SUPPLEMENTAL GUARANTOR INFORMATION

In 2007, FG completed a sale and leaseback transaction for its undivided interest in Bruce Mansfield Unit 1. FES has fully and unconditionally and irrevocably guaranteed all of FG's obligations under each of the leases. The related lessor notes and pass through certificates are not guaranteed by FES or FG, but the notes are secured by, among other things, each lessor trust's undivided interest in Unit 1, rights and interests under the applicable lease and rights and interests under other related agreements, including FES' lease guaranty. This transaction is classified as an operating lease under GAAP for FES and FirstEnergy and as a financing lease for FG.

The Consolidating Statements of Income and Comprehensive Income for the three months and six months ended June 30, 2013 and 2012, Consolidating Balance Sheets as of June 30, 2013 and December 31, 2012, and Consolidating Statements of Cash Flows for the six months ended June 30, 2013 and 2012, for FES (parent and guarantor), FG and NG (non-guarantor) are presented below. Investments in wholly owned subsidiaries are accounted for by FES using the equity method. Results of operations for FG and NG are, therefore, reflected in FES’ investment accounts and earnings as if operating lease treatment was achieved. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions and the entries required to reflect operating lease treatment associated with the 2007 Bruce Mansfield Unit 1 sale and leaseback transaction.

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



For the Three Months Ended June 30, 2013	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	1,425		$	560		$	457		$	(983	)	$	1,459

OPERATING EXPENSES:
Fuel	—			286			46			—			332
Purchased power from affiliates	1,050			—			70			(983		)	137
Purchased power from non-affiliates	524			—			—			—			524
Other operating expenses	175			70			131			12			388
Provision for depreciation	2			34			44			(2		)	78
General taxes	19			8			7			—			34
Total operating expenses	1,770			398			298			(973		)	1,493

OPERATING INCOME (LOSS)	(345		)	162			159			(10		)	(34		)

OTHER INCOME (EXPENSE):
Loss on debt redemptions	(32		)	—			—			—			(32		)
Investment income	1			—			(14		)	(5		)	(18		)
Miscellaneous income, including net income from equity investees	171			3			—			(168		)	6
Interest expense — affiliates	(5		)	(1		)	(3		)	4			(5		)
Interest expense — other	(12		)	(27		)	(14		)	14			(39		)
Capitalized interest	1			—			9			—			10
Total other income (expense)	124			(25		)	(22		)	(155		)	(78		)

INCOME (LOSS) BEFORE INCOME TAXES	(221		)	137			137			(165		)	(112		)

INCOME TAXES (BENEFITS)	(150		)	54			52			3			(41		)

NET INCOME (LOSS)	$	(71	)	$	83		$	85		$	(168	)	$	(71	)

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME (LOSS)	$	(71	)	$	83		$	85		$	(168	)	$	(71	)

OTHER COMPREHENSIVE LOSS:
Pensions and OPEB prior service costs	(5		)	(5		)	—			5			(5		)
Amortized loss on derivative hedges	(1		)	—			—			—			(1		)
Change in unrealized gain on available-for-sale securities	(8		)	—			(8		)	8			(8		)
Other comprehensive loss	(14		)	(5		)	(8		)	13			(14		)
Income benefits on other comprehensive loss	(5		)	(2		)	(4		)	6			(5		)
Other comprehensive loss, net of tax	(9		)	(3		)	(4		)	7			(9		)
COMPREHENSIVE INCOME (LOSS)	$	(80	)	$	80		$	81		$	(161	)	$	(80	)

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



For the Six Months Ended June 30, 2013	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	2,921		$	1,097		$	897		$	(1,926	)	$	2,989

OPERATING EXPENSES:
Fuel	—			533			99			—			632
Purchased power from affiliates	2,063			—			132			(1,926		)	269
Purchased power from non-affiliates	1,029			—			—			—			1,029
Other operating expenses	337			145			262			24			768
Provision for depreciation	3			66			88			(3		)	154
General taxes	39			19			13			—			71
Total operating expenses	3,471			763			594			(1,905		)	2,923

OPERATING INCOME (LOSS)	(550		)	334			303			(21		)	66

OTHER INCOME (EXPENSE):
Loss on debt redemptions	(103		)	—			—			—			(103		)
Investment income (loss)	2			—			4			(7		)	(1		)
Miscellaneous income, including net income from equity investees	363			4			—			(359		)	8
Interest expense — affiliates	(7		)	(2		)	(4		)	7			(6		)
Interest expense — other	(37		)	(55		)	(29		)	30			(91		)
Capitalized interest	1			—			18			—			19
Total other income (expense)	219			(53		)	(11		)	(329		)	(174		)

INCOME (LOSS) BEFORE INCOME TAXES	(331		)	281			292			(350		)	(108		)

INCOME TAXES (BENEFITS)	(262		)	107			110			6			(39		)

NET INCOME (LOSS)	$	(69	)	$	174		$	182		$	(356	)	$	(69	)

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME (LOSS)	$	(69	)	$	174		$	182		$	(356	)	$	(69	)

OTHER COMPREHENSIVE LOSS:
Pensions and OPEB prior service costs	(11		)	(10		)	—			10			(11		)
Amortized loss on derivative hedges	(2		)	—			—			—			(2		)
Change in unrealized gain on available-for-sale securities	(3		)	—			(3		)	3			(3		)
Other comprehensive loss	(16		)	(10		)	(3		)	13			(16		)
Income benefits on other comprehensive loss	(6		)	(4		)	(2		)	6			(6		)
Other comprehensive loss, net of tax	(10		)	(6		)	(1		)	7			(10		)
COMPREHENSIVE INCOME (LOSS)	$	(79	)	$	168		$	181		$	(349	)	$	(79	)

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



For the Three Months Ended June 30, 2012	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	1,430		$	636		$	473		$	(1,083	)	$	1,456
OPERATING EXPENSES:
Fuel	—			336			44			—			380
Purchased power from affiliates	1,156			—			60			(1,083		)	133
Purchased power from non-affiliates	434			—			—			—			434
Other operating expenses	107			100			172			14			393
Provision for depreciation	1			30			39			(1		)	69
General taxes	20			8			4			—			32
Total operating expenses	1,718			474			319			(1,070		)	1,441

OPERATING INCOME (LOSS)	(288		)	162			154			(13		)	15

OTHER INCOME (EXPENSE):
Investment income	—			5			7			(6		)	6
Miscellaneous income, including net income from equity investees	279			19			—			(278		)	20
Interest expense — affiliates	(5		)	(2		)	(1		)	6			(2		)
Interest expense — other	(24		)	(26		)	(14		)	16			(48		)
Capitalized interest	—			1			8			—			9
Total other income (expense)	250			(3		)	—			(262		)	(15		)

INCOME (LOSS) BEFORE INCOME TAXES	(38		)	159			154			(275		)	—

INCOME TAXES (BENEFITS)	(37		)	(7		)	42			3			1

NET INCOME (LOSS)	$	(1	)	$	166		$	112		$	(278	)	$	(1	)

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME (LOSS)	$	(1	)	$	166		$	112		$	(278	)	$	(1	)

OTHER COMPREHENSIVE INCOME:
Pensions and OPEB prior service costs	8			7			—			(7		)	8
Amortized loss on derivative hedges	1			—			—			—			1
Change in unrealized gain on available for sale securities	3			—			3			(3		)	3
Other comprehensive income	12			7			3			(10		)	12
Income taxes on other comprehensive income	2			3			1			(4		)	2
Other comprehensive income, net of tax	10			4			2			(6		)	10
COMPREHENSIVE INCOME	$	9		$	170		$	114		$	(284	)	$	9

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



For the Six Months Ended June 30, 2012	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	2,920		$	1,178		$	867		$	(1,993	)	$	2,972

OPERATING EXPENSES:
Fuel	—			576			99			—			675
Purchased power from affiliates	2,121			—			122			(1,993		)	250
Purchased power from non-affiliates	921			—			—			—			921
Other operating expenses	183			192			288			25			688
Provision for depreciation	2			60			73			(3		)	132
General taxes	40			18			11			—			69
Total operating expenses	3,267			846			593			(1,971		)	2,735

OPERATING INCOME (LOSS)	(347		)	332			274			(22		)	237

OTHER INCOME (EXPENSE):
Investment income	1			9			12			(10		)	12
Miscellaneous income, including net income from equity investees	537			19			—			(532		)	24
Interest expense — affiliates	(9		)	(3		)	(2		)	10			(4		)
Interest expense — other	(47		)	(52		)	(21		)	31			(89		)
Capitalized interest	—			2			16			—			18
Total other income (expense)	482			(25		)	5			(501		)	(39		)

INCOME BEFORE INCOME TAXES	135			307			279			(523		)	198

INCOME TAXES (BENEFITS)	14			(8		)	65			6			77

NET INCOME	$	121		$	315		$	214		$	(529	)	$	121

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	121		$	315		$	214		$	(529	)	$	121

OTHER COMPREHENSIVE INCOME (LOSS):
Pensions and OPEB prior service costs	3			3			—			(3		)	3
Amortized loss on derivative hedges	(4		)	—			—			—			(4		)
Change in unrealized gain on available-for-sale securities	13			—			13			(13		)	13
Other comprehensive income	12			3			13			(16		)	12
Income taxes on other comprehensive income	4			1			5			(6		)	4
Other comprehensive income, net of tax	8			2			8			(10		)	8
COMPREHENSIVE INCOME	$	129		$	317		$	222		$	(539	)	$	129

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS

(Unaudited)



As of June 30, 2013	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	541		—		—		—			541
Affiliated companies	326		477		325		(693		)	435
Other	86		30		6		—			122
Notes receivable from affiliated companies	573		14		590		(1,057		)	120
Materials and supplies	69		172		213		—			454
Derivatives	170		—		—		—			170
Prepayments and other	83		39		7		—			129
	1,848		734		1,141		(1,750		)	1,973
PROPERTY, PLANT AND EQUIPMENT:
In service	114		6,234		6,598		(383		)	12,563
Less — Accumulated provision for depreciation	34		1,964		2,798		(186		)	4,610
	80		4,270		3,800		(197		)	7,953
Construction work in progress	19		99		898		—			1,016
	99		4,369		4,698		(197		)	8,969
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,270		—			1,270
Investment in affiliated companies	5,334		—		—		(5,334		)	—
Other	—		12		—		—			12
	5,334		12		1,270		(5,334		)	1,282
DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits	—		239		—		(239		)	—
Customer intangibles	103		—		—		—			103
Goodwill	24		—		—		—			24
Property taxes	—		14		22		—			36
Unamortized sale and leaseback costs	—		—		—		164			164
Derivatives	87		—		—		—			87
Other	144		245		13		(163		)	239
	358		498		35		(238		)	653
	$	7,639	$	5,613	$	7,144	$	(7,519	)	$	12,877

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	1	$	366	$	514	$	(22	)	$	859
Short-term borrowings-
Affiliated companies	599		458		—		(1,057		)	—
Other	—		4		—		—			4
Accounts payable-
Affiliated companies	702		265		252		(705		)	514
Other	120		136		—		—			256
Accrued taxes	7		14		20		(1		)	40
Derivatives	140		—		—		—			140
Other	63		65		16		35			179
	1,632		1,308		802		(1,750		)	1,992
CAPITALIZATION:
Total equity	5,193		1,965		3,347		(5,312		)	5,193
Long-term debt and other long-term obligations	712		1,875		789		(1,196		)	2,180
	5,905		3,840		4,136		(6,508		)	7,373
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		875			875
Accumulated deferred income taxes	12		—		770		(135		)	647
Asset retirement obligations	—		171		967		—			1,138
Retirement benefits	26		224		—		—			250
Derivatives	35		—		—		—			35
Other	29		70		469		(1		)	567
	102		465		2,206		739			3,512
	$	7,639	$	5,613	$	7,144	$	(7,519	)	$	12,877

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS

(Unaudited)



As of December 31, 2012	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	3	$	—	$	—		$	3
Receivables-
Customers	483		—		—		—			483
Affiliated companies	232		417		478		(748		)	379
Other	56		19		16		—			91
Notes receivable from affiliated companies	366		7		607		(704		)	276
Materials and supplies	66		231		208		—			505
Derivatives	158		—		—		—			158
Prepayments and other	38		39		10		—			87
	1,399		716		1,319		(1,452		)	1,982
PROPERTY, PLANT AND EQUIPMENT:
In service	91		5,899		6,391		(384		)	11,997
Less — Accumulated provision for depreciation	32		1,915		2,646		(185		)	4,408
	59		3,984		3,745		(199		)	7,589
Construction work in progress	34		230		877		—			1,141
	93		4,214		4,622		(199		)	8,730
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,283		—			1,283
Investment in affiliated companies	4,972		—		—		(4,972		)	—
Other	—		12		—		—			12
	4,972		12		1,283		(4,972		)	1,295
DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits	—		313		—		(313		)	—
Customer intangibles	110		—		—		—			110
Goodwill	24		—		—		—			24
Property taxes	—		14		22		—			36
Unamortized sale and leaseback costs	—		—		—		119			119
Derivatives	99		—		—		—			99
Other	160		194		5		(106		)	253
	393		521		27		(300		)	641
	$	6,857	$	5,463	$	7,251	$	(6,923	)	$	12,648

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	1	$	586	$	537	$	(22	)	$	1,102
Short-term borrowings-
Affiliated companies	358		346		—		(704		)	—
Other	—		4		—		—			4
Accounts payable-
Affiliated companies	748		143		583		(748		)	726
Other	63		96		—		—			159
Accrued taxes	126		25		20		—			171
Derivatives	124		—		—		—			124
Other	71		148		15		46			280
	1,491		1,348		1,155		(1,428		)	2,566
CAPITALIZATION:
Total equity	3,763		1,787		3,165		(4,952		)	3,763
Long-term debt and other long-term obligations	1,482		2,009		834		(1,207		)	3,118
	5,245		3,796		3,999		(6,159		)	6,881
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		892			892
Accumulated deferred income taxes	28		—		714		(227		)	515
Asset retirement obligations	—		29		936		—			965
Retirement benefits	26		215		—		—			241
Derivatives	37		—		—		—			37
Other	30		75		447		(1		)	551
	121		319		2,097		664			3,201
	$	6,857	$	5,463	$	7,251	$	(6,923	)	$	12,648

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Unaudited)



For the Six Months Ended June 30, 2013	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(687	)	$	390		$	308		$	(11	)	$	—
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Short-term borrowings, net	240			112			—			(352		)	—
Equity contribution from parent	1,500			—			—			—			1,500
Redemptions and Repayments-
Long-term debt	(770		)	(352		)	(68		)	11			(1,179		)
Tender premiums	(67		)	—			—			—			(67		)
Other	(2		)	(3		)	—			—			(5		)
Net cash provided from (used for) financing activities	901			(243		)	(68		)	(341		)	249
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(7		)	(163		)	(180		)	—			(350		)
Nuclear fuel	—			—			(50		)	—			(50		)
Proceeds from asset sales	—			19			—			—			19
Sales of investment securities held in trusts	—			—			487			—			487
Purchases of investment securities held in trusts	—			—			(515		)	—			(515		)
Loans to affiliated companies, net	(207		)	(7		)	18			352			156
Customer acquisition costs	—			—			—			—			—
Other	—			3			—			—			3
Net cash used for investing activities	(214		)	(148		)	(240		)	352			(250		)
Net change in cash and cash equivalents	—			(1		)	—			—			(1		)
Cash and cash equivalents at beginning of period	—			3			—			—			3
Cash and cash equivalents at end of period	$	—		$	2		$	—		$	—		$	2

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Unaudited)



For the Six Months Ended June 30, 2012	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(525	)	$	308		$	446		$	(10	)	$	219
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt	—			52			30			—			82
Short-term borrowings, net	532			46			—			(578		)	—
Redemptions and Repayments-
Long-term debt	—			(63		)	(87		)	10			(140		)
Short-term borrowings, net	—			—			(32		)	32			—
Other	(1		)	(4		)	(1		)	—			(6		)
Net cash provided from (used for) financing activities	531			31			(90		)	(536		)	(64		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(5		)	(44		)	(164		)	—			(213		)
Nuclear fuel	—			—			(90		)	—			(90		)
Proceeds from asset sales	—			17			—			—			17
Sales of investment securities held in trusts	—			—			109			—			109
Purchases of investment securities held in trusts	—			—			(127		)	—			(127		)
Loans to affiliated companies, net	1			(308		)	(84		)	546			155
Other	(2		)	(4		)	—			—			(6		)
Net cash used for investing activities	(6		)	(339		)	(356		)	546			(155		)
Net change in cash and cash equivalents	—			—			—			—			—
Cash and cash equivalents at beginning of period	—			7			—			—			7
Cash and cash equivalents at end of period	$	—		$	7		$	—		$	—		$	7