FIRSTENERGY CORP [FE] Filings

10-Q 1 fe-20210930.htm 10-Q fe-20210930

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 September 30, 2021

☐ 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 SEPTEMBER 30, 2021
Common Stock, $0.10 par value						544,419,619

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 governmental investigations and agreements, including those associated with compliance with or failure to comply with the DPA with the U.S. Attorney’s Office for the S.D. Ohio.

•The risks and uncertainties associated with government investigations 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 potential of non-compliance with debt covenants in our credit facilities.

•The risks and uncertainties associated with litigation, arbitration, mediation and similar proceedings.

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

•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, maintaining financial flexibility, 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 through a sale of a minority interest in certain of our transmission assets and/or issuance of additional equity.

•Economic and weather conditions affecting future operating results, such as a recession, significant weather events and other natural disasters, and associated regulatory events or actions in response to such conditions.

•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 COVID-19 and the 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 and governmental and regulatory responses to the pandemic.

•The effectiveness of our pandemic and business continuity plans, the precautionary measures we are taking on behalf of our customers, contractors and employees, our customers’ ability to make their utility payment and the potential for supply-chain disruptions.

•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 economic conditions within our territories, the reliability of our transmission and distribution system, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities.

•Changes in customers’ demand for power, including, but not limited to, the impact of climate change or energy efficiency and peak demand reduction mandates.

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

•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.

•The ability to comply with applicable reliability standards and energy efficiency and peak demand reduction mandates.

•Changes to environmental laws and regulations, including, but not limited to, those related to climate change.

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

•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 our 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 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 Stockholders’ 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			38

Item 3. Quantitative and Qualitative Disclosures About Market Risk			84

Item 4. Controls and Procedures			84

Part II. Other Information

Item 1. Legal Proceedings			85

Item 1A. Risk Factors			85

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			85

Item 3. Defaults Upon Senior Securities			85

Item 4. Mine Safety Disclosures			85

Item 5. Other Information			85

Item 6. Exhibits			86

GLOSSARY OF TERMS

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



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
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
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
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, KATCo, MAIT and TrAIL, and has a joint venture in PATH
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
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
Global Rail			Global Rail Group, LLC, a subsidiary of Global Holding that owns coal transportation operations near Roundup, Montana

GPUN			GPU Nuclear, Inc., a subsidiary of FE, which formerly operated TMI-2
JCP&L			Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary
KATCo			Keystone Appalachian Transmission Company, a subsidiary of FET
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
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 are used to identify frequently used terms in this report:

ACE

Affordable Clean Energy

ENEC

Expanded Net Energy Cost

ADIT

Accumulated Deferred Income Taxes

EPA

United States Environmental Protection Agency

AEP

American Electric Power Company, Inc.

EPS

Earnings per Share

AFS

Available-for-sale

ERO

Electric Reliability Organization

AFUDC

Allowance for Funds Used During Construction

ESP IV

Electric Security Plan IV

AMI

Advance Metering Infrastructure

Facebook®

Facebook is a registered trademark of Facebook, Inc.

AOCI

Accumulated Other Comprehensive Income (Loss)

FASB

Financial Accounting Standards Board

ARO

Asset Retirement Obligation

FE Board

FE Board of Directors

ARP

Alternative Revenue Program

FERC

Federal Energy Regulatory Commission

ASC

Accounting Standard Codification

FES Bankruptcy

FES Debtors’ voluntary petitions for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code with the Bankruptcy Court

ASU

Accounting Standards Update

Fitch

Fitch Ratings Service

Bankruptcy Court

U.S. Bankruptcy Court in the Northern District of Ohio in Akron

FPA

Federal Power Act

BGS

Basic Generation Service

FTR

Financial Transmission Right

CAA

Clean Air Act

GAAP

Accounting Principles Generally Accepted in the United States of America

CCR

Coal Combustion Residuals

GHG

Greenhouse Gases

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act of 1980

HB 6

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

CFR

Code of Federal Regulations

HB 128

House Bill 128, as passed by Ohio's 134th General Assembly

CO2

Carbon Dioxide

LIBOR

London Inter-Bank Offered Rate

Code of Business Conduct

The FirstEnergy Code of Business Conduct and Ethics as approved by the FE Board on July 20, 2021

LOC

Letter of Credit

COVID-19

Coronavirus disease

LTIIPs

Long-Term Infrastructure Improvement Plans

CPP

EPA’s Clean Power Plan

MDPSC

Maryland Public Service Commission

CSAPR

Cross-State Air Pollution Rule

MGP

Manufactured Gas Plants

CSR

Conservation Support Rider

MISO

Midcontinent Independent System Operator, Inc.

CTA

Consolidated Tax Adjustment

Moody’s

Moody’s Investors Service, Inc.

CWA

Clean Water Act

Megawatt

D.C. Circuit

United States Court of Appeals for the District of Columbia Circuit

MWH

Megawatt-hour

DCR

Delivery Capital Recovery

NAAQS

National Ambient Air Quality Standards

DMR

Distribution Modernization Rider

NDT

Nuclear Decommissioning Trust

DOE

United States Department of Energy

NERC

North American Electric Reliability Corporation

DPA

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

NJ Rate Counsel

New Jersey Division of Rate Counsel

DSIC

Distribution System Improvement Charge

NJBPU

New Jersey Board of Public Utilities

DSP

Default Service Plan

NOL

Net Operating Loss

EDC

Electric Distribution Company

NOx

Nitrogen Oxide

EDIS

Electric Distribution Investment Surcharge

NPDES

National Pollutant Discharge Elimination
System

EE&C

Energy Efficiency and Conservation

NRC

Nuclear Regulatory Commission

EEI

Edison Electric Institute

NUG

Non-Utility Generation

EGS

Electric Generation Supplier

NYPSC

New York State Public Service Commission

EGU

Electric Generation Units

OAG

Ohio Attorney General

Energy Harbor Corp.

OCA

Office of Consumer Advocate

EmPOWER Maryland

EmPOWER Maryland Energy Efficiency Act

OCC

Ohio Consumers’ Counsel

iii

ODSA

Ohio Development Service Agency

RTO

Regional Transmission Organization

OPEB

Other Post-Employment Benefits

S&P

Standard & Poor’s Ratings Service

OPIC

Other Paid-in Capital

S.D. Ohio

Southern District of Ohio

OVEC

Ohio Valley Electric Corporation

SBC

Societal Benefits Charge

PA DEP

Pennsylvania Department of Environmental Protection

SCOH

Supreme Court of Ohio

PIR

Phase-In Recovery Rider

SEC

United States Securities and Exchange Commission

PJM

PJM Interconnection, LLC

SEET

Significantly Excessive Earnings Test

PJM Tariff

PJM Open Access Transmission Tariff

SIP

State Implementation Plan(s) Under the Clean Air Act

POLR

Provider of Last Resort

SLC

Special Litigation Committee of the FE Board

PPA

Purchase Power Agreement

SO2

Sulfur Dioxide

PPB

Parts per Billion

SOS

Standard Offer Service

PPUC

Pennsylvania Public Utility Commission

SREC

Solar Renewable Energy Credit

PUCO

Public Utilities Commission of Ohio

SSO

Standard Service Offer

PURPA

Public Utility Regulatory Policies Act of 1978

Tax Act

Tax Cuts and Jobs Act adopted December 22, 2017

RCRA

Resource Conservation and Recovery Act

TMI-1

Three Mile Island Unit 1

Regulation FD

Regulation Fair Disclosure promulgated by the SEC

TMI-2

Three Mile Island Unit 2

RFC

ReliabilityFirst Corporation

Twitter®

Twitter is a registered trademark of Twitter, Inc.

RFP

Request for Proposal

VIE

Variable Interest Entity

RGGI

Regional Greenhouse Gas Initiative

VSCC

Virginia State Corporation Commission

ROE

Return on Equity

WVPSC

Public Service Commission of West Virginia

PART I. FINANCIAL INFORMATION

ITEM I. Financial Statements

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions, except per share amounts)	2021		2020		2021		2020

REVENUES:
Distribution services and retail generation	$	2,550	$	2,470	$	6,882	$	6,624
Transmission	411		408		1,223		1,185
Other	163		144		367		444
Total revenues(1)	3,124		3,022		8,472		8,253

OPERATING EXPENSES:
Fuel	132		101		362		276
Purchased power	874		766		2,206		2,073
Other operating expenses	856		937		2,326		2,416

Provision for depreciation	326		316		972		954

Amortization (deferral) of regulatory assets, net	30		(91)		171		(26)
General taxes	275		272		812		792
DPA penalty (Note 9)	—		—		230		—
Gain on sale of Yards Creek (Note 8)	—		—		(109)		—

Total operating expenses	2,493		2,301		6,970		6,485

OPERATING INCOME	631		721		1,502		1,768

OTHER INCOME (EXPENSE):


Miscellaneous income, net	136		100		379		303

Pension and OPEB mark-to-market adjustment (Note 5)	—		—		—		(423)
Interest expense	(283)		(266)		(855)		(792)
Capitalized financing costs	20		21		54		57
Total other expense	(127)		(145)		(422)		(855)

INCOME BEFORE INCOME TAXES	504		576		1,080		913

INCOME TAXES	88		116		271		122

INCOME FROM CONTINUING OPERATIONS	416		460		809		791

Discontinued operations (Note 3)(2)	47		(6)		47		46

NET INCOME	$	463	$	454	$	856	$	837









EARNINGS PER SHARE OF COMMON STOCK (Note 4):
Basic - Continuing Operations	$	0.76	$	0.85	$	1.48	$	1.46
Basic - Discontinued Operations	0.09		(0.01)		0.09		0.08
Basic - Earnings Per Share of Common Stock	$	0.85	$	0.84	$	1.57	$	1.54

Diluted - Continuing Operations	$	0.76	$	0.85	$	1.48	$	1.46
Diluted - Discontinued Operations	0.09		(0.01)		0.09		0.08
Diluted - Earnings Per Share of Common Stock	$	0.85	$	0.84	$	1.57	$	1.54

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic	544		542		544		542
Diluted	545		543		545		543

(1) Includes excise and gross receipts tax collections of $103 million and $100 million during the three months ended September 30, 2021 and 2020, respectively, and $283 million and $276 million during the nine months ended September 30, 2021 and 2020, respectively.

(2) Net of income tax expense (benefits) of $(47) million for the three and nine months ended September 30, 2021, and $6 million and $(29) million for the three and nine months ended September 30, 2020, 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 September 30,				For the Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020

NET INCOME	$	463	$	454	$	856	$	837

OTHER COMPREHENSIVE LOSS:
Pension and OPEB prior service costs	(3)		(3)		(10)		(30)
Amortized losses on derivative hedges	—		—		1		1


Other comprehensive loss	(3)		(3)		(9)		(29)
Income tax benefits on other comprehensive loss	(1)		(1)		(3)		(7)
Other comprehensive loss, net of tax	(2)		(2)		(6)		(22)

COMPREHENSIVE INCOME	$	461	$	452	$	850	$	815

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)	September 30, 2021		December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	577	$	1,734
Restricted cash	107		67
Receivables-
Customers	1,273		1,367
Less — Allowance for uncollectible customer receivables	159		164
	1,114		1,203

Other, net of allowance for uncollectible accounts of $12 in 2021 and $26 in 2020	250		236
Materials and supplies, at average cost	245		317




Prepaid taxes and other	239		157

	2,532		3,714
PROPERTY, PLANT AND EQUIPMENT:
In service	45,032		43,654
Less — Accumulated provision for depreciation	12,460		11,938
	32,572		31,716
Construction work in progress	1,733		1,578
	34,305		33,294

PROPERTY, PLANT AND EQUIPMENT, NET - HELD FOR SALE (NOTE 8)	—		45

INVESTMENTS AND OTHER NONCURRENT ASSETS:
Goodwill	5,618		5,618
Investments (Note 7)	632		605
Regulatory assets	90		82
Other	677		1,106

	7,017		7,411
	$	43,854	$	44,464
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	1,230	$	146
Short-term borrowings	—		2,200
Accounts payable	876		827

Accrued interest	291		282
Accrued taxes	641		640
Accrued compensation and benefits	369		349


Other	687		560

	4,094		5,004
CAPITALIZATION:
Stockholders’ equity-
Common stock, $0.10 par value, authorized 700,000,000 shares - 544,419,619 and 543,117,533 shares outstanding as of September 30, 2021 and December 31, 2020, respectively	54		54

Other paid-in capital	9,468		10,076
Accumulated other comprehensive loss	(11)		(5)
Accumulated deficit	(2,032)		(2,888)
Total stockholders’ equity	7,479		7,237


Long-term debt and other long-term obligations	22,503		22,131
	29,982		29,368
NONCURRENT LIABILITIES:
Accumulated deferred income taxes	3,366		3,095
Retirement benefits	3,124		3,345
Regulatory liabilities	2,015		1,826



Other	1,273		1,826

	9,778		10,092
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9)
	$	43,854	$	44,464

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

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	Nine Months Ended September 30, 2021
	Common Stock			OPIC		AOCI		Accumulated Deficit		Total Stockholders’ Equity
(In millions)	Shares	Amount
Balance, January 1, 2021	543	$	54	$	10,076	$	(5)	$	(2,888)	$	7,237
Net income								335		335
Other comprehensive loss, net of tax						(2)				(2)
Share-based benefit plans	1			2						2
Cash dividends declared on common stock ($0.39 per share in March)				(212)						(212)
Balance, March 31, 2021	544	$	54	$	9,866	$	(7)	$	(2,553)	$	7,360
Net income								58		58
Other comprehensive loss, net of tax						(2)				(2)
Share-based benefit plans				14						14

Balance, June 30, 2021	544	$	54	$	9,880	$	(9)	$	(2,495)	$	7,430
Net income								463		463
Other comprehensive loss, net of tax						(2)				(2)
Share-based benefit plans				13						13
Cash dividends declared on common stock ($0.39 per share in July and September)				(425)						(425)
Balance, September 30, 2021	544	$	54	$	9,468	$	(11)	$	(2,032)	$	7,479


	Nine Months Ended September 30, 2020
	Common Stock			OPIC		AOCI		Accumulated Deficit		Total Stockholders’ Equity
(In millions)	Shares	Amount
Balance, January 1, 2020	541	$	54	$	10,868	$	20	$	(3,967)	$	6,975
Net income								74		74
Other comprehensive loss, net of tax						(18)				(18)
Stock Investment Plan and share-based benefit plans	1			(6)						(6)
Cash dividends declared on common stock ($0.39 per share in March)				(211)						(211)
Balance, March 31, 2020	542	$	54	$	10,651	$	2	$	(3,893)	$	6,814
Net income								309		309
Other comprehensive loss, net of tax						(2)				(2)

Stock Investment Plan and share-based benefit plans				22						22
Balance, June 30, 2020	542	$	54	$	10,673	$	—	$	(3,584)	$	7,143
Net income								454		454
Other comprehensive loss, net of tax						(2)				(2)
Stock Investment Plan and share-based benefit plans	1			17						17
Cash dividends declared on common stock ($0.39 per share in July and September)				(424)						(424)
Balance, September 30, 2020	543	$	54	$	10,266	$	(2)	$	(3,130)	$	7,188

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 Nine Months Ended September 30,
(In millions)	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	856	$	837
Adjustments to reconcile net income to net cash from operating activities-
Depreciation and amortization	1,162		804


Deferred income taxes and investment tax credits, net	255		124

Retirement benefits, net of payments	(310)		(218)

Pension and OPEB mark-to-market adjustment	—		423
Settlement agreement and tax sharing payments to the FES Debtors	—		(978)

Transmission revenue collections, net	120		1
Gain on sale of Yards Creek	(109)		—
Gain on disposal, net of tax (Note 3)	(47)		(46)
Changes in current assets and liabilities-
Receivables	76		(33)
Materials and supplies	73		(23)
Prepaid taxes and other current assets	(34)		(57)
Accounts payable	49		(72)

Accrued taxes	(124)		4
Accrued interest	9