Allegheny Power 2014 Annual Report Download - page 101

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86
Accumulated deferred income taxes as of December 31, 2014 and 2013 are as follows:
2014 2013
(In millions)
FirstEnergy
Property basis differences $ 9,354 $ 8,734
Deferred sale and leaseback gain (381) (401)
Pension and OPEB (1,433) (972)
Nuclear decommissioning activities 458 460
Asset retirement obligations (641) (651)
Regulatory asset/liability 768 750
Loss carryforwards and AMT credits (1,932) (1,598)
Loss carryforward valuation reserve 174 125
All other 172 155
Net deferred income tax liability $ 6,539 $ 6,602
FES
Property basis differences $ 1,749 $ 1,354
Deferred sale and leaseback gain (356) (370)
Pension and OPEB (373) (66)
Lease market valuation liability 75 54
Nuclear decommissioning activities 489 470
Asset retirement obligations (486) (439)
Loss carryforwards and AMT credits (631) (354)
Loss carryforward valuation reserve 32 27
All other (15) 40
Net deferred income tax liability $ 484 $ 716
FirstEnergy has tax returns that are under review at the audit or appeals level by the IRS and state taxing authorities. FirstEnergy's
tax returns for all state jurisdictions are open from 2010-2013. In April 2014, the IRS completed its examination of FirstEnergy’s
2011 and 2012 federal income tax returns and issued Revenue Agent Reports for those years. In addition, in January 2015, the
IRS completed its examination of the 2013 federal income tax return and issued a Revenue Agent Report. For tax years 2011-2013
there were no material impacts to FirstEnergy's effective tax rate associated with these examinations. Tax year 2014 is currently
under review by the IRS.
FirstEnergy has recorded as deferred income tax assets the effect of NOLs and tax credits that will more likely than not be realized
through future operations and through the reversal of existing temporary differences. As of December 31, 2014, the deferred income
tax assets, before any valuation allowances, consisted of $1.5 billion of Federal NOL carryforwards that expire from 2030 to 2034,
Federal AMT credits of $25 million that have an indefinite carryforward period, and $413 million of state and local NOL carryforwards
that will begin to expire in 2015.
The table below summarizes pre-tax NOL carryforwards for state and local income tax purposes of approximately $9.9 billion for
FirstEnergy, of which approximately $5.6 billion is expected to be utilized based on current estimates and assumptions. The ultimate
utilization of these NOLs may be impacted by statutory limitations on the use of NOLs imposed by state and local tax jurisdictions,
changes in statutory tax rates, and changes in business which, among other things, impact both future profitability and the manner
in which future taxable income is apportioned to various state and local tax jurisdictions.
Expiration Period FirstEnergy FES
(In millions)
State Local State Local
2015-2019 $ 63 $ 2,524 $ — $ 1,874
2020-2024 1,813 646 182 —
2025-2029 1,704 — 88 —
2030-2034 3,172 — 1,001 —
$ 6,752 $ 3,170 $ 1,271 $ 1,874