10-KPeriod: FY2023

FIRSTENERGY CORP Annual Report, Year Ended Dec 31, 2023

Filed February 13, 2024For Securities:FE

Summary

FirstEnergy Corp. (FE) operates as a regulated utility, primarily engaged in the transmission and distribution of electricity, serving over six million customers across the Midwest and Mid-Atlantic regions. The company's operations are segmented into Regulated Distribution and Regulated Transmission, with recent strategic moves including the consolidation of Pennsylvania operations into a single entity, FE PA. Financially, FE reported earnings attributable to FE from continuing operations of $1.123 billion in 2023, a significant increase from $406 million in 2022, driven largely by improved performance in the Regulated Transmission segment and a notable reduction in Corporate/Other losses. Capital investments in 2023 totaled $3.7 billion, with a planned $26 billion investment over the next five years through the "Energize365" strategy, focused on grid modernization, energy transition, and infrastructure renewal. The company is navigating ongoing regulatory matters, including investigations related to HB 6, and has implemented new leadership and organizational structures to enhance operational efficiency and customer focus. Key strategic priorities include investing in core regulated businesses, optimizing facilities, and managing capital effectively to support a clean energy future and shareholder returns. The company's liquidity position remains strong, supported by its credit facilities.

Financial Highlights

48 data points
Beta

Revenue

$12.87B

Net Income

$1.10B

8.6% Net Margin

EPS (Diluted)

$1.92

Total Assets

$48.77B

Cash & Equivalents

$137.00M

Free Cash Flow

$1.39B

Financial Statements
Beta
Revenue$12.87B
Operating Expenses$10.60B
Operating Income$2.27B
Interest Expense$1.12B
Net Income$1.10B
EPS (Basic)$1.92
EPS (Diluted)$1.92
Shares Outstanding (Basic)573.00M
Shares Outstanding (Diluted)574.00M

Key Highlights

  • 1FirstEnergy Corp. reported a substantial increase in earnings attributable to FE from continuing operations, reaching $1.123 billion in 2023, up from $406 million in 2022.
  • 2The company's Regulated Transmission segment saw a significant earnings increase of $153 million in 2023 compared to 2022, while Regulated Distribution earnings decreased by $217 million due to lower customer usage.
  • 3FirstEnergy made significant capital investments of $3.7 billion in 2023, exceeding its plan, and anticipates investing approximately $26 billion over the next five years through its 'Energize365' strategy.
  • 4On January 1, 2024, FirstEnergy completed the consolidation of its Pennsylvania utility operations into a single entity, FE PA, aiming for greater operational efficiency and transparency.
  • 5The company expects to close by the end of Q1 2024 on the sale of an additional 30% equity interest in FirstEnergy Transmission, LLC (FET) to Brookfield, increasing Brookfield's stake to 49.9%.
  • 6FirstEnergy's leadership team has been strengthened with new executive hires in key operational roles, reflecting a focus on execution and customer-centricity.
  • 7The company continues to manage its financial obligations and liquidity, with available liquidity from external sources totaling approximately $4.5 billion as of early February 2024, and remains in compliance with its debt covenants.

Frequently Asked Questions

FirstEnergy reported earnings attributable to FE from continuing operations of $1.123 billion in 2023, a significant increase from $406 million in 2022. Revenue increased to $12.87 billion in 2023 from $12.46 billion in 2022. The company made capital investments totaling $3.7 billion in 2023.

FirstEnergy expects to close the sale of an additional 30% equity interest in FirstEnergy Transmission, LLC (FET) to Brookfield by the end of the first quarter of 2024. This transaction will increase Brookfield's ownership interest in FET from 19.9% to 49.9%. FET will continue to be consolidated in FirstEnergy's financial statements upon closing.

FirstEnergy's 'Energize365' strategy outlines approximately $26 billion in system-wide capital investments from 2024 through 2028. These investments are focused on distribution (29%), integrated operations (39%), and stand-alone transmission (32%), with key areas including grid modernization, energy transition initiatives (like clean energy and EV infrastructure), infrastructure renewal, and maintaining fossil generation assets.

FirstEnergy is actively engaged in regulatory proceedings across its service territories. Key matters include the ongoing investigations related to HB 6 and associated government investigations, state-specific rate cases for its utility subsidiaries, and compliance with environmental regulations. The company is also undergoing organizational changes, including the consolidation of its Pennsylvania operations into FE PA.