FIRSTENERGY CORP

MANAGEMENT’S NARRATIVE DISCUSSION AND

ANALYSIS OF RESULTS OF OPERATIONS

JCP&L is a wholly owned subsidiary of FE. JCP&L conducts business in New Jersey by providing regulated electric transmission and distribution services in northern, western and east central New Jersey, representing $5.1 billion in rate base as of December 31, 2025. JCP&L is subject to regulation by the NJBPU and FERC.

JCP&L distributes electricity to approximately 1.2 million customers in New Jersey across its distribution footprint. JCP&L owns and operates transmission infrastructure that is used to transmit electricity, with revenues 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 are subject to an annual true-up based on actual rate base and costs. JCP&L procures electric supply to serve its BGS customers through a statewide auction process approved by the NJBPU. JCP&L’s results reflect the costs of securing and delivering electric generation to customers and net transmission expenses related to the delivery of electricity on JCP&L’s transmission facilities, including the deferral and amortization of certain costs.

As discussed in Note 1., "Organization and Basis of Presentation," of the Combined Notes to Financial Statements of the Registrants, during the fourth quarter of 2025, JCP&L identified an error in the recording of certain expenses for smart meter cost of removal associated with the deployment of its AMI program, resulting in an understatement of expense on the Statements of Income and Comprehensive Income and Regulatory assets/liabilities on the Balance Sheets since 2023. JCP&L evaluated the error, and the specific impact on each affected prior period was not material, however, as a result of the cumulative impact, JCP&L determined it should revise previously issued financial statements to correct the error and, in doing so, also corrected other immaterial errors. As such, JCP&L has revised the previously issued interim Results of Operations for the three and nine months ended September 30, 2025.

As of January 1, 2026, JCP&L made changes in how management evaluates operating performance and allocates resources. As a result of these changes, JCP&L reassessed its operating segments and determined that its operations are now managed as a single integrated business. Historically, JCP&L reported two operating segments, Distribution and Transmission. Accordingly, JCP&L changed its external segment reporting to present its results, including comparative periods, as a single reportable segment for the first nine months of 2026, and reclassified prior periods for comparability. There are no changes to JCP&L’s significant expenses, measure of profit or loss, or other segment items.

For additional information with respect to JCP&L, please see the information contained in FirstEnergy’s Management’s Discussion and Analysis of Financial Condition and Results of Operations under the following subheadings, which information is incorporated by reference herein: Executive Summary and Recent Developments, Regulatory Assets and Liabilities, Capital Resources and Liquidity, Guarantees and Other Assurances, Market Risk Information, Credit Risk, Outlook and New Accounting Pronouncements.

JCP&L Summary of Results of Operations —First Nine Months of 2026 Compared with First Nine Months of 2025

JCP&L’s financial results for the nine months ended September 30, 2026, and 2025, were as follows:

(1) Previously issued 2025 JCP&L amounts have been revised due to the correction of immaterial errors as discussed in Note 1., "Organization and Basis of Presentation," of the Combined Notes to Financial Statements of the Registrants.

Distribution deliveries for the residential and commercial classes were impacted by higher customer usage and demand as a result of the weather temperatures. Cooling degree days in the first nine months of 2026 were 6% above the same period of 2025 and 8% above normal. Heating degree days in the first nine months of 2026 were 10% above the same period of 2025 and 5% above normal.

JCP&L Results of Operations — First Nine Months of 2026 Compared with First Nine Months of 2025

Net income increased $40 million in the first nine months of 2026, as compared to the same period of 2025, primarily due to the absence in 2026 of severance and related costs that were recognized in the first quarter of 2025, true-up adjustments from the annual forward-looking transmission rate filing, lower other operating expenses, higher transmission revenues from regulated capital investments that increased rate base and increased customer usage, partially offset by financing costs.

Revenues

The $189 million increase in total revenues resulted from the following sources:

Distribution services revenue decreased $11 million during the first nine months of 2026, as compared to the same period of 2025, primarily due to the conclusion of the New Jersey ZEC program effective June 1, 2025 and the return of certain ZEC refunds as further described above. These refunds were offset by the amortization of a regulatory liability resulting in no impact to earnings. The revenue decrease was partially offset by higher rider revenues associated with certain regulated investment programs and higher customer usage.

Generation sales revenues increased $152 million during the first nine months of 2026, as compared to the same period of 2025, primarily due to higher non-shopping generation auction rates.

Transmission revenues increased $49 million during the first nine months of 2026, as compared to the same period of 2025, primarily due to higher recovery of transmission operating expenses, true-up adjustments from the annual forward-looking transmission rate filing, and higher rate base from regulated investment programs.

Operating Expenses

Total operating expenses increased $117 million primarily due to:

•Purchased power costs, which have no material impact to earnings, increased $121 million during the first nine months of 2026, as compared to the same period of 2025, primarily due to higher unit costs.

•Other operating expenses increased $323 million in the first nine months of 2026, as compared to the same period of 2025, primarily due to:

•Higher storm restoration expenses of $300 million, which were mostly deferred for future recovery;

•Higher energy efficiency and other state mandated program costs of $34 million, which were deferred for future recovery, resulting in no material impact to earnings;

•Higher formula rate transmission operating and maintenance expenses of $13 million, which have no material impact to earnings.

•The absence in 2026 of $6 million of severance and related costs associated with FirstEnergy’s organizational changes announced and recognized in the first quarter of 2025; and

•Lower other operating expenses of $23 million, primarily due to planned maintenance expenses and the absence in 2026 of a legal reserve recognized in the second quarter of 2025.

•Depreciation expense decreased $9 million in the first nine months of 2026, as compared to the same period of 2025, primarily dueto the accelerated amortization of legacy smart meters in New Jersey, which concluded in December 2025, partially offset bya higher asset base.

•Deferral of regulatory assets, net increased $319 million in the first nine months of 2026, as compared to the same period of 2025, primarily due to a $290 million increase from higher deferral of storm restoration costs, a $22 million increase from higher general and transmission deferrals, a $5 million increase related to the amortization of a regulatory liability associated with ZEC refunds, as further described above, and $2 million related to net increases in other deferrals.

Other Expenses

Total other expenses increased $24 million in the first nine months of 2026, as compared to the same period of 2025, primarily due to higher interest expense as a result of new debt issued since the third quarter of 2025, partially offset by higher capitalized interest and higher pension and OPEB non-service credits.

Income Taxes

The effective tax rate for the nine months ended September 30, 2026, and 2025, was 23.9% and 25.1%, respectively. The decrease in the effective tax rate was primarily due to an increase in the amortization of excess deferred income taxes.