Allegheny Power 2010 Annual Report Download - page 93

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78
Of the 1.7 million stock units authorized under the EDCP and DCPD, 1,239,415 stock units were available for future
awards as of December 31, 2010.
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
(A) LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONS
All borrowings with initial maturities of less than one year are defined as short-term financial instruments under GAAP
and are reported on the Consolidated Balance Sheets at cost, which approximates their fair market value, in the caption
"short-term borrowings." The following table provides the approximate fair value and related carrying amounts of long-
term debt and other long-term obligations as of December 31, 2010 and 2009:
December 31, 2010 December 31, 2009
Carrying Fair Carrying Fair
Value Value Value Value
(In millions)
FirstEnergy
(Consolidated) $ 13,928 $ 14,845 $ 13,853 $ 14,602
FES 4,279 4,403 4,324 4,406
OE 1,159 1,321 1,169 1,299
CEI 1,853 2,035 1,873 2,032
TE 600 653 600 638
JCP&L 1,810 1,962 1,840 1,950
Met-Ed 742 821 842 909
Penelec 1,120 1,189 1,144 1,177
The fair values of long-term debt and other long-term obligations reflect the present value of the cash outflows relating to
those securities based on the current call price, the yield to maturity or the yield to call, as deemed appropriate at the end
of each respective period. The yields assumed were based on securities with similar characteristics offered by
corporations with credit ratings similar to those of FirstEnergy, FES and the Utilities.
(B) INVESTMENTS
All temporary cash investments purchased with an initial maturity of three months or less are reported as cash
equivalents on the Consolidated Balance Sheets at cost, which approximates their fair market value. Investments other
than cash and cash equivalents include held-to-maturity securities, available-for-sale securities and notes receivable.
FES and the Utilities periodically evaluate their investments for other-than-temporary impairment. They first consider their
intent and ability to hold an equity investment until recovery and then consider, among other factors, the duration and the
extent to which the security's fair value has been less than cost and the near-term financial prospects of the security
issuer when evaluating an investment for impairment. For debt securities, FES and the Utilities consider their intent to
hold the security, the likelihood that they will be required to sell the security before recovery of their cost basis, and the
likelihood of recovery of the security's entire amortized cost basis.
Available-For-Sale Securities
FES and the Utilities hold debt and equity securities within their nuclear decommissioning trusts, nuclear fuel disposal
trusts and NUG trusts. These trust investments are considered as available-for-sale at fair market value. FES and the
Utilities have no securities held for trading purposes.