Discontinued Operations and Assets Held for Sale

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Assets Held for Sale

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

On September 4, 2013, certain of FirstEnergy subsidiaries applied for authorization from the FERC to sell eleven hydroelectric power stations in Pennsylvania, Virginia and West Virginia to subsidiaries of Harbor Hydro, a subsidiary of LS Power, for approximately $400 million. The asset purchase agreement was entered into on August 23, 2013, as amended and restated as of September 4, 2013. The proposed transaction is expected to close in the fourth quarter of 2013. The asset purchase agreement is subject to customary and other closing conditions, including, without limitation, the resolution of a potential competing license application, and receipt of approvals by FERC and the VSCC, which is pending. On September 27, 2013, the Federal Trade Commission advised that the Hart-Scott-Rodino waiting period was terminated, meaning this item is complete. As of September 30, 2013, FirstEnergy classified the hydroelectric power stations, with a carrying value of $234 million (FES - $121 million) as Assets held for sale in the Consolidated Balance Sheets. Included in the carrying value of the assets held for sale is goodwill of $29 million (FES - $1 million) which was allocated to the hydroelectric plants to be sold. Net pre-tax results for the hydroelectric facilities of $12 million and $26 million (FES - $12 million and $22 million) for the three and nine months ended September 30, 2013, respectively, and $5 million and $19 million (FES - $8 million and $17 million) for three and nine months ended September 30, 2012, respectively, were reported in FirstEnergy's and FES' Consolidated Statement of Income as discontinued operations. Revenues for the hydroelectric facilities of $11 million and $24 million (FES - $10 million and $22 million) for the three and nine months ended September 30, 2013, respectively, and $6 million and $24 million (FES - $8 million and $18 million) for the three and nine months ended September 30, 2012 respectively, are reported in FirstEnergy's and FES' Consolidated Statement of Income as discontinued operations.