Meghan Geiger Beringer - FirstEnergy Corp. Charles E. Jones - FirstEnergy Corp. James F. Pearson - FirstEnergy Corp. Leila L. Vespoli - FirstEnergy Corp. K. Jon Taylor - FirstEnergy Corp. Steven R. Staub - FirstEnergy Corp.

Stephen Calder Byrd - Morgan Stanley & Co. LLC Julien Dumoulin-Smith - UBS Securities LLC Paul Patterson - Glenrock Associates LLC Praful Mehta - Citigroup Global Markets, Inc. Jonathan Philip Arnold - Deutsche Bank Securities, Inc. Gregg Orrill - Barclays Capital, Inc. Angie Storozynski - Macquarie Capital (USA), Inc. Michael Lapides - Goldman Sachs & Co. Anthony C. Crowdell - Jefferies LLC Charles Fishman - Morningstar, Inc. Larry Liou - JPMorgan Securities LLC

Greetings and welcome to the FirstEnergy Corp.'s Fourth Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Meghan Beringer, Director, Investor Relations for FirstEnergy Corp. Thank you, Ms. Beringer. You may begin. Meghan Geiger Beringer - FirstEnergy Corp.: Thank you, Rob, and good morning. Welcome to FirstEnergy's fourth quarter earnings call. Today, we will make various forward-looking statements regarding revenues, earnings, performance, strategies and prospects. These statements are based on current expectations and are subject to risk and uncertainties. Factors that could cause actual results to differ materially from those indicated by such statements can be found on the Investors section of our website under the Earnings Information link and in our SEC filings. We will also discuss certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures can be found on the FirstEnergy Investor Relations website along with the PowerPoint presentation, which supports today's discussion. Participants in today's call include Chuck Jones, President and Chief Executive Officer; Jim Pearson, Executive Vice President and Chief Financial Officer; Leila Vespoli, Executive Vice President, Corporate Strategy, Regulatory Affairs and Chief Legal Officer; Jon Taylor, Vice President, Controller and Chief Accounting Officer; Steve Staub, Vice President and Treasurer; and Irene Prezelj, Vice President, Investor Relations. Now, I'd like to turn the call over to Chuck Jones. Charles E. Jones - FirstEnergy Corp.: Thanks, Meghan. Good morning, everyone. Thanks for joining us. 2016 was a successful and transformative year for FirstEnergy. Our long list of significant accomplishments includes achieving the operating earnings targets that we outlined to the financial community, making strong progress on our growth strategy, and launching a plan that supports our transition to a fully-regulated company. During today's call, Jim and I will review our results and recent developments, and provide an update on the strategic review of our Competitive business. While we have a great deal to cover, we still expect to have plenty of time for your questions. For the year, we reported GAAP loss of $14.49 per share as a result of impairments in our Competitive business, and I'll discuss those more in a few minutes. On an operating earnings basis, we achieved results of $2.63 per share for 2016, which is in line with the revised guidance we provided in November, and for the second year in a row, higher than our original operating earnings guidance for the year. We are proud of the track record we are building to consistently deliver on the commitments we've made. Like to briefly outline some of our major accomplishments. First, we achieved outstanding operational performance across our company in 2016 with excellent results in distribution and transmission service reliability and plant operations. I'm particularly pleased with our very strong safety results. In 2016, our employees achieved the best safety performance in our company's history. This is the second straight year of setting a new record for safety performance, and I believe this reflects the strong safety culture across our entire organization. On the financial front, we contributed $500 million worth of stock into our qualified pension plan in December. Coupled with cash contributions totaling $382 million earlier in the year, this more than satisfies our 2016 pension funding obligations, and took pension funding obligations off the table for 2017. We continued our focus on costs through our cash flow improvement plan, exceeding the original targets we laid out with incremental fuel and capital savings in our Competitive business. In addition, we successfully restructured our credit facilities to provide the necessary financial flexibility to become a fully regulated company. FirstEnergy Corporation and our regulated subsidiaries entered into three new five-year syndicated credit facilities in December. These replace facilities that were set to expire in 2019 and increased the credit available to our 10 distribution companies. We've also had very successful results from our regulated growth initiatives. In our Transmission business, we completed the transfer of Penelec and Met-Ed transmission assets into our new MAIT subsidiary late last month, following approval from both FERC and the Pennsylvania Public Utilities Commission. While formula rates for both JCP&L and MAIT remain pending at FERC, we requested implementation effective January 1 and February 1 for JCPL (sic) [JCP&L] (5:38) and MAIT, respectively. We're on track for $1 billion in investments and are energizing the future growth initiative in 2017 with a majority of that spend taking place where we have formula rates. This is the last year of our initial $4.2 billion investment. In November, we announced the continuation of the program with $3.2 billion to $4.8 billion in transmission investments planned in 2018 through 2021. We also announced our plan to issue up to $500 million of incremental equity annually in 2017 through 2019 to help fund these investments. Turning to the Distribution business, we achieve resolution in several regulatory proceedings that will support continued investment in safe and reliable service for our customers. In Pennsylvania, we received approval of rates case settlements for our four operating companies with an expected Distribution revenue increase of approximately $290 million annually. In New Jersey, the approved settlement for JCP&L provides for an annual Distribution revenue increase of $80 million. And in Ohio, we will collect approximately $200 million annually for at least three years and up to five under the Ohio Distribution Modernization Rider. The new rates and the Ohio Rider all went into effect last month. The combination of successful outcomes in these state proceedings, coupled with our cost savings initiatives, has helped us begin improving our credit metrics. We achieved FFO to debt levels in 2016 which exceeded the minimum thresholds established by both Moody's and S&P. We also reengaged coverage with Fitch and they recently began rating all of our entities. In December, Mon Power issued an RFP to address the generation shortfall identified in its Integrated Resource Plan, along with a second RFP to sell its interest in the Bath County Pumped Storage Project. RFP for the Integrated Resource Plan seeks a combination of approximately 1,300 megawatts of unforced capacity generation and up to 100 megawatts of demand response. Bids were due on February 3. Then Charles River Associates in their role as RFP manager began assessing each proposal to determine the best combination of value and reliability for the customers of Mon Power. The assessment includes cost factors, such as the expected customer impact, capacity availability, environmental considerations, and acquisition costs; as well as non-cost factors, such as West Virginia's preference for in-state fuel sources, location and ease of integration. We expect Mon Power to announce the results of both RFPs when it submits its regulatory filing to the West Virginia Public Service Commission and FERC in March. Finally, in late 2016, we launched a strategic review of our Competitive Generation business to support our exit from that business by mid-2018. This very complex process is on track and we're very pleased with the progress we have made in the short time since our announcement. In November, FES brought on two independent board members and three new employee board members, who reviewed and authorized FES's entry into a new two-year secured credit facility with FirstEnergy that provides liquidity support through 2018. FirstEnergy and FES have both engaged legal and financial advisors to help guide this transition. We're working on separating FES from the unregulated money pool, and as of January 31, FES, its operating subsidiaries and FENOC, in aggregate, had a money pool investment of $2 million. At this time, FES hasn't drawn on the secured credit facility that is in place with FirstEnergy, but we would expect them to use that facility in the future. The decision to assess strategic options and our intent to exit the Competitive business by mid-2018 made it necessary to reduce the carrying value of certain of our generating assets to their fair market value, which resulted in the non-cash free tax impairment charges of $9.2 billion in the fourth quarter. I'll note that we remain in compliance with financial covenants in our bank credit facilities as the majority of this after-tax charge is excluded from our covenant calculations of debt to total capitalization. These impairments, together with second quarter asset impairment and plant exit costs, primarily associated with Bay Shore, Sammis Units 1 through 4, and the goodwill at our Competitive business totaled $16.67 per share. While these are not the kind of results anyone likes to report, writing down the majority of our Competitive Generation assets was a necessary step towards our exit of Competitive Generation, regardless of which path we ultimately take. And it's an important step to more clearly reflect our business in 2017 and beyond. We continue to assess and evaluate a number of strategic alternatives for our companies – for our Competitive business, including asset sales, legislative or regulatory initiatives for generation that recognizes environmental or energy security benefits, alternatives for our retail business and financial restructuring. In January, we announced an agreement to sell 1,572 megawatts of gas and hydroelectric generation for $925 million in an all-cash deal, with net proceeds expected to exceed $300 million after we repay debt and associated make-whole call premiums. This includes the Springdale, Chambersburg, Gans and Hunlock gas units in Pennsylvania, as well as the competitive portion of our Bath Hydro unit in Virginia, which are all part of our Allegheny Energy Supply subsidiary. We expect the transaction to close in the third quarter, subject to the satisfaction of a number of regulatory approvals and consents from third parties. We continue to explore options for the sale of our West Lorain combined cycle facility and the Buchanan natural gas unit. Otherwise, while the potential of additional generating unit sales or deactivations remains on the table, we do not expect near-term developments in those areas. In West Virginia, our Allegheny Energy Supply subsidiary offered its 1,300 megawatt Pleasants plant into the Mon Power RFP earlier this month for approximately $195 million or $150 per KW. As I mentioned earlier, Mon Power is expected to announce the results of that RFP next month. In Ohio, we have had meaningful dialog with our fellow utilities and with legislators on solutions that can help ensure Ohio's future energy security. Our top priority is the preservation of our two nuclear plants in the state, and legislation for zero-emission nuclear program is expected to be introduced soon. The ZEN program is intended to give state lawmakers greater control and flexibility to preserve valuable nuclear generation. We believe this legislation would preserve not only zero-emission assets, but jobs, economic growth, fuel diversity, price stability, and reliability and grid security for the region. We are advocating for Ohio's support for its two nuclear plants, even though the likely outcome is that FirstEnergy won't be the long-term owner of these assets. We are optimistic given these discussions we've had so far, and we'll keep you posted as this process unfolds. On a related topic, as you may know, the Nuclear Regulatory Commission typically relies on parental support agreements to provide additional assurance that U.S. merchant nuclear plants have the financial resources to maintain safe operations, particularly in the event of an extraordinary situation. In addition to the $500 million credit facility provided to FES by FirstEnergy that provides for ordinary operating liquidity needs, FirstEnergy is now working with FES to establish conditional credit support on terms and conditions to be agreed upon for the $400 million FES parental support agreement that is currently in place, benefiting FE Nuclear Generation. As always, the continued safe operation of these nuclear assets is of utmost importance and is consistent with our pursuit of environmental credits for the assets through a ZEN program. Moving back to our review of the Competitive business, I'd like to add that we may also explore the possibility of engaging creditors to restructure debt at FES. And as we discussed, there remains the possibility that FES and potentially FENOC may seek bankruptcy protection, although no such decision has been made. This initial phase of our review has been productive and we will continue sharing updates with you as we move forward. We remain committed to implementing our exit from Competitive Generation by mid-2018 to complete our transformation into a regulated company. While we're speaking of generation, we received numerous questions about Bruce Mansfield's operating status last week. So I wanted to clear up some confusion. First, the new dewatering facility is in place and it is working as designed. We have had some of the normal growing pains with obtaining the right consistency for the byproducts at the third-party disposal site; however, we are working with a contractor and believe we're on track to resolve that issue. All three units at Mansfield are operational, but they are currently on economic reserve due to low power prices, consistent with our normal dispatch strategy. Before I turn it over to Jim, I'll spend a minute reviewing our expectations for 2017. As we announced yesterday, we're raising operating earnings guidance for the year. This primarily reflects improvements at our Competitive business related to the significant reduction in depreciation expense resulting from the fourth quarter impairment, somewhat offset by advisory costs and the commodity margin impact of the proposed asset sale. Our GAAP earnings forecast is now $2.47 to $2.77 per share. Operating earnings guidance has been raised to $2.70 to $3.00 per share from the previous range of $2.55 to $2.85 per share that we announced at EEI. In our regulated businesses, we continue to anticipate a compound annual growth rate of 4% to 6% from our 2016 weather-adjusted base, or 7% to 9%, when including the Ohio Distribution Modernization Rider through 2019. We will seek incremental opportunities for growth in our regulated businesses in the next few years. Again, we have much to be proud of in 2016 from solid operating results to our operating performance, and the progress we are making towards our goals. In 2017, we'll remain fully focused on positioning the company for stable, predictable and customer service-oriented growth that will benefit customers, employees and shareholders. Now, I'll turn the call over to Jim for a review of the quarter. James F. Pearson - FirstEnergy Corp.: Thanks, Chuck, and good morning, everyone. As always, detailed information about the quarter can be found in the consolidated report, which was posted to our website yesterday afternoon. We also welcome your questions during the Q&A session or following the call. As Chuck explained, the impairment of our competitive assets resulted in a fourth quarter GAAP charge of $13.54, and this drove our GAAP loss of $13.44 per share in the fourth quarter, and $14.49 per share for the full year. A full list of special items can be found in the consolidated report. Operating earnings were $0.38 per share in the fourth quarter and $2.63 per share for the year. As Chuck indicated, these results were stronger than our original estimates and in line with our revised operating earnings guidance. In our Distribution business, fourth quarter deliveries increased 4% overall compared to the same period in 2015 as a result of higher weather-related usage and stronger commercial and industrial demand. While heating degree days were 26% higher than the fourth quarter of 2015, they were 9% below normal, and this milder-than-normal weather impacted our fourth quarter results as compared to our guidance. Fourth quarter 2016 residential deliveries increased 8% compared to last year and were flat on a weather-adjusted basis. Commercial deliveries were up 3% or 1% when adjusted for weather. In the industrial sector, deliveries increased 1.8%, driven primarily by higher usage in the shale and steel sectors. This follows a similar increase in the third quarter 2016, and we remain cautiously optimistic about these positive trends. We are forecasting a 3.5% increase in industrial deliveries in 2017. Moving to our Transmission business, fourth quarter earnings increased by $0.02 per share due to higher revenues related to our Energizing the Future program. And in our corporate segment, results were primarily impacted by higher operating expenses and interest expenses. In our Competitive business, operating earnings were slightly better than our expectations. Commodity margin decreased due to lower capacity revenues related to the capacity prices that went into effect in June as well as lower contract sales volume. This was partially offset by increased wholesale sales, lower capacity expense, and a lower fuel rate, as well as lower-than-anticipated operating expenses. The customer count for our Competitive business is currently about 1.1 million down from 1.6 million. In 2016, our contract sales were 53 million megawatt hours with 15 million megawatt hours being sold in the wholesale spot market. On an annual basis, we currently have about 70 million to 75 million megawatt hours to sell, decreasing to 65 million to 70 million megawatt hours once we complete the gas and hydro asset sale. As we carefully manage our collateral exposure at FES in light of its credit quality, we are closing out certain forward financial hedges we made for 2017 and 2018. This will reduce the committed sales we have and increase our open position for spot sales going forward. As a result, we expect contract sales to total 40 million megawatt hours in 2017 and 2018 with the remainder sold in the spot market. Before I open the call to your questions, I'll spend a minute going over potential implications of some of the tax reform proposals that have been getting quite a bit of attention lately. We have been very engaged with others in our industry to work toward an outcome that would minimize any negative impacts. With ideas still percolating from the House, the Senate, and the President, it is too early to speculate on the details of an eventual tax reform proposal. But based on the blueprint that was released by the House last year, we can give you a sense of how that tax proposal might impact FirstEnergy. Any decrease in the effective tax rate at the utilities could result in lower rates for customers, which would flow through to our FFO given that we aren't a federal cash taxpayer. In addition, since we have about $8 billion of holding company debt between FirstEnergy Corp. and FET, the loss of interest deductibility would disallow approximately $300 million of interest expense, which would negatively impact earnings by at least $0.20 per share. Finally, with 100% bonus depreciation, we would not anticipate being a federal cash taxpayer in the near future. Again, we are working closely with others in our industry to educate Congressional leaders about the importance of interest deductibility for companies like ours. We do support sensible tax reforms which would ultimately benefit the overall economy and industries in our service territory, and we will remain focused on this important and evolving legislation. As Chuck said, 2016 was a very productive year for FirstEnergy and we are pleased with our progress on our regulated growth strategy. We remain committed to positioning the company for stable, predictable and customer service-oriented growth to benefit customers, employees and shareholders. Now, I'd like to open the call for your questions.

Thank you. We will now be conducting a question-and-answer session. Our first question comes from Mr. Stephen Byrd with Morgan Stanley. Please proceed with your question. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Hi. Good morning. Charles E. Jones - FirstEnergy Corp.: Good morning. James F. Pearson - FirstEnergy Corp.: Morning. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Wanted to discuss the zero-emission approach in Ohio, and just wanted to think about that in the context of potentially seeking bankruptcy protection. Would a success in Ohio preclude the need for bankruptcy protection or would it more likely simply allow the nuclear units to continue operating, but might not impact your overall decision about seeking bankruptcy protection for FES? Charles E. Jones - FirstEnergy Corp.: So, here's what I said in my prepared remarks, and I'll elaborate on it a little bit. I think that it is very important for the state of Ohio to look to the future and how they're going to provide for energy security, grid security, and not just from an electric perspective, the economic impact in terms of jobs and taxes and so forth that are associated with these two facilities. I've been very upfront with the legislators that I have met with personally to tell them don't do this for FirstEnergy because it's unlikely we're going to be the long-term owner operators of these assets. So now, your second question on how that might enter into a bankruptcy? That decision is going to be ultimately made by the FES board. And the FES board's going to look at what impact that has at that point in time. I think, though, it's very unlikely. You saw what we did with the impairment on the assets. That leaves the book value of our FES business somewhere around $1.5 billion and we've already communicated what the secured and unsecured debt associated with that business is. I think it's highly unlikely we'll get the value of that business to a place where the book value is greater than the debt. So... Stephen Calder Byrd - Morgan Stanley & Co. LLC: Understood. That makes sense.

Our next question comes from Mr. Julien Dumoulin-Smith with UBS. Please proceed with your question. Julien Dumoulin-Smith - UBS Securities LLC: Hey. Good morning. Charles E. Jones - FirstEnergy Corp.: Hi, Julien. Julien Dumoulin-Smith - UBS Securities LLC: Hey. So, first quick question here a little bit on the numbers. Just in terms of reconciling FFO from the Competitive segment relative to adjusted EBITDA, obviously, adjusted EBITDA going down. But the FFO numbers are a little bit higher net-net versus the adjusted EBITDA. What's the reconciliation there? And also can you discuss – I imagine the bulk of the FFO is at the FES side of the CES business. To what extent should we kind of consider that as kind of a proxy for the FES cash flows, minus perhaps a little bit for the remaining coal asset on the other side of Pleasants (27:22)? James F. Pearson - FirstEnergy Corp.: Let me take a shot at that, Julien, a lot of questions out there. Let me talk about the Competitive segment free cash flow. Let me start with that. It's up a little over $400 million. And what's driving that is the asset sale generated about $815 million. But then when you get into some other components, increased advisory fees are reducing it by about $90 million. The commodity margin is down about $95 million. That's associated with the sale of the AES assets. And also the cash receipts at the Competitive segments are down about $180 million. This is associated with the gain on the sale. So when I take that to the FirstEnergy level, the FFO is down about $200 million from the original guidance. And that's primarily the advisory fees that we're paying of about $90 million, as well as the reduced commodity margin, about a $95 million. Julien Dumoulin-Smith - UBS Securities LLC: Got it. And then just reconciling adjusted EBITDA versus FFO? James F. Pearson - FirstEnergy Corp.: Okay. When you look at the adjusted EBITDA, again, it's impacted primarily by the lower commodity margin of about $95 million as well as the advisory fees that were $90 million. So, those are the primary drivers there. Julien Dumoulin-Smith - UBS Securities LLC: Got it. Okay. Fair enough. And then, the 10-K references a February 24 decision here on the coal litigation. Do you expect to 8-K that and/or (29:16) any further rollout of data points after that? Charles E. Jones - FirstEnergy Corp.: I don't think it references a February 24 decision. It says that that's the end of the initial phase of the hearing on whether or not – or where the liability is going to fall. Following that, the arbitration panel has time yet to then make their decision on liability. And then following that, there would be additional time, if there is liability, to determine what that liability would be. So we're... Julien Dumoulin-Smith - UBS Securities LLC: Right. Charles E. Jones - FirstEnergy Corp.: ...several months, at least, away from knowing any damages, if there are to be damages, and a while away from knowing what the arbitrators decide on liability. Julien Dumoulin-Smith - UBS Securities LLC: Great. Excellent. And just a last quick one, what was the earned ROE in Pennsylvania across the utilities in 2016? I know you disclosed it for 2015 here in the disclosures, but just to reconcile. Leila L. Vespoli - FirstEnergy Corp.: As a result of our last rate case that settled, it was a black box, so there was no ROE. Julien Dumoulin-Smith - UBS Securities LLC: Okay. All right. Fair enough. I'll follow it offline. Thank you, guys.

Our next question is from Mr. John Kiani with Cove Key Management (30:44). Please proceed with your question.

Good morning. Charles E. Jones - FirstEnergy Corp.: Morning. Leila L. Vespoli - FirstEnergy Corp.: Morning.

I'm trying to make sure I can reconcile the amount and add up the amount of support that FE Corp. is giving to FES, just wanted to see if I'm thinking about this correctly. Is the $400 million incremental – or additional credit support for the Nuclear Generation business that you disclosed in the K and on slide six of your deck, is that incremental to the $500 million secured revolver that you all put in place between the parent and FES and the $200 million additional credit support or LC facility as well? So, is the total $500 million plus $400 million plus $200 million, or how should I think about that, please? Charles E. Jones - FirstEnergy Corp.: So, let's take the $400 off to the side here for a second. There is an obligation under our agreements with the Nuclear Regulatory Commission to maintain $400 million of liquidity. That can be accomplished by liquidity or by a parental guarantee that we would backstop that liquidity. That is what we're working on. That would only ever be exercised in the event of an extraordinary set of conditions resulting in all four of our nuclear reactors being offline for an extended period of time. Other than that, it's an insurance policy to the Nuclear Regulatory Commission, but there's not an opportunity for FES to draw down on that. And we're talking about three nuclear plants that are excellent operating nuclear plants. Well, at least, two that are at the high end and one at – I mean, they have run very, very well. So, the likelihood of all three sites and all four units being off for an extended period of time is very, very unlikely. But there is a requirement that we ensure that there is liquidity available under our agreements with the Nuclear Regulatory Commission. The $500 million you know about already. And then what was the – go ahead. James F. Pearson - FirstEnergy Corp.: The $200 million, that was a guarantee on the surety bonds. Charles E. Jones - FirstEnergy Corp.: Yes. So, those two are both additive.

And that $200 million, is that where the LC is posted to the Pennsylvania Department of Environmental Protection for Little Blue Run? Is that correct? James F. Pearson - FirstEnergy Corp.: Yeah, John (33:24). Yeah, that makes up about $169 million of the $200 million. That's right.

Okay. And then, along the same lines of the nuclear support, in the hypothetical event of a FES or nuclear generation bankruptcy, who is ultimately liable for the Nuclear Decommissioning Trusts or any shortfalls or topping off that would need to be done at the – for the NDT? Is it FES? Or is it possible that FE Corp. could be required to guarantee it, because some of the licenses sit at FENOC? How should we think about that, please? Charles E. Jones - FirstEnergy Corp.: So, at the time that that would occur, the Nuclear Decommissioning Trusts would be funded at an appropriate level. And as long as those assets continue to run, would continue to get funded through the useful life of the plants. Ultimately, where that ends up, I believe, and I'm going to ask Leila to help me here, will be determined through a bankruptcy process, if there's a bankruptcy. Leila L. Vespoli - FirstEnergy Corp.: So, just to add a little bit more detail, it's licensee owner that would be responsible. In our case, that's our nuclear gen-co. Right now, the NDTs, given the license duration, is fully-funded. So, FirstEnergy right now is not responsible; it is the license owner.

Got it. And then, one more last question, please. How should we just think about or how would the board of FES or, just in general, how do you think about managing the liquidity of FES and the June 1 putable maturity that exists? I think the business generates a lot of its free cash flow typically towards the latter half of the year, but obviously that maturity is coming up sooner than that. So, how do you think about paying that maturity off or not in the context of how the free cash flow of the business is a little bit more back end of the year weighted, please? Charles E. Jones - FirstEnergy Corp.: So, in the context of the environment that we are operating in, that's not a question for FirstEnergy to answer. We have begun the process of separating FES and FirstEnergy when we put in place a separate board for FES. And that's a decision that the FES board is going to have to wrestle with as that date approaches.

Got it. Thank you.

Our next question comes from Mr. Paul Patterson with Glenrock Associates. Please proceed with your question. Paul Patterson - Glenrock Associates LLC: Good morning, guys. Meghan Geiger Beringer - FirstEnergy Corp.: Good morning, Paul. Paul Patterson - Glenrock Associates LLC: Just wanted to follow-up on John's (36:21) questions here, and I apologize for me being a little dense, but what is the total amount – the $400 million, you were very clear on, what – that's associated with all the four nuclear reactors being shut down. But what is the amount absent that that we should think about as being the parent's commitment to FES? James F. Pearson - FirstEnergy Corp.: Yes, Paul, I would say the commitment to FES is a $500 million secured credit facility and that's secured by first mortgage bonds as well as a $200 million surety bond, which is also secured. Paul Patterson - Glenrock Associates LLC: Okay. James F. Pearson - FirstEnergy Corp.: Now, we have stated that FirstEnergy Corp. guarantees the entire amount of the pension and executive deferred compensation benefit plans, which we consider that, and always have considered that, an FE Corp. responsibility. Paul Patterson - Glenrock Associates LLC: How much is that again? James F. Pearson - FirstEnergy Corp.: That would be in the range of about $1 billion and that will change as the discount rates change as well as we make future contributions to the pension plan. And as Chuck said, we do not have any requirements to make any pension contributions in 2017. However, the period 2018 through 2021, we have about $1.8 billion of required pension contributions and about $700 million years thereafter. Charles E. Jones - FirstEnergy Corp.: And aside from that, Paul, I think we've been very clear that we do not intend to support that business from FirstEnergy any longer. Paul Patterson - Glenrock Associates LLC: Okay. And then the $400 million associated with the NRC commitment, you guys are looking for ZECs, and I guess what I'm wondering is, what – that would suggest that some of these plants or some of these reactors are at economic risk for closure. Am I wrong? So, how should we think about the need for ZECs, and if that weren't forthcoming, the likelihood that these reactors might have to shut down? Charles E. Jones - FirstEnergy Corp.: Well, I can't speak for prospective new owners of these four nuclear units. But I can tell you this. Running nuclear reactors isn't something that just anybody can do. And there is a significant amount of capital risk associated with that business, depending on how these assets, if there's a restructuring or a bankruptcy, where they ultimately go, and who ultimately owns them. I'm not sure people are going to be willing to take on the risk of even the next refueling outage, which is very expensive. So, I don't think there's any guarantee, absent some other support for these units, that they're going to keep running far into the future. Paul Patterson - Glenrock Associates LLC: Okay. Thanks so much for the clarity.

Our next question comes from Mr. Praful Mehta with Citigroup. Please proceed with your question. Praful Mehta - Citigroup Global Markets, Inc.: Thanks so much. Hi, guys. Charles E. Jones - FirstEnergy Corp.: Hey, Praful. Praful Mehta - Citigroup Global Markets, Inc.: So, on the nuclear point – Hi. So, on the nuclear point, just wanted to clarify, clearly, as you pointed out right, it's not – there's very few real buyers for nuclear assets in the market. And if there weren't ZECs, it's very unlikely that somebody steps up. Is that a fair way of understanding it that if there are no ZECs, what is the situation you're left with at that point? Because if there's no buyer for it, are you going to hold on – are you forced to hold on to the assets, or how should we think of that? Charles E. Jones - FirstEnergy Corp.: I think you should think about it this way. And I said earlier, these assets are now valued at somewhere around $1.5 billion. And that includes the nuclear fuel that they own. The debt is significantly higher than that. Absent something to raise the value of these units and make them attractive to a buyer, there's only one way for us to exit this business. Praful Mehta - Citigroup Global Markets, Inc.: All right. Fair enough. Understood. And then secondly, I know that on the call you've mentioned some of the forward hedges of contracts that you had have been sold to minimize the support. Just want to understand, how is that treated? Like, is that treated as cash today? And is that flowing into EBITDA or cash flow? Where does that sit right now, the benefit of the sale of the forward contracts? James F. Pearson - FirstEnergy Corp.: Yeah. Any benefit of unwinding of those forward contracts would flow through. I think the key component is, is it reduces the amount of collateral that we were required to have outstanding. So, that impacts our cash. And from the end of the year until where we are right now, we've reduced our collateral requirements by about $70 million. Praful Mehta - Citigroup Global Markets, Inc.: Got you. No, I get the collateral requirement benefit. I'm just trying to figure out like just where does that sit, like, in your forecast or in your – is it in cash flow, free cash, but not in EBITDA, just so I understand where that does (41:45)? James F. Pearson - FirstEnergy Corp.: That's right. It would be in our cash flow. Any gains or losses associated with unwinding that would flow through to EBITDA, but that was not anything that would be material. Just the return of the cash would be part of our cash flow. Praful Mehta - Citigroup Global Markets, Inc.: Got you. Thank you, guys.

Our next question is from Mr. Jonathan Arnold with Deutsche Bank. Please proceed with your question. Jonathan Philip Arnold - Deutsche Bank Securities, Inc.: Yeah. Good morning, guys. Charles E. Jones - FirstEnergy Corp.: Hey, Jon. James F. Pearson - FirstEnergy Corp.: Good morning. Jonathan Philip Arnold - Deutsche Bank Securities, Inc.: I had a question on the tax reform slide. Firstly, I just want to make sure I understand the $0.20 number that you referenced in the second bullet. Is that discrete to eliminating interest expense deductions at the hold-co? And am I correct that there'd be maybe another dime or so of exposure just from the lower tax rate on the parent company drag, or am I thinking about that wrong? James F. Pearson - FirstEnergy Corp.: No, the way I would think about that, Jonathan, is we've got a little over $300 million in interest expense, and losing that 35% deductibility is about $100 million. And you divide it by your shares outstanding, that's how you get to the number we were talking about there. We did not try to quantify anything else at that point. Jonathan Philip Arnold - Deutsche Bank Securities, Inc.: So, that was just the interest component of the parent company? James F. Pearson - FirstEnergy Corp.: That's purely the interest component associated with that. That's correct. Jonathan Philip Arnold - Deutsche Bank Securities, Inc.: Okay. And then as a follow-up to that, you obviously are flagging the risk to your FFO. Can you talk at all about potential implications given where you are on credit metrics at certain scenarios and maybe frame that a little more for us? And maybe what your priority responses might be if you needed to address it? Charles E. Jones - FirstEnergy Corp.: So, Jonathan, over the last couple of years, I have resisted trying to guess about what the future might be. And I think this whole tax reform issue is getting a lot of attention. Obviously, all of my other peers have commented on it. Whether or not it even happens in my mind is a question and what version happens. There's a different version that the President has than what the House has and what the Senate has, and we haven't even started to really run all those issues to ground. I will tell you this. I've been attending EEI CEO meetings since 2001, and our industry coalesced around what the right answer for our industry is with regard to this, quicker on this issue than I have ever seen it happened. Several of my peers, who I have a tremendous amount of respect for, have already been to Washington DC to talk about the impact on our industry. And what they're trying to do with tax reform is inject money into the economy from a supply side to jumpstart this economy. Capital formation in our industry is not a problem. And this would actually have the inverse effect on our industry of what they're trying to accomplish. So, I think our representatives felt like they had meaningful discussions. And so, I don't think there's any reason for us to be playing Doomsday at this point with regard to FirstEnergy or anyone else in this industry. Jonathan Philip Arnold - Deutsche Bank Securities, Inc.: Would your inclination be to step up capital spend, I guess? Really, my question is whether – because others have emphasized that as being an offset. I felt you're not really doing that. Is the balance sheet a constraint on going down that path, or do you think you would be playing that card, too? Charles E. Jones - FirstEnergy Corp.: As I said, if you can tell me where it's going to end up, then we can tell you how we will react to it. But I'm not going to speculate about where it's going to end up or the impact it's going to have on what we do. I do think, obviously, if the House plan got accepted exactly as it's been promulgated so far, it would be a difficult issue for our industry to wrestle with. Jonathan Philip Arnold - Deutsche Bank Securities, Inc.: All right. Thank you, Chuck.

Our next question is from Mr. Gregg Orrill with Barclays Bank. Please proceed with your question. Gregg Orrill - Barclays Capital, Inc.: Yes. Thank you. I was wondering if you could talk about the taxes a little bit in terms of – you're not a cash taxpayer. Would it be possible to provide some guidance around how much of the benefits come from the NOL versus the taking of bonus depreciation, or at least, mechanically, give us a way to think about how both of those are impacting the cash flows? K. Jon Taylor - FirstEnergy Corp.: Gregg, this is Jon. As you know, we're not a federal cash taxpayer today. The federal NOL as of the end of the year was $5 billion. So, we don't anticipate being a federal taxpayer for some time until (47:17) 2021, 2022. With respect to bonus, we've been dealing with some form of bonus depreciation for the last 5 to 10 years, and it's just something that we'll have to continue to look at. Gregg Orrill - Barclays Capital, Inc.: Okay. Thank you.

The next question is from Ms. Angie Storozynski with Macquarie. Please proceed with your question. Angie Storozynski - Macquarie Capital (USA), Inc.: Thank you. So, just one follow-up. So, I'm look at your financial plan slide from the fourth quarter fact-book and compare it against the EEI financial plan slide, and there's a small change in the wording. You are skipping the word for FE Corp. from your commitment to investment-grade credit rating. Is that intentional? Charles E. Jones - FirstEnergy Corp.: No. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. That's all I have. Thank you. Charles E. Jones - FirstEnergy Corp.: We are committed to investment-grade credit metrics at FE Corp. Angie Storozynski - Macquarie Capital (USA), Inc.: Thank you.

Our next question comes from Mr. Michael Lapides with Goldman Sachs. Please proceed with your question. Michael Lapides - Goldman Sachs & Co.: Hey, guys. Just I'm trying to get a proxy in thinking about those core regulated businesses at FE. Could you talk a little bit about what you're kind of expecting for growth on the Distribution side after 2017 and kind of compare that to growth on the Regulated Transmission side after 2017? Charles E. Jones - FirstEnergy Corp.: So, I would say, Michael, that what we're talking about is average annual growth for T&D of 4% to 6% per year. It would be ramped up a little bit in the earlier years because of the $200 million that we're receiving in Ohio. But obviously, that goes away at some point in time. And the way I think about it is this. We have numerous investment mechanisms through riders on the Distribution side of our company in Ohio and Pennsylvania, in particular. We have formula rates so far with ATSI and TrAILCo. And eventually, when we get another FERC Commissioner, we'll have one for MAIT and JCP&L. So, we have the ability to move those funds around quite a bit between T&D and from state to state, et cetera, et cetera. And that gives us a lot of flexibility to address some of the reliability challenges that we see on our wire side of our company. And hopefully, at some point, some of the load growth that we're going to see on the wire side of our company. So, I think you should think about it in terms of the combination of the two, because we're going to move money around. And I think, probably, in the very near future, we're going to start having dialog with the Ohio Commission on their grid modernization ideas. The extent we move forward there, that has the same return on equity as a transmission formula rate. So, that might move some money around there too. So there's just so many moving parts, I don't want to commit that it's going to be this for Transmission and this for Distribution. I'd rather just tell you, you can count on 4% to 6%. And as I said in my remarks, as we move a little bit farther down the tracks, we're going to look at ways to ramp that up over the next few years. Michael Lapides - Goldman Sachs & Co.: Got it. And just curious on the Transmission – actually, before I ask that one, I want to come back to New Jersey, because you brought up JCP&L a little bit. Some of your peers in New Jersey have very different rate-making mechanisms than what JCP&L has. Just curious, where are you in the process, if anywhere, in talking with interveners and with the BPU about being able to adopt some of those same rate-making mechanisms for JCP&L? Charles E. Jones - FirstEnergy Corp.: Well, here's what I would say. We finally got a settlement on a rate case in New Jersey for the first time in the 15 years that we've owned JCP&L. That was a tremendous accomplishment on our part. We've had a lots of issues over there with four horrific storms, with some reliability issues early on in our ownership of JCP&L, with some union issues early on in our ownership of JCP&L. I think the settlement on this case was a big step forward for us in terms of our relationship in New Jersey. We would not have been able to get that accomplished if we didn't have solid relationships with our local elected officials that are much better than they ever were, with the BPU, and if we weren't performing over there. So, that's all a good place to be. The paint isn't even dry on that settlement yet. It just went into effect last month. So, I think now is the time that over time we'll start having discussions with the BPU about what types of investments do they want to see and what mechanisms would they be interested in considering to do it. And more to come on that. But we're not having any right now. Michael Lapides - Goldman Sachs & Co.: Got it. Thank you, Chuck. Much appreciated.

Our next question comes from Mr. Stephen Byrd with Morgan Stanley. Please proceed with your question. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Great. Thanks, and sorry for getting disconnected earlier. Just had one quick follow-up on the pension obligation at the Competitive business. I think I saw in the appendix that the net impact was about $700 million rather than $1 billion. But I just wanted to check on the magnitude of the liability, essentially, that the parent company has for that pension? Steven R. Staub - FirstEnergy Corp.: Steve, it's Steve Staub. It also takes into consideration the OPEB, which actually has a positive balance, so it nets out to about $700 million with respect to the pension and OPEB. And then, there's some other guarantees that Jim had mentioned specific to the executive deferred comp as well as some other small guarantees that add up to about $1 billion. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Great. Thank you very much. That's all I had.

Our next question comes from Mr. Anthony Crowdell with Jefferies. Please proceed with your question. Anthony C. Crowdell - Jefferies LLC: Good morning. Just hopefully two quick questions. One, it appears that if a ZEC does get passed in Ohio, it's – I don't know if to use these words, unlikely that FE would be the owner of these assets, would that change FE's – would FE's intention – would you be inclined to own a nuclear plant if they were rate based? Charles E. Jones - FirstEnergy Corp.: I don't see any possibility that they're going to be rate based in the timeframe that I've committed to you that we're going to exit this Competitive Generation. So, I don't even think we should even be talking about that. We are going to work hard on this ZEN legislation, because I believe it's the right thing to do for the state of Ohio. I believe it's the right thing to do for these assets. I believe it's the right thing to do for our employees that work at these facilities. And I think it's the right thing to do for those communities that these big, huge manufacturing facilities are resident in. So, we're going to do it for all the right reasons, even though it's not going to, ultimately, I don't think, have any impact to the shareholder value of FirstEnergy over the long haul. Anthony C. Crowdell - Jefferies LLC: Got it. And just lastly, a more housekeeping. On the fourth quarter – in fourth quarter results, corporate and other took a charge, I guess, for legacy coal plants. Any reason that was not at the op-cos? James F. Pearson - FirstEnergy Corp.: Now, that... Charles E. Jones - FirstEnergy Corp.: Go ahead. James F. Pearson - FirstEnergy Corp.: Those are assets that were former GPU assets. They are those manufactured gas plants. So, they don't really pertain to any of the other segments. That's why we've decided to keep them there. In fact, last year, we had a similar charge, but it was not in the fourth quarter. So, we've just been recording it in that segment. Anthony C. Crowdell - Jefferies LLC: Great. Thanks for taking my questions. Charles E. Jones - FirstEnergy Corp.: Okay, Stephen (sic) [Anthony] (56:04).

Our next question comes from Mr. Charles Fishman with Morningstar. Please proceed with your question. Charles Fishman - Morningstar, Inc.: Thank you. Just a quick one on Transmission. You have a pretty tight earnings guidance range; $360 million to $380 million, yet there's a lot of uncertainty with respect to the timing and eventual outcome of some of these FERC-related cases and obviously with the vacancy on the FERC Commission. Does that range still take into account that uncertainty? James F. Pearson - FirstEnergy Corp.: Charles, no, this is Jim. No, that range was based on having those rates go into effect January 1. At a time that we find out that something may be different than that, then we'll update that guidance. But what you're looking at is assuming that both MAIT and JCP&L go into effect at the beginning of the year. Charles Fishman - Morningstar, Inc.: Okay. That's all I had. Thank you. Go ahead. Charles E. Jones - FirstEnergy Corp.: I would add on to that, though, that inside a company that's as big as ours, with 10 regulated distribution companies and the transmission footprint that we have, we have the ability, in the interim until we have certainty on how we're going to get our returns through MAIT, to move some of our capital plan around into other formula rates. And I am not excusing our energy delivery leader from meeting his earnings targets this year just because that's been delayed. Leila L. Vespoli - FirstEnergy Corp.: And, Charles, this is Leila. One point of clarification. So, staff does now have some delegated authority. And if they so – chose to do so, they could use that delegated authority and put the rates into effect January 1, February 1, subject to refund. So you don't need the FERC (57:56) Commissioner in order for that to happen is my point. Charles Fishman - Morningstar, Inc.: Okay, Leila. So, these issues are staff – are at the level that the staff could make a decision? Leila L. Vespoli - FirstEnergy Corp.: Correct. They're within staff domain at this point. Charles Fishman - Morningstar, Inc.: Got it. Thank you. Yeah.

Our next question comes from Mr. Larry Liou with JPMorgan. Please proceed with your question. Larry Liou - JPMorgan Securities LLC: Thanks for taking my call. I think in the beginning, you mentioned that you're in the process of separating FES from the unregulated money pool. Can you just expand on that a little? What are the kind of final hurdles there? Steven R. Staub - FirstEnergy Corp.: Yeah, it's Steve. We are in a process of doing that and we expect by the end of the first quarter to have FES, its subsidiaries, and FENOC operating under their own separate money pool. And so, we expect to have that in place shortly. Larry Liou - JPMorgan Securities LLC: Okay. And then for the asset sale proceeds, I saw that in your presentation, you changed 2019 issuance guidance. Is that kind of telegraphing potential de-levering at the holding company? Steven R. Staub - FirstEnergy Corp.: Can you repeat your question, please? Larry Liou - JPMorgan Securities LLC: In your EEI presentation, I think for 2019, you talked about refinancing the term loan that's due then. In the fourth quarter presentation, that's missing from the financing plan. So, is that kind of telegraphing that maybe you'll look to pay down that 2019 term loan? Steven R. Staub - FirstEnergy Corp.: So, the 2019 term loan was refinanced in December of 2016, in line with the restructuring of our credit facilities. Larry Liou - JPMorgan Securities LLC: Okay. So, that just kind of pushed out everything. Charles E. Jones - FirstEnergy Corp.: That's right. Larry Liou - JPMorgan Securities LLC: And then, just the last one, Chuck, you mentioned West Lorain and Buchanan as potential asset sales. But also, you touched upon the alternatives for the retail business. Can you just talk a little bit more about what are you looking at there? Charles E. Jones - FirstEnergy Corp.: I can't talk about what we're looking at there, because again I think that is going to be the responsibility of the FES board to look at it. But I think what I said is, other than West Lorain and Buchanan, I don't think you should expect any announcements in the near future. Larry Liou - JPMorgan Securities LLC: All right. Thank you. Charles E. Jones - FirstEnergy Corp.: Okay.

There are no further questions at this time. I'd like to turn the floor back over to Mr. Pearson for closing comment. Charles E. Jones - FirstEnergy Corp.: All right. So, I'll take over for Jim, and just like to thank you all for your continued support of FirstEnergy, your questions. Look forward to seeing many of you in Boston next week. And then, Jim will see some of you in New York next week. So, thank you.

This concludes today's teleconference. You may disconnect your lines at this time. And thank you for your participation.