SUPPLEMENTAL GUARANTOR INFORMATION

In 2007, FG completed a sale and leaseback transaction for a 93.83% undivided interest in Bruce Mansfield Unit 1. FG's parent company 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 FG or its parent company, 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 three months ended March 31, 2017 and 2016, Condensed Consolidating Balance Sheets as of March 31, 2017 and December 31, 2016, and Condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2017 and 2016, for the parent and guarantor and non-guarantor subsidiaries are presented below. These statements are provided as FG's parent company 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 the parent company using the equity method. Results of operations for FG and NG are, therefore, reflected in their parent company's 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 (LOSS) AND COMPREHENSIVE INCOME (LOSS)


For the Three Months Ended March 31, 2017	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME (LOSS)

REVENUES	$	880		$	236		$	336		$	(538	)	$	914

OPERATING EXPENSES:
Fuel	—			98			46			—			144
Purchased power from affiliates	663			—			38			(538		)	163
Purchased power from non-affiliates	160			—			—			—			160
Other operating expenses	114			225			167			12			518
Provision for depreciation	3			7			15			—			25
General taxes	6			8			7			—			21
Total operating expenses	946			338			273			(526		)	1,031

OPERATING INCOME (LOSS)	(66		)	(102		)	63			(12		)	(117		)

OTHER INCOME (EXPENSE):
Investment income (loss), including net income (loss) from equity investees	(18		)	10			27			1			20
Miscellaneous income	—			—			5			—			5
Interest expense — affiliates	(18		)	(3		)	(1		)	20			(2		)
Interest expense — other	(11		)	(27		)	(11		)	14			(35		)
Capitalized interest	—			1			7			—			8
Total other income (expense)	(47		)	(19		)	27			35			(4		)

INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)	(113		)	(121		)	90			23			(121		)

INCOME TAXES (BENEFITS)	(33		)	(42		)	33			1			(41		)

NET INCOME (LOSS)	$	(80	)	$	(79	)	$	57		$	22		$	(80	)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

NET INCOME (LOSS)	$	(80	)	$	(79	)	$	57		$	22		$	(80	)

OTHER COMPREHENSIVE INCOME (LOSS):
Pension and OPEB prior service costs	(3		)	(3		)	—			3			(3		)
Change in unrealized gains on available-for-sale securities	16			—			16			(16		)	16
Other comprehensive income (loss)	13			(3		)	16			(13		)	13
Income taxes (benefits) on other comprehensive income (loss)	5			(1		)	6			(5		)	5
Other comprehensive income (loss), net of tax	8			(2		)	10			(8		)	8
COMPREHENSIVE INCOME (LOSS)	$	(72	)	$	(81	)	$	67		$	14		$	(72	)



FIRSTENERGY SOLUTIONS CORP.
CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


For the Three Months Ended March 31, 2016	FES			FG			NG			Eliminations			Consolidated
	(In millions)
STATEMENTS OF INCOME

REVENUES	$	1,155		$	415		$	531		$	(902	)	$	1,199

OPERATING EXPENSES:
Fuel	—			119			46			—			165
Purchased power from affiliates	927			—			57			(902		)	82
Purchased power from non-affiliates	377			—			—			—			377
Other operating expenses	4			71			153			12			240
Provision for depreciation	3			31			50			(1		)	83
General taxes	8			10			8			—			26
Total operating expenses	1,319			231			314			(891		)	973

OPERATING INCOME (LOSS)	(164		)	184			217			(11		)	226

OTHER INCOME (EXPENSE):
Investment income, including net income from equity investees	249			6			17			(259		)	13
Miscellaneous income	2			—			—			—			2
Interest expense — affiliates	(9		)	(2		)	(2		)	11			(2		)
Interest expense — other	(13		)	(26		)	(11		)	14			(36		)
Capitalized interest	—			2			8			—			10
Total other income (expense)	229			(20		)	12			(234		)	(13		)

INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS)	65			164			229			(245		)	213

INCOME TAXES (BENEFITS)	(66		)	61			86			1			82

NET INCOME (LOSS)	$	131		$	103		$	143		$	(246	)	$	131

STATEMENTS OF COMPREHENSIVE INCOME

NET INCOME (LOSS)	$	131		$	103		$	143		$	(246	)	$	131

OTHER COMPREHENSIVE INCOME (LOSS)
Pension and OPEB prior service costs	(4		)	(3		)	—			3			(4		)
Change in unrealized gains on available-for-sale securities	23			—			23			(23		)	23
Other comprehensive income (loss)	19			(3		)	23			(20		)	19
Income taxes (benefits) on other comprehensive income (loss)	7			(1		)	8			(7		)	7
Other comprehensive income (loss), net of tax	12			(2		)	15			(13		)	12
COMPREHENSIVE INCOME (LOSS)	$	143		$	101		$	158		$	(259	)	$	143

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS



As of March 31, 2017	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	173		—		—		—			173
Affiliated companies	266		188		237		(315		)	376
Other	14		3		34		—			51
Notes receivable from affiliated companies	457		1,675		1,285		(3,417		)	—
Materials and supplies	34		135		83		—			252
Derivatives	43		—		—		—			43
Collateral	106		1		—		—			107
Prepayments and other	44		6		1		—			51
	1,137		2,010		1,640		(3,732		)	1,055
PROPERTY, PLANT AND EQUIPMENT:
In service	121		2,550		4,718		(281		)	7,108
Less — Accumulated provision for depreciation	56		1,931		4,198		(187		)	5,998
	65		619		520		(94		)	1,110
Construction work in progress	3		58		427		—			488
	68		677		947		(94		)	1,598
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,593		—			1,593
Investment in affiliated companies	2,911		—		—		(2,911		)	—
Other	—		10		—		—			10
	2,911		10		1,593		(2,911		)	1,603

DEFERRED CHARGES AND OTHER ASSETS:
Property taxes	—		9		21		—			30
Accumulated deferred income tax benefits	392		1,305		843		(272		)	2,268
Derivatives	17		—		—		—			17
Other	33		335		—		25			393
	442		1,649		864		(247		)	2,708
	$	4,558	$	4,346	$	5,044	$	(6,984	)	$	6,964

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	—	$	171	$	5	$	(26	)	$	150
Short-term borrowings- affiliated companies	3,069		461		1		(3,417		)	114
Accounts payable-
Affiliated companies	446		81		198		(409		)	316
Other	26		81		—		—			107
Accrued taxes	50		42		61		(16		)	137
Derivatives	21		4		—		—			25
Other	32		101		15		46			194
	3,644		941		280		(3,822		)	1,043
CAPITALIZATION:
Total equity	146		741		2,073		(2,814		)	146
Long-term debt and other long-term obligations	691		2,093		1,120		(1,092		)	2,812
	837		2,834		3,193		(3,906		)	2,958
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		748			748
Accumulated deferred income taxes	4		—		—		(4		)	—
Retirement benefits	27		175		—		—			202
Asset retirement obligations	—		189		726		—			915
Derivatives	3		—		—		—			3
Other	43		207		845		—			1,095
	77		571		1,571		744			2,963
	$	4,558	$	4,346	$	5,044	$	(6,984	)	$	6,964

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING BALANCE SHEETS



As of December 31, 2016	FES		FG		NG		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2	$	—	$	—		$	2
Receivables-
Customers	213		—		—		—			213
Affiliated companies	332		315		417		(612		)	452
Other	17		2		8		—			27
Notes receivable from affiliated companies	501		1,585		1,294		(3,351		)	29
Materials and supplies	45		142		80		—			267
Derivatives	137		—		—		—			137
Collateral	157		—		—		—			157
Prepayments and other	38		24		1		—			63
	1,440		2,070		1,800		(3,963		)	1,347
PROPERTY, PLANT AND EQUIPMENT:
In service	120		2,524		4,703		(290		)	7,057
Less — Accumulated provision for depreciation	52		1,920		4,144		(187		)	5,929
	68		604		559		(103		)	1,128
Construction work in progress	2		67		358		—			427
	70		671		917		(103		)	1,555
INVESTMENTS:
Nuclear plant decommissioning trusts	—		—		1,552		—			1,552
Investment in affiliated companies	2,923		—		—		(2,923		)	—
Other	—		9		1		—			10
	2,923		9		1,553		(2,923		)	1,562

DEFERRED CHARGES AND OTHER ASSETS:
Property taxes	—		12		28		—			40
Accumulated deferred income tax benefits	395		1,271		883		(270		)	2,279
Derivatives	77		—		—		—			77
Other	33		327		—		21			381
	505		1,610		911		(249		)	2,777
	$	4,938	$	4,360	$	5,181	$	(7,238	)	$	7,241

LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES:
Currently payable long-term debt	$	—	$	200	$	5	$	(26	)	$	179
Short-term borrowings - affiliated companies	2,969		483		—		(3,351		)	101
Accounts payable-
Affiliated companies	743		107		406		(706		)	550
Other	17		93		—		—			110
Accrued taxes	50		48		61		(16		)	143
Derivatives	71		6		—		—			77
Other	56		54		10		36			156
	3,906		991		482		(4,063		)	1,316
CAPITALIZATION:
Total equity	218		828		2,006		(2,834		)	218
Long-term debt and other long-term obligations	691		2,093		1,120		(1,091		)	2,813
	909		2,921		3,126		(3,925		)	3,031
NONCURRENT LIABILITIES:
Deferred gain on sale and leaseback transaction	—		—		—		757			757
Accumulated deferred income taxes	4		3		—		(7		)	—
Retirement benefits	25		172		—		—			197
Asset retirement obligations	—		188		713		—			901
Derivatives	52		—		—		—			52
Other	42		85		860		—			987
	123		448		1,573		750			2,894
	$	4,938	$	4,360	$	5,181	$	(7,238	)	$	7,241

FIRSTENERGY SOLUTIONS CORP.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS



For the Three Months Ended March 31, 2017	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(142	)	$	163		$	200		$	—		$	221
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Short-term borrowings, net	100			—			1			(88		)	13
Redemptions and Repayments-
Long-term debt	—			(29		)	—			—			(29		)
Short-term borrowings, net	—			(22		)	—			22			—
Other	(1		)	(2		)	—			—			(3		)
Net cash provided from (used for) financing activities	99			(53		)	1			(66		)	(19		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	—			(21		)	(64		)	—			(85		)
Nuclear fuel	—			—			(132		)	—			(132		)
Sales of investment securities held in trusts	—			—			231			—			231
Purchases of investment securities held in trusts	—			—			(245		)	—			(245		)
Loans to affiliated companies, net	43			(89		)	9			66			29
Net cash provided from (used for) investing activities	43			(110		)	(201		)	66			(202		)
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 Three Months Ended March 31, 2016	FES			FG			NG			Eliminations			Consolidated
	(In millions)

NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES	$	(356	)	$	278		$	307		$	—		$	229
CASH FLOWS FROM FINANCING ACTIVITIES:
New Financing-
Short-term borrowings, net	352			8			1			(312		)	49
Redemptions and Repayments-
Short-term borrowings, net	—			(11		)	—			11			—
Other	—			(3		)	—			—			(3		)
Net cash provided from (used for) financing activities	352			(6		)	1			(301		)	46

CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions	(27		)	(53		)	(63		)	—			(143		)
Nuclear fuel	—			—			(149		)	—			(149		)
Sales of investment securities held in trusts	—			—			138			—			138
Purchases of investment securities held in trusts	—			—			(151		)	—			(151		)
Cash Investments	10			—			—			—			10
Loans to affiliated companies, net	12			(219		)	(83		)	301			11
Other	9			—			—			—			9
Net cash provided from (used for) investing activities	4			(272		)	(308		)	301			(275		)
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