Allegheny Power 2015 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2015 Allegheny Power annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 163

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163

22
Corporate/Other—2015Comparedwith2014
FinancialresultsfromCorporate/Otherresultedina$369milliondecreaseinnetincomein2015comparedto2014primarilyduetoa
$362 million pretax impairment of FirstEnergy's equity method investment in Global Holding, higher costs associated with
environmentalremediationatlegacyplants,higherinterestexpenseandahighereffectivetaxrate.During2015,basedonthe
significant decline in coal pricing and the current outlook for the coal market, FirstEnergy assessed the carrying value of its
investmentinGlobalHoldinganddeterminedtherewasanotherthantemporarydeclineinthefairvaluebelowitscarryingvalue,
whichresultedintheimpairmentcharge.Theincreasedinterestexpenseprimarilyrelatestoa$1billiontermloanenteredintoin
March2014andagainontheterminationofinterestrateswaparrangementsrecognizedin2014.Thehighereffectivetaxrate
primarilyresultedfromtheabsenceoftaxbenefitsrecognizedin2014associatedwithanIRSapprovedchangeinaccounting
methodthatincreasedthetaxbasisincertainassetsresultinginhigherfuturetaxdeductions,areductioninstatedeferredtax
liabilities resulting from changes in state apportionment factors, the elimination of certain tax liabilities associated with basis
differencesaswellascertaintaxbenefitsrecordedin2014thatrelatedtopriorperiods.
23
Summaryof Resultsof Operations—2014Comparedwith2013
Financial results for FirstEnergy’s business segments in2014and2013were as follows:
2014Financial Results
Regulated
Distribution
Regulated
Transmission
Competitive
Energy
Services
Corporate/Other
andReconciling
Adjustments
FirstEnergy
Consolidated
(In millions)
Revenues:
External
Electric $8,898 $769 $5,281 $(193) $ 14,755
Other 204 —189 (99)294
Internal — — 819 (819) —
Total Revenues 9,102 769 6,289 (1,111)15,049
OperatingExpenses:
Fuel 567 —1,713 —2,280
Purchasedpower 3,385 —2,150 (819)4,716
Other operatingexpenses 2,081 139 2,075 (333)3,962
PensionandOPEB marktomarket 506 2327 —835
Provisionfor depreciation 658 127 387 48 1,220
Amortizationof regulatory assets, net 111 — — 12
General taxes 693 70 171 28 962
Impairment of longlivedassets — — — — —
Total OperatingExpenses 7,891 349 6,823 (1,076)13,987
OperatingIncome(loss) 1,211 420 (534)(35)1,062
Other Income(Expense):
Loss ondebt redemptions — — (8) — (8)
Investment income 56 —54 (38)72
Interest expense (589)(131)(189)(164)(1,073)
Capitalized interest 14 55 37 12 118
Total Other Expense (519)(76)(106)(190)(891)
Income(Loss) From ContinuingOperations
BeforeIncomeTaxes (Benefits) 692 344 (640)(225)171
Incometaxes(benefits) 227 121 (223)(167)(42)
Income(Loss) From ContinuingOperations 465 223 (417)(58)213
DiscontinuedOperations, net of tax — — 86 —86
Net Income(Loss) $465 $223 $(331) $ (58) $ 299