Allegheny Power 2010 Annual Report Download - page 37
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22
business -- professional and contractor expenses, billings from affiliated service companies, uncollectible
customer accounts and agent fees.
Other Expense –
Total other expense in 2010 was $93 million higher than the same period in 2009, primarily due to a decrease in nuclear
decommissioning trust investment income ($66) million and a $23 million increase in net interest expense from new long-
term debt issued in late 2009 combined with the restructuring of outstanding PCRBs that occurred throughout 2009 and
2010.
Other – 2010 Compared to 2009
Financial results from other operating segments and reconciling items, including interest expense on holding company
debt and corporate support services revenues and expenses, resulted in a $135 million decrease in earnings available to
FirstEnergy in 2010 compared to 2009. The decrease resulted primarily from increased income tax expense ($342
million) due in part to the absence of favorable tax settlements that occurred in 2009 ($200 million), partially offset by the
absence of 2009 debt retirement costs in connection with the tender offer for holding company debt ($90 million),
decreased interest expense associated with the debt retirement ($53 million), increased investment income ($20 million)
and decreased depreciation ($20 million).
Summary of Results of Operations – 2009 Compared with 2008
Financial results for FirstEnergy's major business segments in 2009 were as follows:
Energy Competitive Other and
Delivery Energy Reconciling FirstEnergy
2009 Financial Results Services Services Adjustments Consolidated
(In millions)
Revenues:
External
Electric $ 10,585 $ 1,447 $ - $ 12,032
Other 559 447 (82) 924
Internal* - 2,843 (2,826) 17
Total Revenues 11,144 4,737 (2,908) 12,973
Expenses:
Fuel - 1,153 - 1,153
Purchased power 6,560 996 (2,826) 4,730
Other operating expenses 1,424 1,357 (84) 2,697
Provision for depreciation 445 270 21 736
A
mortization of regulatory assets 1,155 - - 1,155
Deferral of new regulatory assets (136) - - (136)
Impairment of long lived assets - 6 - 6
General taxes 641 108 4 753
Total Expenses 10,089 3,890 (2,885) 11,094
Operating Income 1,055 847 (23) 1,879
Other Income (Expense):
Investment income 139 121 (56) 204
Interest expense (472) (166) (340) (978)
Capitalized interest 3 60 67 130
Total Other Expense (330) 15 (329) (644)
Income Before Income Taxes 725 862 (352) 1,235
Income taxes 290 345 (390) 245
Net Income 435 517 38 990
Loss attributable to noncontrolling interest - - (16) (16)
Earnings available to FirstEnergy Corp. $ 435 $ 517 $ 54 $ 1,006
* Under the accounting standard for the effects of certain types of regulation, internal revenues are not fully offset for sale of RECs by
FES to the Ohio Companies that are retained in inventory.