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, 2015, 2014, and 2013, Condensed Consolidating Balance Sheets as of December 31, 2015 and December 31, 2014, and Condensed Consolidating Statements of Cash Flows for the years ended December 31, 2015, 2014, and 2013, for FES (parent and guarantor), FG and NG (non-guarantor) are presented below. These statements are provided as FES 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 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



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	399			275			618			49			1,341
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
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):
Loss on debt redemptions	(3		)	(1		)	(2		)	—			(6		)
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	(53		)	(101		)	(52		)	60			(146		)
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 $70)	—			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 STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



For the Year Ended December 31, 2013	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	6,068		$	2,399		$	1,634		$	(3,928	)	$	6,173

OPERATING EXPENSES:
Fuel	—			1,056			206			—			1,262
Purchased power from affiliates	4,148			—			266			(3,928		)	486
Purchased power from non-affiliates	2,326			7			—			—			2,333
Other operating expenses	635			275			529			48			1,487
Pension and OPEB mark-to-market adjustment	(8		)	(37		)	(36		)	—			(81		)
Provision for depreciation	6			127			178			(5		)	306
General taxes	80			34			24			—			138
Total operating expenses	7,187			1,462			1,167			(3,885		)	5,931

OPERATING INCOME (LOSS)	(1,119		)	937			467			(43		)	242

OTHER INCOME (EXPENSE):
Loss on debt redemptions	(103		)	—			—			—			(103		)
Investment income, including net income from equity investees	847			1			25			(857		)	16
Miscellaneous income	4			24			—			—			28
Interest expense — affiliates	(13		)	(5		)	(6		)	14			(10		)
Interest expense — other	(63		)	(104		)	(54		)	61			(160		)
Capitalized interest	1			2			36			—			39
Total other income (expense)	673			(82		)	1			(782		)	(190		)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (BENEFITS)	(446		)	855			468			(825		)	52

INCOME TAXES (BENEFITS)	(506		)	365			135			12			6

INCOME FROM CONTINUING OPERATIONS	60			490			333			(837		)	46

Discontinued operations (net of income taxes of $8)	—			14			—			—			14

NET INCOME	$	60		$	504		$	333		$	(837	)	$	60

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME	$	60		$	504		$	333		$	(837	)	$	60

OTHER COMPREHENSIVE LOSS:
Pension and OPEB prior service costs	(15		)	(13		)	—			13			(15		)
Amortized gain on derivative hedges	(6		)	—			—			—			(6		)
Change in unrealized gain on available-for-sale securities	(8		)	—			(8		)	8			(8		)
Other comprehensive loss	(29		)	(13		)	(8		)	21			(29		)
Income tax benefits on other comprehensive loss	(11		)	(5		)	(3		)	8			(11		)
Other comprehensive loss, net of tax	(18		)	(8		)	(5		)	13			(18		)
COMPREHENSIVE INCOME	$	42		$	496		$	328		$	(824	)	$	42

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	33		318		21		12			384
	496		346		49		(304		)	587
	$	9,506	$	6,669	$	8,210	$	(11,200	)	$	13,185

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	694		2,122		847		(1,136		)	2,527
	6,299		5,066		5,323		(8,556		)	8,132
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		791			791
Accumulated deferred income taxes	6		—		697		(103		)	600
Asset retirement obligations	—		191		640		—			831
Retirement benefits	27		305		—		—			332
Derivatives	37		1		—		—			38
Other	35		61		803		—			899
	105		558		2,140		688			3,491
	$	9,506	$	6,669	$	8,210	$	(11,200	)	$	13,185

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS



As of December 31, 2014	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	415		—		—		—			415
Affiliated companies	484		487		674		(1,120		)	525
Other	66		21		20		—			107
Notes receivable from affiliated companies	339		838		272		(1,449		)	—
Materials and supplies	67		202		223		—			492
Derivatives	147		—		—		—			147
Collateral	229		—		—		—			229
Prepayments and other	48		19		—		1			68
	1,795		1,569		1,189		(2,568		)	1,985
PROPERTY, PLANT AND EQUIPMENT:
In service	133		6,217		7,628		(382		)	13,596
Less — Accumulated provision for depreciation	36		2,058		3,305		(191		)	5,208
	97		4,159		4,323		(191		)	8,388
Construction work in progress	3		206		801		—			1,010
	100		4,365		5,124		(191		)	9,398
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,365		—			1,365
Investment in affiliated companies	6,607		—		—		(6,607		)	—
Other	—		10		—		—			10
	6,607		10		1,365		(6,607		)	1,375

DEFERRED CHARGES AND OTHER ASSETS:
Accumulated deferred income tax benefits	284		98		—		(382		)	—
Customer intangibles	78		—		—		—			78
Goodwill	23		—		—		—			23
Property taxes	—		14		27		—			41
Unamortized sale and leaseback costs	—		—		—		—			—
Derivatives	52		—		—		—			52
Other	34		277		7		13			331
	471		389		34		(369		)	525
	$	8,973	$	6,333	$	7,712	$	(9,735	)	$	13,283

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	18	$	164	$	348	$	(24	)	$	506
Short-term borrowings-
Affiliated companies	1,135		321		28		(1,449		)	35
Other	90		9		—		—			99
Accounts payable-
Affiliated companies	1,068		197		219		(1,068		)	416
Other	46		202		—		—			248
Accrued taxes	2		62		161		(123		)	102
Derivatives	166		—		—		—			166
Other	72		56		9		47			184
	2,597		1,011		765		(2,617		)	1,756
CAPITALIZATION:
Total equity	5,585		2,561		4,014		(6,575		)	5,585
Long-term debt and other long-term obligations	695		2,215		859		(1,161		)	2,608
	6,280		4,776		4,873		(7,736		)	8,193
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		824			824
Accumulated deferred income taxes	13		—		678		(207		)	484
Asset retirement obligations	—		189		652		—			841
Retirement benefits	36		288		—		—			324
Derivatives	14		—		—		—			14
Other	33		69		744		1			847
	96		546		2,074		618			3,334
	$	8,973	$	6,333	$	7,712	$	(9,735	)	$	13,283

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

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Year Ended December 31, 2013	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(1,429	)	$	753		$	776		$	(22	)	$	78
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Short-term borrowings, net	864			371			150			(954		)	431
Equity contribution from parent	1,500			—			—			—			1,500
Redemptions and Repayments-
Long-term debt	(770		)	(364		)	(90		)	22			(1,202		)
Short-term borrowings, net	(244		)	(505		)	—			749			—
Tender premiums	(67		)	—			—			—			(67		)
Other	(4		)	(5		)	—			—			(9		)
Net cash provided from (used for) financing activities	1,279			(503		)	60			(183		)	653
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(12		)	(256		)	(449		)	—			(717		)
Nuclear fuel	—			—			(250		)	—			(250		)
Proceeds from asset sales	—			21			—			—			21
Sales of investment securities held in trusts	—			—			940			—			940
Purchases of investment securities held in trusts	—			—			(1,000		)	—			(1,000		)
Loans to affiliated companies, net	163			(15		)	(77		)	205			276
Other	(1		)	(1		)	—			—			(2		)
Net cash provided from (used for) investing activities	150			(251		)	(836		)	205			(732		)
Net change in cash and cash equivalents	—			(1		)	—			—			(1		)
Cash and cash equivalents at beginning of period	—			3			—			—			3
Cash and cash equivalents at end of period	$	—		$	2		$	—		$	—		$	2