XML 68 R49.htm IDEA: XBRL DOCUMENT v3.8.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2017
Fair Value of Financial Instruments [Line Items]  
Assets and liabilities measured on recurring basis
The following tables set forth the recurring assets and liabilities that are accounted for at fair value by level within the fair value hierarchy:
FirstEnergy
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements
December 31, 2017
 
December 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
(In millions)
Corporate debt securities
$
—

 
$
1,196

 
$
—

 
$
1,196

 
$
—

 
$
1,247

 
$
—

 
$
1,247

Derivative assets - commodity contracts
—

 
33

 
—

 
33

 
10

 
200

 
—

 
210

Derivative assets - FTRs
—

 
—

 
4

 
4

 
—

 
—

 
7

 
7

Derivative assets - NUG contracts(1)
—

 
—

 
—

 
—

 
—

 
—

 
1

 
1

Equity securities(2)
1,104

 
—

 
—

 
1,104

 
925

 
—

 
—

 
925

Foreign government debt securities
—

 
88

 
—

 
88

 
—

 
78

 
—

 
78

U.S. government debt securities
—

 
154

 
—

 
154

 
—

 
161

 
—

 
161

U.S. state debt securities
—

 
276

 
—

 
276

 
—

 
246

 
—

 
246

Other(3)
589

 
135

 
—

 
724

 
199

 
123

 
—

 
322

Total assets
$
1,693

 
$
1,882

 
$
4

 
$
3,579

 
$
1,134

 
$
2,055

 
$
8

 
$
3,197

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities - commodity contracts
$
—

 
$
(27
)
 
$
—

 
$
(27
)
 
$
(6
)
 
$
(118
)
 
$
—

 
$
(124
)
Derivative liabilities - FTRs
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
(6
)
 
(6
)
Derivative liabilities - NUG contracts(1)
—

 
—

 
(79
)
 
(79
)
 
—

 
—

 
(108
)
 
(108
)
Total liabilities
$
—

 
$
(27
)
 
$
(80
)
 
$
(107
)
 
$
(6
)
 
$
(118
)
 
$
(114
)
 
$
(238
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets (liabilities)(4)
$
1,693

 
$
1,855

 
$
(76
)
 
$
3,472

 
$
1,128

 
$
1,937

 
$
(106
)
 
$
2,959



(1) 
NUG contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings.
(2) 
NDT funds hold equity portfolios whose performance is benchmarked against the Alerian MLP Index or the Wells Fargo Hybrid and Preferred Securities REIT index.
(3) 
Primarily consists of short-term cash investments.
(4) 
Excludes $(8) million and $(3) million as of December 31, 2017 and December 31, 2016, respectively, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
Reconciliation of changes in the fair value roll forward of level 3 measurements of NUG contracts
The following table provides a reconciliation of changes in the fair value of NUG contracts and FTRs that are classified as Level 3 in the fair value hierarchy for the periods ended December 31, 2017 and December 31, 2016:

 
NUG Contracts(1)
 
FTRs
 
Derivative Assets
 
Derivative Liabilities
 
Net
 
Derivative Assets
 
Derivative Liabilities
 
Net
 
(In millions)
January 1, 2016 Balance
$
1

 
$
(137
)
 
$
(136
)
 
$
8

 
$
(13
)
 
$
(5
)
Unrealized gain (loss)
2

 
(17
)
 
(15
)
 
(6
)
 
(4
)
 
(10
)
Purchases
—

 
—

 
—

 
16

 
(7
)
 
9

Settlements
(2
)
 
46

 
44

 
(11
)
 
18

 
7

December 31, 2016 Balance
$
1

 
$
(108
)
 
$
(107
)
 
$
7

 
$
(6
)
 
$
1

Unrealized gain (loss)
—

 
(10
)
 
(10
)
 
1

 
(2
)
 
(1
)
Purchases
—

 
—

 
—

 
4

 
(1
)
 
3

Settlements
(1
)
 
39

 
38

 
(8
)
 
8

 
—

December 31, 2017 Balance
$
—

 
$
(79
)
 
$
(79
)
 
$
4

 
$
(1
)
 
$
3


(1)NUG contracts are subject to regulatory accounting treatment and changes in market values do not impact earnings.
Quantitative information for level 3 valuation
The following table provides quantitative information for FTRs and NUG contracts that are classified as Level 3 in the fair value hierarchy for the period ended December 31, 2017:
 
 
 
Fair Value, Net (In millions)
 
Valuation
Technique
 
Significant Input
 
Range
 
Weighted Average
 
Units
FTRs
 
$
3

 
Model
 
RTO auction clearing prices
 
($4.60) to $5.40
 
$0.70
 
Dollars/MWH
NUG Contracts
 
$
(79
)
 
Model
 
Generation
Regional electricity prices
 
400 to 2,099,000
$30.70 to $32.00
 
426,000 $30.70
 
MWH
Dollars/MWH
Amortized cost basis, unrealized gains and losses and fair values of investments in available-for-sale securities
The following table summarizes the amortized cost basis, unrealized gains (there were no unrealized losses) and fair values of investments held in NDT and nuclear fuel disposal trusts as of December 31, 2017 and December 31, 2016:

 
 
December 31, 2017(1)
 
December 31, 2016(2)
 
 
Cost Basis
 
Unrealized Gains
 
Fair Value
 
Cost Basis
 
Unrealized Gains
 
Fair Value
 
 
(In millions)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
 
FirstEnergy
 
$
1,707

 
$
31

 
$
1,738

 
$
1,735

 
$
38


$
1,773

FES
 
950

 
20

 
970

 
847

 
27

 
874

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
 
 
 
 
 
FirstEnergy
 
$
949

 
$
155

 
$
1,104

 
$
822

 
$
103

 
$
925

FES
 
695

 
115

 
810

 
564

 
70

 
634


(1) 
Excludes short-term cash investments: FirstEnergy - $87 million; FES - $76 million.
(2) 
Excludes short-term cash investments: FirstEnergy - $61 million; FES - $44 million.
Proceeds from the sale of investments in available-for-sale securities, realized gains and losses on those sales, and interest and dividend income
Proceeds from the sale of investments in AFS securities, realized gains and losses on those sales, OTTI and interest and dividend income for the three years ended December 31, 2017, 2016 and 2015 were as follows:

December 31, 2017
 
Sale Proceeds
 
Realized Gains
 
Realized Losses
 
OTTI
 
Interest and
Dividend Income
 
 
(In millions)
FirstEnergy
 
$
2,170

 
$
330

 
$
(253
)
 
$
(13
)
 
$
98

FES
 
940

 
256

 
(195
)
 
(13
)
 
59

 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
Sale Proceeds
 
Realized Gains
 
Realized Losses
 
OTTI
 
Interest and Dividend Income
 
 
(In millions)
FirstEnergy
 
$
1,678

 
$
170

 
$
(121
)
 
$
(21
)
 
$
100

FES
 
717

 
117

 
(69
)
 
(19
)
 
56

 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
Sale Proceeds
 
Realized Gains
 
Realized Losses
 
OTTI
 
Interest and
Dividend Income
 
 
(In millions)
FirstEnergy
 
$
1,534

 
$
209

 
$
(191
)
 
$
(102
)
 
$
101

FES
 
733

 
158

 
(134
)
 
(90
)
 
57
Fair value and related carrying amounts of long-term debt and other long-term obligations
The following table provides the approximate fair value and related carrying amounts of long-term debt, which excludes capital lease obligations and net unamortized debt issuance costs, premiums and discounts:
 
December 31, 2017
 
December 31, 2016
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
 
(In millions)
FirstEnergy
$
22,261

 
$
23,038

 
$
19,885

 
$
19,829

FES
2,836

 
1,487

 
3,000

 
1,555
FES  
Fair Value of Financial Instruments [Line Items]  
Assets and liabilities measured on recurring basis
FES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements
December 31, 2017
 
December 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
(In millions)
Corporate debt securities
$
—

 
$
720

 
$
—

 
$
720

 
$
—

 
$
726

 
$
—

 
$
726

Derivative assets - commodity contracts
—

 
33

 
—

 
33

 
10

 
200

 
—

 
210

Derivative assets - FTRs
—

 
—

 
1

 
1

 
—

 
—

 
4

 
4

Equity securities(1)
810

 
—

 
—

 
810

 
634

 
—

 
—

 
634

Foreign government debt securities
—

 
65

 
—

 
65

 
—

 
58

 
—

 
58

U.S. government debt securities
—

 
133

 
—

 
133

 
—

 
48

 
—

 
48

U.S. state debt securities
—

 
29

 
—

 
29

 
—

 
3

 
—

 
3

Other(2)
1

 
96

 
—

 
97

 
2

 
81

 
—

 
83

Total assets
$
811

 
$
1,076

 
$
1

 
$
1,888

 
$
646

 
$
1,116

 
$
4

 
$
1,766

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities - commodity contracts
$
—

 
$
(23
)
 
$
—

 
$
(23
)
 
$
(6
)
 
$
(118
)
 
$
—

 
$
(124
)
Derivative liabilities - FTRs
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
(5
)
 
(5
)
Total liabilities
$
—

 
$
(23
)
 
$
(1
)
 
$
(24
)
 
$
(6
)
 
$
(118
)
 
$
(5
)
 
$
(129
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets (liabilities)(3)
$
811

 
$
1,053

 
$
—

 
$
1,864

 
$
640

 
$
998

 
$
(1
)
 
$
1,637



(1) 
NDT funds hold equity portfolios whose performance is benchmarked against the Alerian MLP Index or the Wells Fargo Hybrid and Preferred Securities REIT index.
(2) 
Primarily consists of short-term cash investments.
(3) 
Excludes $3 million and $2 million as of December 31, 2017 and December 31, 2016, respectively, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
Reconciliation of changes in the fair value roll forward of level 3 measurements of NUG contracts
The following table provides a reconciliation of changes in the fair value of FTRs held by FES and classified as Level 3 in the fair value hierarchy for the periods ended December 31, 2017 and December 31, 2016:

 
 
Derivative Asset
 
Derivative Liability
 
Net Asset/(Liability)
 
 
(In millions)
January 1, 2016 Balance
 
$
5

 
$
(11
)
 
$
(6
)
Unrealized loss
 
(4
)
 
(3
)
 
(7
)
Purchases
 
10

 
(5
)
 
5

Settlements
 
(7
)
 
14

 
7

December 31, 2016 Balance
 
$
4

 
$
(5
)
 
$
(1
)
Unrealized loss
 
—

 
(1
)
 
(1
)
Purchases
 
1

 
(1
)
 
—

Settlements
 
(4
)
 
6

 
2

December 31, 2017 Balance
 
$
1

 
$
(1
)
 
$
—
Quantitative information for level 3 valuation
The following table provides quantitative information for FTRs held by FES that are classified as Level 3 in the fair value hierarchy for the period ended December 31, 2017:
 
 
 
Fair Value, Net (In millions)
 
Valuation
Technique
 
Significant Input
 
Range
 
Weighted Average
 
Units
FTRs
 
$
—

 
Model
 
RTO auction clearing prices
 
($4.60) to $3.30
 
$0.10
 
Dollars/MWH