Allegheny Power 2013 Annual Report Download - page 54

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Changes in Cash Position
As of December 31, 2013, FirstEnergy had $218 million of cash and cash equivalents compared to $172 million of cash and cash
equivalents as of December 31, 2012. As of December 31, 2013 and December 31, 2012, FirstEnergy had approximately $103
million and $62 million, respectively, of restricted cash included in Other Current Assets on the Consolidated Balance Sheets.
Cash Flows From Operating Activities
FirstEnergy’s consolidated net cash from operating activities was provided by its regulated distribution, regulated transmission and
competitive energy services businesses (see Results of Operations above). Net cash provided from operating activities was $2,662
million during 2013, $2,320 million during 2012 and $3,063 million during 2011, as summarized in the following table:
For the Years Ended December 31,
Operating Cash Flows 2013 2012 2011
(In millions)
Net income $ 392 $ 771 $ 869
Non-cash charges 2,635 2,058 2,306
Pension trust contributions — (600) (372)
Working capital and other (365) 91 260
$ 2,662 $ 2,320 $ 3,063
The $342 million increase in cash from operations is primarily a result of a $600 million pension contribution in 2012 that did not
occur in 2013. The increase was partially offset primarily as a result of payments in 2013 associated with 2012 storm restoration
activities.
The $577 million increase in non-cash charges is primarily due to the following:
• $795 million increase from impairment of long-lived assets due to the Hatfield's Ferry and Mitchell plant deactivations as
well as the West Virginia asset transfer.
• $132 million increase from the loss on debt redemptions associated with the completion of the FES/AE Supply tender
offers and FES debt redemptions described below.
• $162 million increase from lower deferred purchased power and other costs primarily due to the expiration of certain NUG
agreements.
• $50 million increase from higher deferred rents and market lease valuation as a result of increased net amortization of
lease expense.
• $232 million increase in amortization of regulatory assets primarily due to a regulatory asset impairments associated with
the recovery of marginal transmission losses at ME and PN ($254 million), recovery of RECs for the Ohio Companies' ($51
million), and the asset transfer between MP and AE Supply ($23 million) as well as higher default generation service cost
recovery in Pennsylvania, partially offset by a reduction of NUG cost recovery at ME and PN and higher transmission cost
deferrals in Ohio.
• $99 million increase due to net commodity derivative transactions.
• $404 million decrease in deferred income taxes and investment tax credits. Of the decrease, $156 million was the result
of the reversal of deferred income tax liabilities associated with the impairment of Hatfield's Ferry and Mitchell.
• $375 million increase due to storm deferrals related to Hurricane Sandy in 2012.
• $865 million decrease due to Pensions and OPEB mark-to-market charges, reflecting a higher discount rate to measure
related obligations in 2013.
The $456 million decrease in cash flows from working capital and other is primarily due to the following:
• $101 million decrease from increased customer receivables during 2013 primarily as a result of increased weather related
usage as described in the Results of Operations above.
• $183 million of decreased asset removal costs charged to income primarily related to hurricane Sandy in 2012.
• $146 million increase from materials and supplies, primarily due to reduced fuel inventory resulting primarily from plant
deactivations in 2013 and 2012.
• $125 million decrease from lower accounts payable balances at the end of 2013, primarily due to higher balances related
to Hurricane Sandy in 2012, a portion of which was paid in 2013.
• $187 million decrease from make whole premiums paid on debt redemptions during 2013.
• $114 million decrease from increased prepaid taxes.
• $87 million increase from higher accrued taxes driven by the timing of state tax related liabilities.