Allegheny Power 2015 Annual Report Download - page 39

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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 interest expense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into in
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wereas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
2
327
—
835
Provisionfordepreciation
658
127
387
48
1,220
Amortizationofregulatoryassets,net
1
11
—
—
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