Allegheny Power 2010 Annual Report Download - page 48

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Long-Term Debt Capacity
As of December 31, 2010, the Ohio Companies and Penn had the aggregate capability to issue approximately
$2.4 billion of additional FMBs on the basis of property additions and retired bonds under the terms of their respective
mortgage indentures. The issuance of FMBs by the Ohio Companies is also subject to provisions of their senior note
indentures generally limiting the incurrence of additional secured debt, subject to certain exceptions that would permit,
among other things, the issuance of secured debt (including FMBs) supporting pollution control notes or similar
obligations, or as an extension, renewal or replacement of previously outstanding secured debt. In addition, these
provisions would permit OE and CEI to incur additional secured debt not otherwise permitted by a specified exception of
up to $124 million and $26 million, respectively, as of December 31, 2010. As a result of the indenture provisions, TE
cannot incur any additional secured debt. Met-Ed and Penelec had the capability to issue secured debt of approximately
$394 million and $343 million, respectively, under provisions of their senior note indentures as of December 31, 2010.
Based upon FGCO's FMB indenture, net earnings and available bondable property additions as of December 31, 2010,
FGCO had the capability to issue $1.7 billion of additional FMBs under the terms of that indenture. Based upon NGC’s
FMB indenture, net earnings and available bondable property additions, NGC had the capability to issue $695 million of
additional FMBs as of December 31, 2010.
FirstEnergy's access to capital markets and costs of financing are influenced by the ratings of its securities. On February
11, 2010, S&P issued a report lowering FirstEnergy’s and its subsidiaries’ credit ratings by one notch, while maintaining its
stable outlook. Moody’s and Fitch affirmed the ratings and stable outlook of FirstEnergy and its subsidiaries on February 11,
2010. On September 28, 2010, S&P issued a report reaffirming the ratings and stable outlook of FirstEnergy and its
subsidiaries. Fitch revised its outlook on FirstEnergy and FES from stable to negative on December 15, 2010. The following
table displays FirstEnergy's, FES' and the Utilities' securities ratings as of December 31, 2010:
Senior Secured Senior Unsecured
Issuer S&P Moody's Fitch S&P Moody's Fitch
FirstEnergy Corp. - - - BB+ Baa3 BBB
FES - - - BBB- Baa2 BBB
OE BBB A3 BBB+ BBB- Baa2 BBB
Penn BBB+ A3 BBB+ - - -
CEI BBB Baa1 BBB BBB- Baa3 BBB-
TE BBB Baa1 BBB - - -
JCP&L - - - BBB- Baa2 BBB+
Met-Ed BBB A3 BBB+ BBB- Baa2 BBB
Penelec BBB A3 BBB+ BBB- Baa2 BBB
A
TSI - - - BBB- Baa1 -
Changes in Cash Position
As of December 31, 2010, FirstEnergy had $1 billion of cash and cash equivalents compared to $874 million as of
December 31, 2009. As of December 31, 2010 and 2009, FirstEnergy had approximately $13 million and $12 million,
respectively, of restricted cash included in other current assets on the Consolidated Balance Sheet.
During 2010, FirstEnergy received $850 million of cash dividends from its subsidiaries and paid $670 million in cash
dividends to common shareholders.
Cash Flows From Operating Activities
FirstEnergy's consolidated net cash from operating activities is provided primarily by its competitive energy services and
energy delivery services businesses (see Results of Operations above). Net cash provided from operating activities was
$3.1 billion in 2010, $2.5 billion in 2009 and $2.2 billion in 2008, as summarized in the following table:
Operating Cash Flows 2010 2009 2008
(In millions)
Net income $ 760 $ 990 $ 1,339
Non-cash charges and other adjustments 2,309 2,281 1,405
Pension trust contribution - (500) -
Working capital and other 7 (306) (520)
$ 3,076 $ 2,465 $ 2,224