SUPPLEMENTAL GUARANTOR INFORMATION

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

The Condensed Consolidating Statements of Income (Loss) and Comprehensive Income (Loss) for the years ended December 31, 2016, 2015, and 2014, Condensed Consolidating Balance Sheets as of December 31, 2016 and December 31, 2015, and Condensed Consolidating Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014, for the parent and guarantor and non-guarantor subsidiaries are presented below. These statements are provided as FG's parent company fully and unconditionally guarantees outstanding registered securities of FG as well as FG's obligations under the facility lease for the Bruce Mansfield sale and leaseback that underlie outstanding registered pass-through trust certificates. Investments in wholly owned subsidiaries are accounted for by the parent company using the equity method. Results of operations for FG and NG are, therefore, reflected in their parent company's investment accounts and earnings as if operating lease treatment was achieved. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions and the entries required to reflect operating lease treatment associated with the 2007 Bruce Mansfield Unit 1 sale and leaseback transaction.

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)



For the Year Ended December 31, 2016	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME (LOSS)

REVENUES	$	4,242		$	1,739		$	2,004		$	(3,587	)	$	4,398

OPERATING EXPENSES:
Fuel	—			582			198			—			780
Purchased power from affiliates	4,024			—			187			(3,587		)	624
Purchased power from non-affiliates	1,020			—			—			—			1,020
Other operating expenses	310			286			632			49			1,277
Pension and OPEB mark-to-market adjustment	(1		)	(4		)	53			—			48
Provision for depreciation	13			120			206			(3		)	336
General taxes	31			30			27			—			88
Impairment of assets	39			3,937			4,729			(83		)	8,622
Total operating expenses	5,436			4,951			6,032			(3,624		)	12,795

OPERATING LOSS	(1,194		)	(3,212		)	(4,028		)	37			(8,397		)

OTHER INCOME (EXPENSE):
Investment income (loss), including net income from equity investees	(4,585		)	30			84			4,538			67
Miscellaneous income	4			3			—			—			7
Interest expense — affiliates	(50		)	(10		)	(4		)	57			(7		)
Interest expense — other	(55		)	(105		)	(44		)	57			(147		)
Capitalized interest	—			8			26			—			34
Total other income (expense)	(4,686		)	(74		)	62			4,652			(46		)

LOSS BEFORE INCOME TAX BENEFITS	(5,880		)	(3,286		)	(3,966		)	4,689			(8,443		)

INCOME TAX BENEFITS	(425		)	(1,169		)	(1,429		)	35			(2,988		)

NET LOSS	$	(5,455	)	$	(2,117	)	$	(2,537	)	$	4,654		$	(5,455	)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

NET LOSS	$	(5,455	)	$	(2,117	)	$	(2,537	)	$	4,654		$	(5,455	)

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and OPEB prior service costs	(14		)	(14		)	—			14			(14		)
Amortized gain on derivative hedges	—			—			—			—			—
Change in unrealized gain on available-for-sale securities	52			—			52			(52		)	52
Other comprehensive income (loss)	38			(14		)	52			(38		)	38
Income taxes (benefits) on other comprehensive income (loss)	15			(5		)	20			(15		)	15
Other comprehensive income (loss), net of tax	23			(9		)	32			(23		)	23
COMPREHENSIVE LOSS	$	(5,432	)	$	(2,126	)	$	(2,505	)	$	4,631		$	(5,432	)

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



For the Year Ended December 31, 2015	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	4,824		$	1,801		$	2,138		$	(3,758	)	$	5,005

OPERATING EXPENSES:
Fuel	—			679			192			—			871
Purchased power from affiliates	3,826			—			285			(3,758		)	353
Purchased power from non-affiliates	1,684			—			—			—			1,684
Other operating expenses	378			273			608			49			1,308
Pension and OPEB mark-to-market adjustment	(8		)	10			55			—			57
Provision for depreciation	12			124			191			(3		)	324
General taxes	45			26			27			—			98
Impairment of assets	21			2			10			—			33
Total operating expenses	5,958			1,114			1,368			(3,712		)	4,728

OPERATING INCOME (LOSS)	(1,134		)	687			770			(46		)	277

OTHER INCOME (EXPENSE):
Investment income (loss), including net income from equity investees	844			17			(5		)	(870		)	(14		)
Miscellaneous income	1			2			—			—			3
Interest expense — affiliates	(29		)	(8		)	(4		)	34			(7		)
Interest expense — other	(52		)	(104		)	(49		)	58			(147		)
Capitalized interest	—			6			29			—			35
Total other income (expense)	764			(87		)	(29		)	(778		)	(130		)

INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)	(370		)	600			741			(824		)	147

INCOME TAXES (BENEFITS)	(452		)	224			278			15			65

NET INCOME	$	82		$	376		$	463		$	(839	)	$	82

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	82		$	376		$	463		$	(839	)	$	82

OTHER COMPREHENSIVE LOSS:
Pension and OPEB prior service costs	(6		)	(5		)	—			5			(6		)
Amortized gain on derivative hedges	(3		)	—			—			—			(3		)
Change in unrealized gain on available-for-sale securities	(9		)	—			(8		)	8			(9		)
Other comprehensive loss	(18		)	(5		)	(8		)	13			(18		)
Income tax benefits on other comprehensive loss	(7		)	(2		)	(3		)	5			(7		)
Other comprehensive loss, net of tax	(11		)	(3		)	(5		)	8			(11		)
COMPREHENSIVE INCOME	$	71		$	373		$	458		$	(831	)	$	71

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)



For the Year Ended December 31, 2014	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME (LOSS)

REVENUES	$	5,990		$	1,902		$	2,172		$	(3,920	)	$	6,144

OPERATING EXPENSES:
Fuel	—			1,055			198			—			1,253
Purchased power from affiliates	3,920			—			271			(3,920		)	271
Purchased power from non-affiliates	2,767			4			—			—			2,771
Other operating expenses	790			269			527			49			1,635
Pension and OPEB mark-to-market adjustment	19			90			188			—			297
Provision for depreciation	10			119			193			(3		)	319
General taxes	72			31			25			—			128
Total operating expenses	7,578			1,568			1,402			(3,874		)	6,674

OPERATING INCOME (LOSS)	(1,588		)	334			770			(46		)	(530		)

OTHER INCOME (EXPENSE):
Investment income, including net income from equity investees	791			8			61			(799		)	61
Miscellaneous income	2			4			—			—			6
Interest expense — affiliates	(12		)	(6		)	(4		)	15			(7		)
Interest expense — other	(56		)	(102		)	(54		)	60			(152		)
Capitalized interest	—			4			30			—			34
Total other income (expense)	725			(92		)	33			(724		)	(58		)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (BENEFITS)	(863		)	242			803			(770		)	(588		)

INCOME TAXES (BENEFITS)	(619		)	87			298			6			(228		)

INCOME (LOSS) FROM CONTINUING OPERATIONS	(244		)	155			505			(776		)	(360		)

Discontinued operations (net of income taxes of $8)	—			116			—			—			116

NET INCOME (LOSS)	$	(244	)	$	271		$	505		$	(776	)	$	(244	)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

NET INCOME (LOSS)	$	(244	)	$	271		$	505		$	(776	)	$	(244	)

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and OPEB prior service costs	(6		)	(5		)	—			5			(6		)
Amortized gain on derivative hedges	(10		)	—			—			—			(10		)
Change in unrealized gain on available-for-sale securities	21			—			21			(21		)	21
Other comprehensive income (loss)	5			(5		)	21			(16		)	5
Income taxes (benefits) on other comprehensive income (loss )	2			(2		)	8			(6		)	2
Other comprehensive income (loss), net of tax	3			(3		)	13			(10		)	3
COMPREHENSIVE INCOME (LOSS)	$	(241	)	$	268		$	518		$	(786	)	$	(241	)

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS



As of December 31, 2016	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	213		—		—		—			213
Affiliated companies	332		315		417		(612		)	452
Other	17		2		8		—			27
Notes receivable from affiliated companies	501		1,585		1,294		(3,351		)	29
Materials and supplies	45		142		80		—			267
Derivatives	137		—		—		—			137
Collateral	157		—		—		—			157
Prepayments and other	38		24		1		—			63
	1,440		2,070		1,800		(3,963		)	1,347
PROPERTY, PLANT AND EQUIPMENT:
In service	120		2,524		4,703		(290		)	7,057
Less — Accumulated provision for depreciation	52		1,920		4,144		(187		)	5,929
	68		604		559		(103		)	1,128
Construction work in progress	2		67		358		—			427
	70		671		917		(103		)	1,555
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,552		—			1,552
Investment in affiliated companies	2,923		—		—		(2,923		)	—
Other	—		9		1		—			10
	2,923		9		1,553		(2,923		)	1,562

DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits	395		1,271		883		(270		)	2,279
Customer intangibles	9		—		—		—			9
Property taxes	—		12		28		—			40
Derivatives	77		—		—		—			77
Other	24		327		—		21			372
	505		1,610		911		(249		)	2,777
	$	4,938	$	4,360	$	5,181	$	(7,238	)	$	7,241

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	—	$	200	$	5	$	(26	)	$	179
Short-term borrowings-
Affiliated companies	2,969		483		—		(3,351		)	101
Other	—		—		—		—			—
Accounts payable-
Affiliated companies	743		107		406		(706		)	550
Other	17		93		—		—			110
Accrued taxes	50		48		61		(16		)	143
Derivatives	71		6		—		—			77
Other	56		54		10		36			156
	3,906		991		482		(4,063		)	1,316
CAPITALIZATION:
Total equity	218		828		2,006		(2,834		)	218
Long-term debt and other long-term obligations	691		2,093		1,120		(1,091		)	2,813
	909		2,921		3,126		(3,925		)	3,031
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		757			757
Accumulated deferred income taxes	4		3		—		(7		)	—
Retirement benefits	25		172		—		—			197
Asset retirement obligations	—		188		713		—			901
Derivatives	52		—		—		—			52
Other	42		85		860		—			987
	123		448		1,573		750			2,894
	$	4,938	$	4,360	$	5,181	$	(7,238	)	$	7,241

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS



As of December 31, 2015	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	275		—		—		—			275
Affiliated companies	433		403		461		(846		)	451
Other	36		4		19		—			59
Notes receivable from affiliated companies	406		1,210		805		(2,410		)	11
Materials and supplies	53		204		213		—			470
Derivatives	154		—		—		—			154
Collateral	70		—		—		—			70
Prepayments and other	48		18		—		—			66
	1,475		1,841		1,498		(3,256		)	1,558
PROPERTY, PLANT AND EQUIPMENT:
In service	93		6,367		8,233		(382		)	14,311
Less — Accumulated provision for depreciation	40		2,144		3,775		(194		)	5,765
	53		4,223		4,458		(188		)	8,546
Construction work in progress	30		249		878		—			1,157
	83		4,472		5,336		(188		)	9,703
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,327		—			1,327
Investment in affiliated companies	7,452		—		—		(7,452		)	—
Other	—		10		—		—			10
	7,452		10		1,327		(7,452		)	1,337

DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits	300		16		—		(316		)	—
Customer intangibles	61		—		—		—			61
Goodwill	23		—		—		—			23
Property taxes	—		12		28		—			40
Derivatives	79		—		—		—			79
Other	29		312		14		12			367
	492		340		42		(304		)	570
	$	9,502	$	6,663	$	8,203	$	(11,200	)	$	13,168

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	—	$	229	$	308	$	(25	)	$	512
Short-term borrowings-
Affiliated companies	2,021		389		—		(2,410		)	—
Other	—		8		—		—			8
Accounts payable-
Affiliated companies	884		146		368		(856		)	542
Other	21		118		—		—			139
Accrued taxes	7		93		62		(86		)	76
Derivatives	103		1		—		—			104
Other	66		61		9		45			181
	3,102		1,045		747		(3,332		)	1,562
CAPITALIZATION:
Total equity	5,605		2,944		4,476		(7,420		)	5,605
Long-term debt and other long-term obligations	690		2,116		840		(1,136		)	2,510
	6,295		5,060		5,316		(8,556		)	8,115
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		791			791
Accumulated deferred income taxes	6		—		697		(103		)	600
Retirement benefits	27		305		—		—			332
Asset retirement obligations	—		191		640		—			831
Derivatives	37		1		—		—			38
Other	35		61		803		—			899
	105		558		2,140		688			3,491
	$	9,502	$	6,663	$	8,203	$	(11,200	)	$	13,168

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Year Ended December 31, 2016	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(842	)	$	549		$	1,103		$	(25	)	$	785
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt	—			186			285			—			471
Short-term borrowings, net	948			94			—			(941		)	101
Redemptions and Repayments-
Long-term debt	—			(224		)	(308		)	25			(507		)
Other	—			(6		)	(2		)	—			(8		)
Net cash provided from (used for) financing activities	948			50			(25		)	(916		)	57
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(30		)	(224		)	(292		)	—			(546		)
Nuclear fuel	—			—			(232		)	—			(232		)
Proceeds from asset sales	9			—			—			—			9
Sales of investment securities held in trusts	—			—			717			—			717
Purchases of investment securities held in trusts	—			—			(783		)	—			(783		)
Cash Investments	10			—			—			—			10
Loans to affiliated companies, net	(95		)	(376		)	(488		)	941			(18		)
Other	—			1			—			—			1
Net cash used for investing activities	(106		)	(599		)	(1,078		)	941			(842		)
Net change in cash and cash equivalents	—			—			—			—			—
Cash and cash equivalents at beginning of period	—			2			—			—			2
Cash and cash equivalents at end of period	$	—		$	2		$	—		$	—		$	2

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Year Ended December 31, 2015	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(637	)	$	551		$	1,261		$	(24	)	$	1,151
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt	—			45			296			—			341
Short-term borrowings, net	796			67			—			(863		)	—
Redemptions and Repayments-
Long-term debt	(17		)	(70		)	(348		)	24			(411		)
Short-term borrowings, net	—			—			(28		)	(98		)	(126		)
Common stock dividend payment	(70		)	—			—			—			(70		)
Other	—			(5		)	(1		)	—			(6		)
Net cash provided from (used for) financing activities	709			37			(81		)	(937		)	(272		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(5		)	(223		)	(399		)	—			(627		)
Nuclear fuel	—			—			(190		)	—			(190		)
Proceeds from asset sales	10			3			—			—			13
Sales of investment securities held in trusts	—			—			733			—			733
Purchases of investment securities held in trusts	—			—			(791		)	—			(791		)
Cash investments	(10		)	—			—			—			(10		)
Loans to affiliated companies, net	(67		)	(372		)	(533		)	961			(11		)
Other	—			4			—			—			4
Net cash used for investing activities	(72		)	(588		)	(1,180		)	961			(879		)
Net change in cash and cash equivalents	—			—			—			—			—
Cash and cash equivalents at beginning of period	—			2			—			—			2
Cash and cash equivalents at end of period	$	—		$	2		$	—		$	—		$	2

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Year Ended December 31, 2014	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(600	)	$	408		$	785		$	(22	)	$	571
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt	—			431			447			—			878
Short-term borrowings, net	247			114			—			(361		)	—
Equity contribution from parent	500			—			—			—			500
Redemptions and Repayments-
Long-term debt	(1		)	(269		)	(568		)	22			(816		)
Short-term borrowings, net	—			—			(123		)	(178		)	(301		)
Other	(1		)	(12		)	(2		)	—			(15		)
Net cash provided from (used for) financing activities	745			264			(246		)	(517		)	246
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(8		)	(169		)	(662		)	—			(839		)
Nuclear fuel	—			—			(233		)	—			(233		)
Proceeds from asset sales	—			307			—			—			307
Sales of investment securities held in trusts	—			—			1,163			—			1,163
Purchases of investment securities held in trusts	—			—			(1,219		)	—			(1,219		)
Loans to affiliated companies, net	(136		)	(815		)	412			539			—
Other	(1		)	5			—			—			4
Net cash used for investing activities	(145		)	(672		)	(539		)	539			(817		)
Net change in cash and cash equivalents	—			—			—			—			—
Cash and cash equivalents at beginning of period	—			2			—			—			2
Cash and cash equivalents at end of period	$	—		$	2		$	—		$	—		$	2