWs of regulated net maximum generation capacity located primarily in West Virginia and Virginia.Virginia, which includes three solar generation sites, representing 30 MWs of generation capacity. The segmentsegment’s willresults alsoreflect includethe costs of securing and delivering electric generation to customers, including the deferral and amortization of certain costs. Additionally, on October 1, 2025, MP and PE’sPE 50filed their integrated resource plan with the WVPSC proposing, among other things, the addition of 70 MWs of solar generation atby five sites in West Virginia once complete. The first two solar generation sites were completed2028, and placed in service in January and September 2024, representing 241,200 MWs of netnatural maximumgas generatingcombined capacity.cycle Thegeneration remainingby three2031, sites, once completed,which are expected to providerequire 26an MWsestimated capital investment of approximately $2.5 billion, as detailed in the filing. See Note 13., "Regulatory Matters," of the Combined Notes to Financial Statements of the Registrants for additional net maximum generation capacity.details.

TheFirstEnergy's Stand-Alone Transmission segment, which consists of FE's ownership in FET and KATCo, representing $5.3$5.4 billion in FirstEnergy-owned rate base as of December 31, 2024,2025, includes transmission infrastructure owned and operated by the Transmission Companies and used to transmit electricity. The segment’s revenues are primarily derived from forward-looking formula rates, pursuant to which the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual rate base and costs. The segment’s results also reflect the net transmission expenses related to the delivery of electricity on FirstEnergy’s transmission facilities. KATCo, which was a subsidiary of FET, became a wholly owned subsidiary of FE prior to the closing of the FET P&SA I and remains in the Stand-Alone Transmission segment. On January 1, 2024, WP transferred certain of its Pennsylvania-based transmission assets to KATCo and prior year results in the Stand-Alone Transmission segment reflect the earnings and results of those WP transmission assets.

FirstEnergy's Corporate/Other reflects corporate support and other costs not charged or attributable to the Electric Companies or Transmission Companies, including FE’s retained pension and OPEB assets and liabilities of former subsidiaries, interest expense on FE’s holding company debt and other investments or businesses that do not constitute an operating segment, including FEV’s investment of 33-1/3% equity ownership in Global Holding. On July 16, 2025, FEV sold its entire 33-1/3% equity ownership in Global Holding, the holding company for a joint venture in the Signal Peak mining and coal transportation operations, at book value to WMB Marketing Ventures, LLC and Pinesdale LLC for $47.5 million. Also included in Corporate/Other for segment reporting is 67 MWs of net maximum generation capacity, representing AE Supply’s OVEC capacity entitlement. As of December 31, 2024,2025, Corporate/Other had approximately $6.1$6.8 billion of external FE holding company debt.

OurInvestment Strategy

As of MarchJune 31,30, 2026, there has been no material change to the risk factors disclosed in the Registrants’ Annual Report on Form 10-K for the year ended December 31, 2025. You should carefully consider the FirstEnergyRegistrants’ risk factors discussed in "Item 1A. Risk Factors" in the Registrants’ Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 18, 2026.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q discusses the three and six months ended MarchJune 31,30, 20262026, and year-over-year comparisons between the three and six months ended MarchJune 31,30, 20262026, and 20252025, and should be read in conjunction with the Registrants’ interim financial statements and notes included in this Form 10-Q, and the Registrants’ audited financial statements andstatements, notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7. in its Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 18, 2026.

FirstEnergy is dedicated to integrity, safety, reliability and operational excellence and is principally involved in the transmission, distribution and generation of electricity through its reportable segments: Distribution, Integrated and Stand-Alone Transmission. Its electric distribution companies form one of the nation's largest investor-owned electric systems, serving over 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. FirstEnergy’s transmission subsidiaries operate more than 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions and two regional transmission operation centers. As of MarchJune 31,30, 2026, AGC and MP control 3,610 MWs of net maximum generation capacity.

FirstEnergy’s customer-focused Energize365 investment plan for the 2026 to 2030 time period is $36 billion, approximately 25% higher than the previous 2025 to 2029 five-year plan, and aims to strengthen the grid, improve reliability and support growing customer demand. Through the Energize365 program, system-wide capital investments from 2026 to 2030 are expected to include 28% in the Distribution segmentsegment, 28%,35% in the Integrated segment 35%,segment, and 35% in the Stand-Alone Transmission segment 35%,segment, focused on the following:

•Transmission projects awarded through the PJM Open Window to address regional expansion projects, including incremental opportunities in the 2026 Open Window, for which the planning period was recently opened.

PJM RTEP Long-Term ProposalOpen Window Projects

On February 21, 2025, FET, DominionHV and Transource entered into the Valley Link Operating Agreement, which established the general framework for Valley Link and the Valley Link Subsidiaries to accept, design, develop, construct, own, operate and finance those transmission projects awarded by PJM to Valley Link. This general framework includes parameters regarding the relationship among the three members, confers governance rights to its members so long as certain ownership percentages are maintained, as described below, and defines the list of projects that Valley Link will have the right to develop. Valley Link is the owner of the Valley Link Subsidiaries, which are organized in various states. On February 26, 2025, in response to the PJM 2024 RTEP Long-Term ProposalOpen Window #1, PJM awarded two electric transmission projects to Valley Link estimated to be approximately $3 billion, with FET’s share estimated to be approximately $1 billion.

On February 13, 2026, FET and Transource entered into the Grid Growth Operating Agreement, which established the general framework for Grid Growth to accept, design, develop, construct, own, operate and finance certain transmission projects awarded by PJM to certain of the subsidiaries of Grid Growth. This general framework includes parameters regarding the relationship amongbetween the two members, confers governance rights to its members so long as certain ownership percentages are maintained and defines the list of projects that Grid Growth will have the right to develop. The relative ownership interests of the members under the Grid Growth Operating Agreement are 50% for each of FET and Transource. Grid Growth is the sole owner of Grid Growth Ohio and owns an 80% interest in Grid Growth EHV, with Transource owning the remaining interest. On February 12, 2026, in response to the PJM 2025 RTEP Long-Term ProposalOpen Window #1, PJM awarded a project to Grid Growth estimated to be approximately $1 billion, with FET’s share estimated to be approximately $448 million.

On October 1, 2025, MP and PE filed their integrated resource plan with the WVPSC. To ensure that MP and PE can meet their PJM adequacy requirements, the plan proposes, among other things, near-term market capacity purchases and the addition of 70 MWs of solar generation by 2028 and 1,200 MWs of natural gas combined cycle generation by 2031. On February 13, 2026, MP and PE filed a CPCN to construct and operate the proposed generation resources, including a 1,200 MW combined cycle gas turbine plantplant, that will be known as the Maidsville Energy Center, and 70 MWs of solar generation capacitycapacity, for an estimated capital investment totalingof approximately $2.7 billion as of the datefiling of the filing.date. The request also includes a surcharge designed to recover financing costs during development and construction of the projects, as well as toa transition to recovery in base rates once the projects are placed in-servicein service and approved through a base rate case. An evidentiary hearing on the integrated resource plan was held on May 6, 2026, and evidentiary hearings on the CPCN application were held on July 16 and 17, 2026. A final order is expected from the WVPSC in the second half of 2026.

PE anticipates filing a base rate distribution case with the MDPSC in the secondthird halfquarter of 2026, with new rates expected to become effective in the first quarter of 2027.

FirstSecond Three MonthsQuarter of 2026 Compared with FirstSecond Three MonthsQuarter of 2025

Earnings attributable to FE were $405$288 million or $0.70$0.50 per share (basic and diluted) in the firstsecond three monthsquarter of 2026 compared to $360$268 million or $0.62$0.46 per share (basic and diluted) in the firstsecond three monthsquarter of 2025, representing an increase of $45$20 million that was primarily due to the following:

•Higher transmission revenues from regulated capital investments that increased rate base and true-up adjustments from the annual forward-looking transmission rate filings;

•The absence in 2026 of customer credits associated with the PUCO-approved Ohio Stipulation recognized in 2025;

•Higher net periodic pension and OPEB credits.non-service credits;

•Higher interest expenses from new long-term debt issuancesand sinceconvertible thenote firstissuances, quarternet of 2025.redemptions and repayments; and

Actual distributionDistribution deliveries in the firstsecond quarter of 2026 for the residential and commercial customer classes were higherlower than the same period of 2025 due to the impact of colderthe milder weather temperatures. HeatingCooling degree days in the firstsecond three monthsquarter of 2026 were 2%consistent abovewith the same period of 2025 and 3%6% above normal. Heating degree days in the second quarter of 2026 were 5% below the same period of 2025 and 8% below normal. Industrial deliveries in the second quarter of 2026 compared to the same period of 2025 increased primarily due to growth in the manufacturing sector.