SEGMENT INFORMATION

FirstEnergy's reportable segments are as follows: Regulated Distribution and Regulated Transmission.

On March 31, 2018, as discussed in Note 3, “Discontinued Operations,” FirstEnergy deconsolidated FES and FENOC and presented FES, FENOC, BSPC and a portion of AE Supply, representing substantially all of FirstEnergy’s operations that previously comprised the CES reportable operating segment, as discontinued operations in FirstEnergy’s consolidated financial statements resulting from actions taken as part of the strategic review of exiting commodity-exposed generation. The financial information for all periods has been revised to present the discontinued operations within Reconciling Adjustments. The remaining business activities that previously comprised the CES reportable operating segment were not material and, as such, have been combined into Corporate/Other for reporting purposes.

The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies, serving approximately six million customers within 65,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York, and purchases power for its POLR, SOS, SSO and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. This segment also controls 3,790 MWs of regulated electric generation capacity located primarily in West Virginia, Virginia and New Jersey. The segment's results reflect the commodity costs of securing electric generation and the deferral and amortization of certain fuel costs.

The Regulated Transmission segment provides transmission infrastructure owned and operated by ATSI, TrAIL, MAIT and certain of FirstEnergy's utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment's revenues are primarily derived from forward-looking formula rates at ATSI, TrAIL, and MAIT as well as stated transmission rates at certain of FirstEnergy’s utilities. As discussed in Note 13, "Regulatory Matters - FERC Matters" above, MAIT filed a settlement with FERC on October 13, 2017, which settlement agreement is pending final order by FERC. Both the forward-looking formula and stated rates recover costs that the regulatory agencies determine are permitted to be recovered and provide a return on transmission capital investment. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual costs. The segment's results also reflect the net transmission expenses related to the delivery of electricity on FirstEnergy's transmission facilities.

Corporate support not charged to FE's subsidiaries, interest expense on stand-alone holding company debt, corporate income taxes and other businesses that do not constitute an operating segment are categorized as Corporate/Other for reportable business segment purposes. Additionally, reconciling adjustments for the elimination of inter-segment transactions are included in Corporate/Other. As of March 31, 2018, 2,123 MWs of electric generating capacity was included in Corporate/Other, including, as discussed in Note 3, "Discontinued Operations," AGC's interests in Bath County (713 MWs), the sale of which is expected to close in the second quarter of 2018. As of March 31, 2018, Corporate/Other had $5.35 billion of stand-alone holding company long-term debt and $1.2 billion was borrowed by FE under its revolving credit facility.

Financial information for each of FirstEnergy's reportable segments is presented in the tables below.

Segment Financial Information



For the Three Months Ended	Regulated Distribution			Regulated Transmission		Corporate/ Other			Reconciling Adjustments			Consolidated
	(In millions)

March 31, 2018
Revenues	$	2,576		$	323	$	125		$	(48	)	$	2,976
Depreciation	196			61		19			18			294
Amortization (deferral) of regulatory assets, net	(152		)	4		—			—			(148		)
Miscellaneous income	56			4		16			(9		)	67
Interest expense	128			39		92			(9		)	250
Income taxes	93			32		127			—			252
Income (loss) from continuing operations	322			99		(244		)	—			177
Total assets	27,504			9,681		1,255			355			38,795
Total goodwill	5,004			614		—			—			5,618
Property additions	264			292		12			15			583

March 31, 2017
Revenues	$	2,500		$	313	$	92		$	(50	)	$	2,855
Depreciation	178			51		4			17			250
Amortization of regulatory assets, net	81			2		—			—			83
Miscellaneous income	15			—		6			(7		)	14
Interest expense	138			39		75			(7		)	245
Income taxes (benefits)	138			52		(38		)	—			152
Income (loss) from continuing operations	237			88		(68		)	—			257
Total assets	27,826			8,938		1,160			5,288			43,212
Total goodwill	5,004			614		—			—			5,618
Property additions	264			224		10			90			588