Allegheny Power 2010 Annual Report Download - page 115
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100
The changes in unrecognized tax benefits for the three years ended December 31, 2010 are as follows:
FE FES OE CEI TE JCP&L Met-Ed Penelec
(In millions)
Balance, January 1, 2010 $ 191 $ 41 $ 77 $ 29 $ 6 $ 14 $ 13 $ 11
Increase for tax positions related to the
current year 10 6 2 (1) - - 2 1
Increase for tax positions related to
prior years 2 - - - - - - -
Decrease for tax positions related to
prior years (81) (4) (19) (15) (6) (21) (2) (5)
Decrease for settlement (77) (2) (58) (14) - 7 (11) (6)
Balance, December 31, 2010 $ 45 $ 41 $ 2 $ (1) $ - $ - $ 2 $ 1
Balance, January 1, 2009 $ 219 $ 5 $ (30) $ (26) $ (4) $ 42 $ 28 $ 24
Increase for tax positions related to the
current year 41 34 4 3 - - - -
Increase for tax positions related to
prior years 46 2 103 52 10 - - -
Decrease for tax positions related to
prior years (100) - - - - (28) (15) (13)
Decrease for settlement (15) - - - - - - -
Balance, December 31, 2009 $ 191 $ 41 $ 77 $ 29 $ 6 $ 14 $ 13 $ 11
Balance, January 1, 2008 $ 272 $ 14 $ (12) $ (17) $ (1) $ 38 $ 24 $ 16
Increase for tax positions related to the
current year 14 - 1 - - - - -
Increase for tax positions related to
prior years - 1 1 - - 6 5 9
Decrease for tax positions related to
prior years (56) (10) (14) (8) (3) (2) (1) (1)
Decrease for settlement (11) - (6) (1) - - - -
Balance, December 31, 2008 $ 219 $ 5 $ (30) $ (26) $ (4) $ 42 $ 28 $ 24
FirstEnergy recognizes interest expense or income related to uncertain tax positions. That amount is computed by
applying the applicable statutory interest rate to the difference between the tax position recognized and the amount
previously taken or expected to be taken on the tax return. FirstEnergy includes net interest and penalties in the provision
for income taxes. The reversal of accrued interest associated with the recognized tax benefits noted above favorably
affected FirstEnergy’s effective tax rate by $12 million in 2010. The reversal of accrued interest associated with the
$161 million in recognized tax benefits favorably affected FirstEnergy's effective tax rate in 2009 by $56 million and an
interest receivable of $11 million was removed from the accrued interest for uncertain tax positions. The reversal of
accrued interest associated with the $56 million in recognized tax benefits favorably affected FirstEnergy’s effective tax
rate in 2008 by $12 million and an interest receivable of $4 million was removed from the accrued interest for uncertain
tax positions. During the years ended December 31, 2010, 2009 and 2008, FirstEnergy recognized net interest expense
(income) of approximately $(10) million, $(49) million and $2 million, respectively. The net amount of interest accrued as
of December 31, 2010 and 2009 was $3 million and $21 million, respectively.