|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange on Which Registered
|
|
Common Stock, $0.10 par value
|
|
FE
|
|
New York Stock Exchange
|
|
Yes
|
☑
|
No
|
☐
|
|
|
Yes
|
☑
|
No
|
☐
|
|
|
Yes
|
☐
|
No
|
☑
|
|
|
|
|
OUTSTANDING
|
|
|
CLASS
|
|
AS OF SEPTEMBER 30, 2019
|
|
|
Common Stock, $0.10 par value
|
|
540,311,707
|
|
|
|
|
•
|
The ability to successfully execute an exit from commodity-based generation, including, without limitation, mitigating exposure for remedial activities associated with formerly owned generation assets.
|
|
•
|
The risks associated with the FES Bankruptcy that could adversely affect us, our liquidity or results of operations, including, without limitation, that conditions to the FES Bankruptcy settlement agreement may not be met or that the FES Bankruptcy settlement agreement may not be otherwise consummated, and if so, the potential for litigation and payment demands against us by FES or FENOC or their creditors.
|
|
•
|
The ability to accomplish or realize anticipated benefits from strategic and financial goals, including, but not limited to, our strategy to operate and grow as a fully regulated business, to execute our transmission and distribution investment plans, to continue to reduce costs through FE Tomorrow and other initiatives, and to improve our credit metrics, strengthen our balance sheet and grow earnings.
|
|
•
|
Legislative and regulatory developments, including, but not limited to, matters related to rates, compliance and enforcement activity.
|
|
•
|
Economic and weather conditions affecting future operating results, such as significant weather events and other natural disasters, and associated regulatory events or actions.
|
|
•
|
Changes in assumptions regarding economic conditions within our territories, the reliability of our transmission and distribution system, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities.
|
|
•
|
Changes in customers’ demand for power, including, but not limited to, the impact of climate change or energy efficiency and peak demand reduction mandates.
|
|
•
|
Changes in national and regional economic conditions affecting us and/or our major industrial and commercial customers or others with which we do business.
|
|
•
|
The risks associated with cyber-attacks and other disruptions to our information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information.
|
|
•
|
The ability to comply with applicable reliability standards and energy efficiency and peak demand reduction mandates.
|
|
•
|
Changes to environmental laws and regulations, including, but not limited to, those related to climate change.
|
|
•
|
Changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts and other trust funds, or causing us to make contributions sooner, or in amounts that are larger, than currently anticipated.
|
|
•
|
The risks associated with the decommissioning of our retired and former nuclear facilities.
|
|
•
|
The risks and uncertainties associated with litigation, arbitration, mediation and like proceedings.
|
|
•
|
Labor disruptions by our unionized workforce.
|
|
•
|
Changes to significant accounting policies.
|
|
•
|
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, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions.
|
|
•
|
Actions that may be taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity.
|
|
•
|
The risks and other factors discussed from time to time in our SEC filings.
|
|
TABLE OF CONTENTS
|
|
|
|
Page
|
|
|
|
|
Part I. Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AE
|
Allegheny Energy, Inc., a Maryland utility holding company that merged with a subsidiary of FirstEnergy on February 25, 2011, which subsequently merged with and into FE on January 1, 2014
|
|
AE Supply
|
Allegheny Energy Supply Company, LLC, an unregulated generation subsidiary
|
|
AGC
|
Allegheny Generating Company, formerly a generation subsidiary of AE Supply that became a wholly owned subsidiary of MP in May 2018
|
|
ATSI
|
American Transmission Systems, Incorporated, formerly a direct subsidiary of FE that became a subsidiary of FET in April 2012, which owns and operates transmission facilities
|
|
BSPC
|
Bay Shore Power Company
|
|
CEI
|
The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary
|
|
CES
|
Competitive Energy Services, formerly a reportable operating segment of FirstEnergy
|
|
FE
|
FirstEnergy Corp., a public utility holding company
|
|
FENOC
|
FirstEnergy Nuclear Operating Company which operates NG’s nuclear generating facilities
|
|
FES
|
FirstEnergy Solutions Corp., together with its consolidated subsidiaries, FG, NG, FE Aircraft Leasing Corp., Norton Energy Storage LLC, and FGMUC, which provides energy-related products and services
|
|
FES Debtors
|
FES and FENOC
|
|
FESC
|
FirstEnergy Service Company, which provides legal, financial and other corporate support services
|
|
FET
|
FirstEnergy Transmission, LLC, formerly known as Allegheny Energy Transmission, LLC, which is the parent of ATSI, MAIT and TrAIL, and has a joint venture in PATH
|
|
FEV
|
FirstEnergy Ventures Corp., which invests in certain unregulated enterprises and business ventures
|
|
FG
|
FirstEnergy Generation, LLC, a wholly owned subsidiary of FES, which owns and operates non-nuclear generating facilities
|
|
FGMUC
|
FirstEnergy Generation Mansfield Unit 1 Corp., a wholly owned subsidiary of FG, which has certain leasehold interests in a portion of Unit 1 at the Bruce Mansfield plant
|
|
FirstEnergy
|
FirstEnergy Corp., together with its consolidated subsidiaries
|
|
Global Holding
|
Global Mining Holding Company, LLC, a joint venture between FEV, WMB Marketing Ventures, LLC and Pinesdale LLC
|
|
Global Rail
|
Global Rail Group, LLC, a subsidiary of Global Holding that owns coal transportation operations near Roundup, Montana
|
|
GPUN
|
GPU Nuclear, Inc., a subsidiary of FE, which operates TMI-2
|
|
JCP&L
|
Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary
|
|
MAIT
|
Mid-Atlantic Interstate Transmission, LLC, a subsidiary of FET, which owns and operates transmission facilities
|
|
ME
|
Metropolitan Edison Company, a Pennsylvania electric utility operating subsidiary
|
|
MP
|
Monongahela Power Company, a West Virginia electric utility operating subsidiary
|
|
NG
|
FirstEnergy Nuclear Generation, LLC, a wholly owned subsidiary of FES, which owns nuclear generating facilities
|
|
OE
|
Ohio Edison Company, an Ohio electric utility operating subsidiary
|
|
Ohio Companies
|
CEI, OE and TE
|
|
PATH
|
Potomac-Appalachian Transmission Highline, LLC, a joint venture between FE and a subsidiary of AEP
|
|
PATH-Allegheny
|
PATH Allegheny Transmission Company, LLC
|
|
PATH-WV
|
PATH West Virginia Transmission Company, LLC
|
|
PE
|
The Potomac Edison Company, a Maryland and West Virginia electric utility operating subsidiary
|
|
Penn
|
Pennsylvania Power Company, a Pennsylvania electric utility operating subsidiary of OE
|
|
Pennsylvania Companies
|
ME, PN, Penn and WP
|
|
PN
|
Pennsylvania Electric Company, a Pennsylvania electric utility operating subsidiary
|
|
Signal Peak
|
Signal Peak Energy, LLC, an indirect subsidiary of Global Holding that owns mining operations near Roundup, Montana
|
|
TE
|
The Toledo Edison Company, an Ohio electric utility operating subsidiary
|
|
TrAIL
|
Trans-Allegheny Interstate Line Company, a subsidiary of FET, which owns and operates transmission facilities
|
|
Transmission Companies
|
ATSI, MAIT and TrAIL
|
|
Utilities
|
OE, CEI, TE, Penn, JCP&L, ME, PN, MP, PE and WP
|
|
WP
|
West Penn Power Company, a Pennsylvania electric utility operating subsidiary
|
|
|
|
|
|
|
|
|
|
|
OMAEG
|
Ohio Manufacturers’ Association Energy Group
|
|
RTEP
|
Regional Transmission Expansion Plan
|
|
OPEB
|
Other Post-Employment Benefits
|
|
RTO
|
Regional Transmission Organization
|
|
OPIC
|
Other Paid-in Capital
|
|
S&P
|
Standard & Poor’s Ratings Service
|
|
OVEC
|
Ohio Valley Electric Corporation
|
|
SBC
|
Societal Benefits Charge
|
|
PA DEP
|
Pennsylvania Department of Environmental Protection
|
|
SCOH
|
Supreme Court of Ohio
|
|
PJM
|
PJM Interconnection, LLC
|
|
SEC
|
United States Securities and Exchange Commission
|
|
PJM Tariff
|
PJM Open Access Transmission Tariff
|
|
SIP
|
State Implementation Plan(s) Under the Clean Air Act
|
|
POLR
|
Provider of Last Resort
|
|
SO2
|
Sulfur Dioxide
|
|
POR
|
Purchase of Receivables
|
|
SOS
|
Standard Offer Service
|
|
PPA
|
Purchase Power Agreement
|
|
SPE
|
Special Purpose Entity
|
|
PPB
|
Parts per Billion
|
|
SREC
|
Solar Renewable Energy Credit
|
|
PPUC
|
Pennsylvania Public Utility Commission
|
|
SSO
|
Standard Service Offer
|
|
PUCO
|
Public Utilities Commission of Ohio
|
|
Tax Act
|
Tax Cuts and Jobs Act adopted December 22, 2017
|
|
PURPA
|
Public Utility Regulatory Policies Act of 1978
|
|
TMI-2
|
Three Mile Island Unit 2
|
|
RCRA
|
Resource Conservation and Recovery Act
|
|
Twitter®
|
Twitter is a registered trademark of Twitter, Inc.
|
|
REC
|
Renewable Energy Credit
|
|
UCC
|
Official committee of unsecured creditors appointed in connection with the FES Bankruptcy
|
|
Regulation FD
|
Regulation Fair Disclosure promulgated by the SEC
|
|
VIE
|
Variable Interest Entity
|
|
RFC
|
ReliabilityFirst Corporation
|
|
VMS
|
Vegetation Management Surcharge
|
|
RFP
|
Request for Proposal
|
|
VSCC
|
Virginia State Corporation Commission
|
|
RGGI
|
Regional Greenhouse Gas Initiative
|
|
WVPSC
|
Public Service Commission of West Virginia
|
|
ROE
|
Return on Equity
|
|
ZEC
|
Zero Emissions Certificate
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
(In millions, except per share amounts)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
REVENUES:
|
|
|
|
|
|
|
|
|
||||||||
|
Distribution services and retail generation
|
|
$
|
2,411
|
|
|
$
|
2,463
|
|
|
$
|
6,651
|
|
|
$
|
6,807
|
|
|
Transmission
|
|
371
|
|
|
341
|
|
|
1,090
|
|
|
996
|
|
||||
|
Other
|
|
181
|
|
|
260
|
|
|
621
|
|
|
748
|
|
||||
|
Total revenues(1)
|
|
2,963
|
|
|
3,064
|
|
|
8,362
|
|
|
8,551
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Fuel
|
|
122
|
|
|
137
|
|
|
382
|
|
|
404
|
|
||||
|
Purchased power
|
|
798
|
|
|
876
|
|
|
2,190
|
|
|
2,393
|
|
||||
|
Other operating expenses
|
|
758
|
|
|
739
|
|
|
2,143
|
|
|
2,363
|
|
||||
|
Provision for depreciation
|
|
304
|
|
|
283
|
|
|
910
|
|
|
843
|
|
||||
|
Amortization (deferral) of regulatory assets, net
|
|
43
|
|
|
67
|
|
|
85
|
|
|
(188
|
)
|
||||
|
General taxes
|
|
257
|
|
|
252
|
|
|
757
|
|
|
746
|
|
||||
|
Total operating expenses
|
|
2,282
|
|
|
2,354
|
|
|
6,467
|
|
|
6,561
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
OPERATING INCOME
|
|
681
|
|
|
710
|
|
|
1,895
|
|
|
1,990
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Miscellaneous income, net
|
|
57
|
|
|
49
|
|
|
191
|
|
|
164
|
|
||||
|
Interest expense
|
|
(261
|
)
|
|
(255
|
)
|
|
(773
|
)
|
|
(858
|
)
|
||||
|
Capitalized financing costs
|
|
19
|
|
|
16
|
|
|
53
|
|
|
47
|
|
||||
|
Total other expense
|
|
(185
|
)
|
|
(190
|
)
|
|
(529
|
)
|
|
(647
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
INCOME BEFORE INCOME TAXES
|
|
496
|
|
|
520
|
|
|
1,366
|
|
|
1,343
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
INCOME TAXES
|
|
107
|
|
|
121
|
|
|
281
|
|
|
455
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
INCOME FROM CONTINUING OPERATIONS
|
|
389
|
|
|
399
|
|
|
1,085
|
|
|
888
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Discontinued operations (Note 3)(2)
|
|
2
|
|
|
(857
|
)
|
|
(62
|
)
|
|
322
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
NET INCOME (LOSS)
|
|
$
|
391
|
|
|
$
|
(458
|
)
|
|
$
|
1,023
|
|
|
$
|
1,210
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
INCOME ALLOCATED TO PREFERRED STOCKHOLDERS (Note 4)
|
|
—
|
|
|
54
|
|
|
7
|
|
|
357
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
|
$
|
391
|
|
|
$
|
(512
|
)
|
|
$
|
1,016
|
|
|
$
|
853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
EARNINGS PER SHARE OF COMMON STOCK (Note 4):
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Basic - Continuing Operations
|
|
$
|
0.72
|
|
|
$
|
0.68
|
|
|
$
|
2.02
|
|
|
$
|
1.10
|
|
|
Basic - Discontinued Operations
|
|
0.01
|
|
|
(1.70
|
)
|
|
(0.12
|
)
|
|
0.66
|
|
||||
|
Basic - Net Income (Loss) Attributable to Common Stockholders
|
|
$
|
0.73
|
|
|
$
|
(1.02
|
)
|
|
$
|
1.90
|
|
|
$
|
1.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted - Continuing Operations
|
|
$
|
0.72
|
|
|
$
|
0.68
|
|
|
$
|
2.00
|
|
|
$
|
1.09
|
|
|
Diluted - Discontinued Operations
|
|
—
|
|
|
(1.70
|
)
|
|
(0.11
|
)
|
|
0.66
|
|
||||
|
Diluted - Net Income (Loss) Attributable to Common Stockholders
|
|
$
|
0.72
|
|
|
$
|
(1.02
|
)
|
|
$
|
1.89
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
||||||||
|
Basic
|
|
538
|
|
|
503
|
|
|
533
|
|
|
485
|
|
||||
|
Diluted
|
|
542
|
|
|
505
|
|
|
541
|
|
|
487
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
NET INCOME (LOSS)
|
|
$
|
391
|
|
|
$
|
(458
|
)
|
|
$
|
1,023
|
|
|
$
|
1,210
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Pension and OPEB prior service costs
|
|
(7
|
)
|
|
(18
|
)
|
|
(21
|
)
|
|
(55
|
)
|
||||
|
Amortized losses on derivative hedges
|
|
—
|
|
|
2
|
|
|
1
|
|
|
19
|
|
||||
|
Change in unrealized gains on AFS securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
||||
|
Other comprehensive loss
|
|
(7
|
)
|
|
(16
|
)
|
|
(20
|
)
|
|
(142
|
)
|
||||
|
Income tax benefits on other comprehensive loss
|
|
(3
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|
(61
|
)
|
||||
|
Other comprehensive loss, net of tax
|
|
(4
|
)
|
|
(12
|
)
|
|
(14
|
)
|
|
(81
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
COMPREHENSIVE INCOME (LOSS)
|
|
$
|
387
|
|
|
$
|
(470
|
)
|
|
$
|
1,009
|
|
|
$
|
1,129
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except share amounts)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
ASSETS
|
|
|
|
|
|
|
||
|
CURRENT ASSETS:
|
|
|
|
|
|
|
||
|
Cash and cash equivalents
|
|
$
|
716
|
|
|
$
|
367
|
|
|
Restricted cash
|
|
34
|
|
|
62
|
|
||
|
Receivables-
|
|
|
|
|
|
|||
|
Customers, net of allowance for uncollectible accounts of $46 in 2019 and $50 in 2018
|
|
1,130
|
|
|
1,221
|
|
||
|
Affiliated companies, net of allowance for uncollectible accounts of $945 in 2019 and $920 in 2018
|
|
—
|
|
|
20
|
|
||
|
Other, net of allowance for uncollectible accounts of $7 in 2019 and $2 in 2018
|
|
206
|
|
|
270
|
|
||
|
Materials and supplies, at average cost
|
|
258
|
|
|
252
|
|
||
|
Prepaid taxes and other
|
|
239
|
|
|
175
|
|
||
|
Current assets - discontinued operations
|
|
33
|
|
|
25
|
|
||
|
|
|
2,616
|
|
|
2,392
|
|
||
|
PROPERTY, PLANT AND EQUIPMENT:
|
|
|
|
|
|
|
||
|
In service
|
|
41,016
|
|
|
39,469
|
|
||
|
Less — Accumulated provision for depreciation
|
|
11,234
|
|
|
10,793
|
|
||
|
|
|
29,782
|
|
|
28,676
|
|
||
|
Construction work in progress
|
|
1,370
|
|
|
1,235
|
|
||
|
|
|
31,152
|
|
|
29,911
|
|
||
|
|
|
|
|
|
||||
|
INVESTMENTS:
|
|
|
|
|
|
|
||
|
Nuclear plant decommissioning trusts
|
|
871
|
|
|
790
|
|
||
|
Nuclear fuel disposal trust
|
|
271
|
|
|
256
|
|
||
|
Other
|
|
283
|
|
|
253
|
|
||
|
|
|
1,425
|
|
|
1,299
|
|
||
|
DEFERRED CHARGES AND OTHER ASSETS:
|
|
|
|
|
|
|
||
|
Goodwill
|
|
5,618
|
|
|
5,618
|
|
||
|
Regulatory assets
|
|
77
|
|
|
91
|
|
||
|
Other
|
|
618
|
|
|
752
|
|
||
|
|
|
6,313
|
|
|
6,461
|
|
||
|
|
|
$
|
41,506
|
|
|
$
|
40,063
|
|
|
LIABILITIES AND CAPITALIZATION
|
|
|
|
|
|
|
||
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
||
|
Currently payable long-term debt
|
|
$
|
381
|
|
|
$
|
503
|
|
|
Short-term borrowings
|
|
1,000
|
|
|
1,250
|
|
||
|
Accounts payable
|
|
893
|
|
|
965
|
|
||
|
Accounts payable - affiliated companies
|
|
46
|
|
|
—
|
|
||
|
Accrued taxes
|
|
537
|
|
|
533
|
|
||
|
Accrued compensation and benefits
|
|
268
|
|
|
318
|
|
||
|
Collateral
|
|
30
|
|
|
39
|
|
||
|
Other
|
|
1,084
|
|
|
1,026
|
|
||
|
|
|
4,239
|
|
|
4,634
|
|
||
|
CAPITALIZATION:
|
|
|
|
|
|
|
||
|
Stockholders’ equity-
|
|
|
|
|
|
|
||
|
Common stock, $0.10 par value, authorized 700,000,000 shares - 540,311,707 and 511,915,450 shares outstanding as of September 30, 2019 and December 31, 2018, respectively
|
|
54
|
|
|
51
|
|
||
|
Preferred stock, $100 par value, authorized 5,000,000 shares, of which 1,616,000 are designated Series A Convertible Preferred - none outstanding as of September 30, 2019, and 704,589 shares outstanding as of December 31, 2018
|
|
—
|
|
|
71
|
|
||
|
Other paid-in capital
|
|
11,047
|
|
|
11,530
|
|
||
|
Accumulated other comprehensive income
|
|
27
|
|
|
41
|
|
||
|
Accumulated deficit
|
|
(3,856
|
)
|
|
(4,879
|
)
|
||
|
Total stockholders’ equity
|
|
7,272
|
|
|
6,814
|
|
||
|
Long-term debt and other long-term obligations
|
|
19,422
|
|
|
17,751
|
|
||
|
|
|
26,694
|
|
|
24,565
|
|
||
|
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
||
|
Accumulated deferred income taxes
|
|
2,900
|
|
|
2,502
|
|
||
|
Retirement benefits
|
|
2,403
|
|
|
2,906
|
|
||
|
Regulatory liabilities
|
|
2,605
|
|
|
2,498
|
|
||
|
Asset retirement obligations
|
|
844
|
|
|
812
|
|
||
|
Adverse power contract liability
|
|
66
|
|
|
89
|
|
||
|
Other
|
|
1,755
|
|
|
2,057
|
|
||
|
|
|
10,573
|
|
|
10,864
|
|
||
|
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 13)
|
|
|
|
|
|
|
||
|
|
|
$
|
41,506
|
|
|
$
|
40,063
|
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
(In millions)
|
|
2019
|
|
2018
|
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
|
Net income
|
|
$
|
1,023
|
|
|
$
|
1,210
|
|
|
Adjustments to reconcile net income to net cash from operating activities-
|
|
|
|
|
||||
|
Loss (gain) on disposal, net of tax (Note 3)
|
|
16
|
|
|
(405
|
)
|
||
|
Depreciation and amortization, including regulatory assets, net, intangible assets and deferred debt-related costs
|
|
1,069
|
|
|
1,003
|
|
||
|
Deferred income taxes and investment tax credits, net
|
|
251
|
|
|
462
|
|
||
|
Retirement benefits, net of payments
|
|
(81
|
)
|
|
(113
|
)
|
||
|
Pension trust contributions
|
|
(500
|
)
|
|
(1,250
|
)
|
||
|
Changes in current assets and liabilities-
|
|
|
|
|
||||
|
Receivables
|
|
228
|
|
|
(254
|
)
|
||
|
Materials and supplies
|
|
(14
|
)
|
|
43
|
|
||
|
Prepaid taxes and other
|
|
(69
|
)
|
|
(114
|
)
|
||
|
Accounts payable
|
|
(102
|
)
|
|
125
|
|
||
|
Accrued taxes
|
|
(105
|
)
|
|
(125
|
)
|
||
|
Accrued compensation and benefits
|
|
(68
|
)
|
|
(19
|
)
|
||
|
Other current liabilities
|
|
29
|
|
|
(140
|
)
|
||
|
Collateral, net
|
|
(9
|
)
|
|
(21
|
)
|
||
|
Other
|
|
69
|
|
|
156
|
|
||
|
Net cash provided from operating activities
|
|
1,737
|
|
|
558
|
|
||
|
|
|
|
|
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
|
New financing-
|
|
|
|
|
||||
|
Long-term debt
|
|
2,100
|
|
|
624
|
|
||
|
Short-term borrowings, net
|
|
—
|
|
|
1,400
|
|
||
|
Preferred stock issuance
|
|
—
|
|
|
1,616
|
|
||
|
Common stock issuance
|
|
—
|
|
|
850
|
|
||
|
Redemptions and repayments-
|
|
|
|
|
||||
|
Long-term debt
|
|
(784
|
)
|
|
(2,278
|
)
|
||
|
Make-whole premiums paid on debt redemptions
|
|
—
|
|
|
(89
|
)
|
||
|
Preferred stock dividend payments
|
|
(6
|
)
|
|
(52
|
)
|
||
|
Common stock dividend payments
|
|
(609
|
)
|
|
(527
|
)
|
||
|
Other
|
|
(36
|
)
|
|
(21
|
)
|
||
|
Net cash provided from financing activities
|
|
665
|
|
|
1,523
|
|
||
|
|
|
|
|
|
||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
|
Property additions
|
|
(1,912
|
)
|
|
(1,942
|
)
|
||
|
Proceeds from asset sales
|
|
18
|
|
|
419
|
|
||
|
Sales of investment securities held in trusts
|
|
506
|
|
|
736
|
|
||
|
Purchases of investment securities held in trusts
|
|
(536
|
)
|
|
(780
|
)
|
||
|
Notes receivable from affiliated companies
|
|
—
|
|
|
(500
|
)
|
||
|
Asset removal costs
|
|
(158
|
)
|
|
(171
|
)
|
||
|
Other
|
|
1
|
|
|
1
|
|
||
|
Net cash used for investing activities
|
|
(2,081
|
)
|
|
(2,237
|
)
|
||
|
|
|
|
|
|
||||
|
Net change in cash, cash equivalents, and restricted cash
|
|
321
|
|
|
(156
|
)
|
||
|
Cash, cash equivalents, and restricted cash at beginning of period
|
|
429
|
|
|
643
|
|
||
|
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
750
|
|
|
$
|
487
|
|
|
|
|
|
|
|
||||
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
||||
|
Non-cash transaction, beneficial conversion feature (Note 4)
|
|
$
|
—
|
|
|
$
|
296
|
|
|
Non-cash transaction, deemed dividend preferred stock (Note 4)
|
|
$
|
—
|
|
|
$
|
(296
|
)
|
|
•
|
FE will pay certain pre-petition FES Debtors employee-related obligations, which include unfunded pension obligations and other employee benefits.
|
|
•
|
FE will waive all pre-petition claims (other than those claims under the Tax Allocation Agreement for the 2018 tax year) and certain post-petition claims, against the FES Debtors related to the FES Debtors and their businesses, including the full borrowings by FES under the $500 million secured credit facility, the $200 million credit agreement being used to
|
|
•
|
A nonconsensual release of all claims against FirstEnergy by the FES Debtors’ creditors, which was subsequently waived pursuant to the Waiver Agreement, discussed below.
|
|
•
|
A $225 million cash payment from FirstEnergy.
|
|
•
|
A $628 million aggregate principal amount note issuance by FirstEnergy to the FES Debtors, which may be decreased by the amount, if any, of cash paid by FirstEnergy to the FES Debtors under the Intercompany Income Tax Allocation Agreement for the tax benefits related to the sale or deactivation of certain plants.
|
|
•
|
Transfer of the Pleasants Power Station and related assets, including the economic interests therein as of January 1, 2019, and a requirement that FE continue to provide access to the McElroy’s Run CCR Impoundment Facility, which is not being transferred. FE will provide guarantees for certain retained environmental liabilities of AE Supply, including the McElroy’s Run CCR Impoundment Facility.
|
|
•
|
FirstEnergy agrees to waive all pre-petition claims related to shared services and credit for nine months of the FES Debtors’ shared service costs beginning as of April 1, 2018 through December 31, 2018, in an amount not to exceed $112.5 million, and FirstEnergy agrees to extend the availability of shared services until no later than June 30, 2020.
|
|
•
|
Subject to a cap, FirstEnergy has agreed to fund a pension enhancement through its pension plan, for voluntary enhanced retirement packages offered to certain FES employees, as well as offer certain other employee benefits (approximately $14 million recognized in the first nine months of 2019).
|
|
•
|
FirstEnergy agrees to perform under the Intercompany Tax Allocation Agreement through the FES Debtors’ emergence from bankruptcy, at which time FirstEnergy will waive a 2017 overpayment for NOLs of approximately $71 million, reverse 2018 estimated payments for NOLs of approximately $88 million and pay the FES Debtors for the use of NOLs in an amount no less than $66 million for 2018. Based on the 2018 federal tax return filed in September 2019, FirstEnergy owes the FES debtors approximately $31 million associated with 2018, which will be paid upon emergence.
|
|
|
|
For the Three Months Ended September 30, 2019
|
||||||||||||||
|
Revenues by Type of Service
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments (1)
|
|
Total
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Distribution services(2)
|
|
$
|
1,457
|
|
|
$
|
—
|
|
|
$
|
(21
|
)
|
|
$
|
1,436
|
|
|
Retail generation
|
|
989
|
|
|
—
|
|
|
(14
|
)
|
|
975
|
|
||||
|
Wholesale sales
|
|
100
|
|
|
—
|
|
|
2
|
|
|
102
|
|
||||
|
Transmission(2)
|
|
—
|
|
|
371
|
|
|
—
|
|
|
371
|
|
||||
|
Other
|
|
42
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||
|
Total revenues from contracts with customers
|
|
$
|
2,588
|
|
|
$
|
371
|
|
|
$
|
(33
|
)
|
|
$
|
2,926
|
|
|
ARP
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||
|
Other non-customer revenue
|
|
23
|
|
|
4
|
|
|
(15
|
)
|
|
12
|
|
||||
|
Total revenues
|
|
$
|
2,636
|
|
|
$
|
375
|
|
|
$
|
(48
|
)
|
|
$
|
2,963
|
|
|
|
|
For the Three Months Ended September 30, 2018
|
||||||||||||||
|
Revenues by Type of Service
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments (1)
|
|
Total
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Distribution services(2)
|
|
$
|
1,440
|
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
|
$
|
1,418
|
|
|
Retail generation
|
|
1,059
|
|
|
—
|
|
|
(14
|
)
|
|
1,045
|
|
||||
|
Wholesale sales
|
|
133
|
|
|
—
|
|
|
6
|
|
|
139
|
|
||||
|
Transmission(2)
|
|
—
|
|
|
341
|
|
|
—
|
|
|
341
|
|
||||
|
Other
|
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||
|
Total revenues from contracts with customers
|
|
$
|
2,675
|
|
|
$
|
341
|
|
|
$
|
(30
|
)
|
|
$
|
2,986
|
|
|
ARP
|
|
66
|
|
|
—
|
|
|
—
|
|
|
66
|
|
||||
|
Other non-customer revenue
|
|
25
|
|
|
5
|
|
|
(18
|
)
|
|
12
|
|
||||
|
Total revenues
|
|
$
|
2,766
|
|
|
$
|
346
|
|
|
$
|
(48
|
)
|
|
$
|
3,064
|
|
|
|
|
For the Nine Months Ended September 30, 2019
|
||||||||||||||
|
Revenues by Type of Service
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments (1)
|
|
Total
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Distribution services(2)
|
|
$
|
3,903
|
|
|
$
|
—
|
|
|
$
|
(63
|
)
|
|
$
|
3,840
|
|
|
Retail generation
|
|
2,853
|
|
|
—
|
|
|
(42
|
)
|
|
2,811
|
|
||||
|
Wholesale sales
|
|
316
|
|
|
—
|
|
|
9
|
|
|
325
|
|
||||
|
Transmission(2)
|
|
—
|
|
|
1,090
|
|
|
—
|
|
|
1,090
|
|
||||
|
Other
|
|
113
|
|
|
—
|
|
|
1
|
|
|
114
|
|
||||
|
Total revenues from contracts with customers
|
|
$
|
7,185
|
|
|
$
|
1,090
|
|
|
$
|
(95
|
)
|
|
$
|
8,180
|
|
|
ARP
|
|
142
|
|
|
—
|
|
|
—
|
|
|
142
|
|
||||
|
Other non-customer revenue
|
|
74
|
|
|
13
|
|
|
(47
|
)
|
|
40
|
|
||||
|
Total revenues
|
|
$
|
7,401
|
|
|
$
|
1,103
|
|
|
$
|
(142
|
)
|
|
$
|
8,362
|
|
|
|
|
For the Nine Months Ended September 30, 2018
|
||||||||||||||
|
Revenues by Type of Service
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments (1)
|
|
Total
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Distribution services(2)
|
|
$
|
3,949
|
|
|
$
|
—
|
|
|
$
|
(81
|
)
|
|
$
|
3,868
|
|
|
Retail generation
|
|
2,981
|
|
|
—
|
|
|
(42
|
)
|
|
2,939
|
|
||||
|
Wholesale sales
|
|
377
|
|
|
—
|
|
|
16
|
|
|
393
|
|
||||
|
Transmission(2)
|
|
—
|
|
|
996
|
|
|
—
|
|
|
996
|
|
||||
|
Other
|
|
113
|
|
|
—
|
|
|
4
|
|
|
117
|
|
||||
|
Total revenues from contracts with customers
|
|
$
|
7,420
|
|
|
$
|
996
|
|
|
$
|
(103
|
)
|
|
$
|
8,313
|
|
|
ARP
|
|
190
|
|
|
—
|
|
|
—
|
|
|
190
|
|
||||
|
Other non-customer revenue
|
|
84
|
|
|
14
|
|
|
(50
|
)
|
|
48
|
|
||||
|
Total revenues
|
|
$
|
7,694
|
|
|
$
|
1,010
|
|
|
$
|
(153
|
)
|
|
$
|
8,551
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
Revenues by Customer Class
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Residential
|
|
$
|
1,538
|
|
|
$
|
1,572
|
|
|
$
|
4,145
|
|
|
$
|
4,290
|
|
|
Commercial
|
|
600
|
|
|
628
|
|
|
1,759
|
|
|
1,778
|
|
||||
|
Industrial
|
|
286
|
|
|
276
|
|
|
786
|
|
|
792
|
|
||||
|
Other
|
|
22
|
|
|
23
|
|
|
66
|
|
|
70
|
|
||||
|
Total Revenues
|
|
$
|
2,446
|
|
|
$
|
2,499
|
|
|
$
|
6,756
|
|
|
$
|
6,930
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
Transmission Owner
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
ATSI
|
|
$
|
184
|
|
|
$
|
167
|
|
|
$
|
542
|
|
|
$
|
492
|
|
|
TrAIL
|
|
55
|
|
|
60
|
|
|
172
|
|
|
183
|
|
||||
|
MAIT
|
|
58
|
|
|
43
|
|
|
157
|
|
|
106
|
|
||||
|
Other
|
|
74
|
|
|
71
|
|
|
219
|
|
|
215
|
|
||||
|
Total Revenues
|
|
$
|
371
|
|
|
$
|
341
|
|
|
$
|
1,090
|
|
|
$
|
996
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
||||||||||||
|
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Revenues
|
|
$
|
62
|
|
|
$
|
83
|
|
|
$
|
147
|
|
|
$
|
934
|
|
|
Fuel
|
|
(50
|
)
|
|
(52
|
)
|
|
(105
|
)
|
|
(269
|
)
|
||||
|
Purchased power
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
||||
|
Other operating expenses
|
|
(16
|
)
|
|
(24
|
)
|
|
(42
|
)
|
|
(414
|
)
|
||||
|
Provision for depreciation
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(96
|
)
|
||||
|
General taxes
|
|
(2
|
)
|
|
(4
|
)
|
|
(11
|
)
|
|
(32
|
)
|
||||
|
Other income (expense) (1)
|
|
2
|
|
|
(1
|
)
|
|
10
|
|
|
(82
|
)
|
||||
|
Loss from discontinued operations, before tax
|
|
(4
|
)
|
|
(16
|
)
|
|
(1
|
)
|
|
(44
|
)
|
||||
|
Income tax expense
|
|
17
|
|
|
7
|
|
|
45
|
|
|
39
|
|
||||
|
Loss from discontinued operations, net of tax
|
|
(21
|
)
|
|
(23
|
)
|
|
(46
|
)
|
|
(83
|
)
|
||||
|
Gain (loss) on disposal of FES and FENOC, net of tax
|
|
23
|
|
|
(834
|
)
|
|
(16
|
)
|
|
405
|
|
||||
|
Income (loss) from discontinued operations
|
|
$
|
2
|
|
|
$
|
(857
|
)
|
|
$
|
(62
|
)
|
|
$
|
322
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Removal of investment in FES and FENOC
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,193
|
|
|
Assumption of benefit obligations retained at FE
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(820
|
)
|
||||
|
Guarantees and credit support provided by FE
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
||||
|
Reserve on receivables and allocated pension/OPEB mark-to-market
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(914
|
)
|
||||
|
Settlement consideration and services credit
|
|
8
|
|
|
(1,183
|
)
|
|
(15
|
)
|
|
(1,183
|
)
|
||||
|
Gain (loss) on disposal of FES and FENOC, before tax
|
|
8
|
|
|
(1,183
|
)
|
|
(15
|
)
|
|
(863
|
)
|
||||
|
Income tax benefit (expense), including estimated worthless stock deduction
|
|
15
|
|
|
349
|
|
|
(1
|
)
|
|
1,268
|
|
||||
|
Gain (loss) on disposal of FES and FENOC, net of tax
|
|
$
|
23
|
|
|
$
|
(834
|
)
|
|
$
|
(16
|
)
|
|
$
|
405
|
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
(In millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
|
Income (loss) from discontinued operations
|
|
$
|
(62
|
)
|
|
$
|
322
|
|
|
Depreciation and amortization, including regulatory assets, net, intangible assets and deferred debt-related costs
|
|
—
|
|
|
110
|
|
||
|
|
|
|
|
|
||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
|
Property additions
|
|
—
|
|
|
(27
|
)
|
||
|
Sales of investment securities held in trusts
|
|
—
|
|
|
109
|
|
||
|
Purchases of investment securities held in trusts
|
|
—
|
|
|
(122
|
)
|
||
|
•
|
preferred stock dividends,
|
|
•
|
deemed dividends for the amortization of the beneficial conversion feature recognized at issuance of the preferred stock (if any), and
|
|
•
|
an allocation of undistributed earnings between the common stock and the participating securities (convertible preferred stock) based on their respective rights to receive dividends.
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
Reconciliation of Basic and Diluted EPS of Common Stock
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||||
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
||||||||
|
EPS of Common Stock
|
|
|
|
|
|
|
|
|
||||||||
|
Income from continuing operations
|
|
$
|
389
|
|
|
$
|
399
|
|
|
$
|
1,085
|
|
|
$
|
888
|
|
|
Less: Preferred dividends
|
|
—
|
|
|
(19
|
)
|
|
(3
|
)
|
|
(61
|
)
|
||||
|
Less: Amortization of beneficial conversion feature
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(296
|
)
|
||||
|
Less: Undistributed earnings allocated to preferred stockholders(1)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
|
Income from continuing operations available to common stockholders
|
|
389
|
|
|
345
|
|
|
1,078
|
|
|
531
|
|
||||
|
Discontinued operations, net of tax
|
|
2
|
|
|
(857
|
)
|
|
(62
|
)
|
|
322
|
|
||||
|
Less: Undistributed earnings allocated to preferred stockholders (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Income (loss) from discontinued operations available to common stockholders
|
|
2
|
|
|
(857
|
)
|
|
(62
|
)
|
|
322
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) available to common stockholders, basic
|
|
$
|
391
|
|
|
$
|
(512
|
)
|
|
$
|
1,016
|
|
|
$
|
853
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income allocated to preferred shareholders, preferred dilutive (2)
|
|
—
|
|
|
N/A
|
|
|
7
|
|
|
N/A
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) available to common stockholders, dilutive
|
|
$
|
391
|
|
|
$
|
(512
|
)
|
|
$
|
1,023
|
|
|
$
|
853
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Share Count information:
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average number of basic shares outstanding
|
|
538
|
|
|
503
|
|
|
533
|
|
|
485
|
|
||||
|
Assumed exercise of dilutive stock options and awards
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||
|
Assumed conversion of preferred stock
|
|
2
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
|
Weighted average number of diluted shares outstanding
|
|
542
|
|
|
505
|
|
|
541
|
|
|
487
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (loss) available to common stockholders, per common share:
|
|
|
|
|
|
|
|
|
||||||||
|
Income from continuing operations, basic
|
|
$
|
0.72
|
|
|
$
|
0.68
|
|
|
$
|
2.02
|
|
|
$
|
1.10
|
|
|
Discontinued operations, basic
|
|
0.01
|
|
|
(1.70
|
)
|
|
(0.12
|
)
|
|
0.66
|
|
||||
|
Income (loss) available to common stockholders, basic
|
|
$
|
0.73
|
|
|
$
|
(1.02
|
)
|
|
$
|
1.90
|
|
|
$
|
1.76
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income from continuing operations, diluted
|
|
$
|
0.72
|
|
|
$
|
0.68
|
|
|
$
|
2.00
|
|
|
$
|
1.09
|
|
|
Discontinued operations, diluted
|
|
—
|
|
|
(1.70
|
)
|
|
(0.11
|
)
|
|
0.66
|
|
||||
|
Income (loss) available to common stockholders, diluted
|
|
$
|
0.72
|
|
|
$
|
(1.02
|
)
|
|
$
|
1.89
|
|
|
$
|
1.75
|
|
|
(1)
|
Undistributed earnings were not allocated to participating securities for the three and nine months ended September 30, 2018, as well as the three months ended September 30, 2019, as income from continuing operations less dividends declared (common and preferred) and deemed dividends were a net loss.
|
|
(2)
|
The shares of common stock issuable upon conversion of the preferred shares (26 million shares) were not included for 2018 as their inclusion would be anti-dilutive to basic EPS from continuing operations.
|
|
Components of Net Periodic Benefit Costs (Credits)
|
|
Pension
|
OPEB
|
|||||||||||||
|
For the Three Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Service costs (1)
|
|
$
|
48
|
|
|
$
|
56
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Interest costs (2)
|
|
93
|
|
|
93
|
|
|
6
|
|
|
6
|
|
||||
|
Expected return on plan assets (2)
|
|
(135
|
)
|
|
(144
|
)
|
|
(7
|
)
|
|
(7
|
)
|
||||
|
Amortization of prior service costs (credits) (2)
|
|
2
|
|
|
2
|
|
|
(9
|
)
|
|
(20
|
)
|
||||
|
Special termination costs (2) (3)
|
|
—
|
|
|
21
|
|
|
—
|
|
|
6
|
|
||||
|
Net periodic costs (credits), including amounts capitalized
|
|
$
|
8
|
|
|
$
|
28
|
|
|
$
|
(9
|
)
|
|
$
|
(14
|
)
|
|
Net periodic costs (credits), recognized in earnings
|
|
$
|
(11
|
)
|
|
$
|
5
|
|
|
$
|
(10
|
)
|
|
$
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Components of Net Periodic Benefit Costs (Credits)
|
|
Pension
|
OPEB
|
|||||||||||||
|
For the Nine Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Service costs (1)
|
|
$
|
144
|
|
|
$
|
168
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
Interest costs (2)
|
|
279
|
|
|
279
|
|
|
16
|
|
|
18
|
|
||||
|
Expected return on plan assets (2)
|
|
(405
|
)
|
|
(432
|
)
|
|
(21
|
)
|
|
(22
|
)
|
||||
|
Amortization of prior service costs (credits) (2)
|
|
6
|
|
|
6
|
|
|
(27
|
)
|
|
(60
|
)
|
||||
|
Special termination costs (2) (3)
|
|
14
|
|
|
21
|
|
|
—
|
|
|
6
|
|
||||
|
Net periodic costs (credits), including amounts capitalized
|
|
$
|
38
|
|
|
$
|
42
|
|
|
$
|
(29
|
)
|
|
$
|
(55
|
)
|
|
Net periodic credits, recognized in earnings
|
|
$
|
(19
|
)
|
|
$
|
(27
|
)
|
|
$
|
(30
|
)
|
|
$
|
(57
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Gains & Losses on Cash Flow Hedges (1)
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
AOCI Balance, July 1, 2019
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
31
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amounts reclassified from AOCI
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||
|
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||
|
Income tax benefits on other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
|
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
AOCI Balance, September 30, 2019
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
AOCI Balance, July 1, 2018
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
87
|
|
|
$
|
73
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amounts reclassified from AOCI
|
|
2
|
|
|
—
|
|
|
(18
|
)
|
|
(16
|
)
|
||||
|
Other comprehensive income (loss)
|
|
2
|
|
|
—
|
|
|
(18
|
)
|
|
(16
|
)
|
||||
|
Income tax benefits on other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||
|
Other comprehensive income (loss), net of tax
|
|
2
|
|
|
—
|
|
|
(14
|
)
|
|
(12
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
AOCI Balance, September 30, 2018
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Gains & Losses on Cash Flow Hedges (1)
|
|
Unrealized Gains on AFS Securities
|
|
Defined Benefit Pension & OPEB Plans
|
|
Total
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
AOCI Balance, January 1, 2019
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
41
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amounts reclassified from AOCI
|
|
1
|
|
|
—
|
|
|
(21
|
)
|
|
(20
|
)
|
||||
|
Other comprehensive income (loss)
|
|
1
|
|
|
—
|
|
|
(21
|
)
|
|
(20
|
)
|
||||
|
Income tax benefits on other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||
|
Other comprehensive income (loss), net of tax
|
|
1
|
|
|
—
|
|
|
(15
|
)
|
|
(14
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
AOCI Balance, September 30, 2019
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
AOCI Balance, January 1, 2018
|
|
$
|
(22
|
)
|
|
$
|
67
|
|
|
$
|
97
|
|
|
$
|
142
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
(97
|
)
|
||||
|
Amounts reclassified from AOCI
|
|
6
|
|
|
(1
|
)
|
|
(55
|
)
|
|
(50
|
)
|
||||
|
Deconsolidation of FES and FENOC
|
|
13
|
|
|
(8
|
)
|
|
—
|
|
|
5
|
|
||||
|
Other comprehensive income (loss)
|
|
19
|
|
|
(106
|
)
|
|
(55
|
)
|
|
(142
|
)
|
||||
|
Income taxes (benefits) on other comprehensive income (loss)
|
|
9
|
|
|
(39
|
)
|
|
(31
|
)
|
|
(61
|
)
|
||||
|
Other comprehensive income (loss), net of tax
|
|
10
|
|
|
(67
|
)
|
|
(24
|
)
|
|
(81
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
AOCI Balance, September 30, 2018
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
61
|
|
|
|
|
For the Three Months Ended September 30, 2019
|
||||||||||||||
|
(In millions)
|
|
Vehicles
|
|
Buildings
|
|
Other
|
|
Total
|
||||||||
|
Operating lease costs (1)
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Finance lease costs:
|
|
|
|
|
|
|
|
|
||||||||
|
Amortization of right-of-use assets
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
|
Interest on lease liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Total finance lease cost
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
|
Total lease cost
|
|
$
|
9
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
15
|
|
|
|
|
For the Nine Months Ended September 30, 2019
|
||||||||||||||
|
(In millions)
|
|
Vehicles
|
|
Buildings
|
|
Other
|
|
Total
|
||||||||
|
Operating lease costs (1)
|
|
$
|
20
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
35
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Finance lease costs:
|
|
|
|
|
|
|
|
|
||||||||
|
Amortization of right-of-use assets
|
|
12
|
|
|
—
|
|
|
1
|
|
|
13
|
|
||||
|
Interest on lease liabilities
|
|
2
|
|
|
2
|
|
|
—
|
|
|
4
|
|
||||
|
Total finance lease cost
|
|
14
|
|
|
2
|
|
|
1
|
|
|
17
|
|
||||
|
Total lease cost
|
|
$
|
34
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
52
|
|
|
(In millions)
|
|
For the Three Months Ended September 30, 2019
|
|
For the Nine Months Ended September 30, 2019
|
||||
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
||||
|
Operating cash flows from operating leases
|
|
$
|
4
|
|
|
$
|
19
|
|
|
Operating cash flows from finance leases
|
|
1
|
|
|
4
|
|
||
|
Finance cash flows from finance leases
|
|
12
|
|
|
21
|
|
||
|
|
|
|
|
|
||||
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
|
||||
|
Operating leases
|
|
$
|
47
|
|
|
$
|
73
|
|
|
Finance leases
|
|
—
|
|
|
2
|
|
||
|
|
|
As of September 30, 2019
|
|
|
Weighted-average remaining lease terms (years)
|
|
|
|
|
Operating leases
|
|
8.39
|
|
|
Finance leases
|
|
4.66
|
|
|
|
|
|
|
|
Weighted-average discount rate (1)
|
|
|
|
|
Operating leases
|
|
4.76
|
%
|
|
Finance leases
|
|
3.45
|
%
|
|
(In millions)
|
|
Financial Statement Line Item
|
|
As of September 30, 2019
|
||
|
|
|
|
|
|
||
|
Assets
|
|
|
|
|
||
|
Operating lease assets, net of accumulated amortization of $17 million
|
|
Deferred charges and other assets
|
|
$
|
200
|
|
|
Finance lease assets, net of accumulated amortization of $91 million
|
|
Property, plant and equipment
|
|
76
|
|
|
|
Total leased assets
|
|
|
|
$
|
276
|
|
|
|
|
|
|
|
||
|
Liabilities
|
|
|
|
|
||
|
Current:
|
|
|
|
|
||
|
Operating
|
|
Other current liabilities
|
|
$
|
34
|
|
|
Finance
|
|
Currently payable long-term debt
|
|
16
|
|
|
|
|
|
|
|
|
||
|
Noncurrent:
|
|
|
|
|
||
|
Operating
|
|
Other noncurrent liabilities
|
|
212
|
|
|
|
Finance
|
|
Long-term debt and other long-term obligations
|
|
47
|
|
|
|
Total leased liabilities
|
|
|
|
$
|
309
|
|
|
(In millions)
|
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
|
||||||
|
2019
|
|
$
|
8
|
|
|
$
|
12
|
|
|
$
|
20
|
|
|
|
2020
|
|
42
|
|
|
19
|
|
|
61
|
|
|
|||
|
2021
|
|
40
|
|
|
17
|
|
|
57
|
|
|
|||
|
2022
|
|
39
|
|
|
15
|
|
|
54
|
|
|
|||
|
2023
|
|
35
|
|
|
8
|
|
|
43
|
|
|
|||
|
2024
|
|
30
|
|
|
4
|
|
|
34
|
|
|
|||
|
Thereafter
|
|
108
|
|
|
12
|
|
|
120
|
|
|
|||
|
Total lease payments (1)
|
|
302
|
|
|
87
|
|
|
389
|
|
|
|||
|
Less imputed interest
|
|
(56
|
)
|
|
(24
|
)
|
|
(80
|
)
|
|
|||
|
Total net present value
|
|
$
|
246
|
|
|
$
|
63
|
|
|
$
|
309
|
|
|
|
Capital Leases
|
|
|
||
|
|
|
(In millions)
|
||
|
2019
|
|
$
|
24
|
|
|
2020
|
|
19
|
|
|
|
2021
|
|
16
|
|
|
|
2022
|
|
13
|
|
|
|
2023
|
|
8
|
|
|
|
Years thereafter
|
|
16
|
|
|
|
Total minimum lease payments
|
|
96
|
|
|
|
Interest portion
|
|
(23
|
)
|
|
|
Present value of net minimum lease payments
|
|
73
|
|
|
|
Less current portion
|
|
18
|
|
|
|
Noncurrent portion
|
|
$
|
55
|
|
|
Operating Leases
|
|
|
||
|
|
|
(In millions)
|
||
|
2019
|
|
$
|
34
|
|
|
2020
|
|
36
|
|
|
|
2021
|
|
34
|
|
|
|
2022
|
|
30
|
|
|
|
2023
|
|
28
|
|
|
|
Years thereafter
|
|
127
|
|
|
|
Total minimum lease payments
|
|
$
|
289
|
|
|
|
|
Series A Convertible Preferred Stock
|
|
Common Stock
|
|
OPIC
|
|
AOCI
|
|
Accumulated Deficit
|
|
Total Stockholders’ Equity
|
||||||||||||||||||
|
(In millions)
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||
|
Balance, January 1, 2019
|
|
0.7
|
|
|
$
|
71
|
|
|
512
|
|
|
$
|
51
|
|
|
$
|
11,530
|
|
|
$
|
41
|
|
|
$
|
(4,879
|
)
|
|
$
|
6,814
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
320
|
|
|
320
|
|
||||||||||||
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
|
(5
|
)
|
||||||||||||
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
7
|
|
||||||||||||
|
Stock Investment Plan and certain share-based benefit plans
|
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|||||||||||
|
Cash dividends declared on common stock ($0.38/common share)
|
|
|
|
|
|
|
|
|
|
(202
|
)
|
|
|
|
|
|
(202
|
)
|
||||||||||||
|
Cash dividends declared on preferred stock ($0.38/as-converted share)
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
(3
|
)
|
||||||||||||
|
Conversion of Series A Convertible Preferred Stock
|
|
(0.5
|
)
|
|
(50
|
)
|
|
18
|
|
|
2
|
|
|
48
|
|
|
|
|
|
|
—
|
|
||||||||
|
Balance, March 31, 2019
|
|
0.2
|
|
|
$
|
21
|
|
|
531
|
|
|
$
|
53
|
|
|
$
|
11,381
|
|
|
$
|
36
|
|
|
$
|
(4,559
|
)
|
|
$
|
6,932
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
312
|
|
|
312
|
|
|||||||||
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
|
|
(5
|
)
|
|||||||||
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
9
|
|
|||||||||
|
Stock Investment Plan and certain share-based benefit plans
|
|
|
|
|
|
1
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
|
21
|
|
||||||||
|
Balance, June 30, 2019
|
|
0.2
|
|
|
$
|
21
|
|
|
532
|
|
|
$
|
53
|
|
|
$
|
11,411
|
|
|
$
|
31
|
|
|
$
|
(4,247
|
)
|
|
$
|
7,269
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
391
|
|
|
391
|
|
|||||||||
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
(4
|
)
|
|||||||||
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
7
|
|
|||||||||
|
Stock Investment Plan and certain share-based benefit plans
|
|
|
|
|
|
1
|
|
|
|
|
20
|
|
|
|
|
|
|
20
|
|
|||||||||||
|
Cash dividends declared on common stock ($0.38/share in July and September)
|
|
|
|
|
|
|
|
|
|
(411
|
)
|
|
|
|
|
|
(411
|
)
|
||||||||||||
|
Conversion of Series A Convertible Preferred Stock
|
|
(0.2
|
)
|
|
(21
|
)
|
|
7
|
|
|
1
|
|
|
20
|
|
|
|
|
|
|
|
|
—
|
|
||||||
|
Balance, September 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
540
|
|
|
$
|
54
|
|
|
$
|
11,047
|
|
|
$
|
27
|
|
|
$
|
(3,856
|
)
|
|
$
|
7,272
|
|
|
|
|
Series A Convertible Preferred Stock
|
|
Common Stock
|
|
OPIC
|
|
AOCI
|
|
Accumulated Deficit
|
|
Total Stockholders’ Equity
|
||||||||||||||||||
|
(In millions)
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||
|
Balance, January 1, 2018
|
|
—
|
|
|
$
|
—
|
|
|
445
|
|
|
$
|
44
|
|
|
$
|
10,001
|
|
|
$
|
142
|
|
|
$
|
(6,262
|
)
|
|
$
|
3,925
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,369
|
|
|
1,369
|
|
||||||||||||
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
(56
|
)
|
|
|
|
(56
|
)
|
||||||||||||
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
19
|
|
||||||||||||
|
Stock Investment Plan and certain share-based benefit plans
|
|
|
|
|
|
2
|
|
|
1
|
|
|
5
|
|
|
|
|
|
|
6
|
|
||||||||||
|
Cash dividends declared on common stock ($0.36/common share in January and March)
|
|
|
|
|
|
|
|
|
|
(343
|
)
|
|
|
|
|
|
(343
|
)
|
||||||||||||
|
Cash dividends declared on preferred stock ($0.36/as-converted share in January and March)
|
|
|
|
|
|
|
|
|
|
(42
|
)
|
|
|
|
|
|
(42
|
)
|
||||||||||||
|
Stock issuance (1)
|
|
1.6
|
|
|
162
|
|
|
30
|
|
|
3
|
|
|
2,297
|
|
|
|
|
|
|
2,462
|
|
||||||||
|
Impact of adopting new accounting pronouncements (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35
|
|
|
35
|
|
||||||||||||
|
Balance, March 31, 2018
|
|
1.6
|
|
|
$
|
162
|
|
|
477
|
|
|
$
|
48
|
|
|
$
|
11,937
|
|
|
$
|
86
|
|
|
$
|
(4,858
|
)
|
|
$
|
7,375
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
299
|
|
|
$
|
299
|
|
||||
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
(13
|
)
|
||||||
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
19
|
|
||||||
|
Stock Investment Plan and certain share-based benefit plans
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
19
|
|
||||||
|
Balance, June 30, 2018
|
|
1.6
|
|
|
$
|
162
|
|
|
478
|
|
|
$
|
48
|
|
|
$
|
11,975
|
|
|
$
|
73
|
|
|
$
|
(4,559
|
)
|
|
$
|
7,699
|
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(458
|
)
|
|
$
|
(458
|
)
|
||||||||||
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
(12
|
)
|
||||||||||||
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
10
|
|
|||||||||||
|
Stock Investment Plan and certain share-based benefit plans
|
|
|
|
|
|
1
|
|
|
|
|
21
|
|
|
|
|
|
|
21
|
|
|||||||||||
|
Cash dividends declared on common stock ($0.36/common share in July and September)
|
|
|
|
|
|
|
|
|
|
(368
|
)
|
|
|
|
|
|
(368
|
)
|
||||||||||||
|
Cash dividends declared on preferred stock ($0.36/as-converted share in July and September)
|
|
|
|
|
|
|
|
|
|
(19
|
)
|
|
|
|
|
|
(19
|
)
|
||||||||||||
|
Conversion of Series A Convertible Preferred Stock
|
|
(0.9
|
)
|
|
(92
|
)
|
|
33
|
|
|
3
|
|
|
89
|
|
|
|
|
|
|
—
|
|
||||||||
|
Balance, September 30, 2018
|
|
0.7
|
|
|
$
|
70
|
|
|
512
|
|
|
$
|
51
|
|
|
$
|
11,708
|
|
|
$
|
61
|
|
|
$
|
(5,017
|
)
|
|
$
|
6,873
|
|
|
•
|
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 September 30, 2019, and December 31, 2018, $268 million and $292 million of the phase-in recovery bonds were outstanding, respectively.
|
|
•
|
JCP&L Securitization - 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 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 September 30, 2019, and December 31, 2018, $29 million and $41 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 September 30, 2019, and December 31, 2018, $333 million and $358 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 ventures economic performance. FEV’s ownership interest is subject to the equity method of accounting. As of September 30, 2019, the carrying value of the equity method investment was $19 million.
|
|
•
|
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 September 30, 2019, the carrying value of the equity method investment was $18 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.
|
|
•
|
FES and FENOC - As a result of the Chapter 11 bankruptcy filing discussed in Note 3, “Discontinued Operations,” FE evaluated its investments in FES and FENOC and determined they are VIEs. FE is not the primary beneficiary because it lacks a controlling interest in FES and FENOC, which are subject to the jurisdiction of the Bankruptcy Court. The carrying values of the equity investments in FES and FENOC were zero at September 30, 2019.
|
|
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
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
Assets
|
(In millions)
|
||||||||||||||||||||||||||||||
|
Corporate debt securities
|
$
|
—
|
|
|
$
|
446
|
|
|
$
|
—
|
|
|
$
|
446
|
|
|
$
|
—
|
|
|
$
|
405
|
|
|
$
|
—
|
|
|
$
|
405
|
|
|
Derivative assets FTRs(1)
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||||||
|
Equity securities(2)
|
362
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|
339
|
|
|
—
|
|
|
—
|
|
|
339
|
|
||||||||
|
Foreign government debt securities
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||||
|
U.S. government debt securities
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||||||
|
U.S. state debt securities
|
—
|
|
|
266
|
|
|
—
|
|
|
266
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
||||||||
|
Other(3)
|
716
|
|
|
71
|
|
|
—
|
|
|
787
|
|
|
367
|
|
|
34
|
|
|
—
|
|
|
401
|
|
||||||||
|
Total assets
|
$
|
1,078
|
|
|
$
|
818
|
|
|
$
|
6
|
|
|
$
|
1,902
|
|
|
$
|
706
|
|
|
$
|
722
|
|
|
$
|
10
|
|
|
$
|
1,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Derivative liabilities FTRs(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Derivative liabilities NUG contracts(1)
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
(44
|
)
|
||||||||
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net assets (liabilities)(4)
|
$
|
1,078
|
|
|
$
|
818
|
|
|
$
|
(21
|
)
|
|
$
|
1,875
|
|
|
$
|
706
|
|
|
$
|
722
|
|
|
$
|
(35
|
)
|
|
$
|
1,393
|
|
|
(1)
|
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 S&P 500 Low Volatility High Dividend Index, S&P 500 Index, MSCI World Index and MSCI AC World IMI Index.
|
|
(3)
|
Primarily consists of short-term cash investments.
|
|
(4)
|
Excludes $(15) million and $4 million as of September 30, 2019 and December 31, 2018, respectively, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
|
|
|
NUG Contracts(1)
|
|
FTRs(1)
|
||||||||||||||||||||
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
|
January 1, 2018 Balance
|
$
|
—
|
|
|
$
|
(79
|
)
|
|
$
|
(79
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
Unrealized gain
|
—
|
|
|
2
|
|
|
2
|
|
|
8
|
|
|
1
|
|
|
9
|
|
||||||
|
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(5
|
)
|
|
—
|
|
||||||
|
Settlements
|
—
|
|
|
33
|
|
|
33
|
|
|
(6
|
)
|
|
3
|
|
|
(3
|
)
|
||||||
|
December 31, 2018 Balance
|
$
|
—
|
|
|
$
|
(44
|
)
|
|
$
|
(44
|
)
|
|
$
|
10
|
|
|
$
|
(1
|
)
|
|
$
|
9
|
|
|
Unrealized loss
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
|
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(4
|
)
|
|
2
|
|
||||||
|
Settlements
|
—
|
|
|
28
|
|
|
28
|
|
|
(10
|
)
|
|
3
|
|
|
(7
|
)
|
||||||
|
September 30, 2019 Balance
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
(24
|
)
|
|
$
|
6
|
|
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
|
|
Fair Value, Net (In millions)
|
|
Valuation
Technique |
|
Significant Input
|
|
Range
|
|
Weighted Average
|
|
Units
|
|||
|
FTRs
|
|
$
|
3
|
|
|
Model
|
|
RTO auction clearing prices
|
|
$0.60 to $3.60
|
|
$1.20
|
|
Dollars/MWH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
NUG Contracts
|
|
$
|
(24
|
)
|
|
Model
|
|
Generation
|
|
400 to 553,000
|
|
115,000
|
|
|
MWH
|
|
|
|
|
Regional electricity prices
|
|
$26.20 to $28.30
|
|
$27.20
|
|
Dollars/MWH
|
||||||
|
|
|
September 30, 2019(1)
|
|
December 31, 2018(1)
|
||||||||||||||||||||||||||||
|
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
|
Cost Basis
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||||||||||
|
|
|
(In millions)
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Debt securities
|
|
$
|
736
|
|
|
$
|
27
|
|
|
$
|
(14
|
)
|
|
$
|
749
|
|
|
$
|
714
|
|
|
$
|
2
|
|
|
$
|
(28
|
)
|
|
$
|
688
|
|
|
Equity securities
|
|
$
|
312
|
|
|
$
|
50
|
|
|
$
|
(2
|
)
|
|
$
|
360
|
|
|
$
|
339
|
|
|
$
|
15
|
|
|
$
|
(16
|
)
|
|
$
|
338
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
||||||||||||
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Sale proceeds
|
|
$
|
204
|
|
|
$
|
261
|
|
|
$
|
506
|
|
|
$
|
627
|
|
|
Realized gains
|
|
8
|
|
|
3
|
|
|
20
|
|
|
31
|
|
||||
|
Realized losses
|
|
(7
|
)
|
|
(7
|
)
|
|
(18
|
)
|
|
(34
|
)
|
||||
|
Interest and dividend income
|
|
10
|
|
|
11
|
|
|
30
|
|
|
31
|
|
||||
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
|
Carrying value (1)
|
$
|
19,880
|
|
|
$
|
18,315
|
|
|
Fair value
|
$
|
22,910
|
|
|
$
|
19,266
|
|
|
Potential Collateral Obligations
|
|
|
AE Supply
|
|
Utilities and FET
|
|
FE
|
|
Total
|
||||||||
|
|
|
(In millions)
|
|||||||||||||||
|
Contractual Obligations for Additional Collateral
|
|
|
|
|
|
|
|
|
|
||||||||
|
At current credit rating
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Upon further downgrade
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||
|
Surety Bonds (collateralized amount)(1)
|
|
|
1
|
|
|
63
|
|
|
246
|
|
|
310
|
|
||||
|
Total Exposure from Contractual Obligations
|
|
|
$
|
2
|
|
|
$
|
103
|
|
|
$
|
246
|
|
|
$
|
351
|
|
|
(1)
|
Surety Bonds are not tied to a credit rating. Surety Bonds’ impact assumes maximum contractual obligations (typical obligations require 30 days to cure). 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 CCR impoundment closure and post-closure activities and the Hatfield’s Ferry CCR disposal site, respectively.
|
|
For the Three Months Ended
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/ Other
|
|
Reconciling Adjustments
|
|
Consolidated
|
||||||||||
|
|
|
(In millions)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
External revenues
|
|
$
|
2,590
|
|
|
$
|
371
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2,963
|
|
|
Internal revenues
|
|
46
|
|
|
4
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|||||
|
Total revenues
|
|
$
|
2,636
|
|
|
$
|
375
|
|
|
$
|
2
|
|
|
$
|
(50
|
)
|
|
$
|
2,963
|
|
|
Depreciation
|
|
215
|
|
|
71
|
|
|
—
|
|
|
18
|
|
|
304
|
|
|||||
|
Amortization of regulatory assets, net
|
|
42
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||
|
Miscellaneous income (expense), net
|
|
36
|
|
|
4
|
|
|
24
|
|
|
(7
|
)
|
|
57
|
|
|||||
|
Interest expense
|
|
124
|
|
|
49
|
|
|
95
|
|
|
(7
|
)
|
|
261
|
|
|||||
|
Income taxes (benefits)
|
|
103
|
|
|
26
|
|
|
(22
|
)
|
|
—
|
|
|
107
|
|
|||||
|
Income (loss) from continuing operations
|
|
370
|
|
|
113
|
|
|
(94
|
)
|
|
—
|
|
|
389
|
|
|||||
|
Property additions
|
|
365
|
|
|
304
|
|
|
15
|
|
|
—
|
|
|
684
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
External revenues
|
|
$
|
2,717
|
|
|
$
|
341
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
3,064
|
|
|
Internal revenues
|
|
49
|
|
|
5
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|||||
|
Total revenues
|
|
$
|
2,766
|
|
|
$
|
346
|
|
|
$
|
6
|
|
|
$
|
(54
|
)
|
|
$
|
3,064
|
|
|
Depreciation
|
|
202
|
|
|
64
|
|
|
1
|
|
|
16
|
|
|
283
|
|
|||||
|
Amortization of regulatory assets, net
|
|
65
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|||||
|
Miscellaneous income (expense), net
|
|
34
|
|
|
4
|
|
|
19
|
|
|
(8
|
)
|
|
49
|
|
|||||
|
Interest expense
|
|
127
|
|
|
43
|
|
|
93
|
|
|
(8
|
)
|
|
255
|
|
|||||
|
Income taxes (benefits)
|
|
126
|
|
|
34
|
|
|
(39
|
)
|
|
—
|
|
|
121
|
|
|||||
|
Income (loss) from continuing operations
|
|
416
|
|
|
99
|
|
|
(116
|
)
|
|
—
|
|
|
399
|
|
|||||
|
Property additions
|
|
356
|
|
|
262
|
|
|
5
|
|
|
12
|
|
|
635
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
For the Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
External revenues
|
|
$
|
7,261
|
|
|
$
|
1,091
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
8,362
|
|
|
Internal revenues
|
|
140
|
|
|
12
|
|
|
—
|
|
|
(152
|
)
|
|
—
|
|
|||||
|
Total revenues
|
|
$
|
7,401
|
|
|
$
|
1,103
|
|
|
$
|
10
|
|
|
$
|
(152
|
)
|
|
$
|
8,362
|
|
|
Depreciation
|
|
644
|
|
|
211
|
|
|
3
|
|
|
52
|
|
|
910
|
|
|||||
|
Amortization of regulatory assets, net
|
|
79
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|||||
|
Miscellaneous income (expense), net
|
|
128
|
|
|
12
|
|
|
73
|
|
|
(22
|
)
|
|
191
|
|
|||||
|
Interest expense
|
|
370
|
|
|
142
|
|
|
283
|
|
|
(22
|
)
|
|
773
|
|
|||||
|
Income taxes (benefits)
|
|
259
|
|
|
87
|
|
|
(65
|
)
|
|
—
|
|
|
281
|
|
|||||
|
Income (loss) from continuing operations
|
|
957
|
|
|
333
|
|
|
(205
|
)
|
|
—
|
|
|
1,085
|
|
|||||
|
Property additions
|
|
1,037
|
|
|
835
|
|
|
40
|
|
|
—
|
|
|
1,912
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
External revenues
|
|
$
|
7,540
|
|
|
$
|
996
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
8,551
|
|
|
Internal revenues
|
|
154
|
|
|
14
|
|
|
13
|
|
|
(181
|
)
|
|
—
|
|
|||||
|
Total revenues
|
|
$
|
7,694
|
|
|
$
|
1,010
|
|
|
$
|
28
|
|
|
$
|
(181
|
)
|
|
$
|
8,551
|
|
|
Depreciation
|
|
598
|
|
|
187
|
|
|
6
|
|
|
52
|
|
|
843
|
|
|||||
|
Amortization (deferral) of regulatory assets, net
|
|
(194
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(188
|
)
|
|||||
|
Miscellaneous income (expense), net
|
|
146
|
|
|
11
|
|
|
34
|
|
|
(27
|
)
|
|
164
|
|
|||||
|
Interest expense
|
|
384
|
|
|
124
|
|
|
377
|
|
|
(27
|
)
|
|
858
|
|
|||||
|
Income taxes (benefits)
|
|
357
|
|
|
104
|
|
|
(6
|
)
|
|
—
|
|
|
455
|
|
|||||
|
Income (loss) from continuing operations
|
|
1,115
|
|
|
302
|
|
|
(529
|
)
|
|
—
|
|
|
888
|
|
|||||
|
Property additions
|
|
1,011
|
|
|
836
|
|
|
68
|
|
|
27
|
|
|
1,942
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total assets
|
|
$
|
29,428
|
|
|
$
|
11,255
|
|
|
$
|
790
|
|
|
$
|
33
|
|
|
$
|
41,506
|
|
|
Total goodwill
|
|
5,004
|
|
|
614
|
|
|
—
|
|
|
—
|
|
|
5,618
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total assets
|
|
$
|
28,690
|
|
|
$
|
10,404
|
|
|
$
|
944
|
|
|
$
|
25
|
|
|
$
|
40,063
|
|
|
Total goodwill
|
|
5,004
|
|
|
614
|
|
|
—
|
|
|
—
|
|
|
5,618
|
|
|||||
|
•
|
FE will pay certain pre-petition FES Debtors employee-related obligations, which include unfunded pension obligations and other employee benefits.
|
|
•
|
A nonconsensual release of all claims against FirstEnergy by the FES Debtors’ creditors, which was subsequently waived pursuant to the Waiver Agreement, discussed below.
|
|
•
|
A $225 million cash payment from FirstEnergy.
|
|
•
|
A $628 million aggregate principal amount note issuance by FirstEnergy to the FES Debtors, which may be decreased by the amount, if any, of cash paid by FirstEnergy to the FES Debtors under the Intercompany Income Tax Allocation Agreement for the tax benefits related to the sale or deactivation of certain plants.
|
|
•
|
Transfer of the Pleasants Power Station and related assets, including the economic interests therein as of January 1, 2019, and a requirement that FE continue to provide access to the McElroy’s Run CCR Impoundment Facility, which is not being transferred. FE will provide guarantees for certain retained environmental liabilities of AE Supply, including the McElroy’s Run CCR Impoundment Facility.
|
|
•
|
FirstEnergy agrees to waive all pre-petition claims related to shared services and credit for nine months of the FES Debtors’ shared service costs beginning as of April 1, 2018 through December 31, 2018, in an amount not to exceed $112.5 million, and FirstEnergy agrees to extend the availability of shared services until no later than June 30, 2020.
|
|
•
|
Subject to a cap, FirstEnergy has agreed to fund a pension enhancement through its pension plan, for voluntary enhanced retirement packages offered to certain FES employees, as well as offer certain other employee benefits (approximately $14 million recognized in the first nine months of 2019).
|
|
•
|
FirstEnergy agrees to perform under the Intercompany Tax Allocation Agreement through the FES Debtors’ emergence from bankruptcy, at which time FirstEnergy will waive a 2017 overpayment for NOLs of approximately $71 million, reverse 2018 estimated payments for NOLs of approximately $88 million and pay the FES Debtors for the use of NOLs in an amount no less than $66 million for 2018. Based on the 2018 federal tax return filed in September 2019, FirstEnergy owes the FES debtors approximately $31 million associated with 2018, which will be paid upon emergence.
|
|
(In millions)
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Revenues
|
|
$
|
2,963
|
|
|
$
|
3,064
|
|
|
$
|
(101
|
)
|
|
(3
|
)%
|
|
$
|
8,362
|
|
|
$
|
8,551
|
|
|
$
|
(189
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Operating expenses
|
|
2,282
|
|
|
2,354
|
|
|
(72
|
)
|
|
(3
|
)%
|
|
6,467
|
|
|
6,561
|
|
|
(94
|
)
|
|
(1
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Operating income
|
|
681
|
|
|
710
|
|
|
(29
|
)
|
|
(4
|
)%
|
|
1,895
|
|
|
1,990
|
|
|
(95
|
)
|
|
(5
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Other expenses, net
|
|
(185
|
)
|
|
(190
|
)
|
|
5
|
|
|
3
|
%
|
|
(529
|
)
|
|
(647
|
)
|
|
118
|
|
|
18
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Income before income taxes
|
|
496
|
|
|
520
|
|
|
(24
|
)
|
|
(5
|
)%
|
|
1,366
|
|
|
1,343
|
|
|
23
|
|
|
2
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Income taxes
|
|
107
|
|
|
121
|
|
|
(14
|
)
|
|
(12
|
)%
|
|
281
|
|
|
455
|
|
|
(174
|
)
|
|
(38
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Income from continuing operations
|
|
389
|
|
|
399
|
|
|
(10
|
)
|
|
(3
|
)%
|
|
1,085
|
|
|
888
|
|
|
197
|
|
|
22
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Discontinued operations, net of tax
|
|
2
|
|
|
(857
|
)
|
|
859
|
|
|
NM
|
|
|
(62
|
)
|
|
322
|
|
|
(384
|
)
|
|
NM
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Net income (loss)
|
|
$
|
391
|
|
|
$
|
(458
|
)
|
|
$
|
849
|
|
|
185
|
%
|
|
$
|
1,023
|
|
|
$
|
1,210
|
|
|
$
|
(187
|
)
|
|
(15
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Third Quarter 2019 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Electric
|
|
$
|
2,571
|
|
|
$
|
371
|
|
|
$
|
(33
|
)
|
|
$
|
2,909
|
|
|
Other
|
|
65
|
|
|
4
|
|
|
(15
|
)
|
|
54
|
|
||||
|
Total Revenues
|
|
2,636
|
|
|
375
|
|
|
(48
|
)
|
|
2,963
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fuel
|
|
122
|
|
|
—
|
|
|
—
|
|
|
122
|
|
||||
|
Purchased power
|
|
794
|
|
|
—
|
|
|
4
|
|
|
798
|
|
||||
|
Other operating expenses
|
|
715
|
|
|
75
|
|
|
(32
|
)
|
|
758
|
|
||||
|
Provision for depreciation
|
|
215
|
|
|
71
|
|
|
18
|
|
|
304
|
|
||||
|
Amortization of regulatory assets, net
|
|
42
|
|
|
1
|
|
|
—
|
|
|
43
|
|
||||
|
General taxes
|
|
197
|
|
|
53
|
|
|
7
|
|
|
257
|
|
||||
|
Total Operating Expenses
|
|
2,085
|
|
|
200
|
|
|
(3
|
)
|
|
2,282
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income (Loss)
|
|
551
|
|
|
175
|
|
|
(45
|
)
|
|
681
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Miscellaneous income, net
|
|
36
|
|
|
4
|
|
|
17
|
|
|
57
|
|
||||
|
Interest expense
|
|
(124
|
)
|
|
(49
|
)
|
|
(88
|
)
|
|
(261
|
)
|
||||
|
Capitalized financing costs
|
|
10
|
|
|
9
|
|
|
—
|
|
|
19
|
|
||||
|
Total Other Expense
|
|
(78
|
)
|
|
(36
|
)
|
|
(71
|
)
|
|
(185
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) Before Income Taxes (Benefits)
|
|
473
|
|
|
139
|
|
|
(116
|
)
|
|
496
|
|
||||
|
Income taxes (benefits)
|
|
103
|
|
|
26
|
|
|
(22
|
)
|
|
107
|
|
||||
|
Income (Loss) From Continuing Operations
|
|
370
|
|
|
113
|
|
|
(94
|
)
|
|
389
|
|
||||
|
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
|
Net Income (Loss)
|
|
$
|
370
|
|
|
$
|
113
|
|
|
$
|
(92
|
)
|
|
$
|
391
|
|
|
Third Quarter 2018 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Electric
|
|
$
|
2,698
|
|
|
$
|
341
|
|
|
$
|
(30
|
)
|
|
$
|
3,009
|
|
|
Other
|
|
68
|
|
|
5
|
|
|
(18
|
)
|
|
55
|
|
||||
|
Total Revenues
|
|
2,766
|
|
|
346
|
|
|
(48
|
)
|
|
3,064
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fuel
|
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
||||
|
Purchased power
|
|
873
|
|
|
—
|
|
|
3
|
|
|
876
|
|
||||
|
Other operating expenses
|
|
663
|
|
|
68
|
|
|
8
|
|
|
739
|
|
||||
|
Provision for depreciation
|
|
202
|
|
|
64
|
|
|
17
|
|
|
283
|
|
||||
|
Amortization of regulatory assets, net
|
|
65
|
|
|
2
|
|
|
—
|
|
|
67
|
|
||||
|
General taxes
|
|
197
|
|
|
49
|
|
|
6
|
|
|
252
|
|
||||
|
Total Operating Expenses
|
|
2,137
|
|
|
183
|
|
|
34
|
|
|
2,354
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income (Loss)
|
|
629
|
|
|
163
|
|
|
(82
|
)
|
|
710
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Miscellaneous income, net
|
|
34
|
|
|
4
|
|
|
11
|
|
|
49
|
|
||||
|
Interest expense
|
|
(127
|
)
|
|
(43
|
)
|
|
(85
|
)
|
|
(255
|
)
|
||||
|
Capitalized financing costs
|
|
6
|
|
|
9
|
|
|
1
|
|
|
16
|
|
||||
|
Total Other Expense
|
|
(87
|
)
|
|
(30
|
)
|
|
(73
|
)
|
|
(190
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) Before Income Taxes (Benefits)
|
|
542
|
|
|
133
|
|
|
(155
|
)
|
|
520
|
|
||||
|
Income taxes (benefits)
|
|
126
|
|
|
34
|
|
|
(39
|
)
|
|
121
|
|
||||
|
Income (Loss) From Continuing Operations
|
|
416
|
|
|
99
|
|
|
(116
|
)
|
|
399
|
|
||||
|
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(857
|
)
|
|
(857
|
)
|
||||
|
Net Income (Loss)
|
|
$
|
416
|
|
|
$
|
99
|
|
|
$
|
(973
|
)
|
|
$
|
(458
|
)
|
|
Changes Between Third Quarter 2019 and Third Quarter 2018 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Electric
|
|
$
|
(127
|
)
|
|
$
|
30
|
|
|
$
|
(3
|
)
|
|
$
|
(100
|
)
|
|
Other
|
|
(3
|
)
|
|
(1
|
)
|
|
3
|
|
|
(1
|
)
|
||||
|
Total Revenues
|
|
(130
|
)
|
|
29
|
|
|
—
|
|
|
(101
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fuel
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||
|
Purchased power
|
|
(79
|
)
|
|
—
|
|
|
1
|
|
|
(78
|
)
|
||||
|
Other operating expenses
|
|
52
|
|
|
7
|
|
|
(40
|
)
|
|
19
|
|
||||
|
Provision for depreciation
|
|
13
|
|
|
7
|
|
|
1
|
|
|
21
|
|
||||
|
Amortization of regulatory assets, net
|
|
(23
|
)
|
|
(1
|
)
|
|
—
|
|
|
(24
|
)
|
||||
|
General taxes
|
|
—
|
|
|
4
|
|
|
1
|
|
|
5
|
|
||||
|
Total Operating Expenses
|
|
(52
|
)
|
|
17
|
|
|
(37
|
)
|
|
(72
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income (Loss)
|
|
(78
|
)
|
|
12
|
|
|
37
|
|
|
(29
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Miscellaneous income, net
|
|
2
|
|
|
—
|
|
|
6
|
|
|
8
|
|
||||
|
Interest expense
|
|
3
|
|
|
(6
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
|
Capitalized financing costs
|
|
4
|
|
|
—
|
|
|
(1
|
)
|
|
3
|
|
||||
|
Total Other Expense
|
|
9
|
|
|
(6
|
)
|
|
2
|
|
|
5
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) Before Income Taxes (Benefits)
|
|
(69
|
)
|
|
6
|
|
|
39
|
|
|
(24
|
)
|
||||
|
Income taxes (benefits)
|
|
(23
|
)
|
|
(8
|
)
|
|
17
|
|
|
(14
|
)
|
||||
|
Income (Loss) From Continuing Operations
|
|
(46
|
)
|
|
14
|
|
|
22
|
|
|
(10
|
)
|
||||
|
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
859
|
|
|
859
|
|
||||
|
Net Income (Loss)
|
|
$
|
(46
|
)
|
|
$
|
14
|
|
|
$
|
881
|
|
|
$
|
849
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
||||||||
|
Revenues by Type of Service
|
|
2019
|
|
2018
|
|
Decrease
|
||||||
|
|
|
(In millions)
|
||||||||||
|
Distribution services(1)
|
|
$
|
1,482
|
|
|
$
|
1,506
|
|
|
$
|
(24
|
)
|
|
|
|
|
|
|
|
|
||||||
|
Generation sales:
|
|
|
|
|
|
|
||||||
|
Retail
|
|
989
|
|
|
1,059
|
|
|
(70
|
)
|
|||
|
Wholesale
|
|
100
|
|
|
133
|
|
|
(33
|
)
|
|||
|
Total generation sales
|
|
1,089
|
|
|
1,192
|
|
|
(103
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Other
|
|
65
|
|
|
68
|
|
|
(3
|
)
|
|||
|
Total Revenues
|
|
$
|
2,636
|
|
|
$
|
2,766
|
|
|
$
|
(130
|
)
|
|
|
|
For the Three Months Ended September 30,
|
|
|
|||||
|
Electric Distribution MWH Deliveries
|
|
2019
|
|
2018
|
|
Decrease
|
|||
|
|
|
(In thousands)
|
|||||||
|
Residential
|
|
15,306
|
|
|
15,657
|
|
|
(2.2
|
)%
|
|
Commercial
|
|
10,013
|
|
|
10,412
|
|
|
(3.8
|
)%
|
|
Industrial
|
|
14,477
|
|
|
14,618
|
|
|
(1.0
|
)%
|
|
Other
|
|
135
|
|
|
137
|
|
|
(1.5
|
)%
|
|
Total Electric Distribution MWH Deliveries
|
|
39,931
|
|
|
40,824
|
|
|
(2.2
|
)%
|
|
Source of Change in Generation Revenues
|
|
Increase (Decrease)
|
||
|
|
|
(In millions)
|
||
|
Retail:
|
|
|
|
|
|
Change in sales volumes
|
|
$
|
6
|
|
|
Change in prices
|
|
(76
|
)
|
|
|
|
|
(70
|
)
|
|
|
Wholesale:
|
|
|
||
|
Change in sales volumes
|
|
(2
|
)
|
|
|
Change in prices
|
|
(8
|
)
|
|
|
Capacity revenue
|
|
(23
|
)
|
|
|
|
|
(33
|
)
|
|
|
Decrease in Generation Revenues
|
|
$
|
(103
|
)
|
|
•
|
Fuel expense decreased $15 million in 2019, as compared to the same period of 2018, primarily due to lower unit costs.
|
|
•
|
Purchased power costs were $79 million lower in the third quarter of 2019, as compared to the same period in 2018, primarily due to lower unit costs and capacity expense, partially offset by the implementation of the NJ Zero Emission Program in June 2019.
|
|
Source of Change in Purchased Power
|
|
Increase (Decrease)
|
|||
|
|
|
(In millions)
|
|||
|
Purchases from non-affiliates:
|
|
|
|||
|
Change due to decreased unit costs
|
|
$
|
(41
|
)
|
|
|
Change due to volumes
|
|
47
|
|
||
|
|
|
6
|
|
||
|
Purchases from affiliates:
|
|
|
|||
|
Change due to decreased unit costs
|
|
(3
|
)
|
||
|
Change due to volumes
|
|
(48
|
)
|
||
|
|
|
(51
|
)
|
||
|
Capacity expense
|
|
(34
|
)
|
||
|
Decrease in Purchased Power Costs
|
|
$
|
(79
|
)
|
|
|
•
|
Other operating expenses increased $52 million in the third quarter of 2019, as compared to the same period of 2018, primarily due to the following:
|
|
•
|
Increased storm restoration costs of $19 million, which were mostly deferred for future recovery, resulting in no material impact on current period earnings.
|
|
•
|
Higher network transmission expenses of $44 million, reflecting increased transmission costs as well as the absence of the FERC settlement during the third quarter of 2018, which reallocated certain transmission costs across utilities in PJM and resulted in a refund to the Ohio Companies. Except for certain transmission costs and credits at the Ohio Companies recognized in 2018, 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 $5 million, primarily associated with higher employee benefit costs and regulated generation maintenance activities, partially offset by lower regulated generation support costs and transactions now accounted for as finance leases. As a result of the adoption of the new lease accounting standard, financing lease expenses that were recognized in other operating expenses are now recognized in depreciation and interest expense.
|
|
•
|
Higher vegetation management spend of $6 million, partially offset by lower energy efficiency and other program costs of $2 million. These costs are deferred for future recovery, resulting in no material impact on current period earnings.
|
|
•
|
The absence of $20 million in costs associated with the 2018 voluntary enhanced retirement package.
|
|
•
|
Depreciation expense increased $13 million in the third quarter of 2019, as compared to the same period of 2018, primarily due to a higher asset base and transactions now accounted for as finance leases, as discussed above.
|
|
•
|
Amortization expense decreased $23 million in the third quarter of 2019, as compared to the same period of 2018, primarily due to higher storm restoration cost deferrals, partially offset by lower deferrals of generation and transmission expenses, including the FERC settlement discussed above.
|
|
|
|
For the Three Months Ended September 30,
|
|
Increase
|
||||||||
|
Revenues by Transmission Asset Owner
|
|
2019
|
|
2018
|
|
(Decrease)
|
||||||
|
|
|
(In millions)
|
||||||||||
|
ATSI
|
|
$
|
185
|
|
|
$
|
168
|
|
|
$
|
17
|
|
|
TrAIL
|
|
57
|
|
|
62
|
|
|
(5
|
)
|
|||
|
MAIT
|
|
59
|
|
|
44
|
|
|
15
|
|
|||
|
Other
|
|
74
|
|
|
72
|
|
|
2
|
|
|||
|
Total Revenues
|
|
$
|
375
|
|
|
$
|
346
|
|
|
$
|
29
|
|
|
First Nine Months 2019 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Electric
|
|
$
|
7,214
|
|
|
$
|
1,090
|
|
|
$
|
(96
|
)
|
|
$
|
8,208
|
|
|
Other
|
|
187
|
|
|
13
|
|
|
(46
|
)
|
|
154
|
|
||||
|
Total Revenues
|
|
7,401
|
|
|
1,103
|
|
|
(142
|
)
|
|
8,362
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fuel
|
|
382
|
|
|
—
|
|
|
—
|
|
|
382
|
|
||||
|
Purchased power
|
|
2,177
|
|
|
—
|
|
|
13
|
|
|
2,190
|
|
||||
|
Other operating expenses
|
|
2,116
|
|
|
205
|
|
|
(178
|
)
|
|
2,143
|
|
||||
|
Provision for depreciation
|
|
644
|
|
|
211
|
|
|
55
|
|
|
910
|
|
||||
|
Amortization of regulatory assets, net
|
|
79
|
|
|
6
|
|
|
—
|
|
|
85
|
|
||||
|
General taxes
|
|
572
|
|
|
156
|
|
|
29
|
|
|
757
|
|
||||
|
Total Operating Expenses
|
|
5,970
|
|
|
578
|
|
|
(81
|
)
|
|
6,467
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income (Loss)
|
|
1,431
|
|
|
525
|
|
|
(61
|
)
|
|
1,895
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Miscellaneous income, net
|
|
128
|
|
|
12
|
|
|
51
|
|
|
191
|
|
||||
|
Interest expense
|
|
(370
|
)
|
|
(142
|
)
|
|
(261
|
)
|
|
(773
|
)
|
||||
|
Capitalized financing costs
|
|
27
|
|
|
25
|
|
|
1
|
|
|
53
|
|
||||
|
Total Other Expense
|
|
(215
|
)
|
|
(105
|
)
|
|
(209
|
)
|
|
(529
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) Before Income Taxes (Benefits)
|
|
1,216
|
|
|
420
|
|
|
(270
|
)
|
|
1,366
|
|
||||
|
Income taxes (benefits)
|
|
259
|
|
|
87
|
|
|
(65
|
)
|
|
281
|
|
||||
|
Income (Loss) From Continuing Operations
|
|
957
|
|
|
333
|
|
|
(205
|
)
|
|
1,085
|
|
||||
|
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(62
|
)
|
|
(62
|
)
|
||||
|
Net Income (Loss)
|
|
$
|
957
|
|
|
$
|
333
|
|
|
$
|
(267
|
)
|
|
$
|
1,023
|
|
|
|
||||||||||||||||
|
First Nine Months 2018 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Electric
|
|
$
|
7,497
|
|
|
$
|
996
|
|
|
$
|
(107
|
)
|
|
$
|
8,386
|
|
|
Other
|
|
197
|
|
|
14
|
|
|
(46
|
)
|
|
165
|
|
||||
|
Total Revenues
|
|
7,694
|
|
|
1,010
|
|
|
(153
|
)
|
|
8,551
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fuel
|
|
404
|
|
|
—
|
|
|
—
|
|
|
404
|
|
||||
|
Purchased power
|
|
2,391
|
|
|
—
|
|
|
2
|
|
|
2,393
|
|
||||
|
Other operating expenses
|
|
2,227
|
|
|
182
|
|
|
(46
|
)
|
|
2,363
|
|
||||
|
Provision for depreciation
|
|
598
|
|
|
187
|
|
|
58
|
|
|
843
|
|
||||
|
Amortization (deferral) of regulatory assets, net
|
|
(194
|
)
|
|
6
|
|
|
—
|
|
|
(188
|
)
|
||||
|
General taxes
|
|
576
|
|
|
144
|
|
|
26
|
|
|
746
|
|
||||
|
Total Operating Expenses
|
|
6,002
|
|
|
519
|
|
|
40
|
|
|
6,561
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income (Loss)
|
|
1,692
|
|
|
491
|
|
|
(193
|
)
|
|
1,990
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Miscellaneous income, net
|
|
146
|
|
|
11
|
|
|
7
|
|
|
164
|
|
||||
|
Interest expense
|
|
(384
|
)
|
|
(124
|
)
|
|
(350
|
)
|
|
(858
|
)
|
||||
|
Capitalized financing costs
|
|
18
|
|
|
28
|
|
|
1
|
|
|
47
|
|
||||
|
Total Other Expense
|
|
(220
|
)
|
|
(85
|
)
|
|
(342
|
)
|
|
(647
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) Before Income Taxes (Benefits)
|
|
1,472
|
|
|
406
|
|
|
(535
|
)
|
|
1,343
|
|
||||
|
Income taxes (benefits)
|
|
357
|
|
|
104
|
|
|
(6
|
)
|
|
455
|
|
||||
|
Income (Loss) From Continuing Operations
|
|
1,115
|
|
|
302
|
|
|
(529
|
)
|
|
888
|
|
||||
|
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
322
|
|
|
322
|
|
||||
|
Net Income (Loss)
|
|
$
|
1,115
|
|
|
$
|
302
|
|
|
$
|
(207
|
)
|
|
$
|
1,210
|
|
|
|
||||||||||||||||
|
Changes Between First Nine Months 2019 and First Nine Months 2018 Financial Results
|
|
Regulated Distribution
|
|
Regulated Transmission
|
|
Corporate/Other and Reconciling Adjustments
|
|
FirstEnergy Consolidated
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Electric
|
|
$
|
(283
|
)
|
|
$
|
94
|
|
|
$
|
11
|
|
|
$
|
(178
|
)
|
|
Other
|
|
(10
|
)
|
|
(1
|
)
|
|
—
|
|
|
(11
|
)
|
||||
|
Total Revenues
|
|
(293
|
)
|
|
93
|
|
|
11
|
|
|
(189
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fuel
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
|
Purchased power
|
|
(214
|
)
|
|
—
|
|
|
11
|
|
|
(203
|
)
|
||||
|
Other operating expenses
|
|
(111
|
)
|
|
23
|
|
|
(132
|
)
|
|
(220
|
)
|
||||
|
Provision for depreciation
|
|
46
|
|
|
24
|
|
|
(3
|
)
|
|
67
|
|
||||
|
Amortization (deferral) of regulatory assets, net
|
|
273
|
|
|
—
|
|
|
—
|
|
|
273
|
|
||||
|
General taxes
|
|
(4
|
)
|
|
12
|
|
|
3
|
|
|
11
|
|
||||
|
Total Operating Expenses
|
|
(32
|
)
|
|
59
|
|
|
(121
|
)
|
|
(94
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income (Loss)
|
|
(261
|
)
|
|
34
|
|
|
132
|
|
|
(95
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Miscellaneous income (expense), net
|
|
(18
|
)
|
|
1
|
|
|
44
|
|
|
27
|
|
||||
|
Interest expense
|
|
14
|
|
|
(18
|
)
|
|
89
|
|
|
85
|
|
||||
|
Capitalized financing costs
|
|
9
|
|
|
(3
|
)
|
|
—
|
|
|
6
|
|
||||
|
Total Other Expense
|
|
5
|
|
|
(20
|
)
|
|
133
|
|
|
118
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income (Loss) Before Income Taxes (Benefits)
|
|
(256
|
)
|
|
14
|
|
|
265
|
|
|
23
|
|
||||
|
Income taxes (benefits)
|
|
(98
|
)
|
|
(17
|
)
|
|
(59
|
)
|
|
(174
|
)
|
||||
|
Income (Loss) From Continuing Operations
|
|
(158
|
)
|
|
31
|
|
|
324
|
|
|
197
|
|
||||
|
Discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
(384
|
)
|
|
(384
|
)
|
||||
|
Net Income (Loss)
|
|
$
|
(158
|
)
|
|
$
|
31
|
|
|
$
|
(60
|
)
|
|
$
|
(187
|
)
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
||||||||
|
Revenues by Type of Service
|
|
2019
|
|
2018
|
|
Decrease
|
||||||
|
|
|
(In millions)
|
||||||||||
|
Distribution services(1)
|
|
$
|
4,045
|
|
|
$
|
4,139
|
|
|
$
|
(94
|
)
|
|
|
|
|
|
|
|
|
||||||
|
Generation sales:
|
|
|
|
|
|
|
||||||
|
Retail
|
|
2,853
|
|
|
2,981
|
|
|
(128
|
)
|
|||
|
Wholesale
|
|
316
|
|
|
377
|
|
|
(61
|
)
|
|||
|
Total generation sales
|
|
3,169
|
|
|
3,358
|
|
|
(189
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Other
|
|
187
|
|
|
197
|
|
|
(10
|
)
|
|||
|
Total Revenues
|
|
$
|
7,401
|
|
|
$
|
7,694
|
|
|
$
|
(293
|
)
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
|||||
|
Electric Distribution MWH Deliveries
|
|
2019
|
|
2018
|
|
Decrease
|
|||
|
|
|
(In thousands)
|
|||||||
|
Residential
|
|
41,311
|
|
|
42,730
|
|
|
(3.3
|
)%
|
|
Commercial
|
|
28,496
|
|
|
29,365
|
|
|
(3.0
|
)%
|
|
Industrial
|
|
42,032
|
|
|
42,663
|
|
|
(1.5
|
)%
|
|
Other
|
|
413
|
|
|
418
|
|
|
(1.2
|
)%
|
|
Total Electric Distribution MWH Deliveries
|
|
112,252
|
|
|
115,176
|
|
|
(2.5
|
)%
|
|
Source of Change in Generation Revenues
|
|
Increase (Decrease)
|
||
|
|
|
(In millions)
|
||
|
Retail:
|
|
|
|
|
|
Change in sales volumes
|
|
$
|
8
|
|
|
Change in prices
|
|
(136
|
)
|
|
|
|
|
(128
|
)
|
|
|
Wholesale:
|
|
|
||
|
Change in sales volumes
|
|
(9
|
)
|
|
|
Change in prices
|
|
(33
|
)
|
|
|
Capacity revenue
|
|
(19
|
)
|
|
|
|
|
(61
|
)
|
|
|
Decrease in Generation Revenues
|
|
$
|
(189
|
)
|
|
•
|
Fuel costs were $22 million lower during the first nine months of 2019, as compared to the same period of 2018, primarily due to lower unit costs.
|
|
•
|
Purchased power costs decreased $214 million during the first nine months of 2019, as compared to the same period of 2018, primarily due to lower unit costs, partially offset by the implementation of the NJ Zero Emission Program in June 2019.
|
|
Source of Change in Purchased Power
|
|
Increase (Decrease)
|
|||
|
|
|
(In millions)
|
|||
|
Purchases from non-affiliates:
|
|
|
|||
|
Change due to decreased unit costs
|
|
$
|
(148
|
)
|
|
|
Change due to volumes
|
|
56
|
|
||
|
|
|
(92
|
)
|
||
|
Purchases from affiliates:
|
|
|
|||
|
Change due to decreased unit costs
|
|
(7
|
)
|
||
|
Change due to volumes
|
|
(93
|
)
|
||
|
|
|
(100
|
)
|
||
|
Capacity
|
|
(22
|
)
|
||
|
Decrease in Purchased Power Costs
|
|
$
|
(214
|
)
|
|
|
•
|
Other operating expenses decreased $111 million in the first nine months of 2019, as compared to the same period of 2018, primarily due to:
|
|
•
|
Decreased storm restoration costs of $123 million, which were deferred for future recovery, resulting in no material impact on current period earnings.
|
|
•
|
Lower energy efficiency and other program costs of $19 million, partially offset by higher vegetation management spend of $8 million. These costs are deferred for future recovery, resulting in no material impact on current period earnings.
|
|
•
|
Lower operating and maintenance expenses of $40 million, primarily associated with lower corporate support costs and transactions now accounted for as finance leases, partially offset by higher contractor spend and regulated generation maintenance activities. As a result of the adoption of the new lease accounting standard, financing lease expenses that were recognized in other operating expenses are now recognized in depreciation and interest expense in 2019.
|
|
•
|
The absence of $19 million in costs associated with the 2018 voluntary enhanced retirement package.
|
|
•
|
Higher net network transmission expenses of $82 million, reflecting increased transmission costs as well as the absence of the FERC settlement during the third quarter of 2018, which reallocated certain transmission costs across utilities in PJM and resulted in a refund to the Ohio Companies. Except for certain transmission costs and credits at the Ohio Companies recognized in 2018, 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.
|
|
•
|
Depreciation expense increased $46 million in the first nine months of 2019, as compared to the same period of 2018, primarily due to a higher rate base and transactions now accounted for as finance leases, as discussed above.
|
|
•
|
Amortization expense increased $273 million in the first nine months of 2019, as compared to the same period of 2018, primarily due to decreased deferral of storm restoration costs, the absence of the reversal of a liability at the Ohio Companies for an Ohio Supreme Court ruling regarding purchase of RECs, as well as lower deferrals of generation and transmission expenses, including the FERC settlement discussed above.
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
||||||||
|
Revenues by Transmission Asset Owner
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
|
|
|
(In millions)
|
||||||||||
|
ATSI
|
|
$
|
545
|
|
|
$
|
495
|
|
|
$
|
50
|
|
|
TrAIL
|
|
178
|
|
|
190
|
|
|
(12
|
)
|
|||
|
MAIT
|
|
160
|
|
|
109
|
|
|
51
|
|
|||
|
Other
|
|
220
|
|
|
216
|
|
|
4
|
|
|||
|
Total Revenues
|
|
$
|
1,103
|
|
|
$
|
1,010
|
|
|
$
|
93
|
|
|
Net Regulatory Assets (Liabilities) by Source
|
|
September 30,
2019 |
|
December 31,
2018 |
|
Change
|
||||||
|
|
|
(In millions)
|
||||||||||
|
Regulatory transition costs
|
|
$
|
(4
|
)
|
|
$
|
49
|
|
|
$
|
(53
|
)
|
|
Customer payables for future income taxes
|
|
(2,682
|
)
|
|
(2,725
|
)
|
|
43
|
|
|||
|
Nuclear decommissioning and spent fuel disposal costs
|
|
(198
|
)
|
|
(148
|
)
|
|
(50
|
)
|
|||
|
Asset removal costs
|
|
(771
|
)
|
|
(787
|
)
|
|
16
|
|
|||
|
Deferred transmission costs
|
|
145
|
|
|
170
|
|
|
(25
|
)
|
|||
|
Deferred generation costs
|
|
186
|
|
|
202
|
|
|
(16
|
)
|
|||
|
Deferred distribution costs
|
|
169
|
|
|
208
|
|
|
(39
|
)
|
|||
|
Contract valuations
|
|
65
|
|
|
72
|
|
|
(7
|
)
|
|||
|
Storm-related costs
|
|
541
|
|
|
500
|
|
|
41
|
|
|||
|
Other
|
|
21
|
|
|
52
|
|
|
(31
|
)
|
|||
|
Net Regulatory Liabilities included on the Consolidated Balance Sheets
|
|
$
|
(2,528
|
)
|
|
$
|
(2,407
|
)
|
|
$
|
(121
|
)
|
|
Regulatory Assets by Source Not Earning a Current Return
|
|
September 30,
2019 |
|
December 31,
2018 |
|
Change
|
||||||
|
|
|
(In millions)
|
||||||||||
|
Regulatory transition costs
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
(1
|
)
|
|
Deferred transmission costs
|
|
35
|
|
|
87
|
|
|
(52
|
)
|
|||
|
Storm-related costs
|
|
449
|
|
|
363
|
|
|
86
|
|
|||
|
Other
|
|
47
|
|
|
43
|
|
|
4
|
|
|||
|
Regulatory Assets Not Earning a Current Return
|
|
$
|
540
|
|
|
$
|
503
|
|
|
$
|
37
|
|
|
Currently Payable Long-Term Debt
|
|
(In millions)
|
||
|
Unsecured notes
|
|
$
|
250
|
|
|
Secured notes
|
|
50
|
|
|
|
Sinking fund requirements
|
|
65
|
|
|
|
Other notes
|
|
16
|
|
|
|
|
|
$
|
381
|
|
|
Borrower(s)
|
|
Type
|
|
Maturity
|
|
Commitment
|
|
Available Liquidity
|
||||
|
|
|
|
|
|
|
(In millions)
|
||||||
|
FirstEnergy(1)
|
|
Revolving
|
|
December 2022
|
|
$
|
2,500
|
|
|
$
|
2,494
|
|
|
FET(2)
|
|
Revolving
|
|
December 2022
|
|
1,000
|
|
|
1,000
|
|
||
|
|
|
|
|
Subtotal
|
|
$
|
3,500
|
|
|
$
|
3,494
|
|
|
|
|
Cash and cash equivalents
|
|
—
|
|
|
743
|
|
||||
|
|
|
|
|
Total
|
|
$
|
3,500
|
|
|
$
|
4,237
|
|
|
(1)
|
FE and the Utilities. Available liquidity includes impact of $6 million of LOCs issued under various terms.
|
|
(2)
|
Includes FET and the Transmission Companies.
|
|
Borrower
|
|
FirstEnergy Revolving
Credit Facility
Sub-Limit
|
|
FET Revolving
Credit Facility
Sub-Limit
|
|
Regulatory and
Other Short-Term Debt Limitations
|
|
|
|||||||||
|
|
|
(In millions)
|
|
|
|||||||||||||
|
FE
|
|
|
$
|
2,500
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
(1)
|
|
|
FET
|
|
|
—
|
|
|
|
1,000
|
|
|
|
—
|
|
(1)
|
|
|||
|
OE
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
|
CEI
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
|
TE
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
(2)
|
|
|||
|
JCP&L
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
|
ME
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
|
PN
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
(2)
|
|
|||
|
WP
|
|
|
200
|
|
|
|
—
|
|
|
|
200
|
|
(2)
|
|
|||
|
MP
|
|
|
500
|
|
|
|
—
|
|
|
|
500
|
|
(2)
|
|
|||
|
PE
|
|
|
150
|
|
|
|
—
|
|
|
|
150
|
|
(2)
|
|
|||
|
ATSI
|
|
|
—
|
|
|
|
500
|
|
|
|
500
|
|
(2)
|
|
|||
|
Penn
|
|
|
100
|
|
|
|
—
|
|
|
|
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.
|
|
|
|
Corporate Credit Rating
|
|
Senior Secured
|
|
Senior Unsecured
|
|
Outlook (1)
|
||||||||||||||||
|
Issuer
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
|
FE
|
|
BBB
|
|
Baa3
|
|
BBB-
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa3
|
|
BBB-
|
|
S
|
|
S
|
|
P
|
|
AGC
|
|
BBB-
|
|
Baa2
|
|
BBB
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
S
|
|
S
|
|
S
|
|
ATSI
|
|
BBB
|
|
A3
|
|
BBB
|
|
—
|
|
—
|
|
—
|
|
BBB
|
|
A3
|
|
BBB+
|
|
S
|
|
S
|
|
P
|
|
CEI
|
|
BBB
|
|
Baa2
|
|
BBB
|
|
A-
|
|
A3
|
|
A-
|
|
BBB
|
|
Baa2
|
|
BBB+
|
|
S
|
|
S
|
|
P
|
|
FET
|
|
BBB
|
|
Baa2
|
|
BBB-
|
|
—
|
|
—
|
|
—
|
|
BBB-
|
|
Baa2
|
|
BBB-
|
|
S
|
|
S
|
|
P
|
|
JCP&L
|
|
BBB
|
|
Baa1
|
|
BBB
|
|
—
|
|
—
|
|
—
|
|
BBB
|
|
Baa1
|
|
BBB+
|
|
S
|
|
P
|
|
P
|
|
ME
|
|
BBB
|
|
A3
|
|
BBB
|
|
—
|
|
—
|
|
—
|
|
BBB
|
|
A3
|
|
BBB+
|
|
S
|
|
S
|
|
P
|
|
MAIT
|
|
BBB
|
|
A3
|
|
BBB
|
|
—
|
|
—
|
|
—
|
|
BBB
|
|
A3
|
|
BBB+
|
|
S
|
|
S
|
|
P
|
|
MP
|
|
BBB
|
|
Baa2
|
|
BBB
|
|
A-
|
|
A3
|
|
A-
|
|
BBB
|
|
Baa2
|
|
—
|
|
S
|
|
S
|
|
S
|
|
OE
|
|
BBB
|
|
A3
|
|
BBB
|
|
A-
|
|
A1
|
|
A-
|
|
BBB
|
|
A3
|
|
BBB+
|
|
S
|
|
P
|
|
P
|
|
PN
|
|
BBB
|
|
Baa1
|
|
BBB
|
|
—
|
|
—
|
|
—
|
|
BBB
|
|
Baa1
|
|
BBB+
|
|
S
|
|
S
|
|
P
|
|
Penn
|
|
BBB
|
|
A3
|
|
BBB
|
|
—
|
|
A1
|
|
A-
|
|
—
|
|
—
|
|
—
|
|
S
|
|
P
|
|
P
|
|
PE
|
|
BBB
|
|
Baa2
|
|
BBB
|
|
—
|
|
—
|
|
A-
|
|
—
|
|
—
|
|
—
|
|
S
|
|
S
|
|
S
|
|
TE
|
|
BBB
|
|
Baa1
|
|
BBB
|
|
A-
|
|
A2
|
|
A-
|
|
—
|
|
—
|
|
—
|
|
S
|
|
S
|
|
P
|
|
TrAIL
|
|
BBB
|
|
A3
|
|
BBB
|
|
—
|
|
—
|
|
—
|
|
BBB
|
|
A3
|
|
BBB+
|
|
S
|
|
S
|
|
P
|
|
WP
|
|
BBB
|
|
A3
|
|
BBB
|
|
—
|
|
—
|
|
A-
|
|
—
|
|
—
|
|
—
|
|
S
|
|
S
|
|
P
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
(In millions)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
|
Income (loss) from discontinued operations
|
|
$
|
(62
|
)
|
|
$
|
322
|
|
|
Depreciation and amortization, including regulatory assets, net, intangible assets and deferred debt-related costs
|
|
—
|
|
|
110
|
|
||
|
•
|
a $750 million decrease in cash contributions to the qualified pension plan;
|
|
•
|
higher transmission revenue reflecting a higher base rate and recovery of incremental operating expenses at ATSI and MAIT;
|
|
•
|
an increase in working capital primarily due to the timing of payments from customers;
|
|
•
|
lower storm costs; partially offset by
|
|
•
|
the absence of FES’ cash from operations from the first quarter of 2018.
|
|
|
|
For the Nine Months
Ended September 30,
|
||||||
|
Securities Issued or Redeemed / Repaid
|
|
2019
|
|
2018
|
||||
|
|
|
(In millions)
|
||||||
|
New Issues
|
|
|
|
|
|
|
||
|
Unsecured notes
|
|
$
|
1,850
|
|
|
$
|
550
|
|
|
Pollution Control Revenue Bonds
|
|
—
|
|
|
74
|
|
||
|
FMBs
|
|
250
|
|
|
—
|
|
||
|
|
|
$
|
2,100
|
|
|
$
|
624
|
|
|
|
|
|
|
|
||||
|
Preferred stock issuance
|
|
$
|
—
|
|
|
$
|
1,616
|
|
|
|
|
|
|
|
||||
|
Common stock issuance
|
|
$
|
—
|
|
|
$
|
850
|
|
|
|
|
|
|
|
||||
|
Redemptions / Repayments
|
|
|
|
|
|
|
||
|
Unsecured notes
|
|
$
|
(725
|
)
|
|
$
|
(555
|
)
|
|
Term loan
|
|
—
|
|
|
(1,450
|
)
|
||
|
Pollution Control Revenue Bonds
|
|
—
|
|
|
(216
|
)
|
||
|
Senior secured notes
|
|
(59
|
)
|
|
(57
|
)
|
||
|
|
|
$
|
(784
|
)
|
|
$
|
(2,278
|
)
|
|
|
|
|
|
|
||||
|
Make-whole premiums paid on debt redemptions
|
|
$
|
—
|
|
|
$
|
(89
|
)
|
|
|
|
|
|
|
||||
|
Short-term borrowings, net
|
|
$
|
—
|
|
|
$
|
1,400
|
|
|
|
|
|
|
|
||||
|
Preferred stock dividend payments
|
|
$
|
(6
|
)
|
|
$
|
(52
|
)
|
|
|
|
|
|
|
||||
|
Common stock dividend payments
|
|
$
|
(609
|
)
|
|
$
|
(527
|
)
|
|
|
|
For the Nine Months
Ended September 30,
|
|
Increase
|
||||||||
|
Cash Used for Investing Activities(1)
|
|
2019
|
|
2018
|
|
(Decrease)
|
||||||
|
|
|
(In millions)
|
||||||||||
|
Property Additions:
|
|
|
|
|
|
|
||||||
|
Regulated Distribution
|
|
$
|
1,037
|
|
|
$
|
1,011
|
|
|
$
|
26
|
|
|
Regulated Transmission
|
|
835
|
|
|
836
|
|
|
(1
|
)
|
|||
|
Corporate / Other
|
|
40
|
|
|
95
|
|
|
(55
|
)
|
|||
|
Proceeds from asset sales
|
|
(18
|
)
|
|
(419
|
)
|
|
401
|
|
|||
|
Investments
|
|
30
|
|
|
44
|
|
|
(14
|
)
|
|||
|
Notes receivable from affiliated companies
|
|
—
|
|
|
500
|
|
|
(500
|
)
|
|||
|
Asset removal costs
|
|
158
|
|
|
171
|
|
|
(13
|
)
|
|||
|
Other
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
|
|
|
$
|
2,081
|
|
|
$
|
2,237
|
|
|
$
|
(156
|
)
|
|
|
|
|
|
|
|
|
||||||
|
•
|
a decrease of $55 million at Corporate/Other due to lower competitive generation related investments; partially offset by
|
|
•
|
an increase of $26 million at Regulated Distribution due to investments in electric system improvements and modernization projects to increase reliability.
|
|
Guarantees and Other Assurances
|
|
Maximum Exposure
|
||
|
|
|
(In millions)
|
||
|
FE’s Guarantees on Behalf of FES and FENOC
|
|
|
|
|
|
Surety Bonds - FG(1)
|
|
$
|
200
|
|
|
Deferred compensation arrangements
|
|
143
|
|
|
|
|
|
343
|
|
|
|
FE’s Guarantees on Behalf of its Consolidated Subsidiaries
|
|
|
||
|
AE Supply asset sales(2)
|
|
555
|
|
|
|
Deferred compensation arrangements
|
|
424
|
|
|
|
Fuel related contracts and other
|
|
13
|
|
|
|
|
|
992
|
|
|
|
FE’s Guarantees and Other Assurances
|
|
|
||
|
Global holding facility
|
|
145
|
|
|
|
Surety Bonds
|
|
135
|
|
|
|
LOCs and other
|
|
21
|
|
|
|
|
|
301
|
|
|
|
Total Guarantees and Other Assurances
|
|
$
|
1,636
|
|
|
(1)
|
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 CCR impoundment closure and post-closure activities and the Hatfield’s Ferry CCR disposal site, respectively.
|
|
(2)
|
As a condition to closing AE Supply’s sale of four natural gas generating plants in December 2017, FE provided the purchaser two limited three-year guarantees totaling $555 million of certain obligations of AE Supply and AGC. In connection with the FES Bankruptcy settlement agreement, FirstEnergy has also committed to provide additional guarantees to FG for certain retained environmental liabilities of AE Supply related to the Pleasants Power Station and the McElroy’s Run CCR disposal facility.
|
|
Potential Collateral Obligations
|
|
|
AE Supply
|
|
Utilities and FET
|
|
FE
|
|
Total
|
||||||||
|
|
|
(In millions)
|
|||||||||||||||
|
Contractual Obligations for Additional Collateral
|
|
|
|
|
|
|
|
|
|
||||||||
|
At current credit rating
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Upon further downgrade
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
40
|
|
||||
|
Surety Bonds (collateralized amount)(1)
|
|
|
1
|
|
|
63
|
|
|
246
|
|
|
310
|
|
||||
|
Total Exposure from Contractual Obligations
|
|
|
$
|
2
|
|
|
$
|
103
|
|
|
$
|
246
|
|
|
$
|
351
|
|
|
(1)
|
Surety Bonds are not tied to a credit rating. Surety Bonds’ impact assumes maximum contractual obligations (typical obligations require 30 days to cure). 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 CCR impoundment closure and post-closure activities and the Hatfield’s Ferry CCR disposal site, respectively.
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
|
Exhibit Number
|
Description
|
||
|
|
|
|
|
|
|
10.1
|
|
Amendment No. 1 to Term Loan Credit Agreement, dated as of September 11, 2019, among FirstEnergy Corp., as borrower, the banks named therein and The Bank of Nova Scotia, as administrative agent (incorporated by reference to FE’s Form 8-K filed September 17, 2019, Exhibit 10.1, File No. 333-21011).
|
|
|
10.2
|
|
Amendment No. 1 to Term Loan Credit Agreement, dated as of September 11, 2019, among FirstEnergy Corp., as borrower, the banks named therein and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to FE’s Form 8-K filed September 17, 2019, Exhibit 10.2, File No. 333-21011).
|
|
(A) (B)
|
10.3
|
|
|
|
(A)
|
31.1
|
|
|
|
(A)
|
31.2
|
|
|
|
(A)
|
32
|
|
|
|
|
101
|
|
The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Corp. for the period ended September 30, 2019, formatted in iXBRL (Inline 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 Cash Flows, (iv) related notes to these financial statements and (v) document and entity information.
|
|
|
|
|
|
|
|
FIRSTENERGY CORP.
|
|
|
Registrant
|
|
|
|
|
|
/s/ Jason J. Lisowski
|
|
|
Jason J. Lisowski
|
|
|
Vice President, Controller
and Chief Accounting Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this report on Form 10-Q of FirstEnergy Corp.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Charles E. Jones
|
|
|
|
Charles E. Jones
|
|
|
|
President and Chief Executive Officer
|
|
|
1.
|
I have reviewed this report on Form 10-Q of FirstEnergy Corp.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Steven E. Strah
|
|
|
|
Steven E. Strah
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
/s/ Charles E. Jones
|
|
|
|
Charles E. Jones
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ Steven E. Strah
|
|
|
|
Steven E. Strah
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|