FIRSTENERGY CORPFE

FIRSTENERGY CORP Earnings Per Share Disclosure

10-KFiled Feb 18, 20262 min read
EARNINGS PER SHARE OF COMMON STOCK
The disclosures in this note apply to FirstEnergy only.

EPS is calculated by dividing earnings attributable to FE by the weighted average number of common shares outstanding.

Basic EPS is computed using the weighted average number of common shares outstanding during the relevant period as the denominator. The denominator for diluted EPS of common stock reflects the weighted average of common shares outstanding plus the potential additional common shares that could result if dilutive securities and other agreements to issue common stock were exercised.
Diluted EPS reflects the dilutive effect of potential common shares from share-based awards and convertible securities. The dilutive effect of outstanding share-based awards was computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of the award would be used to purchase common stock at the average market price for the period. The dilutive effect of the 2026 Convertible Notes, 2029 Convertible Notes and the 2031 Convertible Notes, as further discussed in Note 11., "Capitalization" under Long-term debt and other long-term obligations, is computed using the if-converted method.

The following table reconciles basic and diluted EPS attributable to FE:

For the Years Ended December 31,
Reconciliation of Basic and Diluted EPS of Common Stock202520242023
(In millions, except per share amounts)
Earnings Attributable to FE - continuing operations$1,020 $978 $1,123 
Earnings Attributable to FE - discontinued operations, net of tax— — (21)
Earnings Attributable to FE$1,020 $978 $1,102 
Share Count information:
Weighted average number of basic shares outstanding577 575 573 
Assumed exercise of dilutive share-based awards1 2 1 
Weighted average number of diluted shares outstanding578 577 574 
EPS Attributable to FE:
Income from continuing operations, basic$1.77 $1.70 $1.96 
Discontinued operations, basic — — (0.04)
Basic EPS$1.77 $1.70 $1.92 
Income from continuing operations, diluted$1.76 $1.70 $1.96 
Discontinued operations, diluted— — (0.04)
Diluted EPS$1.76 $1.70 $1.92 

For the years ended December 31, 2025, 2024 and 2023, there was no material amount of shares excluded from the calculation of diluted shares outstanding, as their inclusion would be antidilutive.

The dilutive effect of the convertible notes is limited to the conversion obligation in excess of the aggregate principal amount of the convertible notes being converted. For the years ended December 31, 2025, 2024 and 2023, there was no dilutive effect resulting from the outstanding convertible notes as the average market price of FE shares of common stock was below the initial conversion price of $47.78 per share for the 2029 and 2031 Convertible Notes, and $46.42 per share for the 2026 Convertible Notes. See Note 10., "Fair Value Measurements," of the Combined Notes to Financial Statements of the Registrants for additional information on the convertible notes.

Historical Timeline

Fiscal YearFiled
2025Feb 18, 2026Showing above
2024Feb 27, 2025
2023Feb 13, 2024
2022Feb 13, 2023

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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