FIRSTENERGY CORP.


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FIRSTENERGY'S BUSINESS

FE and its subsidiaries are principally involved in the transmission, distribution and generation of electricity through its reportable segments, Regulated Distribution and Regulated Transmission.



The Regulated Distribution segment distributes electricity through FirstEnergy's
ten utility operating companies, serving approximately six million customers
within 65,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New
Jersey and New York, and purchases power for its POLR, SOS, SSO and default
service requirements in Ohio, Pennsylvania, New Jersey and Maryland. This
segment also controls 3,580 MWs of regulated electric generation capacity
located primarily in West Virginia and Virginia. The segment's results reflect
the costs of securing and delivering electric generation from transmission
facilities to customers, including the deferral and amortization of certain
related costs.
The Regulated Transmission segment provides transmission infrastructure owned
and operated by the Transmission Companies and certain of FirstEnergy's
utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources
to distribution facilities. The segment's revenues are derived from
forward-looking formula rates. Forward-looking rates recover costs that FERC
determines are permitted to be recovered and provide a return on transmission
capital investment. Under forward-looking formula rates, 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 costs. The segment's results also
reflect the net transmission expenses related to the delivery of electricity on
FirstEnergy's transmission facilities.
Corporate/Other reflects corporate support and other costs not charged or
attributable to the Utilities or Transmission Companies, including FE's retained
Pension and OPEB assets and liabilities of the FES Debtors, interest expense on
FE's holding company debt and other businesses that do not constitute an
operating segment. Additionally, reconciling adjustments for the elimination of
inter-segment transactions are included in Corporate/Other. As of September 30,
2021, 67 MWs of electric generating capacity, representing AE Supply's OVEC
capacity entitlement, was included in continuing operations of Corporate/Other.
As of September 30, 2021, Corporate/Other had approximately $7.4 billion of FE
holding company debt.


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EXECUTIVE SUMMARY



FirstEnergy is a forward-thinking, electric utility centered on integrity,
powered by a diverse team of employees, committed to making customers' lives
brighter, the environment better and our communities stronger. As a fully
regulated electric utility, FirstEnergy is focused on stable and predictable
earnings and cash flow from its Regulated Distribution and Regulated
Transmission business units that deliver enhanced customer service and
reliability that supports FE's dividend.

On July 21, 2020, a complaint and supporting affidavit containing federal
criminal allegations were unsealed against the now former Ohio House Speaker
Larry Householder and other individuals and entities allegedly affiliated with
Mr. Householder. Also, on July 21, 2020, and in connection with the
investigation, FirstEnergy received subpoenas for records from the U.S.
Attorney's Office for the S.D. Ohio. FirstEnergy was not aware of the criminal
allegations, affidavit or subpoenas before July 21, 2020.

On July 21, 2021, FE entered into a three-year DPA with the U.S. Attorney's
Office that, subject to court proceedings, resolves the U.S. Attorney's Office
investigation into FirstEnergy relating to FirstEnergy's lobbying and
governmental affairs activities concerning HB 6, which, among other things
required FE to pay a monetary penalty of $230 million, which FE paid in the
third quarter of 2021. Under the DPA, FE agreed to the filing of a criminal
information charging FE with one count of conspiracy to commit honest services
wire fraud. The $230 million payment was made during the third quarter of 2021
and will neither be recovered in rates or charged to FirstEnergy customers nor
will FirstEnergy seek any tax deduction related to such payment. Under the terms
of the DPA, the criminal information will be dismissed after FirstEnergy fully
complies with its obligations under the DPA.

In addition to the subpoenas referenced above, the OAG, certain FE shareholders
and FirstEnergy customers filed several lawsuits against FirstEnergy and certain
current and former directors, officers and other employees, each relating to the
allegations against the now former Ohio House Speaker Larry Householder and
other individuals and entities allegedly affiliated with Mr. Householder. In
addition, on August 10, 2020, the SEC, through its Division of Enforcement,
issued an order directing an investigation of possible securities laws
violations by FE, and on September 1, 2020, issued subpoenas to FE and certain
FE officers. Subsequently, on April 28, 2021, the SEC issued an additional
subpoena to FE. Further, in a letter dated February 22, 2021, staff of FERC's
Division of Investigations notified FirstEnergy that the Division is
investigating FirstEnergy's lobbying and governmental affairs activities
concerning HB 6.

A committee of independent members of the FE Board was put in place to direct an
internal investigation related to the ongoing government investigations. In
addition, the FE Board formed a sub-committee of the Audit Committee to,
together with the FE Board, assess FirstEnergy's compliance program and
implement potential changes, as appropriate. FirstEnergy has taken the following
steps to address current challenges and improve its compliance culture:

•Certain members of senior management, including the former Chief Executive
Officer, were terminated for violating certain FirstEnergy policies and code of
conduct.

•Immediately following these terminations, the independent members of its FE
Board appointed Mr. Steven E. Strah to the position of Acting Chief Executive
Officer and Mr. Christopher D. Pappas, a current member of the FE Board, to the
temporary position of Executive Director. In March 2021, Mr. Strah was elected
to the position of Chief Executive Officer and a Director of the FE Board.

•FirstEnergy's Chief Legal Officer and Chief Ethics Officer were separated from FirstEnergy in November 2020 due to inaction and conduct that the FE Board determined was influenced by the improper tone at the top.



•In February 2021, the FE Board appointed Mr. John W. Somerhalder II to the
positions of Vice Chairperson of the FE Board and Executive Director, replacing
Mr. Pappas, who continues to serve on the FE Board as an independent director.
The FE Board also appointed Mr. Hyun Park to the position of Senior Vice
President & Chief Legal Officer and Mr. Antonio Fernández, to the position of
Vice President and Chief Ethics and Compliance Officer, in January 2021 and
March 2021, respectively. These executives help play a critical role in
enhancing FirstEnergy's culture of compliance, ethics, integrity and
accountability.

•In March 2021, in connection with an agreement with Icahn Capital, the FE Board
appointed Andrew Teno and Jesse Lynn as Directors to the FE Board, increasing
the size from 12 directors to 14. However, until such time as all final
regulatory approvals are obtained, neither Mr. Teno nor Mr. Lynn will have the
right to vote at any meeting of the FE Board or any committee thereof. In May
2021, Melvin D. Williams was elected to the FE Board, filling a vacant seat. In
June 2021, the FE Board appointed Lisa Winston Hicks and Paul Kaleta as
directors to the FE Board, further increasing the size from 14 directors to 16.

•FirstEnergy is making significant changes in its approach to political and
legislative engagement and advocacy, through stopping all contributions to
501(c)(4) organizations, the pause of other political disbursements, including
from the FirstEnergy Political Action Committee, limiting participation in the
political process, suspending or terminating various political consulting
relationships, and adding additional oversight and significantly more robust
disclosure around political spending to provide increased transparency.

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•In March 2021, the FE Board met with FirstEnergy's top 140 leaders to discuss expectations regarding compliance and ethics.

•Performed training on up-the-ladder reporting for the Legal Department in March 2021.

•In July 2021, enhanced new employee and third-party on-boarding processes to include expectations of FirstEnergy's code of conduct.



•In May 2021, FirstEnergy separated its Vice President, Rates and Regulatory
Affairs, and Acting Vice President, External Affairs due to this individual's
inaction with respect to a previously disclosed purported consulting agreement.
•On June 29, 2021, the FE Board established a SLC of the FE Board, effective
July 1, 2021. The SLC has been delegated full authority by the FE Board to take
all actions as the SLC deems advisable, appropriate, and in the best interests
of FirstEnergy and its shareholders with respect to pending shareholder
derivative litigation and demands. Each of Ms. Hicks and Messrs. Kaleta, Lynn
and Williams were appointed to serve on the SLC.

•On July 20, 2021, the FE Board approved and adopted a new Code of Business
Conduct, which:
•Promotes and emphasizes FirstEnergy's commitment to compliance and ethics,
•Establishes a "speak up" culture in which stakeholders are encouraged to report
actual or suspected Code of Business Conduct violations without fear of
retaliation,
•Conforms to applicable compliance standards, and
•Improves readability

•On July 20, 2021, the FE Board approved FE entering into a DPA with the U.S. Attorney's Office that, subject to court proceedings, resolves the U.S. Attorney's Office investigation into FirstEnergy relating to FirstEnergy's lobbying and governmental affairs activities concerning HB 6.



•During the third quarter of 2021, FirstEnergy appointed new senior leaders
committed to supporting integrity, including:
•Vice President of Internal Audit,
•Vice President and Chief Risk Officer, and
•Director of Ethics & Compliance.

•FirstEnergy completed additional steps toward enhancing the overall compliance
program, including:
•Completion of the Office of Ethics & Compliance charter,
•Delivered a Chief Ethics & Compliance Officer-led Code Awareness training to
senior leader and individuals with significant roles in FirstEnergy's control
environment,
•Conducted leader-led training on the Code of Business Conduct for all leaders,
•Published an Ethics & Compliance Communication Plan, and
•Selected and began implementation planning for a Governance, Risk and
Compliance tool

Also, in connection with the internal investigation, FirstEnergy identified
certain transactions, which, in some instances, extended back ten years or more,
including vendor service, that were either improperly classified, misallocated
to certain of the Utilities and Transmission Companies, or lacked proper
supporting documentation. These transactions resulted in amounts collected from
customers that were immaterial to FirstEnergy. The Utilities and Transmission
Companies are working with the appropriate regulatory agencies to address these
amounts.

FirstEnergy has also taken proactive steps to reduce regulatory uncertainty affecting the Ohio Companies:



•On January 31, 2021, FirstEnergy reached a partial settlement with the OAG and
other parties regarding decoupling. While the partial settlement with the OAG
focused specifically on decoupling, the Ohio Companies will of their own accord,
not seek to recover lost distribution revenue from residential and commercial
customers.

•On March 31, 2021, FirstEnergy announced that the Ohio Companies will
proactively refund to customers amounts previously collected under the
decoupling mechanism authorized under Ohio law, which totals approximately $27
million, with interest. On July 7, 2021, the PUCO approved the Ohio Companies'
proposal to return the amount to customers in August 2021.

•Also on March 31, 2021, Governor DeWine signed HB 128, which, among other
things, repealed parts of HB 6, the legislation that established support for
nuclear energy supply in Ohio, provided for a decoupling mechanism for electric
utilities, and provided for the ending of current energy efficiency program
mandates.

•FirstEnergy is committed to pursuing an open dialogue in an appropriate manner
with the several regulatory proceedings currently underway, including a state
management audit, and multi-year SEET and ESP quadrennial review, among other
matters. FirstEnergy believes a holistic transparent discussion with the PUCO
staff, and interested

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stakeholders in the regulatory process, is an important step towards removing
uncertainties about regulatory concerns in Ohio and critical to re-establishing
trust in FirstEnergy and restoring its reputation.

Despite the many disruptions FirstEnergy is currently facing, the leadership
team remains committed and focused on executing its strategy and running the
business. See "Outlook - Other Legal Proceedings" below for additional details
on the government investigations, the DPA, and subsequent litigation surrounding
the investigation of HB 6. See also "Outlook - State Regulation - Ohio" below
for details on the PUCO proceeding reviewing political and charitable spending
and legislative activity in response to the investigation of HB 6. The outcome
of the government investigations, PUCO proceedings, legislative activity, and
any of these lawsuits is uncertain and could have a material adverse effect on
FirstEnergy's financial condition, results of operations and cash flows. As
discussed below, FirstEnergy has made reductions to its Regulated Distribution
and Regulated Transmission capital investment plans and is considering
reductions to operating expenses, as well as changes to its planned equity
issuances, to allow for flexibility, for among other things, to address the
outcomes of the ongoing government investigations and related lawsuits and
regulatory actions.

On October 18, 2021, FE, FET, the Utilities, and the Transmission Companies
entered into six separate senior unsecured five-year syndicated revolving credit
facilities with JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd. and PNC Bank,
National Association (collectively, the "2021 Credit Facilities"), which replace
the FE Revolving Facility and the FET Revolving Facility, and provide for
aggregate commitments of $4.5 billion. The 2021 Credit Facilities are available
until October 18, 2026, as follows:

•FE and FET, $1.0 billion revolving credit facility •Ohio Companies, $800 million revolving credit facility •Pennsylvania Companies, $950 million revolving credit facility •JCP&L, $500 million revolving credit facility •MP and PE, $400 million revolving credit facility •Transmission Companies, $850 million credit facility



Under the 2021 Credit Facilities, an aggregate amount of $4.5 billion is
available to be borrowed, repaid and reborrowed, subject to each borrower's
respective sublimit for each borrower under the respective facilities. These new
credit facilities provide substantial liquidity to support the Regulated
Distribution and Regulated Transmission businesses, and each of the operating
companies within the businesses.

FirstEnergy is also working to improve how it conducts business and serve its
customers. In February 2021, FirstEnergy announced a new initiative to build
upon FirstEnergy's strong operations and business fundamentals and deliver
immediate value and resilience, with substantial operating and capital
efficiencies ramping up through 2024. Called "FE Forward," the initiative will
play a critical first step in FirstEnergy's transformation journey as it looks
to optimize processes and procedures through range of opportunities, including:

•Optimizing operations by expanding capabilities in areas such as strategic sourcing, inventory optimization and commercial contract terms, and by standardizing best-in-class work management policies across FirstEnergy;



•accelerating FirstEnergy's digital transformation by revamping customers'
online experience, automating sourcing data collection and management, and
deploying advanced analytics in asset health decisions as well as vegetation
management programs; and

•productivity improvements through system integration that puts advanced technology tools, such as mobile dashboards and remote access to asset management information, in the hands of frontline employees.



During the initial phase of FE Forward, FirstEnergy reviewed existing policies
and practices, as well as the structure and processes around how decisions are
made. In the second phase of FE Forward completed in May 2021, FirstEnergy
reviewed further improvement opportunities and developed detailed, executable
plans focusing on who, when, how and at what cost opportunities can be realized.
In June 2021, phase three began and is focused on executing and implementing
these findings and opportunities. By 2024, FE Forward is projected to generate
approximately $300 million in annualized capital expenditure efficiencies while
continuing to hold operating expenses flat by absorbing approximately $100
million in projected increases. In addition, FirstEnergy expects to generate
approximately $250 million in working capital improvements by 2022. This program
includes an estimated $150 million of costs to achieve through 2023, which are
expected to be self-funded through these efficiencies. FE Forward is not a
downsizing effort and there will not be any involuntary employee reductions in
connection with this program. FirstEnergy expects that FE Forward will be a
significant catalyst to augment its growth potential by taking a more strategic
approach to operating expenditures and reinvesting in a more diverse capital
program that over the long-term continues to support a smarter and cleaner
electric grid. As part of these efforts, FirstEnergy will evaluate the
appropriate cadence to initiate rates cases on a state-by-state basis to best
support FirstEnergy's customer-focused strategic priorities.

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                                                                 For the Years Ended December 31,
FE Forward Expected Capital Efficiencies and
Working Capital Improvements                               2021                 2022                2023
                                                                           (In millions)
Gross Capital Expenditure Efficiencies                $        180          $      210          $      300
Cost to Achieve (+/- 10%)                                      (40)                (60)                (50)
Net Capital Expenditure Efficiencies                  $        140          $      150          $      250
Working Capital Improvements                                   100                 150                   -
Total Cash Flow Improvements                          $        240

$ 300 $ 250





With an operating territory of 65,000 square miles, the scale and diversity of
the ten Utilities that comprise the Regulated Distribution business uniquely
position this business for growth through opportunities for additional
investment, with plans to invest up to $6.6 billion in capital from 2020 to
2023. Over the past several years, Regulated Distribution has experienced rate
base growth through investments that have improved reliability and added
operating flexibility to the distribution infrastructure, which provide benefits
to the customers and communities those Utilities serve. Additionally, this
business is exploring other opportunities for growth, including investments in
electric system improvement and modernization projects to increase reliability
and improve service to customers, as well as exploring opportunities in customer
engagement that focus on the electrification of customers' homes and businesses
by providing a full range of products and services.

With approximately 24,000 miles of transmission lines in operation, the
Regulated Transmission business is the centerpiece of FirstEnergy's regulated
investment strategy with 100% of its capital investments recovered under
forward-looking formula rates at the Transmission Companies effective January 1,
2021. Regulated Transmission has also experienced significant growth as part of
its Energizing the Future transmission plan with plans to invest up to
$5.15 billion in capital from 2020 to 2023.

FirstEnergy believes there are incremental investment opportunities for its
existing transmission infrastructure of over $20 billion beyond those identified
through 2023, which are expected to strengthen grid and cyber-security and make
the transmission system more reliable, robust, secure and resistant to extreme
weather events, with improved operational flexibility.

While FirstEnergy continues to have customer-focused investment opportunities
across its distribution and transmission businesses of up to $3 billion
annually, it has discontinued providing a long-term earnings compound annual
growth rate until there is further clarity regarding Ohio regulatory matters and
the ongoing government investigations.

FirstEnergy anticipates the need to raise equity and continues to consider all
options to raise equity capital. Currently, FirstEnergy is engaging in a process
to sell a minority interest in its transmission holding company, FET.
FirstEnergy is committed to improving the balance sheet, targeting metrics that
support investment grade credit ratings, and to ensure financial flexibility to
fund capital expenditures that support a smarter and cleaner electric grid.
Beyond FirstEnergy's expectation to issue up to $100 million per year in equity
for its regular stock investment and employee benefit plans, FirstEnergy
continues to consider all options to raise equity and expects to provide
additional clarity on those financing plans later during the fourth quarter of
2021. The amount and timing of any potential equity issuances or alternatives to
raise equity capital, are subject to, among other matters, the ongoing
government investigations, related lawsuits and regulatory actions, market
conditions and business operations.

FirstEnergy has established new goals for key areas of its business that support
the mission to be a forward-thinking, electric utility centered on integrity,
powered by a diverse team of employees, committed to making customers' lives
brighter, the environment better and our communities stronger.

In November 2020, FirstEnergy published its Climate Story which includes its
climate position and strategy, as well as a new comprehensive and ambitious GHG
emission goal. FirstEnergy pledged to achieve carbon neutrality by 2050 and set
an interim goal for a 30% reduction in GHG within FirstEnergy's direct
operational control by 2030, based on 2019 levels. In addition, FirstEnergy has
also set a fleet electrification goal in which beginning in 2021, FirstEnergy
plans for 100% of new purchases for its light duty and aerial truck fleet to be
electric or hybrid vehicles, creating a path to 30% fleet electrification by
2030. Also, later in 2021, FirstEnergy will seek approval to construct a solar
generation source of at least 50 MWs in West Virginia. Future resource plans to
achieve carbon reductions, including any determination of retirement dates of
the regulated coal-fired generating facilities, will be developed by working
collaboratively with regulators in West Virginia. Determination of the useful
life of the regulated coal-fired generating facilities could result in changes
in depreciation, and/or continued collection of net plant in rates after
retirement, securitization, sale, impairment or regulatory disallowances. If MP
is unable to recover these costs, it could have a material adverse effect on
FirstEnergy's and/or MP's financial condition, results of operations, and cash
flow.


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In January 2021, the updated "Strategic Plan - Powered by our Core Values &
Behaviors" was published. This comprehensive update provides a vision of
FirstEnergy's path forward in an evolving electric industry. It also articulates
significant new goals that will help achieve our long-term strategic commitments
in a transparent, sustainable and responsible manner. The Strategic Plan
includes specific targets related to:

•Enhancing a culture of compliance through transparency and accountability;

•Enabling a smarter, more resilient electric system;

•Embracing innovation across the organization;

•Meeting the challenges of climate change;



•Developing a diverse and inclusive workforce, including 2025 goals to increase
the number of employees and leaders from underrepresented racial and ethnic
groups by 30% each and targeting 20% of supply chain spend to be with diverse
suppliers;

•Building collaborative relationships, marked by trust and respect, with all stakeholders;

•Strengthening FirstEnergy's safety-first culture; and

•Delivering strong and predictable financial results.


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FINANCIAL OVERVIEW AND RESULTS OF OPERATIONS
(In millions)                               For the Three Months Ended September 30,                           For the Nine Months Ended September 30,
                                      2021              2020                   Change                   2021              2020                   Change

Revenues                           $  3,124          $ 3,022          $ 102               3  %       $  8,472          $ 8,253          $ 219               3  %

Operating expenses                    2,493            2,301            192               8  %          6,970            6,485            485               7  %

Operating income                        631              721            (90)            (12) %          1,502            1,768           (266)            (15) %

Other expenses, net                    (127)            (145)            18              12  %           (422)            (855)           433              51  %

Income before income taxes              504              576            (72)            (13) %          1,080              913            167              18  %

Income taxes                             88              116            (28)            (24) %            271              122            149                 NM

Income from continuing
operations                              416              460            (44)            (10) %            809              791             18               2  %

Discontinued operations, net
of tax                                   47               (6)            53                 NM             47               46              1                 NM

Net income                         $    463          $   454          $   9               2  %       $    856          $   837          $  19               2  %


*NM= not meaningful

The financial results discussed below include revenues and expenses from
transactions among FirstEnergy's business segments. A reconciliation of segment
financial results is provided in Note 10, "Segment Information," of the Notes to
Consolidated Financial Statements.



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