XML 41 R29.htm IDEA: XBRL DOCUMENT v3.7.0.1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2017
Fair Value of Financial Instruments [Line Items]  
Assets and liabilities measured on recurring basis
The following tables set forth the recurring assets and liabilities that are accounted for at fair value by level within the fair value hierarchy:

FirstEnergy
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements
March 31, 2017
 
December 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
(In millions)
Corporate debt securities
$
—

 
$
1,244

 
$
—

 
$
1,244

 
$
—

 
$
1,247

 
$
—

 
$
1,247

Derivative assets - commodity contracts
—

 
60

 
—

 
60

 
10

 
200

 
—

 
210

Derivative assets - FTRs
—

 
—

 
—

 
—

 
—

 
—

 
7

 
7

Derivative assets - NUG contracts(1)
—

 
—

 
—

 
—

 
—

 
—

 
1

 
1

Equity securities(2)
982

 
—

 
—

 
982

 
925

 
—

 
—

 
925

Foreign government debt securities
—

 
95

 
—

 
95

 
—

 
78

 
—

 
78

U.S. government debt securities
—

 
152

 
—

 
152

 
—

 
161

 
—

 
161

U.S. state debt securities
—

 
250

 
—

 
250

 
—

 
246

 
—

 
246

Other(3)
164

 
128

 
—

 
292

 
199

 
123

 
—

 
322

Total assets
$
1,146

 
$
1,929

 
$
—

 
$
3,075

 
$
1,134

 
$
2,055

 
$
8

 
$
3,197

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities - commodity contracts
$
—

 
$
(26
)
 
$
—

 
$
(26
)
 
$
(6
)
 
$
(118
)
 
$
—

 
$
(124
)
Derivative liabilities - FTRs
—

 
—

 
(4
)
 
(4
)
 
—

 
—

 
(6
)
 
(6
)
Derivative liabilities - NUG contracts(1)
—

 
—

 
(103
)
 
(103
)
 
—

 
—

 
(108
)
 
(108
)
Total liabilities
$
—

 
$
(26
)
 
$
(107
)
 
$
(133
)
 
$
(6
)
 
$
(118
)
 
$
(114
)
 
$
(238
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets (liabilities)(4)
$
1,146

 
$
1,903

 
$
(107
)
 
$
2,942

 
$
1,128

 
$
1,937

 
$
(106
)
 
$
2,959


(1) 
NUG contracts are subject to regulatory accounting treatment and do not impact earnings.
(2) 
NDT funds hold equity portfolios whose performance is benchmarked against the Alerian MLP Index or the Wells Fargo Hybrid and Preferred Securities REIT index.
(3) 
Primarily consists of short-term cash investments.
(4) 
Excludes $(14) million and $(3) million as of March 31, 2017 and December 31, 2016, respectively, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
Reconciliation of changes in the fair value roll forward of level 3 measurements of NUG contracts
The following table provides a reconciliation of changes in the fair value of NUG contracts and FTRs that are classified as Level 3 in the fair value hierarchy for the periods ended March 31, 2017 and December 31, 2016:

 
NUG Contracts(1)
 
FTRs
 
Derivative Assets
 
Derivative Liabilities
 
Net
 
Derivative Assets
 
Derivative Liabilities
 
Net
 
(In millions)
January 1, 2016 Balance
$
1

 
$
(137
)
 
$
(136
)
 
$
8

 
$
(13
)
 
$
(5
)
Unrealized gain (loss)
2

 
(17
)
 
(15
)
 
(6
)
 
(4
)
 
(10
)
Purchases
—

 
—

 
—

 
16

 
(7
)
 
9

Settlements
(2
)
 
46

 
44

 
(11
)
 
18

 
7

December 31, 2016 Balance
$
1

 
$
(108
)
 
$
(107
)
 
$
7

 
$
(6
)
 
$
1

Unrealized loss
—

 
(6
)
 
(6
)
 
—

 
(1
)
 
(1
)
Settlements
(1
)
 
11

 
10

 
(7
)
 
3

 
(4
)
March 31, 2017 Balance
$
—

 
$
(103
)
 
$
(103
)
 
$
—

 
$
(4
)
 
$
(4
)

(1) 
NUG contracts are subject to regulatory accounting treatment and do not impact earnings.
Quantitative information for level 3 valuation
The following table provides quantitative information for FTRs and NUG contracts that are classified as Level 3 in the fair value hierarchy for the period ended March 31, 2017:
 
 
 
Fair Value, Net (In millions)
 
Valuation
Technique
 
Significant Input
 
Range
 
Weighted Average
 
Units
FTRs
 
$
(4
)
 
Model
 
RTO auction clearing prices
 
$(2.70) to $2.90
 
$0.30
 
Dollars/MWH
 
 
 
 
 
 
 
 
 
 
 
 
 
NUG Contracts
 
$
(103
)
 
Model
 
Generation
 
400 to 2,766,000
 
560,000

 
MWH
 
 
 
Regional electricity prices
 
$31.70 to $33.60
 
$31.70
 
Dollars/MWH
Amortized cost basis, unrealized gains and losses and fair values of investments in available-for-sale securities
The following table summarizes the amortized cost basis, unrealized gains (there were no unrealized losses) and fair values of investments held in NDT and nuclear fuel disposal trusts as of March 31, 2017 and December 31, 2016:

 
 
March 31, 2017(1)
 
December 31, 2016(2)
 
 
Cost Basis
 
Unrealized Gains
 
Fair Value
 
Cost Basis
 
Unrealized Gains
 
Fair Value
 
 
(In millions)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
 
FirstEnergy
 
$
1,746

 
$
38

 
$
1,784

 
$
1,735

 
$
38


$
1,773

FES
 
855

 
28

 
883

 
847

 
27

 
874

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
 
 
 
 
 
FirstEnergy
 
$
852

 
$
130

 
$
982

 
$
822

 
$
103

 
$
925

FES
 
578

 
89

 
667

 
564

 
70

 
634


(1) 
Excludes short-term cash investments: FirstEnergy - $53 million; FES - $43 million.
(2) 
Excludes short-term cash investments: FirstEnergy - $61 million; FES - $44 million.
Proceeds from the sale of investments in available-for-sale securities, realized gains and losses on those sales, and interest and dividend income
Proceeds from the sale of investments in AFS securities, realized gains and losses on those sales, OTTI and interest and dividend income for the three months ended March 31, 2017 and 2016 were as follows:

For the Three Months Ended
March 31, 2017
 
Sale Proceeds
 
Realized Gains
 
Realized Losses
 
OTTI
 
Interest and
Dividend Income
 
 
(In millions)
FirstEnergy
 
$
738

 
$
85

 
$
(63
)
 
$
(3
)
 
$
23

FES
 
231

 
64

 
(48
)
 
(3
)
 
14

 
 
 
 
 
 
 
 
 
 
 
March 31, 2016
 
Sale Proceeds
 
Realized Gains
 
Realized Losses
 
OTTI
 
Interest and Dividend Income
 
 
(In millions)
FirstEnergy
 
$
465

 
$
61

 
$
(50
)
 
$
(9
)
 
$
23

FES
 
138

 
42

 
(29
)
 
(8
)
 
13
Fair value and related carrying amounts of long-term debt and other long-term obligations
The following table provides the approximate fair value and related carrying amounts of long-term debt, which excludes capital lease obligations and net unamortized debt issuance costs, premiums and discounts:

 
March 31, 2017
 
December 31, 2016
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
 
(In millions)
FirstEnergy
$
19,921

 
$
20,029

 
$
19,885

 
$
19,829

FES
2,971

 
1,424

 
3,000

 
1,555
FES  
Fair Value of Financial Instruments [Line Items]  
Assets and liabilities measured on recurring basis
FES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements
March 31, 2017
 
December 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
(In millions)
Corporate debt securities
$
—

 
$
746

 
$
—

 
$
746

 
$
—

 
$
726

 
$
—

 
$
726

Derivative assets - commodity contracts
—

 
60

 
—

 
60

 
10

 
200

 
—

 
210

Derivative assets - FTRs
—

 
—

 
—

 
—

 
—

 
—

 
4

 
4

Equity securities(1)
667

 
—

 
—

 
667

 
634

 
—

 
—

 
634

Foreign government debt securities
—

 
62

 
—

 
62

 
—

 
58

 
—

 
58

U.S. government debt securities
—

 
30

 
—

 
30

 
—

 
48

 
—

 
48

U.S. state debt securities
—

 
3

 
—

 
3

 
—

 
3

 
—

 
3

Other(2)
2

 
87

 
—

 
89

 
2

 
81

 
—

 
83

Total assets
$
669

 
$
988

 
$
—

 
$
1,657

 
$
646

 
$
1,116

 
$
4

 
$
1,766

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities - commodity contracts
$
—

 
$
(26
)
 
$
—

 
$
(26
)
 
$
(6
)
 
$
(118
)
 
$
—

 
$
(124
)
Derivative liabilities - FTRs
—

 
—

 
(2
)
 
(2
)
 
—

 
—

 
(5
)
 
(5
)
Total liabilities
$
—

 
$
(26
)
 
$
(2
)
 
$
(28
)
 
$
(6
)
 
$
(118
)
 
$
(5
)
 
$
(129
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets (liabilities)(3)
$
669

 
$
962

 
$
(2
)
 
$
1,629

 
$
640

 
$
998

 
$
(1
)
 
$
1,637


(1) 
NDT funds hold equity portfolios whose performance is benchmarked against the Alerian MLP Index or the Wells Fargo Hybrid and Preferred Securities REIT index.
(2) 
Primarily consists of short-term cash investments.
(3) 
Excludes $(2) million and $2 million as of March 31, 2017 and December 31, 2016, respectively, of receivables, payables, taxes and accrued income associated with the financial instruments reflected within the fair value table.
Reconciliation of changes in the fair value roll forward of level 3 measurements of NUG contracts
The following table provides a reconciliation of changes in the fair value of FTRs held by FES and classified as Level 3 in the fair value hierarchy for the periods ended March 31, 2017 and December 31, 2016:

 
 
Derivative Asset
 
Derivative Liability
 
Net Asset (Liability)
 
 
(In millions)
January 1, 2016 Balance
 
$
5

 
$
(11
)
 
$
(6
)
Unrealized loss
 
(4
)
 
(3
)
 
(7
)
Purchases
 
10

 
(5
)
 
5

Settlements
 
(7
)
 
14

 
7

December 31, 2016 Balance
 
$
4

 
$
(5
)
 
$
(1
)
Settlements
 
(4
)
 
3

 
(1
)
March 31, 2017 Balance
 
$
—

 
$
(2
)
 
$
(2
)
Quantitative information for level 3 valuation
The following table provides quantitative information for FTRs held by FES that are classified as Level 3 in the fair value hierarchy for the period ended March 31, 2017:
 
 
 
Fair Value, Net (In millions)
 
Valuation
Technique
 
Significant Input
 
Range
 
Weighted Average
 
Units
FTRs
 
$
(2
)
 
Model
 
RTO auction clearing prices
 
($2.70) to $2.40
 
$0.20
 
Dollars/MWH