|
Commission
|
|
Registrant; State of Incorporation;
|
|
I.R.S. Employer
|
File Number
|
|
Address; and Telephone Number
|
|
Identification No.
|
|
|
|
|
|
333-21011
|
|
FIRSTENERGY CORP.
|
|
34-1843785
|
|
|
(An Ohio Corporation)
|
|
|
|
|
76 South Main Street
|
|
|
|
|
Akron, OH 44308
|
|
|
|
|
Telephone (800)736
-
3402
|
|
|
|
|
|
|
|
000-53742
|
|
FIRSTENERGY SOLUTIONS CORP.
|
|
31-1560186
|
|
|
(An Ohio Corporation)
|
|
|
|
|
c/o FirstEnergy Corp.
|
|
|
|
|
76 South Main Street
|
|
|
|
|
Akron, OH 44308
|
|
|
|
|
Telephone (800)736-3402
|
|
|
Yes
þ
No
o
|
|
FirstEnergy Corp. and FirstEnergy Solutions Corp.
|
Yes
þ
No
o
|
|
FirstEnergy Corp. and FirstEnergy Solutions Corp.
|
Yes
o
No
þ
|
|
FirstEnergy Corp. and FirstEnergy Solutions Corp.
|
|
|
OUTSTANDING
|
|
CLASS
|
|
AS OF NOVEMBER 4, 2013
|
|
FirstEnergy Corp., $0.10 par value
|
|
418,229,541
|
|
FirstEnergy Solutions Corp., no par value
|
|
7
|
|
|
•
|
The speed and nature of increased competition in the electric utility industry, in general, and the retail sales market in particular.
|
•
|
The impact of the regulatory process on the pending matters before FERC and in the various states in which we do business including, but not limited to, matters related to rates and pending rate cases.
|
•
|
The uncertainties of various cost recovery and cost allocation issues resulting from ATSI's realignment into PJM.
|
•
|
Economic or weather conditions affecting future sales and margins.
|
•
|
Regulatory outcomes associated with storm restoration, including but not limited to Hurricane Sandy, Hurricane Irene and the October snowstorm of 2011.
|
•
|
Changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil, and availability and their impact on retail margins.
|
•
|
The continued ability of our regulated utilities to recover their costs.
|
•
|
Costs being higher than anticipated and the success of our policies to control costs and to mitigate low energy, capacity and market prices.
|
•
|
Other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission, water discharge, water intake and coal combustion residual regulations, the potential impacts of CSAPR, CAIR, and/or any laws, rules or regulations that ultimately replace CAIR, and the effects of the EPA's MATS rules including our estimated costs of compliance.
|
•
|
The uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to deactivate or idle certain generating units).
|
•
|
The uncertainties associated with the deactivation of certain older regulated and competitive fossil units including the impact on vendor commitments, and the timing thereof as they relate to, among other things, RMR arrangements and the reliability of the transmission grid.
|
•
|
Adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant).
|
•
|
Issues arising from the indications of cracking in the shield building at Davis-Besse.
|
•
|
The impact of future changes to the operational status or availability of our generating units.
|
•
|
The risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments.
|
•
|
Replacement power costs being higher than anticipated or not fully hedged.
|
•
|
The ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates.
|
•
|
Changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates.
|
•
|
The ability to accomplish or realize anticipated benefits from strategic and financial goals including, but not limited to, the ability to reduce costs and to successfully complete our announced financial plans designed to improve our credit metrics and strengthen our balance sheet, including but not limited to, proposed capital raising and debt reduction initiatives, and the proposed sale of non-core hydro assets.
|
•
|
Our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins.
|
•
|
The ability to experience growth in the Regulated Distribution and Regulated Transmission segments and to continue to successfully implement our direct retail sales strategy in the Competitive Energy Services segment.
|
•
|
Changing market conditions that could affect the measurement of liabilities and the value of assets held in our NDTs, pension trusts and other trust funds, and cause us and our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated.
|
•
|
The impact of changes to material accounting policies.
|
•
|
The ability to access the public securities and other capital and credit markets in accordance with our announced financial plan, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries.
|
•
|
Actions that may be taken by credit rating agencies that could negatively affect us and our subsidiaries' access to financing, increase the costs thereof, and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees.
|
•
|
Changes in national and regional economic conditions affecting us, our subsidiaries and our major industrial and commercial customers, and other counterparties including fuel suppliers, with which we do business.
|
•
|
Issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business.
|
•
|
The risks and other factors discussed from time to time in our SEC filings, and other similar factors.
|
TABLE OF CONTENTS
|
|
|
Page
|
|
|
Part I. Financial Information
|
|
|
|
|
|
Item 1. Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FirstEnergy Corp.
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 3.
Defaults Upon Senior Securities
|
|
|
|
Item 4.
Mine Safety Disclosures
|
|
|
|
Item 5. Other Information
|
|
|
|
GLOSSARY OF TERMS,
Continued
|
|
ASLB
|
Atomic Safety and Licensing Board
|
BGS
|
Basic Generation Service
|
CAA
|
Clean Air Act
|
CAIR
|
Clean Air Interstate Rule
|
CBP
|
Competitive Bid Process
|
CCB
|
Coal Combustion By-products
|
CCR
|
Coal Combustion Residuals
|
CDWR
|
California Department of Water Resources
|
CERCLA
|
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
|
CFR
|
Code of Federal Regulations
|
CO
2
|
Carbon Dioxide
|
CSAPR
|
Cross-State Air Pollution Rule
|
CWA
|
Clean Water Act
|
DCR
|
Delivery Capital Recovery
|
DOE
|
United States Department of Energy
|
DOJ
|
United States Department of Justice
|
DSP
|
Default Service Plan
|
EDC
|
Electric Distribution Company
|
EDCP
|
Executive Deferred Compensation Plan
|
EE&C
|
Energy Efficiency and Conservation
|
EGS
|
Electric Generation Supplier
|
ELPC
|
Environmental Law & Policy Center
|
ENEC
|
Expanded Net Energy Cost
|
EPA
|
United States Environmental Protection Agency
|
ERO
|
Electric Reliability Organization
|
ESP
|
Electric Security Plan
|
FERC
|
Federal Energy Regulatory Commission
|
Fitch
|
Fitch Ratings
|
FMB
|
First Mortgage Bond
|
FPA
|
Federal Power Act
|
FTR
|
Financial Transmission Right
|
GAAP
|
Accounting Principles Generally Accepted in the United States of America
|
GHG
|
Greenhouse Gases
|
GWH
|
Gigawatt-hour
|
HCL
|
Hydrochloric Acid
|
ICE
|
IntercontinentalExchange, Inc.
|
ICG
|
International Coal Group Inc.
|
ILP
|
Integrated License Application Process
|
kV
|
Kilovolt
|
KWH
|
Kilowatt-hour
|
LAR
|
License Amendment Request
|
LBR
|
Little Blue Run
|
LCAPP
|
Long-Term Capacity Agreement Pilot Program
|
LOC
|
Letter of Credit
|
LSE
|
Load Serving Entity
|
MAAC
|
Mid-Atlantic Region of PJM
|
MATS
|
Mercury and Air Toxics Standards
|
MDPSC
|
Maryland Public Service Commission
|
MISO
|
Midcontinent Independent System Operator, Inc.
|
mmBTU
|
One Million British Thermal Units
|
Moody’s
|
Moody’s Investors Service, Inc.
|
GLOSSARY OF TERMS,
Continued
|
|
MOPR
|
Minimum Offer Price Rule
|
MTEP
|
MISO Regional Transmission Expansion Plan
|
MVP
|
Multi-value Project
|
MW
|
Megawatt
|
MWH
|
Megawatt-hour
|
NDT
|
Nuclear Decommissioning Trust
|
NERC
|
North American Electric Reliability Corporation
|
NGO
|
Non-Governmental Organization
|
NJBPU
|
New Jersey Board of Public Utilities
|
NNSR
|
Non-Attainment New Source Review
|
NOV
|
Notice of Violation
|
NOx
|
Nitrogen Oxide
|
NPDES
|
National Pollutant Discharge Elimination System
|
NRC
|
Nuclear Regulatory Commission
|
NSR
|
New Source Review
|
NUG
|
Non-Utility Generation
|
NYPSC
|
New York State Public Service Commission
|
NYSEG
|
New York State Electric and Gas
|
OCC
|
Ohio Consumers' Counsel
|
OPEB
|
Other Post-Employment Benefits
|
OTTI
|
Other Than Temporary Impairments
|
OVEC
|
Ohio Valley Electric Corporation
|
PA DEP
|
Pennsylvania Department of Environmental Protection
|
PCB
|
Polychlorinated Biphenyl
|
PCRB
|
Pollution Control Revenue Bond
|
PJM
|
PJM Interconnection LLC
|
PM
|
Particulate Matter
|
POLR
|
Provider of Last Resort
|
PPUC
|
Pennsylvania Public Utility Commission
|
PSA
|
Power Supply Agreement
|
PSD
|
Prevention of Significant Deterioration
|
PUCO
|
Public Utilities Commission of Ohio
|
PURPA
|
Public Utility Regulatory Policies Act of 1978
|
RCRA
|
Resource Conservation and Recovery Act
|
REC
|
Renewable Energy Credit
|
REIT
|
Real Estate Investment Trust
|
RFC
|
Reliability
First
Corporation
|
RFP
|
Request for Proposal
|
RGGI
|
Regional Greenhouse Gas Initiative
|
RMR
|
Reliability Must-Run
|
ROP
|
Reactor Oversight Process
|
RPM
|
Reliability Pricing Model
|
RTEP
|
Regional Transmission Expansion Plan
|
RTO
|
Regional Transmission Organization
|
S&P
|
Standard & Poor’s Ratings Service
|
SAIDI
|
System Average Interruption Duration Index
|
SAIFI
|
System Average Interruption Frequency Index
|
SB221
|
Amended Substitute Senate Bill 221
|
SBC
|
Societal Benefits Charge
|
SEC
|
United States Securities and Exchange Commission
|
SIP
|
State Implementation Plan(s) Under the Clean Air Act
|
*
|
Includes excise tax collections of
$117 million
and
$123 million
in the three months ended
September 30, 2013
and
2012
, respectively, and
$346 million
and
$351 million
in the
nine
months ended
September 30, 2013
and
2012
, respectively.
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
|
||||||||||||
(In millions)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME
|
|
$
|
218
|
|
|
$
|
425
|
|
|
$
|
250
|
|
|
$
|
919
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pensions and OPEB prior service costs
|
|
(47
|
)
|
|
(47
|
)
|
|
(148
|
)
|
|
(148
|
)
|
|
||||
Amortized losses on derivative hedges
|
|
2
|
|
|
—
|
|
|
4
|
|
|
1
|
|
|
||||
Change in unrealized gain on available-for-sale securities
|
|
6
|
|
|
1
|
|
|
3
|
|
|
13
|
|
|
||||
Other comprehensive loss
|
|
(39
|
)
|
|
(46
|
)
|
|
(141
|
)
|
|
(134
|
)
|
|
||||
Income tax benefits on other comprehensive loss
|
|
(15
|
)
|
|
(24
|
)
|
|
(55
|
)
|
|
(75
|
)
|
|
||||
Other comprehensive loss, net of tax
|
|
(24
|
)
|
|
(22
|
)
|
|
(86
|
)
|
|
(59
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
COMPREHENSIVE INCOME
|
|
194
|
|
|
403
|
|
|
164
|
|
|
860
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
COMPREHENSIVE INCOME AVAILABLE TO FIRSTENERGY CORP.
|
|
$
|
194
|
|
|
$
|
403
|
|
|
$
|
164
|
|
|
$
|
859
|
|
|
(In millions, except share amounts)
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
|
|
|
||
CURRENT ASSETS:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
222
|
|
|
$
|
172
|
|
Receivables-
|
|
|
|
|
|
|
||
Customers, net of allowance for uncollectible accounts of $41 in 2013 and $40 in 2012
|
|
1,579
|
|
|
1,614
|
|
||
Other, net of allowance for uncollectible accounts of $3 in 2013 and $4 in 2012
|
|
231
|
|
|
315
|
|
||
Materials and supplies, at average cost
|
|
731
|
|
|
861
|
|
||
Prepaid taxes
|
|
104
|
|
|
119
|
|
||
Derivatives
|
|
140
|
|
|
160
|
|
||
Accumulated deferred income taxes
|
|
290
|
|
|
319
|
|
||
Other
|
|
262
|
|
|
208
|
|
||
|
|
3,559
|
|
|
3,768
|
|
||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
|
|
|
||
In service
|
|
44,089
|
|
|
43,210
|
|
||
Less — Accumulated provision for depreciation
|
|
13,167
|
|
|
12,600
|
|
||
|
|
30,922
|
|
|
30,610
|
|
||
Construction work in progress
|
|
2,301
|
|
|
2,293
|
|
||
|
|
33,223
|
|
|
32,903
|
|
||
INVESTMENTS:
|
|
|
|
|
|
|
||
Nuclear plant decommissioning trusts
|
|
2,183
|
|
|
2,204
|
|
||
Investments in lease obligation bonds
|
|
46
|
|
|
54
|
|
||
Other
|
|
876
|
|
|
936
|
|
||
|
|
3,105
|
|
|
3,194
|
|
||
|
|
|
|
|
||||
ASSETS HELD FOR SALE (NOTE 16)
|
|
234
|
|
|
—
|
|
||
|
|
|
|
|
||||
DEFERRED CHARGES AND OTHER ASSETS:
|
|
|
|
|
|
|
||
Goodwill
|
|
6,418
|
|
|
6,447
|
|
||
Regulatory assets
|
|
2,146
|
|
|
2,375
|
|
||
Other
|
|
1,698
|
|
|
1,719
|
|
||
|
|
10,262
|
|
|
10,541
|
|
||
|
|
$
|
50,383
|
|
|
$
|
50,406
|
|
LIABILITIES AND CAPITALIZATION
|
|
|
|
|
|
|
||
CURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Currently payable long-term debt
|
|
$
|
1,889
|
|
|
$
|
1,999
|
|
Short-term borrowings
|
|
3,404
|
|
|
1,969
|
|
||
Accounts payable
|
|
995
|
|
|
1,599
|
|
||
Accrued taxes
|
|
401
|
|
|
543
|
|
||
Accrued compensation and benefits
|
|
289
|
|
|
331
|
|
||
Derivatives
|
|
105
|
|
|
126
|
|
||
Other
|
|
872
|
|
|
1,038
|
|
||
|
|
7,955
|
|
|
7,605
|
|
||
CAPITALIZATION:
|
|
|
|
|
|
|
||
Common stockholders’ equity-
|
|
|
|
|
|
|
||
Common stock, $0.10 par value, authorized 490,000,000 shares - 418,216,437 shares outstanding
|
|
42
|
|
|
42
|
|
||
Other paid-in capital
|
|
9,755
|
|
|
9,769
|
|
||
Accumulated other comprehensive income
|
|
299
|
|
|
385
|
|
||
Retained earnings
|
|
2,448
|
|
|
2,888
|
|
||
Total common stockholders’ equity
|
|
12,544
|
|
|
13,084
|
|
||
Noncontrolling interest
|
|
3
|
|
|
9
|
|
||
Total equity
|
|
12,547
|
|
|
13,093
|
|
||
Long-term debt and other long-term obligations
|
|
15,291
|
|
|
15,179
|
|
||
|
|
27,838
|
|
|
28,272
|
|
||
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Accumulated deferred income taxes
|
|
6,603
|
|
|
6,616
|
|
||
Retirement benefits
|
|
3,104
|
|
|
3,080
|
|
||
Asset retirement obligations
|
|
1,834
|
|
|
1,599
|
|
||
Deferred gain on sale and leaseback transaction
|
|
866
|
|
|
892
|
|
||
Adverse power contract liability
|
|
467
|
|
|
506
|
|
||
Other
|
|
1,716
|
|
|
1,836
|
|
||
|
|
14,590
|
|
|
14,529
|
|
||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 13)
|
|
|
|
|
|
|
||
|
|
$
|
50,383
|
|
|
$
|
50,406
|
|
|
|
Nine Months Ended September 30
|
|
||||||
(In millions)
|
|
2013
|
|
2012
|
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||
Net Income
|
|
$
|
250
|
|
|
$
|
919
|
|
|
Adjustments to reconcile net income to net cash from operating activities-
|
|
|
|
|
|
||||
Provision for depreciation
|
|
909
|
|
|
834
|
|
|
||
Amortization of regulatory assets, net
|
|
443
|
|
|
198
|
|
|
||
Nuclear fuel amortization
|
|
156
|
|
|
156
|
|
|
||
Deferred purchased power and other costs
|
|
(61
|
)
|
|
(214
|
)
|
|
||
Deferred income taxes and investment tax credits, net
|
|
114
|
|
|
712
|
|
|
||
Impairments of long-lived assets
|
|
473
|
|
|
—
|
|
|
||
Investment impairments
|
|
74
|
|
|
10
|
|
|
||
Deferred rents and lease market valuation liability
|
|
(22
|
)
|
|
(62
|
)
|
|
||
Retirement benefits
|
|
(133
|
)
|
|
(97
|
)
|
|
||
Gain on asset sales
|
|
(21
|
)
|
|
(17
|
)
|
|
||
Commodity derivative transactions, net (Note 10)
|
|
24
|
|
|
(80
|
)
|
|
||
Pension trust contributions
|
|
—
|
|
|
(600
|
)
|
|
||
Cash collateral, net
|
|
(67
|
)
|
|
(3
|
)
|
|
||
Loss on debt redemptions
|
|
132
|
|
|
—
|
|
|
||
Make-whole premiums paid on debt redemptions
|
|
(181
|
)
|
|
—
|
|
|
||
Income from discontinued operations (Note 16)
|
|
(17
|
)
|
|
(11
|
)
|
|
||
Decrease (increase) in operating assets-
|
|
|
|
|
|
||||
Receivables
|
|
(7
|
)
|
|
(41
|
)
|
|
||
Materials and supplies
|
|
117
|
|
|
(63
|
)
|
|
||
Prepayments and other current assets
|
|
(59
|
)
|
|
(151
|
)
|
|
||
Increase (decrease) in operating liabilities-
|
|
|
|
|
|
||||
Accounts payable
|
|
(279
|
)
|
|
(227
|
)
|
|
||
Accrued taxes
|
|
(146
|
)
|
|
(58
|
)
|
|
||
Accrued interest
|
|
29
|
|
|
50
|
|
|
||
Accrued compensation and benefits
|
|
(43
|
)
|
|
(71
|
)
|
|
||
Other
|
|
(14
|
)
|
|
92
|
|
|
||
Net cash provided from operating activities
|
|
1,671
|
|
|
1,276
|
|
|
||
|
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||
New Financing-
|
|
|
|
|
|
||||
Long-term debt
|
|
2,745
|
|
|
660
|
|
|
||
Short-term borrowings, net
|
|
1,435
|
|
|
1,604
|
|
|
||
Redemptions and Repayments-
|
|
|
|
|
|
||||
Long-term debt
|
|
(2,662
|
)
|
|
(870
|
)
|
|
||
Tender premiums paid on debt redemptions
|
|
(110
|
)
|
|
—
|
|
|
||
Common stock dividend payments
|
|
(690
|
)
|
|
(690
|
)
|
|
||
Other
|
|
(64
|
)
|
|
(42
|
)
|
|
||
Net cash provided from financing activities
|
|
654
|
|
|
662
|
|
|
||
|
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||
Property additions
|
|
(1,960
|
)
|
|
(1,686
|
)
|
|
||
Nuclear fuel
|
|
(159
|
)
|
|
(207
|
)
|
|
||
Sales of investment securities held in trusts
|
|
1,545
|
|
|
2,133
|
|
|
||
Purchases of investment securities held in trusts
|
|
(1,567
|
)
|
|
(2,188
|
)
|
|
||
Cash investments
|
|
(12
|
)
|
|
100
|
|
|
||
Asset removal costs
|
|
(125
|
)
|
|
(119
|
)
|
|
||
Other
|
|
3
|
|
|
(23
|
)
|
|
||
Net cash used for investing activities
|
|
(2,275
|
)
|
|
(1,990
|
)
|
|
||
|
|
|
|
|
|
||||
Net change in cash and cash equivalents
|
|
50
|
|
|
(52
|
)
|
|
||
Cash and cash equivalents at beginning of period
|
|
172
|
|
|
202
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
222
|
|
|
$
|
150
|
|
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(In millions)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
STATEMENTS OF INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|||||||
Electric sales to non-affiliates
|
|
$
|
1,455
|
|
|
$
|
1,358
|
|
|
$
|
4,066
|
|
|
$
|
4,035
|
|
Electric sales to affiliates
|
|
186
|
|
|
155
|
|
|
482
|
|
|
385
|
|
||||
Other
|
|
38
|
|
|
37
|
|
|
107
|
|
|
91
|
|
||||
Total revenues
|
|
1,679
|
|
|
1,550
|
|
|
4,655
|
|
|
4,511
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel
|
|
304
|
|
|
303
|
|
|
936
|
|
|
978
|
|
||||
Purchased power from affiliates
|
|
132
|
|
|
131
|
|
|
401
|
|
|
381
|
|
||||
Purchased power from non-affiliates
|
|
724
|
|
|
502
|
|
|
1,755
|
|
|
1,425
|
|
||||
Other operating expenses
|
|
339
|
|
|
342
|
|
|
1,105
|
|
|
1,028
|
|
||||
Provision for depreciation
|
|
80
|
|
|
70
|
|
|
231
|
|
|
200
|
|
||||
General taxes
|
|
35
|
|
|
35
|
|
|
106
|
|
|
104
|
|
||||
Total operating expenses
|
|
1,614
|
|
|
1,383
|
|
|
4,534
|
|
|
4,116
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
OPERATING INCOME
|
|
65
|
|
|
167
|
|
|
121
|
|
|
395
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss on debt redemptions
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
—
|
|
||||
Investment income (loss)
|
|
(3
|
)
|
|
38
|
|
|
(4
|
)
|
|
50
|
|
||||
Miscellaneous income
|
|
21
|
|
|
1
|
|
|
29
|
|
|
25
|
|
||||
Interest expense — affiliates
|
|
(1
|
)
|
|
(3
|
)
|
|
(7
|
)
|
|
(7
|
)
|
||||
Interest expense — other
|
|
(35
|
)
|
|
(51
|
)
|
|
(126
|
)
|
|
(140
|
)
|
||||
Capitalized interest
|
|
9
|
|
|
9
|
|
|
28
|
|
|
27
|
|
||||
Total other expense
|
|
(9
|
)
|
|
(6
|
)
|
|
(183
|
)
|
|
(45
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
56
|
|
|
161
|
|
|
(62
|
)
|
|
350
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
INCOME TAXES (BENEFITS)
|
|
23
|
|
|
65
|
|
|
(19
|
)
|
|
139
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
|
$
|
33
|
|
|
$
|
96
|
|
|
$
|
(43
|
)
|
|
$
|
211
|
|
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations (net of income taxes of $5, $3, $8 and $6, respectively) (Note 16)
|
|
7
|
|
|
5
|
|
|
14
|
|
|
11
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME (LOSS)
|
|
$
|
40
|
|
|
$
|
101
|
|
|
$
|
(29
|
)
|
|
$
|
222
|
|
|
|
|
|
|
|
|
|
|
||||||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME (LOSS)
|
|
$
|
40
|
|
|
$
|
101
|
|
|
$
|
(29
|
)
|
|
$
|
222
|
|
|
|
|
|
|
|
|
|
|
||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
||||||
Pensions and OPEB prior service costs
|
|
(5
|
)
|
|
(5
|
)
|
|
(16
|
)
|
|
(2
|
)
|
||||
Amortized loss on derivative hedges
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Change in unrealized gain on available-for-sale securities
|
|
5
|
|
|
(2
|
)
|
|
2
|
|
|
11
|
|
||||
Other comprehensive income (loss)
|
|
(1
|
)
|
|
(9
|
)
|
|
(17
|
)
|
|
3
|
|
||||
Income taxes (benefits) on other comprehensive income (loss)
|
|
(1
|
)
|
|
(3
|
)
|
|
(7
|
)
|
|
1
|
|
||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
(6
|
)
|
|
(10
|
)
|
|
2
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
COMPREHENSIVE INCOME (LOSS)
|
|
$
|
40
|
|
|
$
|
95
|
|
|
$
|
(39
|
)
|
|
$
|
224
|
|
(In millions, except share amounts)
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
|
|
|
||
CURRENT ASSETS:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
2
|
|
|
$
|
3
|
|
Receivables-
|
|
|
|
|
|
|
||
Customers, net of allowance for uncollectible accounts of $14 in 2013 and $16 in 2012
|
|
524
|
|
|
483
|
|
||
Affiliated companies
|
|
519
|
|
|
379
|
|
||
Other, net of allowance for uncollectible accounts of $3 in 2013 and $2 in 2012
|
|
123
|
|
|
91
|
|
||
Notes receivable from affiliated companies
|
|
254
|
|
|
276
|
|
||
Materials and supplies
|
|
439
|
|
|
505
|
|
||
Derivatives
|
|
139
|
|
|
158
|
|
||
Prepayments and other
|
|
105
|
|
|
87
|
|
||
|
|
2,105
|
|
|
1,982
|
|
||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
|
|
|
||
In service
|
|
12,508
|
|
|
11,997
|
|
||
Less — Accumulated provision for depreciation
|
|
4,649
|
|
|
4,408
|
|
||
|
|
7,859
|
|
|
7,589
|
|
||
Construction work in progress
|
|
1,116
|
|
|
1,141
|
|
||
|
|
8,975
|
|
|
8,730
|
|
||
INVESTMENTS:
|
|
|
|
|
|
|
||
Nuclear plant decommissioning trusts
|
|
1,270
|
|
|
1,283
|
|
||
Other
|
|
11
|
|
|
12
|
|
||
|
|
1,281
|
|
|
1,295
|
|
||
|
|
|
|
|
||||
ASSETS HELD FOR SALE (NOTE 16)
|
|
121
|
|
|
—
|
|
||
|
|
|
|
|
||||
DEFERRED CHARGES AND OTHER ASSETS:
|
|
|
|
|
|
|
||
Customer intangibles
|
|
99
|
|
|
110
|
|
||
Goodwill
|
|
23
|
|
|
24
|
|
||
Property taxes
|
|
36
|
|
|
36
|
|
||
Unamortized sale and leaseback costs
|
|
161
|
|
|
119
|
|
||
Derivatives
|
|
65
|
|
|
99
|
|
||
Other
|
|
268
|
|
|
253
|
|
||
|
|
652
|
|
|
641
|
|
||
|
|
$
|
13,134
|
|
|
$
|
12,648
|
|
LIABILITIES AND CAPITALIZATION
|
|
|
|
|
|
|
||
CURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Currently payable long-term debt
|
|
$
|
859
|
|
|
$
|
1,102
|
|
Short-term borrowings
|
|
4
|
|
|
4
|
|
||
Accounts payable-
|
|
|
|
|
|
|
||
Affiliated companies
|
|
776
|
|
|
726
|
|
||
Other
|
|
213
|
|
|
159
|
|
||
Accrued taxes
|
|
42
|
|
|
171
|
|
||
Derivatives
|
|
103
|
|
|
124
|
|
||
Other
|
|
176
|
|
|
280
|
|
||
|
|
2,173
|
|
|
2,566
|
|
||
CAPITALIZATION:
|
|
|
|
|
|
|
||
Common stockholder's equity-
|
|
|
|
|
|
|
||
Common stock, without par value, authorized 750 shares- 7 shares outstanding
|
|
3,078
|
|
|
1,573
|
|
||
Accumulated other comprehensive income
|
|
62
|
|
|
72
|
|
||
Retained earnings
|
|
2,089
|
|
|
2,118
|
|
||
Total common stockholder's equity
|
|
5,229
|
|
|
3,763
|
|
||
Long-term debt and other long-term obligations
|
|
2,178
|
|
|
3,118
|
|
||
|
|
7,407
|
|
|
6,881
|
|
||
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Deferred gain on sale and leaseback transaction
|
|
866
|
|
|
892
|
|
||
Accumulated deferred income taxes
|
|
699
|
|
|
515
|
|
||
Asset retirement obligations
|
|
1,159
|
|
|
965
|
|
||
Retirement benefits
|
|
255
|
|
|
241
|
|
||
Derivatives
|
|
22
|
|
|
37
|
|
||
Other
|
|
553
|
|
|
551
|
|
||
|
|
3,554
|
|
|
3,201
|
|
||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 13)
|
|
|
|
|
|
|
||
|
|
$
|
13,134
|
|
|
$
|
12,648
|
|
|
|
Nine Months Ended September 30
|
|
||||||
(In millions)
|
|
2013
|
|
2012
|
|
||||
|
|
|
|
|
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||
Net Income (Loss)
|
|
$
|
(29
|
)
|
|
$
|
222
|
|
|
Adjustments to reconcile net income (loss) to net cash from operating activities-
|
|
|
|
|
|
||||
Provision for depreciation
|
|
231
|
|
|
200
|
|
|
||
Nuclear fuel amortization
|
|
156
|
|
|
159
|
|
|
||
Deferred rents and lease market valuation liability
|
|
(36
|
)
|
|
(144
|
)
|
|
||
Deferred income taxes and investment tax credits, net
|
|
205
|
|
|
123
|
|
|
||
Investment impairments
|
|
66
|
|
|
8
|
|
|
||
Pension trust contribution
|
|
—
|
|
|
(209
|
)
|
|
||
Gain on asset sales
|
|
(20
|
)
|
|
(17
|
)
|
|
||
Commodity derivative transactions, net (Note 10)
|
|
24
|
|
|
(67
|
)
|
|
||
Cash collateral, net
|
|
(35
|
)
|
|
(4
|
)
|
|
||
Loss on debt redemptions
|
|
103
|
|
|
—
|
|
|
||
Make-whole premiums paid on debt redemptions
|
|
(31
|
)
|
|
—
|
|
|
||
Income from discontinued operations (Note 16)
|
|
(14
|
)
|
|
(11
|
)
|
|
||
Decrease (increase) in operating assets-
|
|
|
|
|
|
||||
Receivables
|
|
(214
|
)
|
|
95
|
|
|
||
Materials and supplies
|
|
66
|
|
|
(40
|
)
|
|
||
Prepayments and other current assets
|
|
(22
|
)
|
|
5
|
|
|
||
Increase (decrease) in operating liabilities-
|
|
|
|
|
|
||||
Accounts payable
|
|
129
|
|
|
312
|
|
|
||
Accrued taxes
|
|
(131
|
)
|
|
(150
|
)
|
|
||
Accrued compensation and benefits
|
|
(5
|
)
|
|
10
|
|
|
||
Other
|
|
(54
|
)
|
|
9
|
|
|
||
Net cash provided from operating activities
|
|
389
|
|
|
501
|
|
|
||
|
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||
New financing-
|
|
|
|
|
|
||||
Long-term debt
|
|
—
|
|
|
560
|
|
|
||
Short-term borrowings, net
|
|
—
|
|
|
3
|
|
|
||
Equity contribution from parent
|
|
1,500
|
|
|
—
|
|
|
||
Redemptions and repayments-
|
|
|
|
|
|
||||
Long-term debt
|
|
(1,179
|
)
|
|
(246
|
)
|
|
||
Tender premiums paid on debt redemptions
|
|
(67
|
)
|
|
—
|
|
|
||
Other
|
|
(7
|
)
|
|
(9
|
)
|
|
||
Net cash provided from financing activities
|
|
247
|
|
|
308
|
|
|
||
|
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||
Property additions
|
|
(477
|
)
|
|
(535
|
)
|
|
||
Nuclear fuel
|
|
(159
|
)
|
|
(207
|
)
|
|
||
Proceeds from asset sales
|
|
21
|
|
|
17
|
|
|
||
Sales of investment securities held in trusts
|
|
650
|
|
|
1,167
|
|
|
||
Purchases of investment securities held in trusts
|
|
(694
|
)
|
|
(1,194
|
)
|
|
||
Loans to affiliated companies, net
|
|
22
|
|
|
(55
|
)
|
|
||
Other
|
|
—
|
|
|
(6
|
)
|
|
||
Net cash used for investing activities
|
|
(637
|
)
|
|
(813
|
)
|
|
||
|
|
|
|
|
|
||||
Net change in cash and cash equivalents
|
|
(1
|
)
|
|
(4
|
)
|
|
||
Cash and cash equivalents at beginning of period
|
|
3
|
|
|
7
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
2
|
|
|
$
|
3
|
|
|
Note
Number
|
|
Page
Number
|
|
|
|
|
|
|
Goodwill
|
||
|
|
|
Impairment of Long-Lived Assets
|
||
|
|
|
Earnings Per Share of Common Stock
|
||
|
|
|
|
|
|
Accumulated Other Comprehensive Income
|
||
|
|
|
Income Taxes
|
||
|
|
|
Variable Interest Entities
|
||
|
|
|
Fair Value Measurements
|
||
|
|
|
Derivative Instruments
|
||
|
|
|
Asset Retirement Obligations
|
||
|
|
|
Regulatory Matters
|
||
|
|
|
1
3
|
Commitments, Guarantees and Contingencies
|
|
|
|
|
1
4
|
Supplemental Guarantor Information
|
|
|
|
|
1
5
|
Segment Information
|
|
|
|
|
1
6
|
Discontinued Operations and Assets Held for Sale
|
Goodwill
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive Energy Services
|
|
Other/Corporate
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Balance as of December 31, 2012
|
|
$
|
5,025
|
|
|
$
|
526
|
|
|
$
|
896
|
|
|
$
|
—
|
|
|
$
|
6,447
|
|
Classification to Assets Held for Sale
(1)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||||
Balance as of September 30, 2013
|
|
$
|
5,025
|
|
|
$
|
526
|
|
|
$
|
867
|
|
|
$
|
—
|
|
|
$
|
6,418
|
|
(1)
|
See Note 16, Discontinued Operations and Assets Held for Sale.
|
Generating Units
|
MW Capacity
|
Location
|
Hatfield's Ferry, Units 1-3
|
1,710
|
Masontown, Pennsylvania
|
Mitchell, Units 2-3
|
370
|
Courtney, Pennsylvania
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
Reconciliation of Basic and Diluted Earnings per Share of Common Stock
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In millions, except per share amounts)
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||
Net income from continuing operations
|
|
$
|
209
|
|
|
$
|
422
|
|
|
$
|
233
|
|
|
$
|
908
|
|
Less: Income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Income from continuing operations available to common shareholders
|
|
209
|
|
|
422
|
|
|
233
|
|
|
907
|
|
||||
Discontinued operations (Note 16)
|
|
9
|
|
|
3
|
|
|
17
|
|
|
11
|
|
||||
Earnings available to FirstEnergy Corp.
|
|
$
|
218
|
|
|
$
|
425
|
|
|
$
|
250
|
|
|
$
|
918
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of basic shares outstanding
|
|
418
|
|
|
417
|
|
|
418
|
|
|
418
|
|
||||
Assumed exercise of dilutive stock options and awards
(1)
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
||||
Weighted average number of diluted shares outstanding
|
|
419
|
|
|
419
|
|
|
419
|
|
|
419
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations
|
|
$
|
0.50
|
|
|
$
|
1.01
|
|
|
$
|
0.56
|
|
|
$
|
2.17
|
|
Discontinued operations (Note 16)
|
|
0.02
|
|
|
0.01
|
|
|
0.04
|
|
|
0.03
|
|
||||
Net earnings per basic share
|
|
$
|
0.52
|
|
|
$
|
1.02
|
|
|
$
|
0.60
|
|
|
$
|
2.20
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations
|
|
$
|
0.50
|
|
|
$
|
1.00
|
|
|
$
|
0.56
|
|
|
$
|
2.16
|
|
Discontinued operations (Note 16)
|
|
0.02
|
|
|
0.01
|
|
|
0.04
|
|
|
0.03
|
|
||||
Net earnings per diluted share
|
|
$
|
0.52
|
|
|
$
|
1.01
|
|
|
$
|
0.60
|
|
|
$
|
2.19
|
|
(1)
|
For the three months and nine ended
September 30, 2013
,
2 million
shares were excluded from the calculation of diluted shares outstanding, as their inclusion would be antidilutive. For the three and nine months ended
September 30, 2012
, less than
1 million
shares were excluded from the calculation of diluted shares outstanding, as their inclusion would be antidilutive.
|
Components of Net Periodic Benefit Costs (Credits)
|
|
Pensions
|
OPEB
|
|||||||||||||
For the Three Months Ended September 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In millions)
|
||||||||||||||
Service costs
|
|
$
|
49
|
|
|
$
|
40
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest costs
|
|
93
|
|
|
97
|
|
|
9
|
|
|
12
|
|
||||
Expected return on plan assets
|
|
(125
|
)
|
|
(121
|
)
|
|
(8
|
)
|
|
(9
|
)
|
||||
Amortization of prior service costs (credits)
|
|
3
|
|
|
3
|
|
|
(50
|
)
|
|
(50
|
)
|
||||
Net periodic costs (credits)
|
|
$
|
20
|
|
|
$
|
19
|
|
|
$
|
(46
|
)
|
|
$
|
(44
|
)
|
Components of Net Periodic Benefit Costs (Credits)
|
|
Pensions
|
OPEB
|
|||||||||||||
For the Nine Months Ended September 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In millions)
|
||||||||||||||
Service costs
|
|
$
|
147
|
|
|
$
|
120
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Interest costs
|
|
279
|
|
|
291
|
|
|
27
|
|
|
36
|
|
||||
Expected return on plan assets
|
|
(375
|
)
|
|
(363
|
)
|
|
(24
|
)
|
|
(27
|
)
|
||||
Amortization of prior service costs (credits)
|
|
9
|
|
|
9
|
|
|
(157
|
)
|
|
(152
|
)
|
||||
Net periodic costs (credits)
|
|
$
|
60
|
|
|
$
|
57
|
|
|
$
|
(145
|
)
|
|
$
|
(134
|
)
|
|
|
|
|
|
|
|
|
|
Net Periodic Benefit Expense (Credit)
|
|
Pensions
|
|
OPEB
|
||||||||||||
For the Three Months Ended September 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In millions)
|
||||||||||||||
FirstEnergy
|
|
$
|
16
|
|
|
$
|
14
|
|
|
$
|
(31
|
)
|
|
$
|
(30
|
)
|
FES
|
|
5
|
|
|
5
|
|
|
(4
|
)
|
|
(4
|
)
|
Net Periodic Benefit Expense (Credit)
|
|
Pensions
|
|
OPEB
|
||||||||||||
For the Nine Months Ended September 30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(In millions)
|
||||||||||||||
FirstEnergy
|
|
$
|
41
|
|
|
$
|
41
|
|
|
$
|
(95
|
)
|
|
$
|
(92
|
)
|
FES
|
|
13
|
|
|
13
|
|
|
(12
|
)
|
|
(12
|
)
|
FirstEnergy
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gains & Losses on Cash Flow Hedges
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
AOCI Balance as of July 1, 2013
|
|
$
|
(37
|
)
|
|
$
|
13
|
|
|
$
|
347
|
|
|
$
|
323
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Amounts reclassified from AOCI
|
|
1
|
|
|
(1
|
)
|
|
(29
|
)
|
|
(29
|
)
|
||||
Net other comprehensive income (loss)
|
|
1
|
|
|
4
|
|
|
(29
|
)
|
|
(24
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2013
|
|
$
|
(36
|
)
|
|
$
|
17
|
|
|
$
|
318
|
|
|
$
|
299
|
|
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of July 1, 2012
|
|
$
|
(39
|
)
|
|
$
|
27
|
|
|
$
|
401
|
|
|
$
|
389
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
(25
|
)
|
|
(22
|
)
|
|
(47
|
)
|
||||
Net other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2012
|
|
$
|
(39
|
)
|
|
$
|
27
|
|
|
$
|
379
|
|
|
$
|
367
|
|
FES
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gains & Losses on Cash Flow Hedges
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
AOCI Balance as of July 1, 2013
|
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
49
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Net other comprehensive income (loss)
|
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2013
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
46
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of July 1, 2012
|
|
$
|
6
|
|
|
$
|
25
|
|
|
$
|
53
|
|
|
$
|
84
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications
|
|
(1
|
)
|
|
24
|
|
|
—
|
|
|
23
|
|
||||
Amounts reclassified from AOCI
|
|
(1
|
)
|
|
(25
|
)
|
|
(3
|
)
|
|
(29
|
)
|
||||
Net other comprehensive loss
|
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2012
|
|
$
|
4
|
|
|
$
|
24
|
|
|
$
|
50
|
|
|
$
|
78
|
|
FirstEnergy
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gains & Losses on Cash Flow Hedges
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
AOCI Balance as of January 1, 2013
|
|
$
|
(38
|
)
|
|
$
|
15
|
|
|
$
|
408
|
|
|
$
|
385
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||
Amounts reclassified from AOCI
|
|
2
|
|
|
(17
|
)
|
|
(90
|
)
|
|
(105
|
)
|
||||
Net other comprehensive income (loss)
|
|
2
|
|
|
2
|
|
|
(90
|
)
|
|
(86
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2013
|
|
$
|
(36
|
)
|
|
$
|
17
|
|
|
$
|
318
|
|
|
$
|
299
|
|
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of January 1, 2012
|
|
$
|
(39
|
)
|
|
$
|
19
|
|
|
$
|
446
|
|
|
$
|
426
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
1
|
|
|
38
|
|
|
5
|
|
|
44
|
|
||||
Amounts reclassified from AOCI
|
|
(1
|
)
|
|
(30
|
)
|
|
(72
|
)
|
|
(103
|
)
|
||||
Net other comprehensive income (loss)
|
|
—
|
|
|
8
|
|
|
(67
|
)
|
|
(59
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2012
|
|
$
|
(39
|
)
|
|
$
|
27
|
|
|
$
|
379
|
|
|
$
|
367
|
|
FES
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gains & Losses on Cash Flow Hedges
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
AOCI Balance as of January 1, 2013
|
|
$
|
3
|
|
|
$
|
13
|
|
|
$
|
56
|
|
|
$
|
72
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Amounts reclassified from AOCI
|
|
(2
|
)
|
|
(15
|
)
|
|
(10
|
)
|
|
(27
|
)
|
||||
Net other comprehensive income (loss)
|
|
(2
|
)
|
|
2
|
|
|
(10
|
)
|
|
(10
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2013
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
46
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of January 1, 2012
|
|
$
|
8
|
|
|
$
|
16
|
|
|
$
|
52
|
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
37
|
|
|
8
|
|
|
45
|
|
||||
Amounts reclassified from AOCI
|
|
(4
|
)
|
|
(29
|
)
|
|
(10
|
)
|
|
(43
|
)
|
||||
Net other comprehensive income (loss)
|
|
(4
|
)
|
|
8
|
|
|
(2
|
)
|
|
2
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance as of September 30, 2012
|
|
$
|
4
|
|
|
$
|
24
|
|
|
$
|
50
|
|
|
$
|
78
|
|
|
Maximum
Exposure
|
|
Discounted Lease
Payments, net
(1)
|
|
Net
Exposure
|
||||||
|
(In millions)
|
||||||||||
FES
|
$
|
1,288
|
|
|
$
|
1,079
|
|
|
$
|
209
|
|
Other FE subsidiaries
|
762
|
|
|
329
|
|
|
433
|
|
(1)
|
The net present value of FirstEnergy’s consolidated sale and leaseback operating lease commitments is
$1.2 billion
.
|
Level 1
|
-
|
Quoted prices for identical instruments in active market
|
|
|
|
Level 2
|
-
|
Quoted prices for similar instruments in active market
|
|
-
|
Quoted prices for identical or similar instruments in markets that are not active
|
|
-
|
Model-derived valuations for which all significant inputs are observable market data
|
Level 3
|
-
|
Valuation inputs are unobservable and significant to the fair value measurement
|
FirstEnergy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Recurring Fair Value Measurements
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
(In millions)
|
||||||||||||||||||||||||||||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
1,299
|
|
|
$
|
—
|
|
|
$
|
1,299
|
|
|
$
|
—
|
|
|
$
|
1,259
|
|
|
$
|
—
|
|
|
$
|
1,259
|
|
Derivative assets - commodity contracts
|
4
|
|
|
197
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
252
|
|
|
—
|
|
|
252
|
|
||||||||
Derivative assets - FTRs
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||||||
Derivative assets - NUG contracts
(1)
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
36
|
|
||||||||
Equity securities
(2)
|
461
|
|
|
—
|
|
|
—
|
|
|
461
|
|
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
||||||||
Foreign government debt securities
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
126
|
|
||||||||
U.S. government debt securities
|
—
|
|
|
171
|
|
|
—
|
|
|
171
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
179
|
|
||||||||
U.S. state debt securities
|
—
|
|
|
226
|
|
|
—
|
|
|
226
|
|
|
—
|
|
|
299
|
|
|
—
|
|
|
299
|
|
||||||||
Other
(3)
|
160
|
|
|
157
|
|
|
—
|
|
|
317
|
|
|
126
|
|
|
227
|
|
|
—
|
|
|
353
|
|
||||||||
Total assets
|
$
|
625
|
|
|
$
|
2,151
|
|
|
$
|
26
|
|
|
$
|
2,802
|
|
|
$
|
436
|
|
|
$
|
2,342
|
|
|
$
|
44
|
|
|
$
|
2,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities - commodity contracts
|
$
|
(5
|
)
|
|
$
|
(107
|
)
|
|
$
|
—
|
|
|
$
|
(112
|
)
|
|
$
|
(3
|
)
|
|
$
|
(151
|
)
|
|
$
|
—
|
|
|
$
|
(154
|
)
|
Derivative liabilities - FTRs
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||||
Derivative liabilities - NUG contracts
(1)
|
—
|
|
|
—
|
|
|
(233
|
)
|
|
(233
|
)
|
|
—
|
|
|
—
|
|
|
(290
|
)
|
|
(290
|
)
|
||||||||
Derivative liabilities - LCAPP contracts
(1)
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
(144
|
)
|
||||||||
Total liabilities
|
$
|
(5
|
)
|
|
$
|
(107
|
)
|
|
$
|
(413
|
)
|
|
$
|
(525
|
)
|
|
$
|
(3
|
)
|
|
$
|
(151
|
)
|
|
$
|
(443
|
)
|
|
$
|
(597
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net assets (liabilities)
(4)
|
$
|
620
|
|
|
$
|
2,044
|
|
|
$
|
(387
|
)
|
|
$
|
2,277
|
|
|
$
|
433
|
|
|
$
|
2,191
|
|
|
$
|
(399
|
)
|
|
$
|
2,225
|
|
(1)
|
NUG and LCAPP contracts are generally subject to regulatory accounting treatment and do not impact earnings.
|
(2)
|
NDT funds hold equity portfolios whose performance is benchmarked against the Alerian MLP Index or the Wells Fargo Hybrid and Preferred Securities REIT index.
|
(3)
|
Primarily consists of short-term cash investments.
|
(4)
|
Excludes
$13 million
and
$110 million
as of
September 30, 2013
and
December 31, 2012
, respectively, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
|
NUG Contracts
(1)
|
|
LCAPP Contracts
(1)
|
|
FTRs
|
||||||||||||||||||||||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
|
||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||
January 1, 2012 Balance
|
$
|
57
|
|
|
$
|
(349
|
)
|
|
$
|
(292
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(23
|
)
|
|
$
|
(22
|
)
|
Unrealized gain (loss)
|
(20
|
)
|
|
(180
|
)
|
|
(200
|
)
|
|
—
|
|
|
1
|
|
|
1
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
(145
|
)
|
|
13
|
|
|
(10
|
)
|
|
3
|
|
|||||||||
Settlements
|
(1
|
)
|
|
239
|
|
|
238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
30
|
|
|
18
|
|
|||||||||
December 31, 2012 Balance
|
$
|
36
|
|
|
$
|
(290
|
)
|
|
$
|
(254
|
)
|
|
$
|
—
|
|
|
$
|
(144
|
)
|
|
$
|
(144
|
)
|
|
$
|
8
|
|
|
$
|
(9
|
)
|
|
$
|
(1
|
)
|
Unrealized gain (loss)
|
(6
|
)
|
|
(6
|
)
|
|
(12
|
)
|
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
|
1
|
|
|
2
|
|
|
3
|
|
|||||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(15
|
)
|
|
(10
|
)
|
|||||||||
Settlements
|
(7
|
)
|
|
63
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
8
|
|
|
(3
|
)
|
|||||||||
September 30, 2013 Balance
|
$
|
23
|
|
|
$
|
(233
|
)
|
|
$
|
(210
|
)
|
|
$
|
—
|
|
|
$
|
(166
|
)
|
|
$
|
(166
|
)
|
|
$
|
3
|
|
|
$
|
(14
|
)
|
|
$
|
(11
|
)
|
(1)
|
Changes in the fair value of NUG and LCAPP contracts are generally subject to regulatory accounting treatment and do not impact earnings.
|
|
|
Fair Value, Net (In millions)
|
|
Valuation
Technique
|
|
Significant Input
|
|
Range
|
|
Weighted Average
|
|
Units
|
||
FTRs
|
|
$
|
(11
|
)
|
|
Model
|
|
RTO auction clearing prices
|
|
($5.60) to $5.40
|
|
$0.62
|
|
Dollars/MWH
|
NUG Contracts
|
|
$
|
(210
|
)
|
|
Model
|
|
Generation
Electricity regional prices
|
|
600 to 5,864,000
$41.40 to $57.30
|
|
1,421,000
$49.40
|
|
MWH
Dollars/MWH
|
LCAPP Contracts
|
|
$
|
(166
|
)
|
|
Model
|
|
Regional capacity prices
|
|
$158.60 to $187.60
|
|
$171.20
|
|
Dollars/MW-Day
|
FES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Recurring Fair Value Measurements
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
(In millions)
|
||||||||||||||||||||||||||||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
742
|
|
|
$
|
—
|
|
|
$
|
742
|
|
|
$
|
—
|
|
|
$
|
703
|
|
|
$
|
—
|
|
|
$
|
703
|
|
Derivative assets - commodity contracts
|
4
|
|
|
197
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
252
|
|
|
—
|
|
|
252
|
|
||||||||
Derivative assets - FTRs
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
||||||||
Equity securities
(1)
|
338
|
|
|
—
|
|
|
—
|
|
|
338
|
|
|
294
|
|
|
—
|
|
|
—
|
|
|
294
|
|
||||||||
Foreign government debt securities
|
—
|
|
|
58
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||||||
U.S. government debt securities
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||||||
Other
(2)
|
—
|
|
|
94
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||||||
Total assets
|
$
|
342
|
|
|
$
|
1,117
|
|
|
$
|
2
|
|
|
$
|
1,461
|
|
|
$
|
294
|
|
|
$
|
1,147
|
|
|
$
|
6
|
|
|
$
|
1,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities - commodity contracts
|
$
|
(5
|
)
|
|
$
|
(107
|
)
|
|
$
|
—
|
|
|
$
|
(112
|
)
|
|
$
|
(3
|
)
|
|
$
|
(151
|
)
|
|
$
|
—
|
|
|
$
|
(154
|
)
|
Derivative liabilities - FTRs
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||||
Total liabilities
|
$
|
(5
|
)
|
|
$
|
(107
|
)
|
|
$
|
(13
|
)
|
|
$
|
(125
|
)
|
|
$
|
(3
|
)
|
|
$
|
(151
|
)
|
|
$
|
(6
|
)
|
|
$
|
(160
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net assets (liabilities)
(3)
|
$
|
337
|
|
|
$
|
1,010
|
|
|
$
|
(11
|
)
|
|
$
|
1,336
|
|
|
$
|
291
|
|
|
$
|
996
|
|
|
$
|
—
|
|
|
$
|
1,287
|
|
(1)
|
NDT funds hold equity portfolios whose performance is benchmarked against the Alerian MLP Index or the Wells Fargo Hybrid and Preferred Securities REIT index.
|
(2)
|
Primarily consists of short-term cash investments.
|
(3)
|
Excludes
$12 million
and
$94 million
as of
September 30, 2013
and
December 31, 2012
, respectively, of receivables, payables, taxes and accrued income associated with the financial instruments reflected within the fair value table.
|
|
|
Derivative Asset FTRs
|
|
Derivative Liability FTRs
|
|
Net FTRs
|
||||||
|
|
(In millions)
|
||||||||||
January 1, 2012 Balance
|
|
$
|
1
|
|
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
Unrealized gain (loss)
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|||
Purchases
|
|
9
|
|
|
(7
|
)
|
|
2
|
|
|||
Settlements
|
|
(8
|
)
|
|
12
|
|
|
4
|
|
|||
December 31, 2012 Balance
|
|
$
|
6
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
Unrealized loss
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Purchases
|
|
4
|
|
|
(12
|
)
|
|
(8
|
)
|
|||
Settlements
|
|
(7
|
)
|
|
6
|
|
|
(1
|
)
|
|||
September 30, 2013 Balance
|
|
$
|
2
|
|
|
$
|
(13
|
)
|
|
$
|
(11
|
)
|
|
|
Fair Value, Net (In millions)
|
|
Valuation
Technique
|
|
Significant Input
|
|
Range
|
|
Weighted Average
|
|
Units
|
||
FTRs
|
|
$
|
(11
|
)
|
|
Model
|
|
RTO auction clearing prices
|
|
($5.60) to $5.40
|
|
$0.40
|
|
Dollars/MWH
|
|
|
September 30, 2013
(1)
|
|
December 31, 2012
(2)
|
||||||||||||||||||||
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Fair Value
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Fair Value
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FirstEnergy
|
|
$
|
1,825
|
|
|
$
|
21
|
|
|
$
|
1,846
|
|
|
$
|
1,827
|
|
|
$
|
34
|
|
|
$
|
1,861
|
|
FES
|
|
868
|
|
|
9
|
|
|
877
|
|
|
778
|
|
|
14
|
|
|
792
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FirstEnergy
|
|
$
|
433
|
|
|
$
|
28
|
|
|
$
|
461
|
|
|
$
|
293
|
|
|
$
|
16
|
|
|
$
|
309
|
|
FES
|
|
317
|
|
|
21
|
|
|
338
|
|
|
281
|
|
|
13
|
|
|
294
|
|
(1)
|
Excludes short-term cash investments: FE Consolidated -
$106 million
; FES -
$55 million
.
|
(2)
|
Excludes short-term cash investments: FE Consolidated -
$326 million
; FES -
$196 million
.
|
Three Months Ended
|
||||||||||||||||||||
September 30, 2013
|
|
Sale Proceeds
|
|
Realized Gains
|
|
Realized Losses
|
|
OTTI
|
|
Interest and
Dividend Income
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
FirstEnergy
|
|
$
|
368
|
|
|
$
|
9
|
|
|
$
|
(15
|
)
|
|
$
|
(21
|
)
|
|
$
|
26
|
|
FES
|
|
164
|
|
|
5
|
|
|
(3
|
)
|
|
(21
|
)
|
|
16
|
|
|||||
September 30, 2012
|
|
Sale Proceeds
|
|
Realized Gains
|
|
Realized Losses
|
|
OTTI
|
|
Interest and Dividend Income
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
FirstEnergy
|
|
$
|
1,751
|
|
|
$
|
81
|
|
|
$
|
(30
|
)
|
|
$
|
(2
|
)
|
|
$
|
18
|
|
FES
|
|
1,059
|
|
|
60
|
|
|
(21
|
)
|
|
(2
|
)
|
|
10
|
|
Nine Months Ended
|
||||||||||||||||||||
September 30, 2013
|
|
Sale Proceeds
|
|
Realized Gains
|
|
Realized Losses
|
|
OTTI
|
|
Interest and
Dividend Income
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
FirstEnergy
|
|
$
|
1,545
|
|
|
$
|
49
|
|
|
$
|
(31
|
)
|
|
$
|
(74
|
)
|
|
$
|
74
|
|
FES
|
|
650
|
|
|
38
|
|
|
(14
|
)
|
|
(66
|
)
|
|
44
|
|
|||||
September 30, 2012
|
|
Sale Proceeds
|
|
Realized Gains
|
|
Realized Losses
|
|
OTTI
|
|
Interest and Dividend Income
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
FirstEnergy
|
|
$
|
2,133
|
|
|
$
|
118
|
|
|
$
|
(58
|
)
|
|
$
|
(9
|
)
|
|
$
|
51
|
|
FES
|
|
1,167
|
|
|
85
|
|
|
(40
|
)
|
|
(8
|
)
|
|
27
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Fair Value
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Fair Value
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Debt Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FirstEnergy
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
47
|
|
|
$
|
54
|
|
|
$
|
30
|
|
|
$
|
84
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
|
(In millions)
|
||||||||||||||
FirstEnergy
|
$
|
17,007
|
|
|
$
|
17,721
|
|
|
$
|
16,957
|
|
|
$
|
19,460
|
|
FES
|
3,015
|
|
|
3,082
|
|
|
4,194
|
|
|
4,524
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||
|
Fair Value
|
|
|
Fair Value
|
||||||||||||
|
September 30,
2013 |
|
December 31,
2012 |
|
|
September 30,
2013 |
|
December 31,
2012 |
||||||||
|
(In millions)
|
|
|
(In millions)
|
||||||||||||
Current Assets - Derivatives
|
|
|
|
|
Current Liabilities - Derivatives
|
|
|
|
||||||||
Commodity Contracts
|
$
|
137
|
|
|
$
|
153
|
|
|
Commodity Contracts
|
$
|
(94
|
)
|
|
$
|
(119
|
)
|
FTRs
|
3
|
|
|
7
|
|
|
FTRs
|
(11
|
)
|
|
(7
|
)
|
||||
|
140
|
|
|
160
|
|
|
|
(105
|
)
|
|
(126
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
Noncurrent Liabilities - Adverse Power Contract Liability
|
|
|
|
||||||||
|
|
|
|
|
NUGs
|
(233
|
)
|
|
(290
|
)
|
||||||
Deferred Charges and Other Assets - Other
|
|
|
|
|
LCAAP
|
(166
|
)
|
|
(144
|
)
|
||||||
Commodity Contracts
|
64
|
|
|
99
|
|
|
Noncurrent Liabilities - Other
|
|
|
|
||||||
FTRs
|
—
|
|
|
1
|
|
|
Commodity Contracts
|
(18
|
)
|
|
(36
|
)
|
||||
NUGs
|
23
|
|
|
36
|
|
|
FTRs
|
(3
|
)
|
|
(2
|
)
|
||||
|
87
|
|
|
136
|
|
|
|
(420
|
)
|
|
(472
|
)
|
||||
Derivative Assets
|
$
|
227
|
|
|
$
|
296
|
|
|
Derivative Liabilities
|
$
|
(525
|
)
|
|
$
|
(598
|
)
|
|
|
|
|
Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
September 30, 2013
|
|
Fair Value
|
|
Derivative Instruments
|
|
Cash Collateral (Received)/Pledged
|
|
Net Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
201
|
|
|
$
|
(104
|
)
|
|
$
|
(11
|
)
|
|
$
|
86
|
|
FTRs
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
NUG contracts
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
|
|
$
|
227
|
|
|
$
|
(107
|
)
|
|
$
|
(11
|
)
|
|
$
|
109
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
(112
|
)
|
|
$
|
104
|
|
|
$
|
5
|
|
|
$
|
(3
|
)
|
FTRs
|
|
(14
|
)
|
|
3
|
|
|
6
|
|
|
(5
|
)
|
||||
NUG contracts
|
|
(233
|
)
|
|
—
|
|
|
—
|
|
|
(233
|
)
|
||||
LCAPP contracts
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
||||
|
|
$
|
(525
|
)
|
|
$
|
107
|
|
|
$
|
11
|
|
|
$
|
(407
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
December 31, 2012
|
|
Fair Value
|
|
Derivative Instruments
|
|
Cash Collateral (Received)/Pledged
|
|
Net Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
252
|
|
|
$
|
(142
|
)
|
|
$
|
(5
|
)
|
|
$
|
105
|
|
FTRs
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
||||
NUG contracts
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
||||
|
|
$
|
296
|
|
|
$
|
(150
|
)
|
|
$
|
(5
|
)
|
|
$
|
141
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
(155
|
)
|
|
$
|
142
|
|
|
$
|
12
|
|
|
$
|
(1
|
)
|
FTRs
|
|
(9
|
)
|
|
8
|
|
|
1
|
|
|
—
|
|
||||
NUG contracts
|
|
(290
|
)
|
|
—
|
|
|
—
|
|
|
(290
|
)
|
||||
LCAPP contracts
|
|
(144
|
)
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
||||
|
|
$
|
(598
|
)
|
|
$
|
150
|
|
|
$
|
13
|
|
|
$
|
(435
|
)
|
|
Purchases
|
|
Sales
|
|
Net
|
|
Units
|
|||
|
(In millions, except for LCAPP)
|
|||||||||
Power Contracts
|
32
|
|
|
37
|
|
|
(5
|
)
|
|
MWH
|
FTRs
|
59
|
|
|
—
|
|
|
59
|
|
|
MWH
|
NUGs
|
11
|
|
|
—
|
|
|
11
|
|
|
MWH
|
LCAPP
|
408
|
|
|
—
|
|
|
408
|
|
|
MW
|
Natural Gas
|
64
|
|
|
—
|
|
|
64
|
|
|
mmBTU
|
|
Three Months Ended September 30
|
||||||||||||||
|
Commodity Contracts
|
|
FTRs
|
|
Interest Rate Swaps
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|||||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|
|
|||||
Other Operating Expense
|
$
|
11
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
||||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
14
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Purchased Power Expense
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||
Other Operating Expense
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Fuel Expense
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|||||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|
|
|||||
Other Operating Expense
|
$
|
7
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest Expense
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
46
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
52
|
|
Purchased Power Expense
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||
Other Operating Expense
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Fuel Expense
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Interest Expense
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
Nine Months Ended September 30
|
||||||||||||||
|
Commodity
Contracts
|
|
FTRs
|
|
Interest Rate Swaps
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|||||
Unrealized Loss Recognized in:
|
|
|
|
|
|
|
|
|
|
|
|||||
Other Operating Expense
|
$
|
(5
|
)
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
29
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Purchased Power Expense
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
||||
Other Operating Expense
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
||||
|
|
|
|
|
|
|
|
|
|||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|||||
Unrealized Gain Recognized in:
|
|
|
|
|
|
|
|
|
|
|
|||||
Other Operating Expense
|
$
|
72
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
|
|
|
|
|
|
|
||||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
260
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
278
|
|
Purchased Power Expense
|
(248
|
)
|
|
—
|
|
|
—
|
|
|
(248
|
)
|
||||
Other Operating Expense
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
(51
|
)
|
||||
Fuel Expense
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Interest Expense
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
|
Three Months Ended September 30
|
||||||||||||||
Derivatives Not in a Hedging Relationship with Regulatory Offset
|
|
NUGs
|
|
LCAPP
|
|
Regulated FTRs
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
2013
|
|
|
|
|
|
|
|
|
||||||||
Unrealized Gain (Loss) on Derivative Instrument
|
|
$
|
7
|
|
|
$
|
(8
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
Realized Gain (Loss) on Derivative Instrument
|
|
14
|
|
|
—
|
|
|
(1
|
)
|
|
13
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
||||||||
Unrealized Gain (Loss) on Derivative Instrument
|
|
$
|
(50
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(47
|
)
|
Realized Gain (Loss) on Derivative Instrument
|
|
61
|
|
|
—
|
|
|
(1
|
)
|
|
60
|
|
|
|
Nine Months Ended September 30
|
||||||||||||||
Derivatives Not in a Hedging Relationship with Regulatory Offset
|
|
NUGs
|
|
LCAPP
|
|
Regulated FTRs
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
2013
|
|
|
|
|
|
|
|
|
||||||||
Unrealized Gain (Loss) on Derivative Instrument
|
|
$
|
(13
|
)
|
|
$
|
(22
|
)
|
|
$
|
1
|
|
|
$
|
(34
|
)
|
Realized Gain (Loss) on Derivative Instrument
|
|
57
|
|
|
—
|
|
|
(1
|
)
|
|
56
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
||||||||
Unrealized Loss on Derivative Instrument
|
|
$
|
(183
|
)
|
|
$
|
(142
|
)
|
|
$
|
—
|
|
|
$
|
(325
|
)
|
Realized Gain on Derivative Instrument
|
|
194
|
|
|
—
|
|
|
7
|
|
|
201
|
|
|
|
Three Months Ended September 30
|
||||||||||||||
Derivatives Not in a Hedging Relationship with Regulatory Offset
|
|
NUGs
|
|
LCAPP
|
|
Regulated FTRs
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Outstanding net liability as of July 1, 2013
|
|
$
|
(231
|
)
|
|
$
|
(158
|
)
|
|
$
|
—
|
|
|
$
|
(389
|
)
|
Additions/Change in value of existing contracts
|
|
7
|
|
|
(8
|
)
|
|
1
|
|
|
—
|
|
||||
Settled contracts
|
|
14
|
|
|
—
|
|
|
(1
|
)
|
|
13
|
|
||||
Outstanding net liability as of September 30, 2013
|
|
$
|
(210
|
)
|
|
$
|
(166
|
)
|
|
$
|
—
|
|
|
$
|
(376
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Outstanding net liability as of July 1, 2012
|
|
$
|
(293
|
)
|
|
$
|
(145
|
)
|
|
$
|
—
|
|
|
$
|
(438
|
)
|
Additions/Change in value of existing contracts
|
|
(50
|
)
|
|
3
|
|
|
—
|
|
|
(47
|
)
|
||||
Settled contracts
|
|
61
|
|
|
—
|
|
|
(1
|
)
|
|
60
|
|
||||
Outstanding net liability as of September 30, 2012
|
|
$
|
(282
|
)
|
|
$
|
(142
|
)
|
|
$
|
(1
|
)
|
|
$
|
(425
|
)
|
|
|
Nine Months Ended September 30
|
||||||||||||||
Derivatives Not in a Hedging Relationship with Regulatory Offset
|
|
NUGs
|
|
LCAPP
|
|
Regulated FTRs
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Outstanding net liability as of January 1, 2013
|
|
$
|
(254
|
)
|
|
$
|
(144
|
)
|
|
$
|
—
|
|
|
$
|
(398
|
)
|
Additions/Change in value of existing contracts
|
|
(13
|
)
|
|
(22
|
)
|
|
1
|
|
|
(34
|
)
|
||||
Settled contracts
|
|
57
|
|
|
—
|
|
|
(1
|
)
|
|
56
|
|
||||
Outstanding net liability as of September 30, 2013
|
|
$
|
(210
|
)
|
|
$
|
(166
|
)
|
|
$
|
—
|
|
|
$
|
(376
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Outstanding net liability as of January 1, 2012
|
|
$
|
(293
|
)
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
(301
|
)
|
Additions/Change in value of existing contracts
|
|
(183
|
)
|
|
(142
|
)
|
|
—
|
|
|
(325
|
)
|
||||
Settled contracts
|
|
194
|
|
|
—
|
|
|
7
|
|
|
201
|
|
||||
Outstanding net liability as of September 30, 2012
|
|
$
|
(282
|
)
|
|
$
|
(142
|
)
|
|
$
|
(1
|
)
|
|
$
|
(425
|
)
|
ARO Reconciliation
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
Balance, December 31, 2012
|
|
$
|
1,599
|
|
|
$
|
965
|
|
Liabilities settled
|
|
(13
|
)
|
|
(14
|
)
|
||
Accretion
|
|
85
|
|
|
52
|
|
||
Revisions in estimated cash flows
|
|
163
|
|
|
156
|
|
||
Balance, September 30, 2013
|
|
$
|
1,834
|
|
|
$
|
1,159
|
|
•
|
Generation supplied through a CBP;
|
•
|
A load cap of no less than
80%
, so that no single supplier is awarded more than
80%
of the tranches, which also applies to tranches assigned post-auction;
|
•
|
A
6%
generation discount to certain low income customers provided by the Ohio Companies through a bilateral wholesale contract with FES (FES is one of the wholesale suppliers to the Ohio Companies);
|
•
|
No increase in base distribution rates through May 31, 2014; and
|
•
|
A new distribution rider, Rider DCR, to recover a return of, and on, capital investments in the delivery system.
|
•
|
Continuing the current base distribution rate freeze through May 31, 2016;
|
•
|
Continuing to provide economic development and assistance to low-income customers for the
two
-year plan period at levels established in the existing ESP;
|
•
|
A
6%
generation rate discount to certain low income customers provided by the Ohio Companies through a bilateral wholesale contract with FES (FES is one of the wholesale suppliers to the Ohio Companies);
|
•
|
Continuing to provide power to non-shopping customers at a market-based price set through an auction process; and
|
•
|
Continuing Rider DCR that allows continued investment in the distribution system for the benefit of customers.
|
•
|
Securing generation supply for a longer period of time by conducting an auction for a
three
-year period rather than a
one
-year period, in each of October 2012 and January 2013, to mitigate any potential price spikes for the Ohio Companies' utility customers who do not switch to a competitive generation supplier; and
|
•
|
Extending the recovery period for costs associated with purchasing RECs mandated by SB221 through the end of the new ESP 3 period. This is expected to initially reduce the monthly renewable energy charge for all non-shopping utility customers of the Ohio Companies by spreading out the costs over the entire ESP period.
|
•
|
$40 million
annualized base rate increases effective June 29, 2010;
|
•
|
Deferral of February 2010 storm restoration expenses over a maximum
five
-year period;
|
•
|
Additional
$20 million
annualized base rate increase effective in January 2011;
|
•
|
Decrease of
$20 million
in ENEC rates effective January 2011, providing for deferral of related costs for later recovery in 2012; and
|
•
|
Moratorium on filing for further increases in base rates before December 1, 2011, except under specified circumstances.
|
Collateral Provisions
|
|
FES
|
|
AE Supply
|
|
Utilities
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Split Rating (One rating agency's rating below investment grade)
|
|
$
|
440
|
|
|
$
|
6
|
|
|
$
|
55
|
|
|
$
|
501
|
|
BB+/Ba1 Credit Ratings
|
|
$
|
484
|
|
|
$
|
6
|
|
|
$
|
55
|
|
|
$
|
545
|
|
Full impact of credit contingent contractual obligations
|
|
$
|
755
|
|
|
$
|
58
|
|
|
$
|
90
|
|
|
$
|
903
|
|
For the Three Months Ended September 30, 2013
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES
|
|
$
|
1,654
|
|
|
$
|
528
|
|
|
$
|
440
|
|
|
$
|
(943
|
)
|
|
$
|
1,679
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
—
|
|
|
249
|
|
|
55
|
|
|
—
|
|
|
304
|
|
|||||
Purchased power from affiliates
|
|
1,009
|
|
|
—
|
|
|
65
|
|
|
(942
|
)
|
|
132
|
|
|||||
Purchased power from non-affiliates
|
|
720
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
724
|
|
|||||
Other operating expenses
|
|
147
|
|
|
65
|
|
|
114
|
|
|
13
|
|
|
339
|
|
|||||
Provision for depreciation
|
|
1
|
|
|
33
|
|
|
46
|
|
|
—
|
|
|
80
|
|
|||||
General taxes
|
|
21
|
|
|
9
|
|
|
5
|
|
|
—
|
|
|
35
|
|
|||||
Total operating expenses
|
|
1,898
|
|
|
360
|
|
|
285
|
|
|
(929
|
)
|
|
1,614
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME (LOSS)
|
|
(244
|
)
|
|
168
|
|
|
155
|
|
|
(14
|
)
|
|
65
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on debt redemptions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Investment income (loss)
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|||||
Miscellaneous income, including net income from equity investees
|
|
180
|
|
|
19
|
|
|
—
|
|
|
(178
|
)
|
|
21
|
|
|||||
Interest expense — affiliates
|
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
5
|
|
|
(1
|
)
|
|||||
Interest expense — other
|
|
(13
|
)
|
|
(24
|
)
|
|
(13
|
)
|
|
15
|
|
|
(35
|
)
|
|||||
Capitalized interest
|
|
—
|
|
|
1
|
|
|
8
|
|
|
—
|
|
|
9
|
|
|||||
Total other income (expense)
|
|
166
|
|
|
(6
|
)
|
|
(7
|
)
|
|
(162
|
)
|
|
(9
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
(78
|
)
|
|
162
|
|
|
148
|
|
|
(176
|
)
|
|
56
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
INCOME TAXES (BENEFITS)
|
|
(118
|
)
|
|
111
|
|
|
28
|
|
|
2
|
|
|
23
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
NET INCOME FROM CONTINUING OPERATIONS
|
|
40
|
|
|
51
|
|
|
120
|
|
|
(178
|
)
|
|
33
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Discontinued operations (net of income taxes of $5)
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
$
|
40
|
|
|
$
|
58
|
|
|
$
|
120
|
|
|
$
|
(178
|
)
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
NET INCOME
|
|
$
|
40
|
|
|
$
|
58
|
|
|
$
|
120
|
|
|
$
|
(178
|
)
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pensions and OPEB prior service costs
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
5
|
|
|
(5
|
)
|
|||||
Amortized gain on derivative hedges
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Change in unrealized gain on available-for-sale securities
|
|
5
|
|
|
—
|
|
|
5
|
|
|
(5
|
)
|
|
5
|
|
|||||
Other comprehensive income (loss)
|
|
(1
|
)
|
|
(5
|
)
|
|
5
|
|
|
—
|
|
|
(1
|
)
|
|||||
Income taxes (benefits) on other comprehensive income (loss)
|
|
(1
|
)
|
|
(2
|
)
|
|
3
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
(3
|
)
|
|
2
|
|
|
1
|
|
|
—
|
|
|||||
COMPREHENSIVE INCOME
|
|
$
|
40
|
|
|
$
|
55
|
|
|
$
|
122
|
|
|
$
|
(177
|
)
|
|
$
|
40
|
|
For the Nine Months Ended September 30, 2013
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES
|
|
$
|
4,575
|
|
|
$
|
1,612
|
|
|
$
|
1,337
|
|
|
$
|
(2,869
|
)
|
|
$
|
4,655
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
—
|
|
|
782
|
|
|
154
|
|
|
—
|
|
|
936
|
|
|||||
Purchased power from affiliates
|
|
3,072
|
|
|
—
|
|
|
197
|
|
|
(2,868
|
)
|
|
401
|
|
|||||
Purchased power from non-affiliates
|
|
1,749
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
1,755
|
|
|||||
Other operating expenses
|
|
484
|
|
|
208
|
|
|
376
|
|
|
37
|
|
|
1,105
|
|
|||||
Provision for depreciation
|
|
4
|
|
|
96
|
|
|
134
|
|
|
(3
|
)
|
|
231
|
|
|||||
General taxes
|
|
60
|
|
|
28
|
|
|
18
|
|
|
—
|
|
|
106
|
|
|||||
Total operating expenses
|
|
5,369
|
|
|
1,120
|
|
|
879
|
|
|
(2,834
|
)
|
|
4,534
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME (LOSS)
|
|
(794
|
)
|
|
492
|
|
|
458
|
|
|
(35
|
)
|
|
121
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on debt redemptions
|
|
(103
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|||||
Investment income
|
|
4
|
|
|
—
|
|
|
3
|
|
|
(11
|
)
|
|
(4
|
)
|
|||||
Miscellaneous income, including net income from equity investees
|
|
543
|
|
|
23
|
|
|
—
|
|
|
(537
|
)
|
|
29
|
|
|||||
Interest expense — affiliates
|
|
(10
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|
12
|
|
|
(7
|
)
|
|||||
Interest expense — other
|
|
(50
|
)
|
|
(79
|
)
|
|
(42
|
)
|
|
45
|
|
|
(126
|
)
|
|||||
Capitalized interest
|
|
1
|
|
|
1
|
|
|
26
|
|
|
—
|
|
|
28
|
|
|||||
Total other income (expense)
|
|
385
|
|
|
(59
|
)
|
|
(18
|
)
|
|
(491
|
)
|
|
(183
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
(409
|
)
|
|
433
|
|
|
440
|
|
|
(526
|
)
|
|
(62
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME TAXES (BENEFITS)
|
|
(380
|
)
|
|
215
|
|
|
138
|
|
|
8
|
|
|
(19
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
|
|
(29
|
)
|
|
218
|
|
|
302
|
|
|
(534
|
)
|
|
(43
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Discontinued operations (net of income taxes of $8)
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
|
$
|
(29
|
)
|
|
$
|
232
|
|
|
$
|
302
|
|
|
$
|
(534
|
)
|
|
$
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
|
$
|
(29
|
)
|
|
$
|
232
|
|
|
$
|
302
|
|
|
$
|
(534
|
)
|
|
$
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pensions and OPEB prior service costs
|
|
(16
|
)
|
|
(15
|
)
|
|
—
|
|
|
15
|
|
|
(16
|
)
|
|||||
Amortized gain on derivative hedges
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Change in unrealized gain on available-for-sale securities
|
|
2
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
|||||
Other comprehensive income (loss)
|
|
(17
|
)
|
|
(15
|
)
|
|
2
|
|
|
13
|
|
|
(17
|
)
|
|||||
Income taxes (benefits) on other comprehensive income (loss)
|
|
(7
|
)
|
|
(6
|
)
|
|
1
|
|
|
5
|
|
|
(7
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
(10
|
)
|
|
(9
|
)
|
|
1
|
|
|
8
|
|
|
(10
|
)
|
|||||
COMPREHENSIVE INCOME (LOSS)
|
|
$
|
(39
|
)
|
|
$
|
223
|
|
|
$
|
303
|
|
|
$
|
(526
|
)
|
|
$
|
(39
|
)
|
For the Three Months Ended September 30, 2012
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES
|
|
$
|
1,523
|
|
|
$
|
610
|
|
|
$
|
395
|
|
|
$
|
(978
|
)
|
|
$
|
1,550
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fuel
|
|
—
|
|
|
248
|
|
|
55
|
|
|
—
|
|
|
303
|
|
|||||
Purchased power from affiliates
|
|
1,042
|
|
|
—
|
|
|
67
|
|
|
(978
|
)
|
|
131
|
|
|||||
Purchased power from non-affiliates
|
|
499
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
502
|
|
|||||
Other operating expenses
|
|
130
|
|
|
78
|
|
|
122
|
|
|
12
|
|
|
342
|
|
|||||
Provision for depreciation
|
|
1
|
|
|
29
|
|
|
41
|
|
|
(1
|
)
|
|
70
|
|
|||||
General taxes
|
|
20
|
|
|
10
|
|
|
5
|
|
|
—
|
|
|
35
|
|
|||||
Total operating expenses
|
|
1,692
|
|
|
368
|
|
|
290
|
|
|
(967
|
)
|
|
1,383
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME (LOSS)
|
|
(169
|
)
|
|
242
|
|
|
105
|
|
|
(11
|
)
|
|
167
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income
|
|
1
|
|
|
5
|
|
|
37
|
|
|
(5
|
)
|
|
38
|
|
|||||
Miscellaneous income, including net income from equity investees
|
|
317
|
|
|
—
|
|
|
—
|
|
|
(316
|
)
|
|
1
|
|
|||||
Interest expense — affiliates
|
|
(5
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
5
|
|
|
(3
|
)
|
|||||
Interest expense — other
|
|
(25
|
)
|
|
(27
|
)
|
|
(15
|
)
|
|
16
|
|
|
(51
|
)
|
|||||
Capitalized interest
|
|
—
|
|
|
1
|
|
|
8
|
|
|
—
|
|
|
9
|
|
|||||
Total other income (expense)
|
|
288
|
|
|
(23
|
)
|
|
29
|
|
|
(300
|
)
|
|
(6
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
119
|
|
|
219
|
|
|
134
|
|
|
(311
|
)
|
|
161
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME TAXES (BENEFITS)
|
|
18
|
|
|
(14
|
)
|
|
59
|
|
|
2
|
|
|
65
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME FROM CONTINUING OPERATIONS
|
|
101
|
|
|
233
|
|
|
75
|
|
|
(313
|
)
|
|
96
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Discontinued operations (net of income taxes of $3)
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
$
|
101
|
|
|
$
|
238
|
|
|
$
|
75
|
|
|
$
|
(313
|
)
|
|
$
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
$
|
101
|
|
|
$
|
238
|
|
|
$
|
75
|
|
|
$
|
(313
|
)
|
|
$
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pensions and OPEB prior service costs
|
|
(5
|
)
|
|
(4
|
)
|
|
—
|
|
|
4
|
|
|
(5
|
)
|
|||||
Amortized gain on derivative hedges
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Change in unrealized gain on available for sale securities
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|||||
Other comprehensive loss
|
|
(9
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
5
|
|
|
(9
|
)
|
|||||
Income tax benefits on other comprehensive loss
|
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
|
(3
|
)
|
|||||
Other comprehensive loss, net of tax
|
|
(6
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
3
|
|
|
(6
|
)
|
|||||
COMPREHENSIVE INCOME
|
|
$
|
95
|
|
|
$
|
236
|
|
|
$
|
74
|
|
|
$
|
(310
|
)
|
|
$
|
95
|
|
For the Nine Months Ended September 30, 2012
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES
|
|
$
|
4,443
|
|
|
$
|
1,777
|
|
|
$
|
1,262
|
|
|
$
|
(2,971
|
)
|
|
$
|
4,511
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
—
|
|
|
824
|
|
|
154
|
|
|
—
|
|
|
978
|
|
|||||
Purchased power from affiliates
|
|
3,163
|
|
|
—
|
|
|
189
|
|
|
(2,971
|
)
|
|
381
|
|
|||||
Purchased power from non-affiliates
|
|
1,420
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
1,425
|
|
|||||
Other operating expenses
|
|
313
|
|
|
268
|
|
|
410
|
|
|
37
|
|
|
1,028
|
|
|||||
Provision for depreciation
|
|
3
|
|
|
87
|
|
|
114
|
|
|
(4
|
)
|
|
200
|
|
|||||
General taxes
|
|
60
|
|
|
28
|
|
|
16
|
|
|
—
|
|
|
104
|
|
|||||
Total operating expenses
|
|
4,959
|
|
|
1,212
|
|
|
883
|
|
|
(2,938
|
)
|
|
4,116
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME (LOSS)
|
|
(516
|
)
|
|
565
|
|
|
379
|
|
|
(33
|
)
|
|
395
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income
|
|
2
|
|
|
14
|
|
|
49
|
|
|
(15
|
)
|
|
50
|
|
|||||
Miscellaneous income, including net income from equity investees
|
|
854
|
|
|
19
|
|
|
—
|
|
|
(848
|
)
|
|
25
|
|
|||||
Interest expense — affiliates
|
|
(14
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
15
|
|
|
(7
|
)
|
|||||
Interest expense — other
|
|
(72
|
)
|
|
(79
|
)
|
|
(36
|
)
|
|
47
|
|
|
(140
|
)
|
|||||
Capitalized interest
|
|
—
|
|
|
3
|
|
|
24
|
|
|
—
|
|
|
27
|
|
|||||
Total other income (expense)
|
|
770
|
|
|
(48
|
)
|
|
34
|
|
|
(801
|
)
|
|
(45
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
254
|
|
|
517
|
|
|
413
|
|
|
(834
|
)
|
|
350
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME TAXES (BENEFITS)
|
|
32
|
|
|
(25
|
)
|
|
124
|
|
|
8
|
|
|
139
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME FROM CONTINUING OPERATIONS
|
|
222
|
|
|
542
|
|
|
289
|
|
|
(842
|
)
|
|
211
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Discontinued operations (net of income taxes of $6)
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
$
|
222
|
|
|
$
|
553
|
|
|
$
|
289
|
|
|
$
|
(842
|
)
|
|
$
|
222
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
$
|
222
|
|
|
$
|
553
|
|
|
$
|
289
|
|
|
$
|
(842
|
)
|
|
$
|
222
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pensions and OPEB prior service costs
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|||||
Amortized gain on derivative hedges
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Change in unrealized gain on available-for-sale securities
|
|
11
|
|
|
—
|
|
|
12
|
|
|
(12
|
)
|
|
11
|
|
|||||
Other comprehensive income (loss)
|
|
3
|
|
|
(1
|
)
|
|
12
|
|
|
(11
|
)
|
|
3
|
|
|||||
Income taxes (benefits) on other comprehensive income (loss)
|
|
1
|
|
|
(1
|
)
|
|
5
|
|
|
(4
|
)
|
|
1
|
|
|||||
Other comprehensive income, net of tax
|
|
2
|
|
|
—
|
|
|
7
|
|
|
(7
|
)
|
|
2
|
|
|||||
COMPREHENSIVE INCOME
|
|
$
|
224
|
|
|
$
|
553
|
|
|
$
|
296
|
|
|
$
|
(849
|
)
|
|
$
|
224
|
|
As of December 31, 2012
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Receivables-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Customers
|
|
483
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
483
|
|
|||||
Affiliated companies
|
|
232
|
|
|
417
|
|
|
478
|
|
|
(748
|
)
|
|
379
|
|
|||||
Other
|
|
56
|
|
|
19
|
|
|
16
|
|
|
—
|
|
|
91
|
|
|||||
Notes receivable from affiliated companies
|
|
366
|
|
|
7
|
|
|
607
|
|
|
(704
|
)
|
|
276
|
|
|||||
Materials and supplies
|
|
66
|
|
|
231
|
|
|
208
|
|
|
—
|
|
|
505
|
|
|||||
Derivatives
|
|
158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|||||
Prepayments and other
|
|
38
|
|
|
39
|
|
|
10
|
|
|
—
|
|
|
87
|
|
|||||
|
|
1,399
|
|
|
716
|
|
|
1,319
|
|
|
(1,452
|
)
|
|
1,982
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
In service
|
|
91
|
|
|
5,899
|
|
|
6,391
|
|
|
(384
|
)
|
|
11,997
|
|
|||||
Less — Accumulated provision for depreciation
|
|
32
|
|
|
1,915
|
|
|
2,646
|
|
|
(185
|
)
|
|
4,408
|
|
|||||
|
|
59
|
|
|
3,984
|
|
|
3,745
|
|
|
(199
|
)
|
|
7,589
|
|
|||||
Construction work in progress
|
|
34
|
|
|
230
|
|
|
877
|
|
|
—
|
|
|
1,141
|
|
|||||
|
|
93
|
|
|
4,214
|
|
|
4,622
|
|
|
(199
|
)
|
|
8,730
|
|
|||||
INVESTMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Nuclear plant decommissioning trusts
|
|
—
|
|
|
—
|
|
|
1,283
|
|
|
—
|
|
|
1,283
|
|
|||||
Investment in affiliated companies
|
|
4,972
|
|
|
—
|
|
|
—
|
|
|
(4,972
|
)
|
|
—
|
|
|||||
Other
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
|
|
4,972
|
|
|
12
|
|
|
1,283
|
|
|
(4,972
|
)
|
|
1,295
|
|
|||||
DEFERRED CHARGES AND OTHER ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accumulated deferred income tax benefits
|
|
—
|
|
|
313
|
|
|
—
|
|
|
(313
|
)
|
|
—
|
|
|||||
Customer intangibles
|
|
110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|||||
Goodwill
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Property taxes
|
|
—
|
|
|
14
|
|
|
22
|
|
|
—
|
|
|
36
|
|
|||||
Unamortized sale and leaseback costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|
119
|
|
|||||
Derivatives
|
|
99
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99
|
|
|||||
Other
|
|
160
|
|
|
194
|
|
|
5
|
|
|
(106
|
)
|
|
253
|
|
|||||
|
|
393
|
|
|
521
|
|
|
27
|
|
|
(300
|
)
|
|
641
|
|
|||||
|
|
$
|
6,857
|
|
|
$
|
5,463
|
|
|
$
|
7,251
|
|
|
$
|
(6,923
|
)
|
|
$
|
12,648
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND CAPITALIZATION
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Currently payable long-term debt
|
|
$
|
1
|
|
|
$
|
586
|
|
|
$
|
537
|
|
|
$
|
(22
|
)
|
|
$
|
1,102
|
|
Short-term borrowings-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Affiliated companies
|
|
358
|
|
|
346
|
|
|
—
|
|
|
(704
|
)
|
|
—
|
|
|||||
Other
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Accounts payable-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Affiliated companies
|
|
748
|
|
|
143
|
|
|
583
|
|
|
(748
|
)
|
|
726
|
|
|||||
Other
|
|
63
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
159
|
|
|||||
Accrued taxes
|
|
126
|
|
|
25
|
|
|
20
|
|
|
—
|
|
|
171
|
|
|||||
Derivatives
|
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|||||
Other
|
|
71
|
|
|
148
|
|
|
15
|
|
|
46
|
|
|
280
|
|
|||||
|
|
1,491
|
|
|
1,348
|
|
|
1,155
|
|
|
(1,428
|
)
|
|
2,566
|
|
|||||
CAPITALIZATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total equity
|
|
3,763
|
|
|
1,787
|
|
|
3,165
|
|
|
(4,952
|
)
|
|
3,763
|
|
|||||
Long-term debt and other long-term obligations
|
|
1,482
|
|
|
2,009
|
|
|
834
|
|
|
(1,207
|
)
|
|
3,118
|
|
|||||
|
|
5,245
|
|
|
3,796
|
|
|
3,999
|
|
|
(6,159
|
)
|
|
6,881
|
|
|||||
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deferred gain on sale and leaseback transaction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
892
|
|
|
892
|
|
|||||
Accumulated deferred income taxes
|
|
28
|
|
|
—
|
|
|
714
|
|
|
(227
|
)
|
|
515
|
|
|||||
Asset retirement obligations
|
|
—
|
|
|
29
|
|
|
936
|
|
|
—
|
|
|
965
|
|
|||||
Retirement benefits
|
|
26
|
|
|
215
|
|
|
—
|
|
|
—
|
|
|
241
|
|
|||||
Derivatives
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||
Other
|
|
30
|
|
|
75
|
|
|
447
|
|
|
(1
|
)
|
|
551
|
|
|||||
|
|
121
|
|
|
319
|
|
|
2,097
|
|
|
664
|
|
|
3,201
|
|
|||||
|
|
$
|
6,857
|
|
|
$
|
5,463
|
|
|
$
|
7,251
|
|
|
$
|
(6,923
|
)
|
|
$
|
12,648
|
|
For the Nine Months Ended September 30, 2013
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES
|
|
$
|
(1,018
|
)
|
|
$
|
712
|
|
|
$
|
705
|
|
|
$
|
(10
|
)
|
|
$
|
389
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
New Financing-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings, net
|
|
338
|
|
|
—
|
|
|
—
|
|
|
(338
|
)
|
|
—
|
|
|||||
Equity contribution from parent
|
|
1,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|||||
Redemptions and Repayments-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt
|
|
(769
|
)
|
|
(352
|
)
|
|
(68
|
)
|
|
10
|
|
|
(1,179
|
)
|
|||||
Short-term borrowings, net
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
32
|
|
|
—
|
|
|||||
Tender premiums
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|||||
Other
|
|
(3
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Net cash provided from (used for) financing activities
|
|
999
|
|
|
(388
|
)
|
|
(68
|
)
|
|
(296
|
)
|
|
247
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property additions
|
|
(9
|
)
|
|
(192
|
)
|
|
(276
|
)
|
|
—
|
|
|
(477
|
)
|
|||||
Nuclear fuel
|
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
(159
|
)
|
|||||
Proceeds from asset sales
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Sales of investment securities held in trusts
|
|
—
|
|
|
—
|
|
|
650
|
|
|
—
|
|
|
650
|
|
|||||
Purchases of investment securities held in trusts
|
|
—
|
|
|
—
|
|
|
(694
|
)
|
|
—
|
|
|
(694
|
)
|
|||||
Loans to affiliated companies, net
|
|
28
|
|
|
(156
|
)
|
|
(156
|
)
|
|
306
|
|
|
22
|
|
|||||
Other
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided from (used for) investing activities
|
|
19
|
|
|
(325
|
)
|
|
(637
|
)
|
|
306
|
|
|
(637
|
)
|
|||||
Net change in cash and cash equivalents
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Three Months Ended
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive Energy Services
|
|
Other/Corporate
|
|
Reconciling Adjustments
|
|
Consolidated
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External revenues
|
|
$
|
2,340
|
|
|
$
|
190
|
|
|
$
|
1,573
|
|
|
$
|
(31
|
)
|
|
$
|
(36
|
)
|
|
$
|
4,036
|
|
Internal revenues
|
|
—
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
(196
|
)
|
|
—
|
|
||||||
Total revenues
|
|
2,340
|
|
|
190
|
|
|
1,769
|
|
|
(31
|
)
|
|
(232
|
)
|
|
4,036
|
|
||||||
Depreciation, amortization and deferrals
|
|
460
|
|
|
31
|
|
|
125
|
|
|
12
|
|
|
—
|
|
|
628
|
|
||||||
Investment income (loss)
|
|
14
|
|
|
—
|
|
|
(5
|
)
|
|
3
|
|
|
(7
|
)
|
|
5
|
|
||||||
Interest expense
|
|
134
|
|
|
23
|
|
|
53
|
|
|
47
|
|
|
—
|
|
|
257
|
|
||||||
Income taxes (benefits)
|
|
50
|
|
|
32
|
|
|
47
|
|
|
(44
|
)
|
|
(8
|
)
|
|
77
|
|
||||||
Income from continuing operations
|
|
85
|
|
|
54
|
|
|
68
|
|
|
—
|
|
|
2
|
|
|
209
|
|
||||||
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Net income (loss)
|
|
85
|
|
|
54
|
|
|
77
|
|
|
(10
|
)
|
|
12
|
|
|
218
|
|
||||||
Total assets
|
|
27,030
|
|
|
4,953
|
|
|
17,809
|
|
|
591
|
|
|
—
|
|
|
50,383
|
|
||||||
Total goodwill
|
|
5,025
|
|
|
526
|
|
|
867
|
|
|
—
|
|
|
—
|
|
|
6,418
|
|
||||||
Property additions
|
|
261
|
|
|
105
|
|
|
162
|
|
|
20
|
|
|
—
|
|
|
548
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
External revenues
|
|
$
|
2,483
|
|
|
$
|
187
|
|
|
$
|
1,462
|
|
|
$
|
(31
|
)
|
|
$
|
(49
|
)
|
|
$
|
4,052
|
|
Internal revenues
|
|
—
|
|
|
—
|
|
|
209
|
|
|
—
|
|
|
(209
|
)
|
|
—
|
|
||||||
Total revenues
|
|
2,483
|
|
|
187
|
|
|
1,671
|
|
|
(31
|
)
|
|
(258
|
)
|
|
4,052
|
|
||||||
Depreciation, amortization and deferrals
|
|
193
|
|
|
28
|
|
|
102
|
|
|
9
|
|
|
1
|
|
|
333
|
|
||||||
Investment income
|
|
20
|
|
|
—
|
|
|
36
|
|
|
(2
|
)
|
|
(15
|
)
|
|
39
|
|
||||||
Interest expense
|
|
136
|
|
|
24
|
|
|
73
|
|
|
(3
|
)
|
|
—
|
|
|
230
|
|
||||||
Income taxes (benefits)
|
|
168
|
|
|
35
|
|
|
74
|
|
|
(8
|
)
|
|
38
|
|
|
307
|
|
||||||
Income from continuing operations
|
|
286
|
|
|
59
|
|
|
126
|
|
|
—
|
|
|
(49
|
)
|
|
422
|
|
||||||
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Net income (loss)
|
|
286
|
|
|
59
|
|
|
129
|
|
|
(13
|
)
|
|
(36
|
)
|
|
425
|
|
||||||
Total assets
|
|
26,122
|
|
|
4,519
|
|
|
16,846
|
|
|
1,251
|
|
|
—
|
|
|
48,738
|
|
||||||
Total goodwill
|
|
5,025
|
|
|
526
|
|
|
893
|
|
|
—
|
|
|
—
|
|
|
6,444
|
|
||||||
Property additions
|
|
308
|
|
|
47
|
|
|
412
|
|
|
8
|
|
|
—
|
|
|
775
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External revenues
|
|
$
|
6,593
|
|
|
$
|
546
|
|
|
$
|
4,350
|
|
|
$
|
(89
|
)
|
|
$
|
(130
|
)
|
|
$
|
11,270
|
|
Internal revenues
|
|
—
|
|
|
—
|
|
|
588
|
|
|
—
|
|
|
(588
|
)
|
|
—
|
|
||||||
Total revenues
|
|
6,593
|
|
|
546
|
|
|
4,938
|
|
|
(89
|
)
|
|
(718
|
)
|
|
11,270
|
|
||||||
Depreciation, amortization and deferrals
|
|
882
|
|
|
91
|
|
|
347
|
|
|
32
|
|
|
—
|
|
|
1,352
|
|
||||||
Investment income (loss)
|
|
41
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
(33
|
)
|
|
8
|
|
||||||
Interest expense
|
|
404
|
|
|
68
|
|
|
187
|
|
|
112
|
|
|
—
|
|
|
771
|
|
||||||
Income taxes (benefits)
|
|
284
|
|
|
93
|
|
|
(189
|
)
|
|
(55
|
)
|
|
(4
|
)
|
|
129
|
|
||||||
Income (loss) from continuing operations
|
|
474
|
|
|
156
|
|
|
(317
|
)
|
|
—
|
|
|
(80
|
)
|
|
233
|
|
||||||
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||||
Net income (loss)
|
|
474
|
|
|
156
|
|
|
(300
|
)
|
|
(92
|
)
|
|
12
|
|
|
250
|
|
||||||
Total assets
|
|
27,030
|
|
|
4,953
|
|
|
17,809
|
|
|
591
|
|
|
—
|
|
|
50,383
|
|
||||||
Total goodwill
|
|
5,025
|
|
|
526
|
|
|
867
|
|
|
—
|
|
|
—
|
|
|
6,418
|
|
||||||
Property additions
|
|
980
|
|
|
291
|
|
|
630
|
|
|
59
|
|
|
—
|
|
|
1,960
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External revenues
|
|
$
|
6,976
|
|
|
$
|
557
|
|
|
$
|
4,465
|
|
|
$
|
(78
|
)
|
|
$
|
(142
|
)
|
|
$
|
11,778
|
|
Internal revenues
|
|
—
|
|
|
—
|
|
|
686
|
|
|
—
|
|
|
(684
|
)
|
|
2
|
|
||||||
Total revenues
|
|
6,976
|
|
|
557
|
|
|
5,151
|
|
|
(78
|
)
|
|
(826
|
)
|
|
11,780
|
|
||||||
Depreciation, amortization and deferrals
|
|
618
|
|
|
86
|
|
|
303
|
|
|
25
|
|
|
—
|
|
|
1,032
|
|
||||||
Investment income
|
|
62
|
|
|
1
|
|
|
48
|
|
|
(1
|
)
|
|
(47
|
)
|
|
63
|
|
||||||
Interest expense
|
|
405
|
|
|
70
|
|
|
209
|
|
|
66
|
|
|
—
|
|
|
750
|
|
||||||
Income taxes
|
|
355
|
|
|
101
|
|
|
165
|
|
|
(49
|
)
|
|
78
|
|
|
650
|
|
||||||
Income from continuing operations
|
|
603
|
|
|
171
|
|
|
284
|
|
|
—
|
|
|
(150
|
)
|
|
908
|
|
||||||
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Net income (loss)
|
|
603
|
|
|
171
|
|
|
295
|
|
|
(82
|
)
|
|
(68
|
)
|
|
919
|
|
||||||
Total assets
|
|
26,122
|
|
|
4,519
|
|
|
16,846
|
|
|
1,251
|
|
|
—
|
|
|
48,738
|
|
||||||
Total goodwill
|
|
5,025
|
|
|
526
|
|
|
893
|
|
|
—
|
|
|
—
|
|
|
6,444
|
|
||||||
Property additions
|
|
751
|
|
|
169
|
|
|
715
|
|
|
51
|
|
|
—
|
|
|
1,686
|
|
Change In Basic Earnings (Losses) Per Share From Prior Year
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||
Basic Earnings Per Share - 2012
|
|
$
|
1.02
|
|
|
$
|
2.20
|
|
Segment operating results
(1)
-
|
|
|
|
|
||||
Regulated Distribution
|
|
(0.08
|
)
|
|
0.07
|
|
||
Regulated Transmission
|
|
—
|
|
|
(0.03
|
)
|
||
Competitive Energy Services
|
|
(0.17
|
)
|
|
(0.39
|
)
|
||
Regulatory charges
|
|
(0.32
|
)
|
|
(0.36
|
)
|
||
Non-core asset sales/impairments
|
|
—
|
|
|
(0.02
|
)
|
||
Merger-related costs
|
|
—
|
|
|
0.01
|
|
||
Merger accounting — commodity contracts
|
|
0.01
|
|
|
0.03
|
|
||
Trust securities impairments
|
|
(0.03
|
)
|
|
(0.08
|
)
|
||
Mark-to-market adjustments
|
|
(0.03
|
)
|
|
(0.07
|
)
|
||
Plant deactivation costs
(2)
|
|
—
|
|
|
(0.73
|
)
|
||
Debt redemption costs
|
|
0.02
|
|
|
(0.20
|
)
|
||
Interest expense, net of amounts capitalized
|
|
(0.01
|
)
|
|
(0.03
|
)
|
||
Investment income
|
|
(0.03
|
)
|
|
(0.01
|
)
|
||
Income tax legislative changes - 2012
|
|
0.03
|
|
|
0.07
|
|
||
Change in effective tax rate
|
|
0.09
|
|
|
0.11
|
|
||
Discontinued operations
|
|
0.01
|
|
|
0.01
|
|
||
Other
|
|
0.01
|
|
|
0.02
|
|
||
Basic Earnings Per Share - 2013
|
|
$
|
0.52
|
|
|
$
|
0.60
|
|
•
|
On August 21, 2013, MP and PE, along with the majority of the parties to the companies' generation transaction proceedings involving the Harrison Power Station, filed a comprehensive settlement agreement with the WVPSC. On October 7, 2013, the WVPSC issued an Order authorizing the transaction with certain conditions and on October 9, 2013, MP sold its approximate 8% share of Pleasants at its fair market value of $73 million to AE Supply, and AE Supply sold its approximate 80% share of Harrison to MP at its book value of $1.2 billion. The transaction resulted in AE Supply receiving net consideration of $1.1 billion and MP's assumption of a $73.5 million pollution control note. Currently, the $1.1 billion net consideration was financed by MP through an equity infusion from FE of approximately $527 million and a note payable to AE Supply of approximately $573 million. In connection with the closing, in the fourth quarter of 2013, MP recorded a pre-tax impairment charge of approximately $330 million to reduce the net book value of the Harrison Power Station to the amount that was permitted to be included in jurisdictional rate base. Additionally, MP recognized a regulatory liability of approximately $23 million in the fourth quarter of 2013 representing refunds to customers associated with the excess purchase price received by MP above the net book value of MP's minority interest in the Pleasants Power Station.
|
•
|
On September 4, 2013, FESC, on behalf of FG, AE Supply and Green Valley Hydro LLC applied for authorization from the FERC to sell eleven hydroelectric power stations in Pennsylvania, Virginia and West Virginia to subsidiaries of Harbor Hydro, a subsidiary of LS Power, for approximately $400 million. The hydroelectric power stations included in this proposed sale have a total generating capacity of approximately 527 MW, which represents less than 3 percent of FirstEnergy's competitive generation fleet output. An asset purchase agreement was entered into on August 23, and amended and restated as of September 4, 2013. Subject to receiving the required regulatory authorizations and the resolution of the potential competing license application and other claims and matters regarding the Seneca Pumped Storage Project, the proposed transaction is expected to close in the fourth quarter of 2013.
|
•
|
On September 25, 2013, FE filed a registration statement with the SEC to register 4 million shares of common stock to be issued to registered shareholders and its employees and the employees of its subsidiaries under its Stock Investment Plan. In addition, FE expects to also begin fulfilling certain share-based benefit plan obligations through the issuance of authorized but unissued common stock.
|
•
|
On August 21, 2013, JCP&L issued $500 million of 4.7% fixed-rate unsecured taxable long-term debt. The proceeds were used to pay down a portion if its short-term debt obligations.
|
•
|
On August 28, 2013, the Ohio Companies redeemed $660 million of long-term debt. In addition, approximately $120 million was paid in make-whole premiums which was deferred as a regulatory asset and will be amortized over the original life of the redeemed debt.
|
•
|
On October 31, 2013, FE amended its existing $2.5 billion multi-year syndicated revolving credit facility to exclude certain after-tax, non-cash write-downs and non-cash charges of approximately $1.4 billion from the debt to total capitalization ratio calculations incurred through September 30, 2013. Additionally, the amendment provides for a future allowance of approximately $1.35 billion for after-tax non-cash write-downs and non-cash charges over the remaining life of the facility.
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||||||||||
|
|
2013
|
|
2012
|
|
Increase (Decrease)
|
|
2013
|
|
2012
|
|
Increase (Decrease)
|
||||||||||||
|
|
(In millions, except per share)
|
||||||||||||||||||||||
Earnings (Losses) By Business Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Regulated Distribution
|
|
$
|
85
|
|
|
$
|
286
|
|
|
$
|
(201
|
)
|
|
$
|
474
|
|
|
$
|
603
|
|
|
$
|
(129
|
)
|
Regulated Transmission
|
|
54
|
|
|
59
|
|
|
(5
|
)
|
|
156
|
|
|
171
|
|
|
(15
|
)
|
||||||
Competitive Energy Services
|
|
77
|
|
|
129
|
|
|
(52
|
)
|
|
(300
|
)
|
|
295
|
|
|
(595
|
)
|
||||||
Other and reconciling adjustments
(1)
|
|
2
|
|
|
(49
|
)
|
|
51
|
|
|
(80
|
)
|
|
(151
|
)
|
|
71
|
|
||||||
Net Income
|
|
$
|
218
|
|
|
$
|
425
|
|
|
$
|
(207
|
)
|
|
$
|
250
|
|
|
$
|
918
|
|
|
$
|
(668
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations
|
|
$
|
0.50
|
|
|
$
|
1.01
|
|
|
$
|
(0.51
|
)
|
|
$
|
0.56
|
|
|
$
|
2.17
|
|
|
$
|
(1.61
|
)
|
Discontinued operations (Note 16)
|
|
0.02
|
|
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
|
0.03
|
|
|
0.01
|
|
||||||
Net earnings per basic share
|
|
$
|
0.52
|
|
|
$
|
1.02
|
|
|
$
|
(0.50
|
)
|
|
$
|
0.60
|
|
|
$
|
2.20
|
|
|
$
|
(1.60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations
|
|
$
|
0.50
|
|
|
$
|
1.00
|
|
|
$
|
(0.50
|
)
|
|
$
|
0.56
|
|
|
$
|
2.16
|
|
|
$
|
(1.60
|
)
|
Discontinued operations (Note 16)
|
|
0.02
|
|
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
|
0.03
|
|
|
0.01
|
|
||||||
Net earnings per diluted share
|
|
$
|
0.52
|
|
|
$
|
1.01
|
|
|
$
|
(0.49
|
)
|
|
$
|
0.60
|
|
|
$
|
2.19
|
|
|
$
|
(1.59
|
)
|
(1)
|
Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and the elimination of intersegment transactions.
|
Third Quarter 2013 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Other and
Reconciling Adjustments |
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
2,282
|
|
|
$
|
190
|
|
|
$
|
1,508
|
|
|
$
|
(35
|
)
|
|
$
|
3,945
|
|
Other
|
|
58
|
|
|
—
|
|
|
65
|
|
|
(32
|
)
|
|
91
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
196
|
|
|
(196
|
)
|
|
—
|
|
|||||
Total Revenues
|
|
2,340
|
|
|
190
|
|
|
1,769
|
|
|
(263
|
)
|
|
4,036
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
88
|
|
|
—
|
|
|
569
|
|
|
—
|
|
|
657
|
|
|||||
Purchased power
|
|
910
|
|
|
—
|
|
|
406
|
|
|
(196
|
)
|
|
1,120
|
|
|||||
Other operating expenses
|
|
457
|
|
|
35
|
|
|
457
|
|
|
(72
|
)
|
|
877
|
|
|||||
Provision for depreciation
|
|
151
|
|
|
28
|
|
|
125
|
|
|
12
|
|
|
316
|
|
|||||
Amortization of regulatory assets, net
|
|
309
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
312
|
|
|||||
General taxes
|
|
173
|
|
|
15
|
|
|
49
|
|
|
5
|
|
|
242
|
|
|||||
Total Operating Expenses
|
|
2,088
|
|
|
81
|
|
|
1,606
|
|
|
(251
|
)
|
|
3,524
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
|
252
|
|
|
109
|
|
|
163
|
|
|
(12
|
)
|
|
512
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gain on debt redemptions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|||||
Investment income (loss)
|
|
14
|
|
|
—
|
|
|
(5
|
)
|
|
(4
|
)
|
|
5
|
|
|||||
Interest expense
|
|
(134
|
)
|
|
(23
|
)
|
|
(53
|
)
|
|
(47
|
)
|
|
(257
|
)
|
|||||
Capitalized interest
|
|
3
|
|
|
—
|
|
|
10
|
|
|
4
|
|
|
17
|
|
|||||
Total Other Expense
|
|
(117
|
)
|
|
(23
|
)
|
|
(48
|
)
|
|
(38
|
)
|
|
(226
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income From Continuing Operations Before Income Taxes
|
|
135
|
|
|
86
|
|
|
115
|
|
|
(50
|
)
|
|
286
|
|
|||||
Income taxes
|
|
50
|
|
|
32
|
|
|
47
|
|
|
(52
|
)
|
|
77
|
|
|||||
Income From Continuing Operations
|
|
85
|
|
|
54
|
|
|
68
|
|
|
2
|
|
|
209
|
|
|||||
Discontinued Operations, net of tax
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Net Income
|
|
85
|
|
|
54
|
|
|
77
|
|
|
2
|
|
|
218
|
|
|||||
Income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Earnings Available to FirstEnergy Corp.
|
|
$
|
85
|
|
|
$
|
54
|
|
|
$
|
77
|
|
|
$
|
2
|
|
|
$
|
218
|
|
Third Quarter 2012 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Other and
Reconciling Adjustments |
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
2,426
|
|
|
$
|
187
|
|
|
$
|
1,428
|
|
|
$
|
(55
|
)
|
|
$
|
3,986
|
|
Other
|
|
57
|
|
|
—
|
|
|
34
|
|
|
(25
|
)
|
|
66
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
209
|
|
|
(209
|
)
|
|
—
|
|
|||||
Total Revenues
|
|
2,483
|
|
|
187
|
|
|
1,671
|
|
|
(289
|
)
|
|
4,052
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
76
|
|
|
—
|
|
|
560
|
|
|
—
|
|
|
636
|
|
|||||
Purchased power
|
|
1,010
|
|
|
—
|
|
|
263
|
|
|
(210
|
)
|
|
1,063
|
|
|||||
Other operating expenses
|
|
451
|
|
|
30
|
|
|
468
|
|
|
(88
|
)
|
|
861
|
|
|||||
Provision for depreciation
|
|
134
|
|
|
27
|
|
|
102
|
|
|
9
|
|
|
272
|
|
|||||
Amortization of regulatory assets, net
|
|
59
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
61
|
|
|||||
General taxes
|
|
187
|
|
|
12
|
|
|
52
|
|
|
6
|
|
|
257
|
|
|||||
Total Operating Expenses
|
|
1,917
|
|
|
70
|
|
|
1,445
|
|
|
(282
|
)
|
|
3,150
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
|
566
|
|
|
117
|
|
|
226
|
|
|
(7
|
)
|
|
902
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income
|
|
20
|
|
|
—
|
|
|
36
|
|
|
(17
|
)
|
|
39
|
|
|||||
Interest expense
|
|
(136
|
)
|
|
(24
|
)
|
|
(73
|
)
|
|
3
|
|
|
(230
|
)
|
|||||
Capitalized interest
|
|
4
|
|
|
1
|
|
|
11
|
|
|
2
|
|
|
18
|
|
|||||
Total Other Expense
|
|
(112
|
)
|
|
(23
|
)
|
|
(26
|
)
|
|
(12
|
)
|
|
(173
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income From Continuing Operations Before Income Taxes
|
|
454
|
|
|
94
|
|
|
200
|
|
|
(19
|
)
|
|
729
|
|
|||||
Income taxes
|
|
168
|
|
|
35
|
|
|
74
|
|
|
30
|
|
|
307
|
|
|||||
Income From Continuing Operations
|
|
286
|
|
|
59
|
|
|
126
|
|
|
(49
|
)
|
|
422
|
|
|||||
Discontinued Operations, net of tax
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Net Income
|
|
286
|
|
|
59
|
|
|
129
|
|
|
(49
|
)
|
|
425
|
|
|||||
Income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Earnings Available to FirstEnergy Corp.
|
|
$
|
286
|
|
|
$
|
59
|
|
|
$
|
129
|
|
|
$
|
(49
|
)
|
|
$
|
425
|
|
Changes Between Third Quarter 2013 and Third Quarter 2012 Financial Results
Increase (Decrease)
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Other and
Reconciling Adjustments |
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
(144
|
)
|
|
$
|
3
|
|
|
$
|
80
|
|
|
$
|
20
|
|
|
$
|
(41
|
)
|
Other
|
|
1
|
|
|
—
|
|
|
31
|
|
|
(7
|
)
|
|
25
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
13
|
|
|
—
|
|
|||||
Total Revenues
|
|
(143
|
)
|
|
3
|
|
|
98
|
|
|
26
|
|
|
(16
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
12
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
21
|
|
|||||
Purchased power
|
|
(100
|
)
|
|
—
|
|
|
143
|
|
|
14
|
|
|
57
|
|
|||||
Other operating expenses
|
|
6
|
|
|
5
|
|
|
(11
|
)
|
|
16
|
|
|
16
|
|
|||||
Provision for depreciation
|
|
17
|
|
|
1
|
|
|
23
|
|
|
3
|
|
|
44
|
|
|||||
Amortization of regulatory assets, net
|
|
250
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
251
|
|
|||||
General taxes
|
|
(14
|
)
|
|
3
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(15
|
)
|
|||||
Total Operating Expenses
|
|
171
|
|
|
11
|
|
|
161
|
|
|
31
|
|
|
374
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
(314
|
)
|
|
(8
|
)
|
|
(63
|
)
|
|
(5
|
)
|
|
(390
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gain (loss) on debt redemptions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|||||
Investment income (loss)
|
|
(6
|
)
|
|
—
|
|
|
(41
|
)
|
|
13
|
|
|
(34
|
)
|
|||||
Interest expense
|
|
2
|
|
|
1
|
|
|
20
|
|
|
(50
|
)
|
|
(27
|
)
|
|||||
Capitalized interest
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
2
|
|
|
(1
|
)
|
|||||
Total Other Expense
|
|
(5
|
)
|
|
—
|
|
|
(22
|
)
|
|
(26
|
)
|
|
(53
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) From Continuing Operations Before Income Taxes
|
|
(319
|
)
|
|
(8
|
)
|
|
(85
|
)
|
|
(31
|
)
|
|
(443
|
)
|
|||||
Income taxes (benefits)
|
|
(118
|
)
|
|
(3
|
)
|
|
(27
|
)
|
|
(82
|
)
|
|
(230
|
)
|
|||||
Income (Loss) From Continuing Operations
|
|
(201
|
)
|
|
(5
|
)
|
|
(58
|
)
|
|
51
|
|
|
(213
|
)
|
|||||
Discontinued Operations, net of tax
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Net Income (Loss)
|
|
(201
|
)
|
|
(5
|
)
|
|
(52
|
)
|
|
51
|
|
|
(207
|
)
|
|||||
Income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Earnings (Losses) Available to FirstEnergy Corp.
|
|
$
|
(201
|
)
|
|
$
|
(5
|
)
|
|
$
|
(52
|
)
|
|
$
|
51
|
|
|
$
|
(207
|
)
|
|
|
Three Months Ended September 30
|
|
Increase
|
||||||||
Revenues by Type of Service
|
|
2013
|
|
2012
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Distribution services
|
|
$
|
993
|
|
|
1,121
|
|
|
$
|
(128
|
)
|
|
|
|
|
|
|
|
|
||||||
Generation sales:
|
|
|
|
|
|
|
||||||
Retail
|
|
1,090
|
|
|
1,096
|
|
|
(6
|
)
|
|||
Wholesale
|
|
81
|
|
|
86
|
|
|
(5
|
)
|
|||
Total generation sales
|
|
1,171
|
|
|
1,182
|
|
|
(11
|
)
|
|||
|
|
|
|
|
|
|
||||||
Transmission
|
|
118
|
|
|
123
|
|
|
(5
|
)
|
|||
Other
|
|
58
|
|
|
57
|
|
|
1
|
|
|||
Total Revenues
|
|
$
|
2,340
|
|
|
$
|
2,483
|
|
|
$
|
(143
|
)
|
|
|
Three Months Ended September 30
|
|
Increase
|
|||||
Electric Distribution MWH Deliveries
|
|
2013
|
|
2012
|
|
(Decrease)
|
|||
|
|
(In thousands)
|
|
|
|||||
Residential
|
|
13,911
|
|
|
15,008
|
|
|
(7.3
|
)%
|
Commercial
|
|
11,368
|
|
|
11,436
|
|
|
(0.6
|
)%
|
Industrial
|
|
12,732
|
|
|
12,385
|
|
|
2.8
|
%
|
Other
|
|
147
|
|
|
146
|
|
|
0.7
|
%
|
Total Electric Distribution MWH Deliveries
|
|
38,158
|
|
|
38,975
|
|
|
(2.1
|
)%
|
Source of Change in Generation Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Retail:
|
|
|
|
|
Effect of decrease in sales volumes
|
|
$
|
(95
|
)
|
Change in prices
|
|
89
|
|
|
|
|
(6
|
)
|
|
Wholesale:
|
|
|
||
Effect of decrease in sales volumes
|
|
(31
|
)
|
|
Change in prices
|
|
26
|
|
|
|
|
(5
|
)
|
|
Decrease in Generation Revenues
|
|
$
|
(11
|
)
|
•
|
Fuel expense was $
12 million
higher in 2013 primarily related to increased generation at the Fort Martin plant during third quarter of 2013.
|
•
|
Purchased power costs were
$100 million
lower in
2013
primarily due to a decrease in volumes required as a result of increased customer shopping, higher generation and reduced NUG purchases, partially offset by higher energy and capacity unit cost.
|
Source of Change in Purchased Power
|
|
Increase(Decrease)
|
|||
|
|
(In millions)
|
|||
Purchases from non-affiliates:
|
|
|
|||
Change due to decreased unit costs
|
|
$
|
(9
|
)
|
|
Change due to decreased volumes
|
|
(121
|
)
|
||
|
|
(130
|
)
|
||
Purchases from affiliates:
|
|
|
|||
Change due to increased unit costs
|
|
23
|
|
||
Change due to decreased volumes
|
|
(36
|
)
|
||
|
|
(13
|
)
|
||
Decrease in costs deferred
|
|
43
|
|
||
Decrease in Purchased Power Costs
|
|
$
|
(100
|
)
|
•
|
Other operating expenses increased
$6 million
primarily due to:
|
•
|
higher transmission expenses of $26 million primarily due to PJM transmission costs associated with RMR units, partially offset by
|
•
|
lower distribution operating and maintenance expenses of $8 million primarily due to lower storm related maintenance activities during the third quarter of 2013, partially offset by more work allocated to capital in the third quarter of 2012 associated with integrating Allegheny's work management system,
|
•
|
lower Pennsylvania state reimbursed program costs of $6 million, which are recovered through rates, and
|
•
|
decreased regulated generation operating and maintenance expenses of $6 million primarily related to a forced outage at Fort Martin in the third quarter of 2012.
|
•
|
Depreciation expense increased by
$17 million
due to a higher asset base and an adjustment in the third quarter of 2012 to reduce depreciation rates for WP that was approved by the PPUC in September 2012.
|
•
|
Net regulatory asset amortization increased
$250 million
primarily due to a regulatory asset impairment associated with the recovery of marginal transmission losses at ME and PN, lower storm cost deferrals and higher default generation service costs recovery in Pennsylvania, partially offset by a reduction of NUG cost recovery at ME and PN and higher transmission cost deferrals in Ohio.
|
•
|
General taxes decreased by
$14 million
primarily due to lower gross receipts and payroll taxes, partially offset by higher property taxes.
|
|
|
Three Months Ended September 30
|
|
Increase
|
||||||||
Revenues by Transmission Asset Owner
|
|
2013
|
|
2012
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
ATSI
|
|
$
|
56
|
|
|
$
|
53
|
|
|
$
|
3
|
|
TrAIL
|
|
56
|
|
|
51
|
|
|
5
|
|
|||
PATH
|
|
5
|
|
|
4
|
|
|
1
|
|
|||
Utilities
|
|
73
|
|
|
79
|
|
|
(6
|
)
|
|||
Total Revenues
|
|
$
|
190
|
|
|
$
|
187
|
|
|
$
|
3
|
|
|
|
Three Months Ended September 30
|
|
Increase (Decrease)
|
||||||||
Revenues by Type of Service
|
|
2013
|
|
2012
|
|
|||||||
|
|
(In millions)
|
||||||||||
Direct
|
|
$
|
767
|
|
|
$
|
763
|
|
|
$
|
4
|
|
Governmental Aggregation
|
|
346
|
|
|
323
|
|
|
23
|
|
|||
Mass Market
|
|
119
|
|
|
104
|
|
|
15
|
|
|||
POLR and Structured
|
|
338
|
|
|
327
|
|
|
11
|
|
|||
Wholesale
|
|
100
|
|
|
82
|
|
|
18
|
|
|||
Transmission
|
|
34
|
|
|
37
|
|
|
(3
|
)
|
|||
RECs
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||
Other
|
|
65
|
|
|
34
|
|
|
31
|
|
|||
Total Revenues
|
|
$
|
1,769
|
|
|
$
|
1,671
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30
|
|
Increase (Decrease)
|
|||||
MWH Sales by Channel
|
|
2013
|
|
2012
|
|
||||
|
|
(In thousands)
|
|
|
|||||
Direct
|
|
14,725
|
|
|
14,312
|
|
|
2.9
|
%
|
Governmental Aggregation
|
|
5,813
|
|
|
5,229
|
|
|
11.2
|
%
|
Mass Market
|
|
1,774
|
|
|
1,539
|
|
|
15.3
|
%
|
POLR and Structured
|
|
6,358
|
|
|
5,718
|
|
|
11.2
|
%
|
Wholesale
|
|
556
|
|
|
774
|
|
|
(28.2
|
)%
|
Total MWH Sales
|
|
29,226
|
|
|
27,572
|
|
|
6.0
|
%
|
Source of Change in Direct Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Direct :
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
22
|
|
Change in prices
|
|
(18
|
)
|
|
|
|
$
|
4
|
|
Source of Change in Governmental Aggregation Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Governmental Aggregation:
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
36
|
|
Change in prices
|
|
(13
|
)
|
|
|
|
$
|
23
|
|
Source of Change in Mass Market Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Mass Market:
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
16
|
|
Change in prices
|
|
(1
|
)
|
|
|
|
$
|
15
|
|
Source of Change in POLR and Structured Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
POLR and Structured:
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
47
|
|
Change in prices
|
|
(36
|
)
|
|
|
|
$
|
11
|
|
Source of Change in Wholesale Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Wholesale:
|
|
|
||
Effect of decrease in sales volumes
|
|
$
|
(6
|
)
|
Gain on settled contracts
|
|
(9
|
)
|
|
Capacity revenue
|
|
33
|
|
|
|
|
$
|
18
|
|
•
|
Fuel costs increased
$9 million
due primarily to settlements associated with past damages on various coal and transportation contracts, partially offset by lower unit prices associated with new and restructured coal contracts. Volumes increased as a result of higher fossil generation driven by increased economic generation and the W.H. Sammis Plant being temporarily idled in September 2012, partially offset by lower nuclear generation due to unplanned outages.
|
•
|
Purchased power costs increased
$143 million
due to higher capacity expenses ($43 million), higher volumes ($64 million) and increased prices ($46 million), partially offset by reduced losses on financially settled contracts ($10 million). The
|
•
|
Fossil operating costs decreased by $10 million due primarily to lower labor costs resulting from previously deactivated units and lower compensation and benefit expenses based on plan changes.
|
•
|
Nuclear operating costs decreased by $10 million due primarily to lower labor costs and lower compensation and benefit expenses based on plan changes.
|
•
|
Transmission expenses increased $20 million due primarily to higher rates associated with higher congestion, network and line loss costs and additional retail load, partially offset by lower ancillary costs and a credit received in the third quarter of 2013 for previously incurred PJM transmission costs associated with RMR units in the ATSI zone.
|
•
|
General taxes decreased by
$3 million
due primarily to lower payroll taxes as a result of lower labor costs noted above, partially offset by higher property taxes.
|
•
|
Depreciation expense increased
$23 million
primarily due to a higher asset base and accelerated depreciation associated with the deactivation of two unregulated coal-fired generating plants.
|
•
|
Other operating expenses decreased by $11 million primarily due to reduced lease costs from the sale and leaseback repurchases and lower corporate support costs.
|
First Nine Months 2013 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Other and
Reconciling Adjustments |
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
6,414
|
|
|
$
|
546
|
|
|
$
|
4,204
|
|
|
$
|
(128
|
)
|
|
$
|
11,036
|
|
Other
|
|
179
|
|
|
—
|
|
|
146
|
|
|
(91
|
)
|
|
234
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
588
|
|
|
(588
|
)
|
|
—
|
|
|||||
Total Revenues
|
|
6,593
|
|
|
546
|
|
|
4,938
|
|
|
(807
|
)
|
|
11,270
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
250
|
|
|
—
|
|
|
1,665
|
|
|
—
|
|
|
1,915
|
|
|||||
Purchased power
|
|
2,547
|
|
|
—
|
|
|
973
|
|
|
(588
|
)
|
|
2,932
|
|
|||||
Other operating expenses
|
|
1,274
|
|
|
98
|
|
|
1,517
|
|
|
(244
|
)
|
|
2,645
|
|
|||||
Provision for depreciation
|
|
446
|
|
|
84
|
|
|
347
|
|
|
32
|
|
|
909
|
|
|||||
Amortization of regulatory assets, net
|
|
436
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
443
|
|
|||||
General taxes
|
|
527
|
|
|
41
|
|
|
158
|
|
|
21
|
|
|
747
|
|
|||||
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
473
|
|
|
—
|
|
|
473
|
|
|||||
Total Operating Expenses
|
|
5,480
|
|
|
230
|
|
|
5,133
|
|
|
(779
|
)
|
|
10,064
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
1,113
|
|
|
316
|
|
|
(195
|
)
|
|
(28
|
)
|
|
1,206
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss on debt redemptions
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
17
|
|
|
(132
|
)
|
|||||
Investment income (loss)
|
|
41
|
|
|
—
|
|
|
(6
|
)
|
|
(27
|
)
|
|
8
|
|
|||||
Interest expense
|
|
(404
|
)
|
|
(68
|
)
|
|
(187
|
)
|
|
(112
|
)
|
|
(771
|
)
|
|||||
Capitalized interest
|
|
8
|
|
|
1
|
|
|
31
|
|
|
11
|
|
|
51
|
|
|||||
Total Other Expense
|
|
(355
|
)
|
|
(67
|
)
|
|
(311
|
)
|
|
(111
|
)
|
|
(844
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) From Continuing Operations Before Income Taxes
|
|
758
|
|
|
249
|
|
|
(506
|
)
|
|
(139
|
)
|
|
362
|
|
|||||
Income taxes (benefits)
|
|
284
|
|
|
93
|
|
|
(189
|
)
|
|
(59
|
)
|
|
129
|
|
|||||
Income (Loss) From Continuing Operations
|
|
474
|
|
|
156
|
|
|
(317
|
)
|
|
(80
|
)
|
|
233
|
|
|||||
Discontinued Operations, net of tax
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|||||
Net Income (Loss)
|
|
474
|
|
|
156
|
|
|
(300
|
)
|
|
(80
|
)
|
|
250
|
|
|||||
Income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Earnings (Losses) Available to FirstEnergy Corp.
|
|
$
|
474
|
|
|
$
|
156
|
|
|
$
|
(300
|
)
|
|
$
|
(80
|
)
|
|
$
|
250
|
|
First Nine Months 2012 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Other and
Reconciling Adjustments |
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
6,818
|
|
|
$
|
557
|
|
|
$
|
4,355
|
|
|
$
|
(166
|
)
|
|
$
|
11,564
|
|
Other
|
|
158
|
|
|
—
|
|
|
110
|
|
|
(54
|
)
|
|
214
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
686
|
|
|
(684
|
)
|
|
2
|
|
|||||
Total Revenues
|
|
6,976
|
|
|
557
|
|
|
5,151
|
|
|
(904
|
)
|
|
11,780
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
173
|
|
|
—
|
|
|
1,660
|
|
|
—
|
|
|
1,833
|
|
|||||
Purchased power
|
|
2,987
|
|
|
—
|
|
|
1,064
|
|
|
(684
|
)
|
|
3,367
|
|
|||||
Other operating expenses
|
|
1,363
|
|
|
99
|
|
|
1,387
|
|
|
(252
|
)
|
|
2,597
|
|
|||||
Provision for depreciation
|
|
421
|
|
|
85
|
|
|
303
|
|
|
25
|
|
|
834
|
|
|||||
Amortization of regulatory assets, net
|
|
197
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
198
|
|
|||||
General taxes
|
|
543
|
|
|
33
|
|
|
161
|
|
|
23
|
|
|
760
|
|
|||||
Total Operating Expenses
|
|
5,684
|
|
|
218
|
|
|
4,575
|
|
|
(888
|
)
|
|
9,589
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
|
1,292
|
|
|
339
|
|
|
576
|
|
|
(16
|
)
|
|
2,191
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income
|
|
62
|
|
|
1
|
|
|
48
|
|
|
(48
|
)
|
|
63
|
|
|||||
Interest expense
|
|
(405
|
)
|
|
(70
|
)
|
|
(209
|
)
|
|
(66
|
)
|
|
(750
|
)
|
|||||
Capitalized interest
|
|
9
|
|
|
2
|
|
|
34
|
|
|
9
|
|
|
54
|
|
|||||
Total Other Expense
|
|
(334
|
)
|
|
(67
|
)
|
|
(127
|
)
|
|
(105
|
)
|
|
(633
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income From Continuing Operations Before Income Taxes
|
|
958
|
|
|
272
|
|
|
449
|
|
|
(121
|
)
|
|
1,558
|
|
|||||
Income taxes
|
|
355
|
|
|
101
|
|
|
165
|
|
|
29
|
|
|
650
|
|
|||||
Income From Continuing Operations
|
|
603
|
|
|
171
|
|
|
284
|
|
|
(150
|
)
|
|
908
|
|
|||||
Discontinued Operations, net of tax
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Net Income
|
|
603
|
|
|
171
|
|
|
295
|
|
|
(150
|
)
|
|
919
|
|
|||||
Income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Earnings Available to FirstEnergy Corp.
|
|
$
|
603
|
|
|
$
|
171
|
|
|
$
|
295
|
|
|
$
|
(151
|
)
|
|
$
|
918
|
|
Changes Between First Nine Months 2013 and First Nine Months 2012 Financial Results Increase (Decrease)
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Other and
Reconciling Adjustments |
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
(404
|
)
|
|
$
|
(11
|
)
|
|
$
|
(151
|
)
|
|
$
|
38
|
|
|
$
|
(528
|
)
|
Other
|
|
21
|
|
|
—
|
|
|
36
|
|
|
(37
|
)
|
|
20
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
96
|
|
|
(2
|
)
|
|||||
Total Revenues
|
|
(383
|
)
|
|
(11
|
)
|
|
(213
|
)
|
|
97
|
|
|
(510
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
77
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
82
|
|
|||||
Purchased power
|
|
(440
|
)
|
|
—
|
|
|
(91
|
)
|
|
96
|
|
|
(435
|
)
|
|||||
Other operating expenses
|
|
(89
|
)
|
|
(1
|
)
|
|
130
|
|
|
8
|
|
|
48
|
|
|||||
Provision for depreciation
|
|
25
|
|
|
(1
|
)
|
|
44
|
|
|
7
|
|
|
75
|
|
|||||
Amortization of regulatory assets, net
|
|
239
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
245
|
|
|||||
General taxes
|
|
(16
|
)
|
|
8
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(13
|
)
|
|||||
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
473
|
|
|
—
|
|
|
473
|
|
|||||
Total Operating Expenses
|
|
(204
|
)
|
|
12
|
|
|
558
|
|
|
109
|
|
|
475
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
(179
|
)
|
|
(23
|
)
|
|
(771
|
)
|
|
(12
|
)
|
|
(985
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gain (loss) on debt redemptions
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
17
|
|
|
(132
|
)
|
|||||
Investment income
|
|
(21
|
)
|
|
(1
|
)
|
|
(54
|
)
|
|
21
|
|
|
(55
|
)
|
|||||
Interest expense
|
|
1
|
|
|
2
|
|
|
22
|
|
|
(46
|
)
|
|
(21
|
)
|
|||||
Capitalized interest
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
2
|
|
|
(3
|
)
|
|||||
Total Other Expense
|
|
(21
|
)
|
|
—
|
|
|
(184
|
)
|
|
(6
|
)
|
|
(211
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) From Continuing Operations Before Income Taxes
|
|
(200
|
)
|
|
(23
|
)
|
|
(955
|
)
|
|
(18
|
)
|
|
(1,196
|
)
|
|||||
Income taxes (benefits)
|
|
(71
|
)
|
|
(8
|
)
|
|
(354
|
)
|
|
(88
|
)
|
|
(521
|
)
|
|||||
Income (Loss) From Continuing Operations
|
|
(129
|
)
|
|
(15
|
)
|
|
(601
|
)
|
|
70
|
|
|
(675
|
)
|
|||||
Discontinued Operations, net of tax
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Net Income (Loss)
|
|
(129
|
)
|
|
(15
|
)
|
|
(595
|
)
|
|
70
|
|
|
(669
|
)
|
|||||
Loss attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Earnings (Losses) Available to FirstEnergy Corp.
|
|
$
|
(129
|
)
|
|
$
|
(15
|
)
|
|
$
|
(595
|
)
|
|
$
|
71
|
|
|
$
|
(668
|
)
|
|
|
Nine Months Ended September 30
|
|
Increase
|
||||||||
Revenues by Type of Service
|
|
2013
|
|
2012
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Distribution services
|
|
$
|
2,861
|
|
|
$
|
3,006
|
|
|
$
|
(145
|
)
|
|
|
|
|
|
|
|
||||||
Generation sales:
|
|
|
|
|
|
|
||||||
Retail
|
|
3,014
|
|
|
3,200
|
|
|
(186
|
)
|
|||
Wholesale
|
|
203
|
|
|
269
|
|
|
(66
|
)
|
|||
Total generation sales
|
|
3,217
|
|
|
3,469
|
|
|
(252
|
)
|
|||
|
|
|
|
|
|
|
||||||
Transmission
|
|
336
|
|
|
343
|
|
|
(7
|
)
|
|||
Other
|
|
179
|
|
|
158
|
|
|
21
|
|
|||
Total Revenues
|
|
$
|
6,593
|
|
|
$
|
6,976
|
|
|
$
|
(383
|
)
|
|
|
Nine Months Ended September 30
|
|
Increase
|
|||||
Electric Distribution MWH Deliveries
|
|
2013
|
|
2012
|
|
(Decrease)
|
|||
|
|
(In thousands)
|
|
|
|||||
Residential
|
|
40,996
|
|
|
40,934
|
|
|
0.2
|
%
|
Commercial
|
|
32,058
|
|
|
32,384
|
|
|
(1.0
|
)%
|
Industrial
|
|
37,851
|
|
|
37,740
|
|
|
0.3
|
%
|
Other
|
|
436
|
|
|
444
|
|
|
(1.8
|
)%
|
Total Electric Distribution MWH Deliveries
|
|
111,341
|
|
|
111,502
|
|
|
(0.1
|
)%
|
Source of Change in Generation Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Retail:
|
|
|
|
|
Effect of decrease in sales volumes
|
|
$
|
(193
|
)
|
Change in prices
|
|
7
|
|
|
|
|
(186
|
)
|
|
Wholesale:
|
|
|
||
Effect of decrease in sales volumes
|
|
(96
|
)
|
|
Change in prices
|
|
30
|
|
|
|
|
(66
|
)
|
|
Decrease in Generation Revenues
|
|
$
|
(252
|
)
|
•
|
Fuel expense was
$77 million
higher in 2013 primarily related to increased generation at Fort Martin as a result of planned and forced outages in the first nine months of 2012.
|
•
|
Purchased power costs were
$440 million
lower in
2013
primarily due to a decrease in volumes required from increased customer shopping, higher generation, reduced NUG purchases and lower unit power supply costs during the first
nine
months of
2013
compared to the same period of
2012
.
|
Source of Change in Purchased Power
|
|
Increase(Decrease)
|
|||
|
|
(In millions)
|
|||
Purchases from non-affiliates:
|
|
|
|||
Change due to decreased unit costs
|
|
$
|
(118
|
)
|
|
Change due to decreased volumes
|
|
(333
|
)
|
||
|
|
(451
|
)
|
||
Purchases from affiliates:
|
|
|
|||
Change due to decreased unit costs
|
|
(6
|
)
|
||
Change due to decreased volumes
|
|
(80
|
)
|
||
|
|
(86
|
)
|
||
Decrease in costs deferred
|
|
97
|
|
||
Decrease in Purchased Power Costs
|
|
$
|
(440
|
)
|
•
|
Other operating expenses decreased
$89 million
primarily due to:
|
•
|
a decrease in energy efficiency program expenses of $45 million resulting from the completion of certain initiatives in Ohio and Pennsylvania, which are recovered through rates,
|
•
|
lower distribution operating and maintenance expenses of $58 million primarily due to lower storm related maintenance activities during the first nine months of 2013, and
|
•
|
decreased regulated generation operating and maintenance expenses of $22 million primarily related to planned and forced outages at Fort Martin in the first nine months of 2012, partially offset by
|
•
|
higher transmission expenses of $36 million primarily due to PJM transmission costs associated with RMR units.
|
•
|
Depreciation expense increased by
$25 million
due to a higher asset base.
|
•
|
Net regulatory asset amortization increased
$239 million
primarily due to a regulatory asset impairment associated with the recovery of marginal transmission losses at ME and PN, lower storm cost deferrals and higher default generation service costs recovery in Pennsylvania, partially offset by a reduction of NUG cost recovery at ME and PN and higher transmission cost deferrals in Ohio.
|
•
|
General taxes decreased by
$16 million
primarily due to a decrease in gross receipt taxes, payroll taxes and West Virginia's business and occupation tax, partially offset by an increase in property taxes.
|
|
|
Nine Months Ended September 30
|
|
Increase
|
||||||||
Revenues by Transmission Asset Owner
|
|
2013
|
|
2012
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
ATSI
|
|
$
|
156
|
|
|
$
|
160
|
|
|
$
|
(4
|
)
|
TrAIL
|
|
155
|
|
|
153
|
|
|
2
|
|
|||
PATH
|
|
15
|
|
|
12
|
|
|
3
|
|
|||
Utilities
|
|
220
|
|
|
232
|
|
|
(12
|
)
|
|||
Total Revenues
|
|
$
|
546
|
|
|
$
|
557
|
|
|
$
|
(11
|
)
|
|
|
Nine Months Ended September 30
|
|
Increase
|
||||||||
Revenues by Type of Service
|
|
2013
|
|
2012
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Direct
|
|
$
|
2,202
|
|
|
$
|
2,223
|
|
|
$
|
(21
|
)
|
Governmental Aggregation
|
|
911
|
|
|
788
|
|
|
123
|
|
|||
Mass Market
|
|
335
|
|
|
264
|
|
|
71
|
|
|||
POLR and Structured
|
|
971
|
|
|
1,002
|
|
|
(31
|
)
|
|||
Wholesale
|
|
258
|
|
|
637
|
|
|
(379
|
)
|
|||
Transmission
|
|
115
|
|
|
122
|
|
|
(7
|
)
|
|||
RECs
|
|
—
|
|
|
5
|
|
|
(5
|
)
|
|||
Other
|
|
146
|
|
|
110
|
|
|
36
|
|
|||
Total Revenues
|
|
$
|
4,938
|
|
|
$
|
5,151
|
|
|
$
|
(213
|
)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30
|
|
Increase
|
|||||
MWH Sales by Channel
|
|
2013
|
|
2012
|
|
(Decrease)
|
|||
|
|
(In thousands)
|
|
|
|||||
Direct
|
|
42,347
|
|
|
41,029
|
|
|
3.2
|
%
|
Governmental Aggregation
|
|
15,975
|
|
|
12,833
|
|
|
24.5
|
%
|
Mass Market
|
|
5,045
|
|
|
3,865
|
|
|
30.5
|
%
|
POLR and Structured
|
|
18,716
|
|
|
17,740
|
|
|
5.5
|
%
|
Wholesale
|
|
1,394
|
|
|
3,513
|
|
|
(60.3
|
)%
|
Total MWH Sales
|
|
83,477
|
|
|
78,980
|
|
|
5.7
|
%
|
Source of Change in Direct Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Direct :
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
72
|
|
Change in prices
|
|
(93
|
)
|
|
|
|
$
|
(21
|
)
|
Source of Change in Governmental Aggregation Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Governmental Aggregation:
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
193
|
|
Change in prices
|
|
(70
|
)
|
|
|
|
$
|
123
|
|
Source of Change in Mass Market Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Mass Market:
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
80
|
|
Change in prices
|
|
(9
|
)
|
|
|
|
$
|
71
|
|
Source of Change in POLR and Structured Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
POLR and Structured:
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
66
|
|
Change in prices
|
|
(97
|
)
|
|
|
|
$
|
(31
|
)
|
Source of Change in Wholesale Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Wholesale:
|
|
|
||
Effect of decrease in sales volumes
|
|
$
|
(55
|
)
|
Change in prices
|
|
6
|
|
|
Gain on settled contracts
|
|
(185
|
)
|
|
Capacity revenue
|
|
(145
|
)
|
|
|
|
$
|
(379
|
)
|
•
|
Fuel costs increased
$5 million
due primarily to settlements associated with past damages on various coal and transportation contracts, partially offset by lower unit prices associated with new and restructured coal contracts. Volumes decreased as a result of lower nuclear generation due to unplanned outages, partially offset by higher fossil generation driven by increased economic generation and the W.H. Sammis Plant being temporarily idled in September 2012.
|
•
|
Purchased power costs decreased
$91 million
due to reduced capacity expenses ($170 million) and lower losses on financially settled contracts ($218 million) partially offset by higher volumes ($218 million) and prices ($79 million). The increase in purchased power volumes relates to lower generation primarily from the plants that were deactivated in 2012 and those under RMR arrangements, lower nuclear generation and the overall increase in sales volumes.
|
•
|
Fossil operating costs decreased by $9 million due primarily to lower labor costs resulting from previously deactivated units and lower compensation and benefit expenses based on plan changes. The lower labor costs were partially offset by higher contractor, materials and equipment costs resulting from an increase in planned generating unit outages in the first nine months of 2013 as compared to the same period in 2012.
|
•
|
Nuclear operating costs decreased by $27 million due primarily to lower contractor, materials and equipment costs. In 2013, there was a single refueling outage at Perry while there were two refueling outages during the same period of 2012. Additionally, compensation and benefit expenses were lower as a result of plan changes in 2013.
|
•
|
Transmission expenses increased $79 million due primarily to higher rates associated with higher ancillary, network and line loss costs and additional retail load, partially offset by lower congestion costs and a credit received in the third quarter of 2013 for previously incurred PJM transmission costs associated with RMR units.
|
•
|
Impairments of long-lived assets increased by $473 million due to the decision to deactivate two unregulated, coal-fired generating plants in the second quarter of 2013.
|
•
|
Depreciation expense increased
$44 million
primarily due to the absence of credits in 2013 from a 2012 settlement with the DOE, higher asset base, and accelerated depreciation associated with deactivation noted above.
|
•
|
General taxes decreased by $3 million due primarily to lower payroll taxes as a result of lower labor costs noted above, partially offset by higher property taxes.
|
•
|
Other operating expenses increased by $87 million primarily due to an increase in mark-to-market expense on commodity contract positions ($99 million) and increased retail expenses ($13 million), partially offset by reduced lease costs from sale and leaseback repurchases ($25 million).
|
Regulatory Assets by Source
|
|
September 30,
2013 |
|
December 31,
2012 |
|
Increase
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Regulatory transition costs
|
|
$
|
265
|
|
|
$
|
293
|
|
|
$
|
(28
|
)
|
Customer receivables for future income taxes
|
|
505
|
|
|
508
|
|
|
(3
|
)
|
|||
Nuclear decommissioning and spent fuel disposal costs
|
|
(191
|
)
|
|
(219
|
)
|
|
28
|
|
|||
Asset removal costs
|
|
(358
|
)
|
|
(372
|
)
|
|
14
|
|
|||
Deferred transmission costs
|
|
154
|
|
|
390
|
|
|
(236
|
)
|
|||
Deferred generation costs
|
|
408
|
|
|
379
|
|
|
29
|
|
|||
Deferred distribution costs
|
|
205
|
|
|
231
|
|
|
(26
|
)
|
|||
Contract valuations
|
|
435
|
|
|
463
|
|
|
(28
|
)
|
|||
Storm-related costs
|
|
463
|
|
|
469
|
|
|
(6
|
)
|
|||
Other
|
|
260
|
|
|
233
|
|
|
27
|
|
|||
Total
|
|
$
|
2,146
|
|
|
$
|
2,375
|
|
|
$
|
(229
|
)
|
Currently Payable Long-Term Debt
|
|
(In millions)
|
||
PCRBs supported by bank LOCs
(1)
|
|
$
|
809
|
|
Unsecured notes
|
|
827
|
|
|
Unsecured PCRBs
(1)
|
|
50
|
|
|
Collateralized lease obligation bonds
|
|
67
|
|
|
Sinking fund requirements
|
|
120
|
|
|
Other notes
|
|
16
|
|
|
|
|
$
|
1,889
|
|
(1)
|
These PCRBs are classified as currently payable long-term debt because the applicable interest rate mode permits individual debt holders to put the respective debt back to the issuer prior to maturity.
|
Borrower(s)
|
|
Type
|
|
Maturity
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
|
|
|
|
(In millions)
|
||||||
FirstEnergy
(1)
|
|
Revolving
|
|
May 2018
|
|
$
|
2,500
|
|
|
$
|
294
|
|
FES / AE Supply
|
|
Revolving
|
|
May 2018
|
|
2,500
|
|
|
2,499
|
|
||
FET
(2)
|
|
Revolving
|
|
May 2018
|
|
1,000
|
|
|
—
|
|
||
AGC
|
|
Revolving
|
|
Dec. 2013
|
|
50
|
|
|
45
|
|
||
|
|
|
|
Subtotal
|
|
$
|
6,050
|
|
|
$
|
2,838
|
|
|
|
|
|
Cash
|
|
—
|
|
|
119
|
|
||
|
|
|
|
Total
|
|
$
|
6,050
|
|
|
$
|
2,957
|
|
(1)
|
FE and the Utilities.
|
(2)
|
Includes FET, ATSI and TrAIL.
|
Borrower
|
|
FirstEnergy Revolving
Credit Facility
Sub-Limit
|
|
FES/AE Supply Revolving
Credit Facility
Sub-Limit
|
|
FET Revolving
Credit Facility
Sub-Limit
|
|
Regulatory and
Other Short-Term Debt Limitations
|
|
|
Debt to Capitalization
|
|||||||||||||
|
|
(In millions)
|
|
|
|
|||||||||||||||||||
FE
|
|
|
$
|
2,500
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
(1)
|
|
59.8
|
%
|
FES
|
|
|
—
|
|
|
|
1,500
|
|
|
|
—
|
|
|
|
—
|
|
(2)
|
|
35.3
|
%
|
||||
AE Supply
|
|
|
—
|
|
|
|
1,000
|
|
|
|
—
|
|
|
|
—
|
|
(2)
|
|
27.2
|
%
|
||||
FET
|
|
|
—
|
|
|
|
—
|
|
|
|
1,000
|
|
|
|
—
|
|
(1)
|
|
64.2
|
%
|
||||
OE
|
|
|
500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
500
|
|
(3)
|
|
46.5
|
%
|
||||
CEI
|
|
|
500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
500
|
|
(3)
|
|
54.0
|
%
|
||||
TE
|
|
|
500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
500
|
|
(3)
|
|
49.7
|
%
|
||||
JCP&L
|
|
|
600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
850
|
|
(3)
|
|
47.6
|
%
|
||||
ME
|
|
|
300
|
|
|
|
—
|
|
|
|
—
|
|
|
|
500
|
|
(3)
|
|
51.4
|
%
|
||||
PN
|
|
|
300
|
|
|
|
—
|
|
|
|
—
|
|
|
|
300
|
|
(3)
|
|
54.3
|
%
|
||||
WP
|
|
|
200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
200
|
|
(3)
|
|
47.7
|
%
|
||||
MP
|
|
|
150
|
|
|
|
—
|
|
|
|
—
|
|
|
|
150
|
|
(3)
|
|
46.6
|
%
|
||||
PE
|
|
|
150
|
|
|
|
—
|
|
|
|
—
|
|
|
|
150
|
|
(3)
|
|
49.8
|
%
|
||||
ATSI
|
|
|
—
|
|
|
|
—
|
|
|
|
100
|
|
|
|
100
|
|
(3)
|
|
40.3
|
%
|
||||
Penn
|
|
|
50
|
|
|
|
—
|
|
|
|
—
|
|
|
|
50
|
|
(3)
|
|
38.2
|
%
|
||||
TrAIL
|
|
|
—
|
|
|
|
—
|
|
|
|
200
|
|
|
|
400
|
|
(3)
|
|
44.3
|
%
|
(1)
|
No limitations.
|
(2)
|
No limitation based upon blanket financing authorization from the FERC under existing open market tariffs.
|
(3)
|
Includes amounts which may be borrowed under the regulated companies' money pool.
|
Bank
|
|
Aggregate Amount
(1)
|
|
Termination Date
|
|
Reimbursements of Draws Due
|
||
|
|
(In millions)
|
|
|
|
|
||
UBS
|
|
$
|
268
|
|
|
April 2014
|
|
April 2014
|
CitiBank N.A.
|
|
164
|
|
|
June 2014
|
|
June 2014
|
|
Wells Fargo
|
|
151
|
|
|
March 2014
|
|
March 2014
|
|
The Bank of Nova Scotia
|
|
48
|
|
|
April 2014
|
|
April 2014
|
|
The Bank of Nova Scotia
|
|
82
|
|
|
April 2015
|
|
April 2015
|
|
The Bank of Nova Scotia
|
|
96
|
|
|
December 2015
|
|
December 2015
|
|
Total
|
|
$
|
809
|
|
|
|
|
|
(1)
|
Excludes approximately
$9 million
of applicable interest coverage.
|
|
|
Senior Secured
|
|
Senior Unsecured
|
||||||||
Issuer
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
FE
|
|
—
|
|
—
|
|
—
|
|
BB+
|
|
Baa3
|
|
BB+
|
FES
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa3
|
|
BB+
|
AE Supply
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa3
|
|
BB+
|
AGC
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa3
|
|
BBB
|
ATSI
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa2
|
|
BBB+
|
CEI
|
|
BBB
|
|
Baa1
|
|
BBB
|
|
BBB-
|
|
Baa3
|
|
BBB-
|
JCP&L
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa2
|
|
BBB
|
ME
|
|
BBB
|
|
A3
|
|
A-
|
|
BBB-
|
|
Baa2
|
|
BBB+
|
MP
|
|
BBB+
|
|
Baa1
|
|
A-
|
|
BBB-
|
|
Baa3
|
|
BBB+
|
OE
|
|
BBB
|
|
A3
|
|
BBB+
|
|
BBB-
|
|
Baa2
|
|
BBB
|
PN
|
|
BBB
|
|
A3
|
|
BBB+
|
|
BBB-
|
|
Baa2
|
|
BBB
|
Penn
|
|
BBB+
|
|
A3
|
|
BBB+
|
|
—
|
|
—
|
|
—
|
PE
|
|
BBB+
|
|
Baa1
|
|
A-
|
|
BBB-
|
|
Baa3
|
|
BBB+
|
TE
|
|
BBB
|
|
Baa1
|
|
BBB
|
|
—
|
|
—
|
|
—
|
TrAIL
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa1
|
|
BBB+
|
WP
|
|
BBB+
|
|
A3
|
|
A-
|
|
BBB-
|
|
Baa2
|
|
BBB+
|
|
|
Nine Months Ended September 30
|
|
|
||||||||
Operating Cash Flows
|
|
2013
|
|
2012
|
|
Increase (Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Net income
|
|
$
|
250
|
|
|
$
|
919
|
|
|
$
|
(669
|
)
|
Non-cash charges
|
|
2,064
|
|
|
1,520
|
|
|
544
|
|
|||
Pension trust contributions
|
|
—
|
|
|
(600
|
)
|
|
600
|
|
|||
Working capital and other
|
|
(643
|
)
|
|
(563
|
)
|
|
(80
|
)
|
|||
|
|
$
|
1,671
|
|
|
$
|
1,276
|
|
|
$
|
395
|
|
•
|
$473 million
increase from impairment of long-lived assets due to the Hatfield's Ferry and Mitchell plant deactivations.
|
•
|
$132 million
increase from the loss on debt redemptions associated with the completion of the FES/AE Supply tender offers and the $400 million FES debt redemption described below.
|
•
|
$153 million
increase from lower deferred purchased power and other costs primarily due to the expiration of certain NUG agreements.
|
•
|
$40 million
increase from higher deferred rents and market lease valuation as a result of increased net amortization of lease expense.
|
•
|
$245 million
increase in amortization of regulatory assets primarily due to a regulatory asset impairment charge at ME and PN associated with the recovery of marginal transmission losses.
|
•
|
$104 million
increase due to net commodity derivative transactions.
|
•
|
$598 million
decrease in deferred income taxes and investment tax credits. Of the decrease, $156 million was the result of the reversal of deferred income tax liabilities associated with the impairment of Hatfield's Ferry and Mitchell.
|
|
|
Nine Months Ended September 30
|
||||||
Securities Issued or Redeemed / Repaid
|
|
2013
|
|
2012
|
||||
|
|
(In millions)
|
||||||
New Issues
|
|
|
|
|
|
|
||
PCRBs
|
|
$
|
—
|
|
|
$
|
560
|
|
Long-term revolving credit
|
|
—
|
|
|
—
|
|
||
Senior secured notes
|
|
445
|
|
|
—
|
|
||
FMBs
|
|
—
|
|
|
100
|
|
||
Unsecured Notes
|
|
2,300
|
|
|
—
|
|
||
|
|
$
|
2,745
|
|
|
$
|
660
|
|
|
|
|
|
|
||||
Redemptions / Repayments
|
|
|
|
|
|
|
||
PCRBs
|
|
$
|
(234
|
)
|
|
$
|
(188
|
)
|
Long-term revolving credit
|
|
(40
|
)
|
|
—
|
|
||
Senior secured notes
|
|
(353
|
)
|
|
(99
|
)
|
||
Unsecured notes
|
|
(2,035
|
)
|
|
(583
|
)
|
||
|
|
$
|
(2,662
|
)
|
|
$
|
(870
|
)
|
|
|
|
|
|
||||
|
|
|
|
|
||||
Short-term borrowings, net
|
|
$
|
1,435
|
|
|
$
|
1,604
|
|
|
|
Nine Months Ended September 30
|
|
|
||||||||
Cash Used for Investing Activities
|
|
2013
|
|
2012
|
|
Increase (Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Property Additions:
|
|
|
|
|
|
|
||||||
Regulated distribution
|
|
$
|
980
|
|
|
$
|
751
|
|
|
$
|
229
|
|
Regulated transmission
|
|
291
|
|
|
169
|
|
|
122
|
|
|||
Competitive energy services
|
|
630
|
|
|
715
|
|
|
(85
|
)
|
|||
Other and reconciling adjustments
|
|
59
|
|
|
51
|
|
|
8
|
|
|||
Nuclear fuel
|
|
159
|
|
|
207
|
|
|
(48
|
)
|
|||
Investments
|
|
34
|
|
|
(45
|
)
|
|
79
|
|
|||
Other
|
|
122
|
|
|
142
|
|
|
(20
|
)
|
|||
|
|
$
|
2,275
|
|
|
$
|
1,990
|
|
|
$
|
285
|
|
Guarantees and Other Assurances
|
|
Maximum Exposure
|
||
|
|
(In millions)
|
||
FirstEnergy Guarantees on Behalf of its Subsidiaries
|
|
|
|
|
Energy and Energy-Related Contracts
(1)
|
|
$
|
269
|
|
LOC (long-term debt) - interest coverage
(2)
|
|
5
|
|
|
OVEC obligations
|
|
300
|
|
|
Deferred compensation arrangements
|
|
504
|
|
|
Other
(3)
|
|
325
|
|
|
|
|
1,403
|
|
|
Subsidiaries’ Guarantees
|
|
|
||
Energy and Energy-Related Contracts
|
|
66
|
|
|
LOC (long-term debt) - interest coverage
(2)
|
|
3
|
|
|
FES’ guarantee of NG’s nuclear property insurance
|
|
88
|
|
|
FES’ guarantee of FG’s sale and leaseback obligations
|
|
2,064
|
|
|
Other
|
|
11
|
|
|
|
|
2,232
|
|
|
|
|
|
||
Global Holding facility
|
|
350
|
|
|
Surety Bonds
|
|
265
|
|
|
LOCs
(4)
|
|
132
|
|
|
|
|
747
|
|
|
Total Guarantees and Other Assurances
|
|
$
|
4,382
|
|
(1)
|
Issued for open-ended terms, with a 10-day termination right by FirstEnergy.
|
(2)
|
Reflects the interest coverage portion of LOCs issued in support of floating rate PCRBs with various maturities. The principal amount of floating-rate PCRBs of
$809 million
is reflected in currently payable long-term debt on FirstEnergy's consolidated balance sheets.
|
(3)
|
Includes guarantees of
$136 million
for nuclear decommissioning funding assurances,
$161 million
supporting OE’s sale and leaseback arrangements, and
$21 million
for railcar leases.
|
(4)
|
Includes
$7 million
issued for various terms pursuant to LOC capacity available under FirstEnergy’s revolving credit facilities,
$97 million
pledged in connection with the sale and leaseback of Beaver Valley Unit 2 by OE and
$28 million
pledged in connection with the sale and leaseback of Perry by OE.
|
Collateral Provisions
|
|
FES
|
|
AE Supply
|
|
Utilities
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Split Rating (One rating agency's rating below investment grade)
|
|
$
|
440
|
|
|
$
|
6
|
|
|
$
|
55
|
|
|
$
|
501
|
|
BB+/Ba1 Credit Ratings
|
|
$
|
484
|
|
|
$
|
6
|
|
|
$
|
55
|
|
|
$
|
545
|
|
Full impact of credit contingent contractual obligations
|
|
$
|
755
|
|
|
$
|
58
|
|
|
$
|
90
|
|
|
$
|
903
|
|
Source of Information-
Fair Value by Contract Year
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Prices actively quoted
(1)
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Other external sources
(2)
|
|
(8
|
)
|
|
(31
|
)
|
|
(35
|
)
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|||||||
Prices based on models
|
|
(2
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(160
|
)
|
|
(190
|
)
|
|||||||
Total
(3)
|
|
$
|
(12
|
)
|
|
$
|
(35
|
)
|
|
$
|
(35
|
)
|
|
$
|
(33
|
)
|
|
$
|
(23
|
)
|
|
$
|
(160
|
)
|
|
$
|
(298
|
)
|
(1)
|
Represents exchange traded New York Mercantile Exchange futures and options.
|
(2)
|
Primarily represents contracts based on broker and ICE quotes.
|
(3)
|
Includes
$(376) million
in non-hedge derivative contracts that are primarily related to NUG and LCAPP contracts. NUG and LCAPP contracts are generally subject to regulatory accounting and do not materially impact earnings.
|
•
|
Generation supplied through a CBP;
|
•
|
A load cap of no less than
80%
, so that no single supplier is awarded more than
80%
of the tranches, which also applies to tranches assigned post-auction;
|
•
|
A
6%
generation discount to certain low income customers provided by the Ohio Companies through a bilateral wholesale contract with FES (FES is one of the wholesale suppliers to the Ohio Companies);
|
•
|
No increase in base distribution rates through May 31, 2014; and
|
•
|
A new distribution rider, Rider DCR, to recover a return of, and on, capital investments in the delivery system.
|
•
|
Continuing the current base distribution rate freeze through May 31, 2016;
|
•
|
Continuing to provide economic development and assistance to low-income customers for the
two
-year plan period at levels established in the existing ESP;
|
•
|
A
6%
generation rate discount to certain low income customers provided by the Ohio Companies through a bilateral wholesale contract with FES (FES is one of the wholesale suppliers to the Ohio Companies);
|
•
|
Continuing to provide power to non-shopping customers at a market-based price set through an auction process; and
|
•
|
Continuing Rider DCR that allows continued investment in the distribution system for the benefit of customers.
|
•
|
Securing generation supply for a longer period of time by conducting an auction for a
three
-year period rather than a
one
-year period, in each of October 2012 and January 2013, to mitigate any potential price spikes for the Ohio Companies' utility customers who do not switch to a competitive generation supplier; and
|
•
|
Extending the recovery period for costs associated with purchasing RECs mandated by SB221 through the end of the new ESP 3 period. This is expected to initially reduce the monthly renewable energy charge for all non-shopping utility customers of the Ohio Companies by spreading out the costs over the entire ESP period.
|
•
|
$40 million
annualized base rate increases effective June 29, 2010;
|
•
|
Deferral of February 2010 storm restoration expenses over a maximum
five
-year period;
|
•
|
Additional
$20 million
annualized base rate increase effective in January 2011;
|
•
|
Decrease of
$20 million
in ENEC rates effective January 2011, providing for deferral of related costs for later recovery in 2012; and
|
•
|
Moratorium on filing for further increases in base rates before December 1, 2011, except under specified circumstances.
|
|
|
Nine Months Ended September 30
|
|
Increase
|
||||||||
Revenues by Type of Service
|
|
2013
|
|
2012
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Direct
|
|
$
|
2,162
|
|
|
$
|
2,157
|
|
|
$
|
5
|
|
Governmental Aggregation
|
|
911
|
|
|
788
|
|
|
123
|
|
|||
Mass Market
|
|
335
|
|
|
264
|
|
|
71
|
|
|||
POLR and Structured
|
|
862
|
|
|
693
|
|
|
169
|
|
|||
Wholesale
|
|
180
|
|
|
429
|
|
|
(249
|
)
|
|||
Transmission
|
|
98
|
|
|
84
|
|
|
14
|
|
|||
RECs
|
|
—
|
|
|
5
|
|
|
(5
|
)
|
|||
Other
|
|
107
|
|
|
91
|
|
|
16
|
|
|||
Total Revenues
|
|
$
|
4,655
|
|
|
$
|
4,511
|
|
|
$
|
144
|
|
|
|
Nine Months Ended September 30
|
|
Increase
|
|||||
MWH Sales by Channel
|
|
2013
|
|
2012
|
|
(Decrease)
|
|||
|
|
(In thousands)
|
|
|
|||||
Direct
|
|
41,678
|
|
|
39,922
|
|
|
4.4
|
%
|
Governmental Aggregation
|
|
15,975
|
|
|
12,833
|
|
|
24.5
|
%
|
Mass Market
|
|
5,045
|
|
|
3,865
|
|
|
30.5
|
%
|
POLR and Structured
|
|
16,780
|
|
|
12,300
|
|
|
36.4
|
%
|
Wholesale
|
|
—
|
|
|
96
|
|
|
(100.0
|
)%
|
Total MWH Sales
|
|
79,478
|
|
|
69,016
|
|
|
15.2
|
%
|
Source of Change in Direct Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
95
|
|
Change in prices
|
|
(90
|
)
|
|
|
|
$
|
5
|
|
Source of Change in Governmental Aggregation Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
193
|
|
Change in prices
|
|
(70
|
)
|
|
|
|
$
|
123
|
|
Source of Change in Mass Market Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
80
|
|
Change in prices
|
|
(9
|
)
|
|
|
|
$
|
71
|
|
Source of Change in POLR and Structured Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
|
|
|
||
Effect of increase in sales volumes
|
|
$
|
260
|
|
Change in prices
|
|
(91
|
)
|
|
|
|
$
|
169
|
|
Source of Change in Wholesale Revenues
|
|
Decrease
|
||
|
|
(In millions)
|
||
|
|
|
||
Gain on settled contracts
|
|
$
|
(189
|
)
|
Effect of decrease in sales volumes
|
|
(2
|
)
|
|
Capacity revenue
|
|
(58
|
)
|
|
|
|
$
|
(249
|
)
|
Source of Change in Fuel and Purchased Power
|
Increase (Decrease)
|
||
|
(In millions)
|
||
Fossil Fuel:
|
|
|
|
Change due to increased unit costs
|
$
|
21
|
|
Change due to volume consumed
|
(63
|
)
|
|
|
(42
|
)
|
|
|
|
|
|
Nuclear Fuel:
|
|
|
|
Change due to increased unit costs
|
5
|
|
|
Change due to volume consumed
|
(5
|
)
|
|
|
—
|
|
|
|
|
|
|
Non-affiliated Purchased Power:
|
|
|
|
Change due to increased unit costs
|
96
|
|
|
Change due to volume purchased
|
560
|
|
|
Loss on settled contracts
|
(201
|
)
|
|
Capacity expense
|
(125
|
)
|
|
|
330
|
|
|
|
|
|
|
Affiliated Purchased Power:
|
|
|
|
Change due to increased unit costs
|
23
|
|
|
Change due to volume purchased
|
(14
|
)
|
|
Loss on settled contracts with AE Supply
|
11
|
|
|
|
20
|
|
|
Net Increase in Fuel and Purchased Power Costs
|
$
|
308
|
|
•
|
Fossil operating costs decreased by $31 million due primarily to lower labor costs resulting from previously deactivated units and lower compensation and benefit expenses based on plan changes.
|
•
|
Nuclear operating costs decreased by $27 million due primarily to lower contractor, materials and equipment costs. In 2013, there was a single refueling outage at Perry while there were two refueling outages during the same period of 2012. Additionally, compensation and benefit expenses were lower as a result of plan changes in 2013.
|
•
|
Transmission expenses increased $71 million due primarily to higher rates associated with higher ancillary, network and line loss costs and additional retail load, partially offset by lower congestion costs and a credit received in the third quarter of 2013 for previously incurred PJM transmission costs associated with RMR units.
|
•
|
Other operating expenses increased by $64 million primarily due to an increase in mark-to-market expense on commodity contract positions ($88 million) partially offset by reduced lease expense ($24 million) from repurchasing interests in sale and leaseback transactions during 2012.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
|
Period
|
||||||||||||||
|
July
|
|
August
|
|
September
|
|
Third Quarter
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total Number of Shares Purchased
(1)
|
34,101
|
|
|
40,043
|
|
|
489,291
|
|
|
563,435
|
|
||||
Average Price Paid per Share
|
$
|
37.22
|
|
|
$
|
37.82
|
|
|
$
|
37.38
|
|
|
$
|
37.40
|
|
Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Share amounts reflect purchases on the open market to satisfy FirstEnergy's obligations to deliver common stock for some or all of the following: 2007 Incentive Plan, Deferred Compensation Plan for Outside Directors, Executive Deferred Compensation Plan, Savings Plan, Director Compensation, Allegheny Energy, Inc., 1998 Long-Term Incentive Plan, Allegheny Energy, Inc., 2008 Long-Term Incentive Plan, Allegheny Energy, Inc., Non-Employee Director Stock Plan, Allegheny Energy, Inc., Amended and Restated Revised Plan for Deferral of Compensation of Directors, and Stock Investment Plan.
|
(2)
|
FirstEnergy does not currently have any publicly announced plan or program for share purchases.
|
(1)
|
the $2.5 billion Credit Agreement, dated as of June 17, 2011, as amended, among FirstEnergy, CEI, ME, OE, Penn, TE, JCP&L, MP, PN, PE and WP, as borrowers, The Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein (FirstEnergy Facility); and
|
(2)
|
the $2.5 billion Credit Agreement, dated as of June 17, 2011, as amended, among FES and AE Supply, as borrowers, and JPMorgan Chase Bank, N.A., as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein (FES/AE Supply Facility).
|
Exhibit Number
|
|
||
|
|
|
|
FirstEnergy
|
|
|
|
(A)
|
10.1(a)
|
|
Amendment, dated as of October 31, 2013, to the Credit Agreement, dated as of June 17, 2011, as amended as of May 8, 2012 and May 8, 2013, among FirstEnergy, The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power Company, as borrowers, The Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein.
|
(A)
|
10.2
|
|
Guarantee, dated as of September 16, 2013 by FirstEnergy Corp. in favor of participants under the FirstEnergy Corp. Executive Deferred Compensation Plan.
|
(A)
|
12
|
|
Fixed charge ratio
|
(A)
|
31.1
|
|
Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a)
|
(A)
|
31.2
|
|
Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a)
|
(A)
|
32
|
|
Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350
|
|
101
|
|
The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Corp. for the period ended September 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements and (v) document and entity information.
|
|
|
|
|
FES
|
|
|
|
(A)
|
10.1(b)
|
|
Amendment, dated as of October 31, 2013, to the Credit Agreement, dated as of June 17, 2011, as amended as of October 3, 2011, May 8, 2012 and May 8, 2013, among FirstEnergy Solutions Corp. and Allegheny Energy Supply Company, LLC, as borrowers, and JPMorgan Chase Bank, N.A., as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein.
|
(A)
|
31.1
|
|
Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a)
|
(A)
|
31.2
|
|
Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a)
|
(A)
|
32
|
|
Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350
|
|
101
|
|
The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Solutions Corp. for the period ended September 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements and (v) document and entity information.
|
|
FIRSTENERGY CORP.
|
|
Registrant
|
|
|
|
FIRSTENERGY SOLUTIONS CORP.
|
|
Registrant
|
|
|
|
/s/ K. Jon Taylor
|
|
K. Jon Taylor
|
|
Vice President, Controller
and Chief Accounting Officer
|
Exhibit Number
|
|
||
|
|
|
|
FirstEnergy
|
|
|
|
(A)
|
10.1(a)
|
|
Amendment, dated as of October 31, 2013, to the Credit Agreement, dated as of June 17, 2011, as amended as of May 8, 2012 and May 8, 2013, among FirstEnergy, The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power Company, as borrowers, The Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein.
|
(A)
|
10.2
|
|
Guarantee, dated as of September 16, 2013 by FirstEnergy Corp. in favor of participants under the FirstEnergy Corp. Executive Deferred Compensation Plan.
|
(A)
|
12
|
|
Fixed charge ratio
|
(A)
|
31.1
|
|
Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a)
|
(A)
|
31.2
|
|
Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a)
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(A)
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32
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|
Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350
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101
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|
The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Corp. for the period ended September 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements and (v) document and entity information.
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|
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FES
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|
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(A)
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10.1(b)
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Amendment, dated as of October 31, 2013, to the Credit Agreement, dated as of June 17, 2011, as amended as of October 3, 2011, May 8, 2012 and May 8, 2013, among FirstEnergy Solutions Corp. and Allegheny Energy Supply Company, LLC, as borrowers, and JPMorgan Chase Bank, N.A., as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein.
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(A)
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31.1
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Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a)
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(A)
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31.2
|
|
Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a)
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(A)
|
32
|
|
Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350
|
|
101
|
|
The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Solutions Corp. for the period ended September 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements and (v) document and entity information.
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1.
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FirstEnergy does hereby guarantee payment, as provided under the terms of the Plan, of all current and future liabilities of each Subsidiary with respect to any benefit a Participant employed (or formerly employed) by such Subsidiary has accrued or will accrue under the Plan while employed by such Subsidiary.
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2.
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This Guarantee is in addition to the obligations each Subsidiary has under the terms of the Plan and nothing in this Guarantee shall modify any of the terms and conditions of the Plan, including, without limitation, the terms related to the time and form of payment of the benefits payable thereunder.
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3.
|
This Guarantee shall be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws (other than conflicts of law provisions) of the State of Ohio.
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(1)
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Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined.
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1.
|
I have reviewed this report on Form 10-Q of FirstEnergy Corp.;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Anthony J. Alexander
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Anthony J. Alexander
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Chief Executive Officer
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|
1.
|
I have reviewed this report on Form 10-Q of FirstEnergy Solutions Corp.;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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|
/s/ Donald R. Schneider
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|
|
Donald R. Schneider
|
|
|
Chief Executive Officer
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|
1.
|
I have reviewed this report on Form 10-Q of FirstEnergy Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ James F. Pearson
|
|
|
James F. Pearson
|
|
|
Chief Financial Officer
|
|
1.
|
I have reviewed this report on Form 10-Q of FirstEnergy Solutions Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ James F. Pearson
|
|
|
James F. Pearson
|
|
|
Chief Financial Officer
|
|
|
/s/ Anthony J. Alexander
|
|
|
Anthony J. Alexander
|
|
|
Chief Executive Officer
|
|
|
|
|
|
/s/ James F. Pearson
|
|
|
James F. Pearson
|
|
|
Chief Financial Officer
|
|
|
/s/ Donald R. Schneider
|
|
|
Donald R. Schneider
|
|
|
President
|
|
|
(Chief Executive Officer)
|
|
|
|
|
|
/s/ James F. Pearson
|
|
|
James F. Pearson
|
|
|
Chief Financial Officer
|
|