FIRSTENERGY CORP [FE] Filings

10-Q 1 fe-20220630.htm 10-Q fe-20220630

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

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

44308

Telephone

(800)

736-3402

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, $0.10 par value

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☑

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☑

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer			☑

Accelerated Filer			☐

Non-accelerated Filer			☐

Smaller Reporting Company			☐

Emerging Growth Company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


						OUTSTANDING
CLASS						AS OF JUNE 30, 2022
Common Stock, $0.10 par value						571,395,285

FirstEnergy Website and Other Social Media Sites and Applications

FirstEnergy’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments to those reports, and all other documents filed with or furnished to the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 are made available free of charge on or through the “Investors” page of FirstEnergy’s website at www.firstenergycorp.com. These documents are also available to the public from commercial document retrieval services and the website maintained by the SEC at www.sec.gov.

These SEC filings are posted on the website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Additionally, FirstEnergy routinely posts additional important information, including press releases, investor presentations, investor factbook, and notices of upcoming events under the “Investors” section of FirstEnergy’s website and recognizes FirstEnergy’s website as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD. Investors may be notified of postings to the website by signing up for email alerts and Rich Site Summary feeds on the “Investors” page of FirstEnergy’s website. FirstEnergy also uses Twitter® and Facebook® as additional channels of distribution to reach public investors and as a supplemental means of disclosing material non-public information for complying with its disclosure obligations under Regulation FD. Information contained on FirstEnergy’s website, Twitter® handle or Facebook® page, and any corresponding applications of those sites, shall not be deemed incorporated into, or to be part of, this report.

Forward-Looking Statements: This Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on information currently available to management. Such statements are subject to certain risks and uncertainties and readers are cautioned not to place undue reliance on these forward-looking statements. 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,” "forecast," "target," "will," "intend," “believe,” "project," “estimate," "plan" 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, which may include the following (see Glossary of Terms for definitions of capitalized terms):

•The potential liabilities, increased costs and unanticipated developments resulting from government investigations and agreements, including those associated with compliance with or failure to comply with the DPA.

•The risks and uncertainties associated with government investigations and audits regarding HB 6 and related matters, including potential adverse impacts on federal or state regulatory matters, including, but not limited to, matters relating to rates.

•The risks and uncertainties associated with litigation, arbitration, mediation, and similar proceedings, particularly regarding HB 6 related matters, including risks associated with obtaining court approval of the settlement agreement in the derivative shareholder lawsuits.

•Changes in national and regional economic conditions, including recession and inflationary pressure, affecting us and/or our customers and those vendors with which we do business.

•Weather conditions, such as temperature variations and severe weather conditions, or other natural disasters affecting future operating results and associated regulatory actions or outcomes in response to such conditions.

•Legislative and regulatory developments, including, but not limited to, matters related to rates, compliance and enforcement activity, cybersecurity, and climate change.

•The ability to accomplish or realize anticipated benefits from our FE Forward initiative and our other strategic and financial goals, including, but not limited to, overcoming current uncertainties and challenges associated with the ongoing government investigations, executing our transmission and distribution investment plans, greenhouse gas reduction goals, controlling costs, improving our credit metrics, growing earnings and strengthening our balance sheet.

•Changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts may negatively impact our results of operations, and may also cause us to make contributions to our pension sooner or in amounts that are larger than currently anticipated.

•The risks associated with cyber-attacks and other disruptions to our, or our vendors’, information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information.

•Mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets.

•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.

•The extent and duration of the COVID-19 pandemic and the related impacts to our business, operations and financial condition resulting from the outbreak of COVID-19 including, but not limited to, disruption of businesses in our territories, supply chain disruptions, additional costs, workforce impacts and governmental and regulatory responses to the pandemic, such as the moratoriums on utility disconnections and workforce vaccination mandates imposed at varying points throughout the pandemic.

•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.

•Changes in assumptions regarding factors such as 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, economic conditions, the impact of climate change, or energy efficiency and peak demand reduction mandates.

•The potential of non-compliance with debt covenants in our credit facilities.

•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.

•Labor disruptions by our unionized workforce.

•Changes to significant accounting policies.

•Any changes in tax laws or regulations, or adverse tax audit results or rulings.

•The risks and other factors discussed from time to time in our SEC filings.

Dividends declared from time to time on our common stock during any period may in the aggregate vary from prior periods due to circumstances considered by the FE Board 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.

These forward-looking statements are also qualified by, and should be read together with, the risk factors included in FirstEnergy’s filings with the SEC, including, but not limited to, the most recent Annual Report on Form 10-K, this Form 10-Q and

any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The foregoing review of factors also 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 obligation to update or revise, except as required by law, any forward-looking statements contained herein or in the information incorporated by reference as a result of new information, future events or otherwise.

TABLE OF CONTENTS


			Page

Part I. Financial Information

Glossary of Terms			ii

Item 1. Financial Statements

FirstEnergy Corp.
Consolidated Statements of Income			1
Consolidated Statements of Comprehensive Income			2
Consolidated Balance Sheets			3
Consolidated Statements of Equity			4
Consolidated Statements of Cash Flows			5

Notes To Consolidated Financial Statements			6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			32

Item 3. Quantitative and Qualitative Disclosures About Market Risk			74

Item 4. Controls and Procedures			74

Part II. Other Information

Item 1. Legal Proceedings			74

Item 1A. Risk Factors			74

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			75

Item 3. Defaults Upon Senior Securities			75

Item 4. Mine Safety Disclosures			75

Item 5. Other Information			75

Item 6. Exhibits			76

GLOSSARY OF TERMS

The following abbreviations and acronyms are used in this report to identify FirstEnergy Corp. and its current and former subsidiaries:


AE Supply			Allegheny Energy Supply Company, LLC, an unregulated generation subsidiary
AGC			Allegheny Generating Company, a generation subsidiary of MP
ATSI			American Transmission Systems, Incorporated, a subsidiary of FET, which owns and operates transmission facilities
CEI			The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary
FE			FirstEnergy Corp., a public utility holding company
FELHC, Inc.			FirstEnergy License Holding Company
FENOC			Energy Harbor Nuclear Corp. (formerly known as FirstEnergy Nuclear Operating Company), a subsidiary of EH, which operates NG’s nuclear generating facilities
FES			Energy Harbor LLC. (formerly known as FirstEnergy Solutions Corp.), a subsidiary of EH, which provides energy-related products and services
FES Debtors			FES, FENOC, FG, NG, FE Aircraft Leasing Corp., Norton Energy Storage LLC, and FGMUC
FESC			FirstEnergy Service Company, which provides legal, financial, and other corporate support services
FET			FirstEnergy Transmission, LLC, the parent company 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			Energy Harbor Generation LLC (formerly known as FirstEnergy Generation, LLC), a subsidiary of EH, which owns and operates fossil generating facilities
FGMUC			FirstEnergy Generation Mansfield Unit 1 Corp., a subsidiary of FG
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
GPU			GPU, Inc., former parent of JCP&L, ME and PN, that merged with FE on November 7, 2001
JCP&L			Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary
KATCo			Keystone Appalachian Transmission Company, a former subsidiary of FET which, in May 2022, became a subsidiary of FE
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			Energy Harbor Nuclear Generation LLC (formerly known as FirstEnergy Nuclear Generation, LLC), a subsidiary of EH, 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

The following abbreviations and acronyms may be used to identify frequently used terms in this report:

2021 Credit Facilities

Collectively, the six separate senior unsecured five-year syndicated revolving credit facilities entered into by FE, FET, the Utilities, and the Transmission Companies, on October 18, 2021

DSIC

Distribution System Improvement Charge

2023 Notes

FE’s 4.25% Notes, Series B, due 2023

DSP

Default Service Plan

2031 Notes

FE’s 7.375% Notes, Series C, due 2031

EDC

Electric Distribution Company

2047 Notes

FE’s 4.85% Notes, Series C, due 2047

EDCP

Executive Deferred Compensation Plan

ACE

Affordable Clean Energy

EE&C

Energy Efficiency and Conservation

ADIT

Accumulated Deferred Income Taxes

EEI

Edison Electric Institute

AEP

American Electric Power Company, Inc.

EGS

Electric Generation Supplier

AEPSC

American Electric Power Service Corporation

EGU

Electric Generation Units

AFS

Available-for-sale

Energy Harbor Corp.

AFUDC

Allowance for Funds Used During Construction

ELG

Effluent Limitation Guidelines

AMI

Advance Metering Infrastructure

EmPOWER Maryland

EmPOWER Maryland Energy Efficiency Act

AOCI

Accumulated Other Comprehensive Income (Loss)

ENEC

Expanded Net Energy Cost

ARO

Asset Retirement Obligation

EPA

United States Environmental Protection Agency

ARP

Alternative Revenue Program

EPS

Earnings per Share

ASC

Accounting Standard Codification

ERO

Electric Reliability Organization

ASU

Accounting Standards Update

ESG

Environmental, Social, Corporate Governance

BGS

Basic Generation Service

ESP IV

Electric Security Plan IV

Brookfield

North American Transmission Company II LLC, a controlled investment vehicle entity of Brookfield Infrastructure Partners

Exchange Act

Securities and Exchange Act of 1934, as amended

Brookfield Guarantors

Brookfield Super-Core Infrastructure Partners L.P., Brookfield Super-Core Infrastructure Partners (NUS) L.P., and Brookfield Super-Core Infrastructure Partners (ER) SCSp

Facebook®

Facebook is a registered trademark of Facebook, Inc.

CAA

Clean Air Act

FASB

Financial Accounting Standards Board

CCR

Coal Combustion Residuals

FCA

Financial Conduct Authority

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act of 1980

FE Board

FE Board of Directors

CFR

Code of Federal Regulations

FE Revolving Facility

FE and the Utilities’ former five-year syndicated revolving credit facility, as amended, and replaced by the 2021 Credit Facilities on October 18, 2021

CO2

Carbon Dioxide

FERC

Federal Energy Regulatory Committee

COVID-19

Coronavirus disease

FET Board

The Board of Directors of FET

CPP

EPA's Clean Power Plan

FET LLC Agreement

Third Amended and Restated Limited Liability Company Operating Agreement of FET

CSAPR

Cross-State Air Pollution Rule

FET P&SA

Purchase and Sale Agreement entered into on November 6, 2021, by and between FE, FET, Brookfield and Brookfield Guarantors

CSR

Conservation Support Rider

FET Revolving Facility

FET and certain of its subsidiaries’ former five-year syndicated revolving credit facility, as amended, and replaced by the 2021 Credit Facilities on October 18, 2021

CTA

Consolidated Tax Adjustment

Fitch

Fitch Ratings Service

CWA

Clean Water Act

FMB

First Mortgage Bond

DCR

Delivery Capital Recovery

FPA

Federal Power Act

D.C. Circuit

United States Court of Appeals for the District of Columbia Circuit

FTR

Financial Transmission Right

DMR

Distribution Modernization Rider

GAAP

Accounting Principles Generally Accepted in the United States of America

DPA

Deferred Prosecution Agreement entered into on July 21, 2021 between FE and S.D. Ohio

GHG

Greenhouse Gases

iii

HB 6

House Bill 6, as passed by Ohio's 133rd General Assembly

PPA

Purchase Power Agreement

IBA

ICE Benchmark Administration Limited

PPUC

Pennsylvania Public Utility Commission

IRS

Internal Revenue Service

PUCO

Public Utilities Commission of Ohio

LED

Light Emitting Diode

RCRA

Resource Conservation and Recovery Act

LIBOR

London Inter-Bank Offered Rate

Recoupment Policy

FirstEnergy Executive Compensation Recoupment Policy

LOC

Letter of Credit

Regulation FD

Regulation Fair Disclosure promulgated by the SEC

LTIIPs

Long-Term Infrastructure Improvement Plans

RFC

ReliabilityFirst Corporation

MDPSC

Maryland Public Service Commission

RFP

Request for Proposal

MGP

Manufactured Gas Plants

RGGI

Regional Greenhouse Gas Initiative

MISO

Midcontinent Independent System Operator, Inc.

ROE

Return on Equity

Moody’s

Moody’s Investors Service, Inc.

RTO

Regional Transmission Organization

Megawatt

SBC

Societal Benefits Charge

MWH

Megawatt-hour

S.D. Ohio

Southern District of Ohio

NAAQS

National Ambient Air Quality Standards

SEC

United States Securities and Exchange Commission

NCI

Noncontrolling Interest

SEET

Significantly Excessive Earnings Test

N.D. Ohio

Northern District of Ohio

SF6

Sulfur hexafluoride

NERC

North American Electric Reliability Corporation

SIP

State Implementation Plan(s) Under the Clean Air Act

NJBPU

New Jersey Board of Public Utilities

SLC

Special Litigation Committee of the FE Board

NJ Rate Counsel

New Jersey Division of Rate Counsel

SO2

Sulfur Dioxide

NOx

Nitrogen Oxide

SOFR

Secured Overnight Financing Rate

NUG

Non-Utility Generation

SOS

Standard Offer Service

NYPSC

New York State Public Service Commission

SREC

Solar Renewable Energy Credit

OAG

Ohio Attorney General

SSO

Standard Service Offer

OCA

Office of Consumer Advocate

S&P

Standard & Poor’s Ratings Service

OCC

Ohio Consumers' Counsel

Tax Act

Tax Cuts and Jobs Act adopted December 22, 2017

ODSA

Ohio Development Service Agency

TMI-1

Three Mile Island Unit 1

Ohio Stipulation

Stipulation and Recommendation, dated November 1, 2021, entered into by and among the Ohio Companies, the OCC, PUCO Staff, and
several other signatories

Transmission Owner

OPEB

Other Post-Employment Benefits

Twitter®

Twitter is a registered trademark of Twitter, Inc.

OPIC

Other Paid-in Capital

VAR

Volt-Amps Reactive, the measuring unit for reactive power

OVEC

Ohio Valley Electric Corporation

VIE

Variable Interest Entity

PJM

PJM Interconnection, LLC

VSCC

Virginia State Corporation Commission

PJM Tariff

PJM Open Access Transmission Tariff

WVPSC

Public Service Commission of West Virginia

POLR

Provider of Last Resort

PART I. FINANCIAL INFORMATION

ITEM I. Financial Statements

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In millions, except per share amounts)	2022		2021		2022		2021

REVENUES:
Distribution services and retail generation	$	2,170	$	2,096	$	4,567	$	4,332
Transmission	440		411		891		812
Other	208		115		349		204
Total revenues(1)	2,818		2,622		5,807		5,348

OPERATING EXPENSES:
Fuel	190		112		330		230
Purchased power	802		614		1,677		1,332
Other operating expenses	896		718		1,716		1,470

Provision for depreciation	348		323		688		646

Amortization (deferral) of regulatory assets, net	(129)		49		(166)		141
General taxes	264		264		556		537
DPA penalty (Note 8)	—		230		—		230
Gain on sale of Yards Creek (Note 9)	—		—		—		(109)

Total operating expenses	2,371		2,310		4,801		4,477

OPERATING INCOME	447		312		1,006		871

OTHER INCOME (EXPENSE):
Debt redemption costs (Note 6)	(118)		—		(156)		—

Miscellaneous income, net	160		108		266		243


Interest expense	(265)		(287)		(540)		(572)
Capitalized financing costs	17		21		36		34
Total other expense	(206)		(158)		(394)		(295)

INCOME BEFORE INCOME TAXES	241		154		612		576

INCOME TAXES	49		96		132		183





NET INCOME	$	192	$	58	$	480	$	393

Income attributable to noncontrolling interest	5		—		5		—

EARNINGS ATTRIBUTABLE TO FIRSTENERGY CORP.	$	187	$	58	$	475	$	393





EARNINGS PER SHARE ATTRIBUTABLE TO FIRSTENERGY CORP. (Note 3):


Basic	$	0.33	$	0.11	$	0.83	$	0.72



Diluted	$	0.33	$	0.11	$	0.83	$	0.72

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic	571		544		571		544
Diluted	572		545		572		545

(1) Includes excise and gross receipts tax collections of $91 million and $85 million during the three months ended June 30, 2022 and 2021, respectively, and $194 million and $180 million during the six months ended June 30, 2022 and 2021, respectively.

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In millions)	2022		2021		2022		2021

NET INCOME	$	192	$	58	$	480	$	393

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and OPEB prior service costs	(2)		(4)		(4)		(7)
Amortized losses on derivative hedges	8		1		8		1


Other comprehensive income (loss)	6		(3)		4		(6)
Income taxes (benefits) on other comprehensive income (loss)	2		(1)		1		(2)
Other comprehensive income (loss), net of tax	4		(2)		3		(4)

COMPREHENSIVE INCOME	$	196	$	56	$	483	$	389

Comprehensive income attributable to noncontrolling interest	5		—		5		—

COMPREHENSIVE INCOME ATTRIBUTABLE TO FIRSTENERGY CORP.	$	191	$	56	$	478	$	389

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions, except share amounts)	June 30, 2022		December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	478	$	1,462
Restricted cash	54		49
Receivables-
Customers	1,274		1,192
Less — Allowance for uncollectible customer receivables	134		159
	1,140		1,033

Other, net of allowance for uncollectible accounts of $11 in 2022 and $10 in 2021	248		246
Materials and supplies, at average cost	304		260




Prepaid taxes and other	315		187

	2,539		3,237
PROPERTY, PLANT AND EQUIPMENT:
In service	46,818		46,002
Less — Accumulated provision for depreciation	13,035		12,672
	33,783		33,330
Construction work in progress	1,584		1,414
	35,367		34,744



INVESTMENTS AND OTHER NONCURRENT ASSETS:
Goodwill	5,618		5,618
Investments (Note 6)	626		655
Regulatory assets	99		71
Other	871		1,107

	7,214		7,451
	$	45,120	$	45,432
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	353	$	1,606

Accounts payable	1,182		943

Accrued interest	255		283
Accrued taxes	631		647
Accrued compensation and benefits	276		313


Dividends payable	—		222
Other	673		402

	3,370		4,416
CAPITALIZATION:
Common stockholders’ equity-
Common stock, $0.10 par value, authorized 700,000,000 shares - 571,395,285 and 570,261,104 shares outstanding as of June 30, 2022 and December 31, 2021, respectively	57		57

Other paid-in capital	11,943		10,238
Accumulated other comprehensive loss	(12)		(15)
Accumulated deficit	(1,130)		(1,605)
Total common stockholders’ equity	10,858		8,675
Noncontrolling interest	456		—
Total equity	11,314		8,675
Long-term debt and other long-term obligations	20,763		22,248
	32,077		30,923
NONCURRENT LIABILITIES:
Accumulated deferred income taxes	3,623		3,437
Retirement benefits	2,556		2,669
Regulatory liabilities	1,925		2,124



Other	1,569		1,863

	9,673		10,093
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 8)
	$	45,120	$	45,432

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	Six Months Ended June 30, 2022
	Common Stock			OPIC		AOCI		Accumulated Deficit		Total Common Stockholders’ Equity		NCI		Total Equity
(In millions)	Shares	Amount
Balance, January 1, 2022	570	$	57	$	10,238	$	(15)	$	(1,605)	$	8,675	$	—	$	8,675
Net income								288		288				288
Other comprehensive loss, net of tax						(1)				(1)				(1)
Stock Investment Plan and share-based benefit plans	1			20						20				20
Cash dividends declared on common stock ($0.39 per share in March)				(223)						(223)				(223)
Other				(4)						(4)				(4)
Balance, March 31, 2022	571	57		10,031		(16)		(1,317)		8,755		—		8,755
Net income								187		187		5		192
Other comprehensive income, net of tax						4				4				4

Stock Investment Plan and share-based benefit plans				25						25				25
FET minority interest sale, net of transaction costs (Note 1)				1,887						1,887		451		2,338
Balance, June 30, 2022	571	$	57	$	11,943	$	(12)	$	(1,130)	$	10,858	$	456	$	11,314


	Six Months Ended June 30, 2021
	Common Stock			OPIC		AOCI		Accumulated Deficit		Total Common Stockholders’ Equity		NCI		Total Equity
(In millions)	Shares	Amount
Balance, January 1, 2021	543	$	54	$	10,076	$	(5)	$	(2,888)	$	7,237	$	—	$	7,237
Net income								335		335				335
Other comprehensive loss, net of tax						(2)				(2)				(2)
Share-based benefit plans	1			2						2				2
Cash dividends declared on common stock ($0.39 per share in March)				(212)						(212)				(212)
Balance, March 31, 2021	544	54		9,866		(7)		(2,553)		7,360		—		7,360
Net income								58		58				58
Other comprehensive loss, net of tax						(2)				(2)				(2)

Stock Investment Plan and share-based benefit plans				14						14				14
Balance, June 30, 2021	544	$	54	$	9,880	$	(9)	$	(2,495)	$	7,430	$	—	$	7,430

The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Six Months Ended June 30,
(In millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	480	$	393
Adjustments to reconcile net income to net cash from operating activities-
Depreciation and amortization	694		831


Deferred income taxes and investment tax credits, net	123		176

Retirement benefits, net of payments	(188)		(209)




Transmission revenue collections, net	23		81
Gain on sale of Yards Creek	—		(109)

Changes in current assets and liabilities-
Receivables	(109)		121
Materials and supplies	(44)		43
Prepaid taxes and other current assets	(121)		(114)
Accounts payable	239		127
DPA penalty	—		230
Accrued taxes	(16)		(112)
Accrued interest	(28)		11
Accrued compensation and benefits	(85)		(98)
Other current liabilities	(5)		(27)
Collateral, net	262		(5)
Other	58		8
Net cash provided from operating activities	1,283		1,347



CASH FLOWS FROM FINANCING ACTIVITIES:
New financing-