FIRSTENERGY CORP - FORM 8-K - EX-99.2 - CONSOLIDATED REPORT TO THE INVESTMENT COMMUNITY, DATED FEBRUARY 25, 2014 - February 25, 2014

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Exhibit 99.2

Consolidated Report to the Financial Community                                                                           
Fourth Quarter 2013
 
(Released February 25, 2014)         (Unaudited)                 

 
 
 
 
 
 
HIGHLIGHTS
 
 
 
 
 
 
 
 
 
 
 
• Operating earnings*, excluding special items, were $0.75 per basic share for the fourth quarter of 2013, compared with fourth quarter 2012 Operating earnings of $0.80 per basic share. GAAP earnings for the fourth quarter of 2013 were $0.34 per basic share, compared with a fourth quarter 2012 loss of $0.35 per basic share.
• For the twelve months ended December 2013, Operating earnings*, excluding special items, were $3.04 per basic share, compared with Operating earnings of $3.34 per basic share for the same period last year. GAAP earnings for the twelve months ended December 2013 were $0.94 per basic share, compared with $1.85 per basic share for the same period last year.

 
After-Tax EPS Variance Analysis
4th Qtr.
 
 
 
4Q 2012 Basic EPS - GAAP
$(0.35)
 
 
 
Special Items - 2012
1.15
 
 
 
4Q 2012 Basic EPS - Operating*
$0.80
 
 
 
Distribution Revenues
0.05
 
 
 
Regulated Generation Operating Margin
0.02
 
 
 
CES Commodity Margin
(0.09)
 
 
 
O&M Expenses
(0.06)
 
 
 
Investment Income
0.02
 
 
 
Interest Expense
0.01
 
 
 
4Q 2013 Basic EPS - Operating*
$0.75
 
 
 
Special Items - 2013 (See page 4)
(0.41)
 
 
 
4Q 2013 Basic EPS - GAAP
$0.34
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Q4 2013 vs Q4 2012 Earnings Drivers, Excluding Special Items
•
Distribution Revenues - Higher distribution revenues increased earnings by $0.05 per share, primarily resulting from colder temperatures, as heating-degree-days were 7% higher the same period last year and 2% above normal. Total electric distribution deliveries increased by 1.4M MWH, or 4%. Sales to residential and commercial customers increased by 425,000 MWH, or 3%, and 263,000 MWH, or 3%, respectively, while sales to industrial customers increased by 753,000 MWH, or 6%.
  
•
Regulated Generation Operating Margin(1) - Higher operating margin at the Regulated Generation business increased earnings by $0.02 per share, primarily reflecting the impact of the Harrison Plant asset transfer in the fourth quarter of 2013.

(1) Regulated Generation Operating Margin includes generation revenues, fuel and purchased power expenses, net transmission expenses, O&M, depreciation/amortization, and general taxes.



•
Competitive Energy Services (CES) - Lower commodity margin decreased earnings by $0.09 per share, primarily driven by higher expenses and lower average contract sales prices, partially offset by higher sales volumes and capacity revenues.

        
 
 
 
 
 
 
 
 
 
 
Commodity Margin EPS - 4Q13 vs 4Q12
 
Rate
 
Volume
 
Total
 
 
(a) Contract Sales
 
 
 
 
 
 
 
 
   - Direct Sales (LCI & MCI)
 
$
(0.02
)
 
$
0.03

 
$
0.01

 
 
   - Governmental Aggregation Sales
 
0.01

 
0.04

 
0.05

 
 
   - Mass Market Sales
 
—

 
0.04

 
0.04

 
 
   - Structured Sales
 
(0.01
)
 
0.07

 
0.06

 
 
        Subtotal - Contract Sales
 
$
(0.02
)
 
$
0.18

 
$
0.16

 
 
(b) Wholesale Sales
 
—

 
(0.02
)
 
(0.02
)
 
 
(c) PJM Capacity, FRR Auction Revenues
 
0.02

 
—

 
0.02

 
 
(d) Fuel Expense
 
0.01

 
0.13

 
0.14

 
 
(e) Purchased Power
 
(0.03
)
 
(0.26
)
 
(0.29
)
 
 
(f) Capacity Expense
 
(0.07
)
 
—

 
(0.07
)
 
 
(g) Net Financial Sales and Purchases
 
(0.01
)
 
—

 
(0.01
)
 
 
(h) Net MISO - PJM Transmission Cost
 
0.01

 
(0.03
)
 
(0.02
)
 
 
       Net Decrease
 
$
(0.09
)
 
$
—

 
$
(0.09
)
 
 
 
 
 
 
 
 
 
 

(a)
Contract Sales - CES' contract sales increased earnings by $0.16 per share, driven by a 2.3 million MWH, or 9%, increase in sales. The total number of retail customers was 2.7 million as of December 31, 2013, an increase of approximately 100,000 customers since December 31, 2012.
•
Structured sales increased by 1.1 million MWH, nearly doubling sales from the fourth quarter of 2012, due to increased municipal, cooperative, and bilateral sales.
•
Governmental aggregation sales increased by 431,000 MWH, or 10%, primarily due to continued expansion in Illinois, where 108 new communities have been added since the fourth quarter of 2012.
•
Mass market sales increased by 370,000 MWH, or 27%, primarily in Pennsylvania, Ohio, and Illinois.
•
Direct sales to large and medium commercial / industrial customers increased by 298,000 MWH, or 2%, primarily associated with the acquisition of new customers in Central and Southern Ohio.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CES Contract Sales - 4Q13 vs 4Q12
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(thousand MWH)
 
Retail
 
Non-Retail
 
 
 
 
 
 
Direct
 
Aggr.
 
Mass Market
 
POLR
 
Structured
 
Total
 
 
Contract Sales Increase
 
298
 
431

 
370
 
50
 
1,115
 
2,264
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    2


(b) Wholesale Sales - Wholesale sales decreased by 581,000 MWH due to the combination of increased contract sales and lower generation output during the fourth quarter of 2013 and reduced earnings by $0.02 per share.
(c) PJM Capacity Revenues: Base Residual (BR) and Fixed Resource Requirement (FRR) Auctions - Higher capacity revenues, primarily resulting from higher capacity prices and bilateral sales, increased earnings by $0.02 per share.
 
Planning Period
 
RTO
 
ATSI
ATSI
 
MAAC
 
 
 
Price Per Megawatt-Day
 
BR
 
FRR
BR
 
BR
 
 
 
June 2012 - May 2013
 
$16.46
 
$20.46
N/A
 
$133.37
 
 
 
June 2013 - May 2014
 
$27.73
 
N/A
$27.73
 
$226.15
 
 
 
 
 
 
 
 
 
 
 
 
 
(d)
Fuel Expense - Lower fuel expenses increased earnings by $0.14 per share. Total generation output decreased by 3.3 million MWH, primarily due to lost generation output from the transfer of the Harrison plant to Monongahela Power Company and the deactivation of the Hatfield and Mitchell plants in October 2013.
(e) Purchased Power - Power purchases increased by 4.6M MWH and decreased earnings by $0.29 per share, as a result of increased contract sales, lower generation output, and higher average prices in the fourth quarter of 2013.
(f) Capacity Expense - Higher capacity prices decreased earnings by $0.07 per share.
(g) Net Financial Sales and Purchases - Net financial hedges associated with CES sales and generation portfolio decreased earnings by $0.01 per share.
(h) Net MISO-PJM Transmission Cost - Higher transmission expenses decreased earnings by $0.02 per share, primarily due to higher network expenses.
•
O&M Expenses - Higher O&M expenses decreased earnings by $0.06 per share:
(a)
Higher regulated distribution expenses decreased earnings by $0.05 per share primarily due to the absence of Hurricane Sandy storm costs incurred in the fourth quarter of 2012 that resulted in more work being allocated to capital.
(b)
Higher CES O&M expenses decreased earnings by $0.01 per share, primarily due to increased plant outages, partially offset by reduced expenses following the plant deactivations.
•
Investment Income - Higher investment income increased earnings by $0.02 per share, primarily due to higher nuclear decommissioning trust income and higher earnings from our investment in Signal Peak.

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    3


•
Interest Expense - Lower interest expense increased earnings by $0.01 per share, primarily due to decreased interest expense at CES from long-term debt repayments, partially offset by higher interest expense from long-term debt issuances and increased short-term borrowings at FirstEnergy Corp.
•
Special Items - The following special items were recognized during the fourth quarter of 2013:
 
 
 
 
 
 
 
Special Items
 
 
EPS
 
 
Mark-to-market adjustments -
 
 
 
 
 
  Pension/OPEB actuarial assumptions
 
 
$
(0.38
)
 
 
Other
 
 
(0.04
)
 
 
WV asset transfer charges
 
 
0.51

 
 
Regulatory charges
 
 
0.12

 
 
Trust securities impairment
 
 
0.02

 
 
Plant deactivation costs
 
 
0.14

 
 
Merger accounting - commodity contracts
 
 
0.02

 
 
Impact of non-core asset sales/impairments
 
 
0.02

 
 
 
Total
 
$
0.41

 
 
 
 
 
 
 
2014 Earnings Guidance
Operating earnings guidance for 2014, excluding special items, is $2.45 - $2.85 per basic share. For the first quarter of 2014, operating earnings guidance is $0.35 - $0.45 per share.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimate for Year 2014
 
 
 
 
 
FirstEnergy Consolidated Estimate for Q1 of 2014
 
FirstEnergy Consolidated
 
Regulated Distribution
 
Regulated Transmission
 
Competitive Energy Services
 
Corporate/Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS - GAAP
 
$0.50 - $0.60
 
$2.38 - $2.82
 
$1.80 - $2.00
 
$0.52 - $0.58
 
$0.33 - $0.51
 
$(0.27)
 
 
Excluding Special Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory charges
 
0.01
 
0.05
 
0.05
 
—
 
—
 
—
 
 
 
Non-core asset sales/impairments
 
(0.18)
 
(0.16)
 
—
 
—
 
(0.16)
 
—
 
 
 
Plant deactivation costs
 
—
 
0.08 - 0.12
 
—
 
—
 
0.08 - 0.12
 
—
 
 
 
Merger accounting - commodity contracts
 
0.02
 
0.06
 
—
 
—
 
0.06
 
—
 
 
 
Total Special Items
 
(0.15)
 
0.03 - 0.07
 
0.05
 
—
 
(0.02) - 0.02
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS - Operating
 
$0.35 - $0.45
 
$2.45 - $2.85
 
$1.85 - $2.05
 
$0.52 - $0.58
 
$0.35 - $0.49
 
$(0.27)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

For additional information, please contact:
Irene M. Prezelj
 
Meghan G. Beringer    
 
Rey Y. Jimenez
Vice President, Investor Relations
 
Director, Investor Relations
 
Manager, Investor Relations
(330) 384-3859
 
(330) 384-5832
 
(330) 761-4239
*Operating earnings exclude special items as described in the reconciliation table above, and are a non-GAAP financial measure. Management uses operating earnings to evaluate the company’s performance and manage its operations and frequently references this non-GAAP financial measure in its decision-making, using it to facilitate historical and ongoing performance comparisons. Management believes that the non-GAAP financial measure of “Operating Earnings” provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. Generally, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP). This non-GAAP financial measure is intended to complement, and is not considered as an alternative to, the most directly comparable GAAP financial measure. Also, this non-GAAP financial measure may not be comparable to similarly titled measures used by other entities. The 2013 and 2012 GAAP to Operating earnings reconciliations can be found on pages 17-21 and the 2014 GAAP to Operating earnings guidance reconciliation can be found on page 4 of this report. All GAAP to Operating earnings reconciliations are available on FirstEnergy Corp.’s Investor Information website at www.firstenergycorp.com/ir.

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    4


FirstEnergy Corp.
Consolidated Statements of Income (Loss)
(In millions, except for per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31
 
Year Ended December 31
 
 
 
 
 
 
2013
 
2012
 
Change
 
2013
 
2012
 
Change
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1
)
 
Regulated distribution
 
$
2,145

 
$
2,084

 
$
61

 
$
8,738

 
$
9,060

 
$
(322
)
 
 
(2
)
 
Regulated transmission
 
195

 
183

 
12

 
741

 
740

 
1

 
 
(3
)
 
Competitive energy services
 
1,557

 
1,493

 
64

 
6,495

 
6,644

 
(149
)
 
 
(4
)
 
Other and reconciling adjustments
 
(250
)
 
(267
)
 
17

 
(1,057
)
 
(1,171
)
 
114

 
 
(5
)
Total Revenues
 
3,647

 
3,493

 
154

 
14,917

 
15,273

 
(356
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6
)
 
Fuel
 
581

 
638

 
(57
)
 
2,496

 
2,471

 
25

 
 
(7
)
 
Purchased power
 
1,031

 
879

 
152

 
3,963

 
4,246

 
(283
)
 
 
(8
)
 
Other operating expenses
 
948

 
1,163

 
(215
)
 
3,593

 
3,760

 
(167
)
 
 
(9
)
 
Pensions and OPEB mark-to-market
 
(256
)
 
609

 
(865
)
 
(256
)
 
609

 
(865
)
 
 
(10
)
 
Provision for depreciation
 
293

 
285

 
8

 
1,202

 
1,119

 
83

 
 
(11
)
 
Deferral of storm costs
 
—

 
(327
)
 
327

 
—

 
(375
)
 
375

 
 
(12
)
 
Amortization of regulatory assets, net
 
96

 
61

 
35

 
539

 
307

 
232

 
 
(13
)
 
General taxes
 
231

 
224

 
7

 
978

 
984

 
(6
)
 
 
(14
)
 
Impairment of long lived assets
 
322

 
—

 
322

 
795

 
—

 
795

 
 
(15
)
Total Expenses
 
3,246

 
3,532

 
(286
)
 
13,310

 
13,121

 
189

 
 
(16
)
Operating Income (Loss)
 
401

 
(39
)
 
440

 
1,607

 
2,152

 
(545
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(17
)
 
Loss on debt redemptions
 
—

 
—

 
—

 
(132
)
 
—

 
(132
)
 
 
(18
)
 
Investment income
 
28

 
14

 
14

 
36

 
77

 
(41
)
 
 
(19
)
 
Interest expense
 
(245
)
 
(251
)
 
6

 
(1,016
)
 
(1,001
)
 
(15
)
 
 
(20
)
 
Capitalized interest
 
24

 
18

 
6

 
75

 
72

 
3

 
 
(21
)
Total Other Expense
 
(193
)
 
(219
)
 
26

 
(1,037
)
 
(852
)
 
(185
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(22
)
Income (Loss) From Continuing Operations Before Income Taxes
 
208

 
(258
)
 
466

 
570

 
1,300

 
(730
)
 
 
(23
)
 
Income taxes (benefits)
 
66

 
(105
)
 
171

 
195

 
545

 
(350
)
 
 
(24
)
Income (Loss) From Continuing Operations
 
142

 
(153
)
 
295

 
375

 
755

 
(380
)
 
 
(25
)
 
Discontinued operations (net of income taxes)
 
—

 
5

 
(5
)
 
17

 
16

 
1

 
 
(26
)
Net Income (Loss)
 
142

 
(148
)
 
290

 
392

 
771

 
(379
)
 
 
(27
)
 
Income attributable to noncontrolling interest
 
—

 
—

 
—

 
—

 
1

 
(1
)
 
 
(28
)
Earnings (Loss) Available to FirstEnergy Corp.
 
$
142

 
$
(148
)
 
$
290

 
$
392

 
$
770

 
$
(378
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(29
)
Earnings (Loss) Per Share of Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(30
)
 
Basic - Continuing Operations
 
$
0.34

 
$
(0.36
)
 
$
0.70

 
$
0.90

 
$
1.81

 
$
(0.91
)
 
 
(31
)
 
Basic - Discontinued Operations
 
—

 
0.01

 
(0.01
)
 
0.04

 
0.04

 
—

 
 
(32
)
 
Basic - Earnings (Loss) Available to FirstEnergy Corp.
 
$
0.34

 
$
(0.35
)
 
$
0.69

 
$
0.94

 
$
1.85

 
$
(0.91
)
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
(33
)
 
Diluted - Continuing Operations
 
$
0.34

 
$
(0.36
)
 
$
0.70

 
$
0.90

 
$
1.80

 
$
(0.90
)
 
 
(34
)
 
Diluted - Discontinued Operations
 
—

 
0.01

 
(0.01
)
 
0.04

 
0.04

 
—

 
 
(35
)
 
Diluted - Earnings (Loss) Available to FirstEnergy Corp.
 
$
0.34

 
$
(0.35
)
 
$
0.69

 
$
0.94

 
$
1.84

 
$
(0.90
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(36
)
Weighted Average Number of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(37
)
Common Shares Outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(38
)
 
Basic
 
418

 
418

 
—

 
418

 
418

 
—

 
 
(39
)
 
Diluted
 
419

 
419

 
—

 
419

 
419

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    5


FirstEnergy Corp.
Statements of Income - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
Other &
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
Reconciling
 
FirstEnergy
 
 
 
 
Distribution (a)
 
Transmission (b)
 
Services (c)
 
Adjustments (d)
 
Consolidated
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
(1
)
 
Electric sales
$
2,085

 
$
195

 
$
1,338

 
$
(43
)
 
$
3,575

 
(2
)
 
Other
60

 
—

 
37

 
(25
)
 
72

 
(3
)
 
Internal
—

 
—

 
182

 
(182
)
 
—

 
(4
)
Total Revenues
2,145

 
195

 
1,557

 
(250
)
 
3,647

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
(5
)
 
Fuel
127

 
—

 
454

 
—

 
581

 
(6
)
 
Purchased power
761

 
—

 
452

 
(182
)
 
1,031

 
(7
)
 
Other operating expenses
499

 
33

 
490

 
(74
)
 
948

 
(8
)
 
Pensions and OPEB mark-to-market
(149
)
 
—

 
(107
)
 
—

 
(256
)
 
(9
)
 
Provision for depreciation
160

 
30

 
92

 
11

 
293

 
(10
)
 
Amortization of regulatory assets, net
93

 
3

 
—

 
—

 
96

 
(11
)
 
General taxes
170

 
13

 
44

 
4

 
231

 
(12
)
 
Impairment of long-lived assets
322

 
—

 
—

 
—

 
322

 
(13
)
Total Expenses
1,983

 
79

 
1,425

 
(241
)
 
3,246

 
(14
)
Operating Income
162

 
116

 
132

 
(9
)
 
401

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
(15
)
 
Investment income
16

 
—

 
20

 
(8
)
 
28

 
(16
)
 
Interest expense
(139
)
 
(25
)
 
(35
)
 
(46
)
 
(245
)
 
(17
)
 
Capitalized interest
5

 
3

 
11

 
5

 
24

 
(18
)
Total Other Expense
(118
)
 
(22
)
 
(4
)
 
(49
)
 
(193
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(19
)
Income From Continuing Operations Before Income Taxes
44

 
94

 
128

 
(58
)
 
208

 
(20
)
 
Income taxes
17

 
36

 
48

 
(35
)
 
66

 
(21
)
Income From Continuing Operations
27

 
58

 
80

 
(23
)
 
142

 
(22
)
 
Discontinued operations (net of income taxes)
—

 
—

 
—

 
—

 
—

 
(23
)
Net Income
$
27

 
$
58

 
$
80

 
$
(23
)
 
$
142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)

Revenues are primarily derived from the delivery of electricity within FirstEnergy Corp.'s (FirstEnergy) service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
 
(b)

Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads.
 
(c)

Revenues are primarily derived from supplying electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
 
(d)

Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
 
 
 
 


_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    6


FirstEnergy Corp.
Statements of Income (Loss) - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
Other &
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
Reconciling
 
FirstEnergy
 
 
 
 
 
Distribution (a)
 
Transmission (b)
 
Services (c)
 
Adjustments (d)
 
Consolidated
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
(1
)
 
Electric sales
$
2,031

 
$
183

 
$
1,277

 
$
(48
)
 
$
3,443

 
 
(2
)
 
Other
53

 
—

 
36

 
(39
)
 
50

 
 
(3
)
 
Internal
—

 
—

 
180

 
(180
)
 
—

 
 
(4
)
Total Revenues
2,084

 
183

 
1,493

 
(267
)
 
3,493

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
(5
)
 
Fuel
90

 
—

 
548

 
—

 
638

 
 
(6
)
 
Purchased power
814

 
—

 
243

 
(178
)
 
879

 
 
(7
)
 
Other operating expenses
763

 
37

 
453

 
(90
)
 
1,163

 
 
(8
)
 
Pensions and OPEB mark-to-market
392

 
2

 
215

 
—

 
609

 
 
(9
)
 
Provision for depreciation
137

 
29

 
106

 
13

 
285

 
 
(10
)
 
Deferral of storm costs
(322
)
 
(5
)
 
—

 
—

 
(327
)
 
 
(11
)
 
Amortization of regulatory assets, net
60

 
1

 
—

 
—

 
61

 
 
(12
)
 
General taxes
163

 
11

 
48

 
2

 
224

 
 
(13
)
Total Expenses
2,097

 
75

 
1,613

 
(253
)
 
3,532

 
 
(14
)
Operating Income (Loss)
(13
)
 
108

 
(120
)
 
(14
)
 
(39
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
(15
)
 
Investment income
22

 
—

 
18

 
(26
)
 
14

 
 
(16
)
 
Interest expense
(135
)
 
(22
)
 
(75
)
 
(19
)
 
(251
)
 
 
(17
)
 
Capitalized interest
3

 
1

 
10

 
4

 
18

 
 
(18
)
Total Other Expense
(110
)
 
(21
)
 
(47
)
 
(41
)
 
(219
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(18
)
Income (Loss) From Continuing Operations Before Income Taxes
(123
)
 
87

 
(167
)
 
(55
)
 
(258
)
 
 
(19
)
 
Income taxes (benefits)
(60
)
 
32

 
(82
)
 
5

 
(105
)
 
 
(20
)
Income (Loss) From Continuing Operations
(63
)
 
55

 
(85
)
 
(60
)
 
(153
)
 
 
(21
)
 
Discontinued operations (net of income taxes)
—

 
—

 
5

 
—

 
5

 
 
(22
)
Net Income (Loss)
$
(63
)
 
$
55

 
$
(80
)
 
$
(60
)
 
$
(148
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)

Revenues are primarily derived from the delivery of electricity within FirstEnergy's service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
 
 
(b)

Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads.
 
 
(c)

Revenues are primarily derived from supplying electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
 
 
(d)

Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    7


FirstEnergy Corp.
Statements of Income - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2013 vs. Three Months Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
Other &
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
Reconciling
 
FirstEnergy
 
 
 
 
 
Distribution (a)
 
Transmission (b)
 
Services (c)
 
Adjustments (d)
 
Consolidated
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
(1
)
 
Electric sales
$
54

 
$
12

 
$
61

 
$
5

 
$
132

 
 
(2
)
 
Other
7

 
—

 
1

 
14

 
22

 
 
(3
)
 
Internal revenues
—

 
—

 
2

 
(2
)
 
—

 
 
(4
)
Total Revenues
61

 
12

 
64

 
17

 
154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
(5
)
 
Fuel
37

 
—

 
(94
)
 
—

 
(57
)
 
 
(6
)
 
Purchased power
(53
)
 
—

 
209

 
(4
)
 
152

 
 
(7
)
 
Other operating expenses
(264
)
 
(4
)
 
37

 
16

 
(215
)
 
 
(8
)
 
Pension and OPEB mark-to-market
(541
)
 
(2
)
 
(322
)
 
—

 
(865
)
 
 
(9
)
 
Provision for depreciation
23

 
1

 
(14
)
 
(2
)
 
8

 
 
(10
)
 
Deferral of storm costs
322

 
5

 
—

 
—

 
327

 
 
(11
)
 
Amortization of regulatory assets, net
33

 
2

 
—

 
—

 
35

 
 
(12
)
 
General taxes
7

 
2

 
(4
)
 
2

 
7

 
 
(13
)
 
Impairment of long-lived assets
322

 
—

 
—

 
—

 
322

 
 
(14
)
Total Expenses
(114
)
 
4

 
(188
)
 
12

 
(286
)
 
 
(15
)
Operating Income
175

 
8

 
252

 
5

 
440

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
(16
)
 
Investment income
(6
)
 
—

 
2

 
18

 
14

 
 
(17
)
 
Interest expense
(4
)
 
(3
)
 
40

 
(27
)
 
6

 
 
(18
)
 
Capitalized interest
2

 
2

 
1

 
1

 
6

 
 
(19
)
Total Other Income (Expense)
(8
)
 
(1
)
 
43

 
(8
)
 
26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(20
)
Income From Continuing Operations Before Income Taxes
167

 
7

 
295

 
(3
)
 
466

 
 
(21
)
 
Income taxes
77

 
4

 
130

 
(40
)
 
171

 
 
(22
)
Income From Continuing Operations
90

 
3

 
165

 
37

 
295

 
 
(23
)
 
Discontinued operations (net of income taxes)
—

 
—

 
(5
)
 
—

 
(5
)
 
 
(24
)
Net Income
$
90

 
$
3

 
$
160

 
$
37

 
$
290

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)

Revenues are primarily derived from the delivery of electricity within FirstEnergy's service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
 
 
(b)

Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads.
 
 
(c)

Revenues are primarily derived from supplying electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
 
 
(d)

Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    8


FirstEnergy Corp.
Statements of Income (Loss) - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
Other &
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
Reconciling
 
FirstEnergy
 
 
 
 
Distribution (a)
 
Transmission (b)
 
Services (c)
 
Adjustments (d)
 
Consolidated
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
(1
)
 
Electric sales
$
8,499

 
$
741

 
$
5,542

 
$
(171
)
 
$
14,611

 
(2
)
 
Other
239

 
—

 
183

 
(116
)
 
306

 
(3
)
 
Internal
—

 
—

 
770

 
(770
)
 
—

 
(4
)
Total Revenues
8,738

 
741

 
6,495

 
(1,057
)
 
14,917

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
(5
)
 
Fuel
377

 
—

 
2,119

 
—

 
2,496

 
(6
)
 
Purchased power
3,308

 
—

 
1,425

 
(770
)
 
3,963

 
(7
)
 
Other operating expenses
1,773

 
131

 
2,007

 
(318
)
 
3,593

 
(8
)
 
Pensions and OPEB mark-to-market
(149
)
 
—

 
(107
)
 
—

 
(256
)
 
(8
)
 
Provision for depreciation
606

 
114

 
439

 
43

 
1,202

 
(9
)
 
Amortization of regulatory assets, net
529

 
10

 
—

 
—

 
539

 
(10
)
 
General taxes
697

 
54

 
202

 
25

 
978

 
(11
)
 
Impairment of long-lived assets
322

 
—

 
473

 
—

 
795

 
(11
)
Total Expenses
7,463

 
309

 
6,558

 
(1,020
)
 
13,310

 
(12
)
Operating Income (Loss)
1,275

 
432

 
(63
)
 
(37
)
 
1,607

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
(13
)
 
Loss on debt redemptions
—

 
—

 
(149
)
 
17

 
(132
)
 
(14
)
 
Investment income
57

 
—

 
14

 
(35
)
 
36

 
(15
)
 
Interest expense
(543
)
 
(93
)
 
(222
)
 
(158
)
 
(1,016
)
 
(16
)
 
Capitalized interest
13

 
4

 
42

 
16

 
75

 
(17
)
Total Other Expense
(473
)
 
(89
)
 
(315
)
 
(160
)
 
(1,037
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(18
)
Income (Loss) From Continuing Operations Before Income Taxes
802

 
343

 
(378
)
 
(197
)
 
570

 
(19
)
 
Income taxes (benefits)
301

 
129

 
(141
)
 
(94
)
 
195

 
(20
)
Income (Loss) From Continuing Operations
501

 
214

 
(237
)
 
(103
)
 
375

 
(21
)
 
Discontinued operations (net of income taxes)
—

 
—

 
17

 
—

 
17

 
(22
)
Net Income (Loss)
$
501

 
$
214

 
$
(220
)
 
$
(103
)
 
$
392

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)

Revenues are primarily derived from the delivery of electricity within FirstEnergy's service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
 
(b)

Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads.
 
(c)

Revenues are primarily derived from supplying electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
 
(d)

Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    9


FirstEnergy Corp.
Statements of Income - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
Other &
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
Reconciling
 
FirstEnergy
 
 
 
 
 
Distribution (a)
 
Transmission (b)
 
Services (c)
 
Adjustments (d)
 
Consolidated
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
(1
)
 
Electric sales
$
8,849

 
$
740

 
$
5,632

 
$
(214
)
 
$
15,007

 
 
(2
)
 
Other
211

 
—

 
146

 
(93
)
 
264

 
 
(3
)
 
Internal
—

 
—

 
866

 
(864
)
 
2

 
 
(4
)
Total Revenues
9,060

 
740


6,644

 
(1,171
)
 
15,273

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
(5
)
 
Fuel
263

 
—

 
2,208

 
—

 
2,471

 
 
(6
)
 
Purchased power
3,801

 
—

 
1,307

 
(862
)
 
4,246

 
 
(7
)
 
Other operating expenses
2,126

 
136

 
1,840

 
(342
)
 
3,760

 
 
(8
)
 
Pensions and OPEB mark-to-market
392

 
2

 
215

 
—

 
609

 
 
(9
)
 
Provision for depreciation
558

 
114

 
409

 
38

 
1,119

 
 
(10
)
 
Deferral of storm costs
(370
)
 
(5
)
 
—

 
—

 
(375
)
 
 
(11
)
 
Amortization of regulatory assets, net
305

 
2

 
—

 
—

 
307

 
 
(12
)
 
General taxes
706

 
44

 
209

 
25

 
984

 
 
(13
)
Total Expenses
7,781

 
293


6,188

 
(1,141
)
 
13,121

 
 
(14
)
Operating Income
1,279

 
447


456

 
(30
)
 
2,152

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
(15
)
 
Investment income
84

 
1

 
66

 
(74
)
 
77

 
 
(16
)
 
Interest expense
(540
)
 
(92
)
 
(284
)
 
(85
)
 
(1,001
)
 
 
(17
)
 
Capitalized interest
12

 
3

 
44

 
13

 
72

 
 
(18
)
Total Other Expense
(444
)
 
(88
)

(174
)
 
(146
)
 
(852
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(19
)
Income From Continuing Operations Before Income Taxes
835

 
359


282

 
(176
)
 
1,300

 
 
(20
)
 
Income taxes
295

 
133

 
83

 
34

 
545

 
 
(21
)
Income From Continuing Operations
540

 
226

 
199

 
(210
)
 
755

 
 
(22
)
 
Discontinued operations (net of income taxes)
—

 
—

 
16

 
—

 
16

 
 
(23
)
Net Income
$
540

 
$
226


$
215

 
$
(210
)
 
$
771

 
 
(24
)
 
Income attributable to noncontrolling interest
—

 
—

 
—

 
1

 
1

 
 
(25
)
Earnings Available to FirstEnergy Corp.
$
540

 
$
226


$
215

 
$
(211
)
 
$
770

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)

Revenues are primarily derived from the delivery of electricity within FirstEnergy's service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
 
 
(b)

Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads.
 
 
(c)

Revenues are primarily derived from supplying electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
 
 
(d)

Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    10


FirstEnergy Corp.
Statements of Income (Loss) - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31, 2013 vs. Twelve Months Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
Other &
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
Reconciling
 
FirstEnergy
 
 
 
 
 
Distribution (a)
 
Transmission (b)
 
Services (c)
 
Adjustments (d)
 
Consolidated
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
(1
)
 
Electric sales
$
(350
)
 
$
1

 
$
(90
)
 
$
43

 
$
(396
)
 
 
(2
)
 
Other
28

 
—

 
37

 
(23
)
 
42

 
 
(3
)
 
Internal revenues
—

 
—

 
(96
)
 
94

 
(2
)
 
 
(4
)
Total Revenues
(322
)
 
1


(149
)
 
114

 
(356
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
(5
)
 
Fuel
114

 
—

 
(89
)
 
—

 
25

 
 
(6
)
 
Purchased power
(493
)
 
—

 
118

 
92

 
(283
)
 
 
(7
)
 
Other operating expenses
(353
)
 
(5
)
 
167

 
24

 
(167
)
 
 
(8
)
 
Pension and OPEB mark-to-market
(541
)
 
(2
)
 
(322
)
 
—

 
(865
)
 
 
(9
)
 
Provision for depreciation
48

 
—

 
30

 
5

 
83

 
 
(10
)
 
Deferral of storm costs
370

 
5

 
—

 
—

 
375

 
 
(11
)
 
Amortization of regulatory assets, net
224

 
8

 
—

 
—

 
232

 
 
(12
)
 
General taxes
(9
)
 
10

 
(7
)
 
—

 
(6
)
 
 
(13
)
 
Impairment of long-lived assets
322

 
—

 
473

 
—

 
795

 
 
(14
)
Total Expenses
(318
)
 
16


370

 
121

 
189

 
 
(15
)
Operating Income (Loss)
(4
)
 
(15
)

(519
)
 
(7
)
 
(545
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
(16
)
 
Loss on debt redemptions
—

 
—

 
(149
)
 
17

 
(132
)
 
 
(17
)
 
Investment loss
(27
)
 
(1
)
 
(52
)
 
39

 
(41
)
 
 
(18
)
 
Interest expense
(3
)
 
(1
)
 
62

 
(73
)
 
(15
)
 
 
(19
)
 
Capitalized interest
1

 
1

 
(2
)
 
3

 
3

 
 
(20
)
Total Other Expense
(29
)
 
(1
)

(141
)
 
(14
)
 
(185
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(21
)
Income (Loss) From Continuing Operations Before Income Taxes
(33
)
 
(16
)

(660
)
 
(21
)
 
(730
)
 
 
(22
)
 
Income taxes (benefits)
6

 
(4
)
 
(224
)
 
(128
)
 
(350
)
 
 
(23
)
Income (Loss) From Continuing Operations
(39
)
 
(12
)
 
(436
)
 
107

 
(380
)
 
 
(24
)
 
Discontinued operations (net of income taxes)
—

 
—

 
1

 
—

 
1

 
 
(25
)
Net Income (Loss)
$
(39
)
 
$
(12
)

$
(435
)
 
$
107

 
$
(379
)
 
 
(26
)
 
Income attributable to noncontrolling interest
—

 
—

 
—

 
(1
)
 
(1
)
 
 
(27
)
Earnings (Loss) Available to FirstEnergy Corp.
$
(39
)
 
$
(12
)

$
(435
)
 
$
108

 
$
(378
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)

Revenues are primarily derived from the delivery of electricity within FirstEnergy's service areas, cost recovery of regulatory assets and the sale of electric generation service to retail customers who have not selected an alternative supplier (POLR or default service). Its results reflect the commodity costs of securing electric generation from affiliated and non-affiliated power suppliers and the deferral and amortization of certain fuel costs.
 
 
(b)

Revenues are derived from rates charged to load serving entities and other transmission users that recover costs and provide a return on transmission capital investment owned and operated by certain of FirstEnergy's utilities and transmission companies. Its results reflect the net transmission expenses related to the delivery of the respective generation loads.
 
 
(c)

Revenues are primarily derived from supplying electric power to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Maryland, Michigan and New Jersey, and the provision of partial POLR and default service for affiliated and non-affiliated utilities in Ohio, Pennsylvania and Maryland.
 
 
(d)

Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses and elimination of intersegment transactions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    11


FirstEnergy Corp.
Financial Information
(In millions)
 
 
 
 
 
 
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
 
As of
 
 
Assets
 
Dec. 31, 2013
 
Dec. 31, 2012
 
 
Current Assets:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
218

 
$
172

 
 
 
Receivables
 
1,918

 
1,929

 
 
 
Other
 
1,751

 
1,667

 
 
Total Current Assets
 
3,887

 
3,768

 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment
 
33,252

 
33,036

 
 
Investments
 
3,104

 
3,194

 
 
Assets Held for Sale
 
235

 
—

 
 
Deferred Charges and Other Assets
 
9,946

 
10,496

 
 
Total Assets
 
$
50,424

 
$
50,494

 
 
 
 
 
 
 
 
 
 
Liabilities and Capitalization
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
Currently payable long-term debt
 
$
1,415

 
$
1,999

 
 
 
Short-term borrowings
 
3,404

 
1,969

 
 
 
Accounts payable
 
1,250

 
1,599

 
 
 
Other
 
1,568

 
2,038

 
 
Total Current Liabilities
 
7,637

 
7,605

 
 
 
 
 
 
 
 
 
 
Capitalization:
 
 
 
 
 
 
 
Total equity
 
12,695

 
13,093

 
 
 
Long-term debt and other long-term obligations
 
15,831

 
15,179

 
 
Total Capitalization
 
28,526

 
28,272

 
 
Noncurrent Liabilities
 
14,261

 
14,617

 
 
Total Liabilities and Capitalization
 
$
50,424

 
$
50,494

 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
General Information
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31
 
Year Ended December 31
 
 
 
 
2013
 
2012
 
2013
 
2012
 
 
Debt redemptions
 
$
(938
)
 
$
(70
)
 
$
(3,600
)
 
$
(940
)
 
 
New long-term debt issues
 
$
1,000

 
$
90

 
$
3,745

 
$
750

 
 
Short-term borrowings increase
 
$
—

 
$
365

 
$
1,435

 
$
1,969

 
 
Property additions
 
$
678

 
$
992

 
$
2,638

 
$
2,678

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt to Total Capitalization Ratio as Defined Under the FE Credit Facility

 
 
 
 
 
 
 
 
As of December 31
 
As of December 31
 
 
 
 
2013
 
% Total
 
2012
 
% Total
 
 
Total Equity (GAAP)
 
$
12,695

 
37
 %
 
$
13,093

 
41
 %
 
 
Non-cash Charges / Non-cash Write Downs*
 
1,412

 
4
 %
 
—

 
—
 %
 
 
Accumulated Other Comprehensive Income
 
(284
)
 
(1
)%
 
(385
)
 
(1
)%
 
 
Adjusted Equity**
 
13,823

 
40
 %
 
12,708

 
40
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt and Other Long-term Obligations (GAAP)
 
15,831

 
46
 %
 
15,179

 
47
 %
 
 
Currently Payable Long-term Debt (GAAP)
 
1,415

 
4
 %
 
1,999

 
6
 %
 
 
Short-term Borrowings (GAAP)
 
3,404

 
10
 %
 
1,969

 
6
 %
 
 
Reimbursement Obligations
 
7

 
—
 %
 
31

 
—
 %
 
 
Guarantees of Indebtedness
 
846

 
3
 %
 
816

 
3
 %
 
 
Less Securitization Debt
 
(1,123
)
 
(3
)%
 
(736
)
 
(2
)%
 
 
Adjusted Debt**
 
20,380

 
60
 %
 
19,258

 
60
 %
 
 
 
 
 
 


 
 
 


 
 
Adjusted Capitalization**
 
$
34,203

 
100
 %
 
$
31,966

 
100
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
*Includes after-tax non-cash charges and non-cash write downs as required by the amendment to the FirstEnergy Credit Agreement dated October 31, 2013, primarily associated with pension and OPEB mark-to-market adjustments, impairment of long-lived assets and regulatory asset charges.
 
 
**Management uses Adjusted Equity, Adjusted Debt, and Adjusted Capitalization, each of which is a non-GAAP financial measure, to calculate and monitor its compliance with the debt to total capitalization financial covenant under the FE Credit Facility. These financial measures, as calculated in accordance with the FE Credit Facility, help shareholders understand compliance and provide a basis for understanding FE Corp.'s incremental debt capacity under the debt to total capitalization financial covenant. The financial covenant requires FE Corp. to maintain a consolidated debt to total capitalization ratio of no more than 65%, measured at the end of each fiscal quarter.
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    12


FirstEnergy Corp.
Statements of Cash Flows and Liquidity
(In millions)

 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Years Ended
 
 
 
 
December 31
 
December 31
 
 
 
 
2013
 
2012
 
2013
 
2012
 
 
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
Net income
 
$
142

 
$
(148
)
 
$
392

 
$
771

 
 
Adjustments to reconcile net income to net cash from operating activities:
 
 
 
 
 
 
 
 
 
 
Depreciation and deferral / amortization of regulatory assets, net
 
389

 
19

 
1,741

 
1,051

 
 
Asset removal costs charged to income
 
(7
)
 
180

 
20

 
203

 
 
Nuclear fuel amortization
 
53

 
54

 
209

 
210

 
 
Deferred purchased power and other costs
 
(15
)
 
(24
)
 
(76
)
 
(238
)
 
 
Deferred income taxes and investment tax credits, net
 
129

 
(65
)
 
243

 
647

 
 
Impairments of long-lived assets
 
322

 
—

 
795

 
—

 
 
Investment impairments
 
16

 
17

 
90

 
27

 
 
Deferred rents and lease market valuation liability
 
(32
)
 
(42
)
 
(54
)
 
(104
)
 
 
Pension and OPEB mark-to-market
 
(256
)
 
609

 
(256
)
 
609

 
 
Retirement benefits
 
(35
)
 
(30
)
 
(168
)
 
(127
)
 
 
Gain on asset sales
 
—

 
—

 
(21
)
 
(17
)
 
 
Commodity derivative transactions, net
 
(20
)
 
(15
)
 
4

 
(95
)
 
 
Pension trust contribution
 
—

 
—

 
—

 
(600
)
 
 
Cash collateral, net
 
25

 
19

 
(42
)
 
16

 
 
Gain on sale of investment securities held in trusts, net
 
(28
)
 
(24
)
 
(56
)
 
(71
)
 
 
Make-whole premiums paid on debt redemptions
 
(6
)
 
—

 
(187
)
 
—

 
 
Income from discontinued operations
 
—

 
(5
)
 
(17
)
 
(16
)
 
 
Change in working capital and other
 
314

 
499

 
45

 
54

 
 
Cash flows provided from operating activities
 
991

 
1,044

 
2,662

 
2,320

 
 
Cash flows provided from (used for) financing activities
 
(177
)
 
145

 
477

 
807

 
 
Cash flows used for investing activities
 
(818
)
 
(1,167
)
 
(3,093
)
 
(3,157
)
 
 
Net change in cash and cash equivalents
 
$
(4
)
 
$
22

 
$
46

 
$
(30
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Liquidity position as of January 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company
Type
Maturity
Amount
Available
 
 
FirstEnergy(1)
Revolving
May 2018
$2,500
$224
 
 
FES / AE Supply
Revolving
May 2018
2,500
2,489
 
 
FirstEnergy Transmission, LLC (FET)(2)
Revolving
May 2018
1,000
—

 
 
  (1) FirstEnergy Corp. and Utilities
Subtotal:
$6,000
$2,713
 
 
  (2) Includes FET, American Transmission Systems, Incorporated (ATSI), and Trans-Allegheny Interstate Line Company, (TrAIL)
 
Cash:
—

48
 
 
 
Total:
$6,000
$2,761
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    13


FirstEnergy Corp.
Statistical Summary

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electric Distribution Deliveries
 
Three Months Ended December 31
 
Year Ended December 31
 
 
(MWH in thousand)
 
2013
 
2012
 
Change
 
2013
 
2012
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ohio
 - Residential
 
4,385

 
4,295

 
2.1
 %
 
17,279

 
17,646

 
-2.1
 %
 
 
 
 - Commercial
 
3,744

 
3,635

 
3.0
 %
 
15,202

 
15,364

 
-1.1
 %
 
 
 
 - Industrial
 
5,037

 
4,639

 
8.6
 %
 
20,679

 
20,257

 
2.1
 %
 
 
 
 - Other
 
85

 
80

 
6.3
 %
 
332

 
331

 
0.3
 %
 
 
 
Total Ohio
 
13,251

 
12,649

 
4.8
 %
 
53,492

 
53,598

 
-0.2
 %
 
 
Pennsylvania
 - Residential
 
4,840

 
4,599

 
5.2
 %
 
19,066

 
18,548

 
2.8
 %
 
 
 
 - Commercial
 
3,179

 
3,095

 
2.7
 %
 
12,691

 
12,618

 
0.6
 %
 
 
 
 - Industrial
 
5,018

 
4,901

 
2.4
 %
 
20,345

 
20,247

 
0.5
 %
 
 
 
 - Other
 
30

 
30

 
0.0
 %
 
121

 
122

 
-0.8
 %
 
 
 
Total Pennsylvania
 
13,067

 
12,625

 
3.5
 %
 
52,223

 
51,535

 
1.3
 %
 
 
New Jersey
 - Residential
 
2,075

 
1,976

 
5.0
 %
 
9,460

 
9,391

 
0.7
 %
 
 
 
 - Commercial
 
2,192

 
2,150

 
2.0
 %
 
9,025

 
9,015

 
0.1
 %
 
 
 
 - Industrial
 
568

 
500

 
13.6
 %
 
2,321

 
2,320

 
0.0
 %
 
 
 
 - Other
 
22

 
21

 
4.8
 %
 
87

 
87

 
0.0
 %
 
 
 
Total New Jersey
 
4,857

 
4,647

 
4.5
 %
 
20,893

 
20,813

 
0.4
 %
 
 
Maryland
 - Residential
 
814

 
813

 
0.1
 %
 
3,270

 
3,136

 
4.3
 %
 
 
 
 - Commercial
 
514

 
499

 
3.0
 %
 
2,078

 
2,060

 
0.9
 %
 
 
 
 - Industrial
 
418

 
365

 
14.5
 %
 
1,624

 
1,595

 
1.8
 %
 
 
 
 - Other
 
4

 
4

 
0.0
 %
 
16

 
17

 
-5.9
 %
 
 
 
Total Maryland
 
1,750

 
1,681

 
4.1
 %
 
6,988

 
6,808

 
2.6
 %
 
 
West Virginia
 - Residential
 
1,370

 
1,376

 
-0.4
 %
 
5,404

 
5,272

 
2.5
 %
 
 
 
 - Commercial
 
895

 
882

 
1.5
 %
 
3,586

 
3,588

 
-0.1
 %
 
 
 
 - Industrial
 
1,350

 
1,233

 
9.5
 %
 
5,274

 
4,959

 
6.4
 %
 
 
 
 - Other
 
7

 
7

 
0.0
 %
 
28

 
28

 
0.0
 %
 
 
 
Total West Virginia
 
3,622

 
3,498

 
3.5
 %
 
14,292

 
13,847

 
3.2
 %
 
 
Total Residential
 
 
13,484

 
13,059

 
3.3
 %
 
54,479

 
53,993

 
0.9
 %
 
 
Total Commercial
 
 
10,524

 
10,261

 
2.6
 %
 
42,582

 
42,645

 
-0.1
 %
 
 
Total Industrial
 
 
12,391

 
11,638

 
6.4
 %
 
50,243

 
49,378

 
1.8
 %
 
 
Total Other
 
 
148

 
142

 
4.2
 %
 
584

 
585

 
-0.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Distribution Deliveries
 
36,547

 
35,100

 
4.1
 %
 
147,888

 
146,601

 
0.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    14


FirstEnergy Corp.
Statistical Summary




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weather
 
Three Months Ended December 31
 
Year Ended December 31
 
 
 
 
 
2013
 
2012
 
Normal
 
2013
 
2012
 
Normal
 
 
Composite Heating-Degree-Days
 
1,967

 
1,847

 
1,926

 
5,484

 
4,640

 
5,391

 
 
Composite Cooling-Degree-Days
 
35

 
13

 
12

 
967

 
1,143

 
937

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
 
Shopping Statistics (Based Upon MWH)
 
Three Months Ended December 31
 
Year Ended December 31
 
 
 
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
 
 
 
 
 
OE
 
79%
 
77%
 
79%
 
76%
 
 
Penn
 
67%
 
64%
 
66%
 
64%
 
 
CEI
 
85%
 
85%
 
86%
 
85%
 
 
TE
 
77%
 
77%
 
77%
 
75%
 
 
JCP&L
 
55%
 
53%
 
52%
 
50%
 
 
Met-Ed
 
68%
 
64%
 
66%
 
61%
 
 
Penelec
 
71%
 
69%
 
70%
 
67%
 
 
PE(1)
 
48%
 
46%
 
47%
 
46%
 
 
WP
 
63%
 
62%
 
63%
 
59%
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents Maryland only.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive Operating Statistics
 
Three Months Ended December 31
 
Year Ended December 31
 
 
 
 
 
2013
 
2012
 
2013
 
2012
 
 
Ongoing Generation Capacity Factors:
 
 
 
 
 
 
 
 
 
 
 
Nuclear
 
90%
 
91%
 
88%
 
91%
 
 
 
Fossil - Baseload
 
75%
 
68%
 
75%
 
68%
 
 
 
Fossil - Load Following
 
63%
 
27%
 
57%
 
36%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ongoing Generation Fuel Rate:
 
 
 
 
 
 
 
 
 
 
 
Nuclear
 
$7.80
 
$7.79
 
$7.79
 
$7.60
 
 
 
Fossil
 
$26
 
$27
 
$27
 
$28
 
 
 
Total Fleet
 
$19
 
$20
 
$20
 
$21
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ongoing Generation Output Mix:
 
 
 
 
 
 
 
 
 
 
 
Nuclear
 
41%
 
36%
 
34%
 
35%
 
 
 
Fossil - Baseload
 
44%
 
54%
 
53%
 
53%
 
 
 
Fossil - Load Following
 
8%
 
4%
 
8%
 
6%
 
 
 
Peaking/CT/Hydro
 
7%
 
6%
 
5%
 
6%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    15


FirstEnergy Corp.
Competitive Energy Services - Sources & Uses

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive Energy Services - Sources and Uses (MWH in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31
 
Year Ended December 31
 
 
Contract Sales
 
 
2013
 
2012
 
Change
 
2013
 
2012
 
Change
 
 
POLR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - OH
 
 
1,116

 
1,084

 
32

 
4,643

 
5,833

 
(1,190
)
 
 
       - PA
 
 
2,089

 
1,999

 
90

 
8,401

 
9,173

 
(772
)
 
 
       - MD
 
 
616

 
688

 
(72
)
 
2,714

 
2,921

 
(207
)
 
 
 
Total POLR
 
 
3,821

 
3,771

 
50

 
15,758

 
17,927

 
(2,169
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Structured Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - Bilaterals
 
 
1,644

 
702

 
942

 
5,996

 
2,925

 
3,071

 
 
       - Muni/Co-op
 
 
625

 
452

 
173

 
3,051

 
1,812

 
1,239

 
 
                 Total Structured Sales
 
 
2,269

 
1,154

 
1,115

 
9,047

 
4,737

 
4,310

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct - LCI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - OH
 
 
7,146

 
7,017

 
129

 
29,602

 
27,916

 
1,686

 
 
       - PA
 
 
3,681

 
3,898

 
(217
)
 
14,870

 
15,843

 
(973
)
 
 
       - NJ
 
 
348

 
214

 
134

 
1,157

 
1,156

 
1

 
 
       - MI
 
 
733

 
588

 
145

 
2,957

 
2,346

 
611

 
 
       - IL
 
 
638

 
719

 
(81
)
 
2,483

 
3,104

 
(621
)
 
 
       - MD
 
 
208

 
229

 
(21
)
 
832

 
818

 
14

 
 
 
Total Direct - LCI
 
 
12,754

 
12,665

 
89

 
51,901

 
51,183

 
718

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct - MCI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - OH
 
 
602

 
533

 
69

 
2,501

 
2,250

 
251

 
 
       - PA
 
 
381

 
277

 
104

 
1,494

 
1,055

 
439

 
 
       - IL
 
 
58

 
24

 
34

 
233

 
38

 
195

 
 
       - MD
 
 
1

 
—

 
1

 
3

 
2

 
1

 
 
       - NJ
 
 
1

 
—

 
1

 
13

 
—

 
13

 
 
 
Total Direct - MCI
 
 
1,043

 
834

 
209

 
4,244

 
3,345

 
899

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - OH
 
 
3,612

 
3,622

 
(10
)
 
15,459

 
16,022

 
(563
)
 
 
       - IL
 
 
1,273

 
832

 
441

 
5,400

 
1,265

 
4,135

 
 
 
Total Aggregation
 
 
4,885

 
4,454

 
431

 
20,859

 
17,287

 
3,572

 
 
Mass Market
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - OH
 
 
469

 
391

 
78

 
1,920

 
1,486

 
434

 
 
       - PA
 
 
1,178

 
923

 
255

 
4,555

 
3,639

 
916

 
 
       - IL
 
 
37

 
10

 
27

 
147

 
35

 
112

 
 
       - MD
 
 
32

 
22

 
10

 
139

 
52

 
87

 
 
 
Total Mass Market
 
 
1,716

 
1,346

 
370

 
6,761

 
5,212

 
1,549

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Contract Sales
 
 
26,488

 
24,224

 
2,264

 
108,570

 
99,691

 
8,879

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale Sales*
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - Spot
 
—

 
581

 
(581
)
 
1,229

 
4,073

 
(2,844
)
 
 
                 Total Wholesale Sales
 
—

 
581

 
(581
)
 
1,229

 
4,073

 
(2,844
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchased Power*
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       - Bilaterals
 
 
588

 
575

 
13

 
2,067

 
1,820

 
247

 
 
       - Spot
 
 
7,492

 
2,888

 
4,604

 
19,968

 
10,514

 
9,454

 
 
                 Total Purchased Power
 
8,080

 
3,463

 
4,617

 
22,035

 
12,334

 
9,701

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Generation Output
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      - Ongoing Fossil
 
 
11,437

 
11,717

 
(280
)

52,243

 
48,137

 
4,106

 
 
      - Nuclear
 
 
8,005

 
8,054

 
(49
)
 
30,901

 
31,839

 
(938
)
 
 
 
Total Ongoing Generation Output
 
19,442

 
19,771

 
(329
)
 
83,144

 
79,976

 
3,168

 
 
      - Deactivated / RMR Fossil
 
 
105

 
3,101

 
(2,996
)
 
9,776

 
16,531

 
(6,755
)
 
 
 
Total Generation Output
 
19,547

 
22,872

 
(3,325
)
 
92,920

 
96,507

 
(3,587
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*Actual MWH - includes deactivated and RMR coal plants
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    16


FirstEnergy Corp.
Special Items* - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
 
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
 
 
 
 
 
Special Items* - Three Months Ended December 31, 2013
 
Distribution
 
Transmission
 
Services
 
Other
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings Available to FirstEnergy Corp.
 
$
27

 
$
58

 
$
80

 
$
(23
)
 
$
142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-Tax Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory charges (a)
 
70

 
—

 
8

 
—

 
78

 
 
 
Trust securities impairment (b)
 
2

 
—

 
13

 
—

 
15

 
 
 
Impact of non-core asset sales/impairments (c)
 
—

 
—

 
15

 
—

 
15

 
 
 
Mark-to-market adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension/OPEB actuarial assumptions (d)
 
(152
)
 
—

 
(106
)
 
—

 
(258
)
 
 
 
Other (e)
 
—

 
—

 
(22
)
 
—

 
(22
)
 
 
 
Merger accounting - commodity contracts (f)
 
—

 
—

 
11

 
—

 
11

 
 
 
Plant deactivation costs (g)
 
—

 
—

 
91

 
—

 
91

 
 
 
WV asset transfer charges (h)
 
350

 
—

 
—

 
—

 
350

 
 
 
    Subtotal
 
270

 
—

 
10

 
—

 
280

 
 
 
Income taxes
 
(101
)
 
—

 
(4
)
 
(1
)
 
(106
)
 
 
 
    After-Tax Effect
 
169

 
—

 
6

 
(1
)
 
174

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings Available to FirstEnergy Corp.
 
$
196

 
$
58

 
$
86

 
$
(24
)
 
$
316

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
$18 million included in "Other operating expenses"; $59 million included in "Amortization of regulatory assets, net"; $1 million included in "Purchased power".
 
 
(b)
Included in "Investment income".
 
 
(c)
$5 million included in "Investment Income", $10 million included in "Discontinued Operations".
 
 
(d)
($256) million included in "Pensions and OPEB mark-to-market", ($2) million included in "Other operating expenses".
 
 
(e)
Included in "Other operating expenses".
 
 
(f)
$12 million included in "Fuel", ($1) million included in "Other operating expenses".
 
 
(g)
$68 million included in "Fuel", $22 million included in "Other operating expenses"; $1 million included in "General Taxes".
 
 
(h)
$23 million included in "Amortization of regulatory assets, net", $5 million included in "Other operating expenses"; $322 million included in "Impairment of long-lived assets".
 
 
*
Included in GAAP but excluded from Operating earnings.
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    17


FirstEnergy Corp.
Special Items* - By Segment
(In millions)
 
 
 
 
 
 
 
 
Competitive
 
 
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
 
 
 
 
 
Special Items* - Three Months Ended December 31, 2012
 
Distribution
 
Transmission
 
Services
 
Other
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings (Loss) Available to FirstEnergy Corp.
 
$
(63
)
 
$
55

 
$
(80
)
 
$
(60
)
 
$
(148
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-Tax Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory charges (a)
 
11

 
3

 
—

 
—

 
14

 
 
 
Trust securities impairment (b)
 
—

 
—

 
7

 
—

 
7

 
 
 
Merger transaction/integration costs (c)
 
1

 
—

 
—

 
—

 
1

 
 
 
Impact of non-core asset sales/impairments (d)
 
18

 
—

 
9

 
14

 
41

 
 
 
Mark-to-market adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension/OPEB actuarial assumptions (e)
 
406

 
2

 
215

 
—

 
623

 
 
 
Other (c)
 
—

 
—

 
(24
)
 
—

 
(24
)
 
 
 
Merger accounting - commodity contracts (f)
 
2

 
—

 
20

 
—

 
22

 
 
 
Debt redemption costs (g)
 
—

 
—

 
1

 
—

 
1

 
 
 
Restructuring (c)
 
5

 
—

 
5

 
—

 
10

 
 
 
Plant deactivation costs (h)
 
6

 
—

 
77

 
—

 
83

 
 
 
    Subtotal
 
449

 
5

 
310

 
14

 
778

 
 
 
Income tax legislative changes
 
—

 
—

 
—

 
7

 
7

 
 
 
Income taxes
 
(164
)
 
(2
)
 
(119
)
 
(18
)
 
(303
)
 
 
 
    After-Tax Effect
 
285

 
3

 
191

 
3

 
482

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings Available to FirstEnergy Corp.
 
$
222

 
$
58

 
$
111

 
$
(57
)
 
$
334

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
$9 million included in "Other operating expenses"; $2 million included in Revenues; $3 million included in "Amortization of regulatory assets, net".
 
 
(b)
Included in "Investment income".
 
 
(c)
Included in "Other operating expenses".
 
 
(d)
$24 million included in "Investment income", $17 million in "Other operating expenses".
 
 
(e)
$609 included in "Pension and OPEB mark-to-market", $14 million in "Other operating expenses"
 
 
(f)
$8 million included in "Revenues", $11 million included in "Fuel", $3 million included in Purchased Power.
 
 
(g)
Included in "Interest expense".
 
 
(h)
$66 million included in "Fuel", $17 million included in "Other operating expenses".
 
 
*
Included in GAAP but excluded from Operating earnings.
 


_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    18


FirstEnergy Corp.
Special Items* - By Segment
(In millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competitive
 
 
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
 
 
 
 
 
Special Items* - Twelve Months Ended December 31, 2013
 
Distribution
 
Transmission
 
Services
 
Other
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings (Loss) Available to FirstEnergy Corp.
 
$
501

 
$
214

 
$
(220
)
 
$
(103
)
 
$
392

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-Tax Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory charges (a)
 
356

 
—

 
18

 
—

 
374

 
 
 
Trust securities impairment (b)
 
10

 
—

 
72

 
—

 
82

 
 
 
Merger transaction/integration costs (c)
 
—

 
—

 
2

 
—

 
2

 
 
 
Impact of non-core asset sales/impairments (d)
 
—

 
—

 
22

 
—

 
22

 
 
 
Mark-to-market adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension/OPEB actuarial assumptions (e)
 
(152
)
 
—

 
(106
)
 
—

 
(258
)
 
 
 
Other (f)
 
(2
)
 
—

 
(24
)
 
—

 
(26
)
 
 
 
Merger accounting - commodity contracts (g)
 
—

 
—

 
56

 
—

 
56

 
 
 
Restructuring (f)
 
2

 
—

 
1

 
—

 
3

 
 
 
Plant deactivation costs (h)
 
4

 
—

 
649

 
—

 
653

 
 
 
WV asset transfer charges (i)
 
350

 
—

 
—

 
—

 
350

 
 
 
(Gain) loss on debt redemptions (j)
 
1

 
—

 
152

 
(17
)
 
136

 
 
 
    Subtotal
 
569

 
—

 
842

 
(17
)
 
1,394

 
 
 
Income taxes (k)
 
(214
)
 
—

 
(315
)
 
13

 
(516
)
 
 
 
    After-Tax Effect
 
355

 
—

 
527

 
(4
)
 
878

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings Available to FirstEnergy Corp.
 
$
856

 
$
214

 
$
307

 
$
(107
)
 
$
1,270

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
$52 million included in "Other operating expenses"; $3 million included in Revenues; $314 million included in "Amortization of regulatory assets, net"; $5 million included in "Purchased power".
 
 
(b)
Included in "Investment income".
 
 
(c)
$1 million included in "Fuel", $1 million included in "Other operating expenses".
 
 
(d)
$12 million included in "Investment Income", $10 million included in "Discontinued Operations".
 
 
(e)
($256) million included in "Pensions and OPEB mark-to-market", ($2) million included in "Other operating expenses".
 
 
(f)
Included in "Other operating expenses".
 
 
(g)
$14 million included in "Revenues", $47 million included in "Fuel", ($5) million included in "Other operating expenses".
 
 
(h)
($17) million included in "Revenues"; $146 million included in "Fuel", $34 million included in "Other operating expenses"; $6 million included in "General Taxes", $11 million included in "Depreciation", $473 million included in "Impairment of long-lived assets".
 
 
(i)
$23 million included in "Amortization of regulatory assets, net", $5 million included in "Other operating expenses"; $322 million included in "Impairment of long-lived assets".
 
 
(j)
$132 million included in "Loss on debt redemptions", $4 million included in "Interest expense".
 
 
(k)
Includes $20 million associated with valuation reserves against net operating loss carryforwards as a result of plant deactivations.
 
 
*
Included in GAAP but excluded from Operating earnings.
 



_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    19


FirstEnergy Corp.
Special Items* - By Segment
(In millions)
 
 
 
 
 
 
 
 
Competitive
 
 
 
 
 
 
 
 
 
Regulated
 
Regulated
 
Energy
 
 
 
 
 
 
Special Items* - Twelve Months Ended December 31, 2012
 
Distribution
 
Transmission
 
Services
 
Other
 
Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Earnings Available to FirstEnergy Corp.
 
$
540

 
$
226

 
$
215

 
$
(211
)
 
$
770

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-Tax Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory charges (a)
 
50

 
3

 
—

 
—

 
53

 
 
 
Trust securities impairment (b)
 
1

 
—

 
14

 
—

 
15

 
 
 
Merger transaction/integration costs (c)
 
4

 
—

 
3

 
—

 
7

 
 
 
Impact of non-core asset sales/impairments (d)
 
17

 
—

 
5

 
15

 
37

 
 
 
Mark-to-market adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension/OPEB actuarial assumptions (e)
 
406

 
2

 
215

 
—

 
623

 
 
 
Other (c)
 
—

 
—

 
(75
)
 
—

 
(75
)
 
 
 
Merger accounting - commodity contracts (f)
 
7

 
—

 
85

 
—

 
92

 
 
 
Debt redemption costs (g)
 
—

 
—

 
2

 
—

 
2

 
 
 
Restructuring (c)
 
5

 
—

 
6

 
—

 
11

 
 
 
Plant deactivation costs (h)
 
22

 
—

 
168

 
—

 
190

 
 
 
    Subtotal
 
512

 
5

 
423

 
15

 
955

 
 
 
Income tax legislative changes
 
—

 
—

 
—

 
34

 
34

 
 
 
Income taxes
 
(188
)
 
(2
)
 
(160
)
 
(17
)
 
(367
)
 
 
 
    After-Tax Effect
 
324

 
3

 
263

 
32

 
622

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings Available to FirstEnergy Corp.
 
$
864

 
$
229

 
$
478

 
$
(179
)
 
$
1,392

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
$43 million included in "Other operating expenses"; $4 million included in Revenues; $6 million included in "Amortization of regulatory assets, net".
 
 
(b)
Included in "Investment income".
 
 
(c)
Included in "Other operating expenses".
 
 
(d)
($17) million included in "Revenues", $37 million included in "Investment income", $17 million in "Other operating expenses".
 
 
(e)
$609 included in "Pension and OPEB mark-to-market", $14 million in "Other operating expenses"
 
 
(f)
$43 million included in "Revenues", $42 million included in "Fuel", $9 million included in Purchased Power; $(2) million included in "Other operating expenses".
 
 
(g)
Included in "Interest expense".
 
 
(h)
($9) million included in "Revenues", $264 million included in "Fuel", ($154) million included in Purchased Power, $81 million included in "Other operating expenses"; and $8 million included in General Taxes.
 
 
*
Included in GAAP but excluded from Operating earnings.
 


_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    20


FirstEnergy Corp.
EPS Reconciliations


 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share (EPS)
 
 
(Reconciliation of GAAP to Operating Earnings)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Years Ended
 
 
 
 
 
December 31
 
December 31
 
 
 
 
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS - GAAP
 
$
0.34

 
$
(0.35
)
 
$
0.94

 
$
1.85

 
 
Excluding Special Items:
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments -
 
 
 
 
 
 
 
 
 
 
 
  Pension/OPEB actuarial assumptions
 
(0.38
)
 
0.91

 
(0.38
)
 
0.91

 
 
 
Other
 
(0.04
)
 
(0.03
)
 
(0.04
)
 
(0.11
)
 
 
 
Regulatory charges
 
0.12

 
0.02

 
0.54

 
0.08

 
 
 
Trust securities impairment
 
0.02

 
0.01

 
0.12

 
0.02

 
 
 
Income tax legislative changes
 
—

 
0.02

 
—

 
0.08

 
 
 
Merger transaction/integration costs
 
—

 
0.02

 
—

 
0.04

 
 
 
Impact of non-core asset sales/impairments
 
0.02

 
0.04

 
0.03

 
0.03

 
 
 
Plant deactivation costs
 
0.14

 
0.12

 
1.03

 
0.29

 
 
 
Restructuring costs
 
—

 
0.01

 
0.01

 
0.02

 
 
 
Merger accounting - commodity contracts
 
0.02

 
0.03

 
0.08

 
0.13

 
 
 
WV asset transfer charges
 
0.51

 
—

 
0.51

 
—

 
 
 
Loss on debt redemptions
 
—

 
—

 
0.20

 
—

 
 
 
Total Special Items
 
0.41

 
1.15

 
2.10

 
1.49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS - Operating
 
$
0.75

 
$
0.80

 
$
3.04

 
$
3.34

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    21


Recent Developments

Financial Matters
Dividend
On January 21, 2014, the Board of Directors of FirstEnergy Corp. (FirstEnergy) declared a quarterly dividend of $0.36 per share of outstanding common stock. The dividend is payable March 1, 2014, to shareholders of record as of February 7, 2014. This revised dividend equates to an indicated annual dividend of $1.44 per share. Since 2008, FirstEnergy had paid a quarterly dividend of $0.55 per share, which was an annual rate of $2.20 per share.

Financing Activities    
On November 15, 2013, Allegheny Energy Supply Company, LLC (AE Supply) optionally redeemed $235 million of 7.00% pollution control notes due July 15, 2039 at par, in connection with the deactivation of Hatfield's Ferry Units 1-3 on October 9, 2013.

On November 27, 2013, Monongahela Power Company (MP) issued $400 million of 4.1% First Mortgage Bonds due April 15, 2024 and $600 million of 5.4% First Mortgage Bonds due December 15, 2043. Proceeds from this offering were used to: (i) repay at maturity $300 million of its First Mortgage Bonds, 7.95% Series due December 15, 2013, (ii) redeem $120 million of its First Mortgage Bonds, 6.7% Series due June 15, 2014, (iii) repay the note payable to its affiliate, AE Supply, and (iv) for working capital needs and other general corporate purposes.

On December 26, 2013, Metropolitan Edison Company (ME) redeemed $100 million of 4.875% senior notes due April 1, 2014.

On December 26, 2013, Pennsylvania Electric Company (PN) redeemed $150 million of 5.125% senior notes due April 1, 2014.

Sale of Eleven Hydroelectric Generation Assets
On February 12, 2014, FirstEnergy, on behalf of FirstEnergy Generation, LLC, and AE Supply and Green Valley Hydro, LLC, completed the sale of eleven hydroelectric power stations in Pennsylvania, Virginia, and West Virginia to subsidiaries of Harbor Hydro Holdings, LLC, a subsidiary of LS Power Equity Partners II, LP, for approximately $395 million. FirstEnergy expects to recognize a pre-tax gain of approximately $145 million. The stations included in this sale have a total generating capacity of approximately 527 megawatts (MW).

Operational Matters
Beaver Valley Unit 1 Outage
On January 29, 2014, the 911-MW Beaver Valley Unit 1 reactor returned to service following a shutdown on January 6, 2014. The reactor automatically shut down after experiencing a problem with the main unit transformer. The main unit transformer converts power generated from the plant to the appropriate voltage for distribution through the transmission system. An inspection after the shutdown identified an internal fault in the transformer, requiring the equipment to be replaced with a spare transformer that was on site.






_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    22



Davis-Besse Outage
On February 1, 2014, the Davis-Besse Nuclear Power Station entered into an outage to install two new steam generators, replace about a third of the unit’s 177 fuel assemblies and perform numerous safety inspections and preventative maintenance activities. During the preliminary stages of the outage an area of concrete that was not filled to the expected thickness within the shield building wall was discovered at the top of the temporary construction opening that was created as part of the 2011 outage. The 2011 temporary construction opening was created to install the new reactor head. FENOC has assessed the as-found condition of the concrete and has determined the shield building would have performed its design functions. This condition within the shield building wall will be repaired during this outage to conform to its original design configuration. This condition is not expected to extend the outage.

Regulatory Matters

Ohio Alternative Energy Rider Update
On September 18, 2013, the Public Utilities Commission of Ohio (PUCO) granted an application for re-hearing for the purpose of further consideration of the Alternative Energy Rider case filed by the Ohio Companies on September 6, 2013. This followed an order on August 7, 2013 in which the PUCO disallowed the Ohio Companies' recovery of $43.4 million related to 2011 renewable energy credits (RECs) purchased in August 2010. On December 18, 2013, the PUCO denied all of the applications for rehearing. Based on the PUCO ruling, the Ohio Companies recorded a regulatory charge of $51 million (pre-tax). On December 24, 2013, the Ohio Companies filed a notice of appeal and a motion for stay of the PUCO's order with the Supreme Court of Ohio. On February 10, 2014, the Supreme Court of Ohio granted the Ohio Companies' motion for stay, which went into effect on February 14, 2014.

Pennsylvania Marginal Transmission Losses
On September 30, 2013, the U.S. District Court granted the Pennsylvania Public Utility Commission's (PPUC) motion to dismiss Metropolitan Edison Company (ME) and Pennsylvania Electric Company's (PN) complaint on the recovery of marginal transmission losses through the Transmission Service Charge. As a result of the U.S. District Court's September 30, 2013 decision, FirstEnergy recorded a regulatory asset impairment charge of approximately $254 million (pre-tax) in the quarter ended September 30, 2013 included in Amortization of regulatory assets, net within the Consolidated Statement of Income. On October 29, 2013, ME and PN filed a notice of appeal in the U.S. Court of Appeals for the Third Circuit with respect to the U.S. District Court's decision, and on December 30, 2013, ME and PN filed a brief with the Third Circuit that explained why it was legal error for the U.S. District Court to dismiss the complaint. The PPUC filed its brief on February 3, 2014, and ME and PN filed a reply brief on February 21, 2014. Oral argument has been scheduled for April 9, 2014.

Jersey Central Power & Light Company (JCP&L) Rate Filing Update
JCP&L filed rebuttal testimony in response to the testimony of other parties on August 7, 2013. The filing addressed the Division of Rate Counsel's recommendation that revenues produced by JCP&L's base rates for electric service be reduced by approximately $202.8 million. This amount did not address the revenue requirements associated with major storm events of 2011 and 2012, which are subject to review in the generic proceeding. Hearings in the rate case have concluded. Initial briefs were filed on January 27, 2014. In the initial briefs, the Division of Rate Counsel and the Staff of the Board of Public Utilities recommended current rates be decreased by $214.9 million and $207.4 million, respectively. Both decreases exclude costs associated with recovery of the 2011 and 2012 storm costs. Reply briefs were filed on February 24, 2014.



_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    23


JCP&L Generic Storm Proceeding Update
On February 24, 2014, the Company, Staff of the Board of Public Utilities, Division of Rate Counsel entered into a stipulated agreement in the generic storm proceeding case which will allow recovery of $736 million of JCP&L's $744 million of costs related to the significant weather events of 2011 and 2012. The agreement, upon which no other party took a position to oppose or support, is now pending approval before the Board of Public Utilities.

Clean Air Act Compliance
On February 6, 2014, the U.S. District Court for the Western District of Pennsylvania entered judgement for AE, AE Supply and the Allegheny Utilities finding they have no liability and had not performed major modifications in violation of the NSR provisions of the CAA or the Pennsylvania Air Pollution Control Act at the coal-fired Hatfield's Ferry, Armstrong and Mitchell Plants in Pennsylvania. This decision does not change the status of these plants which remain deactivated.


_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    24



Forward-Looking Statements: This Consolidated Report to the Financial Community includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” "will," "intend," “believe,” “estimate” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry, in general, and the retail sales market in particular; the ability to experience growth in the Regulated Distribution and Regulated Transmission segments and to continue to successfully implement our direct retail sales strategy in the Competitive Energy Services segment; the accomplishment of our regulatory and operational goals in connection with our transmission plan and planned distribution rate cases and the effectiveness of our repositioning strategy; the impact of the regulatory process on the pending matters before the Federal Energy Regulatory Commission and in the various states in which we do business including, but not limited to, matters related to rates and pending rate cases or the WVCAG's pending appeal of the Generation Resource Transaction; the uncertainties of various cost recovery and cost allocation issues resulting from American Transmission Systems, Incorporated's realignment into PJM Interconnection LLC; economic or weather conditions affecting future sales and margins such as the polar vortex or other significant weather events; regulatory outcomes associated with storm restoration, including but not limited to, Hurricane Sandy, Hurricane Irene and the October snowstorm of 2011; changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil, and availability and their impact on retail margins; the continued ability of our regulated utilities to recover their costs; costs being higher than anticipated and the success of our policies to control costs and to mitigate low energy, capacity and market prices; other legislative and regulatory changes, and revised environmental requirements, including possible greenhouse gas emission, water discharge, water intake and coal combustion residual regulations, the potential impacts of Cross-State Air Pollution Rule, Clean Air Interstate Rule (CAIR), and/or any laws, rules or regulations that ultimately replace CAIR, and the effects of the United States Environmental Protection Agency's Mercury and Air Toxics Standards rules including our estimated costs of compliance; the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including New Source Review litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to deactivate or idle certain generating units); the uncertainties associated with the deactivation of certain older regulated and competitive fossil units including the impact on vendor commitments, and the timing thereof as they relate to, among other things, Reliability Must-Run arrangements and the reliability of the transmission grid; adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to the revocation or non-renewal of necessary licenses, approvals or operating permits by the Nuclear Regulatory Commission or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant); issues arising from the indications of cracking in the shield building and the steam generator replacement at Davis Besse; the impact of future changes to the operational status or availability of our generating units; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments; replacement power costs being higher than anticipated or not fully hedged; the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates; changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates; the ability to accomplish or realize anticipated benefits from strategic and financial goals including, but not limited to, the ability to reduce costs and to successfully complete our announced financial plans designed to improve our credit metrics and strengthen our balance sheet, including but not limited to, the benefits from our announced dividend reduction and our proposed capital raising and debt reduction initiatives; our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins; changing market conditions that could affect the measurement of certain liabilities and the value of assets held in our Nuclear Decommissioning Trusts, pension trusts and other trust funds, and cause us and our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated; the impact of changes to material accounting policies; the ability to access the public securities and other capital and credit markets in accordance with our announced financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries; actions that may be taken by credit rating agencies that could negatively affect us and our subsidiaries' access to financing, increase the costs thereof, and increase requirements to post additional collateral to support outstanding commodity positions, letters of credit and other financial guarantees; changes in national and regional economic conditions affecting us, our subsidiaries and our major industrial and commercial customers, and other counterparties including fuel suppliers, with which we do business; the impact of any changes in tax laws or regulations or adverse tax audit results or rulings; issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business; the risks and other factors discussed from time to time in our United States Securities and Exchange Commission filings, and other similar factors. Dividends declared from time to time on FirstEnergy Corp.'s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.'s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2013                    25

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