Capitalization (Tables)

6 Months Ended

Jun. 30, 2019

The changes in stockholders’ equity for the three and six months ended June 30, 2019 and 2018 for FirstEnergy are included in the following tables:



	Series A Convertible Preferred Stock					Common Stock			OPIC			AOCI			Accumulated Deficit			Total Stockholders’ Equity
(In millions)	Shares		Amount			Shares	Amount		OPIC			AOCI			Accumulated Deficit			Total Stockholders’ Equity
Balance, January 1, 2019	0.7		$	71		512	$	51	$	11,530		$	41		$	(4,879	)	$	6,814
Net income															320			320
Other comprehensive loss, net of tax												(5		)				(5		)
Stock-based compensation									7									7
Stock Investment Plan and certain share-based benefit plans						1			1									1
Cash dividends declared on common stock									(202		)							(202		)
Cash dividends declared on preferred stock									(3		)							(3		)
Conversion of Series A Convertible Preferred Stock	(0.5	)	(50		)	18	2		48									—
Balance, March 31, 2019	0.2		$	21		531	$	53	$	11,381		$	36		$	(4,559	)	$	6,932
Net income															$	312		$	312
Other comprehensive loss, net of tax												(5		)				(5		)
Stock-based compensation									9									9
Stock Investment Plan and certain share-based benefit plans						1			21									21
Balance, June 30, 2019	0.2		$	21		532	$	53	$	11,411		$	31		$	(4,247	)	$	7,269



	Series A Convertible Preferred Stock			Common Stock			OPIC			AOCI			Accumulated Deficit			Total Stockholders’ Equity
(In millions)	Shares	Amount		Shares	Amount		OPIC			AOCI			Accumulated Deficit			Total Stockholders’ Equity
Balance, January 1, 2018	—	$	—	445	$	44	$	10,001		$	142		$	(6,262	)	$	3,925
Net income													1,369			1,369
Other comprehensive loss, net of tax										(56		)				(56		)
Stock-based compensation							19									19
Stock Investment Plan and certain share-based benefit plans				2	1		5									6
Cash dividends declared on common stock							(343		)							(343		)
Cash dividends declared on preferred stock							(42		)							(42		)
Stock issuance ⁽¹⁾	1.6	162		30	3		2,297									2,462
Impact of adopting new accounting pronouncements ⁽²⁾													35			35
Balance, March 31, 2018	1.6	$	162	477	$	48	$	11,937		$	86		$	(4,858	)	$	7,375
Net income													$	299		$	299
Other comprehensive loss, net of tax										(13		)				(13		)
Stock-based compensation							19									19
Stock Investment Plan and certain share-based benefit plans				1			19									19
Balance, June 30, 2018	1.6	$	162	478	$	48	$	11,975		$	73		$	(4,559	)	$	7,699

⁽¹⁾The preferred stock included an embedded conversion option at a price that was below the fair value of the common stock on the commitment date. This beneficial conversion feature (BCF), which was approximately $296 million, was recorded to OPIC as well as the amortization of the BCF (deemed dividend of $261 million for the six months ended June 30, 2018) through the period from the issue date to the first allowable conversion

date (July 22, 2018). There is no net impact to OPIC for the three and six months ended June 30, 2018. Please see below for additional information on the issuance.

⁽²⁾ FirstEnergy adopted ASU 2016-01, “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” standard on January 1, 2018, and subsequently recorded a cumulative effect adjustment to retained earnings of $57 million representing unrealized gains on equity securities with FES NDTs that were previously recorded to AOCI. In addition, FirstEnergy adopted ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” and upon adoption, recorded a $22 million cumulative effect adjustment for stranded tax effects, such as pension and OPEB prior service costs and losses on derivative hedges, to retained earnings on January 1, 2018. These amounts are offset in other comprehensive loss and do not have an impact on total stockholders’ equity.