Edgar Filing: JERSEY CENTRAL POWER & LIGHT CO

FE-3.31.2012-10Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________



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

000-53742	FIRSTENERGY SOLUTIONS CORP.	31-1560186
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-2578	OHIO EDISON COMPANY	34-0437786
	(An Ohio Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

1-3141	JERSEY CENTRAL POWER & LIGHT COMPANY	21-0485010
	(A New Jersey Corporation)
	c/o FirstEnergy Corp.
	76 South Main Street
	Akron, OH 44308
	Telephone (800)736-3402

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yes þ No o		FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company and Jersey Central Power & Light Company

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



Yes þ No o		FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company and Jersey Central Power & Light Company

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer þ	FirstEnergy Corp.

Accelerated Filer o	N/A

Non-accelerated Filer (Do not check if a smaller reporting company) þ	FirstEnergy Solutions Corp., Ohio Edison Company and Jersey Central Power & Light Company

Smaller Reporting Company o	N/A

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).



Yes o No þ		FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company and Jersey Central Power & Light Company

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:



		OUTSTANDING
CLASS		AS OF APRIL 30, 2012
FirstEnergy Corp., $.10 par value		418,216,437
FirstEnergy Solutions Corp., no par value		7
Ohio Edison Company, no par value		60
Jersey Central Power & Light Company, $10 par value		13,628,447

FirstEnergy Corp. is the sole holder of FirstEnergy Solutions Corp., Ohio Edison Company and Jersey Central Power & Light Company common stock.

This combined Form 10-Q is separately filed by FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company and Jersey Central Power & Light Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. No registrant makes any representation as to information relating to any other registrant, except that information relating to any of the FirstEnergy subsidiary registrants is also attributed to FirstEnergy Corp.

FirstEnergy Web Site

Each of the registrants’ Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are also made available free of charge on or through FirstEnergy’s Internet web site at www.firstenergycorp.com.

These reports are posted on the web site as soon as reasonably practicable after they are electronically filed with the SEC. Additionally, the registrants routinely post important information on FirstEnergy’s Internet web site and recognize FirstEnergy’s Internet web site as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under SEC Regulation FD. Information contained on FirstEnergy’s Internet web site shall not be deemed incorporated into, or to be part of, this report.

OMISSION OF CERTAIN INFORMATION

FirstEnergy Solutions Corp., Ohio Edison Company and Jersey Central Power & Light Company meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) to Form 10-Q.

Forward-Looking Statements: This Form 10-Q includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “believe,” “estimate” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Actual results may differ materially due to:


•	The speed and nature of increased competition in the electric utility industry.


•	The impact of the regulatory process on the pending matters before FERC and in the various states in which we do business including, but not limited to, matters related to rates.


•	The status of the PATH project in light of PJM's direction to suspend work on the project pending review of its planning process, its re-evaluation of the need for the project and the uncertainty of the timing and amounts of any related capital expenditures.


•	The uncertainties of various cost recovery and cost allocation issues resulting from ATSI's realignment into PJM.


•	Economic or weather conditions affecting future sales and margins.


•	Changes in markets for energy services.


•	Changing energy and commodity market prices and availability.


•	Financial derivative reforms that could increase our liquidity needs and collateral costs.


•	The continued ability of our regulated utilities to collect transition and other costs.


•	Operation and maintenance costs being higher than anticipated.


•	Other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission, water intake and coal combustion residual regulations, the potential impacts of any laws, rules or regulations that ultimately replace CAIR, including CSAPR which was stayed by the courts on December 30, 2011, and the effects of the EPA's MATS rules.


•	The uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to shut down or idle certain generating units).


•	The uncertainties associated with our plan to retire our older unscrubbed regulated and competitive fossil units, including the impact on vendor commitments, and PJM's review of our plans for, and the timing of, those retirements.


•	Adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant).


•	Issues that could result from our continuing evaluation of the indications of cracking in the Davis-Besse Plant shield building imposed by the CAL issued by the NRC.


•	Adverse legal decisions and outcomes related to ME's and PN's ability to recover certain transmission costs through their transmission service charge riders.


•	The continuing availability of generating units and changes in their ability to operate at or near full capacity.


•	Replacement power costs being higher than anticipated or inadequately hedged.


•	The ability to comply with applicable state and federal reliability standards and energy efficiency mandates.


•	Changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency mandates.


•	The ability to accomplish or realize anticipated benefits from strategic goals.


•	Our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins.


•	The ability to experience growth in the distribution business.


•	Changing market conditions that could affect the value of assets held in our NDTs, pension trusts and other trust funds, and cause us and our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated.


•	The impact of changes to material accounting policies.


•	The ability to access the public securities and other capital and credit markets in accordance with our financing plans, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries.


•	Changes in general economic conditions affecting us and our subsidiaries.


•	Interest rates and any actions taken by credit rating agencies that could negatively affect us and our subsidiaries' access to financing, increased costs thereof, and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees.


•	The state of the national and regional economy and its impact on our major industrial and commercial customers.


•	Issues concerning the soundness of domestic and foreign financial institutions and counterparties with which we do business.


•	The risks and other factors discussed from time to time in our SEC filings, and other similar factors.

Dividends declared from time to time on FE's common stock during any annual period may in the aggregate vary from the indicated amount due to circumstances considered by FE's Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.

The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. The registrants expressly disclaim any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.

TABLE OF CONTENTS

	Page

Part I. Financial Information

Glossary of Terms	ii

Item 1. Financial Statements

FirstEnergy Corp.
Consolidated Statements of Income	1
Consolidated Statements of Comprehensive Income	2
Consolidated Balance Sheets	3
Consolidated Statements of Cash Flows	4

FirstEnergy Solutions Corp.
Consolidated Statements of Income and Comprehensive Income	5
Consolidated Balance Sheets	6
Consolidated Statements of Cash Flows	7

Ohio Edison Company
Consolidated Statements of Income and Comprehensive Income	8
Consolidated Balance Sheets	9
Consolidated Statements of Cash Flows	10

Jersey Central Power & Light Company
Consolidated Statements of Income and Comprehensive Income	11
Consolidated Balance Sheets	12
Consolidated Statements of Cash Flows	13

Combined Notes To Consolidated Financial Statements	14

Item 2. Management’s Discussion and Analysis of Registrant and Subsidiaries	53
FirstEnergy Corp. Management's Discussion of Analysis of Financial Condition and Results of Operations	53

Management’s Narrative Analysis of Results of Operations
FirstEnergy Solutions Corp.	89
Ohio Edison Company	93
Jersey Central Power & Light Company	95

Item 3. Quantitative and Qualitative Disclosures About Market Risk	97

Item 4. Controls and Procedures — FirstEnergy	97

Part II. Other Information

Item 1. Legal Proceedings	97

Item 1A. Risk Factors	97

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	97

Item 3. Defaults Upon Senior Securities	97

Item 4. Mine Safety Disclosures	97

Item 5. Other Information	97

Item 6. Exhibits	98

GLOSSARY OF TERMS

The following abbreviations and acronyms are used in this report to identify FirstEnergy Corp. and its current and former subsidiaries:



AE	Allegheny Energy, Inc., a Maryland utility holding company that merged with a subsidiary of FirstEnergy on February 25, 2011
AE Supply	Allegheny Energy Supply Company, LLC, an unregulated generation subsidiary of AE
AET	Allegheny Energy Transmission, LLC, a subsidiary of AE, which is the parent of ATSI and TrAIL and has a joint venture in PATH
AGC	Allegheny Generating Company, a generation subsidiary of AE
Allegheny	Allegheny Energy, Inc., together with its consolidated subsidiaries
ATSI	American Transmission Systems, Incorporated, formerly a direct subsidiary of FE that became a subsidiary of AET in April 2012, which owns and operates transmission facilities.
CEI	The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary
FE	FirstEnergy Corp., a public utility holding company
FENOC	FirstEnergy Nuclear Operating Company, which operates nuclear generating facilities
FES	FirstEnergy Solutions Corp., which provides energy-related products and services
FESC	FirstEnergy Service Company, which provides legal, financial and other corporate support services
FEV	FirstEnergy Ventures Corp., which invests in certain unregulated enterprises and business ventures
FGCO	FirstEnergy Generation Corp., a subsidiary of FES, which owns and operates non-nuclear generating facilities
FirstEnergy	FirstEnergy Corp., together with its consolidated subsidiaries
Global Holding	Global Mining Holding Company, LLC, a joint venture between FEV, WMB Marketing Ventures, LLC and Gunvor Group, Ltd. that owns Global Rail and Signal Peak
Global Rail	A joint venture between FEV, WMB Marketing Ventures, LLC and Gunvor Group, Ltd. that owns coal transportation operations near Roundup, Montana
JCP&L	Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary
ME	Metropolitan Edison Company, a Pennsylvania electric utility operating subsidiary
MP	Monongahela Power Company, a West Virginia electric utility operating subsidiary of AE
NGC	FirstEnergy Nuclear Generation Corp., a subsidiary of FES, which owns nuclear generating facilities
OE	Ohio Edison Company, an Ohio electric utility operating subsidiary
Ohio Companies	CEI, OE and TE
PATH	Potomac-Appalachian Transmission Highline, LLC, a joint venture between Allegheny and a subsidiary of AEP
PATH-Allegheny	PATH Allegheny Transmission Company, LLC
PATH-VA	PATH Allegheny Virginia Transmission Corporation
PE	The Potomac Edison Company, a Maryland electric utility operating subsidiary of AE
PN	Pennsylvania Electric Company, a Pennsylvania electric utility operating subsidiary
Penn	Pennsylvania Power Company, a Pennsylvania electric utility operating subsidiary of OE
Pennsylvania Companies	ME, PN, Penn and WP
PNBV	PNBV Capital Trust, a special purpose entity created by OE in 1996
Shippingport	Shippingport Capital Trust, a special purpose entity created by CEI and TE in 1997
Signal Peak	A joint venture between FEV, WMB Marketing Ventures, LLC and Gunvor Group, Ltd. that owns mining operations near Roundup, Montana
TE	The Toledo Edison Company, an Ohio electric utility operating subsidiary
TrAIL	Trans-Allegheny Interstate Line Company, a subsidiary of AET, which owns and operates transmission facilities
Utilities	OE, CEI, TE, Penn, JCP&L, ME, PN, MP, PE and WP
WP	West Penn Power Company, a Pennsylvania electric utility operating subsidiary of AE

The following abbreviations and acronyms are used to identify frequently used terms in this report:
ALJ	Administrative Law Judge
Anker WV	Anker West Virginia Mining Company, Inc.
Anker Coal	Anker Coal Group, Inc.
AOCI	Accumulated Other Comprehensive Income
AEP	American Electric Power Company, Inc.
AREPA	Alternative and Renewable Energy Portfolio Act
ARR	Auction Revenue Right
ASLB	Atomic Safety and Licensing Board

GLOSSARY OF TERMS, Continued

BGS	Basic Generation Service
BMP	Bruce Mansfield Plant
CAA	Clean Air Act
CAL	Confirmatory Action Letter
CAIR	Clean Air Interstate Rule
CBP	Competitive Bid Process
CCB	Coal Combustion By-products
CDWR	California Department of Water Resources
CERCLA	Comprehensive Environmental Response, Compensation, and Liability Act of 1980
CO₂	Carbon Dioxide
CSAPR	Cross-State Air Pollution Rule
CWA	Clean Water Act
DCPD	Deferred Compensation Plan for Outside Directors
DCR	Delivery Capital Recovery Rider
DOE	United States Department of Energy
DOJ	United States Department of Justice
DSP	Default Service Plan
EDC	Electric Distribution Company
EDCP	Executive Deferred Compensation Plan
EE&C	Energy Efficiency and Conservation
EGS	Electric Generation Supplier
EHB	Environmental Hearing Board
ENEC	Expanded Net Energy Cost
EPA	United States Environmental Protection Agency
ERO	Electric Reliability Organization
ESP	Electric Security Plan
FERC	Federal Energy Regulatory Commission
Fitch	Fitch Ratings
FMB	First Mortgage Bond
FPA	Federal Power Act
FTR	Financial Transmission Right
GAAP	Accounting Principles Generally Accepted in the United States of America
GHG	Greenhouse Gases
HCL	Hydrochloric Acid
ICG	International Coal Group Inc.
ILP	Integrated License Application Process
IRS	Internal Revenue Service
kV	Kilovolt
KWH	Kilowatt-hour
LBR	Little Blue Run
LOC	Letter of Credit
LSE	Load Serving Entity
LTIP	Long-Term Incentive Plan
MATS	Mercury and Air Toxics Standards
MDPSC	Maryland Public Service Commission
MISO	Midwest Independent Transmission System Operator, Inc.
Moody’s	Moody’s Investors Service, Inc.
MTEP	MISO Regional Transmission Expansion Plan
MVP	Multi-value Project
MW	Megawatt
MWH	Megawatt-hour

iii

GLOSSARY OF TERMS, Continued

NCEA	NERC Compliance Enforcement Authority
NDT	Nuclear Decommissioning Trust
NEPA	National Environmental Policy Act
NERC	North American Electric Reliability Corporation
NJBPU	New Jersey Board of Public Utilities
NNSR	Non-Attainment New Source Review
NOV	Notice of Violation
NOx	Nitrogen Oxide
NPDES	National Pollutant Discharge Elimination System
NRC	Nuclear Regulatory Commission
NSR	New Source Review
NUG	Non-Utility Generation
NYPSC	New York State Public Service Commission
NYSEG	New York State Electric and Gas
OCI	Other Comprehensive Income
OPEB	Other Post-Employment Benefits
OTTI	Other Than Temporary Impairments
OVEC	Ohio Valley Electric Corporation
PA DEP	Pennsylvania Department of Environmental Protection
PCRB	Pollution Control Revenue Bond
PJM	PJM Interconnection LLC
PM	Particulate Matter
POLR	Provider of Last Resort
PPUC	Pennsylvania Public Utility Commission
PSA	Power Supply Agreement
PSD	Prevention of Significant Deterioration
PUCO	Public Utilities Commission of Ohio
PURPA	Public Utility Regulatory Policies Act of 1978
REC	Renewable Energy Credit
RFC	ReliabilityFirst
RFP	Request for Proposal
RGGI	Regional Greenhouse Gas Initiative
ROE	Return on Equity
RTEP	Regional Transmission Expansion Plan
RTO	Regional Transmission Organization
S&P	Standard & Poor’s Ratings Service
SB221	Amended Substitute Senate Bill 221
SBC	Societal Benefits Charge
SEC	United States Securities and Exchange Commission
SIP	State Implementation Plan(s) Under the Clean Air Act
SMIP	Smart Meter Implementation Plan
SO₂	Sulfur Dioxide
SOS	Standard Offer Service
SREC	Solar Renewable Energy Credit
TDS	Total Dissolved Solid
TMDL	Total Maximum Daily Load
TMI-2	Three Mile Island Unit 2
TSC	Transmission Service Charge
VIE	Variable Interest Entity
VSCC	Virginia State Corporation Commission
WVDEP	West Virginia Department of Environmental Protection
WVPSC	Public Service Commission of West Virginia

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



	Three Months Ended March 31
(In millions, except per share amounts)	2012			2011

REVENUES:
Electric utilities	$	2,554		$	2,332
Unregulated businesses	1,524			1,244
Total revenues*	4,078			3,576

OPERATING EXPENSES:
Fuel	541			453
Purchased power	1,347			1,186
Other operating expenses	812			993
Provision for depreciation	285			225
Amortization of regulatory assets, net	75			132
General taxes	272			237
Total operating expenses	3,332			3,226

OPERATING INCOME	746			350

OTHER INCOME (EXPENSE):
Investment income	11			21
Interest expense	(246		)	(231		)
Capitalized interest	17			18
Total other expense	(218		)	(192		)

INCOME BEFORE INCOME TAXES	528			158

INCOME TAXES	222			111

NET INCOME	306			47

Loss attributable to noncontrolling interest	—			(5		)

EARNINGS AVAILABLE TO FIRSTENERGY CORP.	$	306		$	52

EARNINGS PER SHARE OF COMMON STOCK:
Basic	$	0.73		$	0.15
Diluted	$	0.73		$	0.15

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic	418			342
Diluted	420			343

DIVIDENDS DECLARED PER SHARE OF COMMON STOCK	$	0.55		$	0.55


*	Includes excise tax collections of $121 million and $119 million in the three months ended March 31, 2012 and 2011, respectively.

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31
(In millions)	2012			2011

NET INCOME	$	306		$	47

OTHER COMPREHENSIVE LOSS:
Pensions and OPEB prior service costs	(53		)	(44		)
Amortized losses on derivative hedges	(2		)	(6		)
Change in unrealized gain on available-for-sale securities	10			9
Other comprehensive loss	(45		)	(41		)
Income tax benefits on other comprehensive loss	(24		)	(19		)
Other comprehensive loss, net of tax	(21		)	(22		)

COMPREHENSIVE INCOME	285			25

Comprehensive loss attributable to noncontrolling interest	—			(5		)

COMPREHENSIVE INCOME AVAILABLE TO FIRSTENERGY CORP.	$	285		$	30

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions, except share amounts)	March 31, 2012		December 31, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	74	$	202
Receivables-
Customers, net of allowance for uncollectible accounts of $35 in 2012 and $37 in 2011	1,449		1,525
Other, net of allowance for uncollectible accounts of $8 in 2012 and $3 in 2011	286		269
Materials and supplies	927		811
Prepaid taxes	213		191
Derivatives	346		235
Other	182		122
	3,477		3,355
PROPERTY, PLANT AND EQUIPMENT:
In service	40,587		40,122
Less — Accumulated provision for depreciation	12,086		11,839
	28,501		28,283
Construction work in progress	2,065		2,054
	30,566		30,337
INVESTMENTS:
Nuclear plant decommissioning trusts	2,135		2,112
Investments in lease obligation bonds	336		402
Other	1,011		1,008
	3,482		3,522
DEFERRED CHARGES AND OTHER ASSETS:
Goodwill	6,444		6,441
Regulatory assets	2,006		2,030
Other	1,716		1,641
	10,166		10,112
	$	47,691	$	47,326
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	1,772	$	1,621
Short-term borrowings	1,075		—
Accounts payable	918		1,174
Accrued taxes	442		558
Accrued compensation and benefits	258		384
Derivatives	299		218
Other	1,009		900
	5,773		4,855
CAPITALIZATION:
Common stockholders’ equity-
Common stock, $0.10 par value, authorized 490,000,000 shares - 418,216,437 shares outstanding	42		42
Other paid-in capital	9,754		9,765
Accumulated other comprehensive income	405		426
Retained earnings	3,122		3,047
Total common stockholders’ equity	13,323		13,280
Noncontrolling interest	16		19
Total equity	13,339		13,299
Long-term debt and other long-term obligations	15,527		15,716
	28,866		29,015
NONCURRENT LIABILITIES:
Accumulated deferred income taxes	5,904		5,670
Retirement benefits	2,240		2,823
Asset retirement obligations	1,522		1,497
Deferred gain on sale and leaseback transaction	917		925
Adverse power contract liability	458		469
Other	2,011		2,072
	13,052		13,456
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9)
	$	47,691	$	47,326

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31
(In millions)	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	306		$	47
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation	285			225
Amortization of regulatory assets, net	75			132
Nuclear fuel and lease amortization	58			47
Deferred purchased power and other costs	(107		)	(58		)
Deferred income taxes and investment tax credits, net	265			204
Deferred rents and lease market valuation liability	(23		)	(15		)
Stock based compensation	(29		)	(9		)
Accrued compensation and retirement benefits	(162		)	(53		)
Commodity derivative transactions, net	(64		)	(25		)
Pension trust contributions	(600		)	(157		)
Asset impairments	4			31
Cash collateral, net	(28		)	(28		)
Decrease (increase) in operating assets-
Receivables	59			164
Materials and supplies	(118		)	40
Prepayments and other current assets	(19		)	118
Increase (decrease) in operating liabilities-
Accounts payable	(256		)	(90		)
Accrued taxes	(116		)	(182		)
Accrued interest	70			76
Other	(13		)	24
Net cash provided from (used for) operating activities	(413		)	491

CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt	—			217
Short-term borrowings, net	1,075			—
Redemptions and Repayments-
Long-term debt	(16		)	(359		)
Short-term borrowings, net	—			(214		)
Common stock dividend payments	(230		)	(190		)
Other	(10		)	(4		)
Net cash provided from (used for) financing activities	819			(550		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(589		)	(449		)
Sales of investment securities held in trusts	251			969
Purchases of investment securities held in trusts	(266		)	(993		)
Cash investments	78			47
Cash received in Allegheny merger	—			590
Other	(8		)	(23		)
Net cash provided from (used for) investing activities	(534		)	141

Net change in cash and cash equivalents	(128		)	82
Cash and cash equivalents at beginning of period	202			1,019
Cash and cash equivalents at end of period	$	74		$	1,101

SUPPLEMENTAL CASH FLOW INFORMATION:
Non-cash transaction: merger with Allegheny, common stock issued	$	—		$	4,354

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31
(In millions)	2012			2011

STATEMENTS OF INCOME
REVENUES:
Electric sales to non-affiliates	$	1,332		$	1,044
Electric sales to affiliates	121			261
Other	63			86
Total revenues	1,516			1,391

OPERATING EXPENSES:
Fuel	295			343
Purchased power from affiliates	117			69
Purchased power from non-affiliates	487			297
Other operating expenses	295			465
Provision for depreciation	63			69
General taxes	37			29
Impairment of long-lived assets	—			14
Total operating expenses	1,294			1,286

OPERATING INCOME	222			105

OTHER INCOME (EXPENSE):
Investment income	6			6
Miscellaneous income	4			4
Interest expense — affiliates	(2		)	(1		)
Interest expense — other	(41		)	(53		)
Capitalized interest	9			10
Total other income (expense)	(24		)	(34		)

INCOME BEFORE INCOME TAXES	198			71

INCOME TAXES	76			26

NET INCOME	$	122		$	45

STATEMENTS OF COMPREHENSIVE INCOME
NET INCOME	$	122		$	45

OTHER COMPREHENSIVE INCOME (LOSS):
Pensions and OPEB prior service costs	(5		)	(10		)
Amortized losses on derivative hedges	(5		)	(9		)
Change in unrealized gain on available-for-sale securities	10			8
Other comprehensive loss	—			(11		)
Income taxes (benefits) on other comprehensive income (loss)	2			(6		)
Other comprehensive loss, net of tax	(2		)	(5		)

COMPREHENSIVE INCOME	$	120		$	40

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions, except share amounts)	March 31, 2012		December 31, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7	$	7
Receivables-
Customers, net of allowance for uncollectible accounts of $16 in 2012 and 2011	395		424
Affiliated companies	541		600
Other, net of allowance for uncollectible accounts of $3 in 2012 and 2011	122		61
Notes receivable from affiliated companies	12		383
Materials and supplies	551		492
Derivatives	322		219
Prepayments and other	24		38
	1,974		2,224
PROPERTY, PLANT AND EQUIPMENT:
In service	11,002		10,983
Less — Accumulated provision for depreciation	4,214		4,110
	6,788		6,873
Construction work in progress	1,173		1,014
	7,961		7,887
INVESTMENTS:
Nuclear plant decommissioning trusts	1,240		1,223
Other	7		7
	1,247		1,230
DEFERRED CHARGES AND OTHER ASSETS:
Customer intangibles	120		123
Goodwill	24		24
Property taxes	43		43
Unamortized sale and leaseback costs	120		80
Derivatives	117		79
Other	171		129
	595		478
	$	11,777	$	11,819
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	905	$	905
Accounts payable-
Affiliated companies	483		436
Other	190		220
Accrued Taxes	75		227
Derivatives	281		189
Other	245		261
	2,179		2,238
CAPITALIZATION:
Common stockholder's equity-
Common stock, without par value, authorized 750 shares- 7 shares outstanding	1,568		1,570
Accumulated other comprehensive income	74		76
Retained earnings	2,053		1,931
Total common stockholder's equity	3,695		3,577
Long-term debt and other long-term obligations	2,797		2,799
	6,492		6,376
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	917		925
Accumulated deferred income taxes	365		286
Asset retirement obligations	919		904
Retirement benefits	151		356
Lease market valuation liability	160		171
Other	594		563
	3,106		3,205
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9)
	$	11,777	$	11,819

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

FIRSTENERGY SOLUTIONS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31
(In millions)	2012			2011

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	122		$	45
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation	63			69
Nuclear fuel and lease amortization	57			47
Deferred rents and lease market valuation liability	(47		)	(39		)
Deferred income taxes and investment tax credits, net	83			67
Asset impairments	3			19
Accrued compensation and retirement benefits	(10		)	(16		)
Pension trust contribution	(209		)	—
Commodity derivative transactions, net	(52		)	(35		)
Cash collateral, net	(25		)	(27		)
Decrease (increase) in operating assets-
Receivables	28			(76		)
Materials and supplies	(59		)	61
Prepayments and other current assets	14			8
Increase (decrease) in operating liabilities-
Accounts payable	17			(18		)
Accrued taxes	(155		)	(3		)
Other	(8		)	(8		)
Net cash provided from (used for) operating activities	(178		)	94

CASH FLOWS FROM FINANCING ACTIVITIES:
New financing-
Long-term debt	—			150
Short-term borrowings, net	—			350
Redemptions and repayments-
Long-term debt	—			(332		)
Other	(3		)	(1		)
Net cash provided from (used for) financing activities	(3		)	167

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(181		)	(159		)
Sales of investment securities held in trusts	83			216
Purchases of investment securities held in trusts	(90		)	(231		)
Loans from (to) affiliated companies, net	371			(82		)
Other	(2		)	(7		)
Net cash provided from (used for) investing activities	181			(263		)

Net change in cash and cash equivalents	—			(2		)
Cash and cash equivalents at beginning of period	7			9
Cash and cash equivalents at end of period	$	7		$	7

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

OHIO EDISON COMPANY

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31
(In millions)	2012			2011

STATEMENTS OF INCOME
REVENUES:
Electric sales	$	359		$	364
Excise and gross receipts tax collections	27			28
Total revenues	386			392

OPERATING EXPENSES:
Purchased power from affiliates	52			93
Purchased power from non-affiliates	70			60
Other operating expenses	121			96
Provision for depreciation	24			23
Amortization of regulatory assets, net	—			1
General taxes	50			50
Total operating expenses	317			323

OPERATING INCOME	69			69

OTHER INCOME (EXPENSE):
Investment income	4			5
Interest expense	(22		)	(22		)
Capitalized interest	1			—
Total other expense	(17		)	(17		)

INCOME BEFORE INCOME TAXES	52			52

INCOME TAXES	21			20

NET INCOME	$	31		$	32

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	31		$	32

OTHER COMPREHENSIVE LOSS:
Pensions and OPEB prior service costs	(10		)	(7		)
Other comprehensive loss	(10		)	(7		)
Income tax benefits on other comprehensive loss	(5		)	(4		)
Other comprehensive loss, net of tax	(5		)	(3		)

COMPREHENSIVE INCOME	$	26		$	29

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

OHIO EDISON COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions, except share amounts)	March 31, 2012			December 31, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—		$	26
Receivables-
Customers, net of allowance for uncollectible accounts of $4 in 2012 and 2011	154			163
Affiliated companies	72			86
Other	37			41
Notes receivable from affiliated companies	259			181
Prepayments and other	11			17
	533			514
UTILITY PLANT:
In service	3,405			3,358
Less — Accumulated provision for depreciation	1,280			1,267
	2,125			2,091
Construction work in progress	85			91
	2,210			2,182
OTHER PROPERTY AND INVESTMENTS:
Investment in lease obligation bonds	162			163
Nuclear plant decommissioning trusts	137			137
Other	92			90
	391			390
DEFERRED CHARGES AND OTHER ASSETS:
Regulatory assets	362			363
Pension assets	6			5
Property taxes	80			81
Unamortized sale and leaseback costs	24			25
Other	16			14
	488			488
	$	3,622		$	3,574
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	3		$	2
Accounts payable-
Affiliated companies	110			119
Other	34			35
Accrued taxes	88			88
Accrued interest	25			25
Other	102			79
	362			348
CAPITALIZATION:
Common stockholder's equity-
Common stock, without par value, authorized 175,000,000 shares – 60 shares outstanding	747			747
Accumulated other comprehensive income	49			54
Accumulated deficit	(53		)	(84		)
Total common stockholder's equity	743			717
Noncontrolling interest	5			5
Total equity	748			722
Long-term debt and other long-term obligations	1,156			1,155
	1,904			1,877
NONCURRENT LIABILITIES:
Accumulated deferred income taxes	791			787
Accumulated deferred investment tax credits	8			9
Retirement benefits	213			213
Asset retirement obligations	73			71
Other	271			269
	1,356			1,349
COMMITMENTS AND CONTINGENCIES (Note 9)
	$	3,622		$	3,574

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

OHIO EDISON COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31
(In millions)	2012			2011

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	31		$	32
Adjustments to reconcile net income to net cash from operating activities-
Provision for depreciation	24			23
Amortization of regulatory assets, net	—			1
Amortization of lease costs	33			33
Deferred income taxes and investment tax credits, net	11			29
Accrued compensation and retirement benefits	(17		)	(13		)
Cash collateral, net	(2		)	—
Pension trust contributions	—			(27		)
Decrease (increase) in operating assets-
Receivables	27			82
Prepayments and other current assets	7			(23		)
Increase (decrease) in operating liabilities-
Accounts payable	(10		)	(20		)
Accrued taxes	1			(10		)
Other	(5		)	(3		)
Net cash provided from operating activities	100			104

CASH FLOWS FROM FINANCING ACTIVITIES:
Redemptions and Repayments-
Short-term borrowings, net	—			(39		)
Common stock dividend payments	—			(100		)
Other	(1		)	—
Net cash used for financing activities	(1		)	(139		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(43		)	(37		)
Sales of investment securities held in trusts	37			8
Purchases of investment securities held in trusts	(38		)	(9		)
Loans to affiliated companies, net	(78		)	—
Other	(3		)	(2		)
Net cash used for investing activities	(125		)	(40		)

Net change in cash and cash equivalents	(26		)	(75		)
Cash and cash equivalents at beginning of period	26			420
Cash and cash equivalents at end of period	$	—		$	345

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

JERSEY CENTRAL POWER & LIGHT COMPANY

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31
(In millions)	2012			2011

STATEMENTS OF INCOME
REVENUES:
Electric sales	$	478		$	634
Excise tax collections	10			13
Total revenues	488			647

OPERATING EXPENSES:
Purchased power	264			370
Other operating expenses	81			80
Provision for depreciation	30			26
Amortization of regulatory assets, net	20			82
General taxes	15			18
Total operating expenses	410			576

OPERATING INCOME	78			71

OTHER INCOME (EXPENSE):
Miscellaneous income	1			2
Interest expense	(31		)	(30		)
Total other expense	(30		)	(28		)

INCOME BEFORE INCOME TAXES	48			43

INCOME TAXES	22			20

NET INCOME	$	26		$	23

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	26		$	23

OTHER COMPREHENSIVE LOSS:
Pensions and OPEB prior service costs	(6		)	(6		)
Other comprehensive loss	(6		)	(6		)
Income tax benefits on other comprehensive loss	(4		)	(3		)
Other comprehensive loss, net of tax	(2		)	(3		)

COMPREHENSIVE INCOME	$	24		$	20

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these financial statements.

JERSEY CENTRAL POWER & LIGHT COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions, except share amounts)	March 31, 2012		December 31, 2011
ASSETS
CURRENT ASSETS:
Receivables-
Customers, net of allowance for uncollectible accounts of $3 in 2012 and $4 in 2011	$	202	$	235
Affiliated companies	35		—
Other	16		17
Prepaid taxes	39		33
Other	24		19
	316		304
UTILITY PLANT:
In service	5,022		4,872
Less — Accumulated provision for depreciation	1,759		1,743
	3,263		3,129
Construction work in progress	119		227
	3,382		3,356
OTHER PROPERTY AND INVESTMENTS:
Nuclear fuel disposal trust	225		219
Nuclear plant decommissioning trusts	195		193
Other	2		2
	422		414
DEFERRED CHARGES AND OTHER ASSETS:
Goodwill	1,811		1,811
Regulatory assets	384		408
Other	32		32
	2,227		2,251
	$	6,347	$	6,325
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	34	$	34
Short-term borrowings-
Affiliated companies	300		259
Accounts payable-
Affiliated companies	3		19
Other	94		101
Accrued compensation and benefits	33		41