Allegheny Power 2013 Annual Report Download - page 55

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Cash Flows From Financing Activities
In 2013, cash provided from financing activities was $477 million compared to $807 million of net cash provided from financing
activities during 2012. The following table summarizes new debt financing (net of any discounts) and redemptions:
For the Years Ended December 31,
Securities Issued or Redeemed / Repaid 2013 2012 2011
(In millions)
New Issues
PCRBs $ — $ 650 $ 272
Long-term revolving credit — — 70
Senior secured notes 445 — —
FMBs 1,000 100 —
Unsecured Notes 2,300 — 262
$ 3,745 $ 750 $ 604
Redemptions / Repayments
PCRBs $ (470) $ (238) $ (792)
Long-term revolving credit (50) — (495)
Senior secured notes (376) (118) (460)
FMBs (420) — (15)
Unsecured notes (2,284) (584) (147)
$ (3,600) $ (940) $ (1,909)
Tender premiums paid on debt redemptions $ (110) $ — $ —
Short-term borrowings, net $ 1,435 $ 1,969 $ (700)
On March 5, 2013, FE issued in aggregate $1.5 billion of senior unsecured notes in two series: $650 million of 2.75% senior notes
due March 15, 2018 and $850 million of 4.25% senior notes due March 15, 2023. The stated interest rates are subject to adjustments
based upon changes in the credit ratings of FirstEnergy but will not decrease below the issued rates. The proceeds were used to
repay short-term borrowings and to invest in the money pool for FES and AE Supply's use in funding a portion of their concurrent
tender offers.
On March 28, 2013, pursuant to tender offers launched in February 2013, FES and AE Supply repurchased $369 million and $294
million, respectively, of outstanding senior notes with interest rates ranging from 5.75% to 6.8%. The $369 million of FES repurchases
consisted of original maturities of $252 million due 2021 and $117 million due 2039. The $294 million of AE Supply repurchases
consisted of original maturities of $194 million due 2019 and $100 million due 2039. FES and AE Supply paid $67 million and $43
million, respectively, in tender premiums to repurchase the tendered senior notes. FirstEnergy recorded a loss on debt redemption
of $119 million (FES - $71 million), including such premiums and other related expenses. The tender premiums paid are included
in cash flows from financing activities in the Consolidated Statement of Cash Flows.
In March 2013, ME issued $300 million of 3.50% senior unsecured notes due March 15, 2023. Proceeds from this offering were
used to repay $150 million of ME 4.95% senior unsecured notes that matured in March 2013 and short-term borrowings.
On April 15, 2013, FES redeemed $400 million of its 4.80% senior notes due 2015 and recorded a loss on debt redemption of $32
million including $31 million of make-whole premiums paid. The make-whole premiums paid are included in cash flows from operating
activities in the Consolidated Statement of Cash Flows.
On June 3, 2013, FG exercised a mandatory put option and repurchased approximately $235 million of PCRBs due 2023, which
FG is currently holding for remarketing subject to future market and other conditions.
During August, the Ohio Companies redeemed an additional $660 million of long-term debt with interest rates ranging from 5.65%
to 7.25% and paid approximately $120 million of make-whole premiums which were deferred as a regulatory asset and will be
amortized over the original life of the redeemed debt. The make-whole premiums paid are included in cash flows from operating
activities in the Consolidated Statement of Cash Flows. Additionally, during August, JCP&L issued $500 million of 4.7% unsecured
notes due April 2024 and used the proceeds to pay down a portion of its short-term debt obligations.