FirstEnergy Corp.

Overview Key strengths Key risks Large, lower-risk, fully rate-regulated utility operations serving more than six million customers. Robust capital spending plan necessitates timely recovery of invested capital. Strong geographic and regulatory diversity with operations across six states under mostly constructive regulatory frameworks. Predominately coal-fired regulated generation capacity poses some environmental risk. Primarily residential customer base provides stability to its cash flows. Negative discretionary cash flow indicates need for external funding. We expect FirstEnergy Corp. (FE) to effectively manage its regulatory risk and maintain credit quality commensurate with our aggressive financial risk profile category throughout the forecast period. The company announced that its subsidiary FirstEnergy Transmission LLC (FET) completed its sale of a 19.9% minority equity stake to Brookfield Super-Core Infrastructure

...(FE) to effectively manage its regulatory risk and maintain credit quality commensurate with our aggressive financial risk profile category throughout the forecast period. The company announced that its subsidiary FirstEnergy Transmission LLC (FET) completed its sale of a 19.9% minority equity stake to Brookfield Super-Core Infrastructure Partners for about $2.4 billion in May 2022. In addition, Blackstone Infrastructure completed its purchase of about $1 billion of FE's common equity in December 2021, which the company intends to use the proceeds from for the development of a smart grid, to fund its energy transition plan, and to reduce debt. We view the completion of FET's minority interest sale, FE's issuance of common equity to...

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