our information technology systems may be made. Also, we may be at an increased risk of a cyber-attack and/or data security breach due to the nature of our business. Any such cyber-attack, data security breach, damage, interruption and/or defect could: (i) disable our generation, transmission (including our interconnected regional transmission grid) and/or distribution services for a significant period of time; (ii) delay development and construction of new facilities or capital improvement projects; (iii) adversely affect our customer operations; (iv) corrupt data; and/or (v) result in unauthorized access to the information stored in our data centers and on our networks and those of our vendors and service providers, including, company proprietary information, supplier information, employee data, and personal customer data, causing the information to be publicly disclosed, lost or stolen or result in incidents that could result in economic loss and liability and harmful effects on the environment and human health, including loss of life. Additionally, because our regulated generation, transmission and distribution services are part of an interconnected system, disruption caused by a cybersecurity incident at another utility, electric generator, RTO, or commodity supplier could also adversely affect our operations. Although we maintain cyber insurance and property and casualty insurance, there can be no assurance that liabilities or losses we may incur, including as a result of cybersecurity-related litigation, will be covered under such policies or that the amount of insurance will be adequate. Further, as cyber threats become more difficult to detect and successfully defend against, there can be no assurance that we can implement adequate preventive measures, accurately assess the likelihood of a cyber-incident or quantify potential liabilities or losses. Also, we may not discover any data security breach and loss of information for a significant period of time after the data security breach occurs particularly those of our vendors and service providers. For all of these reasons, any such cyber incident could result in significant lost revenue, the inability to conduct critical business functions and serve customers for a significant period of time, the use of significant management resources, legal claims or proceedings, regulatory penalties, significant remediation costs, increased regulation, increased capital costs, increased protection costs for enhanced cybersecurity systems or personnel, damage to our reputation and/or the rendering of our internal controls ineffective, all of which could materially adversely affect our business, results of operations, financial condition and reputation. If Our "FE Forward" Initiative and Other Cost Saving Initiatives Do Not Achieve the Expected Benefits, There Could Be Negative Impacts to FirstEnergy's Business, Results of Operations and Financial Condition In February 2021, we announced a new initiative, FE Forward, to build upon our strong operations and business fundamentals and deliver immediate value and resilience, with targeted working capital improvements by 2022 and capital efficiencies ramping up through 2024 that would be redeployed in a more diverse capital investment program. In the two years that FE Forward has been active, we have realized working capital improvements and annualized capital expenditure efficiencies in line with our previously disclosed expectations. After assessing our accomplishments and shortfalls, FE Forward has been integrated into our ongoing efforts for continuous improvement, including the strategic reduction of operating expenditures and continued reinvestment in a more diverse capital program in support of our long-term strategy. As such, FirstEnergy has transitioned away from measuring these cash flow metrics and will no longer publish a forecast of these metrics. In addition to FE Forward, FirstEnergy will leverage other opportunities to reduce costs – such as filling only critical positions, implementing our facility optimization plans, as well as exploring other additional, sustainable opportunities, such as reducing contractor spend. There can be no assurance that FE Forward and our other cost saving initiatives will provide the anticipated benefits to our business, results of operations and financial condition in a timely manner, if at all. Our ability to achieve the benefits from FE Forward and our other cost saving initiatives is subject to many estimates and assumptions. FirstEnergy could experience unexpected delays and business disruptions resulting from supporting these initiatives, decreased productivity, and higher than anticipated costs, any of which may impair our ability to reduce operating expenditures and to achieve anticipated results or otherwise harm FirstEnergy's business, results of operations and financial condition. Inflation may negatively impact our financial condition, results of operations, liquidity, and cash flows. Prices for equipment, materials, supplies, employee labor contractor services, together with the cost of variable-rate debt have increased during 2022, and could continue to increase in 2023 and beyond. Long-term inflationary pressures may result in such prices continuing to increase more quickly than expected. Inflation increases costs for labor, materials and services, and we may be unable to secure these resources on economically acceptable terms or offset such costs with increased revenues, operating efficiencies, or cost savings, which may adversely impact our financial condition, results of operations, liquidity, and cash flows. Continued Supply Chain Disruptions Could Have an Adverse Effect on Our Results of Operations, Cash Flow and Financial Condition. We have continued to experience supply chain challenges due to economic conditions that have developed since the start of the COVID-19 pandemic, with order lead times increasing across numerous material categories and with some as much as doubling from pre-pandemic lead times. Some key suppliers have struggled with labor shortages and raw material availability, which along 14
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