Allegheny Power 2015 Annual Report Download - page 87

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70
ThefollowingtableprovidesinformationaboutthecompositionofnetregulatoryassetsasofDecember31,2015andDecember31,
2014,andthechangesduringtheyearendedDecember31,2015:

RegulatoryAssetsbySource
December31,
2015
December31,
2014
Increase
(Decrease)
(Inmillions)
Regulatorytransitioncosts $ 185
$ 240
$ (55)
Customerreceivablesforfutureincometaxes 355
370
(15)
Nucleardecommissioningandspentfueldisposalcosts(272) (305) 33
Assetremovalcosts (372)
(254) (118)
Deferredtransmissioncosts 115
90
25
Deferredgenerationcosts243
281 (38)
Deferreddistributioncosts 335
182
153
Contractvaluations 186
153
33
Stormrelatedcosts403
465 (62)
Other 170
189
(19)
NetRegulatoryAssetsincludedontheConsolidatedBalanceSheets $ 1,348 $ 1,411 $ (63)

Regulatoryassetsthatdonotearnacurrentreturntotaledapproximately $148millionand$488millionasofDecember31,2015and
2014 respectively,primarilyrelatedtostormdamagecosts.JCP&L'sregulatoryassetrelatedto2011and2012stormdamagecosts
beganearningareturnonApril1,2015.EffectivewiththeapprovedsettlementonApril9,2015,associatedwiththeirgeneralbase
ratecase,thePennsylvaniaCompaniestransferredthenetbookvalueoflegacymetersfromplantinservicetoregulatoryassets,
whichisbeingrecoveredoverfiveyears.

AsofDecember31,2015 andDecember31,2014,FirstEnergyhadapproximately$116millionand$243million ofnetregulatory
liabilitiesthatareprimarilyrelatedtoassetremovalcosts.Netregulatoryliabilitiesareclassifiedwithinothernoncurrentliabilitieson
theConsolidatedBalanceSheets.
REVENUESANDRECEIVABLES

TheUtilities'principalbusinessisprovidingelectricservicetocustomersinOhio,Pennsylvania,WestVirginia,NewJerseyand
Maryland.FES'principalbusinessissupplyingelectricpowertoendusecustomersthroughretailandwholesalearrangements,
includingaffiliatedcompanypowersalestomeetaportionofthePOLRanddefaultservicerequirements,andcompetitiveretailsales
tocustomersprimarilyinOhio,Pennsylvania,Illinois,Michigan,NewJerseyandMaryland.Retailcustomersaremeteredonacycle
basis.

Electricrevenuesarerecordedbasedonenergydeliveredthroughtheendofthecalendarmonth.Anestimateofunbilledrevenuesis
calculatedtorecognizeelectricserviceprovidedfromthelastmeterreadingthroughtheendofthemonth.Thisestimateincludes
manyfactors,amongwhicharehistoricalcustomerusage,loadprofiles,estimatedweatherimpacts,customershoppingactivityand
pricesineffectforeachclassofcustomer.Ineachaccountingperiod,FirstEnergyaccruestheestimatedunbilledamountasrevenue
andreversestherelatedpriorperiodestimate.

Receivablesfromcustomersincluderetailelectricsalesanddistributiondeliveriestoresidential,commercialandindustrialcustomers
fortheUtilities,andretailandwholesalesalestocustomersforFES.Therewasnomaterialconcentrationofreceivablesasof
December31,2015and2014withrespecttoanyparticularsegmentofFirstEnergy’scustomers.Billedandunbilledcustomer
receivablesasofDecember31,2015and2014areincludedbelow.


71
CustomerReceivables
FirstEnergy
FES
(Inmillions)
December31,2015
Billed
$
836
$
165
Unbilled
579
110
Total
$
1,415
$
275
December31,2014
Billed
$
914
$
239
Unbilled
640
176
Total
$
1,554
$
415
EARNINGSPERSHAREOFCOMMONSTOCK

Basicearningspershareofcommonstockarecomputedusingtheweightedaveragenumberofcommonsharesoutstandingduring
therelevantperiodasthedenominator.Thedenominatorfordilutedearningspershareofcommonstockreflectstheweighted
averageofcommonsharesoutstandingplusthepotentialadditionalcommonsharesthatcouldresultifdilutivesecuritiesandother
agreementstoissuecommonstockwereexercised.Thefollowingtablereconcilesbasicanddilutedearningspershareofcommon
stock:
ReconciliationofBasicandDilutedEarningsperShareofCommonStock
2015
2014
2013
(Inmillions,exceptpershareamounts)
Incomefromcontinuingoperationsavailabletocommonshareholders
$
578
$
213
$
375
Discontinuedoperations(Note19)
—
86
17
Netincome
$
578
$
299
$
392
Weightedaveragenumberofbasicsharesoutstanding
422
420
418
Assumedexerciseofdilutivestockoptionsandawards(1)
2
1
1
Weightedaveragenumberofdilutedsharesoutstanding
424
421
419
Earningspershare:
Basicearningspershare:
Continuingoperations
$
1.37
$
0.51
$
0.90
Discontinuedoperations(Note19)
—
0.20
0.04
Earningsperbasicshare
$
1.37
$
0.71
$
0.94
Dilutedearningspershare:
Continuingoperations
$
1.37
$
0.51
$
0.90
Discontinuedoperations(Note19)
—
0.20
0.04
Earningsperdilutedshare
$
1.37
$
0.71
$
0.94

(1)FortheyearsendedDecember31,2015
, 2014and2013,approximatelyonemillion,twomillion,andtwomillionshareswereexcludedfromthe
calculationofdilutedsharesoutstanding,respectively,astheirinclusionwouldbeantidilutive.
PROPERTY,PLANTANDEQUIPMENT

Property,plantandequipmentreflectsoriginalcost(netofanyimpairmentsrecognized),includingpayrollandrelatedcostssuchas
taxes,employeebenefits,administrativeandgeneralcosts,andinterestcostsincurredtoplacetheassetsinservice.Thecostsof
normalmaintenance,repairsandminorreplacementsareexpensedasincurred.FirstEnergyrecognizesliabilitiesforplannedmajor
maintenanceprojectsastheyareincurred.ThecostofnuclearfueliscapitalizedwithintheCESsegment'sProperty,plantand
equipmentandchargedtofuelexpenseusingthespecificidentificationmethod.ThecostofnuclearfuelincludedinCES'netplantas
ofDecember31,2015was$418million.NetplantinservicebalancesbysegmentasofDecember31,2015and2014wereas
follows:


71
CustomerReceivablesFirstEnergyFES
(Inmillions)
December31,2015
Billed $ 836 $ 165
Unbilled579110
Total $ 1,415 $ 275
December31,2014
Billed $ 914 $ 239
Unbilled640176
Total $ 1,554 $ 415
EARNINGSPERSHAREOFCOMMONSTOCK

Basicearningspershareofcommonstockarecomputedusingtheweightedaveragenumberofcommonsharesoutstandingduring
therelevantperiodasthedenominator.Thedenominatorfordilutedearningspershareofcommonstockreflectstheweighted
averageofcommonsharesoutstandingplusthepotentialadditionalcommonsharesthatcouldresultifdilutivesecuritiesandother
agreementstoissuecommonstockwereexercised.Thefollowingtablereconcilesbasicanddilutedearningspershareofcommon
stock:
ReconciliationofBasicandDilutedEarningsperShareofCommonStock201520142013
(Inmillions,exceptpershareamounts)
Incomefromcontinuingoperationsavailabletocommonshareholders $ 578 $ 213 $ 375
Discontinuedoperations(Note19) — 8617
Netincome $ 578 $ 299 $ 392
Weightedaveragenumberofbasicsharesoutstanding422420418
Assumedexerciseofdilutivestockoptionsandawards(1) 2 1 1
Weightedaveragenumberofdilutedsharesoutstanding424421419
Earningspershare:
Basicearningspershare:
Continuingoperations $ 1.37 $ 0.51 $ 0.90
Discontinuedoperations(Note19) — 0.200.04
Earningsperbasicshare $ 1.37 $ 0.71 $ 0.94
Dilutedearningspershare:
Continuingoperations $ 1.37 $ 0.51 $ 0.90
Discontinuedoperations(Note19) — 0.200.04
Earningsperdilutedshare $ 1.37 $ 0.71 $ 0.94

(1)FortheyearsendedDecember31,2015 2014and2013,approximatelyonemillion,twomillion,andtwomillionshareswereexcludedfromthe
calculationofdilutedsharesoutstanding,respectively,astheirinclusionwouldbeantidilutive.
PROPERTY,PLANTANDEQUIPMENT

Property,plantandequipmentreflectsoriginalcost(netofanyimpairmentsrecognized),includingpayrollandrelatedcostssuchas
taxes,employeebenefits,administrativeandgeneralcosts,andinterestcostsincurredtoplacetheassetsinservice.Thecostsof
normalmaintenance,repairsandminorreplacementsareexpensedasincurred.FirstEnergyrecognizesliabilitiesforplannedmajor
maintenanceprojectsastheyareincurred.ThecostofnuclearfueliscapitalizedwithintheCESsegment'sProperty,plantand
equipmentandchargedtofuelexpenseusingthespecificidentificationmethod.ThecostofnuclearfuelincludedinCES'netplantas
ofDecember31,2015was$418million.NetplantinservicebalancesbysegmentasofDecember31,2015and2014wereas
follows: