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   &lt;div align="justify" style="font-size: 10pt; margin-top: 0pt"&gt;&lt;b&gt;&lt;/b&gt;
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;&lt;b&gt;1. ORGANIZATION AND BASIS OF PRESENTATION&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;FirstEnergy is a diversified energy company that holds, directly or indirectly, all of the
   outstanding common stock of its principal subsidiaries: OE, CEI, TE, Penn (a wholly owned
   subsidiary of OE), ATSI, JCP&amp;#038;L, Met-Ed, Penelec, FENOC, FES and its subsidiaries FGCO and NGC and
   FESC.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;FirstEnergy and its subsidiaries follow GAAP and comply with the regulations, orders, policies and
   practices prescribed by the SEC, FERC and, as applicable, the PUCO, PPUC and NJBPU. The preparation
   of financial statements in conformity with GAAP requires management to make periodic estimates and
   assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and
   disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
   The reported results of operations are not indicative of results of operations for any future
   period. In preparing the financial statements, FirstEnergy and its subsidiaries have evaluated
   events and transactions for potential recognition or disclosure through the date the financial
   statements were issued.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;FirstEnergy and its subsidiaries consolidate all majority-owned subsidiaries over which they
   exercise control and, when applicable, entities for which they have a controlling financial
   interest. Intercompany transactions and balances are eliminated in consolidation unless otherwise
   prescribed by GAAP (see Note 15). FirstEnergy consolidates a VIE (see Note 8) when it is determined
   to be the VIE&amp;#8217;s primary beneficiary. Investments in non-consolidated affiliates over which
   FirstEnergy and its subsidiaries have the ability to exercise significant influence, but not
   control (20-50% owned companies, joint ventures and partnerships) are accounted for under the
   equity method. Under the equity method, the interest in the entity is reported as an investment in
   the Consolidated Balance Sheets and the percentage share of the entity&amp;#8217;s earnings is reported in
   the Consolidated Statements of Income. These footnotes combine results of FE, FES, OE, CEI, TE,
   JCP&amp;#038;L, Met-Ed and Penelec.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;Certain prior year amounts have been reclassified to conform to the current year presentation.
   Unless otherwise indicated, defined terms used herein have the meanings set forth in the
   accompanying Glossary of Terms.
   &lt;/div&gt;
   &lt;/div&gt;
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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