Allegheny Power 2011 Annual Report Download - page 110

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95
PROVISION FOR INCOME TAXES
2011
Currently payable (receivable)-
Federal
State
Deferred, net-
Federal
State
Investment tax credit amortization
Total provision for income taxes
2010
Currently payable (receivable)-
Federal
State
Deferred, net-
Federal
State
Investment tax credit amortization
Total provision for income taxes
2009
Currently payable (receivable)-
Federal
State
Deferred, net-
Federal
State
Investment tax credit amortization
Total provision for income taxes
FirstEnergy
(In millions)
$ (243)
19
(224)
785
24
809
(11)
$ 574
$ (23)
35
12
432
27
459
(9)
$ 462
$ (183)
44
(139)
296
36
332
(9)
$ 184
FES
$ (219)
9
(210)
206
(3)
203
(4)
$ (11)
$ (23)
(2)
(25)
142
12
154
(4)
$ 125
$ 87
8
95
169
21
190
(4)
$ 281
OE
$ 13
(12)
1
65
13
78
(1)
$ 78
$ 37
(2)
35
41
3
44
(1)
$ 78
$ 21
4
25
36
3
39
(2)
$ 62
CEI
$ 17
(7)
10
15
10
25
(1)
$ 34
$ 58
1
59
(19)
(4)
(23)
(1)
$ 35
$ 40
2
42
(62)
1
(61)
(1)
$ (20)
TE
$ (15)
(6)
(21)
35
1
36
—
$ 15
$ (8)
(2)
(10)
25
1
26
—
$ 16
$ 6
—
6
(3)
2
(1)
—
$ 5
JCP&L
$ 19
7
26
71
20
91
—
$ 117
$ 80
36
116
30
1
31
—
$ 147
$ 40
26
66
38
1
39
—
$ 105
Met-Ed
$ 26
7
33
14
(10)
4
—
$ 37
$ 1
12
13
37
(2)
35
—
$ 48
$ (34)
(4)
(38)
60
7
67
—
$ 29
Penelec
$ (36)
(6)
(42)
75
(3)
72
—
30
$ (81)
(12)
(93)
122
18
140
(1)
$ 46
$ (21)
4
(17)
55
2
57
(1)
$ 39
In 2011, an unregulated subsidiary of FirstEnergy elected to be taxed as a limited liability company, which improved its future taxable
income and resulted in reversing a portion of its valuation allowance previously established for state income tax benefits. The
reversal of the valuation allowance reduced income tax expense by $27 million.
As a result of the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act
signed into law in March 2010, beginning in 2013 the tax deduction currently available to FirstEnergy will be reduced to the extent
that drug costs are reimbursed under the Medicare Part D retiree subsidy program. As retiree healthcare liabilities and related tax
impacts under prior law were already reflected in FirstEnergy’s consolidated financial statements, the change resulted in a charge
to FirstEnergy’s earnings in 2010 of approximately $13 million and a reduction in accumulated deferred tax assets associated with
these subsidies. This change reflects the anticipated increase in income taxes that will occur as a result of the change in tax law.
FES and the Utilities are party to an intercompany income tax allocation agreement with FirstEnergy and its other subsidiaries that
provides for the allocation of consolidated tax liabilities. Net tax benefits attributable to FirstEnergy, excluding any tax benefits
derived from interest expense associated with acquisition indebtedness from the merger with GPU, are reallocated to the subsidiaries
of FirstEnergy that have taxable income. That allocation is accounted for as a capital contribution to the company receiving the tax
benefit.