Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

Summarized results of discontinued operations for the years ended December 31, 2018, 2017 and 2016 were as follows:

	For the Years Ended December 31,
(In millions)	2018			2017			2016
Revenues	$	989		$	3,055		$	3,794
Fuel	(304		)	(879		)	(1,073		)
Purchased power	(84		)	(268		)	(533		)
Other operating expenses	(435		)	(1,499		)	(1,263		)
Provision for depreciation	(96		)	(109		)	(378		)
General taxes	(35		)	(103		)	(129		)
Impairment of assets(2)	—			(2,358		)	(10,622		)
Other expense, net	(83		)	(94		)	(106		)
Loss from discontinued operations, before tax	(48		)	(2,255		)	(10,310		)
Income tax expense (benefit)(1)	61			(820		)	(3,582		)
Loss from discontinued operations, net of tax	(109		)	(1,435		)	(6,728		)
Gain on disposal of FES and FENOC, net of tax	435			—			—
Income (Loss) from discontinued operations	$	326		$	(1,435	)	$	(6,728	)

⁽¹⁾ In conjunction with the sale of an interest in Bath County, AGC wrote off and recognized as a benefit in discontinued operations in the second quarter of 2018 its excess deferred tax liabilities of $32 million, created from the Tax Act, since they are not required to be refunded to ratepayers. Nondeductible interest of $60 million in 2018 has been recorded in discontinued operations as it is entirely attributed to the anticipated inclusion of the FES Debtors in the FirstEnergy consolidated tax return. See further discussion in Note 7, "Taxes".

⁽²⁾ Impairment of assets included in discontinued operations for the year ended December 31, 2017 include amounts related to impairment of the FES nuclear facilities, the Pleasants Power Station ($120 million in the fourth quarter of 2017), and the competitive asset generation sale ($193 million during 2017). Amounts included for the year ended December 31, 2016, include impairment of FES coal and nuclear plants and goodwill associated with AE Supply and FES, as well as other competitive assets including materials and supplies.

The gain on disposal that was recognized in the year ended December 31, 2018, consisted of the following:

(In millions)
Removal of investment in FES and FENOC	$	2,193
Assumption of benefit obligations retained at FE	(820		)
Guarantees and credit support provided by FE	(139		)
Reserve on receivables and allocated Pension/OPEB mark-to-market	(914		)
Settlement consideration and services credit	(1,197		)
Loss on disposal of FES and FENOC, before tax	(877		)
Income tax benefit, including estimated worthless stock deduction	1,312
Gain on disposal of FES and FENOC, net of tax	$	435

The following table summarizes the major classes of assets and liabilities as discontinued operations as of December 31, 2018, and 2017:

(In millions)	December 31, 2018		December 31, 2017
Carrying amount of the major classes of assets included in discontinued operations:
Cash and cash equivalents	$	—	$	1
Restricted cash	—		3
Receivables	—		202
Materials and supplies	25		227
Prepaid taxes and other	—		199
Total current assets	25		632
Property, plant and equipment	—		1,132
Investments	—		1,875
Other noncurrent assets	—		356
Total noncurrent assets	—		3,363
Total assets included in discontinued operations	$	25	$	3,995
Carrying amount of the major classes of liabilities included in discontinued operations:
Currently payable long-term debt	$	—	$	524
Accounts payable	—		200
Accrued taxes	—		38
Accrued compensation and benefits	—		79
Other current liabilities	—		137
Total current liabilities	—		978
Long-term debt and other long-term obligations	—		2,428
Accumulated deferred income taxes (1)	—		(1,812		)
Asset retirement obligations	—		1,945
Deferred gain on sale and leaseback transaction	—		723
Other noncurrent liabilities	—		244
Total noncurrent liabilities	—		3,528
Total liabilities included in discontinued operations	$	—	$	4,506

⁽¹⁾ Represents an increase in FirstEnergy's ADIT liability as an ADIT asset was removed upon deconsolidation of FES and FENOC.

FirstEnergy's Consolidated Statement of Cash Flows combines cash flows from discontinued operations with cash flows from continuing operations within each cash flow category. The following table summarizes the major classes of cash flow items as discontinued operations for the years ended December 31, 2018, 2017 and 2016:

	For the Years Ended December 31,
(In millions)	2018			2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from discontinued operations	$	326		$	(1,435	)	$	(6,728	)
Gain on disposal, net of tax	(435		)	—			—
Depreciation and amortization, including nuclear fuel, regulatory assets, net, intangible assets and deferred debt-related costs	110			333			669
Deferred income taxes and investment tax credits, net	61			(842		)	(3,582		)
Unrealized (gain) loss on derivative transactions	(10		)	81			9
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(27		)	(317		)	(615		)
Nuclear fuel	—			(254		)	(232		)
Sales of investment securities held in trusts	109			940			717
Purchases of investment securities held in trusts	(122		)	(999		)	(783		)