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, OH 44308 | ||||
Telephone (800)736-3402 | ||||
(d) | Exhibits |
Exhibit No. | Description | |
99.1 | Press Release issued by FirstEnergy Corp., dated October 29, 2015 | |
99.2 | Consolidated Report to the Financial Community, dated October 29, 2015 |
FIRSTENERGY CORP. | |
Registrant | |
By: | /s/ K. Jon Taylor |
K. Jon Taylor Vice President, Controller and Chief Accounting Officer |
Exhibit No. | Description | |
99.1 | Press Release issued by FirstEnergy Corp., dated October 29, 2015 | |
99.2 | Consolidated Report to the Financial Community, dated October 29, 2015 |
Consolidated GAAP EPS to Operating (Non-GAAP) EPS* Reconciliation | ||||||||||||
Third Quarter | Year-To-Date | |||||||||||
2015 | 2014 | 2015 | 2014 | Full Year | ||||||||
Basic Earnings Per Share (GAAP) | $0.94 | $0.79 | $1.91 | $1.44 | $1.72 - $2.10 | |||||||
Excluding Special Items*: | ||||||||||||
Regulatory charges | 0.01 | 0.02 | 0.05 | 0.05 | 0.07 | |||||||
Trust securities impairment | 0.07 | 0.01 | 0.11 | 0.02 | 0.11 | |||||||
Impact of non-core asset sales/impairments | 0.02 | 0.01 | 0.05 | (0.16) | 0.05 | |||||||
Plant deactivation costs | — | — | 0.04 | 0.17 | 0.04 | |||||||
Merger accounting - commodity contracts | 0.02 | 0.02 | 0.05 | 0.05 | 0.07 | |||||||
Retail repositioning charges | 0.01 | 0.02 | 0.02 | 0.09 | 0.04 | |||||||
Litigation resolution | — | (0.01) | — | (0.01) | — | |||||||
Loss on debt redemptions | — | — | — | 0.01 | — | |||||||
Mark-to-market adjustments | ||||||||||||
Pension/OPEB actuarial assumptions1 | — | — | — | — | 0.37-0.67 | |||||||
Other | (0.09) | 0.03 | (0.10) | 0.10 | (0.10) | |||||||
Total Special Items* | 0.04 | 0.10 | 0.22 | 0.32 | 0.65-0.95 | |||||||
Basic EPS - Operating (Non-GAAP) | $0.98 | $0.89 | $2.13 | $1.76 | $2.67 - $2.75 | |||||||
1 Based on current discount rates ranging from 4.25% to 4.50% and actual losses on plan assets through September 30, 2015 of (3.50%). * Per share amounts for the special items above are based on the after tax effect of each item, divided by the weighted average basic shares outstanding for the period. | ||||||||||||
Competitive | FirstEnergy | ||||||||||||
EPS Variance Analysis | Regulated | Regulated | Energy | Corporate / | Corp. | ||||||||
(in millions, except per share amounts) | Distribution | Transmission | Services | Other | Consolidated | ||||||||
3Q 2014 Net Income - GAAP | $227 | $55 | $66 | $(15) | $333 | ||||||||
3Q 2014 Basic EPS* (avg. shares outstanding 420M) | $0.54 | $0.13 | $0.16 | $(0.04) | $0.79 | ||||||||
Special Items - 2014 | 0.02 | — | 0.09 | (0.01) | 0.10 | ||||||||
3Q 2014 Basic EPS - Operating (Non-GAAP) Earnings* | $0.56 | $0.13 | $0.25 | $(0.05) | $0.89 | ||||||||
Distribution Deliveries | 0.07 | — | — | — | 0.07 | ||||||||
PA Rate Case | 0.05 | — | — | — | 0.05 | ||||||||
NJ Rate Case | (0.03) | — | — | — | (0.03) | ||||||||
Transmission Revenues | — | 0.08 | — | — | 0.08 | ||||||||
CES Commodity Margin | — | — | 0.15 | — | 0.15 | ||||||||
O&M Expenses | (0.02) | — | (0.05) | (0.02) | (0.09) | ||||||||
Depreciation | (0.02) | (0.01) | — | — | (0.03) | ||||||||
Pension/OPEB | (0.01) | — | (0.01) | — | (0.02) | ||||||||
General Taxes | — | (0.01) | 0.01 | — | — | ||||||||
Interest Expense | — | (0.01) | — | (0.01) | (0.02) | ||||||||
Capitalized Financing Costs | — | (0.01) | — | — | (0.01) | ||||||||
Effective Income Tax Rate | (0.02) | — | (0.01) | (0.04) | (0.07) | ||||||||
Other | 0.01 | — | — | — | 0.01 | ||||||||
3Q 2015 Basic EPS - Operating (Non-GAAP) Earnings* | $0.59 | $0.17 | $0.34 | $(0.12) | $0.98 | ||||||||
Special Items - 2015 | (0.03) | — | (0.01) | — | (0.04) | ||||||||
3Q 2015 Basic EPS* (avg. shares outstanding 423M) | $0.56 | $0.17 | $0.33 | $(0.12) | $0.94 | ||||||||
3Q 2015 Net Income - GAAP | $234 | $70 | $140 | $(49) | $395 | ||||||||
*Per share amounts for the special items and earnings drivers above and throughout this report are based on the after tax effect of each item divided by the weighted average basic shares outstanding for the period. | |||||||||||||
Competitive | FirstEnergy | ||||||||||||
Regulated | Regulated | Energy | Corporate / | Corp. | |||||||||
Special Items - 3Q 2015 | Distribution | Transmission | Services | Other | Consolidated | ||||||||
Regulatory charges | $0.01 | $— | $— | $— | $0.01 | ||||||||
Trust securities impairment | 0.01 | — | 0.06 | — | 0.07 | ||||||||
Merger accounting - commodity contracts | — | — | 0.02 | — | 0.02 | ||||||||
Impact of non-core asset sales/impairments | 0.01 | — | 0.01 | — | 0.02 | ||||||||
Retail repositioning charges | — | — | 0.01 | — | 0.01 | ||||||||
Mark-to-market adjustments | — | — | (0.09) | — | (0.09) | ||||||||
Special Items - 2015 | $0.03 | $— | $0.01 | $— | $0.04 | ||||||||
Competitive | FirstEnergy | ||||||||||||
Regulated | Regulated | Energy | Corporate / | Corp. | |||||||||
Special Items - 3Q 2014 | Distribution | Transmission | Services | Other | Consolidated | ||||||||
Regulatory charges | $0.02 | $— | $— | $— | $0.02 | ||||||||
Trust securities impairment | — | — | 0.01 | — | 0.01 | ||||||||
Merger accounting - commodity contracts | — | — | 0.02 | — | 0.02 | ||||||||
Impact of non-core asset sales/impairments | — | — | 0.01 | — | 0.01 | ||||||||
Retail repositioning charges | — | — | 0.02 | — | 0.02 | ||||||||
Mark-to-market adjustments | — | — | 0.03 | — | 0.03 | ||||||||
Litigation resolution | — | — | — | (0.01) | (0.01) | ||||||||
Special Items - 2014 | $0.02 | $— | $0.09 | $(0.01) | $0.10 | ||||||||
Estimate for Year 2015 | Q4 of 2015 | |||||||||||||
(In millions, except per share amounts) | Regulated Distribution | Regulated Transmission | Competitive Energy Services | Corporate / Other | FirstEnergy Corp. Consolidated | FirstEnergy Corp. Consolidated* | ||||||||
2015F Net Income (Loss) - GAAP | $550 - $650 | $295 - $305 | $65 - $115 | $(185) | $725 - $885 | $(80) - $80 | ||||||||
2015F Basic EPS (avg. shares outstanding 422M) | $1.31 - $1.54 | $0.70 - $0.72 | $0.15 - $0.28 | $(0.44) | $1.72 - $2.10 | ($0.19) - $0.19 | ||||||||
Excluding Special Items: | ||||||||||||||
Regulatory charges | 0.07 | — | — | — | 0.07 | 0.02 | ||||||||
Trust securities impairment | 0.01 | — | 0.10 | — | 0.11 | — | ||||||||
Plant deactivation costs | — | — | 0.04 | — | 0.04 | — | ||||||||
Merger accounting - commodity contracts | — | — | 0.07 | — | 0.07 | 0.02 | ||||||||
Non-core asset sales/impairments | 0.01 | — | 0.04 | — | 0.05 | — | ||||||||
Retail repositioning charges | — | — | 0.04 | — | 0.04 | 0.02 | ||||||||
Mark-to-market adjustments | ||||||||||||||
Pension/OPEB actuarial assumptions1 | 0.23 - 0.42 | — | 0.14 - 0.25 | — | 0.37 - 0.67 | 0.37 - 0.67 | ||||||||
Other | — | — | (0.10) | — | (0.10) | — | ||||||||
Total Special Items | 0.32 - 0.51 | — | 0.33 - 0.44 | — | 0.65 - 0.95 | 0.43 - 0.73 | ||||||||
2015F Basic EPS - Operating (Non-GAAP) (avg. shares outstanding 422M) | $1.82 - $1.86 | $0.70 - $0.72 | $0.59 - $0.61 | $(0.44) | $2.67 - $2.75 | $0.54 - $0.62 | ||||||||
1 Based on current discount rates ranging from 4.25% to 4.50% and actual losses on plan assets through September 30, 2015 of (3.50%). | ||||||||||||||
*Average of 423M shares outstanding for the 4th quarter of 2015 |
Regulated Distribution - GAAP earnings for the third quarter of 2015 were $234 million, or $0.56 per basic share, compared with third quarter 2014 earnings of $227 million, or $0.54 per basic share. Operating (non-GAAP) earnings, excluding special items, were $0.59 per basic share for the third quarter of 2015 compared with $0.56 per basic share for the third quarter of 2014. | |||||||
EPS Variance Analysis | |||||||
(In millions, except per share amounts) | |||||||
3Q 2014 Net Income - GAAP | $227 | ||||||
3Q 2014 Basic EPS (avg. shares outstanding 420M) | $0.54 | ||||||
Special Items - 2014 | 0.02 | ||||||
3Q 2014 Basic EPS - Operating (Non-GAAP) Earnings | $0.56 | ||||||
Distribution Deliveries | 0.07 | ||||||
PA Rate Case | 0.05 | ||||||
NJ Rate Case | (0.03) | ||||||
O&M Expenses | (0.02) | ||||||
Depreciation | (0.02) | ||||||
Pension/OPEB | (0.01) | ||||||
Effective Income Tax Rate | (0.02) | ||||||
Other | 0.01 | ||||||
3Q 2015 Basic EPS - Operating (Non-GAAP) Earnings | $0.59 | ||||||
Special Items - 2015 | (0.03) | ||||||
3Q 2015 Basic EPS (avg. shares outstanding 423M) | $0.56 | ||||||
3Q 2015 Net Income - GAAP | $234 | ||||||
• | Distribution Deliveries - Total electric distribution deliveries increased 1,048,000 megawatt-hours (MWH), or 2.8%, and increased earnings $0.07 per share. Residential sales increased 1,178,000 MWH or 9.0%, and sales to commercial customers increased 294,000 MWH, or 2.6%. Cooling-degree-days were 36% above the same period last year and 13% above normal. Higher deliveries to both residential and commercial customers were primarily due to increased weather-related usage as described above, and are partially offset by declining average customer usage due in part to the impact of energy efficiency mandates. Deliveries to industrial customers decreased 421,000 MWH, or 3.2%, primarily due to lower usage in the steel, coal mining and electrical equipment and manufacturing sectors, partially offset by increased usage from shale gas and automotive sectors. |
• | Pennsylvania Rate Case - Earnings increased $0.05 per share due to approved base distribution rate increases, net of incremental operating expenses, effective May 3, 2015. |
• | New Jersey Rate Case - Earnings decreased $0.03 per share due to an approved distribution rate decrease, including the recovery of 2011 and 2012 storm costs, effective April 1, 2015. |
• | O&M Expense - Higher O&M expense decreased earnings $0.02 per share, primarily due to increased labor and employee benefit expenses. |
• | Depreciation - Higher depreciation expense reduced earnings $0.02 per share, due to a higher asset base. |
• | Pension/OPEB - Higher pension/OPEB expense reduced earnings $0.01 per share, primarily due to lower amortization of OPEB prior service credits. |
• | Effective Income Tax Rate - A higher effective income tax rate (36.9% in Q3 2015 vs 35.2% in Q3 2014) decreased earnings $0.02 per share. The effective tax rate was 36.9% for the first nine months of 2015 compared to 35.2% for the same period last year. |
Regulated Transmission - GAAP and Operating (non-GAAP) earnings for the third quarter of 2015 were $70 million, or $0.17 per basic share, compared with third quarter 2014 GAAP and Operating (non-GAAP) earnings of $55 million, or $0.13 per basic share. | |||||||
EPS Variance Analysis | |||||||
(In millions, except per share amounts) | |||||||
3Q 2014 Net Income - GAAP | $55 | ||||||
3Q 2014 Basic EPS (avg. shares outstanding 420M) | $0.13 | ||||||
Special Items - 2014 | — | ||||||
3Q 2014 Basic EPS - Operating (Non-GAAP) Earnings | $0.13 | ||||||
Transmission Revenues | 0.08 | ||||||
Depreciation | (0.01) | ||||||
General Taxes | (0.01) | ||||||
Interest Expense | (0.01) | ||||||
Capitalized Financing Costs | (0.01) | ||||||
3Q 2015 Basic EPS - Operating (Non-GAAP) Earnings | $0.17 | ||||||
Special Items - 2015 | — | ||||||
3Q 2015 Basic EPS (avg. shares outstanding 423M) | $0.17 | ||||||
3Q 2015 Net Income - GAAP | $70 | ||||||
• | Transmission Revenues - Higher transmission revenues increased earnings $0.08 per share, primarily due to revenue increases at American Transmission Systems, Incorporated (ATSI), reflecting incremental cost of service and rate base recovery associated with its "forward-looking" rate structure beginning January 2015. |
• | Depreciation and General Taxes - Higher depreciation and general tax expense decreased earnings $0.02 per share, due primarily to a higher asset base at ATSI. These expenses are recovered through ATSI's "forward-looking" rate. |
• | Interest Expense - Higher interest expense decreased earnings $0.01 per share, primarily due to increased long-term debt at ATSI associated with a debt issuance of $400 million in September 2014. |
• | Capitalized Financing Costs - Lower capitalized financing costs decreased earnings $0.01 per share, primarily due to lower construction work in progress. |
Competitive Energy Services (CES) - GAAP earnings for the third quarter of 2015 were $140 million, or $0.33 per basic share, compared with third quarter 2014 earnings of $66 million, or $0.16 per basic share. Operating (non-GAAP) earnings, excluding special items, for the third quarter of 2015 were $0.34 per basic share, compared with third quarter 2014 Operating (non-GAAP) earnings of $0.25 per basic share. | |||||||
EPS Variance Analysis | |||||||
(In millions, except per share amounts) | |||||||
3Q 2014 Net Income - GAAP | $66 | ||||||
3Q 2014 Basic EPS (avg. shares outstanding 420M) | $0.16 | ||||||
Special Items - 2014 | 0.09 | ||||||
3Q 2014 Basic EPS - Operating (Non-GAAP) Earnings | $0.25 | ||||||
CES Commodity Margin | 0.15 | ||||||
O&M Expenses | (0.05) | ||||||
Pension/OPEB | (0.01) | ||||||
General Taxes | 0.01 | ||||||
Effective Income Tax Rate | (0.01) | ||||||
3Q 2015 Basic EPS - Operating (Non-GAAP) Earnings | $0.34 | ||||||
Special Items - 2015 | (0.01) | ||||||
3Q 2015 Basic EPS (avg. shares outstanding 423M) | $0.33 | ||||||
3Q 2015 Net Income - GAAP | $140 | ||||||
Commodity Margin EPS - 3Q15 vs 3Q14 | Rate | Volume | Total | |||||||||||
(a) Contract Sales | ||||||||||||||
- Direct Sales (LCI & MCI) | $ | 0.01 | $ | (0.39 | ) | $ | (0.38 | ) | ||||||
- Governmental Aggregation Sales | 0.03 | (0.07 | ) | (0.04 | ) | |||||||||
- Mass Market Sales | — | (0.07 | ) | (0.07 | ) | |||||||||
- POLR Sales | 0.01 | (0.13 | ) | (0.12 | ) | |||||||||
- Structured Sales | (0.02 | ) | 0.03 | 0.01 | ||||||||||
Subtotal - Contract Sales | $ | 0.03 | $ | (0.63 | ) | $ | (0.60 | ) | ||||||
(b) Wholesale Sales | 0.01 | 0.11 | 0.12 | |||||||||||
(c) PJM Capacity, FRR Auction Revenues | 0.25 | — | 0.25 | |||||||||||
(d) Fuel Expense | 0.02 | 0.04 | 0.06 | |||||||||||
(e) Purchased Power (net of financials) | 0.01 | 0.28 | 0.29 | |||||||||||
(f) Capacity Expense | (0.17 | ) | 0.14 | (0.03 | ) | |||||||||
(g) Net MISO - PJM Transmission Cost | — | 0.06 | 0.06 | |||||||||||
Net Change | $ | 0.15 | $ | — | $ | 0.15 | ||||||||
(a) | Contract Sales - CES' contract sales decreased 7.4 million MWH, or 31%, and reduced earnings $0.60 per share. Lower contract sales reflect CES' efforts to reposition its sales portfolio to more effectively hedge its generation. Beginning in the second quarter of 2014, CES reduced sales in certain channels to focus on a selective mix of retail and wholesale sales. Direct sales to large and medium commercial / industrial customers decreased 4.9 million MWH, or 47%. Governmental aggregation sales decreased 766,000 MWH, or 15%. Mass market sales decreased 758,000 MWH, or 46% and POLR sales decreased 1.5 million MWH, or 40%. Structured sales, which includes bilateral and muni/co-op sales, increased 434,000 MWH, or 13%. As of September 30, 2015, the total number of retail customers was 1.7 million, a decrease of approximately 600,000 customers since September 30, 2014. |
CES Contract Sales - 3Q15 vs 3Q14 | |||||||||||||||
(thousand MWH) | Retail | Non-Retail | |||||||||||||
Direct | Aggr. | Mass Market | POLR | Structured | Total | ||||||||||
Contract Sales Increase / (Decrease) | (4,856) | (766 | ) | (758) | (1,467) | 434 | (7,413) | ||||||||
Planning Period | RTO | ATSI | MAAC | ||||||
Price Per Megawatt-Day | BRA | BRA | BRA | ||||||
June 2014 - May 2015 | $125.99 | $125.99 | $136.50 | ||||||
June 2015 - May 2016 | $136.00 | $357.00 | $167.46 | ||||||
(d) | Fuel Expense - Lower fuel expenses increased earnings $0.06 per share primarily due to decreased fossil generation output of 1.1 million MWH from economic dispatch of fossil units associated with low spot market energy prices. |
• | O&M Expenses - Higher O&M expenses decreased earnings $0.05 per share, primarily due to outage costs associated with the Beaver Valley Unit 2 nuclear refueling outage that began in September 2015 and higher employee benefit expenses. |
• | Pension/OPEB - Higher pension/OPEB expense reduced earnings $0.01 per share, primarily due to lower amortization of OPEB prior service credits. |
• | General Taxes - Lower general taxes increased earnings $0.01 per share as a result of lower retail sales. |
• | Effective Income Tax Rate - A higher effective income tax rate (36.6% in Q3 2015 vs 34.6% in Q3 2014) decreased earnings $0.01 per share. The effective tax rate was 36.5% for the first nine months of 2015 compared to 33.3% for the same period last year. |
Corporate / Other - GAAP and Operating (non-GAAP) losses for the third quarter of 2015 were ($49) million, or ($0.12) per basic share, compared with GAAP losses for the third quarter 2014 of ($15) million, or ($0.04) per basic share. Operating (non-GAAP) losses were ($0.05) in the third quarter of 2014. | |||||||
EPS Variance Analysis | |||||||
(In millions, except per share amounts) | |||||||
3Q 2014 Net Loss - GAAP | $(15) | ||||||
3Q 2014 Basic EPS (avg. shares outstanding 420M) | $(0.04) | ||||||
Special Items - 2014 | (0.01) | ||||||
3Q 2014 Basic EPS - Operating (Non-GAAP) Losses | $(0.05) | ||||||
O&M Expenses | (0.02) | ||||||
Interest Expense | (0.01) | ||||||
Effective Income Tax Rate | (0.04) | ||||||
3Q 2015 Basic EPS - Operating (Non-GAAP) Losses | $(0.12) | ||||||
Special Items - 2015 | — | ||||||
3Q 2015 Basic EPS (avg. shares outstanding 423M) | $(0.12) | ||||||
3Q 2015 Net Loss - GAAP | $(49) | ||||||
• | O&M Expense - Higher O&M expense decreased earnings $0.02 per share, primarily due to higher environmental remediation costs at legacy plants. |
• | Interest Expense - Higher interest expense decreased earnings $0.01 per share, due to increased short-term borrowings. |
• | Effective Income Tax Rate - A higher effective income tax rate decreased earnings $0.04 per share, primarily resulting from the absence of tax benefits recognized in 2014 associated with an IRS-approved change in accounting method that increased the tax basis in certain assets resulting in higher future tax deductions. |
Irene M. Prezelj | Meghan G. Beringer | Rey Y. Jimenez | Gina E. Caskey | |||
Vice President, Investor Relations | Director, Investor Relations | Manager, Investor Relations | Manager, Investor Relations | |||
(330) 384-3859 | (330) 384-5832 | (330) 761-4239 | (330) 384-3841 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||
(1 | ) | Regulated distribution | $ | 2,624 | $ | 2,357 | $ | 267 | $ | 7,425 | $ | 6,972 | $ | 453 | |||||||||||||||
(2 | ) | Regulated transmission | 248 | 197 | 51 | 755 | 570 | 185 | |||||||||||||||||||||
(3 | ) | Competitive energy services | 1,468 | 1,599 | (131 | ) | 4,099 | 4,863 | (764 | ) | |||||||||||||||||||
(4 | ) | Corporate / Other | (217 | ) | (265 | ) | 48 | (794 | ) | (839 | ) | 45 | |||||||||||||||||
(5 | ) | Total Revenues | 4,123 | 3,888 | 235 | 11,485 | 11,566 | (81 | ) | ||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||
(6 | ) | Fuel | 482 | 544 | (62 | ) | 1,378 | 1,711 | (333 | ) | |||||||||||||||||||
(7 | ) | Purchased power | 1,209 | 1,188 | 21 | 3,311 | 3,726 | (415 | ) | ||||||||||||||||||||
(8 | ) | Other operating expenses | 850 | 858 | (8 | ) | 2,823 | 3,061 | (238 | ) | |||||||||||||||||||
(9 | ) | Provision for depreciation | 328 | 308 | 20 | 969 | 904 | 65 | |||||||||||||||||||||
(10 | ) | Amortization of regulatory assets, net | 110 | 35 | 75 | 201 | 27 | 174 | |||||||||||||||||||||
(11 | ) | General taxes | 236 | 239 | (3 | ) | 747 | 738 | 9 | ||||||||||||||||||||
(12 | ) | Total Expenses | 3,215 | 3,172 | 43 | 9,429 | 10,167 | (738 | ) | ||||||||||||||||||||
(13 | ) | Operating Income | 908 | 716 | 192 | 2,056 | 1,399 | 657 | |||||||||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||||||||
(14 | ) | Loss on debt redemptions | — | — | — | — | (8 | ) | 8 | ||||||||||||||||||||
(15 | ) | Investment income (loss) | (28 | ) | 16 | (44 | ) | (14 | ) | 67 | (81 | ) | |||||||||||||||||
(16 | ) | Interest expense | (285 | ) | (275 | ) | (10 | ) | (846 | ) | (802 | ) | (44 | ) | |||||||||||||||
(17 | ) | Capitalized financing costs | 26 | 28 | (2 | ) | 93 | 89 | 4 | ||||||||||||||||||||
(18 | ) | Total Other Expense | (287 | ) | (231 | ) | (56 | ) | (767 | ) | (654 | ) | (113 | ) | |||||||||||||||
(19 | ) | Income From Continuing Operations Before Income Taxes | 621 | 485 | 136 | 1,289 | 745 | 544 | |||||||||||||||||||||
(20 | ) | Income taxes | 226 | 152 | 74 | 485 | 226 | 259 | |||||||||||||||||||||
(21 | ) | Income From Continuing Operations | 395 | 333 | 62 | 804 | 519 | 285 | |||||||||||||||||||||
(22 | ) | Discontinued operations (net of income taxes) | — | — | — | — | 86 | (86 | ) | ||||||||||||||||||||
(23 | ) | Net Income | $ | 395 | $ | 333 | $ | 62 | $ | 804 | $ | 605 | $ | 199 | |||||||||||||||
(24 | ) | Earnings Per Share of Common Stock | |||||||||||||||||||||||||||
(25 | ) | Basic - Continuing Operations | $ | 0.94 | $ | 0.79 | $ | 0.15 | $ | 1.91 | $ | 1.24 | $ | 0.67 | |||||||||||||||
(26 | ) | Basic - Discontinued Operations | — | — | — | — | 0.20 | (0.20 | ) | ||||||||||||||||||||
(27 | ) | Basic - Net Earnings per Basic Share | $ | 0.94 | $ | 0.79 | $ | 0.15 | $ | 1.91 | $ | 1.44 | $ | 0.47 | |||||||||||||||
(28 | ) | Diluted - Continuing Operations | $ | 0.93 | $ | 0.79 | $ | 0.14 | $ | 1.90 | $ | 1.24 | $ | 0.66 | |||||||||||||||
(29 | ) | Diluted - Discontinued Operations | — | — | — | — | 0.20 | (0.20 | ) | ||||||||||||||||||||
(30 | ) | Diluted - Net Earnings per Diluted Share | $ | 0.93 | $ | 0.79 | $ | 0.14 | $ | 1.90 | $ | 1.44 | $ | 0.46 | |||||||||||||||
(31 | ) | Weighted Average Number of | |||||||||||||||||||||||||||
(32 | ) | Common Shares Outstanding | |||||||||||||||||||||||||||
(33 | ) | Basic | 423 | 420 | 3 | 422 | 419 | 3 | |||||||||||||||||||||
(34 | ) | Diluted | 424 | 421 | 3 | 423 | 420 | 3 | |||||||||||||||||||||
Three Months Ended September 30, 2015 | |||||||||||||||||||||||
Competitive | |||||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | FirstEnergy | |||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Other (d) | Consolidated | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
(1 | ) | Electric sales | $ | 2,571 | $ | 248 | $ | 1,276 | $ | (41 | ) | $ | 4,054 | ||||||||||
(2 | ) | Other | 53 | — | 51 | (35 | ) | 69 | |||||||||||||||
(3 | ) | Internal | — | — | 141 | (141 | ) | — | |||||||||||||||
(4 | ) | Total Revenues | 2,624 | 248 | 1,468 | (217 | ) | 4,123 | |||||||||||||||
Expenses | |||||||||||||||||||||||
(5 | ) | Fuel | 140 | — | 342 | — | 482 | ||||||||||||||||
(6 | ) | Purchased power | 980 | — | 370 | (141 | ) | 1,209 | |||||||||||||||
(7 | ) | Other operating expenses | 542 | 42 | 336 | (70 | ) | 850 | |||||||||||||||
(8 | ) | Provision for depreciation | 174 | 41 | 98 | 15 | 328 | ||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 110 | — | — | — | 110 | ||||||||||||||||
(10 | ) | General taxes | 172 | 23 | 35 | 6 | 236 | ||||||||||||||||
(11 | ) | Total Expenses | 2,118 | 106 | 1,181 | (190 | ) | 3,215 | |||||||||||||||
(12 | ) | Operating Income | 506 | 142 | 287 | (27 | ) | 908 | |||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||
(13 | ) | Investment income (loss) | 8 | — | (27 | ) | (9 | ) | (28 | ) | |||||||||||||
(14 | ) | Interest expense | (149 | ) | (40 | ) | (48 | ) | (48 | ) | (285 | ) | |||||||||||
(15 | ) | Capitalized financing costs | 6 | 9 | 9 | 2 | 26 | ||||||||||||||||
(16 | ) | Total Other Expense | (135 | ) | (31 | ) | (66 | ) | (55 | ) | (287 | ) | |||||||||||
(17 | ) | Income Before Income Taxes | 371 | 111 | 221 | (82 | ) | 621 | |||||||||||||||
(18 | ) | Income taxes | 137 | 41 | 81 | (33 | ) | 226 | |||||||||||||||
(19 | ) | Net Income | $ | 234 | $ | 70 | $ | 140 | $ | (49 | ) | $ | 395 | ||||||||||
(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) | Contains corporate support and other businesses that are below the quantifiable threshold for separate disclosure as a reportable segment and interest expense on stand-alone holding company debt and corporate income taxes. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. | ||||||||||||||||||||||
Three Months Ended September 30, 2014 | ||||||||||||||||||||||||
Competitive | ||||||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | FirstEnergy | ||||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Other (d) | Consolidated | ||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
(1 | ) | Electric sales | $ | 2,304 | $ | 197 | $ | 1,361 | $ | (38 | ) | $ | 3,824 | |||||||||||
(2 | ) | Other | 53 | — | 45 | (34 | ) | 64 | ||||||||||||||||
(3 | ) | Internal | — | — | 193 | (193 | ) | — | ||||||||||||||||
(4 | ) | Total Revenues | 2,357 | 197 | 1,599 | (265 | ) | 3,888 | ||||||||||||||||
Expenses | ||||||||||||||||||||||||
(5 | ) | Fuel | 159 | — | 385 | — | 544 | |||||||||||||||||
(6 | ) | Purchased power | 873 | — | 508 | (193 | ) | 1,188 | ||||||||||||||||
(7 | ) | Other operating expenses | 473 | 38 | 432 | (85 | ) | 858 | ||||||||||||||||
(8 | ) | Provision for depreciation | 165 | 33 | 100 | 10 | 308 | |||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 33 | 3 | — | (1 | ) | 35 | ||||||||||||||||
(10 | ) | General taxes | 175 | 17 | 40 | 7 | 239 | |||||||||||||||||
(11 | ) | Total Expenses | 1,878 | 91 | 1,465 | (262 | ) | 3,172 | ||||||||||||||||
(12 | ) | Operating Income | 479 | 106 | 134 | (3 | ) | 716 | ||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||
(13 | ) | Investment income (loss) | 14 | — | 11 | (9 | ) | 16 | ||||||||||||||||
(14 | ) | Interest expense | (147 | ) | (35 | ) | (49 | ) | (44 | ) | (275 | ) | ||||||||||||
(15 | ) | Capitalized financing costs | 5 | 14 | 6 | 3 | 28 | |||||||||||||||||
(16 | ) | Total Other Expense | (128 | ) | (21 | ) | (32 | ) | (50 | ) | (231 | ) | ||||||||||||
(17 | ) | Income Before Income Taxes | 351 | 85 | 102 | (53 | ) | 485 | ||||||||||||||||
(18 | ) | Income taxes | 124 | 30 | 36 | (38 | ) | 152 | ||||||||||||||||
(19 | ) | Net Income | $ | 227 | $ | 55 | $ | 66 | $ | (15 | ) | $ | 333 | |||||||||||
(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) | Contains corporate support and other businesses that are below the quantifiable threshold for separate disclosure as a reportable segment and interest expense on stand-alone holding company debt and corporate income taxes. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. | |||||||||||||||||||||||
Changes Between the Three Months Ended September 30, 2015 and the Three Months Ended September 30, 2014 Increase (Decrease) | ||||||||||||||||||||||||
Competitive | ||||||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | FirstEnergy | ||||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Other (d) | Consolidated | ||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
(1 | ) | Electric sales | $ | 267 | $ | 51 | $ | (85 | ) | $ | (3 | ) | $ | 230 | ||||||||||
(2 | ) | Other | — | — | 6 | (1 | ) | 5 | ||||||||||||||||
(3 | ) | Internal revenues | — | — | (52 | ) | 52 | — | ||||||||||||||||
(4 | ) | Total Revenues | 267 | 51 | (131 | ) | 48 | 235 | ||||||||||||||||
Expenses | ||||||||||||||||||||||||
(5 | ) | Fuel | (19 | ) | — | (43 | ) | — | (62 | ) | ||||||||||||||
(6 | ) | Purchased power | 107 | — | (138 | ) | 52 | 21 | ||||||||||||||||
(7 | ) | Other operating expenses | 69 | 4 | (96 | ) | 15 | (8 | ) | |||||||||||||||
(8 | ) | Provision for depreciation | 9 | 8 | (2 | ) | 5 | 20 | ||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 77 | (3 | ) | — | 1 | 75 | ||||||||||||||||
(10 | ) | General taxes | (3 | ) | 6 | (5 | ) | (1 | ) | (3 | ) | |||||||||||||
(11 | ) | Total Expenses | 240 | 15 | (284 | ) | 72 | 43 | ||||||||||||||||
(12 | ) | Operating Income | 27 | 36 | 153 | (24 | ) | 192 | ||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||
(13 | ) | Investment income (loss) | (6 | ) | — | (38 | ) | — | (44 | ) | ||||||||||||||
(14 | ) | Interest expense | (2 | ) | (5 | ) | 1 | (4 | ) | (10 | ) | |||||||||||||
(15 | ) | Capitalized financing costs | 1 | (5 | ) | 3 | (1 | ) | (2 | ) | ||||||||||||||
(16 | ) | Total Other Expense | (7 | ) | (10 | ) | (34 | ) | (5 | ) | (56 | ) | ||||||||||||
(17 | ) | Income Before Income Taxes | 20 | 26 | 119 | (29 | ) | 136 | ||||||||||||||||
(18 | ) | Income taxes | 13 | 11 | 45 | 5 | 74 | |||||||||||||||||
(19 | ) | Net Income | $ | 7 | $ | 15 | $ | 74 | $ | (34 | ) | $ | 62 | |||||||||||
(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) | Contains corporate support and other businesses that are below the quantifiable threshold for separate disclosure as a reportable segment and interest expense on stand-alone holding company debt and corporate income taxes. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. | |||||||||||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||
Competitive | |||||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | FirstEnergy | |||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Other (d) | Consolidated | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
(1 | ) | Electric sales | $ | 7,277 | $ | 755 | $ | 3,381 | $ | (129 | ) | $ | 11,284 | ||||||||||
(2 | ) | Other | 148 | — | 155 | (102 | ) | 201 | |||||||||||||||
(3 | ) | Internal | — | — | 563 | (563 | ) | — | |||||||||||||||
(4 | ) | Total Revenues | 7,425 | 755 | 4,099 | (794 | ) | 11,485 | |||||||||||||||
Expenses | |||||||||||||||||||||||
(5 | ) | Fuel | 406 | — | 972 | — | 1,378 | ||||||||||||||||
(6 | ) | Purchased power | 2,761 | — | 1,113 | (563 | ) | 3,311 | |||||||||||||||
(7 | ) | Other operating expenses | 1,677 | 112 | 1,282 | (248 | ) | 2,823 | |||||||||||||||
(8 | ) | Provision for depreciation | 516 | 116 | 293 | 44 | 969 | ||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 196 | 5 | — | — | 201 | ||||||||||||||||
(10 | ) | General taxes | 536 | 73 | 112 | 26 | 747 | ||||||||||||||||
(11 | ) | Total Expenses | 6,092 | 306 | 3,772 | (741 | ) | 9,429 | |||||||||||||||
(12 | ) | Operating Income (Loss) | 1,333 | 449 | 327 | (53 | ) | 2,056 | |||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||
(13 | ) | Loss on debt redemptions | — | — | — | — | — | ||||||||||||||||
(14 | ) | Investment income (loss) | 33 | — | (23 | ) | (24 | ) | (14 | ) | |||||||||||||
(15 | ) | Interest expense | (439 | ) | (119 | ) | (144 | ) | (144 | ) | (846 | ) | |||||||||||
(16 | ) | Capitalized financing costs | 21 | 36 | 29 | 7 | 93 | ||||||||||||||||
(17 | ) | Total Other Expense | (385 | ) | (83 | ) | (138 | ) | (161 | ) | (767 | ) | |||||||||||
(18 | ) | Income (Loss) From Continuing Operations Before Income Taxes (Benefits) | 948 | 366 | 189 | (214 | ) | 1,289 | |||||||||||||||
(19 | ) | Income taxes (benefits) | 350 | 135 | 70 | (70 | ) | 485 | |||||||||||||||
(20 | ) | Income (Loss) From Continuing Operations | 598 | 231 | 119 | (144 | ) | 804 | |||||||||||||||
(21 | ) | Discontinued operations (net of income taxes) | — | — | — | — | — | ||||||||||||||||
(22 | ) | Net Income (Loss) | $ | 598 | $ | 231 | $ | 119 | $ | (144 | ) | $ | 804 | ||||||||||
(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) | Contains corporate support and other businesses that are below the quantifiable threshold for separate disclosure as a reportable segment and interest expense on stand-alone holding company debt and corporate income taxes. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. | ||||||||||||||||||||||
Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||
Competitive | ||||||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | FirstEnergy | ||||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Other (d) | Consolidated | ||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
(1 | ) | Electric sales | $ | 6,822 | $ | 570 | $ | 4,099 | $ | (145 | ) | $ | 11,346 | |||||||||||
(2 | ) | Other | 150 | — | 140 | (70 | ) | 220 | ||||||||||||||||
(3 | ) | Internal | — | — | 624 | (624 | ) | — | ||||||||||||||||
(4 | ) | Total Revenues | 6,972 | 570 | 4,863 | (839 | ) | 11,566 | ||||||||||||||||
Expenses | ||||||||||||||||||||||||
(5 | ) | Fuel | 441 | — | 1,270 | — | 1,711 | |||||||||||||||||
(6 | ) | Purchased power | 2,600 | — | 1,750 | (624 | ) | 3,726 | ||||||||||||||||
(7 | ) | Other operating expenses | 1,580 | 103 | 1,625 | (247 | ) | 3,061 | ||||||||||||||||
(8 | ) | Provision for depreciation | 491 | 93 | 287 | 33 | 904 | |||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 18 | 9 | — | — | 27 | |||||||||||||||||
(10 | ) | General taxes | 528 | 52 | 133 | 25 | 738 | |||||||||||||||||
(11 | ) | Total Expenses | 5,658 | 257 | 5,065 | (813 | ) | 10,167 | ||||||||||||||||
(12 | ) | Operating Income (Loss) | 1,314 | 313 | (202 | ) | (26 | ) | 1,399 | |||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||
(13 | ) | Loss on debt redemption | — | — | (8 | ) | — | (8 | ) | |||||||||||||||
(14 | ) | Investment income (loss) | 44 | — | 46 | (23 | ) | 67 | ||||||||||||||||
(15 | ) | Interest expense | (445 | ) | (90 | ) | (143 | ) | (124 | ) | (802 | ) | ||||||||||||
(16 | ) | Capitalized financing costs | 12 | 38 | 28 | 11 | 89 | |||||||||||||||||
(17 | ) | Total Other Expense | (389 | ) | (52 | ) | (77 | ) | (136 | ) | (654 | ) | ||||||||||||
(18 | ) | Income (Loss) From Continuing Operations Before Income Taxes (Benefits) | 925 | 261 | (279 | ) | (162 | ) | 745 | |||||||||||||||
(19 | ) | Income taxes (benefits) | 326 | 92 | (102 | ) | (90 | ) | 226 | |||||||||||||||
(20 | ) | Income (Loss) From Continuing Operations | 599 | 169 | (177 | ) | (72 | ) | 519 | |||||||||||||||
(21 | ) | Discontinued operations (net of income taxes) | — | — | 86 | — | 86 | |||||||||||||||||
(22 | ) | Net Income (Loss) | $ | 599 | $ | 169 | $ | (91 | ) | $ | (72 | ) | $ | 605 | ||||||||||
(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) | Contains corporate support and other businesses that are below the quantifiable threshold for separate disclosure as a reportable segment and interest expense on stand-alone holding company debt and corporate income taxes. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. | |||||||||||||||||||||||
Changes Between the First Nine Months of 2015 and the First Nine Months of 2014 Increase (Decrease) | ||||||||||||||||||||||||
Competitive | ||||||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | FirstEnergy | ||||||||||||||||||||
Distribution (a) | Transmission (b) | Services (c) | Other (d) | Consolidated | ||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
(1 | ) | Electric sales | $ | 455 | $ | 185 | $ | (718 | ) | $ | 16 | $ | (62 | ) | ||||||||||
(2 | ) | Other | (2 | ) | — | 15 | (32 | ) | (19 | ) | ||||||||||||||
(3 | ) | Internal revenues | — | — | (61 | ) | 61 | — | ||||||||||||||||
(4 | ) | Total Revenues | 453 | 185 | (764 | ) | 45 | (81 | ) | |||||||||||||||
Expenses | ||||||||||||||||||||||||
(5 | ) | Fuel | (35 | ) | — | (298 | ) | — | (333 | ) | ||||||||||||||
(6 | ) | Purchased power | 161 | — | (637 | ) | 61 | (415 | ) | |||||||||||||||
(7 | ) | Other operating expenses | 97 | 9 | (343 | ) | (1 | ) | (238 | ) | ||||||||||||||
(8 | ) | Provision for depreciation | 25 | 23 | 6 | 11 | 65 | |||||||||||||||||
(9 | ) | Amortization of regulatory assets, net | 178 | (4 | ) | — | — | 174 | ||||||||||||||||
(10 | ) | General taxes | 8 | 21 | (21 | ) | 1 | 9 | ||||||||||||||||
(11 | ) | Total Expenses | 434 | 49 | (1,293 | ) | 72 | (738 | ) | |||||||||||||||
(12 | ) | Operating Income (Loss) | 19 | 136 | 529 | (27 | ) | 657 | ||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||
(13 | ) | Loss on debt redemptions | — | — | 8 | — | 8 | |||||||||||||||||
(14 | ) | Investment income (loss) | (11 | ) | — | (69 | ) | (1 | ) | (81 | ) | |||||||||||||
(15 | ) | Interest expense | 6 | (29 | ) | (1 | ) | (20 | ) | (44 | ) | |||||||||||||
(16 | ) | Capitalized financing costs | 9 | (2 | ) | 1 | (4 | ) | 4 | |||||||||||||||
(17 | ) | Total Other Expense | 4 | (31 | ) | (61 | ) | (25 | ) | (113 | ) | |||||||||||||
(18 | ) | Income (Loss) From Continuing Operations Before Income Taxes (Benefits) | 23 | 105 | 468 | (52 | ) | 544 | ||||||||||||||||
(19 | ) | Income taxes (benefits) | 24 | 43 | 172 | 20 | 259 | |||||||||||||||||
(20 | ) | Income (Loss) From Continuing Operations | (1 | ) | 62 | 296 | (72 | ) | 285 | |||||||||||||||
(21 | ) | Discontinued operations (net of income taxes) | — | — | (86 | ) | — | (86 | ) | |||||||||||||||
(22 | ) | Net Income (Loss) | $ | (1 | ) | $ | 62 | $ | 210 | $ | (72 | ) | $ | 199 | ||||||||||
(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) | Contains corporate support and other businesses that are below the quantifiable threshold for separate disclosure as a reportable segment and interest expense on stand-alone holding company debt and corporate income taxes. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. | |||||||||||||||||||||||
Condensed Consolidated Balance Sheets (GAAP) | |||||||||||
As of | As of | ||||||||||
Assets | Sep. 30, 2015 | Dec. 31, 2014 | |||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 86 | $ | 85 | |||||||
Receivables | 1,772 | 1,779 | |||||||||
Other | 1,975 | 2,012 | |||||||||
Total Current Assets | 3,833 | 3,876 | |||||||||
Property, Plant and Equipment | 36,610 | 35,783 | |||||||||
Investments | 3,154 | 3,222 | |||||||||
Deferred Charges and Other Assets | 9,066 | 9,285 | |||||||||
Total Assets | $ | 52,663 | $ | 52,166 | |||||||
Liabilities and Capitalization | |||||||||||
Current Liabilities: | |||||||||||
Currently payable long-term debt | $ | 1,148 | $ | 804 | |||||||
Short-term borrowings | 1,933 | 1,799 | |||||||||
Accounts payable | 994 | 1,279 | |||||||||
Other | 1,801 | 1,679 | |||||||||
Total Current Liabilities | 5,876 | 5,561 | |||||||||
Capitalization: | |||||||||||
Total equity | 12,628 | 12,422 | |||||||||
Long-term debt and other long-term obligations | 19,093 | 19,176 | |||||||||
Total Capitalization | 31,721 | 31,598 | |||||||||
Noncurrent Liabilities | 15,066 | 15,007 | |||||||||
Total Liabilities and Capitalization | $ | 52,663 | $ | 52,166 | |||||||
General Information | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Debt redemptions | $ | (489 | ) | $ | (137 | ) | $ | (781 | ) | $ | (1,062 | ) | ||||||
New long-term debt issues | $ | 884 | $ | 641 | $ | 1,084 | $ | 3,778 | ||||||||||
Short-term borrowings increase (decrease) | $ | (975 | ) | $ | (702 | ) | $ | 134 | $ | (1,783 | ) | |||||||
Property additions | $ | 539 | $ | 664 | $ | 2,025 | $ | 2,473 | ||||||||||
Debt to Total Capitalization Ratio as Defined Under the FE Credit Facilities | ||||||||||||||||
As of September 30, | As of December 31, | |||||||||||||||
2015 | % Total | 2014 | % Total | |||||||||||||
Total Equity (GAAP) | $ | 12,628 | 35 | % | $ | 12,422 | 36 | % | ||||||||
Non-cash Charges / Non-cash Write Downs* | 1,930 | 5 | % | 1,935 | 5 | % | ||||||||||
Accumulated Other Comprehensive Income | (177 | ) | — | % | (246 | ) | (1 | )% | ||||||||
Adjusted Equity (Non-GAAP)** | 14,381 | 40 | % | 14,111 | 40 | % | ||||||||||
Long-term Debt and Other Long-term Obligations (GAAP) | 19,093 | 53 | % | 19,176 | 55 | % | ||||||||||
Currently Payable Long-term Debt (GAAP) | 1,148 | 3 | % | 804 | 2 | % | ||||||||||
Short-term Borrowings (GAAP) | 1,933 | 5 | % | 1,799 | 5 | % | ||||||||||
Reimbursement Obligations | 54 | — | % | 54 | — | % | ||||||||||
Guarantees of Indebtedness | 328 | 1 | % | 487 | 1 | % | ||||||||||
Less Securitization Debt | (931 | ) | (2 | )% | (1,005 | ) | (3 | )% | ||||||||
Adjusted Debt (Non-GAAP)** | 21,625 | 60 | % | 21,315 | 60 | % | ||||||||||
Adjusted Capitalization (Non-GAAP)** | $ | 36,006 | 100 | % | $ | 35,426 | 100 | % | ||||||||
*Includes after-tax non-cash charges and non-cash write downs, primarily associated with pensions and OPEB mark-to-market adjustments, impairment of long-lived assets and regulatory asset charges through September 30, 2015, as required by the FE Credit Facilities, as amended. | ||||||||||||||||
**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 Facilities. These financial measures, as calculated in accordance with the FE Credit Facilities, help shareholders understand FirstEnergy's compliance with, and provide a basis for understanding FirstEnergy's incremental debt capacity under the debt to total capitalization financial covenant. The financial covenant under the FE Credit Facilities require FirstEnergy to maintain a consolidated debt to total capitalization ratio of no more than 65%, measured at the end of each fiscal quarter. | ||||||||||||||||
Condensed Consolidated Statements of Cash Flows (GAAP) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||||
Net income | $ | 395 | $ | 333 | $ | 804 | $ | 605 | ||||||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||||||
Depreciation and amortization (1) | 514 | 428 | 1,383 | 1,181 | ||||||||||||||
Deferred purchased power and other costs | (28 | ) | (42 | ) | (73 | ) | (89 | ) | ||||||||||
Deferred income taxes and investment tax credits, net | 209 | 168 | 428 | 327 | ||||||||||||||
Impairments of long-lived assets | 15 | — | 31 | — | ||||||||||||||
Investment impairments | 46 | 7 | 70 | 10 | ||||||||||||||
Deferred costs on sale leaseback transaction, net | 13 | 13 | 37 | 37 | ||||||||||||||
Retirement benefits | (2 | ) | (18 | ) | (18 | ) | (60 | ) | ||||||||||
Pension trust contributions | — | — | (143 | ) | — | |||||||||||||
Commodity derivative transactions, net | (57 | ) | 20 | (64 | ) | 60 | ||||||||||||
Loss on debt redemptions | — | — | — | 8 | ||||||||||||||
Lease payments on sale and leaseback transaction | — | — | (102 | ) | (100 | ) | ||||||||||||
Income from discontinued operations | — | — | — | (86 | ) | |||||||||||||
Changes in working capital and other | 222 | 206 | (36 | ) | (156 | ) | ||||||||||||
Cash flows provided from operating activities | 1,327 | 1,115 | 2,317 | 1,737 | ||||||||||||||
Cash flows provided from (used for) financing activities | (741 | ) | (361 | ) | (29 | ) | 444 | |||||||||||
Cash flows used for investing activities | (594 | ) | (721 | ) | (2,287 | ) | (2,290 | ) | ||||||||||
Net change in cash and cash equivalents | $ | (8 | ) | $ | 33 | $ | 1 | $ | (109 | ) | ||||||||
(1) Includes Amortization of Regulatory Assets, net, nuclear fuel, customer intangibles, debt related costs, deferred advertising costs and other assets. | ||||||||||||||||||
Liquidity position as of September 30, 2015 | ||||||||||
Company | Type | Maturity | Amount | Available | ||||||
FirstEnergy(1) | Revolving | March 2019 | $3,500 | $1,619 | ||||||
FirstEnergy Solutions Corp. (FES) / Allegheny Energy Supply Company, LLC (AE Supply) | Revolving | March 2019 | 1,500 | 1,452 | ||||||
FET(2) | Revolving | March 2019 | 1,000 | 950 | ||||||
(1) FirstEnergy Corp. and FEU subsidiary borrowers | Subtotal: | $6,000 | $4,021 | |||||||
(2) Includes FET, ATSI, and TrAILCo | Cash: | — | 59 | |||||||
Total: | $6,000 | $4,080 | ||||||||
Electric Distribution Deliveries | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
(MWH in thousand) | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||
Ohio | - Residential | 4,567 | 4,238 | 7.8 | % | 13,404 | 13,242 | 1.2 | % | ||||||||||||
- Commercial | 4,021 | 3,970 | 1.3 | % | 11,626 | 11,596 | 0.3 | % | |||||||||||||
- Industrial | 5,246 | 5,498 | -4.6 | % | 15,614 | 16,001 | -2.4 | % | |||||||||||||
- Other | 83 | 84 | -1.2 | % | 251 | 250 | 0.4 | % | |||||||||||||
Total Ohio | 13,917 | 13,790 | 0.9 | % | 40,895 | 41,089 | -0.5 | % | |||||||||||||
Pennsylvania | - Residential | 4,600 | 4,226 | 8.8 | % | 14,662 | 14,273 | 2.7 | % | ||||||||||||
- Commercial | 3,397 | 3,314 | 2.5 | % | 9,895 | 9,640 | 2.6 | % | |||||||||||||
- Industrial | 5,024 | 5,218 | -3.7 | % | 15,222 | 15,580 | -2.3 | % | |||||||||||||
- Other | 30 | 32 | -6.3 | % | 90 | 91 | -1.1 | % | |||||||||||||
Total Pennsylvania | 13,051 | 12,790 | 2.0 | % | 39,869 | 39,584 | 0.7 | % | |||||||||||||
New Jersey | - Residential | 3,111 | 2,781 | 11.9 | % | 7,743 | 7,282 | 6.3 | % | ||||||||||||
- Commercial | 2,530 | 2,419 | 4.6 | % | 7,036 | 6,882 | 2.2 | % | |||||||||||||
- Industrial | 570 | 578 | -1.4 | % | 1,683 | 1,741 | -3.3 | % | |||||||||||||
- Other | 22 | 22 | 0.0 | % | 64 | 65 | -1.5 | % | |||||||||||||
Total New Jersey | 6,233 | 5,800 | 7.5 | % | 16,526 | 15,970 | 3.5 | % | |||||||||||||
Maryland | - Residential | 766 | 710 | 7.9 | % | 2,597 | 2,523 | 2.9 | % | ||||||||||||
- Commercial | 545 | 521 | 4.6 | % | 1,615 | 1,572 | 2.7 | % | |||||||||||||
- Industrial | 421 | 421 | 0.0 | % | 1,220 | 1,186 | 2.9 | % | |||||||||||||
- Other | 4 | 4 | 0.0 | % | 12 | 12 | 0.0 | % | |||||||||||||
Total Maryland | 1,736 | 1,656 | 4.8 | % | 5,444 | 5,293 | 2.9 | % | |||||||||||||
West Virginia | - Residential | 1,261 | 1,172 | 7.6 | % | 4,300 | 4,296 | 0.1 | % | ||||||||||||
- Commercial | 970 | 945 | 2.6 | % | 2,834 | 2,799 | 1.3 | % | |||||||||||||
- Industrial | 1,460 | 1,427 | 2.3 | % | 4,410 | 4,159 | 6.0 | % | |||||||||||||
- Other | 7 | 7 | 0.0 | % | 21 | 21 | 0.0 | % | |||||||||||||
Total West Virginia | 3,698 | 3,551 | 4.1 | % | 11,565 | 11,275 | 2.6 | % | |||||||||||||
Total Residential | 14,305 | 13,127 | 9.0 | % | 42,706 | 41,616 | 2.6 | % | |||||||||||||
Total Commercial | 11,463 | 11,169 | 2.6 | % | 33,006 | 32,489 | 1.6 | % | |||||||||||||
Total Industrial | 12,721 | 13,142 | -3.2 | % | 38,149 | 38,667 | -1.3 | % | |||||||||||||
Total Other | 146 | 149 | -2.0 | % | 438 | 439 | -0.2 | % | |||||||||||||
Total Distribution Deliveries | 38,635 | 37,587 | 2.8 | % | 114,299 | 113,211 | 1.0 | % | |||||||||||||
Weather | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2015 | 2014 | Normal | 2015 | 2014 | Normal | ||||||||||
Composite Heating-Degree-Days | 28 | 84 | 79 | 3,878 | 3,941 | 3,460 | |||||||||
Composite Cooling-Degree-Days | 745 | 546 | 657 | 1,083 | 815 | 919 | |||||||||
Shopping Statistics (Based on MWH) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2015 | 2014 | 2015 | 2014 | |||||||
OE | 80% | 80% | 79% | 80% | ||||||
Penn | 62% | 65% | 60% | 67% | ||||||
CEI | 84% | 84% | 83% | 85% | ||||||
TE | 76% | 78% | 75% | 77% | ||||||
JCP&L | 47% | 49% | 49% | 52% | ||||||
Met-Ed | 67% | 70% | 66% | 69% | ||||||
Penelec | 71% | 72% | 70% | 71% | ||||||
PE(1) | 50% | 50% | 48% | 47% | ||||||
WP | 62% | 65% | 61% | 64% | ||||||
(1) Represents Maryland only. | ||||||||||
Competitive Operating Statistics (1) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
2015 | 2014 | 2015 | 2014 | ||||||||
Generation Capacity Factors: | |||||||||||
Nuclear | 97% | 98% | 89% | 85% | |||||||
Fossil - Baseload | 72% | 81% | 63% | 77% | |||||||
Fossil - Load Following | 51% | 55% | 46% | 62% | |||||||
Generation Fuel Rate: | |||||||||||
Nuclear | $6.91 | $7.13 | $7.05 | $7.59 | |||||||
Fossil | $25 | $26 | $26 | $27 | |||||||
Total Fleet | $17 | $18 | $17 | $19 | |||||||
Generation Output Mix: | |||||||||||
Nuclear | 45% | 43% | 46% | 40% | |||||||
Fossil - Baseload | 41% | 43% | 40% | 44% | |||||||
Fossil - Load Following | 6% | 6% | 7% | 8% | |||||||
Peaking/CT/Hydro | 8% | 8% | 7% | 8% | |||||||
(1) Excludes RMR and units deactivated in April 2015 | |||||||||||
Competitive Energy Services - Sources and Uses (MWH in thousands) | ||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
Contract Sales | 2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||
POLR | ||||||||||||||||||||||
- OH | 960 | 1,207 | (247 | ) | 3,368 | 3,650 | (282 | ) | ||||||||||||||
- PA | 907 | 1,930 | (1,023 | ) | 4,999 | 6,444 | (1,445 | ) | ||||||||||||||
- MD | 301 | 498 | (197 | ) | 1,543 | 1,827 | (284 | ) | ||||||||||||||
Total POLR | 2,168 | 3,635 | (1,467 | ) | 9,910 | 11,921 | (2,011 | ) | ||||||||||||||
Structured Sales | ||||||||||||||||||||||
- Bilaterals | 3,187 | 2,321 | 866 | 7,685 | 6,105 | 1,580 | ||||||||||||||||
- Muni/Co-op | 706 | 1,138 | (432 | ) | 2,105 | 3,509 | (1,404 | ) | ||||||||||||||
Total Structured Sales | 3,893 | 3,459 | 434 | 9,790 | 9,614 | 176 | ||||||||||||||||
Direct - LCI | ||||||||||||||||||||||
- OH | 2,425 | 5,114 | (2,689 | ) | 8,427 | 18,041 | (9,614 | ) | ||||||||||||||
- PA | 1,689 | 2,640 | (951 | ) | 5,467 | 8,818 | (3,351 | ) | ||||||||||||||
- NJ | 105 | 298 | (193 | ) | 604 | 961 | (357 | ) | ||||||||||||||
- MI | 554 | 784 | (230 | ) | 1,754 | 2,205 | (451 | ) | ||||||||||||||
- IL | 324 | 496 | (172 | ) | 913 | 1,684 | (771 | ) | ||||||||||||||
- MD | 38 | 190 | (152 | ) | 174 | 586 | (412 | ) | ||||||||||||||
Total Direct - LCI | 5,135 | 9,522 | (4,387 | ) | 17,339 | 32,295 | (14,956 | ) | ||||||||||||||
Direct - MCI | ||||||||||||||||||||||
- OH | 293 | 455 | (162 | ) | 951 | 1,519 | (568 | ) | ||||||||||||||
- PA | 95 | 359 | (264 | ) | 497 | 1,089 | (592 | ) | ||||||||||||||
- IL | 12 | 52 | (40 | ) | 53 | 149 | (96 | ) | ||||||||||||||
- NJ | 5 | 7 | (2 | ) | 18 | 12 | 6 | |||||||||||||||
- MD | 1 | 2 | (1 | ) | 2 | 5 | (3 | ) | ||||||||||||||
Total Direct - MCI | 406 | 875 | (469 | ) | 1,521 | 2,774 | (1,253 | ) | ||||||||||||||
Governmental Aggregation | ||||||||||||||||||||||
- OH | 3,811 | 3,776 | 35 | 11,096 | 11,612 | (516 | ) | |||||||||||||||
- IL | 415 | 1,211 | (796 | ) | 1,173 | 3,790 | (2,617 | ) | ||||||||||||||
- NJ | — | 5 | (5 | ) | 9 | 11 | (2 | ) | ||||||||||||||
Total Aggregation | 4,226 | 4,992 | (766 | ) | 12,278 | 15,413 | (3,135 | ) | ||||||||||||||
Mass Market | ||||||||||||||||||||||
- OH | 180 | 451 | (271 | ) | 704 | 1,444 | (740 | ) | ||||||||||||||
- PA | 700 | 1,127 | (427 | ) | 2,439 | 3,609 | (1,170 | ) | ||||||||||||||
- IL | 12 | 51 | (39 | ) | 43 | 128 | (85 | ) | ||||||||||||||
- MD | 12 | 34 | (22 | ) | 55 | 111 | (56 | ) | ||||||||||||||
- NJ | 2 | 1 | 1 | 5 | 2 | 3 | ||||||||||||||||
Total Mass Market | 906 | 1,664 | (758 | ) | 3,246 | 5,294 | (2,048 | ) | ||||||||||||||
Total Contract Sales | 16,734 | 24,147 | (7,413 | ) | 54,084 | 77,311 | (23,227 | ) | ||||||||||||||
Wholesale Sales | ||||||||||||||||||||||
- Spot | 3,156 | 236 | 2,920 | 4,023 | 268 | 3,755 | ||||||||||||||||
Total Wholesale Sales | 3,156 | 236 | 2,920 | 4,023 | 268 | 3,755 | ||||||||||||||||
Purchased Power | ||||||||||||||||||||||
- Bilaterals | 362 | 414 | (52 | ) | 1,452 | 1,619 | (167 | ) | ||||||||||||||
- Spot | 1,153 | 4,590 | (3,437 | ) | 7,474 | 22,515 | (15,041 | ) | ||||||||||||||
Total Purchased Power | 1,515 | 5,004 | (3,489 | ) | 8,926 | 24,134 | (15,208 | ) | ||||||||||||||
Generation Output | ||||||||||||||||||||||
- Fossil | 10,697 | 11,816 | (1,119 | ) | 27,437 | 33,804 | (6,367 | ) | ||||||||||||||
- Nuclear | 8,661 | 8,781 | (120 | ) | 23,632 | 22,645 | 987 | |||||||||||||||
- RMR / Deactivated Units (1) | — | 62 | (62 | ) | 758 | 830 | (72 | ) | ||||||||||||||
Total Generation Output | 19,358 | 20,659 | (1,301 | ) | 51,827 | 57,279 | (5,452 | ) | ||||||||||||||
(1) Includes RMR and units deactivated in April 2015 |
Three Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating -Non-GAAP | GAAP | Special Items | Operating -Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 4,123 | $ | (1 | ) | (a,b) | $ | 4,122 | $ | 3,888 | $ | 3 | (a) | $ | 3,891 | |||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | 482 | (11 | ) | (c) | 471 | 544 | (10 | ) | (c) | 534 | ||||||||||||||||
(3 | ) | Purchased power | 1,209 | — | 1,209 | 1,188 | 1 | (a) | 1,189 | |||||||||||||||||||
(4 | ) | Other operating expenses | 850 | 31 | (a,b,d,e,g) | 881 | 858 | (40 | ) | (a,d,e,g,h) | 818 | |||||||||||||||||
(5 | ) | Provision for depreciation | 328 | — | 328 | 308 | — | 308 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | 110 | — | 110 | 35 | — | 35 | ||||||||||||||||||||
(7 | ) | General taxes | 236 | — | 236 | 239 | (1 | ) | (b) | 238 | ||||||||||||||||||
(8 | ) | Total Expenses | 3,215 | 20 | 3,235 | 3,172 | (50 | ) | 3,122 | |||||||||||||||||||
(9 | ) | Operating Income | 908 | (21 | ) | 887 | 716 | 53 | 769 | |||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Investment income (loss) | (28 | ) | 52 | (e,f) | 24 | 16 | 11 | (e,f) | 27 | |||||||||||||||||
(11 | ) | Interest expense | (285 | ) | — | (285 | ) | (275 | ) | — | (275 | ) | ||||||||||||||||
(12 | ) | Capitalized financing costs | 26 | — | 26 | 28 | — | 28 | ||||||||||||||||||||
(13 | ) | Total Other Expense | (287 | ) | 52 | (235 | ) | (231 | ) | 11 | (220 | ) | ||||||||||||||||
(14 | ) | Income Before Income Taxes | 621 | 31 | 652 | 485 | 64 | 549 | ||||||||||||||||||||
(15 | ) | Income taxes | 226 | 11 | 237 | 152 | 24 | 176 | ||||||||||||||||||||
(16 | ) | Net Income | $ | 395 | $ | 20 | $ | 415 | $ | 333 | $ | 40 | $ | 373 | ||||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 33 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Regulatory charges: 2015 ($0.01 per share), $1 million included in "Revenues"; and ($10) million included in "Other operating expenses". 2014 ($0.02 per share), $3 million included in "Revenues"; $1 million included in "Purchased power"; and ($9) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(b) | Plant deactivation costs: 2015, ($2) million included in "Revenues"; and ($4) million included in "Other operating expenses". 2014, ($1) million included in "General taxes". | |||||||||||||||||||||||||||
(c) | Merger accounting - commodity contracts: 2015 ($0.02 per share), ($11) million included in "Fuel". 2014 ($0.02 per share), ($10) million included in "Fuel". | |||||||||||||||||||||||||||
(d) | Mark-to-market adjustments: 2015 (($0.09) per share), $57 million included in "Other operating expenses". 2014 ($0.03 per share), ($23) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(e) | Impact of non-core asset sales/impairments: 2015 ($0.02 per share), ($8) million included in "Other operating expenses"; and $5 million included in "Investment income (loss)". 2014 ($0.01 per share), ($1) million included in "Other operating expenses"; and $4 million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(f) | Trust securities impairment: 2015 ($0.07 per share), $47 million included in "Investment income (loss)". 2014 ($0.01 per share), $7 million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(g) | Retail repositioning charges: 2015 ($0.01 per share), ($4) million included in "Other operating expenses". 2014 ($0.02 per share), ($13) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(h) | Litigation resolution: 2014 (($0.01) per share), $6 million included in "Other operating expenses". | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 423 million shares in the third quarter of 2015 and 420 million shares in the third quarter of 2014. | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating -Non-GAAP | GAAP | Special Items | Operating -Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 11,485 | $ | (3 | ) | (a,b,e) | $ | 11,482 | $ | 11,566 | $ | 4 | (a) | $ | 11,570 | |||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | 1,378 | (47 | ) | (b,c) | 1,331 | 1,711 | (122 | ) | (b,c) | 1,589 | ||||||||||||||||
(3 | ) | Purchased power | 3,311 | — | 3,311 | 3,726 | 1 | (a) | 3,727 | |||||||||||||||||||
(4 | ) | Other operating expenses | 2,823 | (21 | ) | (a,b,d,e,g) | 2,802 | 3,061 | (175 | ) | (a,b,c,d,e,g,i) | 2,886 | ||||||||||||||||
(5 | ) | Provision for depreciation | 969 | — | 969 | 904 | — | 904 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | 201 | (2 | ) | (a) | 199 | 27 | (1 | ) | (a) | 26 | ||||||||||||||||
(7 | ) | General taxes | 747 | (1 | ) | (b) | 746 | 738 | (2 | ) | (b) | 736 | ||||||||||||||||
(8 | ) | Total Expenses | 9,429 | (71 | ) | 9,358 | 10,167 | (299 | ) | 9,868 | ||||||||||||||||||
(9 | ) | Operating Income | 2,056 | 68 | 2,124 | 1,399 | 303 | 1,702 | ||||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Loss on debt redemption | — | — | — | (8 | ) | 8 | (h) | — | ||||||||||||||||||
(11 | ) | Investment income (loss) | (14 | ) | 82 | (e,f) | 68 | 67 | 22 | (e,f) | 89 | |||||||||||||||||
(12 | ) | Interest expense | (846 | ) | — | (846 | ) | (802 | ) | — | (802 | ) | ||||||||||||||||
(13 | ) | Capitalized financing costs | 93 | — | 93 | 89 | — | 89 | ||||||||||||||||||||
(14 | ) | Total Other Expense | (767 | ) | 82 | (685 | ) | (654 | ) | 30 | (624 | ) | ||||||||||||||||
(15 | ) | Income From Continuing Operations Before Income Taxes | 1,289 | 150 | 1,439 | 745 | 333 | 1,078 | ||||||||||||||||||||
(16 | ) | Income taxes | 485 | 54 | 539 | 226 | 123 | 349 | ||||||||||||||||||||
(17 | ) | Income From Continuing Operations | 804 | 96 | 900 | 519 | 210 | 729 | ||||||||||||||||||||
(18 | ) | Discontinued operations (net of income taxes) | — | — | — | 86 | (78 | ) | (e) | 8 | ||||||||||||||||||
(19 | ) | Net Income | $ | 804 | $ | 96 | $ | 900 | $ | 605 | $ | 132 | $ | 737 | ||||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 34 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Regulatory charges: 2015 ($0.05 per share), $2 million included in "Revenues"; ($35) million included in "Other operating expenses"; and ($2) million included in "Amortization of regulatory assets, net". 2014 ($0.05 per share), $4 million included in "Revenues"; $1 million included in "Purchased power"; ($30) million included in "Other operating expenses"; and ($1) million included in "Amortization of regulatory assets, net". | |||||||||||||||||||||||||||
(b) | Plant deactivation costs: 2015 ($0.04 per share), ($2) million included in "Revenues"; ($12) million included in "Fuel"; ($10) million included in "Other operating expenses"; and ($1) million included in "General taxes". 2014 ($0.17 per share), ($91) million included in "Fuel"; ($24) million included in "Other operating expenses"; and ($2) million included in "General taxes". | |||||||||||||||||||||||||||
(c) | Merger accounting - commodity contracts: 2015 ($0.05 per share), ($35) million included in "Fuel". 2014 ($0.05 per share), ($31) million included in "Fuel"; and $1 million included in "Other operating expenses". | |||||||||||||||||||||||||||
(d) | Mark-to-market adjustments: 2015 (($0.10) per share), $64 million included in "Other operating expenses. 2014 ($0.10 per share), ($68) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(e) | Impact of non-core asset sales/impairments: 2015 ($0.05 per share), ($3) million included in "Revenues"; ($24) million included in "Other operating expenses"; and $11 million included in "Investment income (loss)". 2014 (($0.16) per share), ($1) million included in "Other operating expenses"; $12 million included in "Investment income (loss)"; and ($78) million included in "Discontinued operations (net of income taxes)". | |||||||||||||||||||||||||||
(f) | Trust securities impairment: 2015 ($0.11 per share), $71 million included in "Investment income (loss)". 2014 ($0.02 per share), $10 million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(g) | Retail repositioning charges: 2015 ($0.02 per share), ($16) million included in "Other operating expenses". 2014 ($0.09 per share), ($59) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(h) | Loss on debt redemptions: 2014 ($0.01 per share), $8 million included in "Loss on debt redemptions". | |||||||||||||||||||||||||||
(i) | Litigation resolution: 2014 (($0.01) per share), $6 million included in "Other operating expenses". | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 422 million shares in the first nine months of 2015 and 419 million shares in the first nine months of 2014. | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating -Non-GAAP | GAAP | Special Items | Operating - Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 2,624 | $ | 1 | (a) | $ | 2,625 | $ | 2,357 | $ | 3 | (a) | $ | 2,360 | ||||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | 140 | — | 140 | 159 | — | 159 | ||||||||||||||||||||
(3 | ) | Purchased power | 980 | — | 980 | 873 | 1 | (a) | 874 | |||||||||||||||||||
(4 | ) | Other operating expenses | 542 | (18 | ) | (a,c) | 524 | 473 | (10 | ) | (a,c) | 463 | ||||||||||||||||
(5 | ) | Provision for depreciation | 174 | — | 174 | 165 | — | 165 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | 110 | — | 110 | 33 | — | 33 | ||||||||||||||||||||
(7 | ) | General taxes | 172 | — | 172 | 175 | — | 175 | ||||||||||||||||||||
(8 | ) | Total Expenses | 2,118 | (18 | ) | 2,100 | 1,878 | (9 | ) | 1,869 | ||||||||||||||||||
(9 | ) | Operating Income | 506 | 19 | 525 | 479 | 12 | 491 | ||||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Investment income (loss) | 8 | 6 | (b) | 14 | 14 | 1 | (b) | 15 | ||||||||||||||||||
(11 | ) | Interest expense | (149 | ) | — | (149 | ) | (147 | ) | — | (147 | ) | ||||||||||||||||
(12 | ) | Capitalized financing costs | 6 | — | 6 | 5 | — | 5 | ||||||||||||||||||||
(13 | ) | Total Other Expense | (135 | ) | 6 | (129 | ) | (128 | ) | 1 | (127 | ) | ||||||||||||||||
(14 | ) | Income Before Income Taxes | 371 | 25 | 396 | 351 | 13 | 364 | ||||||||||||||||||||
(15 | ) | Income taxes | 137 | 9 | 146 | 124 | 4 | 128 | ||||||||||||||||||||
(16 | ) | Net Income | $ | 234 | $ | 16 | $ | 250 | $ | 227 | $ | 9 | $ | 236 | ||||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 33 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Regulatory charges: 2015 ($0.01 per share), $1 million included in "Revenues"; and ($10) million included in "Other operating expenses". 2014 ($0.02 per share), $3 million included in "Revenues"; $1 million included in "Purchased power"; and ($9) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(b) | Trust securities impairment: 2015 ($0.01 per share), $6 million included in "Investment income (loss)". 2014, ($1) million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(c) | Impact of non-core asset sales/impairments: 2015 ($0.01 per share), ($8) million included in "Other operating expenses". 2014, ($1) million included in "Other operating expenses". | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 423 million shares in the third quarter of 2015 and 420 million shares in the third quarter of 2014. | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating -Non-GAAP | GAAP | Special Items | Operating - Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 7,425 | $ | 2 | (a) | $ | 7,427 | $ | 6,972 | $ | 4 | (a) | $ | 6,976 | ||||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | 406 | — | 406 | 441 | — | 441 | ||||||||||||||||||||
(3 | ) | Purchased power | 2,761 | — | 2,761 | 2,600 | 1 | (a) | 2,601 | |||||||||||||||||||
(4 | ) | Other operating expenses | 1,677 | (42 | ) | (a,c) | 1,635 | 1,580 | (31 | ) | (a,c) | 1,549 | ||||||||||||||||
(5 | ) | Provision for depreciation | 516 | — | 516 | 491 | — | 491 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | 196 | (2 | ) | (a) | 194 | 18 | (1 | ) | (a) | 17 | ||||||||||||||||
(7 | ) | General taxes | 536 | — | 536 | 528 | — | 528 | ||||||||||||||||||||
(8 | ) | Total Expenses | 6,092 | (44 | ) | 6,048 | 5,658 | (31 | ) | 5,627 | ||||||||||||||||||
(9 | ) | Operating Income (Loss) | 1,333 | 46 | 1,379 | 1,314 | 35 | 1,349 | ||||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Loss on debt redemption | — | — | — | — | — | — | ||||||||||||||||||||
(11 | ) | Investment income (loss) | 33 | 8 | (b) | 41 | 44 | 1 | (b) | 45 | ||||||||||||||||||
(12 | ) | Interest expense | (439 | ) | — | (439 | ) | (445 | ) | — | (445 | ) | ||||||||||||||||
(13 | ) | Capitalized financing costs | 21 | — | 21 | 12 | — | 12 | ||||||||||||||||||||
(14 | ) | Total Other Expense | (385 | ) | 8 | (377 | ) | (389 | ) | 1 | (388 | ) | ||||||||||||||||
(15 | ) | Income From Continuing Operations Before Income Taxes | 948 | 54 | 1,002 | 925 | 36 | 961 | ||||||||||||||||||||
(16 | ) | Income taxes | 350 | 20 | 370 | 326 | 12 | 338 | ||||||||||||||||||||
(17 | ) | Income From Continuing Operations | 598 | 34 | 632 | 599 | 24 | 623 | ||||||||||||||||||||
(18 | ) | Discontinued operations (net of income taxes) | — | — | — | — | — | — | ||||||||||||||||||||
(19 | ) | Net Income | $ | 598 | $ | 34 | $ | 632 | $ | 599 | $ | 24 | $ | 623 | ||||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 34 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Regulatory charges: 2015 ($0.05 per share), $2 million included in "Revenues"; ($34) million included in "Other operating expenses"; and ($2) million included in "Amortization of regulatory assets, net". 2014 ($0.05 per share), $4 million included in "Revenues"; $1 million included in "Purchased power"; ($30) million included in "Other operating expenses"; and ($1) million included in "Amortization of regulatory assets, net". | |||||||||||||||||||||||||||
(b) | Trust securities impairment: 2015 ($0.01 per share), $8 million included in "Investment income (loss)". 2014 $1 million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(c) | Impact of non-core asset sales/impairments: 2015 ($0.01 per share), ($8) million included in "Other operating expenses". 2014, ($1) million included in "Other operating expenses". | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 422 million shares in the first nine months of 2015 and 419 million shares in the first nine months of 2014. | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating -Non-GAAP | GAAP | Special Items | Operating - Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 248 | $ | — | $ | 248 | $ | 197 | $ | — | $ | 197 | ||||||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | — | — | — | — | — | — | ||||||||||||||||||||
(3 | ) | Purchased power | — | — | — | — | — | — | ||||||||||||||||||||
(4 | ) | Other operating expenses | 42 | — | 42 | 38 | — | 38 | ||||||||||||||||||||
(5 | ) | Provision for depreciation | 41 | — | 41 | 33 | — | 33 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | — | — | — | 3 | — | 3 | ||||||||||||||||||||
(7 | ) | General taxes | 23 | — | 23 | 17 | — | 17 | ||||||||||||||||||||
(8 | ) | Total Expenses | 106 | — | 106 | 91 | — | 91 | ||||||||||||||||||||
(9 | ) | Operating Income | 142 | — | 142 | 106 | — | 106 | ||||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Investment income (loss) | — | — | — | — | — | — | ||||||||||||||||||||
(11 | ) | Interest expense | (40 | ) | — | (40 | ) | (35 | ) | — | (35 | ) | ||||||||||||||||
(12 | ) | Capitalized financing costs | 9 | — | 9 | 14 | — | 14 | ||||||||||||||||||||
(13 | ) | Total Other Expense | (31 | ) | — | (31 | ) | (21 | ) | — | (21 | ) | ||||||||||||||||
(14 | ) | Income Before Income Taxes | 111 | — | 111 | 85 | — | 85 | ||||||||||||||||||||
(15 | ) | Income taxes | 41 | — | 41 | 30 | — | 30 | ||||||||||||||||||||
(16 | ) | Net Income | $ | 70 | $ | — | $ | 70 | $ | 55 | $ | — | $ | 55 | ||||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 33 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating -Non-GAAP | GAAP | Special Items | Operating - Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 755 | $ | — | $ | 755 | $ | 570 | $ | — | $ | 570 | ||||||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | — | — | — | — | — | — | ||||||||||||||||||||
(3 | ) | Purchased power | — | — | — | — | — | — | ||||||||||||||||||||
(4 | ) | Other operating expenses | 112 | — | 112 | 103 | — | 103 | ||||||||||||||||||||
(5 | ) | Provision for depreciation | 116 | — | 116 | 93 | — | 93 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | 5 | — | 5 | 9 | — | 9 | ||||||||||||||||||||
(7 | ) | General taxes | 73 | — | 73 | 52 | — | 52 | ||||||||||||||||||||
(8 | ) | Total Expenses | 306 | — | 306 | 257 | — | 257 | ||||||||||||||||||||
(9 | ) | Operating Income (Loss) | 449 | — | 449 | 313 | — | 313 | ||||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Loss on debt redemption | — | — | — | — | — | — | ||||||||||||||||||||
(11 | ) | Investment income (loss) | — | — | — | — | — | — | ||||||||||||||||||||
(12 | ) | Interest expense | (119 | ) | — | (119 | ) | (90 | ) | — | (90 | ) | ||||||||||||||||
(13 | ) | Capitalized financing costs | 36 | — | 36 | 38 | — | 38 | ||||||||||||||||||||
(14 | ) | Total Other Expense | (83 | ) | — | (83 | ) | (52 | ) | — | (52 | ) | ||||||||||||||||
(15 | ) | Income From Continuing Operations Before Income Taxes | 366 | — | 366 | 261 | — | 261 | ||||||||||||||||||||
(16 | ) | Income taxes | 135 | — | 135 | 92 | — | 92 | ||||||||||||||||||||
(17 | ) | Income (Loss) From Continuing Operations | 231 | — | 231 | 169 | — | 169 | ||||||||||||||||||||
(18 | ) | Discontinued operations (net of income taxes) | — | — | — | — | — | — | ||||||||||||||||||||
(19 | ) | Net Income | $ | 231 | $ | — | $ | 231 | $ | 169 | $ | — | $ | 169 | ||||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 34 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Non-GAAP | GAAP | Special Items | Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 1,468 | $ | (2 | ) | (a) | $ | 1,466 | $ | 1,599 | $ | — | $ | 1,599 | ||||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | 342 | (11 | ) | (b) | 331 | 385 | (10 | ) | (b) | 375 | ||||||||||||||||
(3 | ) | Purchased power | 370 | — | 370 | 508 | — | 508 | ||||||||||||||||||||
(4 | ) | Other operating expenses | 336 | 49 | (a,c,f) | 385 | 432 | (36 | ) | (c,f) | 396 | |||||||||||||||||
(5 | ) | Provision for depreciation | 98 | — | 98 | 100 | — | 100 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | — | — | — | — | — | — | ||||||||||||||||||||
(7 | ) | General taxes | 35 | — | 35 | 40 | (1 | ) | (a) | 39 | ||||||||||||||||||
(8 | ) | Total Expenses | 1,181 | 38 | 1,219 | 1,465 | (47 | ) | 1,418 | |||||||||||||||||||
(9 | ) | Operating Income | 287 | (40 | ) | 247 | 134 | 47 | 181 | |||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Investment income (loss) | (27 | ) | 46 | (d,e) | 19 | 11 | 10 | (d,e) | 21 | |||||||||||||||||
(11 | ) | Interest expense | (48 | ) | — | (48 | ) | (49 | ) | — | (49 | ) | ||||||||||||||||
(12 | ) | Capitalized financing costs | 9 | — | 9 | 6 | — | 6 | ||||||||||||||||||||
(13 | ) | Total Other Expense | (66 | ) | 46 | (20 | ) | (32 | ) | 10 | (22 | ) | ||||||||||||||||
(14 | ) | Income Before Income Taxes | 221 | 6 | 227 | 102 | 57 | 159 | ||||||||||||||||||||
(15 | ) | Income taxes | 81 | 2 | 83 | 36 | 19 | 55 | ||||||||||||||||||||
(16 | ) | Net Income | $ | 140 | $ | 4 | $ | 144 | $ | 66 | $ | 38 | $ | 104 | ||||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 33 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Plant deactivation costs: 2015, ($2) million included in "Revenues"; and ($4) million in "Other operating expenses". 2014, ($1) million included in "General taxes". | |||||||||||||||||||||||||||
(b) | Merger accounting - commodity contracts: 2015 ($0.02 per share), ($11) million included in "Fuel". 2014 ($0.02 per share), ($10) million included in "Fuel". | |||||||||||||||||||||||||||
(c) | Mark-to-market adjustments: 2015 (($0.09) per share), $57 million included in "Other operating expenses". 2014 ($0.03 per share), ($23) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(d) | Impact of non-core asset sales/impairments: 2015 ($0.01 per share), $5 million included in "Investment income (loss)". 2014, ($0.01 per share), $4 million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(e) | Trust securities impairment: 2015 ($0.06 per share), $41 million included in "Investment income (loss)". 2014 ($0.01 per share), $6 million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(f) | Retail repositioning charges: 2015 ($0.01 per share), ($4) million included in "Other operating expenses". 2014 ($0.02 per share), ($13) million included in "Other operating expenses". | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 423 million shares in the third quarter of 2015 and 420 million shares in the third quarter of 2014. | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating -Non-GAAP | GAAP | Special Items | Operating - Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | 4,099 | $ | (5 | ) | (b,e) | $ | 4,094 | $ | 4,863 | $ | — | $ | 4,863 | ||||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | 972 | (47 | ) | (b,c) | 925 | 1,270 | (122 | ) | (b,c) | 1,148 | ||||||||||||||||
(3 | ) | Purchased power | 1,113 | — | 1,113 | 1,750 | — | 1,750 | ||||||||||||||||||||
(4 | ) | Other operating expenses | 1,282 | 21 | (a,b,d,e,g) | 1,303 | 1,625 | (150 | ) | (b,c,d,g) | 1,475 | |||||||||||||||||
(5 | ) | Provision for depreciation | 293 | — | 293 | 287 | — | 287 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | — | — | — | — | — | — | ||||||||||||||||||||
(7 | ) | General taxes | 112 | (1 | ) | (b) | 111 | 133 | (2 | ) | (b) | 131 | ||||||||||||||||
(8 | ) | Total Expenses | 3,772 | (27 | ) | 3,745 | 5,065 | (274 | ) | 4,791 | ||||||||||||||||||
(9 | ) | Operating Income (Loss) | 327 | 22 | 349 | (202 | ) | 274 | 72 | |||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Loss on debt redemptions | — | — | — | (8 | ) | 8 | (h) | — | ||||||||||||||||||
(11 | ) | Investment income (loss) | (23 | ) | 74 | (e,f) | 51 | 46 | 21 | (e,f) | 67 | |||||||||||||||||
(12 | ) | Interest expense | (144 | ) | — | (144 | ) | (143 | ) | — | (143 | ) | ||||||||||||||||
(13 | ) | Capitalized financing costs | 29 | — | 29 | 28 | — | 28 | ||||||||||||||||||||
(14 | ) | Total Other Expense | (138 | ) | 74 | (64 | ) | (77 | ) | 29 | (48 | ) | ||||||||||||||||
(15 | ) | Income (Loss) From Continuing Operations Before Income Taxes (Benefits) | 189 | 96 | 285 | (279 | ) | 303 | 24 | |||||||||||||||||||
(16 | ) | Income taxes (benefits) | 70 | 34 | 104 | (102 | ) | 110 | 8 | |||||||||||||||||||
(17 | ) | Income (Loss) From Continuing Operations | 119 | 62 | 181 | (177 | ) | 193 | 16 | |||||||||||||||||||
(18 | ) | Discontinued operations (net of income taxes) | — | — | — | 86 | (78 | ) | (e) | 8 | ||||||||||||||||||
(19 | ) | Net Income (Loss) | $ | 119 | $ | 62 | $ | 181 | $ | (91 | ) | $ | 115 | $ | 24 | |||||||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 34 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Regulatory charges: 2015, ($1) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(b) | Plant deactivation costs: 2015 ($0.04 per share), ($2) million in "Revenues"; ($12) million included in "Fuel"; ($10) million included in "Other operating expenses"; and ($1) million included in "General taxes". 2014 ($0.17 per share), ($91) million included in "Fuel"; ($24) million included in "Other operating expenses"; and ($2) million included in "General taxes". | |||||||||||||||||||||||||||
(c) | Merger accounting - commodity contracts: 2015 ($0.05 per share), ($35) million included in "Fuel". 2014 ($0.05 per share), ($31) million included in "Fuel"; and $1 million included in "Other operating expenses". | |||||||||||||||||||||||||||
(d) | Mark-to-market adjustments: 2015 (($0.10) per share), $64 million included in "Other operating expenses". 2014, ($0.10 per share), ($68) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(e) | Impact of non-core asset sales/impairments: 2015 ($0.04 per share), ($3) million included in "Revenues"; ($16) million included in "Other operating expenses", and $11 million included in "Investment income (loss)". 2014 (($0.16) per share), $12 million included in "Investment income (loss)"; and ($78) million included in "Discontinued operations (net of income taxes)". | |||||||||||||||||||||||||||
(f) | Trust securities impairment: 2015 ($0.10 per share), $63 million included in "Investment income (loss)". 2014 ($0.02 per share), $9 million included in "Investment income (loss)". | |||||||||||||||||||||||||||
(g) | Retail repositioning charges: 2015 ($0.02 per share), ($16) million included in "Other operating expenses". 2014 ($0.09 per share), ($59) million included in "Other operating expenses". | |||||||||||||||||||||||||||
(h) | Loss on debt redemptions: 2014 ($0.01 per share), $8 million included in "Loss on debt redemptions". | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 422 million shares in the first nine months of 2015 and 419 million shares in the first nine months of 2014. | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2015 | Three Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating - Non-GAAP | GAAP | Special Items | Operating - Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | (217 | ) | $ | — | $ | (217 | ) | $ | (265 | ) | $ | — | $ | (265 | ) | ||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | — | — | — | — | — | — | ||||||||||||||||||||
(3 | ) | Purchased power | (141 | ) | — | (141 | ) | (193 | ) | — | (193 | ) | ||||||||||||||||
(4 | ) | Other operating expenses | (70 | ) | — | (70 | ) | (85 | ) | 6 | (a) | (79 | ) | |||||||||||||||
(5 | ) | Provision for depreciation | 15 | — | 15 | 10 | — | 10 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||||
(7 | ) | General taxes | 6 | — | 6 | 7 | — | 7 | ||||||||||||||||||||
(8 | ) | Total Expenses | (190 | ) | — | (190 | ) | (262 | ) | 6 | (256 | ) | ||||||||||||||||
(9 | ) | Operating Loss | (27 | ) | — | (27 | ) | (3 | ) | (6 | ) | (9 | ) | |||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Investment income (loss) | (9 | ) | — | (9 | ) | (9 | ) | — | (9 | ) | ||||||||||||||||
(11 | ) | Interest expense | (48 | ) | — | (48 | ) | (44 | ) | — | (44 | ) | ||||||||||||||||
(12 | ) | Capitalized financing costs | 2 | — | 2 | 3 | — | 3 | ||||||||||||||||||||
(13 | ) | Total Other Expense | (55 | ) | — | (55 | ) | (50 | ) | — | (50 | ) | ||||||||||||||||
(14 | ) | Loss Before Income Tax Benefits | (82 | ) | — | (82 | ) | (53 | ) | (6 | ) | (59 | ) | |||||||||||||||
(15 | ) | Income tax benefits | (33 | ) | — | (33 | ) | (38 | ) | 1 | (a) | (37 | ) | |||||||||||||||
(16 | ) | Net Loss | $ | (49 | ) | $ | — | $ | (49 | ) | $ | (15 | ) | $ | (7 | ) | $ | (22 | ) | |||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 33 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Litigation resolution: 2014 (($0.01) per share), $6 million included in "Other operating expenses". Income taxes include the difference between Consolidated and segment tax rates on pre-tax special items. | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 423 million shares in the third quarter of 2015 and 420 million shares in the third quarter of 2014. | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||||
GAAP | Special Items | Operating - Non-GAAP | GAAP | Special Items | Operating - Non-GAAP | |||||||||||||||||||||||
(1 | ) | Revenues | $ | (794 | ) | $ | — | $ | (794 | ) | $ | (839 | ) | $ | — | $ | (839 | ) | ||||||||||
Expenses | ||||||||||||||||||||||||||||
(2 | ) | Fuel | — | — | — | — | — | — | ||||||||||||||||||||
(3 | ) | Purchased power | (563 | ) | — | (563 | ) | (624 | ) | — | (624 | ) | ||||||||||||||||
(4 | ) | Other operating expenses | (248 | ) | — | (248 | ) | (247 | ) | 6 | (a) | (241 | ) | |||||||||||||||
(5 | ) | Provision for depreciation | 44 | — | 44 | 33 | — | 33 | ||||||||||||||||||||
(6 | ) | Amortization of regulatory assets, net | — | — | — | — | — | — | ||||||||||||||||||||
(7 | ) | General taxes | 26 | — | 26 | 25 | — | 25 | ||||||||||||||||||||
(8 | ) | Total Expenses | (741 | ) | — | (741 | ) | (813 | ) | 6 | (807 | ) | ||||||||||||||||
(9 | ) | Operating Loss | (53 | ) | — | (53 | ) | (26 | ) | (6 | ) | (32 | ) | |||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||
(10 | ) | Loss on debt redemptions | — | — | — | — | — | — | ||||||||||||||||||||
(11 | ) | Investment income (loss) | (24 | ) | — | (24 | ) | (23 | ) | — | (23 | ) | ||||||||||||||||
(12 | ) | Interest expense | (144 | ) | — | (144 | ) | (124 | ) | — | (124 | ) | ||||||||||||||||
(13 | ) | Capitalized financing costs | 7 | — | 7 | 11 | — | 11 | ||||||||||||||||||||
(14 | ) | Total Other Expense | (161 | ) | — | (161 | ) | (136 | ) | — | (136 | ) | ||||||||||||||||
(15 | ) | Loss From Continuing Operations Before Income Taxes | (214 | ) | — | (214 | ) | (162 | ) | (6 | ) | (168 | ) | |||||||||||||||
(16 | ) | Income tax benefits | (70 | ) | — | (70 | ) | (90 | ) | 1 | (a) | (89 | ) | |||||||||||||||
(17 | ) | Loss From Continuing Operations | (144 | ) | — | (144 | ) | (72 | ) | (7 | ) | (79 | ) | |||||||||||||||
(18 | ) | Discontinued operations (net of income taxes) | — | — | — | — | — | — | ||||||||||||||||||||
(19 | ) | Net Loss | $ | (144 | ) | $ | — | $ | (144 | ) | $ | (72 | ) | $ | (7 | ) | $ | (79 | ) | |||||||||
The above GAAP to Non-GAAP Reconciliation provides additional transparency to our disclosures by providing specific line items to which the special items are recorded. Management consistently utilizes these reconciliations to assist in its analysis of historical and ongoing performance. See page 34 for GAAP to Operating (non-GAAP) EPS Reconciliation. | ||||||||||||||||||||||||||||
(a) | Litigation resolution: 2014 (($0.01) per share), $6 million included in "Other operating expenses". Income taxes include the difference between Consolidated and segment tax rates on pre-tax special items. | |||||||||||||||||||||||||||
Per share amounts included above are based on the after tax effect of the above special items divided by the weighted average shares outstanding of 422 million shares in the first nine months of 2015 and 419 million shares in the first nine months of 2014. | ||||||||||||||||||||||||||||
Earnings Per Share (EPS) | |||||||||||||||||||||||
(Reconciliation of GAAP to Operating (Non-GAAP) Earnings) | |||||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||
Three Months Ended September 30, 2015 | Competitive | FirstEnergy | |||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | Corp. | |||||||||||||||||||
Distribution | Transmission | Services | Other | Consolidated | |||||||||||||||||||
3Q 2015 Net Income - GAAP | $ | 234 | $ | 70 | $ | 140 | $ | (49 | ) | $ | 395 | ||||||||||||
3Q 2015 Basic EPS (avg. shares outstanding 423M) | $ | 0.56 | $ | 0.17 | $ | 0.33 | $ | (0.12 | ) | $ | 0.94 | ||||||||||||
Excluding Special Items: | |||||||||||||||||||||||
Regulatory charges | 0.01 | — | — | — | 0.01 | ||||||||||||||||||
Trust securities impairment | 0.01 | — | 0.06 | — | 0.07 | ||||||||||||||||||
Merger accounting - commodity contracts | — | — | 0.02 | — | 0.02 | ||||||||||||||||||
Impact of non-core asset sales/impairments | 0.01 | — | 0.01 | — | 0.02 | ||||||||||||||||||
Retail repositioning charges | — | — | 0.01 | — | 0.01 | ||||||||||||||||||
Mark-to-market adjustments | — | — | (0.09 | ) | — | (0.09 | ) | ||||||||||||||||
Total Special Items | $ | 0.03 | $ | — | $ | 0.01 | $ | — | $ | 0.04 | |||||||||||||
Basic EPS - Operating (Non-GAAP) | $ | 0.59 | $ | 0.17 | $ | 0.34 | $ | (0.12 | ) | $ | 0.98 | ||||||||||||
Three Months Ended September 30, 2014 | Competitive | FirstEnergy | |||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | Corp. | |||||||||||||||||||
Distribution | Transmission | Services | Other | Consolidated | |||||||||||||||||||
3Q 2014 Net Income - GAAP | $ | 227 | $ | 55 | $ | 66 | $ | (15 | ) | $ | 333 | ||||||||||||
3Q 2014 Basic EPS (avg. shares outstanding 420M) | $ | 0.54 | $ | 0.13 | $ | 0.16 | $ | (0.04 | ) | $ | 0.79 | ||||||||||||
Excluding Special Items: | |||||||||||||||||||||||
Regulatory charges | 0.02 | — | — | — | 0.02 | ||||||||||||||||||
Trust securities impairment | — | — | 0.01 | — | 0.01 | ||||||||||||||||||
Merger accounting - commodity contracts | — | — | 0.02 | — | 0.02 | ||||||||||||||||||
Impact of non-core asset sales/impairments | — | — | 0.01 | — | 0.01 | ||||||||||||||||||
Retail repositioning charges | — | — | 0.02 | — | 0.02 | ||||||||||||||||||
Mark-to-market adjustments | — | — | 0.03 | — | 0.03 | ||||||||||||||||||
Litigation resolution | — | — | — | (0.01 | ) | (0.01 | ) | ||||||||||||||||
Total Special Items | $ | 0.02 | $ | — | $ | 0.09 | $ | (0.01 | ) | $ | 0.10 | ||||||||||||
Basic EPS - Operating (Non-GAAP) | $ | 0.56 | $ | 0.13 | $ | 0.25 | $ | (0.05 | ) | $ | 0.89 | ||||||||||||
Earnings Per Share (EPS) | |||||||||||||||||||||||
(Reconciliation of GAAP to Operating (Non-GAAP) Earnings) | |||||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||
Nine Months Ended September 30, 2015 | Competitive | FirstEnergy | |||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | Corp. | |||||||||||||||||||
Distribution | Transmission | Services | Other | Consolidated | |||||||||||||||||||
2015 Net Income - GAAP | $ | 598 | $ | 231 | $ | 119 | $ | (144 | ) | $ | 804 | ||||||||||||
2015 Basic EPS (avg. shares outstanding 422M) | $ | 1.42 | $ | 0.55 | $ | 0.28 | $ | (0.34 | ) | $ | 1.91 | ||||||||||||
Excluding Special Items: | |||||||||||||||||||||||
Regulatory charges | 0.05 | — | — | — | 0.05 | ||||||||||||||||||
Trust securities impairment | 0.01 | — | 0.10 | — | 0.11 | ||||||||||||||||||
Plant deactivation costs | — | — | 0.04 | — | 0.04 | ||||||||||||||||||
Merger accounting - commodity contracts | — | — | 0.05 | — | 0.05 | ||||||||||||||||||
Impact of non-core asset sales/impairments | 0.01 | — | 0.04 | — | 0.05 | ||||||||||||||||||
Retail repositioning charges | — | — | 0.02 | — | 0.02 | ||||||||||||||||||
Mark-to-market adjustments | — | — | (0.10 | ) | — | (0.10 | ) | ||||||||||||||||
Total Special Items | $ | 0.07 | $ | — | $ | 0.15 | $ | — | $ | 0.22 | |||||||||||||
Basic EPS - Operating (Non-GAAP) | $ | 1.49 | $ | 0.55 | $ | 0.43 | $ | (0.34 | ) | $ | 2.13 | ||||||||||||
Nine Months Ended September 30, 2014 | Competitive | FirstEnergy | |||||||||||||||||||||
Regulated | Regulated | Energy | Corporate / | Corp. | |||||||||||||||||||
Distribution | Transmission | Services | Other | Consolidated | |||||||||||||||||||
2014 Net Income (Loss) - GAAP | $ | 599 | $ | 169 | $ | (91 | ) | $ | (72 | ) | $ | 605 | |||||||||||
2014 Basic EPS (avg. shares outstanding 419M) | $ | 1.43 | $ | 0.40 | $ | (0.22 | ) | $ | (0.17 | ) | $ | 1.44 | |||||||||||
Excluding Special Items: | |||||||||||||||||||||||
Regulatory charges | 0.05 | — | — | — | 0.05 | ||||||||||||||||||
Trust securities impairment | — | — | 0.02 | — | 0.02 | ||||||||||||||||||
Plant deactivation costs | — | — | 0.17 | — | 0.17 | ||||||||||||||||||
Merger accounting - commodity contracts | — | — | 0.05 | — | 0.05 | ||||||||||||||||||
Impact of non-core asset sales/impairments | — | — | (0.16 | ) | — | (0.16 | ) | ||||||||||||||||
Retail repositioning charges | — | — | 0.09 | — | 0.09 | ||||||||||||||||||
Mark-to-market adjustments | — | — | 0.10 | — | 0.10 | ||||||||||||||||||
Loss on debt redemptions | — | — | 0.01 | — | 0.01 | ||||||||||||||||||
Litigation resolution | — | — | — | (0.01 | ) | (0.01 | ) | ||||||||||||||||
Total Special Items | $ | 0.05 | $ | — | $ | 0.28 | $ | (0.01 | ) | $ | 0.32 | ||||||||||||
Basic EPS - Operating (Non-GAAP) | $ | 1.48 | $ | 0.40 | $ | 0.06 | $ | (0.18 | ) | $ | 1.76 | ||||||||||||
• | James F. Pearson, formerly senior vice president and chief financial officer, was named executive vice president and chief financial officer of FirstEnergy Corp. |
• | James H. Lash, formerly president of FirstEnergy Generation, was named executive vice president of FirstEnergy Corp. and president, FirstEnergy Generation. |
• | Charles D. Lasky, formerly vice president, Fossil Fleet Operations, was elected to senior vice president, Human Resources. |
• | Donald A. Moul, formerly vice president of Commodity Operations, was promoted to senior vice president, Fossil Operations and Environmental. |
• | 12.38% from January 1, 2015 through June 30, 2015. |
• | 11.06% from July 1, 2015 through December 31, 2015. |
• | 10.38% beginning January 1, 2016. The 10.38% ROE will remain in effect unless changed pursuant to section 205 or 206 of the Federal Power Act provided the effective date for any change cannot be earlier than January 1, 2018. |