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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 21, 2017



Commission
 
Registrant; State of Incorporation;
 
I.R.S. Employer
File Number
 
Address; and Telephone Number
 
Identification No.
 
 
 
 
 
333-21011
 
FIRSTENERGY CORP.
 
34-1843785
 
 
(An Ohio Corporation)
 
 
 
 
76 South Main Street
 
 
 
 
Akron, OH  44308
 
 
 
 
Telephone (800)736-3402
 
 
 
 
 
 
 















Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02 Results of Operations and Financial Condition

On February 21, 2017, FirstEnergy Corp. (FirstEnergy or Company) issued two public documents regarding, among other things, results for the three months and year ended December 31, 2016 and revised operating earnings guidance for 2017. FirstEnergy’s Press Release and Consolidated Report to the Financial Community, which are attached as Exhibits 99.1 and 99.2 hereto and incorporated herein by reference, contain non-GAAP financial measures. Pursuant to the requirements of Regulation G and Item 10(e)(i) of Regulation S-K, FirstEnergy has provided quantitative reconciliations within the Press Release and Consolidated Report to the Financial Community of the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP). The information in the Press Release and the Consolidated Report to the Financial Community and the information contained in this Item 2.02 and in Item 9.01 below shall not be deemed filed for purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibits 99.1 and 99.2 be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

The Press Release and Consolidated Report to the Financial Community contain references to non-GAAP financial measures including, among others, Operating earnings, Adjusted Equity, Adjusted Debt, and Adjusted Capitalization. In addition, Basic EPS-Operating, calculated on a segment basis, is also a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Operating earnings are not calculated in accordance with GAAP because they exclude the impact of “special items”. Special items represent charges incurred or benefits realized that management believes are not indicative of, or may obscure trends useful in evaluating the Company’s ongoing core activities and results of operations or otherwise warrant separate classification. Special items are not necessarily non-recurring. Basic EPS-Operating for each segment is calculated by dividing segment Operating earnings (losses), which exclude special items as discussed above, by the basic weighted average shares outstanding for the period. Management uses non-GAAP financial measures such as Operating earnings to evaluate the Company’s performance and manage its operations and frequently references these non-GAAP financial measures in its decision-making, using them to facilitate historical and ongoing performance comparisons. Additionally, management uses Basic EPS-Operating by segment to further evaluate FirstEnergy’s performance by segment and references this non-GAAP financial measure in its decision-making. Management believes that the non-GAAP financial measures of Operating earnings and Basic EPS-Operating by segment provide consistent and comparable measures of performance of its businesses on an ongoing basis using the same measures management uses in forecasting, budgeting, long-term planning, and setting compensation. Management also believes that such measures are useful to shareholders and other interested parties to understand performance trends and evaluate the Company against its peer group by presenting period-over-period operating results without the effect of certain charges or benefits that may not be consistent or comparable across periods or across the Company’s peer group. Management uses Adjusted Equity, Adjusted Debt, and Adjusted Capitalization to calculate and monitor its compliance with the debt to total capitalization financial covenant under the FirstEnergy credit facility and term loans. These financial measures, as calculated in accordance with the FirstEnergy credit facility and term loans, help shareholders understand FirstEnergy's compliance with, and provide a basis for understanding FirstEnergy's incremental debt capacity under, the debt to total capitalization financial covenant. The financial covenant requires FirstEnergy to maintain a consolidated debt to total capitalization ratio, as defined in the facilities, of no more than 65%, measured at the end of each fiscal quarter. All of these non-GAAP financial measures are intended to complement, and are not considered as alternatives to, the most directly comparable GAAP financial measures. Also, the non-GAAP financial measures may not be comparable to similarly titled measures used by other entities.

Item 7.01 Regulation FD Disclosure

On February 21, 2017, FirstEnergy expects to post to its website at www.firstenergycorp.com/ir its latest investor FactBook, which has been, among other things, updated in certain respects with information as of the fourth quarter and year ended December 31, 2016.


Item 9.01 Financial Statements and Exhibits
(d)
Exhibits
Exhibit No.
 
Description
99.1
 
Press Release issued by FirstEnergy Corp., dated February 21, 2017
99.2
 
Consolidated Report to the Financial Community, dated February 21, 2017



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Forward-Looking Statements: This Form 8-K includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” "forecast," "target," "will," "intend," “believe,” "project," “estimate," "plan" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following: the ability to experience growth in the Regulated Distribution and Regulated Transmission segments; the accomplishment of our regulatory and operational goals in connection with our transmission investment plan, including, but not limited to, our planned forward-looking formula rates and the effectiveness of our strategy to reflect a more regulated business profile; changes in assumptions regarding economic conditions within our territories, assessment of the reliability of our transmission system, or the availability of capital or other resources supporting identified transmission investment opportunities; the ability to accomplish or realize anticipated benefits from strategic and financial goals, including, but not limited to, the ability to continue to reduce costs and to successfully execute our financial plans designed to improve our credit metrics and strengthen our balance sheet through, among other actions, our cash flow improvement plan and other proposed capital raising initiatives; the risks and uncertainties associated with the lack of viable alternative strategies regarding the Competitive Energy Services (CES) segment, thereby causing FirstEnergy Solutions Corp. (FES), and possibly FirstEnergy Nuclear Operating Company (FENOC), to restructure its debt and other financial obligations with its creditors or seek protection under United States bankruptcy laws and the losses, liabilities and claims arising from such bankruptcy proceeding, including any obligations at FirstEnergy; the risks and uncertainties at the CES segment, including FES and its subsidiaries and FENOC, related to continued depressed wholesale energy and capacity markets, and the viability and/or success of strategic business alternatives, such as potential CES generating unit asset sales, the potential conversion of the remaining generation fleet from competitive operations to a regulated or regulated-like construct or the potential need to deactivate additional generating units; the substantial uncertainty as to FES’ ability to continue as a going concern and substantial risk that it may be necessary for FES, and possibly FENOC, to seek protection under United States bankruptcy laws; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments, such as long-term fuel and transportation agreements; the uncertainties associated with the deactivation of older regulated and competitive units, including the impact on vendor commitments, such as long-term fuel and transportation agreements, and as it relates to the reliability of the transmission grid, the timing thereof; the impact of other future changes to the operational status or availability of our generating units and any capacity performance charges associated with unit unavailability; changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil prices, and their availability and impact on margins; costs being higher than anticipated and the success of our policies to control costs and to mitigate low energy, capacity and market prices; replacement power costs being higher than anticipated or not fully hedged; our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins; the speed and nature of increased competition in the electric utility industry, in general, and the retail sales market in particular; the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including New Source Review litigation, or potential regulatory initiatives or rulemakings (including that such initiatives or rulemakings could result in our decision to deactivate or idle certain generating units); changes in customers' demand for power, including, but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates; economic or weather conditions affecting future sales and margins such as a polar vortex or other significant weather events, and all associated regulatory events or actions; changes in national and regional economic conditions affecting us, our subsidiaries and/or our major industrial and commercial customers, and other counterparties with which we do business, including fuel suppliers; the impact of labor disruptions by our unionized workforce; the risks associated with cyber-attacks and other disruptions to our information technology system that may compromise our generation, transmission and/or distribution services and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information regarding our business, employees, shareholders, customers, suppliers, business partners and other individuals in our data centers and on our networks; the impact of the regulatory process and resulting outcomes on the matters at the federal level and in the various states in which we do business including, but not limited to, matters related to rates and the Ohio Distribution Modernization Rider; the impact of the federal regulatory process on Federal Energy Regulatory Commission (FERC) regulated entities and transactions, in particular FERC regulation of wholesale energy and capacity markets, including PJM Interconnection, L.L.C. (PJM) markets and FERC-jurisdictional wholesale transactions; FERC regulation of cost-of-service rates; and FERC’s compliance and enforcement activity, including compliance and enforcement activity related to North American Electric Reliability Corporation’s mandatory reliability standards; the uncertainties of various cost recovery and cost allocation issues resulting from American Transmission Systems, Incorporated's realignment into PJM; the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates; other legislative and regulatory changes, and revised environmental requirements, including, but not limited to, the effects of the United States Environmental Protection Agency's Clean Power Plan, Coal Combustion Residuals regulations, Cross-State Air Pollution Rule and Mercury and Air Toxics Standards programs, including our estimated costs of compliance, Clean Water Act (CWA) waste water effluent limitations for power plants, and CWA 316(b) water intake regulation; adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to, the revocation or non-renewal of necessary licenses, approvals or operating permits by the Nuclear Regulatory Commission or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant); issues arising from the indications of cracking in the shield building at Davis-Besse; changing market conditions that could affect the measurement of certain liabilities and the value of assets held in our Nuclear Decommissioning Trusts, pension trusts and other trust funds, and cause us and/or our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated; the impact of changes to significant accounting policies; the impact of any changes in tax laws or regulations or adverse tax audit results or rulings; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us and

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our subsidiaries; further actions that may be taken by credit rating agencies that could negatively affect us and/or our subsidiaries’ access to financing, increase the costs thereof, increase requirements to post additional collateral to support, or accelerate payments under outstanding commodity positions, letters of credit and other financial guarantees, and the impact of these events on the financial condition and liquidity of FirstEnergy and/or its subsidiaries, specifically the subsidiaries within the CES segment; issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business; and the risks and other factors discussed from time to time in our United States Securities and Exchange Commission (SEC) filings, and other similar factors. Dividends declared from time to time on FirstEnergy Corp.'s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.'s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. The foregoing factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in our filings with the SEC, including but not limited to the most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy Corp's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.








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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



February 21, 2017

 
 FIRSTENERGY CORP.
 
 Registrant
 
 
 
 
 By:
/s/ K. Jon Taylor
 
K. Jon Taylor
Vice President, Controller and
Chief Accounting Officer


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Exhibit Index

Exhibit No.
 
Description
99.1
 
Press Release issued by FirstEnergy Corp., dated February 21, 2017
99.2
 
Consolidated Report to the Financial Community, dated February 21, 2017



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(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit




FirstEnergy Corp.                    For Release: February 21, 2017
76 South Main Street
Akron, Ohio 44308
www.firstenergycorp.com    

News Media Contact:                Investor Contact:
Tricia Ingraham                    Irene Prezelj
(330) 384-5247                    (330) 384-3859



FirstEnergy Announces Fourth Quarter and Full Year 2016
Financial Results
Raises 2017 Guidance Reflecting Competitive Operations Exit Strategy;
Progressing on Regulated Growth Strategy

AKRON, Ohio - FirstEnergy Corp. (NYSE: FE) today reported a full-year 2016 GAAP loss of $(6.2) billion, or $(14.49) per basic and diluted share of common stock, on revenue of $14.6 billion. The loss reflects asset impairment and plant exit costs, including charges related to the company’s decision to exit competitive operations by mid-2018 as further discussed below. In 2015, the company reported GAAP earnings of $578 million, or $1.37 per basic and diluted share of common stock, on revenue of $15.0 billion.

Operating (non-GAAP) earnings* for 2016 were $2.63 per basic share of common stock, which was in line with the company’s guidance. In 2015, full-year operating (non-GAAP) earnings were $2.71 per basic share of common stock.

“In 2016, we achieved our financial targets, made significant progress on our regulated growth plans, and began an important strategic review that is designed to support our transition into a fully regulated company,” said Charles E. Jones, FirstEnergy president and chief executive officer. “We continue to focus on this transformation, which will allow us to best serve our customers while providing predictable growth to investors.”

The company also announced that it is raising its earnings guidance range for 2017. The revised GAAP earnings estimate is $2.47 to $2.77 per share, while operating (non-GAAP) guidance is $2.70 to $3.00 per share. The change reflects the impact of lower depreciation resulting from the asset impairment charges and additional costs associated with the company’s strategic review of its competitive operations.


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For the fourth quarter of 2016, the asset impairment and plant exit costs resulted in a GAAP loss of $(5.8) billion, or $(13.44) per basic and diluted share of common stock, on revenue of $3.4 billion. These results compare to a fourth quarter 2015 GAAP loss of $(226) million, or $(0.53) per basic and diluted share of common stock, on revenue of $3.5 billion.

Operating (non-GAAP) earnings* for the fourth quarter of 2016 were $0.38 per basic share of common stock and compare to operating (non-GAAP) earnings of $0.58 per share of common stock for the fourth quarter of 2015.

In FirstEnergy’s Regulated Distribution business, fourth quarter 2016 earnings increased compared to the same period in 2015 due to higher distribution revenues and lower operating and interest expense. These offset higher expense related to depreciation, benefits, and taxes. On a GAAP basis, earnings in the Regulated Distribution segment benefited from a lower annual pension and OPEB mark-to-market adjustment compared to the same period in 2015.

Total distribution deliveries increased 4 percent in the fourth quarter of 2016 compared to the same period in 2015. Weather-related usage resulted in an 8 percent increase in residential sales compared to the prior-year period, while commercial sales increased 3 percent due to a combination of weather and stronger demand. Heating degree days in the fourth quarter of 2016 were 8.9 percent below normal but 26.3 percent higher than the same period of 2015. Deliveries to industrial customers increased nearly 2 percent, primarily due to higher usage in the shale gas and steel sectors.

Fourth quarter earnings in the Regulated Transmission business increased as a result of a higher rate base associated with its Energizing the Future transmission program.

In the Competitive Energy Services segment, fourth quarter commodity margin decreased compared to the prior year period due to lower capacity revenues and contract sales volume. This was partially offset by higher wholesale sales and lower capacity and fuel expense. On a GAAP basis, the segment’s results reflect the asset impairment and plant exit costs as further described below.

The company’s fourth quarter 2016 earnings were also impacted by higher corporate operating expenses.

For the full year, results in the Regulated Distribution business reflect higher distribution revenues primarily related to the full-year impact of rate cases approved in 2015 and higher weather-related sales,

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as well as lower operating and maintenance costs. These were partially offset by increasing retirement benefit costs and higher other operating expense. On a GAAP basis, full-year 2016 results benefited from a lower annual pension and OPEB mark-to-market adjustment, partially offset by higher regulatory charges.

In the Regulated Transmission business, results were flat year over year, reflecting an increase in rate base offset by a lower return on equity at ATSI as part of its comprehensive formula rate settlement.

In the Competitive Energy Services segment, commodity margin decreased compared to 2015 and retirement benefit costs increased. On a GAAP basis, full-year 2016 results reflect the asset impairment and plant exit costs, partially offset by a lower pension and OPEB mark-to-market adjustment.

Impairments of Competitive Assets

During the second quarter of 2016, FirstEnergy recorded pre-tax asset impairment and plant exit costs associated with the decision to deactivate Bay Shore Unit 1, W.H. Sammis Units 1-4, and the impairment of goodwill at the company’s competitive business. In the fourth quarter of 2016, FirstEnergy recognized pre-tax impairment charges of $9.218 billion, or $13.54 per share, resulting from its intention to exit competitive operations by mid-2018, significantly before the end of generation assets’ useful lives, and the anticipated cash flows over this shortened period. The impairment charges reduced the carrying value of the majority of the company’s competitive generating assets, nuclear fuel and other assets to their estimated fair value.


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Consolidated GAAP EPS to Operating (Non-GAAP) EPS* Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fourth Quarter
 
Full Year
 
Guidance
 
 
 
 
 
2016
2015
 
2016
2015
 
2017
 
 
Basic Earnings (Loss) Per Share (GAAP)
 
$(13.44)
$(0.53)
 
$(14.49)
$1.37
 
$2.47- $2.77
 
 
Excluding Special Items*:
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments
 
 
 
 
 
 
 
 
 
 
 
  Pension/OPEB actuarial assumptions
 
0.21
0.35
 
0.21
0.35
 
 
 
 
  Other
 
0.03
(0.01)
 
0.01
(0.11)
 
 
 
 
Merger accounting - commodity contracts
 
0.01
0.11
 
0.05
0.16
 
 
 
 
Regulatory charges
 
0.01
0.01
 
0.13
0.07
 
0.04
 
 
 
Retail repositioning charges
 
0.02
 
0.05
 
 
 
 
Asset impairment/Plant exit costs
 
13.54
0.59
 
16.67
0.67
 
 
 
 
Debt redemption costs
 
0.01
 
0.02
 
0.19
 
 
 
Trust securities impairment
 
0.01
0.04
 
0.03
0.15
 
 
 
 
Total Special Items*
 
13.82
1.11
 
17.12
1.34
 
0.23
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS - Operating (Non-GAAP)
 
$0.38
$0.58
 
$2.63
$2.71
 
$2.70 - $3.00
 
 
* Per share amounts for the special items above are based on the after-tax effect of each item, divided by the weighted average basic shares outstanding for the period. The current and deferred income tax effect was calculated by applying the subsidiaries’ statutory tax rate to the pre-tax amount with the exception of the valuation allowances against state and local NOL carryforwards of $159 million included in full year 2016. With the exception of this item included in Asset impairment/Plant exit costs, the income tax rates range from 35% to 42%. 
 
 
 
 
 
 
 

Non-GAAP financial measures
*Operating (non-GAAP) earnings exclude “special items” as described herein, and is a non-GAAP financial measure. Special items represent charges incurred or benefits realized that management believes are not indicative of, or may obscure trends useful in evaluating the company’s ongoing core activities and results of operations or otherwise warrant separate classification. Special items are not necessarily non-recurring. Management uses operating (non-GAAP) earnings and operating (non-GAAP) earnings by segment to evaluate the company’s performance and manage its operations and frequently references these non-GAAP financial measures in its decision making, using them to facilitate historical and ongoing performance comparisons. Management believes that the non-GAAP financial measure of operating (non-GAAP) earnings provides a consistent and comparable measure of performance of its business on an ongoing basis using the same measures management uses in forecasting, budgeting, long-term planning, and setting compensation. Management also believes that such measures are useful to shareholders and other interested parties to understand performance trends and evaluate the company against its peer group by presenting period-over-period operating results without the effect of certain charges or benefits that may not be consistent or comparable across periods or across the company’s peer group. Generally, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP). This non-GAAP financial measure is intended to complement, and is not considered as an alternative to, the most directly comparable GAAP financial measure. Also, this non-GAAP financial measure may not be comparable to similarly titled measures used by other entities. Per share amounts for the special items above are based on the after-tax effect of each item divided by the weighted average shares outstanding for the period.

Consolidated Report and Teleconference

FirstEnergy’s Consolidated Report to the Financial Community, which provides highlights on company developments and financial results for the fourth quarter and full year, is posted on the company’s Investor Information website - www.firstenergycorp.com/ir. To access the report, click on Fourth Quarter 2016 Consolidated Report to the Financial Community. The company’s investor FactBook will also be posted to its Investor Information website this evening.

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The company invites investors, customers and other interested parties to listen to a live internet webcast of its teleconference for financial analysts and view slides associated with the presentation at 10:00 a.m. EST tomorrow. FirstEnergy management will present an overview of the company’s financial results and discuss earnings guidance, followed by a question-and-answer session. The teleconference and presentation can be accessed on the company’s website by selecting the Q4 2016 Earnings Conference Call link. The webcast and presentation will be archived on the website for up to one year.

FirstEnergy is dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. The company's transmission subsidiaries operate more than 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions. Follow FirstEnergy on Twitter @FirstEnergyCorp or online at www.firstenergycorp.com.

Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” "forecast," "target," "will," "intend," “believe,” "project," “estimate," "plan" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following: the ability to experience growth in the Regulated Distribution and Regulated Transmission segments; the accomplishment of our regulatory and operational goals in connection with our transmission investment plan, including, but not limited to, our planned forward-looking formula rates and the effectiveness of our strategy to reflect a more regulated business profile; changes in assumptions regarding economic conditions within our territories, assessment of the reliability of our transmission system, or the availability of capital or other resources supporting identified transmission investment opportunities; the ability to accomplish or realize anticipated benefits from strategic and financial goals, including, but not limited to, the ability to continue to reduce costs and to successfully execute our financial plans designed to improve our credit metrics and strengthen our balance sheet through, among other actions, our cash flow improvement plan and other proposed capital raising initiatives; the risks and uncertainties associated with the lack of viable alternative strategies regarding the Competitive Energy Services (CES) segment, thereby causing FirstEnergy Solutions Corp. (FES), and possibly FirstEnergy Nuclear Operating Company (FENOC), to restructure its debt and other financial obligations with its creditors or seek protection under United States bankruptcy laws and the losses, liabilities and claims arising from such bankruptcy proceeding, including any obligations at FirstEnergy; the risks and uncertainties at the CES segment, including FES and its subsidiaries and FENOC, related to continued depressed wholesale energy and capacity markets, and the viability and/or success of strategic business alternatives, such as potential CES generating unit asset sales, the potential conversion of the remaining generation fleet from competitive operations to a regulated or regulated-like construct or the potential need to deactivate additional generating units; the substantial uncertainty as to FES’ ability to continue as a going concern and substantial risk that it may be necessary for FES, and possibly FENOC, to seek protection under United States bankruptcy laws; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings, including, but not limited to, any such proceedings related to vendor commitments, such as long-term fuel and transportation agreements; the uncertainties associated with the deactivation of older regulated and competitive units, including the impact on vendor commitments, such as long-term fuel and transportation agreements, and as it relates to the reliability of the transmission grid, the timing thereof; the impact of other future changes to the operational status or availability of our generating units and any capacity performance charges associated with unit unavailability; changing energy, capacity and commodity market prices including, but not limited to, coal, natural gas and oil prices, and their availability and impact on margins; costs being higher than anticipated and the success of our policies to control costs and to mitigate low energy, capacity and market prices; replacement power costs being higher than anticipated or not fully hedged; our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel transportation on such margins; the speed and nature of increased competition in the electric utility industry, in general, and the retail sales market in particular; the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation, including New Source Review litigation, or potential regulatory initiatives or rulemakings (including that such initiatives or rulemakings could result in our decision to deactivate or idle certain generating units); changes in customers' demand for power, including, but not limited to, changes resulting from the implementation of state and federal energy efficiency and peak demand reduction mandates; economic or weather conditions affecting future sales and margins such as a polar vortex or other significant weather events, and all associated regulatory events or actions; changes in national and regional economic conditions affecting us, our subsidiaries and/or our major industrial and commercial customers, and other counterparties with which we do business, including fuel suppliers; the impact of labor disruptions by our unionized workforce; the risks associated with cyber-attacks and other disruptions to our information technology system that may compromise our generation, transmission and/or distribution services and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information regarding our business, employees, shareholders, customers, suppliers, business

5



partners and other individuals in our data centers and on our networks; the impact of the regulatory process and resulting outcomes on the matters at the federal level and in the various states in which we do business including, but not limited to, matters related to rates and the Ohio Distribution Modernization Rider; the impact of the federal regulatory process on Federal Energy Regulatory Commission (FERC) regulated entities and transactions, in particular FERC regulation of wholesale energy and capacity markets, including PJM Interconnection, L.L.C. (PJM) markets and FERC-jurisdictional wholesale transactions; FERC regulation of cost-of-service rates; and FERC’s compliance and enforcement activity, including compliance and enforcement activity related to North American Electric Reliability Corporation’s mandatory reliability standards; the uncertainties of various cost recovery and cost allocation issues resulting from American Transmission Systems, Incorporated's realignment into PJM; the ability to comply with applicable state and federal reliability standards and energy efficiency and peak demand reduction mandates; other legislative and regulatory changes, and revised environmental requirements, including, but not limited to, the effects of the United States Environmental Protection Agency's Clean Power Plan, Coal Combustion Residuals regulations, Cross-State Air Pollution Rule and Mercury and Air Toxics Standards programs, including our estimated costs of compliance, Clean Water Act (CWA) waste water effluent limitations for power plants, and CWA 316(b) water intake regulation; adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to, the revocation or non-renewal of necessary licenses, approvals or operating permits by the Nuclear Regulatory Commission or as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant); issues arising from the indications of cracking in the shield building at Davis-Besse; changing market conditions that could affect the measurement of certain liabilities and the value of assets held in our Nuclear Decommissioning Trusts, pension trusts and other trust funds, and cause us and/or our subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated; the impact of changes to significant accounting policies; the impact of any changes in tax laws or regulations or adverse tax audit results or rulings; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us and our subsidiaries; further actions that may be taken by credit rating agencies that could negatively affect us and/or our subsidiaries’ access to financing, increase the costs thereof, increase requirements to post additional collateral to support, or accelerate payments under outstanding commodity positions, letters of credit and other financial guarantees, and the impact of these events on the financial condition and liquidity of FirstEnergy and/or its subsidiaries, specifically the subsidiaries within the CES segment; issues concerning the stability of domestic and foreign financial institutions and counterparties with which we do business; and the risks and other factors discussed from time to time in our United States Securities and Exchange Commission (SEC) filings, and other similar factors. Dividends declared from time to time on FirstEnergy Corp.'s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.'s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. The foregoing factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in our filings with the SEC, including but not limited to the most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy Corp.'s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. The registrants expressly disclaim any current intention to update, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.

(022117)


6
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Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit


Exhibit 99.2
38162908_fe_logoa02.jpg
Consolidated Report to the Financial Community                                                                           
Fourth Quarter 2016
 
(Released February 21, 2017)              
HIGHLIGHTS
GAAP losses for the fourth quarter of 2016 were $(13.44) per basic share, compared with fourth quarter 2015 losses of $(0.53) per basic share. GAAP losses for the fourth quarter of 2016 include the impact of the special items listed below, including asset impairment/plant exit costs of $13.54 per share resulting from FirstEnergy's plan to exit competitive operations by mid-2018. Operating (non-GAAP) earnings*, excluding special items, were $0.38 per basic share for the fourth quarter of 2016, compared with fourth quarter 2015 Operating (non-GAAP) earnings of $0.58 per basic share.
 
 
 
 
 
 
 
 
Competitive
 
 
 
FirstEnergy
 
 
 
EPS Variance Analysis
 
Regulated
 
Regulated
 
Energy
 
Corporate /
 
Corp.
 
 
 
(in millions, except per share amounts)
 
Distribution**
 
Transmission**
 
Services
 
Other
 
Consolidated
 
 
 
4Q 2015 Net Income (Loss) - GAAP
 
$13
 
$74
 
$(40)
 
$(273)
 
$(226)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q 2015 Basic EPS* (avg. shares outstanding 423M)
 
$0.03
 
$0.18
 
$(0.10)
 
$(0.64)
 
$(0.53)
 
 
 
Special Items - 2015***
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments -
 
 
 
 
 
 
 
 
 

 
 
 
Pension/OPEB actuarial assumptions
 
$0.26
 
$—
 
$0.09
 
$—
 
$0.35
 
 
 
Other
 
 
 
(0.01)
 
 
(0.01)
 
 
 
Merger accounting - commodity contracts
 
 
 
0.11
 
 
0.11
 
 
 
Regulatory charges
 
0.01
 
 
 
 
0.01
 
 
 
Retail repositioning charges
 
 
 
0.02
 
 
0.02
 
 
 
Asset impairment/Plant exit costs
 
 
 
0.03
 
0.56
 
0.59
 
 
 
Trust securities impairment
 
 
 
0.04
 
 
0.04
 
 
 
Total Special Items - 4Q 2015
 
0.27
 
 
0.28
 
0.56
 
1.11
 
 
 
4Q 2015 Basic EPS - Operating (Non-GAAP) Earnings*
 
$0.30
 
$0.18
 
$0.18
 
$(0.08)
 
$0.58
 
 
 
Distribution Deliveries - Weather
 
0.05
 
 
 
 
0.05
 
 
 
Distribution Deliveries - Normal Load
 
0.01
 
 
 
 
0.01
 
 
 
Ohio - DCR
 
0.01
 
 
 
 
0.01
 
 
 
Transmission Revenues
 
 
0.04
 
 
 
0.04
 
 
 
Commodity Margin
 
 
 
(0.13)
 
 
(0.13)
 
 
 
O&M Expenses
 
0.02
 
 
(0.01)
 
(0.07)
 
(0.06)
 
 
 
Depreciation
 
(0.02)
 
(0.01)
 
 
 
(0.03)
 
 
 
Pension/OPEB
 
(0.02)
 
 
(0.01)
 
 
(0.03)
 
 
 
General Taxes
 
(0.01)
 
(0.01)
 
(0.01)
 
 
(0.03)
 
 
 
Interest Expense
 
0.01
 
 
 
(0.01)
 
 
 
 
Effective Income Tax Rate
 
(0.01)
 
0.01
 
(0.01)
 
 
(0.01)
 
 
 
Other
 
 
(0.01)
 
(0.01)
 
 
(0.02)
 
 
 
4Q 2016 Basic EPS - Operating (Non-GAAP) Earnings*
 
$0.34
 
$0.20
 
$—
 
$(0.16)
 
$0.38
 
 
 
Special Items - 2016***
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments -
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension/OPEB actuarial assumptions
 
(0.15)
 
 
(0.06)
 
 
(0.21)
 
 
 
Other
 
 
 
(0.03)
 
 
(0.03)
 
 
 
Merger accounting - commodity contracts
 
 
 
(0.01)
 
 
(0.01)
 
 
 
Regulatory charges
 
(0.01)
 
 
 
 
(0.01)
 
 
 
Asset impairment/Plant exit costs
 
 
 
(13.54)
 
 
(13.54)
 
 
 
Debt redemption costs
 
 
 
(0.01)
 
 
(0.01)
 
 
 
Trust securities impairment
 
 
 
(0.01)
 
 
(0.01)
 
    
 
Total Special Items - 4Q 2016
 
(0.16)
 
 
(13.66)
 
 
(13.82)
 
 
 
4Q 2016 Basic EPS* (avg. shares outstanding 431M)
 
$0.18
 
$0.20
 
$(13.66)
 
$(0.16)
 
$(13.44)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q 2016 Net Income (Loss) - GAAP
 
$78
 
$87
 
$(5,890)
 
$(71)
 
$(5,796)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per share amounts for the special items and earnings drivers above and throughout this report are based on the after-tax effect of each item divided
by the weighted average basic shares outstanding for the period. The current and deferred income tax effect was calculated by applying the subsidiaries' statutory tax rate to the pre-tax amount. The income tax rates range from 35% to 41%.
 
 
 
 

1



For the year ended December 31, 2016, GAAP losses were $(14.49) per basic share compared with GAAP earnings of $1.37 per basic share for the same period of 2015. GAAP losses for the year ended December 31, 2016, include the impact of the special items listed below, including asset impairment/plant exit costs of $16.67 per share resulting from FirstEnergy's plan to exit competitive operations by mid-2018, as well as charges recognized in the second quarter of 2016 primarily associated with the impairments of goodwill, Bay Shore Unit 1 and W.H. Sammis Units 1-4. Operating (non-GAAP) earnings*, excluding special items, were $2.63 per basic share for the year ended December 31, 2016, compared to $2.71 per basic share for the same period of 2015.
 
 
 
 
 
 
 
Competitive
 
 
 
FirstEnergy
 
 
EPS Variance Analysis
 
Regulated
 
Regulated
 
Energy
 
Corporate /
 
Corp.
 
 
(in millions, except per share amounts)
 
Distribution**
 
Transmission**
 
Services
 
Other
 
Consolidated
 
 
2015 Net Income (Loss) - GAAP
 
$588
 
$328
 
$89
 
$(427)
 
$578
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015 Basic EPS* (avg. shares outstanding 422M)
 
$1.39
 
$0.78
 
$0.21
 
$(1.01)
 
$1.37
 
 
Special Items - 2015
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments-
 
 
 
 
 
 
 
 
 
 
 
 
Pension/OPEB actuarial assumptions
 
$0.26
 
$—
 
$0.09
 
$—
 
$0.35
 
 
Other
 
 
 
(0.11)
 
 
(0.11)
 
 
Merger accounting - commodity contracts
 
 
 
0.16
 
 
0.16
 
 
Regulatory charges
 
0.07
 
 
 
 
0.07
 
 
Retail repositioning charges
 
 
 
0.05
 
 
0.05
 
 
Asset impairment/Plant exit costs
 
0.01
 
 
0.09
 
0.57
 
0.67
 
 
Trust securities impairment
 
0.02
 
 
0.13
 
 
0.15
 
 
Total Special Items - 2015
 
0.36
 
 
0.41
 
0.57
 
1.34
 
 
2015 Basic EPS - Operating (Non-GAAP) Earnings*
 
$1.75
 
$0.78
 
$0.62
 
$(0.44)
 
$2.71
 
 
Distribution Deliveries - Weather
 
0.07
 
 
 
 
0.07
 
 
Distribution Deliveries - Normal Load
 
(0.03)
 
 
 
 
(0.03)
 
 
Ohio - DCR
 
0.02
 
 
 
 
0.02
 
 
PA Rate Case
 
0.11
 
 
 
 
0.11
 
 
NJ Rate Case
 
(0.03)
 
 
 
 
(0.03)
 
 
Transmission Revenues
 
 
0.14
 
 
 
0.14
 
 
Commodity Margin
 
 
 
(0.01)
 
 
(0.01)
 
 
O&M Expenses
 
0.06
 
 
0.02
 
(0.04)
 
0.04
 
 
Depreciation
 
(0.02)
 
(0.04)
 
0.01
 
 
(0.05)
 
 
Pension/OPEB
 
(0.08)
 
 
(0.04)
 
 
(0.12)
 
 
General Taxes
 
(0.03)
 
(0.07)
 
 
 
(0.10)
 
 
Investment Income
 
 
 
0.02
 
 
0.02
 
 
Net Financing Costs
 
0.02
 
(0.03)
 
 
(0.03)
 
(0.04)
 
 
Effective Income Tax Rate
 
(0.01)
 
0.01
 
(0.01)
 
(0.06)
 
(0.07)
 
 
Share Dilution
 
(0.02)
 
(0.01)
 
(0.01)
 
0.01
 
(0.03)
 
 
2016 Basic EPS - Operating (Non-GAAP) Earnings*
 
$1.81
 
$0.78
 
$0.60
 
$(0.56)
 
$2.63
 
 
Special Items - 2016
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments-
 
 
 
 
 
 
 
 
 
 
 
 
Pension/OPEB actuarial assumptions
 
$(0.15)
 
$—
 
$(0.06)
 
$—
 
$(0.21)
 
 
Other
 
 
 
(0.01)
 
 
(0.01)
 
 
Merger accounting - commodity contracts
 
 
 
(0.05)
 
 
(0.05)
 
 
Regulatory charges
 
(0.13)
 
 
 
 
(0.13)
 
 
Asset impairment/Plant exit costs
 
 
 
(16.67)
 
 
(16.67)
 
 
Debt redemption costs
 
 
 
(0.01)
 
(0.01)
 
(0.02)
 
 
Trust securities impairments
 
 
 
(0.03)
 
 
(0.03)
 
 
Total Special Items - 2016
 
(0.28)
 
 
(16.83)
 
(0.01)
 
(17.12)
 
 
2016 Basic EPS* (avg. shares outstanding 426M)
 
$1.53
 
$0.78
 
$(16.23)
 
$(0.57)
 
$(14.49)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016 Net Income (Loss) - GAAP
 
$651
 
$331
 
$(6,919)
 
$(240)
 
$(6,177)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per share amounts for the special items and earnings drivers above and throughout this report are based on the after-tax effect of each item divided
by the weighted average basic shares outstanding for the period. The current and deferred income tax effect was calculated by applying the subsidiaries' statutory tax rate to the pre-tax amount. The income tax rates range from 35% to 41%.
 
 
 









_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    2



Asset impairment and plant exit costs recorded in the fourth quarter and full year 2016 are shown below. See Recent Developments for additional information.
 
 
 
 
 
Asset Impairment/Plant Exit Costs - Q4 of 2016
 
 
(in millions, except per share amounts)
 
 
 
Impaired assets
Impairment
 
 
Coal generation assets
$4,058
 
 
Nuclear generation assets
4,382

 
 
Gas/Hydro generation assets
266

 
 
Nuclear fuel
243

 
 
Other assets (1)
269

 
 
Total pre-tax Asset impairment/Plant exit costs
9,218

 
 
Income tax benefit
3,382

 
 
Total after-tax Asset impairment/Plant exit costs
$5,836
 
 
GAAP EPS impact
$13.54
 
 
 
 
 
 
The current and deferred income tax effect was calculated by applying the subsidiaries’ statutory tax rate to the pre-tax amount. The income tax rates range from 36% to 38%.

(1) Includes the impairment of materials and supplies ($142 million), AE Supply intangible assets ($55 million), AE Supply's investment in OVEC ($37 million) and other assets ($35 million).
 
 
 
 
 
 
Asset Impairment/Plant Exit Costs - 2016
 
 
(in millions, except per share amounts)
 
 
 
Impaired assets
Impairment
 
 
Coal generation assets
$4,705
 
 
Nuclear generation assets
4,382

 
 
Gas/Hydro generation assets
266

 
 
Nuclear fuel
243

 
 
Goodwill
800

 
 
Other assets (1)
327

 
 
Total pre-tax Asset impairment/Plant exit costs
10,723

 
 
Income tax benefit
3,618

 
 
Total after-tax Asset impairment/Plant exit costs
$7,105
 
 
GAAP EPS impact
$16.67
 
 
 
 
 
 
The current and deferred income tax effect was calculated by applying the subsidiaries’ statutory tax rate to the pre-tax amount with the exception of the impairment of goodwill of which $433 million of the $800 million pre-tax impairment was non-deductible for tax purposes. With the exception of the impairment of goodwill and valuation allowances against state and local NOL carryforwards of $159 million included in Asset impairment/Plant exit costs, the income tax rates range from 35% to 38%.

(1) Includes the impairment of materials and supplies ($142 million), AE Supply intangible assets ($55 million), AE Supply's investment in OVEC ($37 million), coal contract termination and settlement costs ($58 million) and other assets ($35 million).
 
 
 
 
 
*Operating (non-GAAP) earnings (losses) exclude “special items” as described below, and is a non-GAAP financial measure. Special items represent charges incurred or benefits realized that management believes are not indicative of, or may obscure trends useful in evaluating the company’s ongoing core activities and results of operations or otherwise warrant separate classification. Special items are not necessarily non-recurring. Management uses Operating (non-GAAP) earnings and Operating (non-GAAP) earnings by segment to evaluate the company’s performance and manage its operations and frequently references these non-GAAP financial measures in its decision making, using them to facilitate historical and ongoing performance comparisons. Additionally, management uses Basic EPS-Operating, on a segment basis, to further evaluate the company's performance by segment and references this non-GAAP financial measures in its decision making. Basic EPS-Operating for each segment, a non-GAAP financial measure, is calculated by dividing segment Operating (non-GAAP) earnings (losses), which exclude specials items as discussed herein, by the basic weighted average shares outstanding for the period. Management believes that the non-GAAP financial measures of Operating (non-GAAP) earnings and Basic EPS-Operating by segment provide consistent and comparable measures of performance of its businesses on an ongoing basis using the same measures management uses in forecasting, budgeting, long-term planning, and setting compensation. Management also believes that such measures are useful to shareholders and other interested parties to understand performance trends and evaluate the company against its peer group by presenting period-over-period operating results without the effect of certain charges or benefits that may not be consistent or comparable across periods or across the company’s peer group. Generally, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP). These non-GAAP financial measures are intended to complement, and are not considered as alternatives to, the most directly comparable GAAP financial measures. Also, the non-GAAP financial measures may not be comparable to similarly titled measures used by other entities. The 2016 and 2015 GAAP to non-GAAP earnings reconciliations can be found on pages 34 & 35 of this report and all GAAP to non-GAAP earnings reconciliations are available on the company’s Investor Information website at www.firstenergycorp.com/ir.
**Disclosures for FE's reportable operating segments for 2015 have been adjusted to include the activity of the transmission assets at Jersey Central Power & Light Company (JCP&L) and the former transmission assets of Metropolitan Edison Company (ME) and Pennsylvania Electric Company (PN) from the Regulated Distribution segment to the Regulated Transmission segment, to conform to the current presentation.
***See pages 24-37 for additional details regarding special items.

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    3



2017 Guidance
GAAP earnings for 2017 are forecasted at $2.47 - $2.77 per basic share with 2017 Operating (non-GAAP) earnings guidance ranging from $2.70 - $3.00 per basic share. Operating (non-GAAP) earnings guidance for the individual business segments is $2.24 - $2.34 per basic share for Regulated Distribution, $0.81 - $0.85 per basic share for Regulated Transmission, $0.20 - $0.32 per basic share for Competitive Energy Services and $(0.55) - $(0.51) per basic share for Corporate / Other. GAAP earnings forecasted for the first quarter of 2017 are $0.64 - $0.74 per basic share with Operating (non-GAAP) earnings guidance ranging from $0.65 - $0.75 per basic share.

 
 
 
Estimate for Year 2017*
 
Q1 of 2017*
 
 
(In millions, except per share amounts)
 
Regulated Distribution
 
Regulated Transmission
 
Competitive Energy Services
 
Corporate / Other
 
FirstEnergy Corp. Consolidated
 
FirstEnergy Corp. Consolidated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017F Net Income - GAAP
 
$980 - $1,025
 
$360 - $380
 
$5 - $55
 
$(245) - $(225)
 
$1,100 - $1,235
 
$285 - $330
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017F Basic EPS (avg. shares outstanding 445M)
 
$2.20 - $2.30
 
$0.81 - $0.85
 
$0.01 - $0.13
 
$(0.55) - $(0.51)
 
$2.47 - $2.77
 
$0.64 - $0.74
 
Excluding Special Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory charges
 
0.04
 
 
 
 
0.04
 
0.01
 
 
Debt redemption costs
 
 
 
0.19
 
 
0.19
 
 
 
Total Special Items**
 
0.04
 
 
0.19
 
 
0.23
 
0.01
 
2017F Basic EPS - Operating (Non-GAAP) (avg. shares outstanding 445M)
 
$2.24 - $2.34
 
$0.81 - $0.85
 
$0.20 - $0.32
 
$(0.55) - $(0.51)
 
$2.70 - $3.00
 
$0.65 - $0.75
 
 
* Per share amounts for the special items and earnings drivers above are based on the after-tax effect of each item divided by the weighted average basic shares outstanding and assumes up to $600 million of additional equity in 2017, of which ~$100 million relates to employee benefit and other plans. The current and deferred income tax effect was calculated by applying the subsidiaries’ statutory tax rate to the pre-tax amount. The income tax rates range from 37% to 42%.
** See page 37 for descriptions regarding special items.
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    4



4Q 2016 Results vs 4Q 2015 - By Segment
Regulated Distribution
Regulated Distribution - GAAP earnings for the fourth quarter of 2016 were $78 million, or $0.18 per basic share, compared with fourth quarter 2015 earnings of $13 million, or $0.03 per basic share. Operating (non-GAAP) earnings, excluding special items, were $0.34 per basic share for the fourth quarter of 2016, compared with fourth quarter 2015 Operating (non-GAAP) earnings of $0.30 per basic share.
 
 
 
 
 
 
 
 
EPS Variance Analysis
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
4Q 2015 Net Income - GAAP
 
$13
 
 
 
 
 
 
 
 
 
4Q 2015 Basic EPS (avg. shares outstanding 423M)
 
$0.03
 
 
 
Special Items - 2015
 
0.27
 
 
 
4Q 2015 Basic EPS - Operating (Non-GAAP) Earnings
 
$0.30
 
 
 
Distribution Deliveries - Weather
 
0.05
 
 
 
Distribution Deliveries - Normal Load
 
0.01
 
 
 
Ohio - DCR
 
0.01
 
 
 
O&M Expenses
 
0.02
 
 
 
Depreciation
 
(0.02)
 
For the year ended December 31, 2016, GAAP earnings were $651 million, or $1.53 per basic share compared with $588 million, or $1.39 per basic share, for the same period of 2015. Operating (non-GAAP) earnings, excluding special items, were $1.81 per basic share for the year ended December 31, 2016, compared to $1.75 per basic share for the same period of 2015.
 
 
Pension/OPEB
 
(0.02)
 
 
 
General Taxes
 
(0.01)
 
 
 
Interest Expense
 
0.01
 
 
 
Effective Income Tax Rate
 
(0.01)
 
 
 
4Q 2016 Basic EPS - Operating (Non-GAAP) Earnings
 
$0.34
 
 
 
Special Items - 2016
 
(0.16)
 
 
 
4Q 2016 Basic EPS (avg. shares outstanding 431M)
 
$0.18
 
 
 
 
 
 
 
 
 
4Q 2016 Net Income - GAAP
 
$78
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q 2016 vs 4Q 2015 Earnings Drivers, Excluding Special Items
Distribution Revenues - Total distribution revenues increased earnings $0.07 per share as a result of increased deliveries of 1.5 million mega-watt hours (MWH), or 4.4%, resulting from higher weather-related usage given the very mild temperatures in the fourth quarter of 2015, higher revenues from the Ohio Delivery Capital Recovery rider (DCR), and stronger commercial and industrial demand. Residential sales increased by 950,000 MWH, or 8.1%, and sales to commercial customers increased 341,000 MWH, or 3.4%. Heating-degree-days were 26.3% above the same period of 2015 and 8.9% below normal. Deliveries to industrial customers increased 215,000 MWH, or 1.8%, primarily due to higher usage in the shale gas and steel sectors.
O&M Expenses - Earnings increased $0.02 per share due to lower distribution maintenance expenses, partially offset by higher Regulated Generation planned outage costs and higher benefit-related costs.
Depreciation - Higher depreciation expense reduced earnings $0.02 per share due to a higher asset base across the utilities and the absence of a change to depreciation rates for the Pennsylvania utilities made in the fourth quarter of 2015, reflecting lower rates approved by the Pennsylvania Public Utilities Commission (PPUC).
Pension/OPEB - Higher Pension/OPEB expense reduced earnings $0.02 per share.

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    5




General Taxes - Higher general taxes reduced earnings $0.01 per share as a result of higher property and revenue-related taxes.
Interest Expense - Lower interest expense increased earnings $0.01 per share as a result of various maturities.
Effective Income Tax Rate - A higher effective income tax rate reduced earnings $0.01 per share.
Special Items - In the fourth quarter of 2016 and 2015, Regulated Distribution special items totaled $0.16 per share and $0.27 per share, respectively as summarized in the following tables. Additional details regarding special items can be found on page 37.

 
 
 
 
 
 
Regulated Distribution Special Items - 4Q 2016
 
EPS
 
 
Mark-to-market adjustments -
 
 
 
 
Pension/OPEB actuarial assumptions
 
0.15

 
 
Regulatory charges
 
0.01

 
 
Total Special Items
 
$
0.16

 
 
 
 
 
 
 
 
 
 
 
 
Regulated Distribution Special Items - 4Q 2015
 
EPS
 
 
Mark-to-market adjustments -
 
 
 
 
Pension/OPEB actuarial assumptions
 
0.26

 
 
Regulatory charges
 
0.01

 
 
Total Special Items
 
$
0.27

 
 
 
 
 
 


_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    6



Regulated Transmission
Regulated Transmission - GAAP earnings for the fourth quarter of 2016 were $87 million, or $0.20 per basic share, compared with fourth quarter 2015 GAAP earnings of $74 million, or $0.18 per basic share. Operating (non-GAAP) earnings, excluding special items, for the fourth quarter of 2016 were $0.20 per basic share, compared with fourth quarter 2015 Operating (non-GAAP) earnings of $0.18 per basic share.
 
 
 
 
 
 
 
 
EPS Variance Analysis
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
4Q 2015 Net Income - GAAP
 
$74
 
 
 
 
 
 
 
 
 
4Q 2015 Basic EPS (avg. shares outstanding 423M)
 
$0.18
 
 
 
Special Items - 2015
 
 
 
 
4Q 2015 Basic EPS - Operating (Non-GAAP) Earnings
 
$0.18
 
 
 
Transmission Revenues
 
0.04
 
 
 
Depreciation
 
(0.01)
 
 
 
General Taxes
 
(0.01)
 
For the year ended December 31, 2016, GAAP earnings were $331 million, or $0.78 per basic share compared with $328 million, or $0.78 per basic share, for the same period of 2015. Operating (non-GAAP) earnings were $0.78 per basic share for the year ended December 31, 2016, compared to $0.78 per basic share for the same period of 2015.
 
 
Effective Income Tax Rate
 
0.01
 
 
 
Other
 
(0.01)
 
 
 
4Q 2016 Basic EPS - Operating (Non-GAAP) Earnings
 
$0.20
 
 
 
Special Items - 2016
 
 
 
 
4Q 2016 Basic EPS (avg. shares outstanding 431M)
 
$0.20
 
 
 
 
 
 
 
 
 
4Q 2016 Net Income - GAAP
 
$87
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q 2016 vs 4Q 2015 Earnings Drivers, Excluding Special Items
Transmission Revenues - Higher transmission revenues increased earnings $0.04 per share, primarily due to higher rate base and the recovery of incremental operating expenses at American Transmission Systems, Incorporated (ATSI).
Depreciation and General Taxes - Higher depreciation and general taxes decreased earnings $0.02 per share due primarily to a higher asset base at ATSI. These expenses are recovered through ATSI's formula rate.
Effective Income Tax Rate - A lower effective income tax rate increased earnings $0.01 per share.

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    7



Competitive Energy Services
Competitive Energy Services (CES) - GAAP losses for the fourth quarter of 2016 were $(5,890) million, or $(13.66) per basic share primarily reflecting asset impairment/plant exit costs discussed above, compared with fourth quarter 2015 losses of $(40) million, or $(0.10) per basic share. Operating (non-GAAP) earnings, excluding special items, for the fourth quarter of 2016 were $0.00 per basic share, compared with fourth quarter 2015 Operating (non-GAAP) earnings of $0.18 per basic share.
 
 
 
 
 
 
 
 
EPS Variance Analysis
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
4Q 2015 Net Loss - GAAP
 
$(40)
 
 
 
 
 
 
 
 
 
4Q 2015 Basic EPS (avg. shares outstanding 423M)
 
$(0.10)
 
 
 
Special Items - 2015
 
0.28
 
 
 
4Q 2015 Basic EPS - Operating (Non-GAAP) Earnings
 
$0.18
 
 
 
Commodity Margin
 
(0.13)
 
 
 
O&M Expenses
 
(0.01)
 
 
 
Pension/OPEB
 
(0.01)
 
 
 
General Taxes
 
(0.01)
 
 
 
Effective Income Tax Rate
 
(0.01)
 
For the year ended December 31, 2016, GAAP losses were $(6,919) million, or $(16.23) per basic share primarily reflecting asset impairment/plant exit costs discussed above, compared with earnings of $89 million, or $0.21 per basic share, for the same period of 2015. Operating (non-GAAP) earnings, excluding special items, were $0.60 per basic share for the year ended December 31, 2016, compared to $0.62 per basic share for the same period of 2015.
 
 
Other
 
(0.01)
 
 
 
4Q 2016 Basic EPS - Operating (Non-GAAP) Earnings
 
$—
 
 
 
Special Items - 2016
 
(13.66)
 
 
 
4Q 2016 Basic EPS (avg. shares outstanding 431M)
 
$(13.66)
 
 
 
 
 
 
 
 
 
4Q 2016 Net Loss - GAAP
 
$(5,890)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q 2016 vs 4Q 2015 Earnings Drivers, Excluding Special Items
Commodity Margin - CES commodity margin decreased earnings $0.13 per share due to lower capacity revenues and lower contract sales, partially offset by increased wholesale sales, lower capacity expense and a lower fuel rate.

A summary by key component of commodity margin is as follows:
        
 
 
 
 
 
 
 
 
 
 
Commodity Margin EPS - 4Q16 vs 4Q15
 
Rate
 
Volume
 
Total
 
 
(a) Contract Sales
 
 
 
 
 
 
 
 
   - Direct Sales (LCI & MCI)
 
$
(0.01
)
 
$
(0.07
)
 
$
(0.08
)
 
 
   - Governmental Aggregation Sales
 
(0.07
)
 
(0.02
)
 
(0.09
)
 
 
   - Mass Market Sales
 

 
(0.01
)
 
(0.01
)
 
 
   - POLR Sales
 
(0.02
)
 
0.04

 
0.02

 
 
   - Structured Sales
 

 
(0.05
)
 
(0.05
)
 
 
        Subtotal - Contract Sales
 
$
(0.10
)
 
$
(0.11
)
 
$
(0.21
)
 
 
(b) Wholesale Sales
 
0.01

 
0.07

 
0.08

 
 
(c) PJM Capacity Revenues
 
(0.25
)
 
0.03

 
(0.22
)
 
 
(d) Fuel Expense
 
0.03

 
(0.01
)
 
0.02

 
 
(e) Purchased Power (net of financials)
 
0.02

 
(0.01
)
 
0.01

 
 
(f) Capacity Expense
 
0.13

 
0.05

 
0.18

 
 
(g) Net MISO - PJM Transmission Cost
 

 
0.01

 
0.01

 
 
       Net Change
 
$
(0.16
)
 
$
0.03

 
$
(0.13
)
 
 
 
 
 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    8



(a)
Contract Sales - CES' contract sales decreased 1.6 million MWH, or 12%, and reduced earnings $0.21 per share. Direct sales to large and medium commercial/industrial customers decreased 804,000 MWH, or 17%. Governmental aggregation and mass market sales decreased 345,000 MWH, or 9%. As of December 31, 2016, CES' total number of retail customers was 1.1 million, a decrease of approximately 570,000 customers since December 31, 2015.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CES Contract Sales - 4Q16 vs 4Q15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(thousand MWH)
 
Retail
 
Non-Retail
 
 
 
 
 
 
Direct
 
Aggr.
 
Mass Market
 
POLR
 
Structured
 
Total
 
 
Contract Sales Increase (Decrease)
 
(804)
 
(233
)
 
(112)
 
403
 
(873)
 
(1,619)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(b) Wholesale Sales - Wholesale sales increased 2.0 million MWH and increased earnings $0.08 per share.
(c) PJM Capacity Revenues (Base Residual (BR) and Capacity Performance (CP) Auctions) - Lower capacity revenues decreased earnings $0.22 per share, primarily resulting from lower capacity prices on average in the ATSI and RTO zones. Capacity prices by zone for the applicable planning periods are summarized below.
 
Planning Period
 
RTO
 
ATSI
 
MAAC
 
RTO/ATSI/MAAC
 
Price Per Megawatt-Day
 
BR
 
BR
 
BR
 
CP
 
June 2015 - May 2016
 
$136.00
 
$357.00
 
$167.46
 
NA
 
June 2016 - May 2017
 
$59.37
 
$114.23
 
$119.13
 
$134.00
 
 
 
 
 
 
 
 
 
 
(d)
Fuel Expense - Lower fuel expense increased earnings $0.02 per share, primarily due to lower rates on fuel contracts.
(e) Purchased Power (net of financials) - Higher purchased power volumes of 151,000 MWH were more than offset by financial hedges and increased earnings $0.01 per share.
(f) Capacity Expense - Lower capacity expenses associated with contract sales increased earnings $0.18 per share, primarily due to lower average capacity prices in the ATSI and RTO zones and lower sales volumes.
(g) Net MISO-PJM Transmission Cost - Lower transmission expenses and PJM ancillary charges increased earnings $0.01 per share primarily due to lower contract sales.
O&M Expenses - Higher O&M expenses decreased earnings $0.01 per share primarily due to higher benefit-related costs.
Pension/OPEB - Higher Pension/OPEB expense reduced earnings $0.01 per share.

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    9



General Taxes - Higher general taxes decreased earnings $0.01 per share due primarily to higher property taxes.
Effective Income Tax Rate - A higher effective income tax rate decreased earnings $0.01 per share.

Special Items - In the fourth quarter of 2016 and 2015, CES special items totaled $13.66 per share and $0.28 per share, respectively as summarized in the following tables. Additional details regarding special items can be found on page 37.

 
 
 
 
 
 
CES Special Items - 4Q 2016
 
EPS
 
 
Mark-to-market adjustments -
 
 
 
 
Pension/OPEB actuarial assumptions
 
0.06

 
 
Other
 
0.03

 
 
Merger accounting - commodity contracts
 
0.01

 
 
Asset impairment/Plant exit costs
 
13.54

 
 
Debt redemption costs
 
0.01

 
 
Trust securities impairment
 
0.01

 
 
Total Special Items
 
$
13.66

 
 
 
 
 
 
 
 
 
 
 
 
CES Special Items - 4Q 2015
 
EPS
 
 
Mark-to-market adjustments -
 
 
 
 
Pension/OPEB actuarial assumptions
 
0.09

 
 
Other
 
(0.01
)
 
 
Merger accounting - commodity contracts
 
0.11

 
 
Retail repositioning charges
 
0.02

 
 
Asset impairment/Plant exit costs
 
0.03

 
 
Trust securities impairment
 
0.04

 
 
Total Special Items
 
$
0.28

 
 
 
 
 
 

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    10



Corporate / Other
Corporate / Other - GAAP losses for the fourth quarter of 2016 were $(71) million, or $(0.16) per basic share, compared with fourth quarter 2015 losses of $(273) million, or $(0.64) per basic share. Operating (non-GAAP) losses for the fourth quarter of 2016 were $(0.16) per basic share compared with Operating (non-GAAP) losses of $(0.08) per basic share for the fourth quarter of 2015.
 
 
 
 
 
 
 
 
EPS Variance Analysis
 
 
 
 
 
(In millions, except per share amounts)
 
 
 
 
 
4Q 2015 Net Loss - GAAP
 
$(273)
 
 
 
 
 
 
 
 
 
4Q 2015 Basic EPS (avg. shares outstanding 423M)
 
$(0.64)
 
 
 
Special Items - 2015
 
0.56
 
 
 
4Q 2015 Basic EPS - Operating (Non-GAAP) Losses
 
$(0.08)
 
 
 
O&M Expenses
 
(0.07)
 
 
 
Interest Expense
 
(0.01)
 
For the year ended December 31, 2016, GAAP losses were $(240) million, or $(0.57) per basic share, compared with $(427) million, or $(1.01) per basic share, for the same period of 2015. Operating (non-GAAP) losses, excluding special items, were $(0.56) per basic share for the year ended December 31, 2016, compared to $(0.44) per basic share for the same period of 2015.
 
 
4Q 2016 Basic EPS - Operating (Non-GAAP) Losses
 
$(0.16)
 
 
 
Special Items - 2016
 
 
 
 
4Q 2016 Basic EPS (avg. shares outstanding 431M)
 
$(0.16)
 
 
 
 
 
 
 
4Q 2016 Net Loss - GAAP
 
$(71)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4Q 2016 vs 4Q 2015 Earnings Drivers, Excluding Special Items
O&M Expenses - Higher O&M expenses decreased earnings $0.07 per share primarily due to a higher charitable contribution to the FE Foundation and higher environmental remediation costs at legacy plants.
Interest Expense - Higher interest expense decreased earnings $0.01 per share primarily due to increased short-term borrowings.
   

The consolidated effective income tax rate for the fourth quarter of 2016 was 29.1% compared to 29.9% for the same period of 2015. For the year ended December 31, 2016, the consolidated effective income tax rate was 37.6% compared to 36.0% for the same period of 2015.

   
Special Items - In the fourth quarter of 2015, Corporate/Other special items included the impact of asset impairment/plant exit costs of $0.56 per share. Additional details regarding special items can be found on page 37.


For additional information, please contact:
Irene M. Prezelj
 
Meghan G. Beringer    
Vice President,
 
Director,
Investor Relations
 
Investor Relations
(330) 384-3859
 
(330) 384-5832

_____________________________________________________________________________________________________
Consolidated Report to the Financial Community - 4th Quarter 2016                    11



FirstEnergy Corp.
Consolidated Statements of Income (Loss)
(In millions, except for per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31
 
Year Ended December 31
 
 
 
 
 
 
2016
 
2015
 
Change
 
2016
 
2015
 
Change
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1
)
 
Regulated distribution
 
$
2,239

 
$
2,189

 
$
50

 
$
9,629

 
$
9,582

 
$
47

 
 
(2
)
 
Regulated transmission
 
294

 
267

 
27

 
1,151

 
1,054

 
97

 
 
(3
)
 
Competitive energy services
 
1,014

 
1,285

 
(271
)
 
4,549

 
5,384

 
(835
)
 
 
(4
)
 
Other and reconciling adjustments
 
(172
)
 
(200
)
 
28

 
(767
)
 
(994
)
 
227

 
 
(5
)
Total Revenues
 
3,375

 
3,541

 
(166
)
 
14,562

 
15,026

 
(464
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(6
)
 
Fuel
 
397

 
477

 
(80
)
 
1,666

 
1,855

 
(189
)
 
 
(7
)
 
Purchased power
 
821

 
1,007

 
(186
)
 
3,813

 
4,318

 
(505
)
 
 
(8
)
 
Other operating expenses
 
1,023

 
952

 
71

 
3,858

 
3,749

 
109

 
 
(9
)
 
Pensions and OPEB mark-to-market adjustment
 
147

 
242

 
(95
)
 
147

 
242

 
(95
)
 
 
(10
)
 
Provision for depreciation
 
339

 
313

 
26

 
1,313

 
1,282

 
31

 
 
(11
)
 
Amortization of regulatory assets, net
 
98

 
67

 
31

 
320

 
268

 
52

 
 
(12
)
 
General taxes
 
256

 
231

 
25

 
1,042

 
978

 
64

 
 
(13
)
 
Impairment of assets
 
9,218

 
16

 
9,202

 
10,665

 
42

 
10,623

 
 
(14
)
Total Expenses
 
12,299

 
3,305

 
8,994

 
22,824

 
12,734

 
10,090

 
 
(15
)
Operating Income (Loss)
 
(8,924
)
 
236

 
(9,160
)
 
(8,262
)
 
2,292

 
(10,554
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(16
)
 
Investment income (loss)
 
9

 
(8
)
 
17

 
84

 
(22
)
 
106

 
 
(17
)
 
Impairment of equity method investment
 

 
(362
)
 
362

 

 
(362
)
 
362

 
 
(18
)
 
Interest expense
 
(294
)
 
(286
)
 
(8
)
 
(1,157
)
 
(1,132
)
 
(25
)
 
 
(19
)
 
Capitalized financing costs
 
24

 
24

 

 
103

 
117

 
(14
)
 
 
(20
)
Total Other Expense
 
(261
)
 
(632
)
 
371

 
(970
)
 
(1,399
)
 
429

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(21
)
Income (Loss) Before Income Taxes (Benefits)
 
(9,185
)
 
(396
)
 
(8,789
)
 
(9,232
)
 
893

 
(10,125
)
 
 
(22
)
 
Income taxes (benefits)
 
(3,389
)
 
(170
)
 
(3,219
)
 
(3,055
)
 
315

 
(3,370
)
 
 
(23
)
Net Income (Loss)
 
$
(5,796
)
 
$
(226
)
 
$
(5,570
)
 
$
(6,177
)
 
$
578

 
$
(6,755
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Earnings (Loss) Per Share of Common Stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(24
)
 
Basic - Net Income (Loss)
 
$
(13.44
)

$
(0.53
)
 
$
(12.91
)
 
$
(14.49
)
 
$
1.37

 
$
(15.86
)
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
(25
)
 
Diluted - Net Income (Loss)
 
$
(13.44
)
 
$
(0.53
)
 
$
(12.91
)
 
$
(14.49
)
 
$
1.37

 
$
(15.86
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Weighted Average Number of
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Common Shares Outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
Basic
 
431

 
423