SEC Company Response from FIRSTENERGY CORP (FE) (CIK 0001031296) (FE) — Sep 29, 2011
FIRSTENERGY CORP (FE) (CIK 0001031296)
Date: Sept. 29, 2011 · CIK: 0001031296 · Accession: 0001031296-11-000039
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-2101
Referenced dates: August 23, 2011
Letter
VIA EDGAR Division of Corporation Finance United States Securities and Exchange Commission Filed August 2, 2011 Definitive Proxy Statement on Schedule 14A Filed April 1, 2011 File No. 333-2101
Dear Mr. Allegretto:
This letter is written in response to the comments given by the staff (Staff) of the Division of Corporation Finance of the United States Securities and Exchange Commission (Commission) contained in the comment letter dated August 23, 2011 (re-issued September 15, 2011) to Anthony J. Alexander, Chief Executive Officer of FirstEnergy Corp. (FirstEnergy) with respect to FirstEnergy’s Form 10-K as filed on February 16, 2011 (2010 Form 10-K), FirstEnergy’s Form 10-Q as filed on August 2, 2011 (Second Quarter Form 10-Q) and FirstEnergy’s Definitive Proxy Statement as filed on April 1, 2011 (2011 Proxy Statement).
For your convenience, we have set forth each comment from your letter in bold typeface immediately followed by FirstEnergy’s response. Unless otherwise indicated, capitalized terms used herein shall have the meanings set forth in the 2010 Form 10-K.
Form 10-K for the Fiscal Year Ended December 31, 2010
Financial Statements, page 140
Consolidated Statements of Common Stockholders’ Equity, page 142
1.
We note the existence of a non-controlling interest in your capital structure. Please tell us whether you considered disclosing the amounts of consolidated net income and consolidated comprehensive income attributable to both the controlling and non-controlling interest in your consolidated statements of common stockholders’ equity. Also, please tell us whether you considered providing a reconciliation for the beginning and the end of the period carrying amount of equity attributable to controlling and non-controlling interests in your consolidated statements of common stockholders’ equity. Please refer to ASC 220-10-45-5, 220-10-45-8, 810-10-50-1A(a) and 810-10-50-1A(c).
Response:
FirstEnergy has disclosed the loss attributable to the non-controlling interest in its consolidated statements of income for all periods presented. Such losses were $24 million, $16 million and $3 million for 2010, 2009 and 2008, respectively. FirstEnergy has also disclosed the balance of the non-controlling interest in its consolidated balance sheets. The non-controlling interest was a debit balance of $32 million and $2 million and total equity was $8,513 million and $8,557 million as of December 31, 2010 and 2009, respectively.
FirstEnergy has not separately disclosed the amounts of consolidated net income and consolidated comprehensive income attributable to both controlling and non-controlling interest in a consolidated statement of equity due to the insignificance of the amounts relating to the non-controlling interest and the fact that no items in other comprehensive income have been attributable to the non-controlling interest. Similarly, FirstEnergy has not provided a reconciliation of the beginning and ending balance of the non-controlling interest because of the insignificance of such interest and the fact that the changes in the equity of the non-controlling interest have consisted of net income attributable to the non-controlling interest (which is disclosed on the face of the consolidated statement of income) and minor equity distributions.
Note 2. Summary of Significant Accounting Policies, page 179
(C) Earnings Per Share of Common Stock, page 181
2.
Please tell us how you disclosed the amount of securities that could potentially dilute EPS in the future, but which were not included in the calculation of diluted EPS because to do so would have been anti-dilutive for the periods presented. Refer to ASC 260-10-50-1.
Response:
There were no potentially dilutive securities excluded from the diluted EPS calculation for the years ended December 31, 2009 and 2008. The diluted EPS calculation for the year ended December 31, 2010 excluded 1,470,501 shares of FirstEnergy common stock underlying outstanding stock options and 266,281 shares of restricted stock because the inclusion of these shares in the calculation would have been antidilutive. FirstEnergy did not disclose the amount of potentially dilutive securities excluded from its diluted EPS calculation because the number of such securities was not significant compared to the weighted average number of outstanding shares (approximately 305 million shares) used in the diluted EPS calculation for 2010. In future filings, FirstEnergy will disclose the amount of potentially dilutive securities excluded from the calculation of diluted EPS or will include a statement that such amounts were not material.
Note 3. Pension and Other Postretirement Benefit Plans, page 185
3.
Please tell us whether you considered providing disclosure of the beginning and ending balances of the benefit obligation and fair value of plan assets for FES and the Utilities. Please refer to 715-20-50-1. Please tell us your basis for exclusion.
Response:
FirstEnergy’s pension and other postretirement benefit (OPEB) plans are neither multiemployer nor multiple-employer plans. However, because the pension and OPEB costs and funded status are components of cost recovery in the rate regulated jurisdictions in which FirstEnergy's utility subsidiary registrants operate, each subsidiary registrant is allocated a portion of the net periodic costs of the plans and is also allocated a portion of the fair value of plan assets and benefit obligations.
We provide all disclosures required under 715-20-50-1 for the FirstEnergy pension and OPEB plans in FirstEnergy’s consolidated financial statements. In addition, we disclose net periodic pension and OPEB costs and the net pension and OPEB asset (liability) recorded by each subsidiary registrant. We do not believe that the additional disclosure of the allocated amounts of the fair value of plan assets and changes in the fair values of plan assets or the disclosure of the allocated amounts of the benefit obligation and changes in the benefit obligations as if each subsidiary registrant had its own single-employer plans would be meaningful or appropriate.
4.
Please tell us the significance of remeasurement of your qualified pension plan as was done as of August 31, 2009. Please tell us the impact on your required disclosures as a result of your elective remeasurement. Please tell us whether you anticipate the $250 million voluntary contribution in 2011 will result in a decision to re-measure and the accounting and disclosure implications of that election.
Response:
During September 2009, the Utilities and ATSI made a $500 million voluntary contribution to the FirstEnergy Corp. Pension Plan. The decision to make this contribution was made subsequent to the annual actuarial valuation performed in late 2008 that established the actuarially determined benefit obligation as of December 31, 2008, and served as the basis for pension costs for the following 2009 calendar year. Because this large contribution was not anticipated in the 2008 actuarial determination of 2009 pension costs and given the significance of the contribution (exceeding 10% of plan assets at that time), FirstEnergy elected to remeasure its pension obligation as of August 31, 2009 and calculate its pension costs for the remainder of calendar year 2009 based on this actuarial remeasurement. A note to FirstEnergy’s consolidated financial statements included in its Form 10-Q for the quarter ended September 30, 2009 described the pension remeasurement and disclosed that the contribution and actuarial remeasurement decreased FirstEnergy’s accumulated other comprehensive income by approximately $494 million ($304 million, net of tax) in the third quarter of 2009 and reduced FirstEnergy’s expected net postretirement benefit cost (including amounts capitalized) for the remainder of 2009 by $7 million, including a $2 million reduction that was applicable to the third quarter of 2009.
At the time of the annual actuarial valuation of the FirstEnergy qualified pension plan performed as of December 31, 2010, and as disclosed in the 2010 Form 10-K, management anticipated contributing $250 million to the plan during 2011. Because this contribution was anticipated and considered in the actuarial determination of 2011 pension costs and the contribution represented less than 5% of plan assets, FirstEnergy did not perform a remeasurement at the time of the contribution.
Note 4. Stock Based Compensation, page 192
5.
We note that restricted stock, restricted stock units and performance unit awards earn dividend equivalents. Please tell us whether dividend equivalents credited to unvested awards are forfeitable and if not, whether the two-class method of computing earnings per share is necessary. Please refer to ASC 260-10-45-61A.
Response:
All dividend equivalents credited to unvested stock-based awards are forfeitable. In accordance with ASC 260-10-45-61A, the two-class method of computing earnings per share is therefore not necessary.
Note 7. Leases, page 212
6.
We note that you recognized above-market lease liabilities for the Beaver Valley Unit 2 and the Bruce Mansfield Plant. In this regard, please tell us why the above-market lease liabilities included in Note seven on page 214 differ from the amounts included in the consolidated balance sheets as of December 31, 2010 and 2009.
Response:
The liability for the above-market Bruce Mansfield Plant lease is included on the consolidated balance sheets of FirstEnergy Solutions Corp. on page 145 of the 2010 Form 10-K. The noncurrent portion is shown on the line entitled “Lease market valuation liability” and the current portion is included in “Current Liabilities – Other.” Because the counterparty to the lease is an independent third party, the above-market Bruce Mansfield Plant lease liability is also included in similar lines on the consolidated balance sheets of FirstEnergy Corp.
The liability for the above-market Beaver Valley Unit 2 lease is included on the consolidated balance sheets of The Toledo Edison Company on page 160 of the 2010 Form 10-K. The noncurrent portion is shown on the line entitled “Lease market valuation liability” and the current portion is shown on the line entitled “Current Liabilities – lease market valuation liability.” The counterparty to the lease is a subsidiary of FirstEnergy Solutions Corp. and the above-market Beaver Valley Unit 2 lease liability is eliminated in consolidation and therefore does not appear on the consolidated balance sheets of FirstEnergy Corp.
Note 14. Commitments, Guarantees and Contingencies, page 235
(C) Environmental Matters, page 237
7.
We note your disclosure that you cannot predict the outcome of certain environmental matters and what further actions, if any, or the costs or the timing thereof, that may be required with respect to the matters. Please tell us whether it was possible to make an estimate of reasonably possible losses or range of loss in excess of amounts accrued. For those contingencies where you are unable to estimate the possible loss or range of loss, provide an affirmative statement that such an estimate cannot be made. In addition, for those matters where you are unable to estimate the possible loss or range of loss, please tell us the procedures you undertake on a quarterly basis to attempt to develop a range of reasonably possible loss for disclosure. Please refer to ASC 450-20-50.
Response:
With respect to the matters referenced in the Staff’s comment, we respectfully submit that no reasonably possible losses in excess of accrued amounts were estimable at the time the filing was made. The eventual outcome of legal or regulatory proceedings is often difficult to predict, particularly where the proceeding is in its early stages, such as notices of violations, or where claimants seek indeterminate damages. As a result, judgments about the outcome, timing and potential loss relating to proceedings are difficult to make and are subject to risks and uncertainties that could cause actual results to be materially different from those we predict. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory proceedings when those proceedings present loss contingencies that are both probable and estimable. Any such accruals are adjusted thereafter, if appropriate, as the proceeding develops. Where an accrued liability has not been established but we believe a loss is reasonably possible, as well as for proceedings where an accrued liability has been established but for which an exposure to loss in excess of the amount accrued is reasonably possible, we provide a current estimate of the range of possible loss if such determination can be made and is material or indicate that an estimate of the range of possible loss cannot be made. Estimated ranges of possible loss are based on currently available information and
actual results may vary significantly. For proceedings where we are unable to estimate the possible losses or a range of possible loss, we respectfully advise the Staff that we have included disclosure regarding the potential magnitude of the claim to the extent possible.
Following the guidance under ASC 450, FirstEnergy quarterly evaluates the status of the legal and regulatory proceedings in which it is involved to evaluate whether accruals are appropriate and to determine whether it can make an estimate of reasonably possible loss or range of possible loss for the matters referenced in the Staff’s comment. As part of this evaluation, FirstEnergy considers, among other things, the nature of the litigation or claim, its status at the time of the filing of the applicable periodic report, the opinion or views of its outside defense counsel and other advisers, our past experience in similar matters and the experience of other entities (i.e., court rulings, or administrative decisions in factually-similar cases).
FirstEnergy undertakes specific quarterly procedures to estimate any possible loss, or range of loss, or to determine that such an estimate cannot be made. Representatives from our Accounting and Legal groups (and the Environmental group with regard to environmental matters) meet regularly to discuss and assess various outstanding claims. This assessment includes a consideration of the facts and circumstances as well as whether a specific dollar claim has been made. In addition, each quarter management conducts at least two disclosure subcommittee meetings after the quarter close, and prior to the filing of the applicable periodic report, attended by representatives from Accounting, Legal, Enterprise Risk Management, Investor Relations and Communications. As part of these meetings, outstanding litigation and various other potential contingencies are discussed and assessed. As a result of these efforts, FirstEnergy believes it has an appropriate process in place to estimate any loss or range of loss, or to determine that such an estimate cannot be made. The appropriate disclosures in FirstEnergy’s periodic reports are updated based on the information provided in these meetings. Prior to the filing of each of our periodic reports, a meeting of FirstEnergy's entire disclosure committee, including key executives representing all business units, is held to review and provide updates to the disclosures contained in the periodic report. If any outcome, resolution, or new litigation matter occurs prior to the filing of such report, FirstEnergy makes appropriate updates in the relevant report prior to the filing of such report with the Commission.
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sec_letter9-29.htm
VIA EDGAR
September 29, 2011
Mr. Jim Allegretto
Division of Corporation Finance
United States Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Re:
FirstEnergy Corp.
Form 10-K for Fiscal Year Ended December 31, 2010
Filed February 16, 2011
Form 10-Q for Fiscal Quarter Ended June 30, 2011
Filed August 2, 2011
Definitive Proxy Statement on Schedule 14A
Filed April 1, 2011
File No. 333-2101
Dear Mr. Allegretto:
This letter is written in response to the comments given by the staff (Staff) of the Division of Corporation Finance of the United States Securities and Exchange Commission (Commission) contained in the comment letter dated August 23, 2011 (re-issued September 15, 2011) to Anthony J. Alexander, Chief Executive Officer of FirstEnergy Corp. (FirstEnergy) with respect to FirstEnergy’s Form 10-K as filed on February 16, 2011 (2010 Form 10-K), FirstEnergy’s Form 10-Q as filed on August 2, 2011 (Second Quarter Form 10-Q) and FirstEnergy’s Definitive Proxy Statement as filed on April 1, 2011 (2011 Proxy Statement).
For your convenience, we have set forth each comment from your letter in bold typeface immediately followed by FirstEnergy’s response. Unless otherwise indicated, capitalized terms used herein shall have the meanings set forth in the 2010 Form 10-K.
Form 10-K for the Fiscal Year Ended December 31, 2010
Financial Statements, page 140
Consolidated Statements of Common Stockholders’ Equity, page 142
1.
We note the existence of a non-controlling interest in your capital structure. Please tell us whether you considered disclosing the amounts of consolidated net income and consolidated comprehensive income attributable to both the controlling and non-controlling interest in your consolidated statements of common stockholders’ equity. Also, please tell us whether you considered providing a reconciliation for the beginning and the end of the period carrying amount of equity attributable to controlling and non-controlling interests in your consolidated statements of common stockholders’ equity. Please refer to ASC 220-10-45-5, 220-10-45-8, 810-10-50-1A(a) and 810-10-50-1A(c).
Response:
FirstEnergy has disclosed the loss attributable to the non-controlling interest in its consolidated statements of income for all periods presented. Such losses were $24 million, $16 million and $3 million for 2010, 2009 and 2008, respectively. FirstEnergy has also disclosed the balance of the non-controlling interest in its consolidated balance sheets. The non-controlling interest was a debit balance of $32 million and $2 million and total equity was $8,513 million and $8,557 million as of December 31, 2010 and 2009, respectively.
FirstEnergy has not separately disclosed the amounts of consolidated net income and consolidated comprehensive income attributable to both controlling and non-controlling interest in a consolidated statement of equity due to the insignificance of the amounts relating to the non-controlling interest and the fact that no items in other comprehensive income have been attributable to the non-controlling interest. Similarly, FirstEnergy has not provided a reconciliation of the beginning and ending balance of the non-controlling interest because of the insignificance of such interest and the fact that the changes in the equity of the non-controlling interest have consisted of net income attributable to the non-controlling interest (which is disclosed on the face of the consolidated statement of income) and minor equity distributions.
Note 2. Summary of Significant Accounting Policies, page 179
(C) Earnings Per Share of Common Stock, page 181
2.
Please tell us how you disclosed the amount of securities that could potentially dilute EPS in the future, but which were not included in the calculation of diluted EPS because to do so would have been anti-dilutive for the periods presented. Refer to ASC 260-10-50-1.
Response:
There were no potentially dilutive securities excluded from the diluted EPS calculation for the years ended December 31, 2009 and 2008. The diluted EPS calculation for the year ended December 31, 2010 excluded 1,470,501 shares of FirstEnergy common stock underlying outstanding stock options and 266,281 shares of restricted stock because the inclusion of these shares in the calculation would have been antidilutive. FirstEnergy did not disclose the amount of potentially dilutive securities excluded from its diluted EPS calculation because the number of such securities was not significant compared to the weighted average number of outstanding shares (approximately 305 million shares) used in the diluted EPS calculation for 2010. In future filings, FirstEnergy will disclose the amount of potentially dilutive securities excluded from the calculation of diluted EPS or will include a statement that such amounts were not material.
Note 3. Pension and Other Postretirement Benefit Plans, page 185
3.
Please tell us whether you considered providing disclosure of the beginning and ending balances of the benefit obligation and fair value of plan assets for FES and the Utilities. Please refer to 715-20-50-1. Please tell us your basis for exclusion.
Response:
FirstEnergy’s pension and other postretirement benefit (OPEB) plans are neither multiemployer nor multiple-employer plans. However, because the pension and OPEB costs and funded status are components of cost recovery in the rate regulated jurisdictions in which FirstEnergy's utility subsidiary registrants operate, each subsidiary registrant is allocated a portion of the net periodic costs of the plans and is also allocated a portion of the fair value of plan assets and benefit obligations.
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We provide all disclosures required under 715-20-50-1 for the FirstEnergy pension and OPEB plans in FirstEnergy’s consolidated financial statements. In addition, we disclose net periodic pension and OPEB costs and the net pension and OPEB asset (liability) recorded by each subsidiary registrant. We do not believe that the additional disclosure of the allocated amounts of the fair value of plan assets and changes in the fair values of plan assets or the disclosure of the allocated amounts of the benefit obligation and changes in the benefit obligations as if each subsidiary registrant had its own single-employer plans would be meaningful or appropriate.
4.
Please tell us the significance of remeasurement of your qualified pension plan as was done as of August 31, 2009. Please tell us the impact on your required disclosures as a result of your elective remeasurement. Please tell us whether you anticipate the $250 million voluntary contribution in 2011 will result in a decision to re-measure and the accounting and disclosure implications of that election.
Response:
During September 2009, the Utilities and ATSI made a $500 million voluntary contribution to the FirstEnergy Corp. Pension Plan. The decision to make this contribution was made subsequent to the annual actuarial valuation performed in late 2008 that established the actuarially determined benefit obligation as of December 31, 2008, and served as the basis for pension costs for the following 2009 calendar year. Because this large contribution was not anticipated in the 2008 actuarial determination of 2009 pension costs and given the significance of the contribution (exceeding 10% of plan assets at that time), FirstEnergy elected to remeasure its pension obligation as of August 31, 2009 and calculate its pension costs for the remainder of calendar year 2009 based on this actuarial remeasurement. A note to FirstEnergy’s consolidated financial statements included in its Form 10-Q for the quarter ended September 30, 2009 described the pension remeasurement and disclosed that the contribution and actuarial remeasurement decreased FirstEnergy’s accumulated other comprehensive income by approximately $494 million ($304 million, net of tax) in the third quarter of 2009 and reduced FirstEnergy’s expected net postretirement benefit cost (including amounts capitalized) for the remainder of 2009 by $7 million, including a $2 million reduction that was applicable to the third quarter of 2009.
At the time of the annual actuarial valuation of the FirstEnergy qualified pension plan performed as of December 31, 2010, and as disclosed in the 2010 Form 10-K, management anticipated contributing $250 million to the plan during 2011. Because this contribution was anticipated and considered in the actuarial determination of 2011 pension costs and the contribution represented less than 5% of plan assets, FirstEnergy did not perform a remeasurement at the time of the contribution.
Note 4. Stock Based Compensation, page 192
5.
We note that restricted stock, restricted stock units and performance unit awards earn dividend equivalents. Please tell us whether dividend equivalents credited to unvested awards are forfeitable and if not, whether the two-class method of computing earnings per share is necessary. Please refer to ASC 260-10-45-61A.
Response:
All dividend equivalents credited to unvested stock-based awards are forfeitable. In accordance with ASC 260-10-45-61A, the two-class method of computing earnings per share is therefore not necessary.
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Note 7. Leases, page 212
6.
We note that you recognized above-market lease liabilities for the Beaver Valley Unit 2 and the Bruce Mansfield Plant. In this regard, please tell us why the above-market lease liabilities included in Note seven on page 214 differ from the amounts included in the consolidated balance sheets as of December 31, 2010 and 2009.
Response:
The liability for the above-market Bruce Mansfield Plant lease is included on the consolidated balance sheets of FirstEnergy Solutions Corp. on page 145 of the 2010 Form 10-K. The noncurrent portion is shown on the line entitled “Lease market valuation liability” and the current portion is included in “Current Liabilities – Other.” Because the counterparty to the lease is an independent third party, the above-market Bruce Mansfield Plant lease liability is also included in similar lines on the consolidated balance sheets of FirstEnergy Corp.
The liability for the above-market Beaver Valley Unit 2 lease is included on the consolidated balance sheets of The Toledo Edison Company on page 160 of the 2010 Form 10-K. The noncurrent portion is shown on the line entitled “Lease market valuation liability” and the current portion is shown on the line entitled “Current Liabilities – lease market valuation liability.” The counterparty to the lease is a subsidiary of FirstEnergy Solutions Corp. and the above-market Beaver Valley Unit 2 lease liability is eliminated in consolidation and therefore does not appear on the consolidated balance sheets of FirstEnergy Corp.
Note 14. Commitments, Guarantees and Contingencies, page 235
(C) Environmental Matters, page 237
7.
We note your disclosure that you cannot predict the outcome of certain environmental matters and what further actions, if any, or the costs or the timing thereof, that may be required with respect to the matters. Please tell us whether it was possible to make an estimate of reasonably possible losses or range of loss in excess of amounts accrued. For those contingencies where you are unable to estimate the possible loss or range of loss, provide an affirmative statement that such an estimate cannot be made. In addition, for those matters where you are unable to estimate the possible loss or range of loss, please tell us the procedures you undertake on a quarterly basis to attempt to develop a range of reasonably possible loss for disclosure. Please refer to ASC 450-20-50.
Response:
With respect to the matters referenced in the Staff’s comment, we respectfully submit that no reasonably possible losses in excess of accrued amounts were estimable at the time the filing was made. The eventual outcome of legal or regulatory proceedings is often difficult to predict, particularly where the proceeding is in its early stages, such as notices of violations, or where claimants seek indeterminate damages. As a result, judgments about the outcome, timing and potential loss relating to proceedings are difficult to make and are subject to risks and uncertainties that could cause actual results to be materially different from those we predict. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory proceedings when those proceedings present loss contingencies that are both probable and estimable. Any such accruals are adjusted thereafter, if appropriate, as the proceeding develops. Where an accrued liability has not been established but we believe a loss is reasonably possible, as well as for proceedings where an accrued liability has been established but for which an exposure to loss in excess of the amount accrued is reasonably possible, we provide a current estimate of the range of possible loss if such determination can be made and is material or indicate that an estimate of the range of possible loss cannot be made. Estimated ranges of possible loss are based on currently available information and
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actual results may vary significantly. For proceedings where we are unable to estimate the possible losses or a range of possible loss, we respectfully advise the Staff that we have included disclosure regarding the potential magnitude of the claim to the extent possible.
Following the guidance under ASC 450, FirstEnergy quarterly evaluates the status of the legal and regulatory proceedings in which it is involved to evaluate whether accruals are appropriate and to determine whether it can make an estimate of reasonably possible loss or range of possible loss for the matters referenced in the Staff’s comment. As part of this evaluation, FirstEnergy considers, among other things, the nature of the litigation or claim, its status at the time of the filing of the applicable periodic report, the opinion or views of its outside defense counsel and other advisers, our past experience in similar matters and the experience of other entities (i.e., court rulings, or administrative decisions in factually-similar cases).
FirstEnergy undertakes specific quarterly procedures to estimate any possible loss, or range of loss, or to determine that such an estimate cannot be made. Representatives from our Accounting and Legal groups (and the Environmental group with regard to environmental matters) meet regularly to discuss and assess various outstanding claims. This assessment includes a consideration of the facts and circumstances as well as whether a specific dollar claim has been made. In addition, each quarter management conducts at least two disclosure subcommittee meetings after the quarter close, and prior to the filing of the applicable periodic report, attended by representatives from Accounting, Legal, Enterprise Risk Management, Investor Relations and Communications. As part of these meetings, outstanding litigation and various other potential contingencies are discussed and assessed. As a result of these efforts, FirstEnergy believes it has an appropriate process in place to estimate any loss or range of loss, or to determine that such an estimate cannot be made. The appropriate disclosures in FirstEnergy’s periodic reports are updated based on the information provided in these meetings. Prior to the filing of each of our periodic reports, a meeting of FirstEnergy's entire disclosure committee, including key executives representing all business units, is held to review and provide updates to the disclosures contained in the periodic report. If any outcome, resolution, or new litigation matter occurs prior to the filing of such report, FirstEnergy makes appropriate updates in the relevant report prior to the filing of such report with the Commission.
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