Segment Information

3 Months Ended

Mar. 31, 2020

FE and its subsidiaries are principally involved in the transmission, distribution and generation of electricity through its reportable segments, Regulated Distribution and Regulated Transmission.

The Regulated Distribution segment distributes electricity through FirstEnergy’s ten utility operating companies, serving approximately six million customers within 65,000 square miles of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York, and purchases power for its POLR, SOS, SSO and default service requirements in Ohio, Pennsylvania, New Jersey and Maryland. This segment also controls 3,790 MWs of regulated electric generation capacity located primarily in West Virginia, Virginia and New Jersey. The segment’s results reflect the costs of securing and delivering electric generation from transmission facilities to customers, including the deferral and amortization of certain related costs. Included within the segment are $875 million and $882 million of assets classified as held for sale as of March 31, 2020 and December 31, 2019, respectively, associated with the asset purchase and sale agreement with TMI-2 Solutions to transfer TMI-2 to TMI-2 Solutions, LLC. See Note 10, "Commitments, Guarantees and Contingencies" for additional information.

The Regulated Transmission segment provides transmission infrastructure owned and operated by the Transmission Companies and certain of FirstEnergy’s utilities (JCP&L, MP, PE and WP) to transmit electricity from generation sources to distribution facilities. The segment’s revenues are primarily derived from forward-looking formula rates at the Transmission Companies as well as stated transmission rates at JCP&L, MP, PE and WP. Effective January 1, 2020, JPC&L's transmission rates became forward-looking formula rates, subject to refund, pending further hearing and settlement proceedings. Both the forward-looking formula and stated rates recover costs that the regulatory agencies determine are permitted to be recovered and provide a return on transmission capital investment. Under forward-looking formula rates, the revenue requirement is updated annually based on a projected rate base and projected costs, which is subject to an annual true-up based on actual costs. The segment’s results also reflect the net transmission expenses related to the delivery of electricity on FirstEnergy’s transmission facilities.

Corporate/Other reflects corporate support costs not charged to FE’s subsidiaries, including FE’s retained Pension and OPEB assets and liabilities of the FES Debtors, interest expense on FE’s holding company debt and other businesses that do not constitute an operating segment. Reconciling adjustments for the elimination of inter-segment transactions and discontinued operations are shown separately in the following table of Segment Financial Information. As of March 31, 2020, 67 MWs of electric generating capacity, representing AE Supply’s OVEC capacity entitlement, was included in continuing operations of Corporate/Other. As of March 31, 2020, Corporate/Other had approximately $7.9 billion FE holding company debt.

Financial information for each of FirstEnergy’s reportable segments is presented in the tables below:

Segment Financial Information



For the Three Months Ended	Regulated Distribution			Regulated Transmission		Corporate/ Other			Reconciling Adjustments			FirstEnergy Consolidated
	(In millions)

March 31, 2020
External revenues	$	2,311		$	397	$	1		$	—		$	2,709
Internal revenues	47			4		—			(51		)	—
Total revenues	$	2,358		$	401	$	1		$	(51	)	$	2,709
Depreciation	223			76		2			16			317
Amortization of regulatory assets, net	49			3		—			—			52
Miscellaneous income (expense), net	75			6		25			(6		)	100
Interest expense	127			52		90			(6		)	263
Income taxes (benefits)	(32		)	34		(62		)	—			(60		)
Income (loss) from continuing operations	136			117		(229		)	—			24
Property additions	$	338		$	269	$	9		$	—		$	616

March 31, 2019
External revenues	$	2,526		$	352	$	5		$	—		$	2,883
Internal revenues	47			4		—			(51		)	—
Total revenues	$	2,573		$	356	$	5		$	(51	)	$	2,883
Depreciation	209			69		2			17			297
Amortization of regulatory assets, net	3			2		—			—			5
Miscellaneous income (expense), net	46			4		11			(7		)	54
Interest expense	122			45		93			(7		)	253
Income taxes (benefits)	89			31		(27		)	—			93
Income (loss) from continuing operations	329			104		(78		)	—			355
Property additions	$	318		$	231	$	5		$	—		$	554

As of March 31, 2020
Total assets	$	29,642		$	11,753	$	695		$	—		$	42,090
Total goodwill	$	5,004		$	614	$	—		$	—		$	5,618

As of December 31, 2019
Total assets	$	29,642		$	11,611	$	1,015		$	33		$	42,301
Total goodwill	$	5,004		$	614	$	—		$	—		$	5,618