|
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
|
|
|
Registrant
|
|
Title of Each Class
|
|
Name of Each Exchange
on Which Registered
|
|
|
|
|
|
FirstEnergy Corp.
|
|
Common Stock, $0.10 par value per share
|
|
New York Stock Exchange
|
Registrant
|
|
Title of Class
|
|
|
|
FirstEnergy Solutions Corp.
|
|
Common Stock, no par value per share
|
Yes
þ
No
o
|
|
FirstEnergy Corp.
|
Yes
o
No
þ
|
|
FirstEnergy Solutions Corp.
|
Yes
o
No
þ
|
|
FirstEnergy Corp. and FirstEnergy Solutions Corp.
|
Yes
þ
No
o
|
|
FirstEnergy Corp. and FirstEnergy Solutions Corp.
|
Yes
þ
No
o
|
|
FirstEnergy Corp. and FirstEnergy Solutions Corp.
|
þ
|
|
FirstEnergy Corp.
|
þ
|
|
FirstEnergy Solutions Corp.
|
Large Accelerated Filer
þ
|
FirstEnergy Corp.
|
|
|
Accelerated Filer
o
|
N/A
|
|
|
Non-accelerated Filer (Do not check
if a smaller reporting company) þ |
FirstEnergy Solutions Corp.
|
|
|
Smaller Reporting Company
o
|
N/A
|
|
|
Emerging Growth Company
o
|
N/A
|
Yes
o
No
þ
|
|
FirstEnergy Corp. and FirstEnergy Solutions Corp.
|
|
|
OUTSTANDING
|
|
CLASS
|
|
AS OF JANUARY 31, 2018
|
|
FirstEnergy Corp., $0.10 par value
|
|
475,589,829
|
|
FirstEnergy Solutions Corp., no par value
|
|
7
|
|
|
|
PART OF FORM 10-K INTO WHICH
|
DOCUMENT
|
|
DOCUMENT IS INCORPORATED
|
|
|
|
Proxy Statement for 2018 Annual Meeting of Shareholders of FirstEnergy Corp. to be held May 15, 2018
|
|
Part III
|
|
TABLE OF CONTENTS
|
|
|
Page
|
|
|
|
|
Part I.
|
|
|
|
Item 1. Business
|
|
|
|
The Compan
ies
|
|
Maryland Regulatory Matters
|
|
West Virginia Regulatory Matters
|
|
FirstEnergy Web
site and Other Social Media Sites and Applications
|
|
|
|
|
|
|
|
|
|
|
|
Item 4.
Mine Safety Disclosures
|
|
|
|
|
|
|
|
|
|
Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
|
|
GLOSSARY OF TERMS,
Continued
|
|
AEP
|
American Electric Power Company, Inc.
|
AFS
|
Available-for-sale
|
AFUDC
|
Allowance for Funds Used During Construction
|
ALJ
|
Administrative Law Judge
|
AMT
|
Alternative Minimum Tax
|
AOCI
|
Accumulated Other Comprehensive Income
|
ARO
|
Asset Retirement Obligation
|
ASU
|
Accounting Standards Update
|
Bath County
|
Bath County Pumped Storage Hydro-Power Station
|
BGS
|
Basic Generation Service
|
bps
|
Basis points
|
BNSF
|
BNSF Railway Company
|
BRA
|
PJM RPM Base Residual Auction
|
CAA
|
Clean Air Act
|
CBA
|
Collective Bargaining Agreement
|
CCR
|
Coal Combustion Residuals
|
CERCLA
|
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
|
CFL
|
Compact Fluorescent Light
|
CFR
|
Code of Federal Regulations
|
CFTC
|
Commodity Futures Trading Commission
|
CO
2
|
Carbon Dioxide
|
CPP
|
EPA's Clean Power Plan
|
CSAPR
|
Cross-State Air Pollution Rule
|
CSX
|
CSX Transportation, Inc.
|
CTA
|
Consolidated Tax Adjustment
|
CWA
|
Clean Water Act
|
D.C. Circuit
|
United States Court of Appeals for the District of Columbia Circuit
|
DCPD
|
Deferred Compensation Plan for Outside Directors
|
DCR
|
Delivery Capital Recovery
|
DMR
|
Distribution Modernization Rider
|
DOE
|
United States Department of Energy
|
DPM
|
Distribution Platform Modernization
|
DR
|
Demand Response
|
DSIC
|
Distribution System Improvement Charge
|
DSP
|
Default Service Plan
|
DTA
|
Deferred Tax Asset
|
EDC
|
Electric Distribution Company
|
EDCP
|
Executive Deferred Compensation Plan
|
EE&C
|
Energy Efficiency and Conservation
|
EGS
|
Electric Generation Supplier
|
EGU
|
Electric Generation Units
|
ELPC
|
Environmental Law & Policy Center
|
EmPOWER Maryland
|
EmPOWER Maryland Energy Efficiency Act
|
ENEC
|
Expanded Net Energy Cost
|
EPA
|
United States Environmental Protection Agency
|
EPRI
|
Electric Power Research Institute
|
ERO
|
Electric Reliability Organization
|
ESOP
|
Employee Stock Ownership Plan
|
ESP
|
Electric Security Plan
|
ESP IV
|
Electric Security Plan IV
|
ESP IV PPA
|
Unit Power Agreement entered into on April 1, 2016, by and between the Ohio Companies and FES
|
Facebook®
|
Facebook is a registered trademark of Facebook, Inc.
|
GLOSSARY OF TERMS,
Continued
|
|
FASB
|
Financial Accounting Standards Board
|
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
|
HCl
|
Hydrochloric Acid
|
IBEW
|
International Brotherhood of Electrical Workers
|
ICE
|
Intercontinental Exchange, Inc.
|
ICP 2007
|
FirstEnergy Corp. 2007 Incentive Plan
|
ICP 2015
|
FirstEnergy Corp. 2015 Incentive Compensation Plan
|
IIP
|
Investment Infrastructure Program
|
IRP
|
Integrated Resource Plan
|
IRS
|
Internal Revenue Service
|
ISO
|
Independent System Operator
|
kV
|
Kilovolt
|
kW
|
Kilowatt
|
KWH
|
Kilowatt-hour
|
LBR
|
Little Blue Run
|
LED
|
Light Emitting Diode
|
LOC
|
Letter of Credit
|
LSE
|
Load Serving Entity
|
LS Power
|
LS Power Equity Partners, LP
|
LTIIPs
|
Long-Term Infrastructure Improvement Plans
|
MATS
|
Mercury and Air Toxics Standards
|
MDPSC
|
Maryland Public Service Commission
|
MISO
|
Midcontinent Independent System Operator, Inc.
|
MLP
|
Master Limited Partnership
|
mmBTU
|
One Million British Thermal Units
|
Moody’s
|
Moody’s Investors Service, Inc.
|
MOPR
|
Minimum Offer Price Rule
|
MVP
|
Multi-Value Project
|
MW
|
Megawatt
|
MWH
|
Megawatt-hour
|
NAAQS
|
National Ambient Air Quality Standards
|
NDT
|
Nuclear Decommissioning Trust
|
NEIL
|
Nuclear Electric Insurance Limited
|
NERC
|
North American Electric Reliability Corporation
|
NJAPA
|
New Jersey Administrative Procedure Act
|
NJBPU
|
New Jersey Board of Public Utilities
|
NOL
|
Net Operating Loss
|
NOPR
|
Notice of Proposed Rulemaking
|
NOV
|
Notice of Violation
|
NOx
|
Nitrogen Oxide
|
NPDES
|
National Pollutant Discharge Elimination System
|
NRC
|
Nuclear Regulatory Commission
|
NS
|
Norfolk Southern Corporation
|
NSR
|
New Source Review
|
NUG
|
Non-Utility Generation
|
NYPSC
|
New York State Public Service Commission
|
GLOSSARY OF TERMS,
Continued
|
|
OCA
|
Office of Consumer Advocate
|
OCC
|
Ohio Consumers' Counsel
|
OPEB
|
Other Post-Employment Benefits
|
OPEIU
|
Office and Professional Employees International Union
|
ORC
|
Ohio Revised Code
|
OTC
|
Over The Counter
|
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, L.L.C.
|
PJM Region
|
The aggregate of the zones within PJM
|
PJM Tariff
|
PJM Open Access Transmission Tariff
|
PM
|
Particulate Matter
|
POLR
|
Provider of Last Resort
|
POR
|
Purchase of Receivables
|
PPA
|
Purchase Power Agreement
|
PPB
|
Parts per Billion
|
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
|
R&D
|
Research and Development
|
RCRA
|
Resource Conservation and Recovery Act
|
REC
|
Renewable Energy Credit
|
Regulation FD
|
Regulation Fair Disclosure promulgated by the SEC
|
REIT
|
Real Estate Investment Trust
|
RFC
|
Reliability
First
Corporation
|
RFP
|
Request for Proposal
|
RGGI
|
Regional Greenhouse Gas Initiative
|
ROE
|
Return on Equity
|
RPM
|
Reliability Pricing Model
|
RRS
|
Retail Rate Stability
|
RSS
|
Rich Site Summary
|
RTEP
|
Regional Transmission Expansion Plan
|
RTO
|
Regional Transmission Organization
|
RWG
|
Restructuring Working Group
|
S&P
|
Standard & Poor’s Ratings Service
|
SB310
|
Substitute Senate Bill No. 310
|
SBC
|
Societal Benefits Charge
|
SEC
|
United States Securities and Exchange Commission
|
Seventh Circuit
|
United States Court of Appeals for the Seventh Circuit
|
SIP
|
State Implementation Plan(s) Under the Clean Air Act
|
Sixth Circuit
|
United States Court of Appeals for the Sixth Circuit
|
SO
2
|
Sulfur Dioxide
|
SOS
|
Standard Offer Service
|
SPE
|
Special Purpose Entity
|
SRC
|
Storm Recovery Charge
|
SREC
|
Solar Renewable Energy Credit
|
SSA
|
Social Security Administration
|
GLOSSARY OF TERMS,
Continued
|
|
SSO
|
Standard Service Offer
|
Tax Act
|
Tax Cuts and Jobs Act adopted December 22, 2017
|
TDS
|
Total Dissolved Solid
|
TMI-2
|
Three Mile Island Unit 2
|
TO
|
Transmission Owner
|
Twitter®
|
Twitter is a registered trademark of Twitter, Inc.
|
UWUA
|
Utility Workers Union of America
|
VEPCO
|
Virginia Electric and Power Company
|
VIE
|
Variable Interest Entity
|
VMP
|
Vegetation Management Plan
|
VMS
|
Vegetation Management Surcharge
|
VSCC
|
Virginia State Corporation Commission
|
WVDEP
|
West Virginia Department of Environmental Protection
|
WVPSC
|
Public Service Commission of West Virginia
|
ITEM 1.
|
BUSINESS
|
Reportable Segment
|
|
2017 Actual
(1)
|
|
2017 Pension/OPEB Mark-to-Market Capital Adjustment
|
|
2017 Actual Excluding Pension/OPEB Mark-to-Market Capital Costs
|
|
2018 Forecast
(2)
|
|
|||||||
|
|
(In millions)
|
|
|||||||||||||
Regulated Distribution
|
|
$
|
1,342
|
|
|
$
|
(20
|
)
|
|
$
|
1,362
|
|
|
$1,500 - $1,600
|
|
|
Regulated Transmission
|
|
1,032
|
|
|
1
|
|
|
1,031
|
|
|
1,000 - 1,200
|
|
|
|||
CES
|
|
279
|
|
|
(1
|
)
|
|
280
|
|
|
—
|
|
(3)
|
|||
Corporate/Other
|
|
99
|
|
|
—
|
|
|
99
|
|
|
100
|
|
|
|||
Total
|
|
$
|
2,752
|
|
|
$
|
(20
|
)
|
|
$
|
2,772
|
|
|
$2,600 - $2,900
|
|
|
Operating Company
|
|
2017 Actual
(1)
|
|
2017 Pension/OPEB Mark-to-Market Capital Adjustment
|
|
2017 Actual Excluding Pension/OPEB Mark-to-Market Capital Costs
|
|
2018 Forecast
(2)(3)
|
|
||||||||
|
|
(In millions)
|
|||||||||||||||
OE
|
|
$
|
143
|
|
|
$
|
(12
|
)
|
|
$
|
155
|
|
|
$
|
160
|
|
|
Penn
|
|
55
|
|
|
(1
|
)
|
|
56
|
|
|
45
|
|
|
||||
CEI
|
|
134
|
|
|
4
|
|
|
130
|
|
|
145
|
|
|
||||
TE
|
|
37
|
|
|
(3
|
)
|
|
40
|
|
|
50
|
|
|
||||
JCP&L
|
|
317
|
|
|
3
|
|
|
314
|
|
|
380
|
|
|
||||
ME
|
|
142
|
|
|
(4
|
)
|
|
146
|
|
|
185
|
|
|
||||
PN
|
|
162
|
|
|
(12
|
)
|
|
174
|
|
|
195
|
|
|
||||
MP
|
|
269
|
|
|
9
|
|
|
260
|
|
|
280
|
|
|
||||
PE
|
|
112
|
|
|
—
|
|
|
112
|
|
|
150
|
|
|
||||
WP
|
|
199
|
|
|
(2
|
)
|
|
201
|
|
|
260
|
|
|
||||
ATSI
|
|
541
|
|
|
—
|
|
|
541
|
|
|
375
|
|
|
||||
TrAIL
|
|
45
|
|
|
—
|
|
|
45
|
|
|
55
|
|
|
||||
FES
|
|
250
|
|
|
(3
|
)
|
|
253
|
|
|
—
|
|
(4)
|
||||
AE Supply
|
|
34
|
|
|
2
|
|
|
32
|
|
|
—
|
|
(4)
|
||||
MAIT
|
|
242
|
|
|
(1
|
)
|
|
243
|
|
|
400
|
|
|
||||
Other subsidiaries
|
|
70
|
|
|
—
|
|
|
70
|
|
|
70
|
|
|
||||
Total
|
|
$
|
2,752
|
|
|
$
|
(20
|
)
|
|
$
|
2,772
|
|
|
$
|
2,750
|
|
|
|
2018
|
|
2019-2022
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
FirstEnergy
|
$
|
1,051
|
|
|
$
|
6,008
|
|
|
$
|
7,059
|
|
FES
|
$
|
515
|
|
|
$
|
1,948
|
|
|
$
|
2,463
|
|
Borrower(s)
|
|
Type
|
|
Maturity
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
|
|
|
|
(In millions)
|
||||||
FirstEnergy
(1)
|
|
Revolving
|
|
December 2021
|
|
$
|
4,000
|
|
|
$
|
3,740
|
|
FET
(2)
|
|
Revolving
|
|
December 2021
|
|
1,000
|
|
|
1,000
|
|
||
|
|
|
|
Subtotal
|
|
$
|
5,000
|
|
|
$
|
4,740
|
|
|
|
|
|
Cash
|
|
—
|
|
|
358
|
|
||
|
|
|
|
Total
|
|
$
|
5,000
|
|
|
$
|
5,098
|
|
(1)
|
FE and the Utilities. Available liquidity includes impact of $10 million of LOCs issued under various terms.
|
(2)
|
Includes FET, ATSI, MAIT and TrAIL.
|
Type
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
(In millions)
|
||||||
Two-year secured credit facility with FE
|
|
$
|
500
|
|
|
$
|
500
|
|
Cash
|
|
—
|
|
|
1
|
|
||
|
|
$
|
500
|
|
|
$
|
501
|
|
Station
|
|
In-Service Date
|
|
Current License Expiration
|
Beaver Valley Unit 1
|
|
1976
|
|
2036
|
Beaver Valley Unit 2
|
|
1987
|
|
2047
|
Perry
|
|
1986
|
|
2026
|
Davis-Besse
|
|
1977
|
|
2037
|
System Demand
|
|
2017
|
|
2016
|
|
2015
|
|||
|
|
(in MWs)
|
|||||||
OE
|
|
5,434
|
|
|
5,655
|
|
|
5,391
|
|
Penn
|
|
926
|
|
|
994
|
|
|
983
|
|
CEI
|
|
4,220
|
|
|
4,193
|
|
|
4,057
|
|
TE
|
|
2,205
|
|
|
2,171
|
|
|
2,149
|
|
JCP&L
|
|
5,721
|
|
|
5,955
|
|
|
5,789
|
|
ME
|
|
2,897
|
|
|
2,904
|
|
|
2,770
|
|
PN
|
|
2,882
|
|
|
2,890
|
|
|
3,024
|
|
MP
|
|
1,986
|
|
|
2,053
|
|
|
2,031
|
|
PE
|
|
3,049
|
|
|
3,049
|
|
|
3,631
|
|
WP
|
|
3,752
|
|
|
3,947
|
|
|
3,942
|
|
Executive Officers as of February 20, 2018
|
||||||
Name
|
|
Age
|
|
Positions Held During Past Five Years
|
|
Dates
|
G. D. Benz
|
|
58
|
|
Senior Vice President, Strategy (B)
|
|
2015-present
|
|
|
|
|
Vice President, Supply Chain (B)
|
|
*-2015
|
|
|
|
|
|
|
|
D. M. Chack
|
|
67
|
|
Senior Vice President, Product Development, Marketing and Branding (B)
|
|
2017-present
|
|
|
|
|
Senior Vice President, Marketing and Branding (B)
|
|
2015-2017
|
|
|
|
|
President, Ohio Operations (B)
|
|
*-2015
|
|
|
|
|
Vice President (C)
|
|
*-2015
|
|
|
|
|
|
|
|
M. J. Dowling
|
|
53
|
|
Senior Vice President, External Affairs (B)
|
|
*-present
|
|
|
|
|
|
|
|
B. L. Gaines
|
|
64
|
|
Senior Vice President, Corporate Services and Chief Information Officer (B)
|
|
*-present
|
|
|
|
|
|
|
|
C. E. Jones
|
|
62
|
|
President and Chief Executive Officer (A)(B)
|
|
2015-present
|
|
|
|
|
Chief Executive Officer (F)
|
|
2015-2017
|
|
|
|
|
President (C)(D)(H)(I)(L)
|
|
*-2015
|
|
|
|
|
Executive Vice President & President, FirstEnergy Utilities (A)(B)
|
|
2014
|
|
|
|
|
Senior Vice President & President, FirstEnergy Utilities (B)
|
|
*-2013
|
|
|
|
|
|
|
|
C. D. Lasky
|
|
54
|
|
Senior Vice President, Human Resources (B)
|
|
2015-present
|
|
|
|
|
Vice President, Fossil Operations (J)
|
|
2014-2015
|
|
|
|
|
Vice President (G)
|
|
*-2015
|
|
|
|
|
Vice President, Fossil Operations & Engineering (J)
|
|
2014
|
|
|
|
|
Vice President, Fossil Fleet Operations (J)
|
|
*-2013
|
|
|
|
|
|
|
|
J. F. Pearson
|
|
63
|
|
Executive Vice President and Chief Financial Officer (N)
|
|
2016-present
|
|
|
|
|
Executive Vice President and Chief Financial Officer (A)(B)(C)(D)(H)(I)(L)
|
|
2015-present
|
|
|
|
|
Executive Vice President and Chief Financial Officer (F)(G)
|
|
2015-2017
|
|
|
|
|
Executive Vice President and Chief Financial Officer (E)(J)
|
|
2015-2016
|
|
|
|
|
Senior Vice President and Chief Financial Officer (A)(B)(C)(D)(E)(F)(G)(H)(I)(J)(L)
|
|
*-2015
|
|
|
|
|
|
|
|
R. P. Reffner
|
|
67
|
|
Vice President and General Counsel (N)
|
|
2016-present
|
|
|
|
|
Vice President and General Counsel (B)(C)(D)(H)(I)(L)
|
|
2014-present
|
|
|
|
|
Vice President and General Counsel (F)(G)
|
|
2014-2017
|
|
|
|
|
Vice President and General Counsel (E)(J)
|
|
2014-2016
|
|
|
|
|
Vice President, Legal (B)
|
|
*-2013
|
|
|
|
|
|
|
|
S. E. Strah
|
|
54
|
|
President (G)
|
|
2017-present
|
|
|
|
|
President (N)
|
|
2016-present
|
|
|
|
|
Senior Vice President & President, FirstEnergy Utilities (B)
|
|
2015-present
|
|
|
|
|
President (C)(D)(H)(I)(L)
|
|
2015-present
|
|
|
|
|
Vice President, Distribution Support (B)
|
|
*-2015
|
|
|
|
|
|
|
|
K. J. Taylor
|
|
44
|
|
Vice President and Controller (N)
|
|
2016-present
|
|
|
|
|
Vice President, Controller and Chief Accounting Officer (A)(B)
|
|
2013-present
|
|
|
|
|
Vice President and Controller (C)(D)(H)(I)(L)
|
|
2013-present
|
|
|
|
|
Vice President and Controller (F)(G)
|
|
2013-2017
|
|
|
|
|
Vice President and Controller (E)(J)
|
|
2013-2016
|
|
|
|
|
Vice President and Assistant Controller (A)(B)(C)(D)(E)(F)(G)(H)(I)(J)(L)
|
|
*-2013
|
|
|
|
|
|
|
|
L. L. Vespoli
|
|
58
|
|
Executive Vice President, Corporate Strategy, Regulatory Affairs & Chief Legal Officer
(A)(B)(C)(D)(H)(I)(L)(N)
|
|
2016-present
|
|
|
|
|
Executive Vice President, Corporate Strategy, Regulatory Affairs & Chief Legal Officer (F)(G)
|
|
2016-2017
|
|
|
|
|
Executive Vice President, Corporate Strategy, Regulatory Affairs & Chief Legal Officer (E)(J)
|
|
2016
|
|
|
|
|
Executive Vice President, Markets & Chief Legal Officer (A)(B)(C)(D)(E)(F)(G)(H)(I)(J)(L)
|
|
2014-2016
|
|
|
|
|
Executive Vice President and General Counsel (A)(B)(C)(D)(E)(F)(G)(H)(I)(J)(L)
|
|
*-2013
|
|
|
|
|
|
|
|
E. L. Yeboah-Amankwah
|
|
40
|
|
Vice President, Corporate Secretary and Chief Ethics Officer (A)(B)
|
|
2017-present
|
|
|
|
|
Vice President, State and Federal Regulatory Legal Affairs (B)
|
|
2017
|
|
|
|
|
Vice President and Corporate Secretary (C)(D)(G)(H)(I)(L)(N)
|
|
2017-present
|
|
|
|
|
|
|
|
* Indicates position held at least since January 1, 2013
|
(E) Denotes executive officer of FES
|
(J) Denotes executive officer of FG
|
(A) Denotes executive officer of FE
|
(F) Denotes executive officer of FENOC
|
(K) Denotes executive officer of OE
|
(B) Denotes executive officer of FESC
|
(G) Denotes executive officer of AGC
|
(L) Denotes executive officer of ATSI
|
(C) Denotes executive officer of OE, CEI and TE
|
(H) Denotes executive officer of MP, PE and WP
|
(M) Denotes executive officer of CEI
|
(D) Denotes executive officer of ME, PN and Penn
|
(I) Denotes executive officer of TrAIL and FET
|
(N) Denotes executive officer of MAIT
|
|
Total
Employees
|
|
Bargaining
Unit
Employees
|
||
FESC
|
4,944
|
|
|
893
|
|
OE
|
1,141
|
|
|
745
|
|
CEI
|
915
|
|
|
594
|
|
TE
|
334
|
|
|
244
|
|
Penn
|
185
|
|
|
131
|
|
JCP&L
|
1,358
|
|
|
1,047
|
|
ME
|
661
|
|
|
487
|
|
PN
|
750
|
|
|
475
|
|
FES
|
56
|
|
|
—
|
|
FG
|
687
|
|
|
499
|
|
FENOC
|
2,328
|
|
|
1,028
|
|
MP
|
1,045
|
|
|
690
|
|
PE
|
499
|
|
|
307
|
|
WP
|
714
|
|
|
459
|
|
Total
|
15,617
|
|
|
7,599
|
|
•
|
On January 5, 2017, UWUA Local 180, which represents approximately 123 employees in PN, ratified a new agreement that will expire August 31, 2022.
|
•
|
On March 2, 2017, IBEW Local 777, which represents approximately 497 employees in ME, ratified a contract that will expire on April 30, 2022.
|
•
|
On May 18, 2017, IBEW Local 272, which represents approximately 214 employees at the Bruce Mansfield Plant, ratified a new agreement that will expire on February 15, 2020.
|
•
|
On October 10, 2017, UWUA Local 304, which represents approximately 164 employees at the Harrison Plant, ratified a new agreement that will expire March 1, 2022.
|
•
|
On October 27, 2017, UWUA Local 270, which represents approximately 786 employees at CEI, the Perry nuclear plant and the Eastlake synchronous condenser plant, ratified a new agreement that will expire on April 30, 2022.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the inability to refinance debt maturities at FES subsidiaries of $515 million and $323 million in 2018 and 2019, respectively, at attractive rates or at all;
|
•
|
requests to post additional collateral or accelerate payments, including prepayments to certain trade creditors; and
|
•
|
adverse outcomes in previously disclosed disputes regarding long-term coal and coal transportation contracts.
|
•
|
the risk that we may not be able to, or may no longer desire to, complete our planned disposition of our generating assets;
|
•
|
the risk that FirstEnergy could be required to satisfy or otherwise elect to guarantee significant financial obligations of FES or its subsidiaries, which could adversely affect the financial condition and cash flows of FirstEnergy;
|
•
|
the risk that creditors of FES may attempt to assert claims, including those that arise out of litigation or other commercial disputes, against FirstEnergy that may require significant effort and money to defend and could adversely affect the business, financial condition, results of operations and cash flows of FirstEnergy; and
|
•
|
the risk that certain triggering events could constitute events of default under certain of FirstEnergy’s obligations.
|
•
|
difficulty satisfying debt service and other obligations at FES and/or its individual subsidiaries;
|
•
|
the unlikelihood of FG and NG being able to refinance debt maturities of $515 million and $323 million in 2018 and 2019, respectively;
|
•
|
additional postings of collateral or acceleration of payments;
|
•
|
increasing the vulnerability of the business of FES to adverse industry and economic conditions;
|
•
|
reducing the availability of FES cash flow to fund other corporate purposes; and
|
•
|
reducing the ability of FES to enter into transactions with counterparties due to demands for additional collateral or credit support due to FES' creditworthiness.
|
•
|
the potential harmful effects on the environment, human health and safety, including loss of life, resulting from unplanned radiological releases associated with the operation of FES' nuclear facilities and the storage, handling and disposal of radioactive materials;
|
•
|
limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with FES' nuclear operations, including any incidents of unplanned radiological release, or those of others in the United States;
|
•
|
uncertainties with respect to contingencies and assessments if insurance coverage is inadequate; and
|
•
|
uncertainties with respect to the technological and financial aspects of spent fuel storage and decommissioning nuclear plants, including but not limited to, waste disposal at the end of their licensed operation and increases in minimum funding requirements or costs of decommissioning.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
|
|
|
|
|
|
Competitive
|
|
|
|||||||
Plant (Location)
|
|
Unit
|
|
Total
|
|
FES
|
|
AE Supply
|
|
Regulated
|
|||||
|
|
|
|
Net Demonstrated Capacity (MW)
|
|||||||||||
Super-critical Coal-fired:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bruce Mansfield (Shippingport, PA)
|
|
1
|
|
|
830
|
|
(1)
|
830
|
|
|
—
|
|
|
—
|
|
Bruce Mansfield (Shippingport, PA)
|
|
2
|
|
|
830
|
|
|
830
|
|
|
—
|
|
|
—
|
|
Bruce Mansfield (Shippingport, PA)
|
|
3
|
|
|
830
|
|
|
830
|
|
|
—
|
|
|
—
|
|
Harrison (Haywood, WV)
|
|
1-3
|
|
|
1,984
|
|
|
—
|
|
|
—
|
|
|
1,984
|
|
Pleasants (Willow Island, WV)
|
|
1-2
|
|
|
1,300
|
|
(9)
|
—
|
|
|
1,300
|
|
|
—
|
|
W. H. Sammis (Stratton, OH)
|
|
6-7
|
|
|
1,200
|
|
|
1,200
|
|
|
—
|
|
|
—
|
|
Fort Martin (Maidsville, WV)
|
|
1-2
|
|
|
1,098
|
|
|
—
|
|
|
—
|
|
|
1,098
|
|
|
|
|
|
8,072
|
|
|
3,690
|
|
|
1,300
|
|
|
3,082
|
|
|
Sub-critical and Other Coal-fired:
|
|
|
|
|
|
|
|
|
|
|
|||||
W. H. Sammis (Stratton, OH)
|
|
1-5
|
|
|
1,010
|
|
(7)
|
1,010
|
|
|
—
|
|
|
—
|
|
Bay Shore (Toledo, OH)
|
|
1
|
|
|
136
|
|
(7)
|
136
|
|
|
—
|
|
|
—
|
|
OVEC (Cheshire, OH) (Madison, IN)
|
|
1-11
|
|
|
188
|
|
(2)
|
110
|
|
|
67
|
|
|
11
|
|
|
|
|
|
|
1,334
|
|
|
1,256
|
|
|
67
|
|
|
11
|
|
Nuclear:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Beaver Valley (Shippingport, PA)
|
|
1
|
|
|
939
|
|
|
939
|
|
|
—
|
|
|
—
|
|
Beaver Valley (Shippingport, PA)
|
|
2
|
|
|
933
|
|
|
933
|
|
|
—
|
|
|
—
|
|
Davis-Besse (Oak Harbor, OH)
|
|
1
|
|
|
908
|
|
|
908
|
|
|
—
|
|
|
—
|
|
Perry (N. Perry Village, OH)
|
|
1
|
|
|
1,268
|
|
|
1,268
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
4,048
|
|
|
4,048
|
|
|
—
|
|
|
—
|
|
Gas/Oil-fired:
|
|
|
|
|
|
|
|
|
|
|
|
||||
West Lorain (Lorain, OH)
|
|
1-6
|
|
|
545
|
|
|
545
|
|
|
—
|
|
|
—
|
|
Forked River (Ocean County, NJ)
|
|
2
|
|
|
86
|
|
|
86
|
|
|
—
|
|
|
—
|
|
Buchanan (Oakwood, VA)
|
|
1-2
|
|
|
43
|
|
(3)
|
—
|
|
|
43
|
|
(8)
|
—
|
|
Other
|
|
|
|
59
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
733
|
|
|
690
|
|
|
43
|
|
|
—
|
|
|
Pumped-storage Hydro:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bath County (Warm Springs, VA)
|
|
1-6
|
|
|
1,200
|
|
(4)
|
—
|
|
|
713
|
|
(8)
|
487
|
|
Yard’s Creek (Blairstown Twp., NJ)
|
|
1-3
|
|
|
210
|
|
(5)
|
—
|
|
|
—
|
|
|
210
|
|
|
|
|
|
1,410
|
|
|
—
|
|
|
713
|
|
|
697
|
|
|
Wind and Solar Power
|
|
|
|
|
496
|
|
(6)
|
496
|
|
|
—
|
|
|
—
|
|
Total
|
|
|
|
16,093
|
|
|
10,180
|
|
|
2,123
|
|
|
3,790
|
|
(1)
|
Includes FE's leasehold interest of
93.83%
(
779
MWs) from non-affiliates.
|
(2)
|
Represents FES'
4.85%
, AE Supply's
3.01%
and MP's
0.49%
entitlement based on their participation in OVEC.
|
(3)
|
Represents BU Energy's 50% interest. BU Energy is a subsidiary of AE Supply.
|
(4)
|
Represents AGC's 40% undivided interest in Bath County. The station is operated by VEPCO. AGC is 59% owned by AE Supply and 41% owned by MP.
|
(5)
|
Represents JCP&L’s
50%
ownership interest.
|
(6)
|
Includes
167
MWs from leased facilities and
329
MWs under power purchase agreements.
|
(7)
|
On July 22, 2016, FirstEnergy and FES announced its intent to exit operations of the Bay Shore Unit 1 generating station by October 1, 2020, through either sale or deactivation and to deactivate Units 1-4 of the W. H. Sammis generating station by May 31, 2020.
|
(8)
|
Subject to an asset purchase agreement with a subsidiary of LS Power, expected to close in the first half of 2018.
|
(9)
|
On February 16, 2018, AE Supply announced its intent to sell or deactivate the Pleasants Power Station by January 1, 2019.
|
|
Distribution
Lines
(1)
|
|
Transmission
Lines
(1)
|
|
Substation
Transformer
Capacity
(2)
|
|||
|
|
|
|
|
kV Amperes
|
|||
OE
|
67,194
|
|
|
378
|
|
|
7,924,723
|
|
Penn
|
13,605
|
|
|
—
|
|
|
1,033,407
|
|
CEI
|
33,473
|
|
|
—
|
|
|
10,174,280
|
|
TE
|
19,048
|
|
|
73
|
|
|
2,916,453
|
|
JCP&L
|
23,555
|
|
|
2,598
|
|
|
23,505,921
|
|
ME
|
18,929
|
|
|
—
|
|
|
5,160,600
|
|
PN
|
27,623
|
|
|
—
|
|
|
9,059,288
|
|
ATSI
(3)
|
—
|
|
|
7,808
|
|
|
38,895,189
|
|
WP
|
25,008
|
|
|
4,339
|
|
|
16,016,116
|
|
MP
|
22,324
|
|
|
2,653
|
|
|
12,206,638
|
|
PE
|
25,796
|
|
|
2,149
|
|
|
11,256,764
|
|
TrAIL
|
—
|
|
|
261
|
|
|
13,130,600
|
|
MAIT
|
—
|
|
|
4,234
|
|
|
13,190,236
|
|
Total
|
276,555
|
|
|
24,493
|
|
|
164,470,215
|
|
(1)
|
Circuit Miles
|
(2)
|
Top rating of in-service power transformers only. Excludes grounding banks, station power transformers, and generator and customer-owned transformers.
|
(3)
|
Represents transmission line assets of
69
kV and greater located in the service territories of OE, Penn, CEI and TE.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
For the Years Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(In millions, except per share amounts)
|
||||||||||||||||||
Revenues
|
|
$
|
14,017
|
|
|
$
|
14,562
|
|
|
$
|
15,026
|
|
|
$
|
15,049
|
|
|
$
|
14,892
|
|
Income (Loss) From Continuing Operations
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
|
$
|
213
|
|
|
$
|
375
|
|
Earnings (Loss) Available to FirstEnergy Corp.
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
|
$
|
299
|
|
|
$
|
392
|
|
Earnings (Loss) per Share of Common Stock:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic - Continuing Operations
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
0.51
|
|
|
$
|
0.90
|
|
Basic - Discontinued Operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.20
|
|
|
0.04
|
|
|||||
Basic - Earnings (Loss) Available to FirstEnergy Corp.
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
0.71
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted - Continuing Operations
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
0.51
|
|
|
$
|
0.90
|
|
Diluted - Discontinued Operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.20
|
|
|
0.04
|
|
|||||
Diluted - Earnings (Loss) Available to FirstEnergy Corp.
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
0.71
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
444
|
|
|
426
|
|
|
422
|
|
|
420
|
|
|
418
|
|
|||||
Diluted
|
|
444
|
|
|
426
|
|
|
424
|
|
|
421
|
|
|
419
|
|
|||||
Dividends Declared per Share of Common Stock
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.65
|
|
Total Assets
|
|
$
|
42,257
|
|
|
$
|
43,148
|
|
|
$
|
52,094
|
|
|
$
|
51,552
|
|
|
$
|
49,980
|
|
Capitalization as of December 31:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Equity
|
|
$
|
3,925
|
|
|
$
|
6,241
|
|
|
$
|
12,422
|
|
|
$
|
12,422
|
|
|
$
|
12,695
|
|
Long-Term Debt and Other Long-Term Obligations
|
|
21,115
|
|
|
18,192
|
|
|
19,099
|
|
|
19,080
|
|
|
15,753
|
|
|||||
Total Capitalization
|
|
$
|
25,040
|
|
|
$
|
24,433
|
|
|
$
|
31,521
|
|
|
$
|
31,502
|
|
|
$
|
28,448
|
|
|
2017
|
|
2016
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
|
32.54
|
|
|
$
|
29.51
|
|
|
$
|
36.54
|
|
|
$
|
30.62
|
|
Second Quarter
|
$
|
31.94
|
|
|
$
|
27.93
|
|
|
$
|
36.32
|
|
|
$
|
31.37
|
|
Third Quarter
|
$
|
33.08
|
|
|
$
|
28.93
|
|
|
$
|
36.60
|
|
|
$
|
32.12
|
|
Fourth Quarter
|
$
|
35.22
|
|
|
$
|
30.18
|
|
|
$
|
34.83
|
|
|
$
|
29.33
|
|
Yearly
|
$
|
35.22
|
|
|
$
|
27.93
|
|
|
$
|
36.60
|
|
|
$
|
29.33
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
The ability to experience growth in the Regulated Distribution and Regulated Transmission segments and the effectiveness of our strategy to transition to a fully regulated business profile.
|
•
|
The accomplishment of our regulatory and operational goals in connection with our transmission and distribution investment plans, including, but not limited to, our planned transition to forward-looking formula rates.
|
•
|
Changes in assumptions regarding economic conditions within our territories, assessment of the reliability of our transmission system, or the availability of capital or other resources supporting identified transmission investment opportunities.
|
•
|
The ability to accomplish or realize anticipated benefits from strategic and financial goals, including, but not limited to, the ability to continue to reduce costs and to successfully execute our financial plans designed to improve our credit metrics and strengthen our balance sheet.
|
•
|
Success of legislative and regulatory solutions for generation assets that recognize their environmental or energy security benefits.
|
•
|
The risks and uncertainties associated with the lack of viable alternative strategies regarding the CES segment, thereby causing FES to restructure its substantial debt and other financial obligations with its creditors or seek protection under U.S. bankruptcy laws (which filing would include FENOC) and the losses, liabilities and claims arising from such bankruptcy proceeding, including any obligations at FirstEnergy.
|
•
|
The risks and uncertainties at the CES segment, including FES, its subsidiaries, and FENOC, related to wholesale energy and capacity markets, and the viability and/or success of strategic business alternatives, such as pending and potential CES generating unit asset sales or the potential need to deactivate additional generating units, which could result in further substantial write-downs and impairments of assets.
|
•
|
The substantial uncertainty as to FES’ ability to continue as a going concern and substantial risk that it may be necessary for FES and FENOC to seek protection under U.S. bankruptcy laws.
|
•
|
The risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments, such as long-term fuel and transportation agreements.
|
•
|
The uncertainties associated with the deactivation of older regulated and competitive units, including the impact on vendor commitments, such as long-term fuel and transportation agreements, and as it relates to the reliability of the transmission grid, the timing thereof.
|
•
|
The impact of other future changes to the operational status or availability of our generating units and any capacity performance charges associated with unit unavailability.
|
•
|
Changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil prices, and their availability and impact on margins.
|
•
|
Costs being higher than anticipated and the success of our policies to control costs and to mitigate low energy, capacity and market prices.
|
•
|
Replacement power costs being higher than anticipated or not fully hedged.
|
•
|
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 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 initiatives or rulemakings could result in our decision to deactivate or idle certain generating units).
|
•
|
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.
|
•
|
Economic or weather conditions affecting future sales, margins and operations such as a polar vortex or other significant weather events, and all associated regulatory events or actions.
|
•
|
Changes in national and regional economic conditions affecting us, our subsidiaries and/or our major industrial and commercial customers, and other counterparties with which we do business, including fuel suppliers.
|
•
|
The impact of labor disruptions by our unionized workforce.
|
•
|
The risks associated with cyber-attacks and other disruptions to our information technology system that may compromise our generation, transmission and/or distribution services and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information regarding our business, employees, shareholders, customers, suppliers, business partners and other individuals in our data centers and on our networks
.
|
•
|
The impact of the regulatory process and resulting outcomes on the matters at the federal level and in the various states in which we do business including, but not limited to, matters related to rates.
|
•
|
The impact of the federal regulatory process on FERC-regulated entities and transactions, in particular FERC regulation of wholesale energy and capacity markets, including PJM markets and FERC-jurisdictional wholesale transactions; FERC regulation of cost-of-service rates; and FERC’s compliance and enforcement activity, including compliance and enforcement activity related to NERC’s mandatory reliability standards.
|
•
|
The uncertainties of various cost recovery and cost allocation issues resulting from ATSI's realignment into PJM.
|
•
|
The ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates.
|
•
|
Other legislative and regulatory changes, including the federal administration's required review and potential revision of environmental requirements, including, but not limited to, the effects of the EPA's CPP, CCR, CSAPR and MATS programs, including our estimated costs of compliance, CWA waste water effluent limitations for power plants, and CWA 316(b) water intake regulation.
|
•
|
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).
|
•
|
Issues arising from the indications of cracking in the shield building at Davis-Besse.
|
•
|
Changing market conditions that could affect the measurement of certain liabilities and the value of assets held in our NDTs, pension trusts and other trust funds, and cause us and/or our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated.
|
•
|
The impact of changes to significant accounting policies.
|
•
|
The impact of any changes in tax laws or regulations, including the Tax Act, or adverse tax audit results or rulings.
|
•
|
The ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries.
|
•
|
Further actions that may be taken by credit rating agencies that could negatively affect us and/or our subsidiaries’ access to financing, increase the costs thereof, increase requirements to post additional collateral to support, or accelerate payments under outstanding commodity positions, LOCs and other financial guarantees, and the impact of these events on the financial condition and liquidity of FirstEnergy and/or its subsidiaries, specifically FES and its subsidiaries.
|
•
|
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.
|
•
|
Reduction of the corporate federal income tax rate from 35% to 21%, effective in 2018;
|
•
|
Full expensing of qualified property, excluding rate regulated utilities, through 2022 with a phase down beginning in 2023;
|
•
|
Limitations on interest deductions with an exception for rate regulated utilities;
|
•
|
Limitation of the utilization of federal NOLs arising after December 31, 2017 to 80% of taxable income with an indefinite carryforward;
|
•
|
Repeal of the corporate AMT and allowing taxpayers to claim a refund on any AMT credit carryovers.
|
|
|
For the Years Ended December 31
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In millions, except per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
REVENUES:
|
|
$
|
14,017
|
|
|
$
|
14,562
|
|
|
$
|
15,026
|
|
|
$
|
(545
|
)
|
|
(4
|
)%
|
|
$
|
(464
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fuel
|
|
1,383
|
|
|
1,666
|
|
|
1,855
|
|
|
(283
|
)
|
|
(17
|
)%
|
|
(189
|
)
|
|
(10
|
)%
|
|||||
Purchased power
|
|
3,194
|
|
|
3,843
|
|
|
4,423
|
|
|
(649
|
)
|
|
(17
|
)%
|
|
(580
|
)
|
|
(13
|
)%
|
|||||
Other operating expenses
|
|
4,232
|
|
|
3,851
|
|
|
3,740
|
|
|
381
|
|
|
10
|
%
|
|
111
|
|
|
3
|
%
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
141
|
|
|
147
|
|
|
242
|
|
|
(6
|
)
|
|
(4
|
)%
|
|
(95
|
)
|
|
(39
|
)%
|
|||||
Provision for depreciation
|
|
1,138
|
|
|
1,313
|
|
|
1,282
|
|
|
(175
|
)
|
|
(13
|
)%
|
|
31
|
|
|
2
|
%
|
|||||
Amortization of regulatory assets, net
|
|
308
|
|
|
297
|
|
|
172
|
|
|
11
|
|
|
4
|
%
|
|
125
|
|
|
73
|
%
|
|||||
General taxes
|
|
1,043
|
|
|
1,042
|
|
|
978
|
|
|
1
|
|
|
—
|
%
|
|
64
|
|
|
7
|
%
|
|||||
Impairment of assets and related charges
|
|
2,406
|
|
|
10,665
|
|
|
42
|
|
|
(8,259
|
)
|
|
(77
|
)%
|
|
10,623
|
|
|
NM
|
|
|||||
Total operating expenses
|
|
13,845
|
|
|
22,824
|
|
|
12,734
|
|
|
(8,979
|
)
|
|
(39
|
)%
|
|
10,090
|
|
|
79
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OPERATING INCOME (LOSS)
|
|
172
|
|
|
(8,262
|
)
|
|
2,292
|
|
|
8,434
|
|
|
NM
|
|
|
(10,554
|
)
|
|
NM
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income (loss)
|
|
98
|
|
|
84
|
|
|
(22
|
)
|
|
14
|
|
|
17
|
%
|
|
106
|
|
|
NM
|
|
|||||
Impairment of equity method investment
|
|
—
|
|
|
—
|
|
|
(362
|
)
|
|
—
|
|
|
—
|
%
|
|
362
|
|
|
(100
|
)%
|
|||||
Interest expense
|
|
(1,178
|
)
|
|
(1,157
|
)
|
|
(1,132
|
)
|
|
(21
|
)
|
|
2
|
%
|
|
(25
|
)
|
|
2
|
%
|
|||||
Capitalized financing costs
|
|
79
|
|
|
103
|
|
|
117
|
|
|
(24
|
)
|
|
(23
|
)%
|
|
(14
|
)
|
|
(12
|
)%
|
|||||
Total other expense
|
|
(1,001
|
)
|
|
(970
|
)
|
|
(1,399
|
)
|
|
(31
|
)
|
|
3
|
%
|
|
429
|
|
|
(31
|
)%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)
|
|
(829
|
)
|
|
(9,232
|
)
|
|
893
|
|
|
8,403
|
|
|
91
|
%
|
|
(10,125
|
)
|
|
NM
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
INCOME TAXES (BENEFITS)
|
|
895
|
|
|
(3,055
|
)
|
|
315
|
|
|
3,950
|
|
|
NM
|
|
|
(3,370
|
)
|
|
NM
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NET INCOME (LOSS)
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
|
$
|
4,453
|
|
|
72
|
%
|
|
$
|
(6,755
|
)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
10.61
|
|
|
73
|
%
|
|
$
|
(15.86
|
)
|
|
NM
|
|
Diluted
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
10.61
|
|
|
73
|
%
|
|
$
|
(15.86
|
)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NM - Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Impairment charges of
$9,218 million
resulting from management's plans to exit its commodity-exposed generation at CES and the anticipated cash flows over the shortened period.
|
•
|
The impairment of
$800 million
of goodwill at CES, reflecting a weak outlook for energy and capacity markets.
|
•
|
Impairment charges totaling
$647 million
resulting from management's decision to exit the Bay Shore Unit 1 generating station and Units 1-4 of the W.H. Sammis generating station.
|
•
|
Charges of $2,045 million associated with FES' nuclear generating assets, as discussed above in "Executive Summary."
|
•
|
Impairment charges of $193 million as a result of the amended asset purchase agreement between AE Supply, AGC, BU Energy and a subsidiary of LS Power.
|
•
|
Impairment charge of $120 million resulting from AE Supply's announced intent to exit operations of the Pleasants Power Station, through either sale or deactivation by January 1, 2019.
|
•
|
Impairment charges totaling $41 million associated with formula-rate settlement agreements filed with FERC by MAIT and JCP&L.
|
•
|
The decrease in revenues at CES resulted from a 10 million MWH decline in contract sales at lower prices, as well as lower capacity auction prices and lower net gains on financially settled contracts, partially offset by an increase in short-term (net hourly position) transactions.
|
•
|
The increase in revenues at Regulated Transmission resulted primarily from recovery of incremental operating expenses and a higher rate base at ATSI and TrAIL.
|
•
|
The increase in revenues at Regulated Distribution resulted from the implementation of new rates in January 2017, partially offset by lower weather-related distribution deliveries and higher customer shopping.
|
•
|
Purchased power decreased
$649 million
mainly due to lower volumes at CES and Regulated Distribution as well as lower capacity expense at CES.
|
•
|
Fuel expense decreased
$283 million
, mainly due to lower generation at CES associated with outages and lower economic dispatch of fossil units reflecting low wholesale spot market energy prices, as well as lower unit prices on fossil fuel contracts.
|
•
|
Depreciation expense decreased
$175 million
, mainly from a lower asset base at CES resulting from asset impairments recognized in
2016
.
|
•
|
Other operating expenses increased
$381 million
, reflecting an increase of
$251 million
at CES, primarily associated with estimated losses on long-term coal and coal transportation contract disputes recognized in
2017
and higher non-cash mark-to-market losses on commodity contract positions. Operating expenses at Regulated Distribution increased
$88 million
, resulting primarily from higher operating and maintenance expenses, including increased expenses in Pennsylvania recovered through the new base distribution rates, effective January 27, 2017, and increased storm restoration costs.
|
•
|
The decrease in revenue at CES resulted from a 15 million MWH decline in contract sales, as the segment aligned sales to its generation, as well as lower capacity revenue associated with lower capacity auction prices. The decline in contract sales volume was partially offset by higher wholesale sales and higher net gains on financially settled contracts.
|
•
|
The increase in revenue at Regulated Distribution primarily resulted from higher weather-related distribution deliveries and the full year impact of net rate increases implemented in 2015, partially offset by lower generation sales. Distribution deliveries increased 0.3%, or 0.4 million MWHs, reflecting higher weather-related sales.
|
•
|
The increase in revenue at Regulated Transmission primarily resulted from the recovery of incremental operating expenses and a higher rate base at ATSI and TrAIL, partially offset by adjustments associated with ATSI and TrAIL's annual rate filing for costs previously recovered as well as a lower ROE in 2016 at ATSI under its FERC-approved comprehensive settlement related to the implementation of its forward-looking formula rate.
|
•
|
Purchased power decreased
$580 million
mainly due to lower volumes at CES and Regulated Distribution and lower capacity expense at CES.
|
•
|
Fuel expense decreased $
189 million
mainly resulting from lower generation at CES associated with outages and lower economic dispatch of fossil units reflecting low wholesale spot market energy prices, as well as lower unit prices on fossil fuel contracts.
|
•
|
Pension and OPEB mark-to-market adjustments decreased $
95 million
to $
147 million
in 2016. The 2016 adjustment resulted from a 25 bps decrease in the discount rate used to measure benefit obligations partially offset by higher than expected asset returns and changes in certain actuarial assumptions.
|
•
|
Other operating expenses increased $
111 million
, primarily reflecting an increase at Regulated Distribution resulting from the recognition of economic development and energy efficiency obligations in accordance with the PUCO's order approving the Ohio Companies' ESP IV, higher network transmission expenses, higher retirement benefit costs and higher operating and maintenance expenses associated with storm restoration costs, partially offset by lower PJM transmission costs and lower nuclear planned outage costs at CES.
|
|
|
|
|
Increase (Decrease)
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||||
|
|
(In millions, except per share amounts)
|
||||||||||||||||||
Net Income (Loss) By Business Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Regulated Distribution
|
|
$
|
916
|
|
|
$
|
651
|
|
|
$
|
588
|
|
|
$
|
265
|
|
|
$
|
63
|
|
Regulated Transmission
|
|
336
|
|
|
331
|
|
|
328
|
|
|
5
|
|
|
3
|
|
|||||
Competitive Energy Services
|
|
(2,641
|
)
|
|
(6,919
|
)
|
|
89
|
|
|
4,278
|
|
|
(7,008
|
)
|
|||||
Corporate/Other
|
|
(335
|
)
|
|
(240
|
)
|
|
(427
|
)
|
|
(95
|
)
|
|
187
|
|
|||||
Net Income (Loss)
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
|
$
|
4,453
|
|
|
$
|
(6,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic Earnings (Loss) Per Share
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
10.61
|
|
|
$
|
(15.86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted Earnings (Loss) Per Share
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
$
|
10.61
|
|
|
$
|
(15.86
|
)
|
2017 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
9,559
|
|
|
$
|
1,325
|
|
|
$
|
3,063
|
|
|
$
|
(170
|
)
|
|
$
|
13,777
|
|
Other
|
|
175
|
|
|
—
|
|
|
80
|
|
|
(15
|
)
|
|
240
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
386
|
|
|
(386
|
)
|
|
—
|
|
|||||
Total Revenues
|
|
9,734
|
|
|
1,325
|
|
|
3,529
|
|
|
(571
|
)
|
|
14,017
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
493
|
|
|
—
|
|
|
890
|
|
|
—
|
|
|
1,383
|
|
|||||
Purchased power
|
|
2,924
|
|
|
—
|
|
|
656
|
|
|
(386
|
)
|
|
3,194
|
|
|||||
Other operating expenses
|
|
2,517
|
|
|
203
|
|
|
1,777
|
|
|
(265
|
)
|
|
4,232
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
102
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
141
|
|
|||||
Provision for depreciation
|
|
724
|
|
|
224
|
|
|
118
|
|
|
72
|
|
|
1,138
|
|
|||||
Amortization of regulatory assets, net
|
|
292
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|||||
General taxes
|
|
727
|
|
|
173
|
|
|
99
|
|
|
44
|
|
|
1,043
|
|
|||||
Impairment of assets and related charges
|
|
—
|
|
|
41
|
|
|
2,365
|
|
|
—
|
|
|
2,406
|
|
|||||
Total Operating Expenses
|
|
7,779
|
|
|
657
|
|
|
5,944
|
|
|
(535
|
)
|
|
13,845
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
1,955
|
|
|
668
|
|
|
(2,415
|
)
|
|
(36
|
)
|
|
172
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss)
|
|
54
|
|
|
—
|
|
|
81
|
|
|
(37
|
)
|
|
98
|
|
|||||
Interest expense
|
|
(535
|
)
|
|
(156
|
)
|
|
(179
|
)
|
|
(308
|
)
|
|
(1,178
|
)
|
|||||
Capitalized financing costs
|
|
22
|
|
|
29
|
|
|
27
|
|
|
1
|
|
|
79
|
|
|||||
Total Other Expense
|
|
(459
|
)
|
|
(127
|
)
|
|
(71
|
)
|
|
(344
|
)
|
|
(1,001
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) Before Income Taxes (Benefits)
|
|
1,496
|
|
|
541
|
|
|
(2,486
|
)
|
|
(380
|
)
|
|
(829
|
)
|
|||||
Income taxes (benefits)
|
|
580
|
|
|
205
|
|
|
155
|
|
|
(45
|
)
|
|
895
|
|
|||||
Net Income (Loss)
|
|
$
|
916
|
|
|
$
|
336
|
|
|
$
|
(2,641
|
)
|
|
$
|
(335
|
)
|
|
$
|
(1,724
|
)
|
2016 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
9,401
|
|
|
$
|
1,144
|
|
|
$
|
3,892
|
|
|
$
|
(174
|
)
|
|
$
|
14,263
|
|
Other
|
|
228
|
|
|
—
|
|
|
178
|
|
|
(107
|
)
|
|
299
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
479
|
|
|
(479
|
)
|
|
—
|
|
|||||
Total Revenues
|
|
9,629
|
|
|
1,144
|
|
|
4,549
|
|
|
(760
|
)
|
|
14,562
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
567
|
|
|
—
|
|
|
1,099
|
|
|
—
|
|
|
1,666
|
|
|||||
Purchased power
|
|
3,303
|
|
|
—
|
|
|
1,019
|
|
|
(479
|
)
|
|
3,843
|
|
|||||
Other operating expenses
|
|
2,429
|
|
|
154
|
|
|
1,526
|
|
|
(258
|
)
|
|
3,851
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
101
|
|
|
1
|
|
|
45
|
|
|
—
|
|
|
147
|
|
|||||
Provision for depreciation
|
|
676
|
|
|
187
|
|
|
387
|
|
|
63
|
|
|
1,313
|
|
|||||
Amortization of regulatory assets, net
|
|
290
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|||||
General taxes
|
|
720
|
|
|
153
|
|
|
134
|
|
|
35
|
|
|
1,042
|
|
|||||
Impairment of assets and related charges
|
|
—
|
|
|
—
|
|
|
10,665
|
|
|
—
|
|
|
10,665
|
|
|||||
Total Operating Expenses
|
|
8,086
|
|
|
502
|
|
|
14,875
|
|
|
(639
|
)
|
|
22,824
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
1,543
|
|
|
642
|
|
|
(10,326
|
)
|
|
(121
|
)
|
|
(8,262
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss)
|
|
49
|
|
|
—
|
|
|
66
|
|
|
(31
|
)
|
|
84
|
|
|||||
Interest expense
|
|
(586
|
)
|
|
(158
|
)
|
|
(194
|
)
|
|
(219
|
)
|
|
(1,157
|
)
|
|||||
Capitalized financing costs
|
|
20
|
|
|
34
|
|
|
37
|
|
|
12
|
|
|
103
|
|
|||||
Total Other Expense
|
|
(517
|
)
|
|
(124
|
)
|
|
(91
|
)
|
|
(238
|
)
|
|
(970
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) Before Income Taxes (Benefits)
|
|
1,026
|
|
|
518
|
|
|
(10,417
|
)
|
|
(359
|
)
|
|
(9,232
|
)
|
|||||
Income taxes (benefits)
|
|
375
|
|
|
187
|
|
|
(3,498
|
)
|
|
(119
|
)
|
|
(3,055
|
)
|
|||||
Net Income (Loss)
|
|
$
|
651
|
|
|
$
|
331
|
|
|
$
|
(6,919
|
)
|
|
$
|
(240
|
)
|
|
$
|
(6,177
|
)
|
Changes Between 2017 and 2016 Financial Results
Increase (Decrease)
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
158
|
|
|
$
|
181
|
|
|
$
|
(829
|
)
|
|
$
|
4
|
|
|
$
|
(486
|
)
|
Other
|
|
(53
|
)
|
|
—
|
|
|
(98
|
)
|
|
92
|
|
|
(59
|
)
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
93
|
|
|
—
|
|
|||||
Total Revenues
|
|
105
|
|
|
181
|
|
|
(1,020
|
)
|
|
189
|
|
|
(545
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
(74
|
)
|
|
—
|
|
|
(209
|
)
|
|
—
|
|
|
(283
|
)
|
|||||
Purchased power
|
|
(379
|
)
|
|
—
|
|
|
(363
|
)
|
|
93
|
|
|
(649
|
)
|
|||||
Other operating expenses
|
|
88
|
|
|
49
|
|
|
251
|
|
|
(7
|
)
|
|
381
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
1
|
|
|
(1
|
)
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Provision for depreciation
|
|
48
|
|
|
37
|
|
|
(269
|
)
|
|
9
|
|
|
(175
|
)
|
|||||
Amortization of regulatory assets, net
|
|
2
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
General taxes
|
|
7
|
|
|
20
|
|
|
(35
|
)
|
|
9
|
|
|
1
|
|
|||||
Impairment of assets and related charges
|
|
—
|
|
|
41
|
|
|
(8,300
|
)
|
|
—
|
|
|
(8,259
|
)
|
|||||
Total Operating Expenses
|
|
(307
|
)
|
|
155
|
|
|
(8,931
|
)
|
|
104
|
|
|
(8,979
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
|
412
|
|
|
26
|
|
|
7,911
|
|
|
85
|
|
|
8,434
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss)
|
|
5
|
|
|
—
|
|
|
15
|
|
|
(6
|
)
|
|
14
|
|
|||||
Interest expense
|
|
51
|
|
|
2
|
|
|
15
|
|
|
(89
|
)
|
|
(21
|
)
|
|||||
Capitalized financing costs
|
|
2
|
|
|
(5
|
)
|
|
(10
|
)
|
|
(11
|
)
|
|
(24
|
)
|
|||||
Total Other Income (Expense)
|
|
58
|
|
|
(3
|
)
|
|
20
|
|
|
(106
|
)
|
|
(31
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) Before Income Taxes (Benefits)
|
|
470
|
|
|
23
|
|
|
7,931
|
|
|
(21
|
)
|
|
8,403
|
|
|||||
Income taxes (benefits)
|
|
205
|
|
|
18
|
|
|
3,653
|
|
|
74
|
|
|
3,950
|
|
|||||
Net Income (Loss)
|
|
$
|
265
|
|
|
$
|
5
|
|
|
$
|
4,278
|
|
|
$
|
(95
|
)
|
|
$
|
4,453
|
|
|
|
For the Years Ended December 31
|
|
Increase
|
||||||||
Revenues by Type of Service
|
|
2017
|
|
2016
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Distribution services
|
|
$
|
5,323
|
|
|
$
|
4,721
|
|
|
$
|
602
|
|
|
|
|
|
|
|
|
||||||
Generation sales:
|
|
|
|
|
|
|
||||||
Retail
|
|
3,767
|
|
|
4,183
|
|
|
(416
|
)
|
|||
Wholesale
|
|
469
|
|
|
497
|
|
|
(28
|
)
|
|||
Total generation sales
|
|
4,236
|
|
|
4,680
|
|
|
(444
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other
|
|
175
|
|
|
228
|
|
|
(53
|
)
|
|||
Total Revenues
|
|
$
|
9,734
|
|
|
$
|
9,629
|
|
|
$
|
105
|
|
|
|
For the Years Ended December 31
|
|
Increase
|
|||||
Electric Distribution MWH Deliveries
|
|
2017
|
|
2016
|
|
(Decrease)
|
|||
|
|
(In thousands)
|
|
|
|||||
Residential
|
|
52,048
|
|
|
54,840
|
|
|
(5.1
|
)%
|
Commercial
|
|
41,789
|
|
|
43,340
|
|
|
(3.6
|
)%
|
Industrial
|
|
51,307
|
|
|
50,082
|
|
|
2.4
|
%
|
Other
|
|
572
|
|
|
579
|
|
|
(1.2
|
)%
|
Total Electric Distribution MWH Deliveries
|
|
145,716
|
|
|
148,841
|
|
|
(2.1
|
)%
|
Source of Change in Generation Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Retail:
|
|
|
|
|
Effect of decrease in sales volumes
|
|
$
|
(250
|
)
|
Change in prices
|
|
(166
|
)
|
|
|
|
(416
|
)
|
|
Wholesale:
|
|
|
||
Effect of increase in sales volumes
|
|
15
|
|
|
Change in prices
|
|
(30
|
)
|
|
Capacity revenue
|
|
(13
|
)
|
|
|
|
(28
|
)
|
|
Decrease in Generation Revenues
|
|
$
|
(444
|
)
|
•
|
Fuel expense decreased $
74 million
in
2017
, as compared to 2016, primarily related to lower unit costs.
|
•
|
Purchased power costs decreased
$379 million
in
2017
, as compared to 2016, primarily due to decreased volumes, as described above, as well as lower default service auction prices.
|
Source of Change in Purchased Power
|
|
Increase (Decrease)
|
|||
|
|
(In millions)
|
|||
Purchases from non-affiliates:
|
|
|
|||
Change due to decreased unit costs
|
|
$
|
(147
|
)
|
|
Change due to decreased volumes
|
|
(151
|
)
|
||
|
|
(298
|
)
|
||
Purchases from affiliates:
|
|
|
|||
Change due to decreased unit costs
|
|
(26
|
)
|
||
Change due to decreased volumes
|
|
(67
|
)
|
||
|
|
(93
|
)
|
||
Capacity expense
|
|
12
|
|
||
Decrease in Purchased Power Costs
|
|
$
|
(379
|
)
|
•
|
Other operating expenses increased
$88 million
primarily due to:
|
•
|
Higher network transmission expenses of $35 million. The difference between current revenues and transmission costs incurred are deferred for future recovery or refund, resulting in no material impact on current period earnings;
|
•
|
Higher operating and maintenance expenses of $64 million, including increased expenses in Pennsylvania recovered through the new base distribution rates, effective January 27, 2017, and increased storm restoration costs, which were deferred for future recovery, resulting in no material impact on current period earnings;
|
•
|
Higher energy efficiency program expenses of $45 million in Ohio, which were recovered through higher distribution rider revenues; partially offset by,
|
•
|
Lower regulatory costs of $51 million resulting from the absence of economic development and energy efficiency obligations recognized in 2016 in accordance with the PUCO's March 31, 2016 Opinion and Order adopting and approving, with modifications, the Ohio Companies' ESP IV.
|
•
|
Depreciation expenses increased
$48 million
due to a higher asset base as well as increased rates in Pennsylvania.
|
|
|
For the Years Ended December 31
|
|
Increase
|
||||||||
Revenues by Transmission Asset Owner
|
|
2017
|
|
2016
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
ATSI
|
|
$
|
657
|
|
|
$
|
540
|
|
|
$
|
117
|
|
TrAIL
|
|
282
|
|
|
252
|
|
|
30
|
|
|||
MAIT
(1)
|
|
110
|
|
|
101
|
|
|
9
|
|
|||
JCP&L
|
|
125
|
|
|
91
|
|
|
34
|
|
|||
Other
|
|
151
|
|
|
160
|
|
|
(9
|
)
|
|||
Total Revenues
|
|
$
|
1,325
|
|
|
$
|
1,144
|
|
|
$
|
181
|
|
|
|
For the Years Ended December 31
|
|
(Decrease)
|
||||||||
Revenues by Type of Service
|
|
2017
|
|
2016
|
|
|||||||
|
|
(In millions)
|
||||||||||
Contract Sales:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
735
|
|
|
$
|
812
|
|
|
$
|
(77
|
)
|
Governmental Aggregation
|
|
396
|
|
|
814
|
|
|
(418
|
)
|
|||
Mass Market
|
|
127
|
|
|
169
|
|
|
(42
|
)
|
|||
POLR
|
|
504
|
|
|
583
|
|
|
(79
|
)
|
|||
Structured Sales
|
|
346
|
|
|
463
|
|
|
(117
|
)
|
|||
Total Contract Sales
|
|
2,108
|
|
|
2,841
|
|
|
(733
|
)
|
|||
Wholesale
|
|
1,300
|
|
|
1,457
|
|
|
(157
|
)
|
|||
Transmission
|
|
41
|
|
|
73
|
|
|
(32
|
)
|
|||
Other
|
|
80
|
|
|
178
|
|
|
(98
|
)
|
|||
Total Revenues
|
|
$
|
3,529
|
|
|
$
|
4,549
|
|
|
$
|
(1,020
|
)
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31
|
|
Increase (Decrease)
|
|||||
MWH Sales by Channel
|
|
2017
|
|
2016
|
|
||||
|
|
(In thousands)
|
|
|
|||||
Contract Sales:
|
|
|
|
|
|
|
|||
Direct
|
|
15,157
|
|
|
15,310
|
|
|
(1.0
|
)%
|
Governmental Aggregation
|
|
7,431
|
|
|
13,730
|
|
|
(45.9
|
)%
|
Mass Market
|
|
1,867
|
|
|
2,431
|
|
|
(23.2
|
)%
|
POLR
|
|
9,140
|
|
|
9,969
|
|
|
(8.3
|
)%
|
Structured Sales
|
|
8,972
|
|
|
11,414
|
|
|
(21.4
|
)%
|
Total Contract Sales
|
|
42,567
|
|
|
52,854
|
|
|
(19.5
|
)%
|
Wholesale
|
|
22,492
|
|
|
15,201
|
|
|
48.0
|
%
|
Total MWH Sales
|
|
65,059
|
|
|
68,055
|
|
|
(4.4
|
)%
|
|
|
|
|
|
|
|
|
|
Source of Change in Revenues
|
||||||||||||||||||
|
|
Increase (Decrease)
|
||||||||||||||||||
MWH Sales Channel:
|
|
Sales Volumes
|
|
Prices
|
|
Gain on Settled Contracts
|
|
Capacity Revenue
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Direct
|
|
$
|
(8
|
)
|
|
$
|
(69
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(77
|
)
|
Governmental Aggregation
|
|
(373
|
)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(418
|
)
|
|||||
Mass Market
|
|
(40
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||||
POLR
|
|
(49
|
)
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|||||
Structured Sales
|
|
(101
|
)
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(117
|
)
|
|||||
Wholesale
|
|
202
|
|
|
23
|
|
|
(156
|
)
|
|
(226
|
)
|
|
(157
|
)
|
•
|
Fuel costs decreased $209 million, primarily due to the absence of approximately $58 million in settlement and termination costs on coal contracts recognized in 2016, as well as lower generation associated with outages and economic dispatch of fossil units resulting from low wholesale spot market energy prices, as discussed above, partially offset by higher unit costs.
|
•
|
Purchased power costs decreased $363 million primarily due to lower capacity expenses ($271 million) and lower unit costs ($126 million), partially offset by higher volumes ($34 million). The decrease in capacity expense, which is a component of CES' retail price, was primarily the result of lower contract sales and lower capacity rates associated with CES' retail sales obligations. Lower unit costs primarily resulted from lower wholesale spot market prices, as discussed above.
|
•
|
Charges of $318 million associated with estimated losses on long-term coal and coal transportation contract disputes was recognized in 2017, as discussed in "Outlook - Environmental Matters" below.
|
•
|
Fossil operating and maintenance expenses decreased $18 million, primarily due to lower outage costs.
|
•
|
Nuclear operating and maintenance expenses increased $14 million, primarily as a result of higher employee benefit costs, partially offset by lower refueling outage costs.
|
•
|
Retirement benefit costs decreased $14 million.
|
•
|
Transmission expenses decreased $60 million, primarily due to lower contract sales volumes.
|
•
|
Other operating expenses increased $11 million, primarily due to higher non-cash mark-to-market losses on commodity contract positions, partially offset by the absence of a termination charge recognized in 2016 associated with an FES Governmental Aggregation customer contract and lower lease expense as a result of the expiration of a nuclear sale-leaseback agreement.
|
•
|
Depreciation expense decreased $269 million, primarily due to a lower asset base resulting from asset impairments recognized in 2016, partially offset by the absence of an out-of-period adjustment to reduce the depreciation of a hydroelectric generating station in the third quarter of 2016.
|
•
|
General taxes decreased $35 million, primarily due to lower property taxes and reduced gross receipts taxes associated with lower retail sales volumes.
|
•
|
Impairment of assets and related charges decreased
$8,300 million
, primarily due to the absence of impairments recognized in 2016 related to goodwill and the competitive generation assets primarily resulting from the strategic review announced in November 2016, partially offset by the impairments recognized in 2017 related to the nuclear generating assets and the Pleasants Power Station, as discussed further in "Executive Summary," above.
|
2016 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
9,401
|
|
|
$
|
1,144
|
|
|
$
|
3,892
|
|
|
$
|
(174
|
)
|
|
$
|
14,263
|
|
Other
|
|
228
|
|
|
—
|
|
|
178
|
|
|
(107
|
)
|
|
299
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
479
|
|
|
(479
|
)
|
|
—
|
|
|||||
Total Revenues
|
|
9,629
|
|
|
1,144
|
|
|
4,549
|
|
|
(760
|
)
|
|
14,562
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
567
|
|
|
—
|
|
|
1,099
|
|
|
—
|
|
|
1,666
|
|
|||||
Purchased power
|
|
3,303
|
|
|
—
|
|
|
1,019
|
|
|
(479
|
)
|
|
3,843
|
|
|||||
Other operating expenses
|
|
2,429
|
|
|
154
|
|
|
1,526
|
|
|
(258
|
)
|
|
3,851
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
101
|
|
|
1
|
|
|
45
|
|
|
—
|
|
|
147
|
|
|||||
Provision for depreciation
|
|
676
|
|
|
187
|
|
|
387
|
|
|
63
|
|
|
1,313
|
|
|||||
Amortization of regulatory assets, net
|
|
290
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|||||
General taxes
|
|
720
|
|
|
153
|
|
|
134
|
|
|
35
|
|
|
1,042
|
|
|||||
Impairment of assets and related charges
|
|
—
|
|
|
—
|
|
|
10,665
|
|
|
—
|
|
|
10,665
|
|
|||||
Total Operating Expenses
|
|
8,086
|
|
|
502
|
|
|
14,875
|
|
|
(639
|
)
|
|
22,824
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
1,543
|
|
|
642
|
|
|
(10,326
|
)
|
|
(121
|
)
|
|
(8,262
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss)
|
|
49
|
|
|
—
|
|
|
66
|
|
|
(31
|
)
|
|
84
|
|
|||||
Impairment of equity method investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense
|
|
(586
|
)
|
|
(158
|
)
|
|
(194
|
)
|
|
(219
|
)
|
|
(1,157
|
)
|
|||||
Capitalized financing costs
|
|
20
|
|
|
34
|
|
|
37
|
|
|
12
|
|
|
103
|
|
|||||
Total Other Expense
|
|
(517
|
)
|
|
(124
|
)
|
|
(91
|
)
|
|
(238
|
)
|
|
(970
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) Before Income Taxes (Benefits)
|
|
1,026
|
|
|
518
|
|
|
(10,417
|
)
|
|
(359
|
)
|
|
(9,232
|
)
|
|||||
Income taxes (benefits)
|
|
375
|
|
|
187
|
|
|
(3,498
|
)
|
|
(119
|
)
|
|
(3,055
|
)
|
|||||
Net Income (Loss)
|
|
$
|
651
|
|
|
$
|
331
|
|
|
$
|
(6,919
|
)
|
|
$
|
(240
|
)
|
|
$
|
(6,177
|
)
|
2015 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
9,386
|
|
|
$
|
1,046
|
|
|
$
|
4,493
|
|
|
$
|
(165
|
)
|
|
$
|
14,760
|
|
Other
|
|
196
|
|
|
—
|
|
|
205
|
|
|
(135
|
)
|
|
266
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
686
|
|
|
(686
|
)
|
|
—
|
|
|||||
Total Revenues
|
|
9,582
|
|
|
1,046
|
|
|
5,384
|
|
|
(986
|
)
|
|
15,026
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
533
|
|
|
—
|
|
|
1,322
|
|
|
—
|
|
|
1,855
|
|
|||||
Purchased power
|
|
3,653
|
|
|
—
|
|
|
1,456
|
|
|
(686
|
)
|
|
4,423
|
|
|||||
Other operating expenses
|
|
2,231
|
|
|
148
|
|
|
1,670
|
|
|
(309
|
)
|
|
3,740
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
179
|
|
|
3
|
|
|
60
|
|
|
—
|
|
|
242
|
|
|||||
Provision for depreciation
|
|
664
|
|
|
164
|
|
|
394
|
|
|
60
|
|
|
1,282
|
|
|||||
Amortization of regulatory assets, net
|
|
165
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||
General taxes
|
|
703
|
|
|
102
|
|
|
140
|
|
|
33
|
|
|
978
|
|
|||||
Impairment of assets and related charges
|
|
8
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
42
|
|
|||||
Total Operating Expenses
|
|
8,136
|
|
|
424
|
|
|
5,076
|
|
|
(902
|
)
|
|
12,734
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
1,446
|
|
|
622
|
|
|
308
|
|
|
(84
|
)
|
|
2,292
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss)
|
|
42
|
|
|
—
|
|
|
(16
|
)
|
|
(48
|
)
|
|
(22
|
)
|
|||||
Impairment of equity method investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(362
|
)
|
|
(362
|
)
|
|||||
Interest expense
|
|
(600
|
)
|
|
(147
|
)
|
|
(192
|
)
|
|
(193
|
)
|
|
(1,132
|
)
|
|||||
Capitalized financing costs
|
|
25
|
|
|
44
|
|
|
39
|
|
|
9
|
|
|
117
|
|
|||||
Total Other Expense
|
|
(533
|
)
|
|
(103
|
)
|
|
(169
|
)
|
|
(594
|
)
|
|
(1,399
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) Before Income Taxes (Benefits)
|
|
913
|
|
|
519
|
|
|
139
|
|
|
(678
|
)
|
|
893
|
|
|||||
Income taxes (benefits)
|
|
325
|
|
|
191
|
|
|
50
|
|
|
(251
|
)
|
|
315
|
|
|||||
Net Income (Loss)
|
|
$
|
588
|
|
|
$
|
328
|
|
|
$
|
89
|
|
|
$
|
(427
|
)
|
|
$
|
578
|
|
Changes Between 2016 and 2015
Financial Results
Increase (Decrease)
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive
Energy Services |
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Electric
|
|
$
|
15
|
|
|
$
|
98
|
|
|
$
|
(601
|
)
|
|
$
|
(9
|
)
|
|
$
|
(497
|
)
|
Other
|
|
32
|
|
|
—
|
|
|
(27
|
)
|
|
28
|
|
|
33
|
|
|||||
Internal
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
|
207
|
|
|
—
|
|
|||||
Total Revenues
|
|
47
|
|
|
98
|
|
|
(835
|
)
|
|
226
|
|
|
(464
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
34
|
|
|
—
|
|
|
(223
|
)
|
|
—
|
|
|
(189
|
)
|
|||||
Purchased power
|
|
(350
|
)
|
|
—
|
|
|
(437
|
)
|
|
207
|
|
|
(580
|
)
|
|||||
Other operating expenses
|
|
198
|
|
|
6
|
|
|
(144
|
)
|
|
51
|
|
|
111
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
(78
|
)
|
|
(2
|
)
|
|
(15
|
)
|
|
—
|
|
|
(95
|
)
|
|||||
Provision for depreciation
|
|
12
|
|
|
23
|
|
|
(7
|
)
|
|
3
|
|
|
31
|
|
|||||
Amortization of regulatory assets, net
|
|
125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|||||
General taxes
|
|
17
|
|
|
51
|
|
|
(6
|
)
|
|
2
|
|
|
64
|
|
|||||
Impairment of assets and related charges
|
|
(8
|
)
|
|
—
|
|
|
10,631
|
|
|
—
|
|
|
10,623
|
|
|||||
Total Operating Expenses
|
|
(50
|
)
|
|
78
|
|
|
9,799
|
|
|
263
|
|
|
10,090
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss)
|
|
97
|
|
|
20
|
|
|
(10,634
|
)
|
|
(37
|
)
|
|
(10,554
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss)
|
|
7
|
|
|
—
|
|
|
82
|
|
|
17
|
|
|
106
|
|
|||||
Impairment of equity method investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|
362
|
|
|||||
Interest expense
|
|
14
|
|
|
(11
|
)
|
|
(2
|
)
|
|
(26
|
)
|
|
(25
|
)
|
|||||
Capitalized financing costs
|
|
(5
|
)
|
|
(10
|
)
|
|
(2
|
)
|
|
3
|
|
|
(14
|
)
|
|||||
Total Other Expense
|
|
16
|
|
|
(21
|
)
|
|
78
|
|
|
356
|
|
|
429
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (Loss) Before Income Taxes (Benefits)
|
|
113
|
|
|
(1
|
)
|
|
(10,556
|
)
|
|
319
|
|
|
(10,125
|
)
|
|||||
Income taxes (benefits)
|
|
50
|
|
|
(4
|
)
|
|
(3,548
|
)
|
|
132
|
|
|
(3,370
|
)
|
|||||
Net Income (Loss)
|
|
$
|
63
|
|
|
$
|
3
|
|
|
$
|
(7,008
|
)
|
|
$
|
187
|
|
|
$
|
(6,755
|
)
|
|
|
For the Years Ended December 31
|
|
Increase
|
||||||||
Revenues by Type of Service
|
|
2016
|
|
2015
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Distribution services
|
|
$
|
4,721
|
|
|
$
|
4,459
|
|
|
$
|
262
|
|
|
|
|
|
|
|
|
||||||
Generation sales:
|
|
|
|
|
|
|
||||||
Retail
|
|
4,183
|
|
|
4,354
|
|
|
(171
|
)
|
|||
Wholesale
|
|
497
|
|
|
573
|
|
|
(76
|
)
|
|||
Total generation sales
|
|
4,680
|
|
|
4,927
|
|
|
(247
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other
|
|
228
|
|
|
196
|
|
|
32
|
|
|||
Total Revenues
|
|
$
|
9,629
|
|
|
$
|
9,582
|
|
|
$
|
47
|
|
|
|
For the Years Ended December 31
|
|
Increase
|
|||||
Electric Distribution MWH Deliveries
|
|
2016
|
|
2015
|
|
(Decrease)
|
|||
|
|
(In thousands)
|
|
|
|||||
Residential
|
|
54,840
|
|
|
54,466
|
|
|
0.7
|
%
|
Commercial
|
|
43,340
|
|
|
43,091
|
|
|
0.6
|
%
|
Industrial
|
|
50,082
|
|
|
50,269
|
|
|
(0.4
|
)%
|
Other
|
|
579
|
|
|
585
|
|
|
(1.0
|
)%
|
Total Electric Distribution MWH Deliveries
|
|
148,841
|
|
|
148,411
|
|
|
0.3
|
%
|
Source of Change in Generation Revenues
|
|
Increase (Decrease)
|
||
|
|
(In millions)
|
||
Retail:
|
|
|
|
|
Effect of decrease in sales volumes
|
|
$
|
(196
|
)
|
Change in prices
|
|
25
|
|
|
|
|
(171
|
)
|
|
Wholesale:
|
|
|
||
Effect of increase in sales volumes
|
|
47
|
|
|
Change in prices
|
|
(107
|
)
|
|
Capacity revenue
|
|
(16
|
)
|
|
|
|
(76
|
)
|
|
Decrease in Generation Revenues
|
|
$
|
(247
|
)
|
•
|
Fuel expense increased
$34 million
, in 2016 as compared 2015, primarily related to higher generation.
|
•
|
Purchased power costs decreased
$350 million
, in 2016 as compared to 2015, primarily due to lower volumes resulting from increased customer shopping, as described above, as well as lower unit costs reflecting lower default service auction prices in Ohio and Pennsylvania.
|
Source of Change in Purchased Power
|
|
Decrease
|
|||
|
|
(In millions)
|
|||
Purchases from non-affiliates:
|
|
|
|||
Change due to decreased unit costs
|
|
$
|
(133
|
)
|
|
Change due to decreased volumes
|
|
(6
|
)
|
||
|
|
(139
|
)
|
||
Purchases from affiliates:
|
|
|
|||
Change due to decreased unit costs
|
|
(2
|
)
|
||
Change due to decreased volumes
|
|
(204
|
)
|
||
|
|
(206
|
)
|
||
Capacity expense
|
|
(5
|
)
|
||
Decrease in Purchased Power Costs
|
|
$
|
(350
|
)
|
•
|
Other operating expenses increased
$198 million
primarily due to:
|
•
|
An increase of $51 million resulting from the recognition of economic development and energy efficiency obligations in accordance with the PUCO's March 31, 2016 Opinion and Order adopting and approving, with modifications, the Ohio Companies' ESP IV.
|
•
|
Higher retirement benefit costs of $57 million.
|
•
|
Higher transmission expenses of $56 million primarily related to an increase in network transmission expenses at the Ohio Companies, partially offset by lower congestion expenses at MP. The difference between current revenues and transmission costs incurred are deferred for future recovery or refund, resulting in no material impact on current period earnings.
|
•
|
Higher operating and maintenance expense of $33 million, primarily due to increased storm restoration costs, which are deferred for future recovery resulting in no material impact on current period earnings.
|
•
|
Pension and OPEB mark-to-market adjustments decreased
$78 million
to
$101 million
in 2016. The 2016 adjustment resulted from a 25 bps decrease in the discount rate used to measure benefit obligations partially offset by higher than expected asset returns and changes in certain actuarial assumptions.
|
•
|
Depreciation expenses increased
$12 million
due to a higher asset base.
|
•
|
Net amortization of regulatory assets increased
$125 million
primarily due to:
|
•
|
A full year recovery of storm costs in New Jersey, Pennsylvania, and West Virginia, effective with the implementation of new rates as discussed above ($35 million),
|
•
|
Recovery of West Virginia vegetation management program costs ($40 million)
|
•
|
The recovery of previously deferred energy and fuel costs ($75 million), partially offset by
|
•
|
Higher deferral of storm restoration costs ($39 million).
|
•
|
General taxes increased
$17 million
primarily due to higher revenue-related taxes in Pennsylvania and higher property taxes in Ohio.
|
|
|
For the Years Ended December 31
|
|
|
||||||||
Revenues by Transmission Asset Owner
|
|
2016
|
|
2015
|
|
Increase
|
||||||
|
|
(In millions)
|
||||||||||
ATSI
|
|
$
|
540
|
|
|
$
|
446
|
|
|
$
|
94
|
|
TrAIL
|
|
252
|
|
|
252
|
|
|
—
|
|
|||
MAIT
(1)
|
|
101
|
|
|
100
|
|
|
1
|
|
|||
JCPL
|
|
91
|
|
|
89
|
|
|
2
|
|
|||
Other
|
|
160
|
|
|
159
|
|
|
1
|
|
|||
Total Revenues
|
|
$
|
1,144
|
|
|
$
|
1,046
|
|
|
$
|
98
|
|
|
|
For the Years Ended December 31
|
|
Increase
|
||||||||
Revenues by Type of Service
|
|
2016
|
|
2015
|
|
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Contract Sales:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
812
|
|
|
$
|
1,269
|
|
|
$
|
(457
|
)
|
Governmental Aggregation
|
|
814
|
|
|
1,012
|
|
|
(198
|
)
|
|||
Mass Market
|
|
169
|
|
|
265
|
|
|
(96
|
)
|
|||
POLR
|
|
583
|
|
|
712
|
|
|
(129
|
)
|
|||
Structured Sales
|
|
463
|
|
|
558
|
|
|
(95
|
)
|
|||
Total Contract Sales
|
|
2,841
|
|
|
3,816
|
|
|
(975
|
)
|
|||
Wholesale
|
|
1,457
|
|
|
1,225
|
|
|
232
|
|
|||
Transmission
|
|
73
|
|
|
138
|
|
|
(65
|
)
|
|||
Other
|
|
178
|
|
|
205
|
|
|
(27
|
)
|
|||
Total Revenues
|
|
$
|
4,549
|
|
|
$
|
5,384
|
|
|
$
|
(835
|
)
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31
|
|
Increase
|
|||||
MWH Sales by Channel
|
|
2016
|
|
2015
|
|
(Decrease)
|
|||
|
|
(In thousands)
|
|
|
|||||
Contract Sales:
|
|
|
|
|
|
|
|||
Direct
|
|
15,310
|
|
|
23,585
|
|
|
(35.1
|
)%
|
Governmental Aggregation
|
|
13,730
|
|
|
15,443
|
|
|
(11.1
|
)%
|
Mass Market
|
|
2,431
|
|
|
3,878
|
|
|
(37.3
|
)%
|
POLR
|
|
9,969
|
|
|
11,950
|
|
|
(16.6
|
)%
|
Structured Sales
|
|
11,414
|
|
|
12,902
|
|
|
(11.5
|
)%
|
Total Contract Sales
|
|
52,854
|
|
|
67,758
|
|
|
(22.0
|
)%
|
Wholesale
|
|
15,201
|
|
|
7,326
|
|
|
107.5
|
%
|
Total MWH Sales
|
|
68,055
|
|
|
75,084
|
|
|
(9.4
|
)%
|
|
|
|
|
|
|
|
|
|
Source of Change in Revenues
|
||||||||||||||||||
|
|
Increase (Decrease)
|
||||||||||||||||||
MWH Sales Channel:
|
|
Sales Volumes
|
|
Prices
|
|
Gain on Settled Contracts
|
|
Capacity Revenue
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Direct
|
|
$
|
(445
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(457
|
)
|
Governmental Aggregation
|
|
(112
|
)
|
|
(86
|
)
|
|
—
|
|
|
—
|
|
|
(198
|
)
|
|||||
Mass Market
|
|
(99
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(96
|
)
|
|||||
POLR
|
|
(118
|
)
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|||||
Structured Sales
|
|
(64
|
)
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
|||||
Wholesale
|
|
223
|
|
|
(10
|
)
|
|
98
|
|
|
(79
|
)
|
|
232
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
•
|
Fuel costs decreased $223 million, primarily due to lower generation associated with outages and lower economic dispatch of fossil units resulting from low wholesale spot market energy prices, as discussed above, as well as lower unit prices on fossil fuel contracts.
|
•
|
Purchased power costs decreased $437 million due to lower capacity expenses ($234 million) and lower volumes ($203 million). The decrease in capacity expense, which is a component of CES' retail price, was primarily the result of lower contract sales and lower capacity rates associated with CES' retail sales obligations. Lower volumes primarily resulted from lower contract sales, as discussed above, partially offset by higher economic purchases, resulting from the low wholesale spot market price environment.
|
•
|
Nuclear operating costs decreased $39 million, primarily as a result of lower refueling outage costs, partially offset by higher employee benefit costs. There were two refueling outages in 2016 as compared to three refueling outages in 2015.
|
•
|
Retirement benefit costs increased $31 million.
|
•
|
Transmission expenses decreased $175 million, primarily due to lower congestion and market-based ancillary costs associated with less volatile market conditions as compared to 2015, as well as lower load requirements.
|
•
|
Other operating expenses increased $39 million, primarily due to lower mark-to-market gains on commodity contract positions of $84 million and a $37 million charge associated with the termination of an FES customer contract, partially offset by lower lease expense as a result of the expiration of a nuclear sale-leaseback agreement.
|
•
|
Pension and OPEB mark-to-market adjustments decreased $15 million to $45 million in 2016. The 2016 adjustment resulted from a 25 bps decrease in the discount rate used to measure benefit obligations, partially offset by higher than expected asset returns and changes in other actuarial assumptions.
|
•
|
Impairment of assets and related charges increased $10,631 million, primarily due to impairments of goodwill and the competitive generation assets further discussed above.
|
Net Regulatory Assets (Liabilities) by Source
|
|
December 31,
2017 |
|
December 31,
2016 |
|
Increase
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Regulatory transition costs
|
|
$
|
46
|
|
|
$
|
90
|
|
|
$
|
(44
|
)
|
Customer receivables (payables) for future income taxes
|
|
(2,765
|
)
|
|
468
|
|
|
(3,233
|
)
|
|||
Nuclear decommissioning and spent fuel disposal costs
|
|
(323
|
)
|
|
(304
|
)
|
|
(19
|
)
|
|||
Asset removal costs
|
|
(774
|
)
|
|
(770
|
)
|
|
(4
|
)
|
|||
Deferred transmission costs
|
|
187
|
|
|
122
|
|
|
65
|
|
|||
Deferred generation costs
|
|
198
|
|
|
331
|
|
|
(133
|
)
|
|||
Deferred distribution costs
|
|
258
|
|
|
296
|
|
|
(38
|
)
|
|||
Contract valuations
|
|
118
|
|
|
153
|
|
|
(35
|
)
|
|||
Storm-related costs
|
|
329
|
|
|
397
|
|
|
(68
|
)
|
|||
Other
|
|
46
|
|
|
74
|
|
|
(28
|
)
|
|||
Net Regulatory Assets (Liabilities) included on the Consolidated Balance Sheets
|
|
$
|
(2,680
|
)
|
|
$
|
857
|
|
|
$
|
(3,537
|
)
|
Reportable Segment
|
|
2017 Actual
(1)
|
|
2017 Pension/OPEB Mark-to-Market Capital Adjustment
|
|
2017 Actual Excluding Pension/OPEB Mark-to-Market Capital Costs
|
|
2018 Forecast
(2)
|
|
|||||||
|
|
(In millions)
|
|
|||||||||||||
Regulated Distribution
|
|
$
|
1,342
|
|
|
$
|
(20
|
)
|
|
$
|
1,362
|
|
|
$1,500 - $1,600
|
|
|
Regulated Transmission
|
|
1,032
|
|
|
1
|
|
|
1,031
|
|
|
1,000 - 1,200
|
|
|
|||
CES
|
|
279
|
|
|
(1
|
)
|
|
280
|
|
|
—
|
|
(3)
|
|||
Corporate/Other
|
|
99
|
|
|
—
|
|
|
99
|
|
|
100
|
|
|
|||
Total
|
|
$
|
2,752
|
|
|
$
|
(20
|
)
|
|
$
|
2,772
|
|
|
$2,600 - $2,900
|
|
|
Operating Company
|
|
2017 Actual
(1)
|
|
2017 Pension/OPEB Mark-to-Market Capital Adjustment
|
|
2017 Actual Excluding Pension/OPEB Mark-to-Market Capital Costs
|
|
2018 Forecast
(2)(3)
|
|
||||||||
|
|
(In millions)
|
|||||||||||||||
OE
|
|
$
|
143
|
|
|
$
|
(12
|
)
|
|
$
|
155
|
|
|
$
|
160
|
|
|
Penn
|
|
55
|
|
|
(1
|
)
|
|
56
|
|
|
45
|
|
|
||||
CEI
|
|
134
|
|
|
4
|
|
|
130
|
|
|
145
|
|
|
||||
TE
|
|
37
|
|
|
(3
|
)
|
|
40
|
|
|
50
|
|
|
||||
JCP&L
|
|
317
|
|
|
3
|
|
|
314
|
|
|
380
|
|
|
||||
ME
|
|
142
|
|
|
(4
|
)
|
|
146
|
|
|
185
|
|
|
||||
PN
|
|
162
|
|
|
(12
|
)
|
|
174
|
|
|
195
|
|
|
||||
MP
|
|
269
|
|
|
9
|
|
|
260
|
|
|
280
|
|
|
||||
PE
|
|
112
|
|
|
—
|
|
|
112
|
|
|
150
|
|
|
||||
WP
|
|
199
|
|
|
(2
|
)
|
|
201
|
|
|
260
|
|
|
||||
ATSI
|
|
541
|
|
|
—
|
|
|
541
|
|
|
375
|
|
|
||||
TrAIL
|
|
45
|
|
|
—
|
|
|
45
|
|
|
55
|
|
|
||||
FES
|
|
250
|
|
|
(3
|
)
|
|
253
|
|
|
—
|
|
(4)
|
||||
AE Supply
|
|
34
|
|
|
2
|
|
|
32
|
|
|
—
|
|
(4)
|
||||
MAIT
|
|
242
|
|
|
(1
|
)
|
|
243
|
|
|
400
|
|
|
||||
Other subsidiaries
|
|
70
|
|
|
—
|
|
|
70
|
|
|
70
|
|
|
||||
Total
|
|
$
|
2,752
|
|
|
$
|
(20
|
)
|
|
$
|
2,772
|
|
|
$
|
2,750
|
|
|
Currently Payable Long-Term Debt
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
Unsecured notes
|
|
$
|
150
|
|
|
$
|
—
|
|
FMBs
|
|
325
|
|
|
—
|
|
||
Secured PCRBs
|
|
141
|
|
|
141
|
|
||
Unsecured PCRBs
|
|
374
|
|
|
374
|
|
||
Sinking fund requirements
|
|
61
|
|
|
—
|
|
||
Other notes
|
|
31
|
|
|
9
|
|
||
|
|
$
|
1,082
|
|
|
$
|
524
|
|
Borrower(s)
|
|
Type
|
|
Maturity
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
|
|
|
|
(In millions)
|
||||||
FirstEnergy
(1)
|
|
Revolving
|
|
December 2021
|
|
$
|
4,000
|
|
|
$
|
3,740
|
|
FET
(2)
|
|
Revolving
|
|
December 2021
|
|
1,000
|
|
|
1,000
|
|
||
|
|
|
|
Subtotal
|
|
$
|
5,000
|
|
|
$
|
4,740
|
|
|
|
|
|
Cash
|
|
—
|
|
|
358
|
|
||
|
|
|
|
Total
|
|
$
|
5,000
|
|
|
$
|
5,098
|
|
(1)
|
FE and the Utilities. Available liquidity includes impact of $10 million of LOCs issued under various terms.
|
(2)
|
Includes FET, ATSI, MAIT and TrAIL.
|
Type
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
(In millions)
|
||||||
Two-year secured credit facility with FE
|
|
$
|
500
|
|
|
$
|
500
|
|
Cash
|
|
—
|
|
|
1
|
|
||
|
|
$
|
500
|
|
|
$
|
501
|
|
Borrower
|
|
FirstEnergy Revolving
Credit Facility
Sub-Limit
|
|
FET Revolving
Credit Facility
Sub-Limit
|
|
Regulatory and
Other Short-Term Debt Limitations
|
|
|
|||||||||
|
|
(In millions)
|
|
|
|||||||||||||
FE
|
|
|
$
|
4,000
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
(1)
|
|
FET
|
|
|
—
|
|
|
|
1,000
|
|
|
|
—
|
|
(1)
|
|
|||
OE
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
CEI
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
TE
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
(2)
|
|
|||
JCP&L
|
|
|
600
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
ME
|
|
|
300
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
PN
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
(2)
|
|
|||
WP
|
|
|
200
|
|
|
|
—
|
|
|
|
200
|
|
(2)
|
|
|||
MP
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
PE
|
|
|
150
|
|
|
|
—
|
|
|
|
150
|
|
(2)
|
|
|||
ATSI
|
|
|
—
|
|
|
|
500
|
|
|
|
500
|
|
(2)
|
|
|||
Penn
|
|
|
50
|
|
|
|
—
|
|
|
|
100
|
|
(2)
|
|
|||
TrAIL
|
|
|
—
|
|
|
|
400
|
|
|
|
400
|
|
(2)
|
|
|||
MAIT
|
|
|
—
|
|
|
|
400
|
|
|
|
400
|
|
(2)
|
|
(1)
|
No limitations.
|
(2)
|
Includes amounts which may be borrowed under the regulated companies' money pool.
|
|
|
Senior Secured
|
|
Senior Unsecured
|
||||||||
Issuer
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
FE
|
|
—
|
|
—
|
|
—
|
|
BB+
|
|
Baa3
|
|
BBB-
|
FES
|
|
CCC+
|
|
B3
|
|
—
|
|
C
|
|
Ca
|
|
C
|
AE Supply
|
|
BB
|
|
—
|
|
BB
|
|
BB-
|
|
B1
|
|
BB-
|
AGC
|
|
—
|
|
—
|
|
—
|
|
BB-
|
|
Baa3
|
|
BB
|
ATSI
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa1
|
|
BBB+
|
CEI
|
|
BBB+
|
|
Baa1
|
|
A-
|
|
BBB-
|
|
Baa3
|
|
BBB+
|
FET
|
|
—
|
|
—
|
|
—
|
|
BB+
|
|
Baa2
|
|
BBB-
|
JCP&L
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa2
|
|
BBB
|
ME
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
A3
|
|
BBB+
|
MAIT
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa1
|
|
BBB
|
MP
|
|
BBB+
|
|
A3
|
|
BBB+
|
|
—
|
|
—
|
|
—
|
OE
|
|
BBB+
|
|
A2
|
|
A-
|
|
BBB-
|
|
Baa1
|
|
BBB+
|
PN
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa1
|
|
BBB+
|
Penn
|
|
—
|
|
A2
|
|
A-
|
|
—
|
|
—
|
|
—
|
PE
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
TE
|
|
BBB+
|
|
Baa1
|
|
A-
|
|
—
|
|
—
|
|
—
|
TrAIL
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
A3
|
|
BBB+
|
WP
|
|
BBB+
|
|
A1
|
|
A-
|
|
—
|
|
—
|
|
—
|
•
|
the absence of $382 million in cash contributions to the qualified pension plan in 2016;
|
•
|
higher transmission revenue, reflecting recovery of incremental operating expenses, a higher rate base at ATSI and TrAIL, and the implementation of new rates at MAIT and JCP&L;
|
•
|
higher distribution services retail receipts reflecting implementation of approved rates in Ohio, Pennsylvania and New Jersey, as further described above; partially offset by
|
•
|
lower receipts from a decrease in capacity revenue and contract sales at CES.
|
•
|
a $239 million increase in cash contributions to the qualified pension plan, partially offset by
|
•
|
higher distribution deliveries and the full year impact of net rate increases implemented in 2015 at certain Utilities;
|
•
|
higher transmission revenue, reflecting recovery of incremental operating expenses and a higher rate base;
|
•
|
lower disbursements for fuel and purchased power resulting from the lower sales volumes partially offset by lower capacity revenues at CES.
|
|
|
For the Years Ended December 31
|
||||||||||
Securities Issued or Redeemed / Repaid
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
New Issues
|
|
|
|
|
|
|
|
|
|
|||
Unsecured notes
|
|
$
|
3,800
|
|
|
$
|
—
|
|
|
$
|
475
|
|
PCRBs
|
|
—
|
|
|
471
|
|
|
339
|
|
|||
FMBs
|
|
625
|
|
|
305
|
|
|
295
|
|
|||
Term loan
|
|
250
|
|
|
1,200
|
|
|
200
|
|
|||
Senior secured notes
|
|
—
|
|
|
—
|
|
|
2
|
|
|||
|
|
$
|
4,675
|
|
|
$
|
1,976
|
|
|
$
|
1,311
|
|
|
|
|
|
|
|
|
||||||
Redemptions / Repayments
|
|
|
|
|
|
|
|
|
|
|||
Unsecured notes
|
|
$
|
(1,330
|
)
|
|
$
|
(300
|
)
|
|
$
|
—
|
|
PCRBs
|
|
(158
|
)
|
|
(483
|
)
|
|
(313
|
)
|
|||
FMBs
|
|
(725
|
)
|
|
(246
|
)
|
|
(215
|
)
|
|||
Term loan
|
|
—
|
|
|
(1,200
|
)
|
|
(200
|
)
|
|||
Senior secured notes
|
|
(78
|
)
|
|
(102
|
)
|
|
(151
|
)
|
|||
|
|
$
|
(2,291
|
)
|
|
$
|
(2,331
|
)
|
|
$
|
(879
|
)
|
|
|
|
|
|
|
|
||||||
Short-term borrowings (repayments), net
|
|
$
|
(2,375
|
)
|
|
$
|
975
|
|
|
$
|
(91
|
)
|
|
|
|
|
|
|
|
||||||
Common stock dividend payments
|
|
$
|
(639
|
)
|
|
$
|
(611
|
)
|
|
$
|
(607
|
)
|
|
|
For the Years Ended December 31
|
||||||||||
Cash Used for Investing Activities
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
Property Additions:
|
|
|
|
|
|
|
||||||
Regulated Distribution
|
|
$
|
1,191
|
|
|
$
|
1,063
|
|
|
$
|
1,040
|
|
Regulated Transmission
|
|
1,030
|
|
|
1,101
|
|
|
1,020
|
|
|||
Competitive Energy Services
|
|
317
|
|
|
619
|
|
|
588
|
|
|||
Corporate/Other
|
|
49
|
|
|
52
|
|
|
56
|
|
|||
Nuclear fuel
|
|
254
|
|
|
232
|
|
|
190
|
|
|||
Proceeds from asset sales
|
|
(388
|
)
|
|
(15
|
)
|
|
(20
|
)
|
|||
Investments
|
|
98
|
|
|
111
|
|
|
114
|
|
|||
Asset removal costs
|
|
172
|
|
|
145
|
|
|
142
|
|
|||
Other
|
|
(7
|
)
|
|
(27
|
)
|
|
(8
|
)
|
|||
|
|
$
|
2,716
|
|
|
$
|
3,281
|
|
|
$
|
3,122
|
|
•
|
a decrease of $302 million at CES, resulting from lower capital investments associated with outages, MATS compliance and the Mansfield dewatering facility,
|
•
|
a decrease of $71 million at Regulated Transmission due to timing of capital investments associated with its
Energizing the Future
investment program
;
partially offset by,
|
•
|
an increase of $128 million at Regulated Distribution due to an increase in storm restoration work and smart meter investments in Pennsylvania.
|
Contractual Obligations
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Long-term debt
(1)
|
|
$
|
22,266
|
|
|
$
|
1,051
|
|
|
$
|
2,548
|
|
|
$
|
3,460
|
|
|
$
|
15,207
|
|
Short-term borrowings
|
|
300
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest on long-term debt
(2)
|
|
13,972
|
|
|
1,081
|
|
|
1,951
|
|
|
1,773
|
|
|
9,167
|
|
|||||
Operating leases
(3)
|
|
1,874
|
|
|
146
|
|
|
230
|
|
|
235
|
|
|
1,263
|
|
|||||
Capital leases
(3)
|
|
117
|
|
|
28
|
|
|
41
|
|
|
28
|
|
|
20
|
|
|||||
Fuel and purchased power
(4)
|
|
9,110
|
|
|
1,260
|
|
|
1,956
|
|
|
1,395
|
|
|
4,499
|
|
|||||
Capital expenditures
(5)
|
|
1,778
|
|
|
558
|
|
|
625
|
|
|
595
|
|
|
—
|
|
|||||
Pension funding
(6)
|
|
2,217
|
|
|
1,250
|
|
|
—
|
|
|
460
|
|
|
507
|
|
|||||
Total
|
|
$
|
51,634
|
|
|
$
|
5,674
|
|
|
$
|
7,351
|
|
|
$
|
7,946
|
|
|
$
|
30,663
|
|
(1)
|
Excludes unamortized discounts and premiums, fair value accounting adjustments and capital leases.
|
(2)
|
Interest on variable-rate debt based on rates as of
December 31, 2017
.
|
(3)
|
See Note 7, "Leases," of the Combined Notes to Consolidated Financial Statements.
|
(4)
|
Amounts under contract with fixed or minimum quantities based on estimated annual requirements.
|
(5)
|
Amounts represent committed capital expenditures as of
December 31, 2017
.
|
(6)
|
In January 2018, FirstEnergy satisfied its minimum required funding obligations of $500 million and addressed funding obligations through 2020 to its qualified pension plan with additional contributions of $750 million. The impact of the contributions is reflected in the table above.
|
Guarantees and Other Assurances
|
|
Maximum Exposure
|
||
|
|
(In millions)
|
||
FE's Guarantees on Behalf of its Subsidiaries
|
|
|
|
|
Energy and Energy-Related Contracts
(1)
|
|
$
|
7
|
|
Deferred compensation arrangements
(2)
|
|
592
|
|
|
AE Supply asset sales
(3)
|
|
555
|
|
|
Fuel-Related
(4)
|
|
72
|
|
|
Other
(5)
|
|
4
|
|
|
|
|
1,230
|
|
|
Subsidiaries’ Guarantees
|
|
|
||
Energy and Energy-Related Contracts
(6)
|
|
265
|
|
|
FES’ guarantee of FG’s sale and leaseback obligations
|
|
1,574
|
|
|
|
|
1,839
|
|
|
FE's Guarantees on Behalf of Business Ventures
|
|
|
||
Global Holding Facility
|
|
275
|
|
|
|
|
|
||
Other Assurances
|
|
|
||
Surety Bonds - Wholly Owned Subsidiaries
|
|
128
|
|
|
Surety Bonds
(7),(8)
|
|
263
|
|
|
Sale leaseback indemnity
|
|
58
|
|
|
LOCs
(9)
|
|
10
|
|
|
|
|
459
|
|
|
Total Guarantees and Other Assurances
|
|
$
|
3,803
|
|
(1)
|
Issued for open-ended terms, with a 10-day termination right by FirstEnergy.
|
(2)
|
CES related portion is $
149 million
, including
$58 million
and
$91 million
at FES and FENOC, respectively.
|
(3)
|
As a condition to closing the sale of the natural gas generating plants, FE provided the purchaser two limited three-year guarantees totaling $
555 million
of certain obligations of AE Supply and AGC arising under the amended and restated purchase agreement.
|
(4)
|
FE is the guarantor of the remaining payments due to CSX/BNSF in connection with the definitive settlement on a transportation agreement.
|
(5)
|
Includes guarantees of $
4 million
for various leases.
|
(6)
|
Includes energy and energy-related contracts associated with FES.
|
(7)
|
FE provides credit support for FG surety bonds for $
169 million
and $
31 million
for the benefit of the PA DEP with respect to LBR and the Hatfield's Ferry disposal site, respectively.
|
(8)
|
FE provides credit support for $
23 million
of surety bonds held by AE Supply.
|
(9)
|
Includes $
10 million
issued for various terms pursuant to LOC capacity available under FirstEnergy's revolving credit facilities.
|
Potential Collateral Obligations
|
|
FES
|
|
AE Supply
|
|
Regulated
|
|
FE Corp
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Contractual Obligations for Additional Collateral
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At Current Credit Rating
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Upon Further Downgrade
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
|||||
Surety Bonds (Collateralized Amount)
(1)
|
|
16
|
|
|
1
|
|
|
107
|
|
|
237
|
|
|
361
|
|
|||||
Total Exposure from Contractual Obligations
|
|
$
|
20
|
|
|
$
|
2
|
|
|
$
|
148
|
|
|
$
|
237
|
|
|
$
|
407
|
|
Source of Information-
Fair Value by Contract Year
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Other external sources
(1)
|
|
$
|
(25
|
)
|
|
$
|
(35
|
)
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(71
|
)
|
Prices based on models
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Total
(2)
|
|
$
|
(24
|
)
|
|
$
|
(35
|
)
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(70
|
)
|
(1)
|
Primarily represents contracts based on broker and ICE quotes.
|
(2)
|
Includes
$(79) million
in non-hedge derivative contracts that are primarily related to NUG contracts at certain of the Utilities. NUG contracts are subject to regulatory accounting and changes in market values do not impact earnings.
|
Postemployment Benefits Expense (Credits)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
Pension
|
|
$
|
247
|
|
|
$
|
277
|
|
|
$
|
316
|
|
OPEB
|
|
(45
|
)
|
|
(40
|
)
|
|
(61
|
)
|
|||
Total
|
|
$
|
202
|
|
|
$
|
237
|
|
|
$
|
255
|
|
Assumption
|
|
Adverse Change
|
|
Pension
|
|
OPEB
|
|
Total
|
||||||
|
|
|
|
(In millions)
|
||||||||||
Discount rate
|
|
Decrease by .25%
|
|
$
|
315
|
|
|
$
|
18
|
|
|
$
|
333
|
|
Long-term return on assets
|
|
Decrease by .25%
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
20
|
|
Health care trend rate
|
|
Increase by 1.0%
|
|
N/A
|
|
|
$
|
21
|
|
|
$
|
21
|
|
•
|
Reduction of the corporate federal income tax rate from 35% to 21%, effective in 2018;
|
•
|
Full expensing of qualified property, excluding rate regulated utilities, through 2022 with a phase down beginning in 2023;
|
•
|
Limitations on interest deductions with an exception for rate regulated utilities;
|
•
|
Limitation of the utilization of federal NOLs arising after December 31, 2017 to 80% of taxable income with an indefinite carryforward;
|
•
|
Repeal of the corporate AMT and allowing taxpayers to claim a refund on any AMT credit carryovers.
|
|
|
For the Years Ended December 31
|
|
|
||||||||
Revenues by Type of Service
|
|
2017
|
|
2016
|
|
Decrease
|
||||||
|
|
(In millions)
|
||||||||||
Contract Sales:
|
|
|
|
|
|
|
||||||
Direct
|
|
$
|
735
|
|
|
$
|
812
|
|
|
$
|
(77
|
)
|
Governmental Aggregation
|
|
396
|
|
|
814
|
|
|
(418
|
)
|
|||
Mass Market
|
|
127
|
|
|
169
|
|
|
(42
|
)
|
|||
POLR
|
|
504
|
|
|
583
|
|
|
(79
|
)
|
|||
Structured Sales
|
|
337
|
|
|
440
|
|
|
(103
|
)
|
|||
Total Contract Sales
|
|
2,099
|
|
|
2,818
|
|
|
(719
|
)
|
|||
Wholesale
|
|
899
|
|
|
1,350
|
|
|
(451
|
)
|
|||
Transmission
|
|
35
|
|
|
70
|
|
|
(35
|
)
|
|||
Other
|
|
65
|
|
|
160
|
|
|
(95
|
)
|
|||
Total Revenues
|
|
$
|
3,098
|
|
|
$
|
4,398
|
|
|
$
|
(1,300
|
)
|
|
|
For the Years Ended December 31
|
|
|
|||||
MWH Sales by Channel
|
|
2017
|
|
2016
|
|
Decrease
|
|||
|
|
(In thousands)
|
|
|
|||||
Contract Sales:
|
|
|
|
|
|
|
|||
Direct
|
|
15,157
|
|
|
15,310
|
|
|
(1.0
|
)%
|
Governmental Aggregation
|
|
7,431
|
|
|
13,730
|
|
|
(45.9
|
)%
|
Mass Market
|
|
1,867
|
|
|
2,431
|
|
|
(23.2
|
)%
|
POLR
|
|
9,140
|
|
|
9,969
|
|
|
(8.3
|
)%
|
Structured Sales
|
|
8,805
|
|
|
11,004
|
|
|
(20.0
|
)%
|
Total Contract Sales
|
|
42,400
|
|
|
52,444
|
|
|
(19.2
|
)%
|
Wholesale
|
|
13,639
|
|
|
13,812
|
|
|
(1.3
|
)%
|
Total MWH Sales
|
|
56,039
|
|
|
66,256
|
|
|
(15.4
|
)%
|
|
|
Source of Change in Revenues
|
||||||||||||||||||
|
|
Decrease
|
||||||||||||||||||
MWH Sales Channel:
|
|
Sales Volumes
|
|
Prices
|
|
Gain on Settled Contracts
|
|
Capacity Revenue
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Direct
|
|
$
|
(8
|
)
|
|
$
|
(69
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(77
|
)
|
Governmental Aggregation
|
|
(373
|
)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(418
|
)
|
|||||
Mass Market
|
|
(40
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||||
POLR
|
|
(49
|
)
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|||||
Structured Sales
|
|
(89
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|||||
Wholesale
|
|
(6
|
)
|
|
(6
|
)
|
|
(156
|
)
|
|
(283
|
)
|
|
(451
|
)
|
|
|
Source of Change
|
||||||||||||||||||
|
|
Increase (Decrease)
|
||||||||||||||||||
Operating Expense
|
|
Volumes
|
|
Prices
|
|
Loss on Settled Contracts
|
|
Capacity Expense
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Fossil Fuel
|
|
$
|
(147
|
)
|
|
$
|
7
|
|
|
$
|
(58
|
)
|
|
$
|
—
|
|
|
$
|
(198
|
)
|
Nuclear Fuel
|
|
6
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Affiliated Purchased Power
|
|
(134
|
)
|
|
23
|
|
|
(312
|
)
|
|
—
|
|
|
(423
|
)
|
|||||
Non-affiliated Purchased Power
|
|
(18
|
)
|
|
9
|
|
|
(114
|
)
|
|
(269
|
)
|
|
(392
|
)
|
•
|
Charges of $225 million associated with estimated losses on long-term coal transportation contract disputes was recognized in 2017, as discussed in the "Outlook - Environmental Matters" above.
|
•
|
Nuclear operating and maintenance expenses increased $14 million, primarily as a result of higher employee benefit costs, partially offset by lower refueling outage costs.
|
•
|
Retirement benefit costs decreased $12 million.
|
•
|
Transmission expenses decreased $62
million, primarily due to lower contract sales volumes.
|
•
|
Other operating expenses increased $72 million, primarily due to higher non-cash mark-to-market losses on commodity contract positions, partially offset by the absence of a termination charge associated with an FES Governmental Aggregation customer contract.
|
•
|
a $138 million cash contribution to the qualified pension plan;
|
•
|
higher cash collateral postings primarily associated with higher margin requirements by counterparties due to FES' credit downgrading in 2016; partially offset by,
|
•
|
increased capacity revenues.
|
|
|
For the Years Ended December 31
|
||||||||||
Securities Issued or Redeemed / Repaid
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
New Issues
|
|
|
|
|
|
|
|
|
|
|||
PCRBs
|
|
$
|
—
|
|
|
$
|
471
|
|
|
$
|
341
|
|
|
|
|
|
|
|
|
||||||
Redemptions / Repayments
|
|
|
|
|
|
|
|
|
|
|||
PCRBs
|
|
$
|
(158
|
)
|
|
$
|
(484
|
)
|
|
$
|
(316
|
)
|
Senior secured notes
|
|
(5
|
)
|
|
(23
|
)
|
|
(95
|
)
|
|||
|
|
$
|
(163
|
)
|
|
$
|
(507
|
)
|
|
$
|
(411
|
)
|
|
|
|
|
|
|
|
||||||
Short-term borrowings (repayments), net
|
|
$
|
4
|
|
|
$
|
101
|
|
|
$
|
(126
|
)
|
|
|
|
|
|
|
|
||||||
Common stock dividend payments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(70
|
)
|
|
|
For the Years Ended December 31
|
||||||||||
Cash Used for Investing Activities
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
Property additions
|
|
$
|
275
|
|
|
$
|
546
|
|
|
$
|
627
|
|
Nuclear fuel
|
|
254
|
|
|
232
|
|
|
190
|
|
|||
Proceeds from asset sales
|
|
—
|
|
|
(9
|
)
|
|
(13
|
)
|
|||
Investments
|
|
62
|
|
|
56
|
|
|
68
|
|
|||
Other
|
|
(29
|
)
|
|
17
|
|
|
7
|
|
|||
|
|
$
|
562
|
|
|
$
|
842
|
|
|
$
|
879
|
|
Source of Information-
Fair Value by Contract Year
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Other external sources
(1)
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Prices based on models
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Total
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
(1)
|
Primarily represents contracts based on broker and ICE quotes.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
For the Years Ended December 31
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
REVENUES:
|
|
|
|
|
|
|
||||||
Regulated Distribution
|
|
$
|
9,734
|
|
|
$
|
9,629
|
|
|
$
|
9,625
|
|
Regulated Transmission
|
|
1,325
|
|
|
1,144
|
|
|
1,003
|
|
|||
Unregulated businesses
|
|
2,958
|
|
|
3,789
|
|
|
4,398
|
|
|||
Total revenues*
|
|
14,017
|
|
|
14,562
|
|
|
15,026
|
|
|||
|
|
|
|
|
|
|
||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
||||||
Fuel
|
|
1,383
|
|
|
1,666
|
|
|
1,855
|
|
|||
Purchased power
|
|
3,194
|
|
|
3,843
|
|
|
4,423
|
|
|||
Other operating expenses
|
|
4,232
|
|
|
3,851
|
|
|
3,740
|
|
|||
Pension and OPEB mark-to-market adjustment
|
|
141
|
|
|
147
|
|
|
242
|
|
|||
Provision for depreciation
|
|
1,138
|
|
|
1,313
|
|
|
1,282
|
|
|||
Amortization of regulatory assets, net
|
|
308
|
|
|
297
|
|
|
172
|
|
|||
General taxes
|
|
1,043
|
|
|
1,042
|
|
|
978
|
|
|||
Impairment of assets and related charges (Note 2)
|
|
2,406
|
|
|
10,665
|
|
|
42
|
|
|||
Total operating expenses
|
|
13,845
|
|
|
22,824
|
|
|
12,734
|
|
|||
|
|
|
|
|
|
|
||||||
OPERATING INCOME (LOSS)
|
|
172
|
|
|
(8,262
|
)
|
|
2,292
|
|
|||
|
|
|
|
|
|
|
||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
||||||
Investment income (loss)
|
|
98
|
|
|
84
|
|
|
(22
|
)
|
|||
Impairment of equity method investment (Note 1)
|
|
—
|
|
|
—
|
|
|
(362
|
)
|
|||
Interest expense
|
|
(1,178
|
)
|
|
(1,157
|
)
|
|
(1,132
|
)
|
|||
Capitalized financing costs
|
|
79
|
|
|
103
|
|
|
117
|
|
|||
Total other expense
|
|
(1,001
|
)
|
|
(970
|
)
|
|
(1,399
|
)
|
|||
|
|
|
|
|
|
|
||||||
INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)
|
|
(829
|
)
|
|
(9,232
|
)
|
|
893
|
|
|||
|
|
|
|
|
|
|
||||||
INCOME TAXES (BENEFITS)
|
|
895
|
|
|
(3,055
|
)
|
|
315
|
|
|||
|
|
|
|
|
|
|
||||||
NET INCOME (LOSS)
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
|
|
|
|
|
|
|
||||||
EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
Diluted
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
|
|
|
|
|
|
|
||||||
Basic
|
|
444
|
|
|
426
|
|
|
422
|
|
|||
Diluted
|
|
444
|
|
|
426
|
|
|
424
|
|
|||
|
|
|
|
|
|
|
||||||
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
*
|
Includes excise tax collections of
$390 million
,
$406 million
and
$416 million
in
2017
,
2016
and
2015
, respectively.
|
|
|
For the Years Ended December 31
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
NET INCOME (LOSS)
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
||||||
Pension and OPEB prior service costs
|
|
(85
|
)
|
|
(59
|
)
|
|
(116
|
)
|
|||
Amortized losses on derivative hedges
|
|
10
|
|
|
8
|
|
|
5
|
|
|||
Change in unrealized gain on available-for-sale securities
|
|
22
|
|
|
55
|
|
|
(11
|
)
|
|||
Other comprehensive income (loss)
|
|
(53
|
)
|
|
4
|
|
|
(122
|
)
|
|||
Income taxes (benefits) on other comprehensive income (loss)
|
|
(21
|
)
|
|
1
|
|
|
(47
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
(32
|
)
|
|
3
|
|
|
(75
|
)
|
|||
|
|
|
|
|
|
|
||||||
COMPREHENSIVE INCOME (LOSS)
|
|
$
|
(1,756
|
)
|
|
$
|
(6,174
|
)
|
|
$
|
503
|
|
(In millions, except share amounts)
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
|
|
|
||
CURRENT ASSETS:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
589
|
|
|
$
|
199
|
|
Receivables-
|
|
|
|
|
|
|
||
Customers, net of allowance for uncollectible accounts of $51 in 2017 and $53 in 2016
|
|
1,463
|
|
|
1,440
|
|
||
Other, net of allowance for uncollectible accounts of $1 in 2017 and 2016
|
|
191
|
|
|
175
|
|
||
Materials and supplies, at average cost
|
|
463
|
|
|
564
|
|
||
Derivatives
|
|
37
|
|
|
140
|
|
||
Collateral
|
|
146
|
|
|
176
|
|
||
Prepaid taxes and other
|
|
219
|
|
|
256
|
|
||
|
|
3,108
|
|
|
2,950
|
|
||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
|
|
|
||
In service
|
|
39,778
|
|
|
43,767
|
|
||
Less — Accumulated provision for depreciation
|
|
11,925
|
|
|
15,731
|
|
||
|
|
27,853
|
|
|
28,036
|
|
||
Construction work in progress
|
|
1,026
|
|
|
1,351
|
|
||
|
|
28,879
|
|
|
29,387
|
|
||
INVESTMENTS:
|
|
|
|
|
|
|
||
Nuclear plant decommissioning trusts
|
|
2,678
|
|
|
2,514
|
|
||
Other
|
|
506
|
|
|
512
|
|
||
|
|
3,184
|
|
|
3,026
|
|
||
|
|
|
|
|
||||
ASSETS HELD FOR SALE (Note 2)
|
|
375
|
|
|
—
|
|
||
|
|
|
|
|
||||
DEFERRED CHARGES AND OTHER ASSETS:
|
|
|
|
|
|
|
||
Goodwill
|
|
5,618
|
|
|
5,618
|
|
||
Regulatory assets
|
|
40
|
|
|
1,014
|
|
||
Other
|
|
1,053
|
|
|
1,153
|
|
||
|
|
6,711
|
|
|
7,785
|
|
||
|
|
$
|
42,257
|
|
|
$
|
43,148
|
|
LIABILITIES AND CAPITALIZATION
|
|
|
|
|
|
|
||
CURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Currently payable long-term debt
|
|
$
|
1,082
|
|
|
$
|
1,685
|
|
Short-term borrowings
|
|
300
|
|
|
2,675
|
|
||
Accounts payable
|
|
1,027
|
|
|
1,043
|
|
||
Accrued taxes
|
|
571
|
|
|
580
|
|
||
Accrued compensation and benefits
|
|
336
|
|
|
363
|
|
||
Collateral
|
|
39
|
|
|
42
|
|
||
Other
|
|
722
|
|
|
738
|
|
||
|
|
4,077
|
|
|
7,126
|
|
||
CAPITALIZATION:
|
|
|
|
|
|
|
||
Common stockholders’ equity-
|
|
|
|
|
|
|
||
Common stock, $0.10 par value, authorized 700,000,000 and 490,000,000 shares - 445,334,111 and 442,344,218 shares outstanding as of December 31, 2017 and December 31, 2016, respectively
|
|
44
|
|
|
44
|
|
||
Other paid-in capital
|
|
10,001
|
|
|
10,555
|
|
||
Accumulated other comprehensive income
|
|
142
|
|
|
174
|
|
||
Accumulated deficit
|
|
(6,262
|
)
|
|
(4,532
|
)
|
||
Total common stockholders' equity
|
|
3,925
|
|
|
6,241
|
|
||
Long-term debt and other long-term obligations
|
|
21,115
|
|
|
18,192
|
|
||
|
|
25,040
|
|
|
24,433
|
|
||
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Accumulated deferred income taxes
|
|
1,359
|
|
|
3,765
|
|
||
Retirement benefits
|
|
3,975
|
|
|
3,719
|
|
||
Regulatory liabilities
|
|
2,720
|
|
|
157
|
|
||
Asset retirement obligations
|
|
2,515
|
|
|
1,482
|
|
||
Deferred gain on sale and leaseback transaction
|
|
723
|
|
|
757
|
|
||
Adverse power contract liability
|
|
130
|
|
|
162
|
|
||
Other
|
|
1,718
|
|
|
1,547
|
|
||
|
|
13,140
|
|
|
11,589
|
|
||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 16)
|
|
|
|
|
|
|
||
|
|
$
|
42,257
|
|
|
$
|
43,148
|
|
|
|
Common Stock
|
|
Other Paid-In Capital
|
|
Accumulated Other Comprehensive Income
|
|
Retained Earnings (Accumulated Deficit)
|
|||||||||||
(In millions, except share amounts)
|
|
Number of Shares
|
|
Par Value
|
|
|
|
||||||||||||
Balance, January 1, 2015
|
|
421,102,570
|
|
|
$
|
42
|
|
|
$
|
9,847
|
|
|
$
|
246
|
|
|
$
|
2,285
|
|
Net income
|
|
|
|
|
|
|
|
|
|
578
|
|
||||||||
Amortized gains on derivative hedges, net of $1 million of income taxes
|
|
|
|
|
|
|
|
4
|
|
|
|
||||||||
Change in unrealized gain on investments, net of $4 million of income tax benefits
|
|
|
|
|
|
|
|
(7
|
)
|
|
|
||||||||
Pensions and OPEB, net of $44 million of income tax benefits (Note 4)
|
|
|
|
|
|
|
|
(72
|
)
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
|
45
|
|
|
|
|
|
||||||||
Cash dividends declared on common stock
|
|
|
|
|
|
|
|
|
|
|
(607
|
)
|
|||||||
Stock Investment Plan and certain share-based benefit plans
|
|
2,457,827
|
|
|
|
|
60
|
|
|
|
|
|
|||||||
Balance, December 31, 2015
|
|
423,560,397
|
|
|
42
|
|
|
9,952
|
|
|
171
|
|
|
2,256
|
|
||||
Net loss
|
|
|
|
|
|
|
|
|
|
(6,177
|
)
|
||||||||
Amortized gains on derivative hedges, net of $3 million of income taxes
|
|
|
|
|
|
|
|
5
|
|
|
|
||||||||
Change in unrealized gain on investments, net of $21 million of income taxes
|
|
|
|
|
|
|
|
34
|
|
|
|
||||||||
Pensions and OPEB, net of $23 million of income tax benefits (Note 4)
|
|
|
|
|
|
|
|
(36
|
)
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
|
49
|
|
|
|
|
|
||||||||
Cash dividends declared on common stock
|
|
|
|
|
|
|
|
|
|
(611
|
)
|
||||||||
Stock Investment Plan and certain share-based benefit plans
|
|
2,685,946
|
|
|
|
|
|
56
|
|
|
|
|
|
|
|
||||
Stock issuance (Note 12)
|
|
16,097,875
|
|
|
2
|
|
|
498
|
|
|
|
|
|
||||||
Balance, December 31, 2016
|
|
442,344,218
|
|
|
44
|
|
|
10,555
|
|
|
174
|
|
|
(4,532
|
)
|
||||
Net loss
|
|
|
|
|
|
|
|
|
|
(1,724
|
)
|
||||||||
Amortized gains on derivative hedges, net of $4 million of income taxes
|
|
|
|
|
|
|
|
6
|
|
|
|
||||||||
Change in unrealized gain on investments, net of $7 million of income taxes
|
|
|
|
|
|
|
|
15
|
|
|
|
||||||||
Pensions and OPEB, net of $32 million of income tax benefits (Note 4)
|
|
|
|
|
|
|
|
(53
|
)
|
|
|
||||||||
Stock-based compensation
|
|
|
|
|
|
36
|
|
|
|
|
|
||||||||
Cash dividends declared on common stock
|
|
|
|
|
|
(639
|
)
|
|
|
|
|
||||||||
Stock Investment Plan and certain share-based benefit plans
|
|
2,989,893
|
|
|
|
|
56
|
|
|
|
|
|
|||||||
Reclass to liability awards (Note 5)
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
||||||||
Share-based compensation accounting change (Note 1)
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
||||||||
Balance, December 31, 2017
|
|
445,334,111
|
|
|
$
|
44
|
|
|
$
|
10,001
|
|
|
$
|
142
|
|
|
$
|
(6,262
|
)
|
|
|
For the Years Ended December 31
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Net Income (loss)
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
Adjustments to reconcile net income (loss) to net cash from operating activities-
|
|
|
|
|
|
|
||||||
Depreciation and amortization, including nuclear fuel, regulatory assets, net, intangible assets and deferred debt-related costs
|
|
1,700
|
|
|
1,974
|
|
|
1,826
|
|
|||
Impairment of assets and related charges (Note 2)
|
|
2,406
|
|
|
10,665
|
|
|
42
|
|
|||
Investment impairments, including equity method investments
|
|
13
|
|
|
21
|
|
|
464
|
|
|||
Pension and OPEB mark-to-market adjustment
|
|
141
|
|
|
147
|
|
|
242
|
|
|||
Deferred income taxes and investment tax credits, net
|
|
839
|
|
|
(3,063
|
)
|
|
284
|
|
|||
Deferred costs on sale leaseback transaction, net
|
|
49
|
|
|
49
|
|
|
48
|
|
|||
Asset removal costs charged to income
|
|
22
|
|
|
54
|
|
|
55
|
|
|||
Retirement benefits, net of payments
|
|
29
|
|
|
64
|
|
|
(20
|
)
|
|||
Unrealized (gain) loss on derivative transactions (Note 11)
|
|
81
|
|
|
9
|
|
|
(73
|
)
|
|||
Pension trust contributions
|
|
—
|
|
|
(382
|
)
|
|
(143
|
)
|
|||
Gain on sale of investment securities held in trusts
|
|
(63
|
)
|
|
(50
|
)
|
|
(23
|
)
|
|||
Lease payments on sale and leaseback transaction
|
|
(73
|
)
|
|
(120
|
)
|
|
(131
|
)
|
|||
Changes in current assets and liabilities-
|
|
|
|
|
|
|
||||||
Receivables
|
|
(39
|
)
|
|
(11
|
)
|
|
184
|
|
|||
Materials and supplies
|
|
(6
|
)
|
|
41
|
|
|
(15
|
)
|
|||
Prepaid taxes and other
|
|
30
|
|
|
27
|
|
|
(10
|
)
|
|||
Accounts payable
|
|
72
|
|
|
(37
|
)
|
|
(243
|
)
|
|||
Accrued taxes
|
|
(9
|
)
|
|
61
|
|
|
29
|
|
|||
Accrued compensation and benefits
|
|
(27
|
)
|
|
29
|
|
|
5
|
|
|||
Other current liabilities
|
|
20
|
|
|
56
|
|
|
69
|
|
|||
Cash collateral, net
|
|
27
|
|
|
(116
|
)
|
|
140
|
|
|||
Other
|
|
320
|
|
|
142
|
|
|
152
|
|
|||
Net cash provided from operating activities
|
|
3,808
|
|
|
3,383
|
|
|
3,460
|
|
|||
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||||
New Financing-
|
|
|
|
|
|
|
||||||
Long-term debt
|
|
4,675
|
|
|
1,976
|
|
|
1,311
|
|
|||
Short-term borrowings, net
|
|
—
|
|
|
975
|
|
|
—
|
|
|||
Redemptions and Repayments-
|
|
|
|
|
|
|
||||||
Long-term debt
|
|
(2,291
|
)
|
|
(2,331
|
)
|
|
(879
|
)
|
|||
Short-term borrowings, net
|
|
(2,375
|
)
|
|
—
|
|
|
(91
|
)
|
|||
Common stock dividend payments
|
|
(639
|
)
|
|
(611
|
)
|
|
(607
|
)
|
|||
Other
|
|
(72
|
)
|
|
(43
|
)
|
|
(26
|
)
|
|||
Net cash used for financing activities
|
|
(702
|
)
|
|
(34
|
)
|
|
(292
|
)
|
|||
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Property additions
|
|
(2,587
|
)
|
|
(2,835
|
)
|
|
(2,704
|
)
|
|||
Nuclear fuel
|
|
(254
|
)
|
|
(232
|
)
|
|
(190
|
)
|
|||
Proceeds from asset sales
|
|
388
|
|
|
15
|
|
|
20
|
|
|||
Sales of investment securities held in trusts
|
|
2,170
|
|
|
1,678
|
|
|
1,534
|
|
|||
Purchases of investment securities held in trusts
|
|
(2,268
|
)
|
|
(1,789
|
)
|
|
(1,648
|
)
|
|||
Asset removal costs
|
|
(172
|
)
|
|
(145
|
)
|
|
(142
|
)
|
|||
Other
|
|
7
|
|
|
27
|
|
|
8
|
|
|||
Net cash used for investing activities
|
|
(2,716
|
)
|
|
(3,281
|
)
|
|
(3,122
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
|
390
|
|
|
68
|
|
|
46
|
|
|||
Cash and cash equivalents at beginning of period
|
|
199
|
|
|
131
|
|
|
85
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
589
|
|
|
$
|
199
|
|
|
$
|
131
|
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
||||||
Non-cash transaction: stock contribution to pension plan
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
Cash paid (received) during the year -
|
|
|
|
|
|
|
||||||
Interest (net of amounts capitalized)
|
|
$
|
1,039
|
|
|
$
|
1,050
|
|
|
$
|
1,028
|
|
Income taxes, net of refunds
|
|
$
|
53
|
|
|
$
|
(16
|
)
|
|
$
|
37
|
|
|
|
For the Years Ended December 31
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
STATEMENTS OF INCOME (LOSS)
|
|
|
|
|
|
|
|
|||||
REVENUES:
|
|
|
|
|
|
|
|
|||||
Electric sales to non-affiliates
|
|
$
|
2,667
|
|
|
$
|
3,779
|
|
|
$
|
4,151
|
|
Electric sales to affiliates
|
|
366
|
|
|
459
|
|
|
666
|
|
|||
Other
|
|
65
|
|
|
160
|
|
|
188
|
|
|||
Total revenues*
|
|
3,098
|
|
|
4,398
|
|
|
5,005
|
|
|||
|
|
|
|
|
|
|
||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|||
Fuel
|
|
599
|
|
|
780
|
|
|
871
|
|
|||
Purchased power from affiliates
|
|
201
|
|
|
624
|
|
|
353
|
|
|||
Purchased power from non-affiliates
|
|
628
|
|
|
1,020
|
|
|
1,684
|
|
|||
Other operating expenses
|
|
1,514
|
|
|
1,277
|
|
|
1,308
|
|
|||
Pension and OPEB mark-to-market adjustment
|
|
24
|
|
|
48
|
|
|
57
|
|
|||
Provision for depreciation
|
|
109
|
|
|
336
|
|
|
324
|
|
|||
General taxes
|
|
58
|
|
|
88
|
|
|
98
|
|
|||
Impairment of assets and related charges (Note 2)
|
|
2,031
|
|
|
8,622
|
|
|
33
|
|
|||
Total operating expenses
|
|
5,164
|
|
|
12,795
|
|
|
4,728
|
|
|||
|
|
|
|
|
|
|
||||||
OPERATING INCOME (LOSS)
|
|
(2,066
|
)
|
|
(8,397
|
)
|
|
277
|
|
|||
|
|
|
|
|
|
|
||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|||
Investment income (loss)
|
|
94
|
|
|
67
|
|
|
(14
|
)
|
|||
Miscellaneous income
|
|
7
|
|
|
7
|
|
|
3
|
|
|||
Interest expense — affiliates
|
|
(19
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||
Interest expense — other
|
|
(138
|
)
|
|
(147
|
)
|
|
(147
|
)
|
|||
Capitalized interest
|
|
26
|
|
|
34
|
|
|
35
|
|
|||
Total other expense
|
|
(30
|
)
|
|
(46
|
)
|
|
(130
|
)
|
|||
|
|
|
|
|
|
|
||||||
INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)
|
|
(2,096
|
)
|
|
(8,443
|
)
|
|
147
|
|
|||
|
|
|
|
|
|
|
||||||
INCOME TAXES (BENEFITS)
|
|
295
|
|
|
(2,988
|
)
|
|
65
|
|
|||
|
|
|
|
|
|
|
||||||
NET INCOME (LOSS)
|
|
$
|
(2,391
|
)
|
|
$
|
(5,455
|
)
|
|
$
|
82
|
|
|
|
|
|
|
|
|
||||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
NET INCOME (LOSS)
|
|
$
|
(2,391
|
)
|
|
$
|
(5,455
|
)
|
|
$
|
82
|
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|||
Pension and OPEB prior service costs
|
|
(14
|
)
|
|
(14
|
)
|
|
(6
|
)
|
|||
Amortized gains on derivative hedges
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
|||
Change in unrealized gain on available-for-sale securities
|
|
30
|
|
|
52
|
|
|
(9
|
)
|
|||
Other comprehensive income (loss)
|
|
18
|
|
|
38
|
|
|
(18
|
)
|
|||
Income taxes (benefits) on other comprehensive income (loss)
|
|
6
|
|
|
15
|
|
|
(7
|
)
|
|||
Other comprehensive income (loss), net of tax
|
|
12
|
|
|
23
|
|
|
(11
|
)
|
|||
|
|
|
|
|
|
|
||||||
COMPREHENSIVE INCOME (LOSS)
|
|
$
|
(2,379
|
)
|
|
$
|
(5,432
|
)
|
|
$
|
71
|
|
*
|
Includes excise tax collections of
$20 million
,
$28 million
and
$44 million
in
2017
,
2016
and
2015
, respectively.
|
(In millions, except share amounts)
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
|
|
|
||
CURRENT ASSETS:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
1
|
|
|
$
|
2
|
|
Receivables-
|
|
|
|
|
|
|
||
Customers, net of allowance for uncollectible accounts of $2 in 2017 and $5 in 2016
|
|
181
|
|
|
213
|
|
||
Affiliated companies
|
|
224
|
|
|
452
|
|
||
Other
|
|
21
|
|
|
27
|
|
||
Notes receivable from affiliated companies
|
|
—
|
|
|
29
|
|
||
Materials and supplies
|
|
183
|
|
|
267
|
|
||
Derivatives
|
|
34
|
|
|
137
|
|
||
Collateral
|
|
130
|
|
|
157
|
|
||
Prepaid taxes and other
|
|
22
|
|
|
63
|
|
||
|
|
796
|
|
|
1,347
|
|
||
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
|
|
|
||
In service
|
|
2,495
|
|
|
7,057
|
|
||
Less — Accumulated provision for depreciation
|
|
1,823
|
|
|
5,929
|
|
||
|
|
672
|
|
|
1,128
|
|
||
Construction work in progress
|
|
22
|
|
|
427
|
|
||
|
|
694
|
|
|
1,555
|
|
||
INVESTMENTS:
|
|
|
|
|
|
|
||
Nuclear plant decommissioning trusts
|
|
1,856
|
|
|
1,552
|
|
||
Other
|
|
9
|
|
|
10
|
|
||
|
|
1,865
|
|
|
1,562
|
|
||
|
|
|
|
|
||||
DEFERRED CHARGES AND OTHER ASSETS:
|
|
|
|
|
|
|
||
Accumulated deferred income taxes
|
|
1,754
|
|
|
2,279
|
|
||
Property taxes
|
|
25
|
|
|
40
|
|
||
Derivatives
|
|
—
|
|
|
77
|
|
||
Other
|
|
380
|
|
|
381
|
|
||
|
|
2,159
|
|
|
2,777
|
|
||
|
|
$
|
5,514
|
|
|
$
|
7,241
|
|
LIABILITIES AND CAPITALIZATION
|
|
|
|
|
|
|
||
CURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Currently payable long-term debt
|
|
$
|
524
|
|
|
$
|
179
|
|
Short-term borrowings - affiliated companies
|
|
105
|
|
|
101
|
|
||
Accounts payable-
|
|
|
|
|
|
|
||
Affiliated companies
|
|
255
|
|
|
550
|
|
||
Other
|
|
105
|
|
|
110
|
|
||
Accrued taxes
|
|
72
|
|
|
143
|
|
||
Derivatives
|
|
24
|
|
|
77
|
|
||
Other
|
|
169
|
|
|
156
|
|
||
|
|
1,254
|
|
|
1,316
|
|
||
CAPITALIZATION:
|
|
|
|
|
|
|
||
Common stockholder's equity (deficit) -
|
|
|
|
|
|
|
||
Common stock, without par value, authorized 750 shares - 7 shares outstanding as of
December 31, 2017 and 2016 |
|
3,749
|
|
|
3,658
|
|
||
Accumulated other comprehensive income
|
|
81
|
|
|
69
|
|
||
Accumulated deficit
|
|
(5,900
|
)
|
|
(3,509
|
)
|
||
Total common stockholder's equity (deficit)
|
|
(2,070
|
)
|
|
218
|
|
||
Long-term debt and other long-term obligations
|
|
2,299
|
|
|
2,813
|
|
||
|
|
229
|
|
|
3,031
|
|
||
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Deferred gain on sale and leaseback transaction
|
|
723
|
|
|
757
|
|
||
Retirement benefits
|
|
153
|
|
|
197
|
|
||
Asset retirement obligations
|
|
1,945
|
|
|
901
|
|
||
Other
|
|
1,210
|
|
|
1,039
|
|
||
|
|
4,031
|
|
|
2,894
|
|
||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 16)
|
|
|
|
|
|
|
||
|
|
$
|
5,514
|
|
|
$
|
7,241
|
|
|
|
Common Stock
|
|
Accumulated Other Comprehensive Income
|
|
Retained Earnings (Accumulated Deficit)
|
|||||||||
(In millions, except share amounts)
|
|
Number of Shares
|
|
Carrying Value
|
|
|
|||||||||
Balance, January 1, 2015
|
|
7
|
|
|
$
|
3,594
|
|
|
$
|
57
|
|
|
$
|
1,934
|
|
Net income
|
|
|
|
|
|
|
|
82
|
|
||||||
Amortized loss on derivative hedges, net of $1 million of income tax benefits
|
|
|
|
|
|
(2
|
)
|
|
|
||||||
Change in unrealized gain on investments, net of $4 million of income tax benefits
|
|
|
|
|
|
(5
|
)
|
|
|
||||||
Pension and OPEB, net of $2 million of income tax benefits (Note 4)
|
|
|
|
|
|
(4
|
)
|
|
|
||||||
Stock-based compensation
|
|
|
|
10
|
|
|
|
|
|
||||||
Consolidated tax benefit allocation
|
|
|
|
9
|
|
|
|
|
|
||||||
Cash dividends declared on common stock
|
|
|
|
|
|
|
|
(70
|
)
|
||||||
Balance, December 31, 2015
|
|
7
|
|
|
3,613
|
|
|
46
|
|
|
1,946
|
|
|||
Net loss
|
|
|
|
|
|
|
|
(5,455
|
)
|
||||||
Change in unrealized gain on investments, net of $20 million of income taxes
|
|
|
|
|
|
32
|
|
|
|
||||||
Pension and OPEB, net of $5 of income tax benefits
(Note 4) |
|
|
|
|
|
(9
|
)
|
|
|
||||||
Inter-company asset transfer (Note 14)
|
|
|
|
28
|
|
|
|
|
|
||||||
Stock-based compensation
|
|
|
|
9
|
|
|
|
|
|
||||||
Consolidated tax benefit allocation
|
|
|
|
8
|
|
|
|
|
|
||||||
Balance, December 31, 2016
|
|
7
|
|
|
3,658
|
|
|
69
|
|
|
(3,509
|
)
|
|||
Net loss
|
|
|
|
|
|
|
|
(2,391
|
)
|
||||||
Amortized gain on derivative hedges, net of $1 million of income taxes
|
|
|
|
|
|
1
|
|
|
|
||||||
Change in unrealized gain on investments, net of $10 of income taxes
|
|
|
|
|
|
20
|
|
|
|
||||||
Pension and OPEB, net of $5 of income tax benefits
(Note 4) |
|
|
|
|
|
(9
|
)
|
|
|
||||||
Inter-company asset transfer (Note 14)
|
|
|
|
73
|
|
|
|
|
|
||||||
Stock-based compensation
|
|
|
|
3
|
|
|
|
|
|
||||||
Consolidated tax benefit allocation
|
|
|
|
18
|
|
|
|
|
|
||||||
Reclass to liability awards (Note 5)
|
|
|
|
(3
|
)
|
|
|
|
|
||||||
Balance, December 31, 2017
|
|
7
|
|
|
$
|
3,749
|
|
|
$
|
81
|
|
|
$
|
(5,900
|
)
|
|
|
For the Years Ended December 31
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Net Income (loss)
|
|
$
|
(2,391
|
)
|
|
$
|
(5,455
|
)
|
|
$
|
82
|
|
Adjustments to reconcile net income (loss) to net cash from operating activities-
|
|
|
|
|
|
|
||||||
Depreciation and amortization, including nuclear fuel, intangible assets and deferred debt-related costs
|
|
333
|
|
|
633
|
|
|
579
|
|
|||
Investment impairments
|
|
13
|
|
|
19
|
|
|
90
|
|
|||
Pension and OPEB mark-to-market adjustment
|
|
24
|
|
|
48
|
|
|
57
|
|
|||
Deferred income taxes and investment tax credits, net
|
|
455
|
|
|
(2,920
|
)
|
|
119
|
|
|||
Deferred costs on sale and leaseback transaction, net
|
|
49
|
|
|
49
|
|
|
48
|
|
|||
Impairment of assets and related charges (Note 2)
|
|
2,031
|
|
|
8,622
|
|
|
33
|
|
|||
Pension trust contribution
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|||
Gain on investment securities held in trusts
|
|
(62
|
)
|
|
(48
|
)
|
|
(24
|
)
|
|||
Unrealized (gain) loss on derivative transactions (Note 11)
|
|
78
|
|
|
9
|
|
|
(74
|
)
|
|||
Lease payments on sale and leaseback transaction
|
|
(73
|
)
|
|
(120
|
)
|
|
(131
|
)
|
|||
Change in current assets and liabilities-
|
|
|
|
|
|
|
||||||
Receivables
|
|
282
|
|
|
89
|
|
|
277
|
|
|||
Materials and supplies
|
|
(24
|
)
|
|
26
|
|
|
(25
|
)
|
|||
Prepaid taxes and other
|
|
43
|
|
|
(8
|
)
|
|
14
|
|
|||
Accounts payable
|
|
(167
|
)
|
|
(30
|
)
|
|
(76
|
)
|
|||
Accrued taxes
|
|
(71
|
)
|
|
76
|
|
|
(26
|
)
|
|||
Other current liabilities
|
|
—
|
|
|
15
|
|
|
43
|
|
|||
Cash collateral, net
|
|
27
|
|
|
(87
|
)
|
|
159
|
|
|||
Other
|
|
180
|
|
|
6
|
|
|
7
|
|
|||
Net cash provided from operating activities
|
|
727
|
|
|
786
|
|
|
1,152
|
|
|||
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||||
New financing-
|
|
|
|
|
|
|
||||||
Long-term debt
|
|
—
|
|
|
471
|
|
|
341
|
|
|||
Short-term borrowings, net
|
|
4
|
|
|
101
|
|
|
—
|
|
|||
Redemptions and repayments-
|
|
|
|
|
|
|
||||||
Long-term debt
|
|
(163
|
)
|
|
(507
|
)
|
|
(411
|
)
|
|||
Short-term borrowings, net
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|||
Common stock dividend payments
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||
Other
|
|
(7
|
)
|
|
(9
|
)
|
|
(7
|
)
|
|||
Net cash (used for) provided from financing activities
|
|
(166
|
)
|
|
56
|
|
|
(273
|
)
|
|||
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Property additions
|
|
(275
|
)
|
|
(546
|
)
|
|
(627
|
)
|
|||
Nuclear fuel
|
|
(254
|
)
|
|
(232
|
)
|
|
(190
|
)
|
|||
Proceeds from asset sales
|
|
—
|
|
|
9
|
|
|
13
|
|
|||
Sales of investment securities held in trusts
|
|
940
|
|
|
717
|
|
|
733
|
|
|||
Purchases of investment securities held in trusts
|
|
(999
|
)
|
|
(783
|
)
|
|
(791
|
)
|
|||
Cash investments
|
|
(3
|
)
|
|
10
|
|
|
(10
|
)
|
|||
Loans to affiliated companies, net
|
|
29
|
|
|
(18
|
)
|
|
(11
|
)
|
|||
Other
|
|
—
|
|
|
1
|
|
|
4
|
|
|||
Net cash used for investing activities
|
|
(562
|
)
|
|
(842
|
)
|
|
(879
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents at beginning of period
|
|
2
|
|
|
2
|
|
|
2
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
||||||
Cash paid (received) during the year -
|
|
|
|
|
|
|
||||||
Interest (net of amounts capitalized)
|
|
$
|
128
|
|
|
$
|
111
|
|
|
$
|
114
|
|
Income taxes received, net of payments
|
|
$
|
(152
|
)
|
|
$
|
(193
|
)
|
|
$
|
(5
|
)
|
Non-cash transaction: Affiliated net asset transfer (Note 14)
|
|
$
|
73
|
|
|
$
|
28
|
|
|
$
|
—
|
|
Net Regulatory Assets (Liabilities) by Source
|
|
December 31,
2017 |
|
December 31,
2016 |
|
Increase
(Decrease)
|
||||||
|
|
(In millions)
|
||||||||||
Regulatory transition costs
|
|
$
|
46
|
|
|
$
|
90
|
|
|
$
|
(44
|
)
|
Customer receivables (payables) for future income taxes
|
|
(2,765
|
)
|
|
468
|
|
|
(3,233
|
)
|
|||
Nuclear decommissioning and spent fuel disposal costs
|
|
(323
|
)
|
|
(304
|
)
|
|
(19
|
)
|
|||
Asset removal costs
|
|
(774
|
)
|
|
(770
|
)
|
|
(4
|
)
|
|||
Deferred transmission costs
|
|
187
|
|
|
122
|
|
|
65
|
|
|||
Deferred generation costs
|
|
198
|
|
|
331
|
|
|
(133
|
)
|
|||
Deferred distribution costs
|
|
258
|
|
|
296
|
|
|
(38
|
)
|
|||
Contract valuations
|
|
118
|
|
|
153
|
|
|
(35
|
)
|
|||
Storm-related costs
|
|
329
|
|
|
397
|
|
|
(68
|
)
|
|||
Other
|
|
46
|
|
|
74
|
|
|
(28
|
)
|
|||
Net Regulatory Assets (Liabilities) included on the Consolidated Balance Sheets
|
|
$
|
(2,680
|
)
|
|
$
|
857
|
|
|
$
|
(3,537
|
)
|
Customer Receivables
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
December 31, 2017
|
|
|
|
|
||||
Billed
|
|
$
|
860
|
|
|
$
|
106
|
|
Unbilled
|
|
603
|
|
|
75
|
|
||
Total
|
|
$
|
1,463
|
|
|
$
|
181
|
|
|
|
|
|
|
||||
December 31, 2016
|
|
|
|
|
||||
Billed
|
|
$
|
833
|
|
|
$
|
123
|
|
Unbilled
|
|
607
|
|
|
90
|
|
||
Total
|
|
$
|
1,440
|
|
|
$
|
213
|
|
Reconciliation of Basic and Diluted Earnings (Loss) per Share of Common Stock
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions, except per share amounts)
|
||||||||||
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(1,724
|
)
|
|
$
|
(6,177
|
)
|
|
$
|
578
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of basic shares outstanding
|
|
444
|
|
|
426
|
|
|
422
|
|
|||
Assumed exercise of dilutive stock options and awards
(1)
|
|
—
|
|
|
—
|
|
|
2
|
|
|||
Weighted average number of diluted shares outstanding
|
|
444
|
|
|
426
|
|
|
424
|
|
|||
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share of common stock
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
Diluted earnings (loss) per share of common stock
|
|
$
|
(3.88
|
)
|
|
$
|
(14.49
|
)
|
|
$
|
1.37
|
|
(1)
|
For the years ended December 31, 2017,
2016
and 2015, approximately
three million
,
three million
and
one million
shares were excluded from the calculation of diluted shares outstanding, respectively, as their inclusion would be antidilutive, and in the case of 2016 and 2017, a result of the net loss for the period.
|
|
|
December 31, 2017
|
||||||||||||||||||
Property, Plant and Equipment
|
|
In Service
(1)
|
|
Accum. Depr.
|
|
Net Plant
|
|
CWIP
|
|
Total PP&E
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Regulated Distribution
|
|
$
|
25,950
|
|
|
$
|
(7,503
|
)
|
|
$
|
18,447
|
|
|
$
|
469
|
|
|
$
|
18,916
|
|
Regulated Transmission
|
|
10,102
|
|
|
(2,055
|
)
|
|
8,047
|
|
|
480
|
|
|
8,527
|
|
|||||
Competitive Energy Services
(2)
|
|
2,902
|
|
|
(1,958
|
)
|
|
944
|
|
|
28
|
|
|
972
|
|
|||||
Corporate/Other
|
|
824
|
|
|
(409
|
)
|
|
415
|
|
|
49
|
|
|
464
|
|
|||||
Total
|
|
$
|
39,778
|
|
|
$
|
(11,925
|
)
|
|
$
|
27,853
|
|
|
$
|
1,026
|
|
|
$
|
28,879
|
|
|
|
December 31, 2016
|
||||||||||||||||||
Property, Plant and Equipment
|
|
In Service
(1)
|
|
Accum. Depr.
|
|
Net Plant
|
|
CWIP
|
|
Total PP&E
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Regulated Distribution
|
|
$
|
24,979
|
|
|
$
|
(7,169
|
)
|
|
$
|
17,810
|
|
|
$
|
472
|
|
|
$
|
18,282
|
|
Regulated Transmission
|
|
9,342
|
|
|
(1,948
|
)
|
|
7,394
|
|
|
383
|
|
|
7,777
|
|
|||||
Competitive Energy Services
(2)
|
|
8,680
|
|
|
(6,267
|
)
|
|
2,413
|
|
|
453
|
|
|
2,866
|
|
|||||
Corporate/Other
|
|
766
|
|
|
(347
|
)
|
|
419
|
|
|
43
|
|
|
462
|
|
|||||
Total
|
|
$
|
43,767
|
|
|
$
|
(15,731
|
)
|
|
$
|
28,036
|
|
|
$
|
1,351
|
|
|
$
|
29,387
|
|
|
|
December 31, 2017
|
||||||||||||||||||
Property, Plant and Equipment
|
|
In Service
|
|
Accum. Depr.
|
|
Net Plant
|
|
CWIP
|
|
Total PP&E
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Fossil Generation
|
|
$
|
2,344
|
|
|
$
|
(1,743
|
)
|
|
$
|
601
|
|
|
$
|
19
|
|
|
$
|
620
|
|
Other
|
|
151
|
|
|
(80
|
)
|
|
71
|
|
|
3
|
|
|
74
|
|
|||||
Total
|
|
$
|
2,495
|
|
|
$
|
(1,823
|
)
|
|
$
|
672
|
|
|
$
|
22
|
|
|
$
|
694
|
|
|
|
December 31, 2016
|
||||||||||||||||||
Property, Plant and Equipment
|
|
In Service
|
|
Accum. Depr.
|
|
Net Plant
|
|
CWIP
|
|
Total PP&E
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Fossil Generation
|
|
$
|
2,212
|
|
|
$
|
(1,720
|
)
|
|
$
|
492
|
|
|
$
|
63
|
|
|
$
|
555
|
|
Nuclear Generation
|
|
2,065
|
|
|
(1,723
|
)
|
|
342
|
|
|
118
|
|
|
460
|
|
|||||
Nuclear Fuel
|
|
2,637
|
|
|
(2,418
|
)
|
|
219
|
|
|
241
|
|
|
460
|
|
|||||
Other
|
|
143
|
|
|
(68
|
)
|
|
75
|
|
|
5
|
|
|
80
|
|
|||||
Total
|
|
$
|
7,057
|
|
|
$
|
(5,929
|
)
|
|
$
|
1,128
|
|
|
$
|
427
|
|
|
$
|
1,555
|
|
Goodwill
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Consolidated
|
||||||
|
|
(In millions)
|
||||||||||
Balance as of December 31, 2017
|
|
$
|
5,004
|
|
|
$
|
614
|
|
|
$
|
5,618
|
|
•
|
legislative or regulatory solutions for generation assets that recognize their environmental or energy security benefits,
|
•
|
restructuring FES' debt with its creditors,
|
•
|
seeking protection under U.S. bankruptcy laws for FES and likely FENOC, and/or
|
•
|
asset sales and/or plant deactivations.
|
(In millions)
|
|
Pre-tax charge
|
||
Nuclear generating asset
|
|
|
||
Beaver Valley
|
|
$
|
107
|
|
Davis Besse
|
|
420
|
|
|
Perry
|
|
124
|
|
|
Nuclear fuel
|
|
369
|
|
|
Materials and supplies
|
|
81
|
|
|
Asset retirement obligation
|
|
944
|
|
|
Total non-cash charges
|
|
$
|
2,045
|
|
|
|
|
•
|
Future Energy and Capacity Prices:
Observable market information for near-term forward power prices, PJM auction results for near term capacity pricing, and a longer-term fundamental pricing model for energy and capacity that considered the impact of key factors such as load growth, plant retirements, carbon and other environmental regulations, and natural gas pipeline construction, as well as coal and natural gas pricing.
|
•
|
Retail Sales and Margin:
CES' current retail targeted portfolio to estimate future retail sales volume as well as historical financial results to estimate retail margins.
|
•
|
Operating and Capital Costs:
Estimated future operating and capital costs, including the estimated impact on costs of pending carbon and other environmental regulations, as well as costs associated with capacity performance reforms in the PJM market.
|
•
|
Discount Rate:
A discount rate of
9.50%
, based on selected comparable companies' capital structure, return on debt and return on equity.
|
•
|
Terminal Value:
A terminal value of
7.0
x earnings before interest, taxes, depreciation and amortization based on consideration of peer group data and analyst consensus expectations.
|
FirstEnergy
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gains & Losses on Cash Flow Hedges
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
AOCI Balance, January 1, 2015
|
|
$
|
(37
|
)
|
|
$
|
25
|
|
|
$
|
258
|
|
|
$
|
246
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
14
|
|
|
10
|
|
|
24
|
|
||||
Amounts reclassified from AOCI
|
|
5
|
|
|
(25
|
)
|
|
(126
|
)
|
|
(146
|
)
|
||||
Other comprehensive income (loss)
|
|
5
|
|
|
(11
|
)
|
|
(116
|
)
|
|
(122
|
)
|
||||
Income tax (benefits) on other comprehensive income (loss)
|
|
1
|
|
|
(4
|
)
|
|
(44
|
)
|
|
(47
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
4
|
|
|
(7
|
)
|
|
(72
|
)
|
|
(75
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance, December 31, 2015
|
|
$
|
(33
|
)
|
|
$
|
18
|
|
|
$
|
186
|
|
|
$
|
171
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
106
|
|
|
13
|
|
|
119
|
|
||||
Amounts reclassified from AOCI
|
|
8
|
|
|
(51
|
)
|
|
(72
|
)
|
|
(115
|
)
|
||||
Other comprehensive income (loss)
|
|
8
|
|
|
55
|
|
|
(59
|
)
|
|
4
|
|
||||
Income tax (benefits) on other comprehensive income (loss)
|
|
3
|
|
|
21
|
|
|
(23
|
)
|
|
1
|
|
||||
Other comprehensive income (loss), net of tax
|
|
5
|
|
|
34
|
|
|
(36
|
)
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||
AOCI Balance, December 31, 2016
|
|
$
|
(28
|
)
|
|
$
|
52
|
|
|
$
|
150
|
|
|
$
|
174
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
85
|
|
|
(11
|
)
|
|
74
|
|
||||
Amounts reclassified from AOCI
|
|
10
|
|
|
(63
|
)
|
|
(74
|
)
|
|
(127
|
)
|
||||
Other comprehensive income (loss)
|
|
10
|
|
|
22
|
|
|
(85
|
)
|
|
(53
|
)
|
||||
Income tax (benefits) on other comprehensive income (loss)
|
|
4
|
|
|
7
|
|
|
(32
|
)
|
|
(21
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
6
|
|
|
15
|
|
|
(53
|
)
|
|
(32
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance, December 31, 2017
|
|
$
|
(22
|
)
|
|
$
|
67
|
|
|
$
|
97
|
|
|
$
|
142
|
|
|
|
|
|
|
|
|
|
|
FES
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gains & Losses on Cash Flow Hedges
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance, January 1, 2015
|
|
$
|
(7
|
)
|
|
$
|
21
|
|
|
$
|
43
|
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
15
|
|
|
10
|
|
|
25
|
|
||||
Amounts reclassified from AOCI
|
|
(3
|
)
|
|
(24
|
)
|
|
(16
|
)
|
|
(43
|
)
|
||||
Other comprehensive loss
|
|
(3
|
)
|
|
(9
|
)
|
|
(6
|
)
|
|
(18
|
)
|
||||
Income tax benefits on other comprehensive loss
|
|
(1
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
(7
|
)
|
||||
Other comprehensive loss, net of tax
|
|
(2
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(11
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance, December 31, 2015
|
|
$
|
(9
|
)
|
|
$
|
16
|
|
|
$
|
39
|
|
|
$
|
46
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||
Amounts reclassified from AOCI
|
|
—
|
|
|
(48
|
)
|
|
(14
|
)
|
|
(62
|
)
|
||||
Other comprehensive income (loss)
|
|
—
|
|
|
52
|
|
|
(14
|
)
|
|
38
|
|
||||
Income tax (benefits) on other comprehensive income (loss)
|
|
—
|
|
|
20
|
|
|
(5
|
)
|
|
15
|
|
||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
32
|
|
|
(9
|
)
|
|
23
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance, December 31, 2016
|
|
$
|
(9
|
)
|
|
$
|
48
|
|
|
$
|
30
|
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
||||
Amounts reclassified from AOCI
|
|
2
|
|
|
(61
|
)
|
|
(14
|
)
|
|
(73
|
)
|
||||
Other comprehensive income (loss)
|
|
2
|
|
|
30
|
|
|
(14
|
)
|
|
18
|
|
||||
Income tax (benefits) on other comprehensive income (loss)
|
|
1
|
|
|
10
|
|
|
(5
|
)
|
|
6
|
|
||||
Other comprehensive income (loss), net of tax
|
|
1
|
|
|
20
|
|
|
(9
|
)
|
|
12
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
AOCI Balance, December 31, 2017
|
|
$
|
(8
|
)
|
|
$
|
68
|
|
|
$
|
21
|
|
|
$
|
81
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
OPEB
|
||||||||||||
Obligations and Funded Status - Qualified and Non-Qualified Plans
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(In millions)
|
||||||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation as of January 1
|
|
$
|
9,426
|
|
|
$
|
9,079
|
|
|
$
|
711
|
|
|
$
|
724
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
208
|
|
|
191
|
|
|
5
|
|
|
5
|
|
||||
Interest cost
|
|
390
|
|
|
398
|
|
|
27
|
|
|
30
|
|
||||
Plan participants’ contributions
|
|
—
|
|
|
—
|
|
|
4
|
|
|
5
|
|
||||
Plan amendments
|
|
11
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
Medicare retiree drug subsidy
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Actuarial loss
|
|
610
|
|
|
224
|
|
|
32
|
|
|
14
|
|
||||
Benefits paid
|
|
(478
|
)
|
|
(466
|
)
|
|
(49
|
)
|
|
(55
|
)
|
||||
Benefit obligation as of December 31
|
|
$
|
10,167
|
|
|
$
|
9,426
|
|
|
$
|
731
|
|
|
$
|
711
|
|
|
|
|
|
|
|
|
|
|
||||||||
Change in fair value of plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets as of January 1
|
|
$
|
6,213
|
|
|
$
|
5,338
|
|
|
$
|
420
|
|
|
$
|
431
|
|
Actual return on plan assets
|
|
950
|
|
|
442
|
|
|
49
|
|
|
30
|
|
||||
Company contributions
|
|
18
|
|
|
899
|
|
|
16
|
|
|
9
|
|
||||
Plan participants’ contributions
|
|
—
|
|
|
—
|
|
|
4
|
|
|
5
|
|
||||
Benefits paid
|
|
(477
|
)
|
|
(466
|
)
|
|
(50
|
)
|
|
(55
|
)
|
||||
Fair value of plan assets as of December 31
|
|
$
|
6,704
|
|
|
$
|
6,213
|
|
|
$
|
439
|
|
|
$
|
420
|
|
|
|
|
|
|
|
|
|
|
||||||||
Funded Status:
|
|
|
|
|
|
|
|
|
||||||||
Qualified plan
|
|
$
|
(3,043
|
)
|
|
$
|
(2,821
|
)
|
|
|
|
|
||||
Non-qualified plans
|
|
(420
|
)
|
|
(392
|
)
|
|
|
|
|
||||||
Funded Status
|
|
$
|
(3,463
|
)
|
|
$
|
(3,213
|
)
|
|
$
|
(292
|
)
|
|
$
|
(291
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation
|
|
$
|
9,583
|
|
|
$
|
8,913
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized on the Balance Sheet:
|
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
|
(19
|
)
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
||||
Noncurrent liabilities
|
|
(3,444
|
)
|
|
(3,203
|
)
|
|
(292
|
)
|
|
(291
|
)
|
||||
Net liability as of December 31
|
|
$
|
(3,463
|
)
|
|
$
|
(3,213
|
)
|
|
$
|
(292
|
)
|
|
$
|
(291
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in AOCI:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
|
$
|
32
|
|
|
$
|
28
|
|
|
$
|
(206
|
)
|
|
$
|
(288
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Assumptions Used to Determine Benefit Obligations
|
|
|
|
|
|
|
|
|
||||||||
(as of December 31)
|
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
|
3.75
|
%
|
|
4.25
|
%
|
|
3.50
|
%
|
|
4.00
|
%
|
||||
Rate of compensation increase
|
|
4.20
|
%
|
|
4.20
|
%
|
|
N/A
|
|
|
N/A
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Assumed Health Care Cost Trend Rates
|
|
|
|
|
|
|
|
|
||||||||
(as of December 31)
|
|
|
|
|
|
|
|
|
||||||||
Health care cost trend rate assumed (pre/post-Medicare)
|
|
N/A
|
|
|
N/A
|
|
|
6.0-5.5%
|
|
|
6.0-5.5%
|
|
||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
|
N/A
|
|
|
N/A
|
|
|
4.5
|
%
|
|
4.5
|
%
|
||||
Year that the rate reaches the ultimate trend rate
|
|
N/A
|
|
|
N/A
|
|
|
2028
|
|
|
2027
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allocation of Plan Assets (as of December 31)
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
42
|
%
|
|
44
|
%
|
|
50
|
%
|
|
53
|
%
|
||||
Bonds
|
|
32
|
%
|
|
30
|
%
|
|
33
|
%
|
|
41
|
%
|
||||
Absolute return strategies
|
|
10
|
%
|
|
8
|
%
|
|
—
|
%
|
|
—
|
%
|
||||
Real estate funds
|
|
9
|
%
|
|
10
|
%
|
|
—
|
%
|
|
—
|
%
|
||||
Private equity funds
|
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||||
Cash and short-term securities
|
|
6
|
%
|
|
8
|
%
|
|
17
|
%
|
|
6
|
%
|
||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Pension
|
|
OPEB
|
||||||||||||||||||||
Components of Net Periodic Benefit Costs
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Service cost
|
|
$
|
208
|
|
|
$
|
191
|
|
|
$
|
193
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Interest cost
|
|
390
|
|
|
398
|
|
|
383
|
|
|
27
|
|
|
30
|
|
|
29
|
|
||||||
Expected return on plan assets
|
|
(448
|
)
|
|
(399
|
)
|
|
(443
|
)
|
|
(30
|
)
|
|
(30
|
)
|
|
(33
|
)
|
||||||
Amortization of prior service cost (credit)
|
|
7
|
|
|
8
|
|
|
8
|
|
|
(81
|
)
|
|
(80
|
)
|
|
(134
|
)
|
||||||
Pension & OPEB mark-to-market adjustment
|
|
108
|
|
|
179
|
|
|
344
|
|
|
13
|
|
|
15
|
|
|
25
|
|
||||||
Net periodic benefit cost (credit)
|
|
$
|
265
|
|
|
$
|
377
|
|
|
$
|
485
|
|
|
$
|
(66
|
)
|
|
$
|
(60
|
)
|
|
$
|
(108
|
)
|
Assumptions Used to Determine Net Periodic Benefit Cost *
for Years Ended December 31
|
|
Pension
|
|
OPEB
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|||||||
Weighted-average discount rate
|
|
4.25
|
%
|
|
4.50
|
%
|
|
4.25
|
%
|
|
4.00
|
%
|
|
4.25
|
%
|
|
4.00
|
%
|
Expected long-term return on plan assets
|
|
7.50
|
%
|
|
7.50
|
%
|
|
7.75
|
%
|
|
7.50
|
%
|
|
7.50
|
%
|
|
7.75
|
%
|
Rate of compensation increase
|
|
4.20
|
%
|
|
4.20
|
%
|
|
4.20
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
December 31, 2017
|
|
Asset Allocation
|
|||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||||
|
|
(In millions)
|
|
|
|||||||||||||||
Cash and short-term securities
|
|
$
|
—
|
|
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
379
|
|
|
6
|
%
|
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic
|
|
695
|
|
|
27
|
|
|
—
|
|
|
722
|
|
|
11
|
%
|
||||
International
|
|
514
|
|
|
1,569
|
|
|
—
|
|
|
2,083
|
|
|
31
|
%
|
||||
Fixed income
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Government bonds
|
|
—
|
|
|
251
|
|
|
—
|
|
|
251
|
|
|
4
|
%
|
||||
Corporate bonds
|
|
—
|
|
|
1,237
|
|
|
—
|
|
|
1,237
|
|
|
18
|
%
|
||||
High yield debt
|
|
—
|
|
|
689
|
|
|
—
|
|
|
689
|
|
|
10
|
%
|
||||
Mortgage-backed securities (non-government)
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
|
—
|
%
|
||||
Alternatives
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hedge funds (Absolute return)
|
|
—
|
|
|
635
|
|
|
—
|
|
|
635
|
|
|
10
|
%
|
||||
Derivatives
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
%
|
||||
Real estate funds
|
|
—
|
|
|
—
|
|
|
631
|
|
|
631
|
|
|
9
|
%
|
||||
Total
(1)
|
|
$
|
1,209
|
|
|
$
|
4,817
|
|
|
$
|
631
|
|
|
$
|
6,657
|
|
|
99
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Private equity funds
(2)
|
|
|
|
|
|
|
|
57
|
|
|
1
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Investments
|
|
|
|
|
|
|
|
$
|
6,714
|
|
|
100
|
%
|
(1)
|
Excludes
$(10) million
as of
December 31, 2017
, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
(2)
|
Net asset value used as a practical expedient to approximate fair value.
|
|
|
December 31, 2016
|
|
Asset Allocation
|
|||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||||
|
|
(In millions)
|
|
|
|||||||||||||||
Cash and short-term securities
|
|
$
|
—
|
|
|
$
|
464
|
|
|
$
|
—
|
|
|
$
|
464
|
|
|
8
|
%
|
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Domestic
(1)
|
|
1,048
|
|
|
13
|
|
|
—
|
|
|
1,061
|
|
|
17
|
%
|
||||
International
|
|
422
|
|
|
1,269
|
|
|
—
|
|
|
1,691
|
|
|
27
|
%
|
||||
Fixed income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Government bonds
|
|
—
|
|
|
106
|
|
|
—
|
|
|
106
|
|
|
2
|
%
|
||||
Corporate bonds
|
|
—
|
|
|
1,245
|
|
|
—
|
|
|
1,245
|
|
|
20
|
%
|
||||
High yield debt
|
|
—
|
|
|
372
|
|
|
—
|
|
|
372
|
|
|
6
|
%
|
||||
Mortgage-backed securities (non-government)
|
|
—
|
|
|
112
|
|
|
—
|
|
|
112
|
|
|
2
|
%
|
||||
Alternatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Hedge funds (Absolute return)
|
|
—
|
|
|
500
|
|
|
—
|
|
|
500
|
|
|
8
|
%
|
||||
Derivatives
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
%
|
||||
Real estate funds
|
|
—
|
|
|
—
|
|
|
615
|
|
|
615
|
|
|
10
|
%
|
||||
Total
(2)
|
|
$
|
1,470
|
|
|
$
|
4,080
|
|
|
$
|
615
|
|
|
$
|
6,165
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Private equity funds
(3)
|
|
|
|
|
|
|
|
33
|
|
|
—
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
|
$
|
6,198
|
|
|
100
|
%
|
(1)
|
As a result of the
$500 million
equity contribution on December 13, 2016, there was
$293 million
of FE Stock included in the pension plan assets as of December 31, 2016.
|
(2)
|
Excludes
$16 million
as of
December 31, 2016
, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
(3)
|
Net asset value used as a practical expedient to approximate fair value.
|
|
|
Real Estate Funds
|
||
|
|
|
||
Balance as of January 1, 2016
|
|
$
|
587
|
|
Actual return on plan assets:
|
|
|
|
|
Unrealized gains
|
|
29
|
|
|
Realized gains (losses)
|
|
14
|
|
|
Transfers in
|
|
(15
|
)
|
|
Balance as of December 31, 2016
|
|
$
|
615
|
|
Actual return on plan assets:
|
|
|
||
Unrealized gains
|
|
3
|
|
|
Realized gains
|
|
10
|
|
|
Transfers in (out)
|
|
3
|
|
|
Balance as of December 31, 2017
|
|
$
|
631
|
|
|
|
December 31, 2017
|
|
Asset Allocation
|
|||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||||
|
|
(In millions)
|
|
|
|||||||||||||||
Cash and short-term securities
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
17
|
%
|
Equity investment
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic
|
|
220
|
|
|
—
|
|
|
—
|
|
|
220
|
|
|
50
|
%
|
||||
Fixed income
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Government bonds
|
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
|
24
|
%
|
||||
Corporate bonds
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|
8
|
%
|
||||
Mortgage-backed securities (non-government)
|
|
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
1
|
%
|
||||
Total
(1)
|
|
$
|
220
|
|
|
$
|
221
|
|
|
$
|
—
|
|
|
$
|
441
|
|
|
100
|
%
|
(1)
|
Excludes
$(2) million
as of
December 31, 2017
, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
|
|
December 31, 2016
|
|
Asset Allocation
|
|||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||||
|
|
(In millions)
|
|
|
|||||||||||||||
Cash and short-term securities
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
6
|
%
|
Equity investment
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Domestic
|
|
223
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
53
|
%
|
||||
Fixed income
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. treasuries
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
|
9
|
%
|
||||
Government bonds
|
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
|
26
|
%
|
||||
Corporate bonds
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|
6
|
%
|
||||
Mortgage-backed securities (non-government)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
%
|
||||
Total
(1)
|
|
$
|
223
|
|
|
$
|
201
|
|
|
$
|
—
|
|
|
$
|
424
|
|
|
100
|
%
|
(1)
|
Excludes
$(4) million
as of
December 31, 2016
, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
|
|
1-Percentage-Point Increase
|
|
1-Percentage-Point Decrease
|
||||
|
|
(In millions)
|
||||||
Effect on total of service and interest cost
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
Effect on accumulated benefit obligation
|
|
$
|
21
|
|
|
$
|
(18
|
)
|
|
|
|
|
OPEB
|
||||||||
|
|
Pension
|
|
Benefit Payments
|
|
Subsidy Receipts
|
||||||
|
|
(In millions)
|
||||||||||
2018
|
|
$
|
518
|
|
|
$
|
55
|
|
|
$
|
(1
|
)
|
2019
|
|
531
|
|
|
54
|
|
|
(1
|
)
|
|||
2020
|
|
552
|
|
|
53
|
|
|
(1
|
)
|
|||
2021
|
|
567
|
|
|
53
|
|
|
(1
|
)
|
|||
2022
|
|
581
|
|
|
52
|
|
|
(1
|
)
|
|||
Years 2023-2027
|
|
3,056
|
|
|
241
|
|
|
(3
|
)
|
|
|
Pension
|
|
OPEB
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Net Periodic Cost (Credit)
|
|
$
|
60
|
|
|
$
|
(5
|
)
|
|
$
|
10
|
|
|
$
|
(17
|
)
|
|
$
|
(26
|
)
|
|
$
|
(22
|
)
|
FirstEnergy
|
|
Years Ended December 31
|
||||||||||
Stock-based Compensation Plan
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
Restricted Stock Units
|
|
$
|
49
|
|
|
$
|
62
|
|
|
$
|
46
|
|
Restricted Stock
|
|
1
|
|
|
2
|
|
|
2
|
|
|||
Performance Shares
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||
401(k) Savings Plan
|
|
42
|
|
|
39
|
|
|
38
|
|
|||
EDCP & DCPD
|
|
6
|
|
|
5
|
|
|
3
|
|
|||
Total
|
|
$
|
98
|
|
|
$
|
105
|
|
|
$
|
89
|
|
Stock-based compensation costs capitalized
|
|
$
|
37
|
|
|
$
|
38
|
|
|
$
|
32
|
|
FES
|
|
Years Ended December 31
|
||||||||||
Stock-based Compensation Plan
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
Restricted Stock Units
|
|
$
|
4
|
|
|
$
|
11
|
|
|
$
|
6
|
|
401(k) Savings Plan
|
|
3
|
|
|
5
|
|
|
5
|
|
|||
Total
|
|
$
|
7
|
|
|
$
|
16
|
|
|
$
|
11
|
|
Stock-based compensation costs capitalized
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Restricted Stock Unit Activity
|
|
Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Nonvested as of January 1, 2017
|
|
3,063,729
|
|
|
$
|
32.98
|
|
Granted in 2017
|
|
1,577,844
|
|
|
31.71
|
|
|
Forfeited in 2017
|
|
(169,012
|
)
|
|
32.66
|
|
|
Vested in 2017
(1)
|
|
(1,156,810
|
)
|
|
30.81
|
|
|
Nonvested as of December 31, 2017
|
|
3,315,751
|
|
|
$
|
33.24
|
|
Stock Option Activity
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|||
Balance, January 1, 2017 (1,376,821 options exercisable)
|
|
1,376,821
|
|
|
$
|
44.60
|
|
Options forfeited
|
|
(9,946
|
)
|
|
70.60
|
|
|
Balance, December 31, 2017 (1,366,875 options exercisable)
|
|
1,366,875
|
|
|
$
|
44.41
|
|
•
|
Reduction of the corporate federal income tax rate from 35% to 21%, effective in 2018;
|
•
|
Full expensing of qualified property, excluding rate regulated utilities, through 2022 with a phase down beginning in 2023;
|
•
|
Limitations on interest deductions with an exception for rate regulated utilities;
|
•
|
Limitation of the utilization of federal NOLs arising after December 31, 2017 to 80% of taxable income with an indefinite carryforward;
|
•
|
Repeal of the corporate AMT and allowing taxpayers to claim a refund on any AMT credit carryovers.
|
INCOME TAXES (BENEFITS)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
FirstEnergy
|
|
|
|
|
|
|
||||||
Currently payable (receivable)-
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
14
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
State
|
|
42
|
|
|
9
|
|
|
30
|
|
|||
|
|
56
|
|
|
8
|
|
|
31
|
|
|||
Deferred, net-
|
|
|
|
|
|
|
||||||
Federal
|
|
876
|
|
|
(3,114
|
)
|
|
277
|
|
|||
State
|
|
(29
|
)
|
|
59
|
|
|
15
|
|
|||
|
|
847
|
|
|
(3,055
|
)
|
|
292
|
|
|||
Investment tax credit amortization
|
|
(8
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|||
Total provision for income taxes (benefits)
|
|
$
|
895
|
|
|
$
|
(3,055
|
)
|
|
$
|
315
|
|
|
|
|
|
|
|
|
||||||
FES
|
|
|
|
|
|
|
||||||
Currently payable (receivable)-
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(159
|
)
|
|
$
|
(67
|
)
|
|
$
|
(56
|
)
|
State
|
|
(1
|
)
|
|
(1
|
)
|
|
2
|
|
|||
|
|
(160
|
)
|
|
(68
|
)
|
|
(54
|
)
|
|||
Deferred, net-
|
|
|
|
|
|
|
|
|||||
Federal
|
|
509
|
|
|
(2,861
|
)
|
|
103
|
|
|||
State
|
|
(52
|
)
|
|
(57
|
)
|
|
18
|
|
|||
|
|
457
|
|
|
(2,918
|
)
|
|
121
|
|
|||
Investment tax credit amortization
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Total provision for income taxes (benefits)
|
|
$
|
295
|
|
|
$
|
(2,988
|
)
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
FirstEnergy
|
|
|
|
|
|
||||||
Income (loss) before income taxes (benefits)
|
$
|
(829
|
)
|
|
$
|
(9,232
|
)
|
|
$
|
893
|
|
Federal income tax expense (benefit) at statutory rate (35%)
|
$
|
(290
|
)
|
|
$
|
(3,231
|
)
|
|
$
|
313
|
|
Increases (reductions) in taxes resulting from-
|
|
|
|
|
|
||||||
State income taxes, net of federal tax benefit
|
(4
|
)
|
|
(192
|
)
|
|
17
|
|
|||
AFUDC equity and other flow-through
|
(15
|
)
|
|
(13
|
)
|
|
(16
|
)
|
|||
Amortization of investment tax credits
|
(8
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|||
Change in accounting method
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||
ESOP dividend
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
Impairment of non-deductible goodwill
|
—
|
|
|
157
|
|
|
—
|
|
|||
Remeasurement of deferred taxes
|
1,193
|
|
|
—
|
|
|
—
|
|
|||
Uncertain tax positions
|
(3
|
)
|
|
(16
|
)
|
|
1
|
|
|||
Valuation allowances
|
29
|
|
|
246
|
|
|
18
|
|
|||
Other, net
|
(1
|
)
|
|
8
|
|
|
4
|
|
|||
Total income taxes (benefits)
|
$
|
895
|
|
|
$
|
(3,055
|
)
|
|
$
|
315
|
|
Effective income tax rate
|
(108.0
|
)%
|
|
33.1
|
%
|
|
35.3
|
%
|
|||
|
|
|
|
|
|
||||||
FES
|
|
|
|
|
|
||||||
Income (loss) before income taxes (benefits)
|
$
|
(2,096
|
)
|
|
$
|
(8,443
|
)
|
|
$
|
147
|
|
Federal income tax expense (benefit) at statutory rate (35%)
|
$
|
(734
|
)
|
|
$
|
(2,955
|
)
|
|
$
|
51
|
|
Increases (reductions) in taxes resulting from-
|
|
|
|
|
|
||||||
State income taxes, net of federal tax benefit
|
(52
|
)
|
|
(188
|
)
|
|
2
|
|
|||
Amortization of investment tax credits
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
ESOP dividend
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Impairment of non-deductible goodwill
|
—
|
|
|
9
|
|
|
—
|
|
|||
Remeasurement of deferred taxes
|
1,067
|
|
|
—
|
|
|
—
|
|
|||
Uncertain tax positions
|
—
|
|
|
(8
|
)
|
|
5
|
|
|||
Valuation allowances
|
18
|
|
|
151
|
|
|
14
|
|
|||
Other, net
|
(2
|
)
|
|
6
|
|
|
(4
|
)
|
|||
Total income taxes (benefits)
|
$
|
295
|
|
|
$
|
(2,988
|
)
|
|
$
|
65
|
|
Effective income tax rate
|
(14.1
|
)%
|
|
35.4
|
%
|
|
44.2
|
%
|
|||
|
|
|
|
|
|
|
|
2017
|
|
2016
|
||||
|
|
(In millions)
|
||||||
FirstEnergy
|
|
|
|
|
||||
Property basis differences
|
|
$
|
3,662
|
|
|
$
|
7,088
|
|
Deferred sale and leaseback gain
|
|
(231
|
)
|
|
(351
|
)
|
||
Pension and OPEB
|
|
(952
|
)
|
|
(1,347
|
)
|
||
Nuclear decommissioning activities
|
|
450
|
|
|
635
|
|
||
Asset retirement obligations
|
|
(453
|
)
|
|
(669
|
)
|
||
Regulatory asset/liability
|
|
416
|
|
|
545
|
|
||
Deferred compensation
|
|
(177
|
)
|
|
(269
|
)
|
||
Nuclear Fuel
|
|
(375
|
)
|
|
(90
|
)
|
||
Loss carryforwards and AMT credits
|
|
(1,467
|
)
|
|
(2,251
|
)
|
||
Valuation reserve
|
|
580
|
|
|
438
|
|
||
All other
|
|
(94
|
)
|
|
36
|
|
||
Net deferred income tax liability
|
|
$
|
1,359
|
|
|
$
|
3,765
|
|
|
|
|
|
|
||||
FES
|
|
|
|
|
||||
Property basis differences
|
|
$
|
(677
|
)
|
|
$
|
(1,009
|
)
|
Deferred sale and leaseback gain
|
|
(219
|
)
|
|
(328
|
)
|
||
Pension and OPEB
|
|
(244
|
)
|
|
(366
|
)
|
||
Lease market valuation liability
|
|
75
|
|
|
111
|
|
||
Nuclear decommissioning activities
|
|
411
|
|
|
540
|
|
||
Asset retirement obligations
|
|
(296
|
)
|
|
(453
|
)
|
||
Nuclear Fuel
|
|
(375
|
)
|
|
(90
|
)
|
||
Loss carryforwards and AMT credits
|
|
(587
|
)
|
|
(830
|
)
|
||
Valuation reserve
|
|
268
|
|
|
197
|
|
||
All other
|
|
(110
|
)
|
|
(51
|
)
|
||
Net deferred income tax asset
|
|
$
|
(1,754
|
)
|
|
$
|
(2,279
|
)
|
Expiration Period
|
|
FirstEnergy
|
|
FES
|
||||||||||||
|
|
(In millions)
|
||||||||||||||
|
|
State
|
|
Local
|
|
State
|
|
Local
|
||||||||
2018-2022
|
|
$
|
806
|
|
|
$
|
3,472
|
|
|
$
|
2
|
|
|
$
|
1,954
|
|
2023-2027
|
|
1,963
|
|
|
—
|
|
|
32
|
|
|
—
|
|
||||
2028-2032
|
|
2,382
|
|
|
—
|
|
|
703
|
|
|
—
|
|
||||
2033-2037
|
|
1,896
|
|
|
—
|
|
|
982
|
|
|
—
|
|
||||
|
|
$
|
7,047
|
|
|
$
|
3,472
|
|
|
$
|
1,719
|
|
|
$
|
1,954
|
|
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
Balance, January 1, 2015
|
|
$
|
34
|
|
|
$
|
3
|
|
Current year increases
|
|
3
|
|
|
—
|
|
||
Prior years increases
|
|
7
|
|
|
5
|
|
||
Prior years decreases
|
|
(10
|
)
|
|
—
|
|
||
Balance, December 31, 2015
|
|
$
|
34
|
|
|
$
|
8
|
|
Current year increases
|
|
2
|
|
|
—
|
|
||
Prior years increases
|
|
69
|
|
|
—
|
|
||
Prior years decreases
|
|
(21
|
)
|
|
(8
|
)
|
||
Balance, December 31, 2016
|
|
$
|
84
|
|
|
$
|
—
|
|
Current year increases
|
|
2
|
|
|
—
|
|
||
Decrease for lapse in statute
|
|
(6
|
)
|
|
—
|
|
||
Balance, December 31, 2017
|
|
$
|
80
|
|
|
$
|
—
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In millions)
|
||||||||||
FirstEnergy
|
|
|
|
|
|
|
||||||
KWH excise
|
|
$
|
188
|
|
|
$
|
196
|
|
|
$
|
193
|
|
State gross receipts
|
|
204
|
|
|
212
|
|
|
224
|
|
|||
Real and personal property
|
|
486
|
|
|
472
|
|
|
410
|
|
|||
Social security and unemployment
|
|
131
|
|
|
127
|
|
|
119
|
|
|||
Other
|
|
34
|
|
|
35
|
|
|
32
|
|
|||
Total general taxes
|
|
$
|
1,043
|
|
|
$
|
1,042
|
|
|
$
|
978
|
|
|
|
|
|
|
|
|
||||||
FES
|
|
|
|
|
|
|
||||||
State gross receipts
|
|
$
|
20
|
|
|
$
|
28
|
|
|
$
|
44
|
|
Real and personal property
|
|
27
|
|
|
42
|
|
|
36
|
|
|||
Social security and unemployment
|
|
11
|
|
|
15
|
|
|
16
|
|
|||
Other
|
|
—
|
|
|
3
|
|
|
2
|
|
|||
Total general taxes
|
|
$
|
58
|
|
|
$
|
88
|
|
|
$
|
98
|
|
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
FirstEnergy
|
|
$
|
158
|
|
|
$
|
168
|
|
|
$
|
174
|
|
FES
|
|
$
|
93
|
|
|
$
|
94
|
|
|
$
|
94
|
|
Capital Leases
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
2018
|
|
$
|
28
|
|
|
$
|
2
|
|
2019
|
|
23
|
|
|
—
|
|
||
2020
|
|
18
|
|
|
—
|
|
||
2021
|
|
15
|
|
|
—
|
|
||
2022
|
|
13
|
|
|
—
|
|
||
Years thereafter
|
|
20
|
|
|
—
|
|
||
Total minimum lease payments
|
|
117
|
|
|
2
|
|
||
Interest portion
|
|
(26
|
)
|
|
—
|
|
||
Present value of net minimum lease payments
|
|
91
|
|
|
2
|
|
||
Less current portion
|
|
24
|
|
|
2
|
|
||
Noncurrent portion
|
|
$
|
67
|
|
|
$
|
—
|
|
Operating Leases
|
|
FirstEnergy
|
|
FES
|
|
||||
|
|
(In millions)
|
|
||||||
2018
|
|
$
|
146
|
|
|
$
|
101
|
|
|
2019
|
|
128
|
|
|
97
|
|
|
||
2020
|
|
102
|
|
|
68
|
|
|
||
2021
|
|
124
|
|
|
93
|
|
|
||
2022
|
|
111
|
|
|
91
|
|
|
||
Years thereafter
|
|
1,263
|
|
|
1,131
|
|
|
||
Total minimum lease payments
|
|
$
|
1,874
|
|
|
$
|
1,581
|
|
|
|
|
Intangible Assets
|
|
Amortization Expense
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
Actual
|
|
Estimated
|
||||||||||||||||||||||||||||||
(In millions)
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||||||||||
NUG contracts
(1)
|
|
$
|
124
|
|
|
$
|
36
|
|
|
$
|
88
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
63
|
|
OVEC
|
|
8
|
|
|
3
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||||||
Coal contracts
(2)
|
|
102
|
|
|
94
|
|
|
8
|
|
|
4
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
FES customer contracts
|
|
148
|
|
|
144
|
|
|
4
|
|
|
5
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
|
$
|
382
|
|
|
$
|
277
|
|
|
$
|
105
|
|
|
$
|
15
|
|
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
67
|
|
(1)
|
NUG contracts are subject to regulatory accounting and their amortization does not impact earnings.
|
(2)
|
The coal contracts were recorded with a regulatory offset and their amortization does not impact earnings.
|
•
|
Ohio Securitization
-
In September 2012, the Ohio Companies created separate, wholly-owned limited liability company SPEs which issued phase-in recovery bonds to securitize the recovery of certain all-electric customer heating discounts, fuel and purchased power regulatory assets. The phase-in recovery bonds are payable only from, and secured by, phase-in recovery property owned by the SPEs. The bondholder has no recourse to the general credit of FirstEnergy or any of the Ohio Companies. Each of the Ohio Companies, as servicer of its respective SPE, manages and administers the phase-in recovery property including the billing, collection and remittance of usage-based charges payable by retail electric customers. In the aggregate, the Ohio Companies are entitled to annual servicing fees of
$445 thousand
that are recoverable through the usage-based charges. The SPEs are considered VIEs and each one is consolidated into its applicable utility. As of
December 31, 2017
and
December 31, 2016
,
$315 million
and
$339 million
of the phase-in recovery bonds were outstanding, respectively.
|
•
|
JCP&L Securitization
-
In June 2002, JCP&L Transition Funding sold transition bonds to securitize the recovery of JCP&L’s bondable stranded costs associated with the previously divested Oyster Creek Nuclear Generating Station, which were paid in full at maturity on June 5, 2017. Additionally, in August 2006, JCP&L Transition Funding II sold transition bonds to securitize the recovery of deferred costs associated with JCP&L’s supply of BGS. JCP&L did not purchase and does not own any of the transition bonds, which are included as long-term debt on FirstEnergy’s and JCP&L’s Consolidated Balance Sheets. The transition bonds are the sole obligations of JCP&L Transition Funding II and are collateralized by its equity and assets, which consist primarily of bondable transition property. As of
December 31, 2017
and
December 31, 2016
,
$56 million
and
$85 million
of the transition bonds were outstanding, respectively.
|
•
|
MP and PE Environmental Funding Companies
-
The entities issued bonds, the proceeds of which were used to construct environmental control facilities. The limited liability company SPEs own the irrevocable right to collect non-bypassable environmental control charges from all customers who receive electric delivery service in MP's and PE's West Virginia service territories. Principal and interest owed on the environmental control bonds is secured by, and payable solely from, the proceeds of the environmental control charges. Creditors of FirstEnergy, other than the limited liability company SPEs, have no recourse to any assets or revenues of the special purpose limited liability companies. As of
December 31, 2017
and
December 31, 2016
,
$383 million
and
$406 million
of the environmental control bonds were outstanding, respectively.
|
•
|
Global Holding
-
FEV holds a
33-1/3%
equity ownership in Global Holding, the holding company for a joint venture in the Signal Peak mining and coal transportation operations with coal sales in U.S. and international markets. FEV is not the primary beneficiary of the joint venture, as it does not have control over the significant activities affecting the joint venture's economic performance. FEV's ownership interest is subject to the equity method of accounting. In 2015, FirstEnergy fully impaired the value of its investment in Global Holding.
|
•
|
PATH WV
-
PATH, a proposed transmission line from West Virginia through Virginia into Maryland which PJM cancelled in 2012, is a series limited liability company that is comprised of multiple series, each of which has separate rights, powers and duties regarding specified property and the series profits and losses associated with such property. A subsidiary of FE owns
100%
of the Allegheny Series (PATH-Allegheny) and
50%
of the West Virginia Series (PATH-WV), which is a joint venture with a subsidiary of AEP. FirstEnergy is not the primary beneficiary of PATH-WV, as it does not have control over the significant activities affecting the economics of PATH-WV. FirstEnergy's ownership interest in PATH-WV is subject to the equity method of accounting. As of December 31, 2017, the carrying value of the equity method investment was $
17 million
.
|
•
|
Purchase Power Agreements
-
FirstEnergy evaluated its PPAs and determined that certain NUG entities at its Regulated Distribution segment may be VIEs to the extent that they own a plant that sells substantially all of its output to the applicable utilities and the contract price for power is correlated with the plant’s variable costs of production.
|
•
|
Sale and Leaseback Transactions
-
FES has obligations that are not included on its Consolidated Balance Sheet related to the 2007 Bruce Mansfield Unit 1 sale and leaseback arrangement, which are satisfied through operating lease payments. FirstEnergy is not the primary beneficiary of these interests as it does not have control over the significant activities affecting the economics of the arrangements.
|
|
Maximum
Exposure
|
|
Discounted Lease
Payments, net
|
|
Net
Exposure
|
||||||
|
(In millions)
|
||||||||||
FirstEnergy
(1)
|
$
|
1,083
|
|
|
$
|
862
|
|
|
$
|
221
|
|
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
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
(In millions)
|
||||||||||||||||||||||||||||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
1,196
|
|
|
$
|
—
|
|
|
$
|
1,196
|
|
|
$
|
—
|
|
|
$
|
1,247
|
|
|
$
|
—
|
|
|
$
|
1,247
|
|
Derivative assets - commodity contracts
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|
10
|
|
|
200
|
|
|
—
|
|
|
210
|
|
||||||||
Derivative assets - FTRs
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||||
Derivative assets - NUG contracts
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||
Equity securities
(2)
|
1,104
|
|
|
—
|
|
|
—
|
|
|
1,104
|
|
|
925
|
|
|
—
|
|
|
—
|
|
|
925
|
|
||||||||
Foreign government debt securities
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
||||||||
U.S. government debt securities
|
—
|
|
|
154
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
161
|
|
|
—
|
|
|
161
|
|
||||||||
U.S. state debt securities
|
—
|
|
|
276
|
|
|
—
|
|
|
276
|
|
|
—
|
|
|
246
|
|
|
—
|
|
|
246
|
|
||||||||
Other
(3)
|
589
|
|
|
135
|
|
|
—
|
|
|
724
|
|
|
199
|
|
|
123
|
|
|
—
|
|
|
322
|
|
||||||||
Total assets
|
$
|
1,693
|
|
|
$
|
1,882
|
|
|
$
|
4
|
|
|
$
|
3,579
|
|
|
$
|
1,134
|
|
|
$
|
2,055
|
|
|
$
|
8
|
|
|
$
|
3,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities - commodity contracts
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
(6
|
)
|
|
$
|
(118
|
)
|
|
$
|
—
|
|
|
$
|
(124
|
)
|
Derivative liabilities - FTRs
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||||||
Derivative liabilities - NUG contracts
(1)
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
|
(108
|
)
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
(80
|
)
|
|
$
|
(107
|
)
|
|
$
|
(6
|
)
|
|
$
|
(118
|
)
|
|
$
|
(114
|
)
|
|
$
|
(238
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net assets (liabilities)
(4)
|
$
|
1,693
|
|
|
$
|
1,855
|
|
|
$
|
(76
|
)
|
|
$
|
3,472
|
|
|
$
|
1,128
|
|
|
$
|
1,937
|
|
|
$
|
(106
|
)
|
|
$
|
2,959
|
|
(1)
|
NUG contracts are subject to regulatory accounting treatment and changes in market values 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
$(8) million
and
$(3) million
as of
December 31, 2017
and
December 31, 2016
, respectively, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
|
NUG Contracts
(1)
|
|
FTRs
|
||||||||||||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
January 1, 2016 Balance
|
$
|
1
|
|
|
$
|
(137
|
)
|
|
$
|
(136
|
)
|
|
$
|
8
|
|
|
$
|
(13
|
)
|
|
$
|
(5
|
)
|
Unrealized gain (loss)
|
2
|
|
|
(17
|
)
|
|
(15
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
(10
|
)
|
||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
(7
|
)
|
|
9
|
|
||||||
Settlements
|
(2
|
)
|
|
46
|
|
|
44
|
|
|
(11
|
)
|
|
18
|
|
|
7
|
|
||||||
December 31, 2016 Balance
|
$
|
1
|
|
|
$
|
(108
|
)
|
|
$
|
(107
|
)
|
|
$
|
7
|
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
Unrealized gain (loss)
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(1
|
)
|
|
3
|
|
||||||
Settlements
|
(1
|
)
|
|
39
|
|
|
38
|
|
|
(8
|
)
|
|
8
|
|
|
—
|
|
||||||
December 31, 2017 Balance
|
$
|
—
|
|
|
$
|
(79
|
)
|
|
$
|
(79
|
)
|
|
$
|
4
|
|
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
|
Fair Value, Net (In millions)
|
|
Valuation
Technique |
|
Significant Input
|
|
Range
|
|
Weighted Average
|
|
Units
|
||
FTRs
|
|
$
|
3
|
|
|
Model
|
|
RTO auction clearing prices
|
|
($4.60) to $5.40
|
|
$0.70
|
|
Dollars/MWH
|
NUG Contracts
|
|
$
|
(79
|
)
|
|
Model
|
|
Generation
Regional electricity prices |
|
400 to 2,099,000
$30.70 to $32.00
|
|
426,000 $30.70
|
|
MWH
Dollars/MWH |
FES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Recurring Fair Value Measurements
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
(In millions)
|
||||||||||||||||||||||||||||||
Corporate debt securities
|
$
|
—
|
|
|
$
|
720
|
|
|
$
|
—
|
|
|
$
|
720
|
|
|
$
|
—
|
|
|
$
|
726
|
|
|
$
|
—
|
|
|
$
|
726
|
|
Derivative assets - commodity contracts
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|
10
|
|
|
200
|
|
|
—
|
|
|
210
|
|
||||||||
Derivative assets - FTRs
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||
Equity securities
(1)
|
810
|
|
|
—
|
|
|
—
|
|
|
810
|
|
|
634
|
|
|
—
|
|
|
—
|
|
|
634
|
|
||||||||
Foreign government debt securities
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
58
|
|
||||||||
U.S. government debt securities
|
—
|
|
|
133
|
|
|
—
|
|
|
133
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||||||
U.S. state debt securities
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||||
Other
(2)
|
1
|
|
|
96
|
|
|
—
|
|
|
97
|
|
|
2
|
|
|
81
|
|
|
—
|
|
|
83
|
|
||||||||
Total assets
|
$
|
811
|
|
|
$
|
1,076
|
|
|
$
|
1
|
|
|
$
|
1,888
|
|
|
$
|
646
|
|
|
$
|
1,116
|
|
|
$
|
4
|
|
|
$
|
1,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities - commodity contracts
|
$
|
—
|
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
|
$
|
(23
|
)
|
|
$
|
(6
|
)
|
|
$
|
(118
|
)
|
|
$
|
—
|
|
|
$
|
(124
|
)
|
Derivative liabilities - FTRs
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
(23
|
)
|
|
$
|
(1
|
)
|
|
$
|
(24
|
)
|
|
$
|
(6
|
)
|
|
$
|
(118
|
)
|
|
$
|
(5
|
)
|
|
$
|
(129
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net assets (liabilities)
(3)
|
$
|
811
|
|
|
$
|
1,053
|
|
|
$
|
—
|
|
|
$
|
1,864
|
|
|
$
|
640
|
|
|
$
|
998
|
|
|
$
|
(1
|
)
|
|
$
|
1,637
|
|
(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
$3 million
and
$2 million
as of
December 31, 2017
and
December 31, 2016
, respectively, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
|
|
Derivative Asset
|
|
Derivative Liability
|
|
Net Asset/(Liability)
|
||||||
|
|
(In millions)
|
||||||||||
January 1, 2016 Balance
|
|
$
|
5
|
|
|
$
|
(11
|
)
|
|
$
|
(6
|
)
|
Unrealized loss
|
|
(4
|
)
|
|
(3
|
)
|
|
(7
|
)
|
|||
Purchases
|
|
10
|
|
|
(5
|
)
|
|
5
|
|
|||
Settlements
|
|
(7
|
)
|
|
14
|
|
|
7
|
|
|||
December 31, 2016 Balance
|
|
$
|
4
|
|
|
$
|
(5
|
)
|
|
$
|
(1
|
)
|
Unrealized loss
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Purchases
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Settlements
|
|
(4
|
)
|
|
6
|
|
|
2
|
|
|||
December 31, 2017 Balance
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
|
Fair Value, Net (In millions)
|
|
Valuation
Technique |
|
Significant Input
|
|
Range
|
|
Weighted Average
|
|
Units
|
||
FTRs
|
|
$
|
—
|
|
|
Model
|
|
RTO auction clearing prices
|
|
($4.60) to $3.30
|
|
$0.10
|
|
Dollars/MWH
|
|
|
December 31, 2017
(1)
|
|
December 31, 2016
(2)
|
||||||||||||||||||||
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Fair Value
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Fair Value
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FirstEnergy
|
|
$
|
1,707
|
|
|
$
|
31
|
|
|
$
|
1,738
|
|
|
$
|
1,735
|
|
|
$
|
38
|
|
|
$
|
1,773
|
|
FES
|
|
950
|
|
|
20
|
|
|
970
|
|
|
847
|
|
|
27
|
|
|
874
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FirstEnergy
|
|
$
|
949
|
|
|
$
|
155
|
|
|
$
|
1,104
|
|
|
$
|
822
|
|
|
$
|
103
|
|
|
$
|
925
|
|
FES
|
|
695
|
|
|
115
|
|
|
810
|
|
|
564
|
|
|
70
|
|
|
634
|
|
(1)
|
Excludes short-term cash investments: FirstEnergy -
$87 million
; FES -
$76 million
.
|
(2)
|
Excludes short-term cash investments: FirstEnergy -
$61 million
; FES -
$44 million
.
|
December 31, 2017
|
|
Sale Proceeds
|
|
Realized Gains
|
|
Realized Losses
|
|
OTTI
|
|
Interest and
Dividend Income
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
FirstEnergy
|
|
$
|
2,170
|
|
|
$
|
330
|
|
|
$
|
(253
|
)
|
|
$
|
(13
|
)
|
|
$
|
98
|
|
FES
|
|
940
|
|
|
256
|
|
|
(195
|
)
|
|
(13
|
)
|
|
59
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
Sale Proceeds
|
|
Realized Gains
|
|
Realized Losses
|
|
OTTI
|
|
Interest and Dividend Income
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
FirstEnergy
|
|
$
|
1,678
|
|
|
$
|
170
|
|
|
$
|
(121
|
)
|
|
$
|
(21
|
)
|
|
$
|
100
|
|
FES
|
|
717
|
|
|
117
|
|
|
(69
|
)
|
|
(19
|
)
|
|
56
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2015
|
|
Sale Proceeds
|
|
Realized Gains
|
|
Realized Losses
|
|
OTTI
|
|
Interest and
Dividend Income
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
FirstEnergy
|
|
$
|
1,534
|
|
|
$
|
209
|
|
|
$
|
(191
|
)
|
|
$
|
(102
|
)
|
|
$
|
101
|
|
FES
|
|
733
|
|
|
158
|
|
|
(134
|
)
|
|
(90
|
)
|
|
57
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
|
(In millions)
|
||||||||||||||
FirstEnergy
|
$
|
22,261
|
|
|
$
|
23,038
|
|
|
$
|
19,885
|
|
|
$
|
19,829
|
|
FES
|
2,836
|
|
|
1,487
|
|
|
3,000
|
|
|
1,555
|
|
•
|
Changes in the fair value of derivative instruments that are designated and qualify as cash flow hedges are recorded to AOCI with subsequent reclassification to earnings in the period during which the hedged forecasted transaction affects earnings.
|
•
|
Changes in the fair value of derivative instruments that are designated and qualify as fair value hedges are recorded as an adjustment to the item being hedged. When fair value hedges are discontinued, the adjustment recorded to the item being hedged is amortized into earnings.
|
•
|
Changes in the fair value of derivative instruments that are not designated in a hedging relationship are recorded in earnings on a mark-to-market basis, unless otherwise noted.
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||
|
Fair Value
|
|
|
Fair Value
|
||||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
|
December 31,
2017 |
|
December 31,
2016 |
||||||||
|
(In millions)
|
|
|
(In millions)
|
||||||||||||
Current Assets - Derivatives
|
|
|
|
|
Current Liabilities - Other
|
|
|
|
||||||||
Commodity Contracts
|
$
|
33
|
|
|
$
|
133
|
|
|
Commodity Contracts
|
$
|
(27
|
)
|
|
$
|
(72
|
)
|
FTRs
|
4
|
|
|
7
|
|
|
FTRs
|
(1
|
)
|
|
(6
|
)
|
||||
|
37
|
|
|
140
|
|
|
|
(28
|
)
|
|
(78
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
Noncurrent Liabilities - Adverse Power Contract Liability
|
|
|
|
||||||||
Deferred Charges and Other Assets - Other
|
|
|
|
|
NUGs
(1)
|
(79
|
)
|
|
(108
|
)
|
||||||
Commodity Contracts
|
—
|
|
|
77
|
|
|
Noncurrent Liabilities - Other
|
|
|
|
||||||
FTRs
|
—
|
|
|
—
|
|
|
Commodity Contracts
|
—
|
|
|
(52
|
)
|
||||
NUGs
(1)
|
—
|
|
|
1
|
|
|
FTRs
|
—
|
|
|
—
|
|
||||
|
—
|
|
|
78
|
|
|
|
(79
|
)
|
|
(160
|
)
|
||||
Derivative Assets
|
$
|
37
|
|
|
$
|
218
|
|
|
Derivative Liabilities
|
$
|
(107
|
)
|
|
$
|
(238
|
)
|
(1)
|
NUG contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings.
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||
|
Fair Value
|
|
|
Fair Value
|
||||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
|
December 31,
2017 |
|
December 31,
2016 |
||||||||
|
(In millions)
|
|
|
(In millions)
|
||||||||||||
Current Assets - Derivatives
|
|
|
|
|
Current Liabilities - Derivatives
|
|
|
|
||||||||
Commodity Contracts
|
$
|
33
|
|
|
$
|
133
|
|
|
Commodity Contracts
|
$
|
(23
|
)
|
|
$
|
(72
|
)
|
FTRs
|
1
|
|
|
4
|
|
|
FTRs
|
(1
|
)
|
|
(5
|
)
|
||||
|
34
|
|
|
137
|
|
|
|
(24
|
)
|
|
(77
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Deferred Charges and Other Assets - Derivatives
|
|
|
|
|
Noncurrent Liabilities - Other
|
|
|
|
||||||||
Commodity Contracts
|
—
|
|
|
77
|
|
|
Commodity Contracts
|
—
|
|
|
(52
|
)
|
||||
|
—
|
|
|
77
|
|
|
|
—
|
|
|
(52
|
)
|
||||
Derivative Assets
|
$
|
34
|
|
|
$
|
214
|
|
|
Derivative Liabilities
|
$
|
(24
|
)
|
|
$
|
(129
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
December 31, 2017
|
|
Fair Value
|
|
Derivative Instruments
|
|
Cash Collateral (Received)/Pledged
|
|
Net Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
33
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
14
|
|
FTRs
|
|
4
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
||||
|
|
$
|
37
|
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
17
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
(27
|
)
|
|
$
|
19
|
|
|
$
|
3
|
|
|
$
|
(5
|
)
|
FTRs
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
NUG contracts
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
||||
|
|
$
|
(107
|
)
|
|
$
|
20
|
|
|
$
|
3
|
|
|
$
|
(84
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
December 31, 2016
|
|
Fair Value
|
|
Derivative Instruments
|
|
Cash Collateral (Received)/Pledged
|
|
Net Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
210
|
|
|
$
|
(117
|
)
|
|
$
|
—
|
|
|
$
|
93
|
|
FTRs
|
|
7
|
|
|
(6
|
)
|
|
—
|
|
|
1
|
|
||||
NUG contracts
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
|
$
|
218
|
|
|
$
|
(123
|
)
|
|
$
|
—
|
|
|
$
|
95
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
(124
|
)
|
|
$
|
117
|
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
FTRs
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
NUG contracts
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
||||
|
|
$
|
(238
|
)
|
|
$
|
123
|
|
|
$
|
1
|
|
|
$
|
(114
|
)
|
|
|
|
|
Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
December 31, 2017
|
|
Fair Value
|
|
Derivative Instruments
|
|
Cash Collateral (Received)/Pledged
|
|
Net Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
33
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
14
|
|
FTRs
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
34
|
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
(23
|
)
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
FTRs
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
(24
|
)
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
December 31, 2016
|
|
Fair Value
|
|
Derivative Instruments
|
|
Cash Collateral (Received)/Pledged
|
|
Net Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
210
|
|
|
$
|
(117
|
)
|
|
$
|
—
|
|
|
$
|
93
|
|
FTRs
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
214
|
|
|
$
|
(121
|
)
|
|
$
|
—
|
|
|
$
|
93
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
|
$
|
(124
|
)
|
|
$
|
117
|
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
FTRs
|
|
(5
|
)
|
|
4
|
|
|
1
|
|
|
—
|
|
||||
|
|
$
|
(129
|
)
|
|
$
|
121
|
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
Purchases
|
|
Sales
|
|
Net
|
|
Units
|
|||
|
(In millions)
|
|||||||||
Power Contracts
|
2
|
|
|
11
|
|
|
(9
|
)
|
|
MWH
|
FTRs
|
9
|
|
|
—
|
|
|
9
|
|
|
MWH
|
NUGs
|
2
|
|
|
—
|
|
|
2
|
|
|
MWH
|
|
Purchases
|
|
Sales
|
|
Net
|
|
Units
|
|||
|
(In millions)
|
|||||||||
Power Contracts
|
2
|
|
|
11
|
|
|
(9
|
)
|
|
MWH
|
FTRs
|
5
|
|
|
—
|
|
|
5
|
|
|
MWH
|
|
Year Ended December 31
|
||||||||||
|
Commodity
Contracts
|
|
FTRs
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|||
Other Operating Expense
|
$
|
(82
|
)
|
|
$
|
1
|
|
|
$
|
(81
|
)
|
|
|
|
|
|
|
||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
54
|
|
|
$
|
(4
|
)
|
|
$
|
50
|
|
Purchased Power Expense
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
Other Operating Expense
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|||
Fuel Expense
|
5
|
|
|
—
|
|
|
5
|
|
|||
|
|
|
|
|
|
||||||
|
|
Year Ended December 31
|
||||||||||
|
Commodity
Contracts |
|
FTRs
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|||
Other Operating Expense
|
$
|
(14
|
)
|
|
$
|
5
|
|
|
$
|
(9
|
)
|
|
|
|
|
|
|
||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
210
|
|
|
$
|
8
|
|
|
$
|
218
|
|
Purchased Power Expense
|
(131
|
)
|
|
—
|
|
|
(131
|
)
|
|||
Other Operating Expense
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|||
Fuel Expense
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||
|
|
|
|
|
|
|
Year Ended December 31
|
||||||||||
|
Commodity
Contracts |
|
FTRs
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2015
|
|
|
|
|
|
|
|
|
|||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|||
Other Operating Expense
|
$
|
93
|
|
|
$
|
(20
|
)
|
|
$
|
73
|
|
|
|
|
|
|
|
||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
111
|
|
|
$
|
50
|
|
|
$
|
161
|
|
Purchased Power Expense
|
(130
|
)
|
|
—
|
|
|
(130
|
)
|
|||
Other Operating Expense
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
|||
Fuel Expense
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|
Year Ended December 31
|
||||||||||
|
Commodity
Contracts
|
|
FTRs
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|||
Other Operating Expense
|
$
|
(79
|
)
|
|
$
|
1
|
|
|
$
|
(78
|
)
|
|
|
|
|
|
|
||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
54
|
|
|
$
|
(4
|
)
|
|
$
|
50
|
|
Purchased Power Expense
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
Other Operating Expense
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|
Year Ended December 31
|
||||||||||
|
Commodity
Contracts |
|
FTRs
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|||
Other Operating Expense
|
$
|
(14
|
)
|
|
$
|
5
|
|
|
$
|
(9
|
)
|
|
|
|
|
|
|
||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
210
|
|
|
$
|
8
|
|
|
$
|
218
|
|
Purchased Power Expense
|
(131
|
)
|
|
—
|
|
|
(131
|
)
|
|||
Other Operating Expense
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|
Year Ended December 31
|
||||||||||
|
Commodity
Contracts |
|
FTRs
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2015
|
|
|
|
|
|
|
|
|
|||
Unrealized Gain (Loss) Recognized in:
|
|
|
|
|
|
|
|
|
|||
Other Operating Expense
|
$
|
93
|
|
|
$
|
(19
|
)
|
|
$
|
74
|
|
|
|
|
|
|
|
||||||
Realized Gain (Loss) Reclassified to:
|
|
|
|
|
|
|
|
|
|||
Revenues
|
$
|
111
|
|
|
$
|
49
|
|
|
$
|
160
|
|
Purchased Power Expense
|
(130
|
)
|
|
—
|
|
|
(130
|
)
|
|||
Other Operating Expense
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
|
|
Year Ended December 31
|
||||||||||
Derivatives Not in a Hedging Relationship with Regulatory Offset
|
|
NUGs
|
|
Regulated FTRs
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Outstanding net asset (liability) as of January 1, 2017
|
|
$
|
(107
|
)
|
|
$
|
2
|
|
|
$
|
(105
|
)
|
Unrealized loss
|
|
(9
|
)
|
|
(1
|
)
|
|
(10
|
)
|
|||
Purchases
|
|
—
|
|
|
3
|
|
|
3
|
|
|||
Settlements
|
|
37
|
|
|
(1
|
)
|
|
36
|
|
|||
Outstanding net asset (liability) as of December 31, 2017
|
|
$
|
(79
|
)
|
|
$
|
3
|
|
|
$
|
(76
|
)
|
|
|
|
|
|
|
|
||||||
Outstanding net asset (liability) as of January 1, 2016
|
|
$
|
(136
|
)
|
|
$
|
1
|
|
|
$
|
(135
|
)
|
Unrealized loss
|
|
(15
|
)
|
|
(3
|
)
|
|
(18
|
)
|
|||
Purchases
|
|
—
|
|
|
4
|
|
|
4
|
|
|||
Settlements
|
|
44
|
|
|
—
|
|
|
44
|
|
|||
Outstanding net asset (liability) as of December 31, 2016
|
|
$
|
(107
|
)
|
|
$
|
2
|
|
|
$
|
(105
|
)
|
|
|
Preferred Stock
|
|
Preference Stock
|
||||||||||
|
|
Shares Authorized
|
|
Par Value
|
|
Shares Authorized
|
|
Par Value
|
||||||
FirstEnergy
|
|
5,000,000
|
|
|
$
|
100
|
|
|
|
|
|
|
|
|
OE
|
|
6,000,000
|
|
|
$
|
100
|
|
|
8,000,000
|
|
|
no par
|
|
|
OE
|
|
8,000,000
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
Penn
|
|
1,200,000
|
|
|
$
|
100
|
|
|
|
|
|
|
|
|
CEI
|
|
4,000,000
|
|
|
no par
|
|
|
3,000,000
|
|
|
no par
|
|
||
TE
|
|
3,000,000
|
|
|
$
|
100
|
|
|
5,000,000
|
|
|
$
|
25
|
|
TE
|
|
12,000,000
|
|
|
$
|
25
|
|
|
|
|
|
|||
JCP&L
|
|
15,600,000
|
|
|
no par
|
|
|
|
|
|
||||
ME
|
|
10,000,000
|
|
|
no par
|
|
|
|
|
|
||||
PN
|
|
11,435,000
|
|
|
no par
|
|
|
|
|
|
||||
MP
|
|
940,000
|
|
|
$
|
100
|
|
|
|
|
|
|||
PE
|
|
10,000,000
|
|
|
$
|
0.01
|
|
|
|
|
|
|||
WP
|
|
32,000,000
|
|
|
no par
|
|
|
|
|
|
|
|
As of December 31, 2017
|
|
As of December 31
|
||||||||
(Dollar amounts in millions)
|
|
Maturity Date
|
|
Interest Rate
|
|
2017
|
|
2016
|
||||
FirstEnergy:
|
|
|
|
|
|
|
|
|
||||
FMBs and secured notes - fixed rate
|
|
2018 - 2056
|
|
1.726% - 9.740%
|
|
$
|
5,446
|
|
|
$
|
5,623
|
|
Secured notes - variable rate
|
|
2019
|
|
4.500%
|
|
9
|
|
|
10
|
|
||
Total FMBs and secured notes
|
|
|
|
|
|
5,455
|
|
|
5,633
|
|
||
Unsecured notes - fixed rate
|
|
2018 - 2047
|
|
2.550% - 7.700%
|
|
15,370
|
|
|
13,058
|
|
||
Unsecured notes - variable rate
|
|
2020 - 2021
|
|
3.227%
|
|
1,450
|
|
|
1,200
|
|
||
Total unsecured notes
|
|
|
|
|
|
16,820
|
|
|
14,258
|
|
||
Capital lease obligations
|
|
|
|
|
|
91
|
|
|
104
|
|
||
Unamortized debt discounts
|
|
|
|
|
|
(42
|
)
|
|
(25
|
)
|
||
Unamortized debt issuance costs
|
|
|
|
|
|
(113
|
)
|
|
(87
|
)
|
||
Unamortized fair value adjustments
|
|
|
|
|
|
(14
|
)
|
|
(6
|
)
|
||
Currently payable long-term debt
|
|
|
|
|
|
(1,082
|
)
|
|
(1,685
|
)
|
||
Total long-term debt and other long-term obligations
|
|
|
|
|
|
$
|
21,115
|
|
|
$
|
18,192
|
|
|
|
|
|
|
|
|
|
|
||||
FES:
|
|
|
|
|
|
|
|
|
||||
Secured notes - fixed rate
|
|
2018 - 2047
|
|
4.250% - 5.625%
|
|
$
|
612
|
|
|
$
|
617
|
|
Secured notes - variable rate
|
|
2019
|
|
4.500%
|
|
9
|
|
|
10
|
|
||
Total secured notes
|
|
|
|
|
|
621
|
|
|
627
|
|
||
Unsecured notes - fixed rate
|
|
2019 - 2041
|
|
2.550% - 6.800%
|
|
2,215
|
|
|
2,373
|
|
||
Capital lease obligations
|
|
|
|
|
|
2
|
|
|
8
|
|
||
Unamortized debt discounts
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
||
Unamortized debt issuance costs
|
|
|
|
|
|
(14
|
)
|
|
(15
|
)
|
||
Currently payable long-term debt
|
|
|
|
|
|
(524
|
)
|
|
(179
|
)
|
||
Total long-term debt and other long-term obligations
|
|
|
|
|
|
$
|
2,299
|
|
|
$
|
2,813
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
2018
|
|
$
|
1,051
|
|
|
$
|
515
|
|
2019
|
|
1,267
|
|
|
323
|
|
||
2020
|
|
1,281
|
|
|
667
|
|
||
2021
|
|
2,032
|
|
|
674
|
|
||
2022
|
|
1,428
|
|
|
284
|
|
Year
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
2018
|
|
$
|
375
|
|
|
$
|
375
|
|
2019
|
|
232
|
|
|
232
|
|
||
2020
|
|
490
|
|
|
490
|
|
||
2021
|
|
342
|
|
|
342
|
|
||
2022
|
|
284
|
|
|
284
|
|
Borrower(s)
|
|
Type
|
|
Maturity
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
|
|
|
|
(In millions)
|
||||||
FirstEnergy
(1)
|
|
Revolving
|
|
December 2021
|
|
$
|
4,000
|
|
|
$
|
3,740
|
|
FET
(2)
|
|
Revolving
|
|
December 2021
|
|
1,000
|
|
|
1,000
|
|
||
|
|
|
|
Subtotal
|
|
$
|
5,000
|
|
|
$
|
4,740
|
|
|
|
|
|
Cash
|
|
—
|
|
|
358
|
|
||
|
|
|
|
Total
|
|
$
|
5,000
|
|
|
$
|
5,098
|
|
(1)
|
FE and the Utilities. Available liquidity includes impact of $10 million of LOCs issued under various terms.
|
(2)
|
Includes FET, ATSI, MAIT and TrAIL.
|
Type
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
(In millions)
|
||||||
Two-year secured credit facility with FE
|
|
$
|
500
|
|
|
$
|
500
|
|
Cash
|
|
—
|
|
|
1
|
|
||
|
|
$
|
500
|
|
|
$
|
501
|
|
Borrower
|
|
FirstEnergy Revolving Credit Facility Sub-Limits
|
|
FET Revolving Credit Facility Sub-Limits
|
|
Regulatory and
Other Short-Term Debt Limitations
|
|
|||||||||
|
|
(In millions)
|
|
|||||||||||||
FE
|
|
|
$
|
4,000
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
(1)
|
FET
|
|
|
—
|
|
|
|
1,000
|
|
|
|
—
|
|
(1)
|
|||
OE
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|||
CEI
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|||
TE
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
(2)
|
|||
JCP&L
|
|
|
600
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|||
ME
|
|
|
300
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|||
PN
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
(2)
|
|||
WP
|
|
|
200
|
|
|
|
—
|
|
|
|
200
|
|
(2)
|
|||
MP
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|||
PE
|
|
|
150
|
|
|
|
—
|
|
|
|
150
|
|
(2)
|
|||
ATSI
|
|
|
—
|
|
|
|
500
|
|
|
|
500
|
|
(2)
|
|||
Penn
|
|
|
50
|
|
|
|
—
|
|
|
|
100
|
|
(2)
|
|||
TrAIL
|
|
|
—
|
|
|
|
400
|
|
|
|
400
|
|
(2)
|
|||
MAIT
|
|
|
—
|
|
|
|
400
|
|
|
|
400
|
|
(2)
|
(1)
|
No limitations.
|
(2)
|
Includes amounts which may be borrowed under the regulated companies' money pool.
|
|
|
2017
|
|
2016
|
||
FirstEnergy
|
|
3.24
|
%
|
|
2.47
|
%
|
|
|
2017
|
|
2016
|
||||
|
|
(In millions)
|
||||||
FirstEnergy
|
|
$
|
2,678
|
|
|
$
|
2,514
|
|
FES
|
|
$
|
1,856
|
|
|
$
|
1,552
|
|
ARO Reconciliation
|
|
FirstEnergy
|
|
FES
|
||||
|
|
(In millions)
|
||||||
Balance, January 1, 2016
|
|
$
|
1,410
|
|
|
$
|
831
|
|
Liabilities settled
|
|
(27
|
)
|
|
(18
|
)
|
||
Accretion
|
|
95
|
|
|
56
|
|
||
Liabilities Incurred
|
|
4
|
|
|
32
|
|
||
Balance, December 31, 2016
|
|
$
|
1,482
|
|
|
$
|
901
|
|
Changes in timing of estimated cash flows
(1)
|
|
944
|
|
|
944
|
|
||
Liabilities settled
|
|
(12
|
)
|
|
(11
|
)
|
||
Accretion
|
|
101
|
|
|
62
|
|
||
Liabilities Incurred
|
|
—
|
|
|
49
|
|
||
Balance, December 31, 2017
|
|
$
|
2,515
|
|
|
$
|
1,945
|
|
Potential Collateral Obligations
|
|
FES
|
|
AE Supply
|
|
Regulated
|
|
FE Corp
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Contractual Obligations for Additional Collateral
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At Current Credit Rating
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Upon Further Downgrade
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
|||||
Surety Bonds (Collateralized Amount)
(1)
|
|
16
|
|
|
1
|
|
|
107
|
|
|
237
|
|
|
361
|
|
|||||
Total Exposure from Contractual Obligations
|
|
$
|
20
|
|
|
$
|
2
|
|
|
$
|
148
|
|
|
$
|
237
|
|
|
$
|
407
|
|
FES
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
|
|
(In millions)
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Electric sales to affiliates
|
|
$
|
366
|
|
|
$
|
459
|
|
|
$
|
666
|
|
|
Other
|
|
11
|
|
|
11
|
|
|
14
|
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|||
Purchased power from affiliates
|
|
201
|
|
|
622
|
|
|
353
|
|
|
|||
Fuel
|
|
4
|
|
|
4
|
|
|
1
|
|
|
|||
Support services
|
|
775
|
|
|
748
|
|
|
705
|
|
|
|||
Investment Income:
|
|
|
|
|
|
|
|
|
|
|
|||
Interest income from FE
|
|
13
|
|
|
2
|
|
|
2
|
|
|
|||
Interest Expense:
|
|
|
|
|
|
|
|
|
|
|
|||
Interest expense to affiliates
|
|
—
|
|
|
5
|
|
|
4
|
|
|
|||
Interest expense to FE
|
|
19
|
|
|
2
|
|
|
3
|
|
|
For the Year Ended December 31, 2017
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
STATEMENTS OF INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES
|
|
$
|
3,037
|
|
|
$
|
1,062
|
|
|
$
|
1,362
|
|
|
$
|
(2,363
|
)
|
|
$
|
3,098
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
—
|
|
|
390
|
|
|
209
|
|
|
—
|
|
|
599
|
|
|||||
Purchased power from affiliates
|
|
2,488
|
|
|
—
|
|
|
76
|
|
|
(2,363
|
)
|
|
201
|
|
|||||
Purchased power from non-affiliates
|
|
628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
628
|
|
|||||
Other operating expenses
|
|
322
|
|
|
490
|
|
|
653
|
|
|
49
|
|
|
1,514
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
(12
|
)
|
|
(30
|
)
|
|
66
|
|
|
—
|
|
|
24
|
|
|||||
Provision for depreciation
|
|
12
|
|
|
32
|
|
|
67
|
|
|
(2
|
)
|
|
109
|
|
|||||
General taxes
|
|
20
|
|
|
21
|
|
|
17
|
|
|
—
|
|
|
58
|
|
|||||
Impairment of assets and related charges
|
|
—
|
|
|
—
|
|
|
2,031
|
|
|
—
|
|
|
2,031
|
|
|||||
Total operating expenses
|
|
3,458
|
|
|
903
|
|
|
3,119
|
|
|
(2,316
|
)
|
|
5,164
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME (LOSS)
|
|
(421
|
)
|
|
159
|
|
|
(1,757
|
)
|
|
(47
|
)
|
|
(2,066
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss), including net income (loss) from equity investees
|
|
(1,864
|
)
|
|
39
|
|
|
113
|
|
|
1,806
|
|
|
94
|
|
|||||
Miscellaneous income
|
|
1
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
7
|
|
|||||
Interest expense — affiliates
|
|
(75
|
)
|
|
(11
|
)
|
|
(1
|
)
|
|
68
|
|
|
(19
|
)
|
|||||
Interest expense — other
|
|
(46
|
)
|
|
(104
|
)
|
|
(44
|
)
|
|
56
|
|
|
(138
|
)
|
|||||
Capitalized interest
|
|
—
|
|
|
2
|
|
|
24
|
|
|
—
|
|
|
26
|
|
|||||
Total other income (expense)
|
|
(1,984
|
)
|
|
(73
|
)
|
|
97
|
|
|
1,930
|
|
|
(30
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)
|
|
(2,405
|
)
|
|
86
|
|
|
(1,660
|
)
|
|
1,883
|
|
|
(2,096
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME TAXES (BENEFITS)
|
|
(14
|
)
|
|
360
|
|
|
(78
|
)
|
|
27
|
|
|
295
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
|
$
|
(2,391
|
)
|
|
$
|
(274
|
)
|
|
$
|
(1,582
|
)
|
|
$
|
1,856
|
|
|
$
|
(2,391
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
|
$
|
(2,391
|
)
|
|
$
|
(274
|
)
|
|
$
|
(1,582
|
)
|
|
$
|
1,856
|
|
|
$
|
(2,391
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pension and OPEB prior service costs
|
|
(14
|
)
|
|
(13
|
)
|
|
—
|
|
|
13
|
|
|
(14
|
)
|
|||||
Amortized gain on derivative hedges
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Change in unrealized gain on available-for-sale securities
|
|
30
|
|
|
—
|
|
|
30
|
|
|
(30
|
)
|
|
30
|
|
|||||
Other comprehensive income (loss)
|
|
18
|
|
|
(13
|
)
|
|
30
|
|
|
(17
|
)
|
|
18
|
|
|||||
Income taxes (benefits) on other comprehensive income (loss)
|
|
6
|
|
|
(5
|
)
|
|
10
|
|
|
(5
|
)
|
|
6
|
|
|||||
Other comprehensive income (loss), net of tax
|
|
12
|
|
|
(8
|
)
|
|
20
|
|
|
(12
|
)
|
|
12
|
|
|||||
COMPREHENSIVE INCOME (LOSS)
|
|
$
|
(2,379
|
)
|
|
$
|
(282
|
)
|
|
$
|
(1,562
|
)
|
|
$
|
1,844
|
|
|
$
|
(2,379
|
)
|
For the Year Ended December 31, 2016
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
STATEMENTS OF INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES
|
|
$
|
4,242
|
|
|
$
|
1,739
|
|
|
$
|
2,004
|
|
|
$
|
(3,587
|
)
|
|
$
|
4,398
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
—
|
|
|
582
|
|
|
198
|
|
|
—
|
|
|
780
|
|
|||||
Purchased power from affiliates
|
|
4,024
|
|
|
—
|
|
|
187
|
|
|
(3,587
|
)
|
|
624
|
|
|||||
Purchased power from non-affiliates
|
|
1,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,020
|
|
|||||
Other operating expenses
|
|
310
|
|
|
286
|
|
|
632
|
|
|
49
|
|
|
1,277
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
(1
|
)
|
|
(4
|
)
|
|
53
|
|
|
—
|
|
|
48
|
|
|||||
Provision for depreciation
|
|
13
|
|
|
120
|
|
|
206
|
|
|
(3
|
)
|
|
336
|
|
|||||
General taxes
|
|
31
|
|
|
30
|
|
|
27
|
|
|
—
|
|
|
88
|
|
|||||
Impairment of assets and related charges
|
|
39
|
|
|
3,937
|
|
|
4,729
|
|
|
(83
|
)
|
|
8,622
|
|
|||||
Total operating expenses
|
|
5,436
|
|
|
4,951
|
|
|
6,032
|
|
|
(3,624
|
)
|
|
12,795
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING LOSS
|
|
(1,194
|
)
|
|
(3,212
|
)
|
|
(4,028
|
)
|
|
37
|
|
|
(8,397
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss), including net income (loss) from equity investees
|
|
(4,585
|
)
|
|
30
|
|
|
84
|
|
|
4,538
|
|
|
67
|
|
|||||
Miscellaneous income
|
|
4
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Interest expense — affiliates
|
|
(50
|
)
|
|
(10
|
)
|
|
(4
|
)
|
|
57
|
|
|
(7
|
)
|
|||||
Interest expense — other
|
|
(55
|
)
|
|
(105
|
)
|
|
(44
|
)
|
|
57
|
|
|
(147
|
)
|
|||||
Capitalized interest
|
|
—
|
|
|
8
|
|
|
26
|
|
|
—
|
|
|
34
|
|
|||||
Total other income (expense)
|
|
(4,686
|
)
|
|
(74
|
)
|
|
62
|
|
|
4,652
|
|
|
(46
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LOSS BEFORE INCOME TAX BENEFITS
|
|
(5,880
|
)
|
|
(3,286
|
)
|
|
(3,966
|
)
|
|
4,689
|
|
|
(8,443
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME TAX BENEFITS
|
|
(425
|
)
|
|
(1,169
|
)
|
|
(1,429
|
)
|
|
35
|
|
|
(2,988
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET LOSS
|
|
$
|
(5,455
|
)
|
|
$
|
(2,117
|
)
|
|
$
|
(2,537
|
)
|
|
$
|
4,654
|
|
|
$
|
(5,455
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET LOSS
|
|
$
|
(5,455
|
)
|
|
$
|
(2,117
|
)
|
|
$
|
(2,537
|
)
|
|
$
|
4,654
|
|
|
$
|
(5,455
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pension and OPEB prior service costs
|
|
(14
|
)
|
|
(14
|
)
|
|
—
|
|
|
14
|
|
|
(14
|
)
|
|||||
Amortized gain on derivative hedges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Change in unrealized gain on available-for-sale securities
|
|
52
|
|
|
—
|
|
|
52
|
|
|
(52
|
)
|
|
52
|
|
|||||
Other comprehensive income (loss)
|
|
38
|
|
|
(14
|
)
|
|
52
|
|
|
(38
|
)
|
|
38
|
|
|||||
Income taxes (benefits) on other comprehensive income (loss)
|
|
15
|
|
|
(5
|
)
|
|
20
|
|
|
(15
|
)
|
|
15
|
|
|||||
Other comprehensive income (loss), net of tax
|
|
23
|
|
|
(9
|
)
|
|
32
|
|
|
(23
|
)
|
|
23
|
|
|||||
COMPREHENSIVE LOSS
|
|
$
|
(5,432
|
)
|
|
$
|
(2,126
|
)
|
|
$
|
(2,505
|
)
|
|
$
|
4,631
|
|
|
$
|
(5,432
|
)
|
For the Year Ended December 31, 2015
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUES
|
|
$
|
4,824
|
|
|
$
|
1,801
|
|
|
$
|
2,138
|
|
|
$
|
(3,758
|
)
|
|
$
|
5,005
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel
|
|
—
|
|
|
679
|
|
|
192
|
|
|
—
|
|
|
871
|
|
|||||
Purchased power from affiliates
|
|
3,826
|
|
|
—
|
|
|
285
|
|
|
(3,758
|
)
|
|
353
|
|
|||||
Purchased power from non-affiliates
|
|
1,684
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,684
|
|
|||||
Other operating expenses
|
|
378
|
|
|
273
|
|
|
608
|
|
|
49
|
|
|
1,308
|
|
|||||
Pension and OPEB mark-to-market adjustment
|
|
(8
|
)
|
|
10
|
|
|
55
|
|
|
—
|
|
|
57
|
|
|||||
Provision for depreciation
|
|
12
|
|
|
124
|
|
|
191
|
|
|
(3
|
)
|
|
324
|
|
|||||
General taxes
|
|
45
|
|
|
26
|
|
|
27
|
|
|
—
|
|
|
98
|
|
|||||
Impairment of assets and related charges
|
|
21
|
|
|
2
|
|
|
10
|
|
|
—
|
|
|
33
|
|
|||||
Total operating expenses
|
|
5,958
|
|
|
1,114
|
|
|
1,368
|
|
|
(3,712
|
)
|
|
4,728
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING INCOME (LOSS)
|
|
(1,134
|
)
|
|
687
|
|
|
770
|
|
|
(46
|
)
|
|
277
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment income (loss), including net income (loss) from equity investees
|
|
844
|
|
|
17
|
|
|
(5
|
)
|
|
(870
|
)
|
|
(14
|
)
|
|||||
Miscellaneous income
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Interest expense — affiliates
|
|
(29
|
)
|
|
(8
|
)
|
|
(4
|
)
|
|
34
|
|
|
(7
|
)
|
|||||
Interest expense — other
|
|
(52
|
)
|
|
(104
|
)
|
|
(49
|
)
|
|
58
|
|
|
(147
|
)
|
|||||
Capitalized interest
|
|
—
|
|
|
6
|
|
|
29
|
|
|
—
|
|
|
35
|
|
|||||
Total other income (expense)
|
|
764
|
|
|
(87
|
)
|
|
(29
|
)
|
|
(778
|
)
|
|
(130
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)
|
|
(370
|
)
|
|
600
|
|
|
741
|
|
|
(824
|
)
|
|
147
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME TAXES (BENEFITS)
|
|
(452
|
)
|
|
224
|
|
|
278
|
|
|
15
|
|
|
65
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
$
|
82
|
|
|
$
|
376
|
|
|
$
|
463
|
|
|
$
|
(839
|
)
|
|
$
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME
|
|
$
|
82
|
|
|
$
|
376
|
|
|
$
|
463
|
|
|
$
|
(839
|
)
|
|
$
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER COMPREHENSIVE LOSS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pension and OPEB prior service costs
|
|
(6
|
)
|
|
(5
|
)
|
|
—
|
|
|
5
|
|
|
(6
|
)
|
|||||
Amortized gain on derivative hedges
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Change in unrealized gain on available-for-sale securities
|
|
(9
|
)
|
|
—
|
|
|
(8
|
)
|
|
8
|
|
|
(9
|
)
|
|||||
Other comprehensive loss
|
|
(18
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
13
|
|
|
(18
|
)
|
|||||
Income tax benefits on other comprehensive loss
|
|
(7
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
5
|
|
|
(7
|
)
|
|||||
Other comprehensive loss, net of tax
|
|
(11
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
8
|
|
|
(11
|
)
|
|||||
COMPREHENSIVE INCOME
|
|
$
|
71
|
|
|
$
|
373
|
|
|
$
|
458
|
|
|
$
|
(831
|
)
|
|
$
|
71
|
|
For the Year Ended December 31, 2017
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES
|
|
$
|
(485
|
)
|
|
$
|
516
|
|
|
$
|
722
|
|
|
$
|
(26
|
)
|
|
$
|
727
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
New Financing-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings, net
|
|
356
|
|
|
(81
|
)
|
|
—
|
|
|
(271
|
)
|
|
4
|
|
|||||
Redemptions and Repayments-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt
|
|
—
|
|
|
(184
|
)
|
|
(5
|
)
|
|
26
|
|
|
(163
|
)
|
|||||
Other
|
|
(1
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Net cash provided from (used for) financing activities
|
|
355
|
|
|
(271
|
)
|
|
(5
|
)
|
|
(245
|
)
|
|
(166
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property additions
|
|
(2
|
)
|
|
(88
|
)
|
|
(185
|
)
|
|
—
|
|
|
(275
|
)
|
|||||
Nuclear fuel
|
|
—
|
|
|
—
|
|
|
(254
|
)
|
|
—
|
|
|
(254
|
)
|
|||||
Sales of investment securities held in trusts
|
|
—
|
|
|
—
|
|
|
940
|
|
|
—
|
|
|
940
|
|
|||||
Purchases of investment securities held in trusts
|
|
—
|
|
|
—
|
|
|
(999
|
)
|
|
—
|
|
|
(999
|
)
|
|||||
Cash Investments
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Loans to affiliated companies, net
|
|
135
|
|
|
(158
|
)
|
|
(219
|
)
|
|
271
|
|
|
29
|
|
|||||
Net cash provided from (used for) investing activities
|
|
130
|
|
|
(246
|
)
|
|
(717
|
)
|
|
271
|
|
|
(562
|
)
|
|||||
Net change in cash and cash equivalents
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
For the Year Ended December 31, 2015
|
|
FES
|
|
FG
|
|
NG
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES
|
|
$
|
(637
|
)
|
|
$
|
552
|
|
|
$
|
1,261
|
|
|
$
|
(24
|
)
|
|
$
|
1,152
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
New Financing-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt
|
|
—
|
|
|
45
|
|
|
296
|
|
|
—
|
|
|
341
|
|
|||||
Short-term borrowings, net
|
|
796
|
|
|
67
|
|
|
—
|
|
|
(863
|
)
|
|
—
|
|
|||||
Redemptions and Repayments-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Long-term debt
|
|
(17
|
)
|
|
(70
|
)
|
|
(348
|
)
|
|
24
|
|
|
(411
|
)
|
|||||
Short-term borrowings, net
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
(98
|
)
|
|
(126
|
)
|
|||||
Common stock dividend payment
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||||
Other
|
|
—
|
|
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Net cash provided from (used for) financing activities
|
|
709
|
|
|
36
|
|
|
(81
|
)
|
|
(937
|
)
|
|
(273
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property additions
|
|
(5
|
)
|
|
(223
|
)
|
|
(399
|
)
|
|
—
|
|
|
(627
|
)
|
|||||
Nuclear fuel
|
|
—
|
|
|
—
|
|
|
(190
|
)
|
|
—
|
|
|
(190
|
)
|
|||||
Proceeds from asset sales
|
|
10
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Sales of investment securities held in trusts
|
|
—
|
|
|
—
|
|
|
733
|
|
|
—
|
|
|
733
|
|
|||||
Purchases of investment securities held in trusts
|
|
—
|
|
|
—
|
|
|
(791
|
)
|
|
—
|
|
|
(791
|
)
|
|||||
Cash investments
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Loans to affiliated companies, net
|
|
(67
|
)
|
|
(372
|
)
|
|
(533
|
)
|
|
961
|
|
|
(11
|
)
|
|||||
Other
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Net cash used for investing activities
|
|
(72
|
)
|
|
(588
|
)
|
|
(1,180
|
)
|
|
961
|
|
|
(879
|
)
|
|||||
Net change in cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
For the Years Ended December 31
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Competitive Energy Services
|
|
Corporate/ Other
|
|
Reconciling Adjustments
|
|
Consolidated
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External revenues
|
|
$
|
9,734
|
|
|
$
|
1,325
|
|
|
$
|
3,143
|
|
|
$
|
—
|
|
|
$
|
(185
|
)
|
|
$
|
14,017
|
|
Internal revenues
|
|
—
|
|
|
—
|
|
|
386
|
|
|
—
|
|
|
(386
|
)
|
|
—
|
|
||||||
Total revenues
|
|
9,734
|
|
|
1,325
|
|
|
3,529
|
|
|
—
|
|
|
(571
|
)
|
|
14,017
|
|
||||||
Depreciation
|
|
724
|
|
|
224
|
|
|
118
|
|
|
72
|
|
|
—
|
|
|
1,138
|
|
||||||
Amortization of regulatory assets, net
|
|
292
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
||||||
Impairment of assets and related charges
|
|
—
|
|
|
41
|
|
|
2,365
|
|
|
—
|
|
|
—
|
|
|
2,406
|
|
||||||
Investment income
|
|
54
|
|
|
—
|
|
|
81
|
|
|
11
|
|
|
(48
|
)
|
|
98
|
|
||||||
Interest expense
|
|
535
|
|
|
156
|
|
|
179
|
|
|
308
|
|
|
—
|
|
|
1,178
|
|
||||||
Income taxes (benefits)
|
|
580
|
|
|
205
|
|
|
155
|
|
|
(45
|
)
|
|
—
|
|
|
895
|
|
||||||
Net income (loss)
|
|
916
|
|
|
336
|
|
|
(2,641
|
)
|
|
(335
|
)
|
|
—
|
|
|
(1,724
|
)
|
||||||
Total assets
|
|
27,730
|
|
|
9,525
|
|
|
4,339
|
|
|
663
|
|
|
—
|
|
|
42,257
|
|
||||||
Total goodwill
|
|
5,004
|
|
|
614
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,618
|
|
||||||
Property additions
|
|
1,191
|
|
|
1,030
|
|
|
317
|
|
|
49
|
|
|
—
|
|
|
2,587
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External revenues
|
|
$
|
9,629
|
|
|
$
|
1,144
|
|
|
$
|
4,070
|
|
|
$
|
—
|
|
|
$
|
(281
|
)
|
|
$
|
14,562
|
|
Internal revenues
|
|
—
|
|
|
—
|
|
|
479
|
|
|
—
|
|
|
(479
|
)
|
|
—
|
|
||||||
Total revenues
|
|
9,629
|
|
|
1,144
|
|
|
4,549
|
|
|
—
|
|
|
(760
|
)
|
|
14,562
|
|
||||||
Depreciation
|
|
676
|
|
|
187
|
|
|
387
|
|
|
63
|
|
|
—
|
|
|
1,313
|
|
||||||
Amortization of regulatory assets, net
|
|
290
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
297
|
|
||||||
Impairment of assets and related charges
|
|
—
|
|
|
—
|
|
|
10,665
|
|
|
—
|
|
|
—
|
|
|
10,665
|
|
||||||
Investment income
|
|
49
|
|
|
—
|
|
|
66
|
|
|
10
|
|
|
(41
|
)
|
|
84
|
|
||||||
Interest expense
|
|
586
|
|
|
158
|
|
|
194
|
|
|
219
|
|
|
—
|
|
|
1,157
|
|
||||||
Income taxes (benefits)
|
|
375
|
|
|
187
|
|
|
(3,498
|
)
|
|
(119
|
)
|
|
—
|
|
|
(3,055
|
)
|
||||||
Net income (loss)
|
|
651
|
|
|
331
|
|
|
(6,919
|
)
|
|
(240
|
)
|
|
—
|
|
|
(6,177
|
)
|
||||||
Total assets
|
|
27,702
|
|
|
8,755
|
|
|
5,952
|
|
|
739
|
|
|
—
|
|
|
43,148
|
|
||||||
Total goodwill
|
|
5,004
|
|
|
614
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,618
|
|
||||||
Property additions
|
|
1,063
|
|
|
1,101
|
|
|
619
|
|
|
52
|
|
|
—
|
|
|
2,835
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External revenues
|
|
$
|
9,582
|
|
|
$
|
1,046
|
|
|
$
|
4,698
|
|
|
$
|
—
|
|
|
$
|
(300
|
)
|
|
$
|
15,026
|
|
Internal revenues
|
|
—
|
|
|
—
|
|
|
686
|
|
|
—
|
|
|
(686
|
)
|
|
—
|
|
||||||
Total revenues
|
|
9,582
|
|
|
1,046
|
|
|
5,384
|
|
|
—
|
|
|
(986
|
)
|
|
15,026
|
|
||||||
Depreciation
|
|
664
|
|
|
164
|
|
|
394
|
|
|
60
|
|
|
—
|
|
|
1,282
|
|
||||||
Amortization of regulatory assets, net
|
|
165
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
172
|
|
||||||
Impairment of assets and related charges
|
|
8
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||||
Investment income (loss)
|
|
42
|
|
|
—
|
|
|
(16
|
)
|
|
(9
|
)
|
|
(39
|
)
|
|
(22
|
)
|
||||||
Impairment of equity method investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|
—
|
|
|
362
|
|
||||||
Interest expense
|
|
600
|
|
|
147
|
|
|
192
|
|
|
193
|
|
|
—
|
|
|
1,132
|
|
||||||
Income taxes (benefits)
|
|
325
|
|
|
191
|
|
|
50
|
|
|
(251
|
)
|
|
—
|
|
|
315
|
|
||||||
Net income (loss)
|
|
588
|
|
|
328
|
|
|
89
|
|
|
(427
|
)
|
|
—
|
|
|
578
|
|
||||||
Total assets
|
|
27,390
|
|
|
7,800
|
|
|
16,027
|
|
|
877
|
|
|
—
|
|
|
52,094
|
|
||||||
Total goodwill
|
|
5,092
|
|
|
526
|
|
|
800
|
|
|
—
|
|
|
—
|
|
|
6,418
|
|
||||||
Property additions
|
|
1,040
|
|
|
1,020
|
|
|
588
|
|
|
56
|
|
|
—
|
|
|
2,704
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(1)
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)
|
|
||||
Equity compensation plans approved by security holders
|
|
6,104,181
|
|
(2)
|
$
|
37.75
|
|
(3)
|
6,425,034
|
|
(4)
|
Equity compensation plans not approved by security holders
(5)
|
|
—
|
|
|
N/A
|
|
|
—
|
|
|
|
Total
|
|
6,104,181
|
|
|
$
|
37.75
|
|
|
6,425,034
|
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
|
Audit Fees
(1)
|
|
Audit-Related Fees
(2)
|
||||||||||||
Company
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(In thousands)
|
||||||||||||||
FES
|
|
$
|
1,609
|
|
|
$
|
1,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
FE and other subsidiaries
|
|
6,851
|
|
|
5,620
|
|
|
502
|
|
|
335
|
|
||||
Total FirstEnergy
|
|
$
|
8,460
|
|
|
$
|
7,370
|
|
|
$
|
502
|
|
|
$
|
335
|
|
(1)
|
Professional services rendered for the audits of the registrants' annual financial statements and reviews of unaudited financial statements included in the registrants' Quarterly Reports on Form 10-Q and for services in connection with statutory and regulatory filings or engagements, including comfort letters, agreed upon procedures and consents for financings and filings made with the SEC.
|
(2)
|
Professional services rendered in
2017
and
2016
related to SEC Regulation AB. Also, in 2017, professional services rendered related to restructuring and in 2016, professional services rendered related to additional agreed upon procedures for the audit of PE's cost allocation manual and the attestation of Penn's Net Earnings Certificate.
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
||
Exhibit
Number |
|
|
|
|
|
|
|
|
(B) 10-7
|
|
|
|
|
|
(B) 10-8
|
|
|
|
|
|
(B) 10-9
|
|
|
|
|
|
(B) 10-10
|
|
|
|
|
|
(B) 10-11
|
|
|
|
|
|
(B) 10-12
|
|
|
|
|
|
10-13
|
|
|
|
|
|
(B) 10-14
|
|
|
|
|
|
(B) 10-15
|
|
|
|
|
|
(B) 10-16
|
|
|
|
|
|
(B) 10-17
|
|
|
|
|
|
(B) 10-18
|
|
|
|
|
|
(B) 10-19
|
|
|
|
|
|
(B) 10-20
|
|
|
|
|
|
(B) 10-21
|
|
|
|
|
|
(B) 10-22
|
|
|
|
|
|
(B) 10-23
|
|
|
|
|
|
10-24
|
|
|
|
|
|
(B) 10-25
|
|
|
|
|
|
(B) 10-26
|
|
|
|
|
|
(B) 10-27
|
|
|
|
|
|
|
||
Exhibit
Number |
|
|
|
|
|
(B) 10-28
|
|
|
|
|
|
(B) 10-29
|
|
|
|
|
|
(B) 10-30
|
|
|
|
|
|
(B) 10-31
|
|
|
|
|
|
(B) 10-32
|
|
|
|
|
|
(B) 10-33
|
|
|
|
|
|
(B) 10-34
|
|
|
|
|
|
(B) 10-35
|
|
|
|
|
|
(B) 10-36
|
|
|
|
|
|
(B) 10-37
|
|
|
|
|
|
(B) 10-38
|
|
|
|
|
|
(B) 10-39
|
|
|
|
|
|
(B) 10-40
|
|
|
|
|
|
(B) 10-41
|
|
|
|
|
|
(B) 10-42
|
|
|
|
|
|
(B) 10-43
|
|
|
|
|
|
(B) 10-44
|
|
|
|
|
|
10-45
|
|
|
|
|
|
(B) 10-46
|
|
|
|
|
|
10-47
|
|
|
|
|
|
|
||
Exhibit
Number |
|
|
|
|
|
10-48
|
|
|
|
|
|
10-49
|
|
|
|
|
|
10-50
|
|
|
|
|
|
10-51
|
|
|
|
|
|
(B) 10-52
|
|
|
|
|
|
(B) 10-53
|
|
|
|
|
|
10-54
|
|
|
|
|
|
10-55
|
|
|
|
|
|
(A) (B) 10-56
|
|
|
|
|
|
(A) (B) 10-57
|
|
|
|
|
|
(A) (B) 10-58
|
|
|
|
|
|
(A) 12
|
|
|
|
|
|
(A) 21
|
|
|
|
|
|
(A) 23
|
|
|
|
|
|
(A) 31-1
|
|
|
|
|
|
(A) 31-2
|
|
|
|
|
|
(A) 32
|
|
|
|
|
|
101
|
|
The following materials from the Annual Report on Form 10-K for FirstEnergy Corp. for the period ended December 31, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income (Loss) and Consolidated Statements of Comprehensive Income (Loss), (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Common Stockholders' Equity, (iv) Consolidated Statements of Cash Flows, (v) related notes to these financial statements and (vi) document and entity information.
|
|
|
|
(A)
|
|
Provided herein in electronic format as an exhibit.
|
(B)
|
|
Management contract or compensatory plan contract or arrangement filed pursuant to Item 601 of Regulation S-K.
|
3. Exhibits — FES
|
|||
Exhibit
Number |
|
||
|
|
|
|
3-1
|
|
|
|
|
|
|
|
3-2
|
|
|
|
|
|
|
|
4-1
|
|
|
|
|
|
|
|
4-1
|
|
(a)
|
|
|
|
|
|
4-1
|
|
(b)
|
|
|
|
|
|
4-1
|
|
(c)
|
|
|
|
|
|
4-1
|
|
(d)
|
|
|
|
|
|
4-1
|
|
(e)
|
|
|
|
|
|
4-1
|
|
(f)
|
|
|
|
|
|
4-1
|
|
(g)
|
|
|
|
|
|
4-2
|
|
|
|
|
|
|
|
4-2
|
|
(a)
|
|
|
|
|
|
4-2
|
|
(b)
|
|
|
|
|
|
4-2
|
|
(c)
|
|
|
|
|
|
4-2
|
|
(d)
|
|
|
|
|
|
4-3
|
|
|
|
|
|
|
|
4-3
|
|
(a)
|
|
|
|
|
|
|||
Exhibit
Number |
|
||
|
|
|
|
4-4
|
|
|
|
|
|
|
|
4-4
|
|
(a)
|
|
|
|
|
|
4-4
|
|
(b)
|
|
|
|
|
|
4-5
|
|
|
|
|
|
|
|
4-5
|
|
(a)
|
|
|
|
|
|
4-5
|
|
(b)
|
|
|
|
|
|
4-5
|
|
(c)
|
|
|
|
|
|
4-5
|
|
(d)
|
|
|
|
|
|
4-6
|
|
|
|
|
|
|
|
4-6
|
|
(a)
|
|
|
|
|
|
4-7
|
|
|
|
|
|
|
|
4-7
|
|
(a)
|
|
|
|
|
|
10-1
|
|
|
|
|
|
|
|
10-2
|
|
|
|
|
|
|
|
10-3
|
|
|
|
|
|
|
|
10-4
|
|
|
|
|
|
|
|
10-5
|
|
|
|
|
|
|
|
10-6
|
|
|
|
|
|
|
|
|
|||
Exhibit
Number |
|
||
|
|
|
|
10-7
|
|
|
|
|
|
|
|
10-8
|
|
|
|
|
|
|
|
10-9
|
|
|
|
|
|
|
|
10-10
|
|
|
|
|
|
|
|
10-11
|
|
|
|
|
|
|
|
10-12
|
|
|
|
|
|
|
|
10-13
|
|
|
|
|
|
|
|
10-14
|
|
|
|
|
|
|
|
10-15
|
|
|
|
|
|
|
|
10-16
|
|
|
|
|
|
|
|
10-17
|
|
|
|
|
|
|
|
(B) 10-18
|
|
|
|
|
|
|
|
(B) 10-19
|
|
|
|
|
|
|
|
(C) 10-20
|
|
|
|
|
|
|
|
(C) 10-21
|
|
|
|
|
|
|
|
(D) 10-22
|
|
|
|
|
|
|
|
(D) 10-23
|
|
|
|
|||
Exhibit
Number |
|
||
|
|
|
|
|
|
|
|
(B) 10-24
|
|
|
|
|
|
|
|
(B) 10-25
|
|
|
|
|
|
|
|
10-26
|
|
|
|
|
|
|
|
10-27
|
|
|
|
|
|
|
|
10-28
|
|
|
|
|
|
|
|
10-29
|
|
|
|
|
|
|
|
10-30
|
|
|
|
|
|
|
|
10-31
|
|
|
|
|
|
|
|
10-32
|
|
|
|
|
|
|
|
(A) 31-1
|
|
|
|
|
|
|
|
(A) 31-2
|
|
|
|
|
|
|
|
(A) 32
|
|
|
|
|
|
|
|
101
|
|
|
The following materials from the Annual Report on Form 10-K for FirstEnergy Solutions Corp. for the period ended December 31, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Income (Loss) and Consolidated Statements of Comprehensive Income (Loss), (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Common Stockholder's Equity (Deficit), (iv) Consolidated Statements of Cash Flows, (v) related notes to these financial statements and (vi) document and entity information.
|
|
|
|
|
(A)
|
|
|
Provided herein in electronic format as an exhibit.
|
|
|
|
|
(B)
|
|
|
Four substantially similar agreements, each dated as of the same date, were executed and delivered by the registrant and its affiliates with respect to four other series of pollution control revenue refunding bonds issued by the Ohio Water Development Authority, the Ohio Air Quality Authority and Beaver County Industrial Development Authority, Pennsylvania, relating to pollution control notes of FirstEnergy Nuclear Generation, LLC (f/k/a FirstEnergy Nuclear Generation Corp.).
|
|
|
|
|
|
|||
Exhibit
Number |
|
||
|
|
|
|
(C)
|
|
|
Three substantially similar agreements, each dated as of the same date, were executed and delivered by the registrant and its affiliates with respect to three other series of pollution control revenue refunding bonds issued by the Ohio Water Development Authority and the Beaver County Industrial Development Authority relating to pollution control notes of FirstEnergy Generation, LLC (f/k/a FirstEnergy Generation Corp.) and FirstEnergy Nuclear Generation, LLC (f/k/a FirstEnergy Nuclear Generation Corp.).
|
|
|
|
|
(D)
|
|
|
Seven substantially similar agreements, each dated as of the same date, were executed and delivered by the registrant and its affiliates with respect to one other series of pollution control revenue refunding bonds issued by the Ohio Water Development Authority, three other series of pollution control bonds issued by the Ohio Air Quality Development Authority and the three other series of pollution control bonds issued by the Beaver County Industrial Development Authority, relating to pollution control notes of FirstEnergy Generation, LLC (f/k/a FirstEnergy Generation Corp.) and FirstEnergy Nuclear Generation, LLC (f/k/a FirstEnergy Nuclear Generation Corp.).
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
|
Beginning Balance
|
|
Charged to Income
|
|
Charged to Other Accounts
|
(1)
|
Deductions
|
(2)
|
Ending Balance
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accumulated provision for uncollectible accounts — customers
|
|
$
|
53,307
|
|
|
$
|
75,859
|
|
|
$
|
49,728
|
|
|
$
|
127,607
|
|
|
$
|
51,287
|
|
— other
|
|
$
|
884
|
|
|
$
|
6,495
|
|
|
$
|
—
|
|
|
$
|
6,357
|
|
|
$
|
1,022
|
|
Valuation allowance on state and local DTAs
|
|
$
|
437,779
|
|
|
$
|
142,623
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
580,402
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accumulated provision for uncollectible accounts — customers
|
|
$
|
68,775
|
|
|
$
|
81,719
|
|
|
$
|
15,222
|
|
|
$
|
112,409
|
|
|
$
|
53,307
|
|
— other
|
|
$
|
5,231
|
|
|
$
|
13,597
|
|
|
$
|
11,329
|
|
|
$
|
29,273
|
|
|
$
|
884
|
|
Valuation allowance on state and local DTAs
|
|
$
|
192,397
|
|
|
$
|
245,382
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
437,779
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accumulated provision for uncollectible accounts — customers
|
|
$
|
59,266
|
|
|
$
|
114,249
|
|
|
$
|
54,199
|
|
|
$
|
158,939
|
|
|
$
|
68,775
|
|
— other
|
|
$
|
5,197
|
|
|
$
|
899
|
|
|
$
|
4,189
|
|
|
$
|
5,054
|
|
|
$
|
5,231
|
|
Valuation allowance on state and local DTAs
|
|
$
|
174,004
|
|
|
$
|
18,393
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
192,397
|
|
(1)
|
Represents recoveries and reinstatements of accounts previously written off for uncollectible accounts.
|
(2)
|
Represents the write-off of accounts considered to be uncollectible.
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
|
Beginning Balance
|
|
Charged to Income
|
|
Charged to Other Accounts
|
(1)
|
Deductions
|
(2)
|
Ending Balance
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accumulated provision for uncollectible accounts — customers
|
|
$
|
4,898
|
|
|
$
|
2,373
|
|
|
$
|
—
|
|
|
$
|
4,921
|
|
|
$
|
2,350
|
|
— other
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
32
|
|
Valuation allowance on state and local DTAs
|
|
$
|
197,490
|
|
|
$
|
70,777
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
268,267
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accumulated provision for uncollectible accounts — customers
|
|
$
|
8,466
|
|
|
$
|
4,766
|
|
|
$
|
—
|
|
|
$
|
8,334
|
|
|
$
|
4,898
|
|
— other
|
|
$
|
2,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,500
|
|
|
$
|
—
|
|
Valuation allowance on state and local DTAs
|
|
$
|
45,808
|
|
|
$
|
151,682
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
197,490
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accumulated provision for uncollectible accounts — customers
|
|
$
|
17,862
|
|
|
$
|
7,411
|
|
|
$
|
—
|
|
|
$
|
16,807
|
|
|
$
|
8,466
|
|
— other
|
|
$
|
2,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,500
|
|
Valuation allowance on state and local DTAs
|
|
$
|
32,126
|
|
|
$
|
13,682
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,808
|
|
(1)
|
Represents recoveries and reinstatements of accounts previously written off.
|
(2)
|
Represents the write-off of accounts considered to be uncollectible.
|
|
FIRSTENERGY CORP.
|
|
|
|
BY:
|
/s/ Charles E. Jones
|
|
|
|
Charles E. Jones
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
/s/ Charles E. Jones
|
|
|
|
Charles E. Jones
|
|
|
|
President and Chief Executive Officer and Director
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ George M. Smart
|
|
|
|
George M. Smart
|
|
|
|
Director
|
|
|
|
(Non-Executive Chairman of Board)
|
|
|
|
|
|
|
|
/s/ James F. Pearson
|
|
/s/ K. Jon Taylor
|
|
James F. Pearson
|
|
K. Jon Taylor
|
|
Executive Vice President and Chief Financial Officer
|
|
Vice President, Controller and Chief Accounting Officer
|
|
(Principal Financial Officer)
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ Paul T. Addison
|
|
/s/ Thomas N. Mitchell
|
|
Paul T. Addison
|
|
Thomas N. Mitchell
|
|
Director
|
|
Director
|
|
|
|
|
|
/s/ Michael J. Anderson
|
|
/s/ James F. O'Neil III
|
|
Michael J. Anderson
|
|
James F. O'Neil III
|
|
Director
|
|
Director
|
|
|
|
|
|
/s/ William T. Cottle
|
|
/s/ Christopher D. Pappas
|
|
William T. Cottle
|
|
Christopher D. Pappas
|
|
Director
|
|
Director
|
|
|
|
|
|
/s/ Steven J. Demetriou
|
|
/s/ Sandra Pianalto
|
|
Steven J. Demetriou
|
|
Sandra Pianalto
|
|
Director
|
|
Director
|
|
|
|
|
|
/s/ Julia L. Johnson
|
|
/s/ Luis A. Reyes
|
|
Julia L. Johnson
|
|
Luis A. Reyes
|
|
Director
|
|
Director
|
|
|
|
|
|
/s/ Donald T. Misheff
|
|
/s/ Jerry Sue Thornton
|
|
Donald T. Misheff
|
|
Jerry Sue Thornton
|
|
Director
|
|
Director
|
|
|
|
|
|
|
FIRSTENERGY SOLUTIONS CORP.
|
|
|
|
BY:
|
/s/ Donald R. Schneider
|
|
|
|
Donald R. Schneider
|
|
|
|
President
|
|
/s/ Donald R. Schneider
|
|
/s/ Jason J. Lisowski
|
|
Donald R. Schneider
|
|
Jason J. Lisowski
|
|
President and Director
|
|
Controller and Treasurer
|
|
(Chairman of the Board)
|
|
(Principal Financial Officer)
|
|
(Principal Executive Officer)
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Samuel L. Belcher
|
|
/s/ James C. Boland
|
|
Samuel L. Belcher
|
|
James C. Boland
|
|
Director
|
|
Director
|
|
|
|
|
|
/s/ John C. Blickle
|
|
/s/ Donald A. Moul
|
|
John C. Blickle
|
|
Donald A. Moul
|
|
Director
|
|
Director
|
|
(a)
|
Vesting
. Except as otherwise provided in Sections 6 and 7 below, if and to the extent the performance goals set forth on
Exhibit A
attached to this Agreement (the “Performance Goals”) are achieved during the performance period set forth on
Exhibit A
(the “Performance Period”), the RSUs will vest on March 1, 2021 (the “Vesting Date”), as long as the Grantee remains continuously employed by the Company or a Subsidiary until such Vesting Date. The number of RSUs that shall vest will range from 0% to 200% of the Target Number, as determined by the extent to which the Performance Goals are achieved. The Grantee will have no rights to any payment with respect to the RSUs until the RSUs have vested (each RSU that vests pursuant to this Section 4 or Sections 6 and 7 below, a “Vested RSU”). Prior to settlement, each RSU (whether or not a Vested RSU) represents an unfunded and unsecured obligation of the Company.
|
(b)
|
Settlement
. Except as otherwise provided in Sections 6, 7 and 10 below, the Company shall settle each Vested RSU by making a cash payment equal to the Fair Market Value of one Share per Vested RSU to the Grantee as soon as administratively practicable (and no later than 60 days) after the RSU’s Vesting Date. With respect to any Vested RSU, the Fair Market Value of one Share shall be determined as of the RSU’s Vesting Date, except as provided in Section 6. Notwithstanding the foregoing or any provision in Sections 6 or 7 to the contrary, if the Grantee elects to defer the settlement of the RSUs pursuant to the Company’s Executive Deferred Compensation Plan (or any other non-qualified deferred compensation plan providing for the ability to defer settlement of the RSUs), then the time, form and medium of payment with respect to any deferred RSUs shall be made pursuant to the terms and conditions of the Executive Deferred Compensation Plan (or similar non-qualified deferred compensation plan).
|
(a)
|
Death
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee dies, a prorated number of RSUs shall become Vested RSUs. For purposes of this Section 6(a), the number of RSUs that shall become Vested RSUs due to the Grantee’s death shall be equal to (i) the Target Number of RSUs
multiplied by
(ii) a fraction, where the numerator is the number of full calendar months the Grantee remained employed after the Grant Date and the denominator is 36. The Company shall settle any RSUs that become Vested RSUs under this Section 6(a) by paying the Grantee’s estate a cash amount equal to the Fair Market Value of one Share for each Vested RSU as soon as administratively practicable after the date of the Grantee’s death, but in any event, by March 15th of the year following the year in which the Grantee’s death occurred. For purposes of this Section 6(a), the Fair Market Value shall be determined as of the date of the Grantee’s death.
|
(b)
|
Disability
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Disability, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(b) by paying the Grantee a cash amount equal to the Fair Market Value of one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends. For purposes of this Section 6(b), the Fair Market Value shall be determined as of the last day of the Performance Period.
|
(c)
|
Termination without Cause
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated by the Company or a Subsidiary without Cause, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(c) by paying the Grantee a cash amount equal to the Fair Market Value of one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends. For purposes of this Section 6(c), the Fair Market Value shall be determined as of the last day of the Performance Period.
|
(d)
|
Retirement
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Retirement, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(d) by paying the Grantee a cash amount equal to the Fair Market Value of one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends. For purposes of this Section 6(d), the Fair Market Value shall be determined as of the last day of the Performance Period.
|
(e)
|
Change in Position
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee is transferred to a position with the Company or a Subsidiary that is not an executive position eligible for such an award, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(e) by paying the Grantee a cash amount equal to the Fair Market Value of one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends. For purposes of this Section 6(e), the Fair Market Value shall be determined as of the last day of the Performance Period.
|
(f)
|
Prorated Vesting
. The Prorated Number of RSUs described in Section 6(b), (c), (d) or (e) above (the “Prorated Number”) shall be determined as follows:
|
(g)
|
Release Requirement
. Notwithstanding any provision herein to the contrary, except as otherwise determined by the Company, in order for the Grantee to receive payment pursuant to the settlement of Vested RSUs under Section 6(a), (b), (c), (d) or (e) above, the Grantee (or the representative of his or her estate) must execute and deliver to the Company a general release and waiver of claims against the Company, its Subsidiaries and their directors, officers, employees, shareholders and other affiliates in a form that
|
14.
|
Miscellaneous Provisions
.
|
(i)
|
in any case permitted by the terms of the Plan or this Agreement;
|
(ii)
|
except with respect to an adjustment made pursuant to the last paragraph of this Section 14(h), with the written consent of the Grantee; or
|
(iii)
|
without the consent of the Grantee if the amendment is either not materially adverse to the interests of the Grantee or is necessary or appropriate in the view of the Committee to conform with, or to take into account, applicable law, including either exemption from or compliance with any applicable tax law.
|
(a)
|
Vesting
. Except as otherwise provided in Sections 6 and 7 below, if and to the extent the performance goals set forth on
Exhibit A
attached to this Agreement (the “Performance Goals”) are achieved during the performance period set forth on
Exhibit A
(the “Performance Period”), the RSUs will vest on March 1, 2021 (the “Vesting Date”), as long as the Grantee remains continuously employed by the Company or a Subsidiary until such Vesting Date. The number of RSUs that shall vest will range from 0% to 200% of the Target Number, as determined by the extent to which the Performance Goals are achieved. The Grantee will have no rights to the Shares underlying the RSUs until the RSUs have vested (each RSU that vests pursuant to this Section 4 or Sections 6 and 7 below, a “Vested RSU”). Prior to settlement, each RSU (whether or not a Vested RSU) represents an unfunded and unsecured obligation of the Company.
|
(b)
|
Settlement
. Except as otherwise provided in Sections 6, 7 and 11 below, the Company shall settle each Vested RSU by delivering one Share per Vested RSU to the Grantee as soon as administratively practicable (and no later than 60 days) after the RSU’s Vesting Date. Notwithstanding the foregoing or any provision in Sections 6 or 7 to the contrary, if the Grantee elects to defer the settlement of the RSUs pursuant to the Company’s Executive Deferred Compensation Plan (or any other non-qualified deferred compensation plan providing for the ability to defer settlement of the RSUs), then the time, form and medium of payment with respect to any deferred RSUs shall be made pursuant to the terms and conditions of the Executive Deferred Compensation Plan (or similar non-qualified deferred compensation plan). Fractional RSUs, if any, will be settled in cash.
|
(a)
|
Death
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee dies, a prorated number of RSUs shall become Vested RSUs. For purposes of this Section 6(a), the number of RSUs that shall become Vested RSUs due to the Grantee’s death shall be equal to (i) the Target Number of RSUs
multiplied by
(ii) a fraction, where the numerator is the number of full calendar months the Grantee remained employed after the Grant Date and the denominator is 36. The Company shall settle any RSUs that become Vested RSUs under this Section 6(a) by delivering to the Grantee’s estate one Share for each Vested RSU as soon as administratively practicable after the date of the Grantee’s death, but in any event, by March 15th of the year following the year in which the Grantee’s death occurred.
|
(b)
|
Disability
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Disability, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(b) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends.
|
(c)
|
Termination without Cause
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated by the Company or a Subsidiary without Cause, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(c) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends.
|
(d)
|
Retirement
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Retirement, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(d) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends.
|
(e)
|
Change in Position
. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee is transferred to a position with the Company or a Subsidiary that is not an executive position eligible for such an award, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(e) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the last day of the Performance Period, but in any event, by March 15th of the year following the year in which the Performance Period ends.
|
(f)
|
Prorated Vesting
. The Prorated Number of RSUs described in Section 6(b), (c), (d) or (e) above (the “Prorated Number”) shall be determined as follows:
|
(g)
|
Release Requirement
. Notwithstanding any provision herein to the contrary, except as otherwise determined by the Company, in order for the Grantee to receive Shares pursuant to the settlement of Vested RSUs under Section 6(a), (b), (c), (d) or (e) above, the Grantee (or the representative of his or her estate) must execute and deliver to the Company a general release and waiver of claims against the Company, its Subsidiaries and their directors, officers, employees, shareholders and other affiliates in a form that is satisfactory to the Company (the “Release”). The Release must become effective and irrevocable under applicable law no later than 60 days following the date of the Grantee’s death, termination of employment or transfer of position, as applicable.
|
15.
|
Miscellaneous Provisions
.
|
(i)
|
in any case permitted by the terms of the Plan or this Agreement;
|
(ii)
|
except with respect to an adjustment made pursuant to the last paragraph of this Section 15(h), with the written consent of the Grantee; or
|
(iii)
|
without the consent of the Grantee if the amendment is either not materially adverse to the interests of the Grantee or is necessary or appropriate in the view of the Committee to conform with, or to take into account, applicable law, including either exemption from or compliance with any applicable tax law.
|
15.
|
Miscellaneous Provisions
.
|
(i)
|
in any case permitted by the terms of the Plan or this Agreement;
|
(ii)
|
with the written consent of the Grantee; or
|
(iii)
|
without the consent of the Grantee if the amendment is either not materially adverse to the interests of the Grantee or is necessary or appropriate in the view of the Committee to conform with, or to take into account, applicable law, including either exemption from or compliance with any applicable tax law.
|
(1)
|
Includes the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined.
|
(2)
|
The ratio of earnings to fixed charges was less than one-to-one for the years ended December 31, 2017 and 2016 resulting from pre-tax impairment charges of $2,406 and $10,665 million, respectively. Additional earnings of $873 million and $9,298 million would be required to have a one-to-one ratio of earnings to fixed charges for years ended December 31, 2017 and 2016, respectively.
|
FIRSTENERGY CORP.
|
||||||
LIST OF SUBSIDIARIES OF THE REGISTRANT
|
||||||
AT DECEMBER 31, 2017
|
||||||
|
|
|
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|
|
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FirstEnergy Nuclear Operating Company - Incorporated in Ohio
|
||||||
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|
|
|
|
|
|
FirstEnergy Service Company - Incorporated in Ohio
|
||||||
|
|
|
|
|
|
|
FirstEnergy Solutions Corp. - Incorporated in Ohio
|
||||||
|
|
|
|
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|
|
FirstEnergy Transmission, LLC - Organized in Delaware
|
||||||
|
|
|
|
|
|
|
FirstEnergy Ventures Corp. - Incorporated in Ohio
|
||||||
|
|
|
|
|
|
|
Jersey Central Power & Light Company - Incorporated in New Jersey
|
||||||
|
|
|
|
|
|
|
Metropolitan Edison Company - Incorporated in Pennsylvania
|
||||||
|
|
|
|
|
|
|
Monongahela Power Company - Incorporated in Ohio
|
||||||
|
|
|
|
|
|
|
Ohio Edison Company - Incorporated in Ohio
|
||||||
|
|
|
|
|
|
|
Pennsylvania Electric Company - Incorporated in Pennsylvania
|
||||||
|
|
|
|
|
|
|
The Cleveland Electric Illuminating Company - Incorporated in Ohio
|
||||||
|
|
|
|
|
|
|
The Potomac Edison Company - Incorporated in Maryland
|
||||||
|
|
|
|
|
|
|
The Toledo Edison Company - Incorporated in Ohio
|
||||||
|
|
|
|
|
|
|
West Penn Power Company - Incorporated in Pennsylvania
|
1.
|
I have reviewed this report on Form 10-K 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/ Charles E. Jones
|
|
|
Charles E. Jones
|
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this report on Form 10-K 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/ Donald R. Schneider
|
|
|
Donald R. Schneider
|
|
|
President
|
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this report on Form 10-K 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
|
|
|
Executive Vice President and Chief Financial Officer
|
|
1.
|
I have reviewed this report on Form 10-K 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/ Jason J. Lisowski
|
|
|
Jason J. Lisowski
|
|
|
Controller and Treasurer
|
|
|
(Principal Financial Officer)
|
|
|
/s/ Charles E. Jones
|
|
|
Charles E. Jones
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
/s/ James F. Pearson
|
|
|
James F. Pearson
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
/s/ Donald R. Schneider
|
|
|
Donald R. Schneider
|
|
|
President
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Jason J. Lisowski
|
|
|
Jason J. Lisowski
|
|
|
Controller and Treasurer
|
|
|
(Principal Financial Officer)
|
|