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 and Comprehensive Income for the three months ended March 31, 2014 and 2013, Condensed Consolidating Balance Sheets as of March 31, 2014 and December 31, 2013, and Condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2014 and 2013, for FES (parent and guarantor), FG and NG (non-guarantor) are presented below. Investments in wholly owned subsidiaries are accounted for by FES using the equity method. Results of operations for FG and NG are, therefore, reflected in FES’ 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 AND COMPREHENSIVE INCOME

(Unaudited)



For the Three Months Ended March 31, 2014	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	1,797		$	315		$	362		$	(645	)	$	1,829

OPERATING EXPENSES:
Fuel	—			272			47			—			319
Purchased power from affiliates	645			—			64			(645		)	64
Purchased power from non-affiliates	1,025			4			—			—			1,029
Other operating expenses	228			62			150			12			452
Provision for depreciation	2			29			43			—			74
General taxes	21			11			7			—			39
Total operating expenses	1,921			378			311			(633		)	1,977

OPERATING INCOME (LOSS)	(124		)	(63		)	51			(12		)	(148		)

OTHER INCOME (EXPENSE):
Loss on debt redemptions	(3		)	(1		)	(1		)	—			(5		)
Investment income	1			1			21			(3		)	20
Miscellaneous income, including net income from equity investees	103			—			—			(103		)	—
Interest expense — affiliates	(3		)	(1		)	(1		)	3			(2		)
Interest expense — other	(14		)	(24		)	(13		)	15			(36		)
Capitalized interest	—			1			11			—			12
Total other income (expense)	84			(24		)	17			(88		)	(11		)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(40		)	(87		)	68			(100		)	(159		)

INCOME TAXES (BENEFITS)	(52		)	(31		)	26			1			(56		)

INCOME (LOSS) FROM CONTINUING OPERATIONS	12			(56		)	42			(101		)	(103		)

Discontinued operations (net of income taxes of $70) (Note 13)	—			116			—			—			116

NET INCOME	$	12		$	60		$	42		$	(101	)	$	13

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	12		$	60		$	42		$	(101	)	$	13

OTHER COMPREHENSIVE INCOME (LOSS):
Pensions and OPEB prior service costs	(5		)	(4		)	—			4			(5		)
Amortized gain on derivative hedges	(2		)	—			—			—			(2		)
Change in unrealized gain on available-for-sale securities	19			—			19			(19		)	19
Other comprehensive income (loss)	12			(4		)	19			(15		)	12
Income taxes (benefits) on other comprehensive income (loss)	4			(2		)	7			(5		)	4
Other comprehensive income (loss), net of tax	8			(2		)	12			(10		)	8
COMPREHENSIVE INCOME	$	20		$	58		$	54		$	(111	)	$	21

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)



For the Three Months Ended March 31, 2013	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	1,496		$	531		$	440		$	(943	)	$	1,524

OPERATING EXPENSES:
Fuel	—			247			53			—			300
Purchased power from affiliates	1,013			—			62			(943		)	132
Purchased power from non-affiliates	505			1			—			—			506
Other operating expenses	162			74			131			12			379
Provision for depreciation	1			31			44			(1		)	75
General taxes	20			11			6			—			37
Total operating expenses	1,701			364			296			(932		)	1,429

OPERATING INCOME (LOSS)	(205		)	167			144			(11		)	95

OTHER INCOME (EXPENSE):
Loss on debt redemption	(71		)	—			—			—			(71		)
Investment income	1			—			18			(2		)	17
Miscellaneous income, including net income from equity investees	192			1			—			(191		)	2
Interest expense — affiliates	(2		)	(1		)	(1		)	3			(1		)
Interest expense — other	(25		)	(28		)	(15		)	16			(52		)
Capitalized interest	—			—			9			—			9
Total other income (expense)	95			(28		)	11			(174		)	(96		)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(110		)	139			155			(185		)	(1		)

INCOME TAXES (BENEFITS)	(112		)	51			58			3			—

INCOME (LOSS) FROM CONTINUING OPERATIONS	2			88			97			(188		)	(1		)

Discontinued operations (net of income taxes of $2) (Note 13)	—			3			—			—			3

NET INCOME	$	2		$	91		$	97		$	(188	)	$	2

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	2		$	91		$	97		$	(188	)	$	2

OTHER COMPREHENSIVE INCOME (LOSS):
Pensions and OPEB prior service costs	(6		)	(5		)	—			5			(6		)
Amortized gain on derivative hedges	(1		)	—			—			—			(1		)
Change in unrealized gain on available for sale securities	5			—			5			(5		)	5
Other comprehensive income (loss)	(2		)	(5		)	5			—			(2		)
Income taxes (benefits) on other comprehensive income (loss)	(1		)	(2		)	2			—			(1		)
Other comprehensive income (loss), net of tax	(1		)	(3		)	3			—			(1		)
COMPREHENSIVE INCOME	$	1		$	88		$	100		$	(188	)	$	1

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS

(Unaudited)



As of March 31, 2014	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	583		—		—		—			583
Affiliated companies	278		185		180		(274		)	369
Other	60		18		73		—			151
Notes receivable from affiliated companies	457		449		230		(921		)	215
Materials and supplies	63		148		216		—			427
Derivatives	244		—		—		—			244
Collateral	544		—		—		—			544
Prepayments and other	100		79		—		—			179
	2,329		881		699		(1,195		)	2,714
PROPERTY, PLANT AND EQUIPMENT:
In service	106		6,148		6,925		(383		)	12,796
Less — Accumulated provision for depreciation	30		1,978		3,038		(189		)	4,857
	76		4,170		3,887		(194		)	7,939
Construction work in progress	26		130		1,200		—			1,356
	102		4,300		5,087		(194		)	9,295
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,323		—			1,323
Investment in affiliated companies	5,891		—		—		(5,891		)	—
Other	—		11		—		—			11
	5,891		11		1,323		(5,891		)	1,334

DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits	—		105		—		(105		)	—
Customer intangibles	91		—		—		—			91
Goodwill	23		—		—		—			23
Property taxes	—		11		19		—			30
Unamortized sale and leaseback costs	—		—		—		197			197
Derivatives	65		—		—		—			65
Other	72		223		9		(154		)	150
	251		339		28		(62		)	556
	$	8,573	$	5,531	$	7,137	$	(7,342	)	$	13,899

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	1	$	120	$	366	$	(22	)	$	465
Short-term borrowings-
Affiliated companies	636		283		—		(919		)	—
Other	550		5		—		—			555
Accounts payable-
Affiliated companies	373		19		240		(305		)	327
Other	183		112		—		—			295
Accrued taxes	3		68		38		(12		)	97
Derivatives	159		—		—		—			159
Other	51		62		21		80			214
	1,956		669		665		(1,178		)	2,112
CAPITALIZATION:
Total equity	5,807		2,343		3,548		(5,865		)	5,833
Long-term debt and other long-term obligations	712		2,094		931		(1,186		)	2,551
	6,519		4,437		4,479		(7,051		)	8,384
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		850			850
Accumulated deferred income taxes	11		—		763		36			810
Asset retirement obligations	—		188		841		—			1,029
Retirement benefits	22		167		—		—			189
Derivatives	36		—		—		—			36
Other	29		70		389		1			489
	98		425		1,993		887			3,403
	$	8,573	$	5,531	$	7,137	$	(7,342	)	$	13,899

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS

(Unaudited)



As of December 31, 2013	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	539		—		—		—			539
Affiliated companies	938		787		227		(916		)	1,036
Other	52		12		17		—			81
Notes receivable from affiliated companies	203		23		683		(909		)	—
Materials and supplies	76		159		213		—			448
Derivatives	165		—		—		—			165
Collateral	136		—		—		—			136
Prepayments and other	52		50		7		—			109
	2,161		1,033		1,147		(1,825		)	2,516
PROPERTY, PLANT AND EQUIPMENT:
In service	104		6,105		6,645		(382		)	12,472
Less — Accumulated provision for depreciation	28		1,953		2,962		(188		)	4,755
	76		4,152		3,683		(194		)	7,717
Construction work in progress	23		148		1,137		—			1,308
	99		4,300		4,820		(194		)	9,025
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,276		—			1,276
Investment in affiliated companies	5,801		—		—		(5,801		)	—
Other	—		11		—		—			11
	5,801		11		1,276		(5,801		)	1,287

ASSETS HELD FOR SALE	—		122		—		—			122

DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits	—		131		—		(131		)	—
Customer intangibles	95		—		—		—			95
Goodwill	23		—		—		—			23
Property taxes	—		15		26		—			41
Unamortized sale and leaseback costs	—		—		—		168			168
Derivatives	53		—		—		—			53
Other	81		228		18		(155		)	172
	252		374		44		(118		)	552
	$	8,313	$	5,840	$	7,287	$	(7,938	)	$	13,502

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	1	$	367	$	547	$	(23	)	$	892
Short-term borrowings-
Affiliated companies	977		212		151		(909		)	431
Other	—		4		—		—			4
Accounts payable-
Affiliated companies	741		400		362		(738		)	765
Other	94		196		—		—			290
Accrued taxes	204		23		23		(184		)	66
Derivatives	110		—		—		—			110
Other	70		63		18		46			197
	2,197		1,265		1,101		(1,808		)	2,755
CAPITALIZATION:
Total equity	5,312		2,283		3,493		(5,776		)	5,312
Long-term debt and other long-term obligations	712		1,860		742		(1,184		)	2,130
	6,024		4,143		4,235		(6,960		)	7,442
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		858			858
Accumulated deferred income taxes	32		—		736		(27		)	741
Asset retirement obligations	—		187		828		—			1,015
Retirement benefits	22		163		—		—			185
Derivatives	14		—		—		—			14
Other	24		82		387		(1		)	492
	92		432		1,951		830			3,305
	$	8,313	$	5,840	$	7,287	$	(7,938	)	$	13,502

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Unaudited)



For the Three Months Ended March 31, 2014	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(450	)	$	87		$	51		$	—		$	(312	)
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Long-term debt	—			235			182			—			417
Short-term borrowings, net	209			72			—			(161		)	120
Equity contribution from parent	500			—			—			—			500
Redemptions and Repayments-
Long-term debt	—			(248		)	(197		)	—			(445		)
Short-term borrowings, net	—			—			(151		)	151			—
Other	(1		)	(2		)	(1		)	—			(4		)
Net cash provided from (used for) financing activities	708			57			(167		)	(10		)	588
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(2		)	(28		)	(268		)	—			(298		)
Nuclear fuel	—			—			(55		)	—			(55		)
Proceeds from asset sales	—			307			—			—			307
Sales of investment securities held in trusts	—			—			423			—			423
Purchases of investment securities held in trusts	—			—			(438		)	—			(438		)
Loans to affiliated companies, net	(254		)	(425		)	454			10			(215		)
Other	(2		)	2			—			—			—
Net cash provided from (used for) investing activities	(258		)	(144		)	116			10			(276		)
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

(Unaudited)



For the Three Months Ended March 31, 2013	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(529	)	$	298		$	36		$	—		$	(195	)
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Short-term borrowings, net	894			—			586			(778		)	702
Redemptions and Repayments-
Long-term debt	(369		)	(107		)	—			—			(476		)
Short-term borrowings, net	—			(76		)	—			76			—
Tender premiums	(67		)	—			—			—			(67		)
Other	—			(1		)	—			—			(1		)
Net cash provided from financing activities	458			(184		)	586			(702		)	158

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(5		)	(138		)	(74		)	—			(217		)
Nuclear fuel	—			—			(27		)	—			(27		)
Proceeds from asset sales	—			17			—			—			17
Sales of investment securities held in trusts	—			—			252			—			252
Purchases of investment securities held in trusts	—			—			(265		)	—			(265		)
Loans to affiliated companies, net	75			7			(508		)	702			276
Other	1			—			—			—			1
Net cash used for investing activities	71			(114		)	(622		)	702			37
Net change in cash and cash equivalents	—			—			—			—			—
Cash and cash equivalents at beginning of period	—			3			—			—			3
Cash and cash equivalents at end of period	$	—		$	3		$	—		$	—		$	3