Allegheny Power 2011 Annual Report Download - page 37
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22
• Impairments of long-lived assets decreased $85 million compared to last year. The 2011 charges are due to the pending
shutdown of six unregulated, coal-fired generating units; charges in 2010 related to operational changes at certain smaller
coal-fired units.
• Other operating expenses increased $152 million primarily due to a $54 million provision for excess and obsolete material
relating to revised inventory practices adopted in connection with the Allegheny merger; a $64 million increase in pensions
and OPEB mark-to-market adjustment charges from higher net actuarial losses; a $10 million increase in other mark-to-
market adjustments; an $18 million increase in agent fees due to rapid growth in FES' retail business; and a $17 million
increase in intercompany billings. The intercompany billings increased due to higher merger-related costs, partially offset
by lower leasehold costs from the Ohio Companies.
The inclusion of the Allegheny companies' operations added $1.6 billion to operating expenses as shown in the following table:
Source of Operating Expense Changes
Allegheny Companies
Fuel
Purchased power
Fossil operation and maintenance
Transmission
Pensions and OPEB mark-to-market
adjustment
Other mark-to-market
Depreciation
General taxes
Other
Total operating expenses
Increase
(Decrease)
(In millions)
$ 794
149
152
198
44
4
111
40
96
$ 1,588
Other Expense —
Total other expense in 2011 was $453 million lower than 2010, primarily due to a $569 million gain on the partial sale of FEV's
interest in Signal Peak and an increase in nuclear decommissioning trust investment income of $5 million, partially offset by a
$121 million increase in net interest expense. The net interest expense increase in 2011 from 2010 resulted from lower capitalized
interest due to the completion of major environmental projects in 2010.
Other — 2011 Compared to 2010
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 an $99 million decrease in earnings available to FirstEnergy in 2011
compared to 2010. The decrease resulted primarily from decreased capitalized interest and increased depreciation expense resulting
from the completed construction projects placed into service ($58 million), decreased investment income ($16 million), an asset
impairment charge in the first quarter of 2011 ($11 million) and higher income taxes ($13 million).