FIRSTENERGY CORP.


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                    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 primarily derived from
forward-looking formula rates at the Transmission Companies and JCP&L as well as
stated transmission rates at MP, PE and WP; although as explained in Note 8,
"Regulatory Matters," effective January 1, 2021, subject to refund, MP's, PE's
and WP's existing stated rates became forward-looking formula rates. JCP&L
previously had stated transmission rates; however, effective January 1, 2020,
JCP&L implemented forward-looking formula rates, which were approved by FERC on
April 15, 2021. Both forward-looking formula and stated 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.
Revenue requirements under stated rates are calculated annually by multiplying
the highest one-hour peak load in each respective transmission zone by the
approved, stated rate in that zone. 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 to FE's
subsidiaries, 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 June 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 June 30, 2021, Corporate/Other
had approximately $7.9 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
requires FE to pay a monetary penalty of $230 million within the next sixty
days. Under the DPA, FE has 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 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 conducting
an investigation of FirstEnergy's lobbying and governmental affairs activities
concerning HB 6.

A committee of independent members of the FE Board of Directors was put in place
to direct an internal investigation related to the ongoing government
investigations. In addition, the Board formed a sub-committee of the Audit
Committee to, together with the 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 Board
appointed Mr. Steven E. Strah to the position of Acting Chief Executive Officer
and Mr. Christopher D. Pappas, a current member of the 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 Board.

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

•The Board appointed Mr. John W. Somerhalder II to the positions of Vice
Chairperson of the Board and Executive Director, replacing Mr. Pappas, who will
continue to serve on the Board as an independent director. The Board also
appointed Mr. Hyun Park to the position of Senior Vice President & Chief Legal
Counsel and Mr. Antonio Fernández, to the position of Vice President and Chief
Ethics and Compliance Officer. 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 Board
appointed Andrew Teno and Jesse Lynn as Directors to the 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 Board or any committee thereof. In May 2021, Melvin
D. Williams was elected to the Board, filling a vacant seat. In June 2021, the
Board appointed Lisa Winston Hicks and Paul Kaleta as directors to the 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.

•The Board met with FirstEnergy's top 140 leaders to discuss expectations regarding compliance and ethics.


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



•Enhanced new employee and third-party on-boarding processes to include
expectations of FirstEnergy's code of business 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 Board established a Special Litigation Committee of the
Board, effective July 1, 2021. The Special Litigation Committee has been
delegated full authority by the Board to take all actions as the Special
Litigation Committee 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 Special Litigation Committee.

•On July 20, 2021, the Board of FirstEnergy approved and adopted a new Code of
Business Conduct and Ethics, which:
•Promotes and emphasizes the Company'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 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, which, among other
things requires FE to pay a monetary penalty of $230 million within the next
sixty days.

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 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
FE's or its subsidiaries' 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 to address the outcomes of the
ongoing government investigations and related lawsuits and regulatory actions.


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FE and the Utilities and FET and certain of its subsidiaries participate in two
separate five-year syndicated revolving credit facilities providing for
aggregate commitments of $3.5 billion, which are available until December 6,
2022. Under the FE Revolving Facility, an aggregate amount of $2.5 billion is
available to be borrowed, repaid and reborrowed, subject to separate borrowing
sublimits for each borrower including FE and its regulated distribution
subsidiaries. Under the FET Revolving Facility, an aggregate amount of $1.0
billion is available to be borrowed, repaid and reborrowed under a syndicated
credit facility, subject to separate borrowing sublimits for each borrower
including FE's transmission subsidiaries. On July 21, 2021, FE and the Utilities
and FET and certain of its subsidiaries entered into amendments to the FE
Revolving Facility and the FET Revolving Facility, respectively. The amendments
provide for modifications and/or waivers of (i) certain representations and
warranties, (ii) certain affirmative and negative covenants, contained therein,
and (iii) any resulting event of default, which, in each case, resulted either
from FE entering into the DPA or as a consequence of the facts and circumstances
described in the DPA, thus allowing FirstEnergy to be in compliance with the
revolving credit facilities and maintain access to the liquidity provided
thereunder.

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.
                                                                 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 Free 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


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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.

FE and the Utilities and FET and certain of its subsidiaries participate in two
separate five-year syndicated revolving credit facilities providing for
aggregate commitments of $3.5 billion, which are available until December 6,
2022. On November 17, 2020, FE and the Utilities and FET and certain of its
subsidiaries entered into amendments to the FE Revolving Facility and the FET
Revolving Facility, respectively. The amendment to the FE Revolving Facility,
among other things, reduces the sublimit applicable to FE to $1.5 billion, and
the amendments increased certain tiers of pricing applicable to borrowings under
the credit facilities.

On November 23, 2020, FE and JCP&L, ME, Penn, TE and WP, borrowed $950 million
in the aggregate under the FE Revolving Facility, and FET and ATSI, borrowed $1
billion in the aggregate under the FET Revolving Facility. FE, FET and certain
of their respective subsidiaries increased their borrowings under the Revolving
Facilities as a proactive measure to increase their respective cash positions
and preserve financial flexibility.

On March 19, 2021, FET issued $500 million of 2.866% senior unsecured notes due
2028. Proceeds from the issuance were used to repay short-term borrowings under
the FET Revolving Facility.

FE repaid $250 million and $50 million in short-term borrowings under the FE Revolving Facility on March 23, 2021 and June 30, 2021, respectively.



On April 9, 2021, MP issued an additional $200 million of its 3.55% first
mortgage bonds due 2027 at an effective interest rate of approximately 2.06%.
Proceeds from the issuance were used to fund MP's ongoing capital expenditures,
for working capital needs and for other general corporate purposes.

On May 6, 2021, TE issued $150 million of 2.65% senior secured notes due 2028.
Proceeds from the issuance were used to repay short-term borrowings, fund TE's
ongoing capital expenditures and for other general corporate purposes.

On May 24, 2021, MAIT issued an additional $150 million of its 4.10% senior
notes due 2028 at an effective interest rate of approximately 2.55%. Proceeds
from the issuance were used to repay borrowings outstanding under FirstEnergy's
regulated company money pool, to fund MAIT's ongoing capital expenditures, to
fund working capital and for other general corporate purposes.

On June 10, 2021, JCP&L issued $500 million of 2.75% senior notes due 2032. Proceeds from the issuance were used to repay $450 million of short-term debt under the FE Revolving Facility, storm recovery and restoration costs and expenses, to fund JCP&L's ongoing capital expenditures, working capital requirements and for other general corporate purposes.

On June 30, 2021, FET repaid $350 million under the FET Revolving Facility, bringing the outstanding principal balance under the FET Revolving Facility to $150 million with $850 million of remaining availability.

Penn repaid $50 million in short-term borrowings under the FE Revolving Facility on June 30, 2021.



FirstEnergy does not currently anticipate the need to issue additional equity
through 2021 and expects to issue, subject to, among other things, market
conditions, pricing terms and business operations, up to $600 million of equity
annually in 2022 and 2023, including up to $100 million in equity for its
regular stock investment and employee benefit plans. FirstEnergy is also
exploring various alternatives to raise equity capital in a manner that could be
more value-enhancing to all stakeholders. FirstEnergy's expectations regarding
the amount and timing of any potential equity issuances are subject to, among
other matters, the ongoing government investigations and related lawsuits and
regulatory actions.

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

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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.

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 June 30,                                    For the Six Months Ended June 30,
                                          2021                2020                   Change                      2021                2020                  Change

Revenues                             $      2,622          $ 2,522          $  100               4  %       $      5,348          $ 5,231          $ 117              2  %

Operating expenses                          2,310            2,007             303              15  %              4,477            4,184            293              7  %

Operating income                              312              515            (203)            (39) %                871            1,047           (176)           (17) %

Other expenses, net                          (158)            (142)            (16)            (11) %               (295)            (710)           415             58  %

Income before income taxes                    154              373            (219)            (59) %                576              337            239             71  %

Income taxes                                   96               66              30              45  %                183                6            177                NM

Income from continuing
operations                                     58              307            (249)            (81) %                393              331             62             19  %

Discontinued operations, net
of tax                                          -                2              (2)                NM                  -               52            (52)               NM

Net income                           $         58          $   309          $ (251)            (81) %       $        393          $   383          $  10              3  %


*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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