Table of Contents
Commission | Registrant; State of Incorporation; | I.R.S. Employer | ||
File Number | Address; and Telephone Number | Identification No. | ||
333-21011 | FIRSTENERGY CORP. | 34-1843785 | ||
(An Ohio Corporation) | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
000-53742 | FIRSTENERGY SOLUTIONS CORP. | 31-1560186 | ||
(An Ohio Corporation) | ||||
c/o FirstEnergy Corp. | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
1-2578 | OHIO EDISON COMPANY | 34-0437786 | ||
(An Ohio Corporation) | ||||
c/o FirstEnergy Corp. | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
1-2323 | THE CLEVELAND ELECTRIC ILLUMINATING COMPANY | 34-0150020 | ||
(An Ohio Corporation) | ||||
c/o FirstEnergy Corp. | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
1-3583 | THE TOLEDO EDISON COMPANY | 34-4375005 | ||
(An Ohio Corporation) | ||||
c/o FirstEnergy Corp. | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
1-3141 | JERSEY CENTRAL POWER & LIGHT COMPANY | 21-0485010 | ||
(A New Jersey Corporation) | ||||
c/o FirstEnergy Corp. | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
1-446 | METROPOLITAN EDISON COMPANY | 23-0870160 | ||
(A Pennsylvania Corporation) | ||||
c/o FirstEnergy Corp. | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
1-3522 | PENNSYLVANIA ELECTRIC COMPANY | 25-0718085 | ||
(A Pennsylvania Corporation) | ||||
c/o FirstEnergy Corp. | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 |
Yesþ Noo | FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company |
Yesþ Noo | FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company, and Pennsylvania Electric Company |
Large Accelerated Filerþ | FirstEnergy Corp. | |
Accelerated Filero | N/A | |
Non-accelerated Filer (Do not check if a smaller reporting company)þ | FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company | |
Smaller Reporting Companyo | N/A |
Yeso Noþ | FirstEnergy Corp., FirstEnergy Solutions Corp., Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company |
OUTSTANDING | ||||
CLASS | AS OF JULY 29, 2011 | |||
FirstEnergy Corp., $.10 par value | 418,216,437 | |||
FirstEnergy Solutions Corp., no par value | 7 | |||
Ohio Edison Company, no par value | 60 | |||
The Cleveland Electric Illuminating Company, no par value | 67,930,743 | |||
The Toledo Edison Company, $5 par value | 29,402,054 | |||
Jersey Central Power & Light Company, $10 par value | 13,628,447 | |||
Metropolitan Edison Company, no par value | 740,905 | |||
Pennsylvania Electric Company, $20 par value | 4,427,577 |
Table of Contents
• | The speed and nature of increased competition in the electric utility industry. |
• | The impact of the regulatory process on the pending matters in the various states in which we do business including, but not limited to, matters related to rates. |
• | The status of the PATH project in light of PJM’s direction to suspend work on the project pending review of its planning process, its re-evaluation of the need for the project and the uncertainty of the timing and amounts of any related capital expenditures. |
• | Business and regulatory impacts from ATSI’s realignment into PJM Interconnection, L.L.C. |
• | Economic or weather conditions affecting future sales and margins. |
• | Changes in markets for energy services. |
• | Changing energy and commodity market prices and availability. |
• | Financial derivative reforms that could increase our liquidity needs and collateral costs. |
• | The continued ability of FirstEnergy’s regulated utilities to collect transition and other costs. |
• | Operation and maintenance costs being higher than anticipated. |
• | Other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission, water intake and coal combustion residual regulations, the potential impacts of any laws, rules or regulations that ultimately replace CAIR, including the Cross-State Air Pollution Rule (CSAPR), and the effects of the EPA’s recently released MACT proposal to establish certain mercury and other emission standards for electric generating units. |
• | The uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to shut down or idle certain generating units). |
• | Adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC including as a result of the incident at Japan’s Fukushima Daiichi Nuclear Plant). |
• | Adverse legal decisions and outcomes related to Met-Ed’s and Penelec’s ability to recover certain transmission costs through their transmission service charge riders. |
• | The continuing availability of generating units and changes in their ability to operate at or near full capacity. |
• | Replacement power costs being higher than anticipated or inadequately hedged. |
• | The ability to comply with applicable state and federal reliability standards and energy efficiency mandates. |
• | Changes in customers’ demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency mandates. |
• | The ability to accomplish or realize anticipated benefits from strategic goals. |
• | Efforts and our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of coal and coal transportation on such margins. |
• | The ability to experience growth in the distribution business. |
• | The changing market conditions that could affect the value of assets held in FirstEnergy’s nuclear decommissioning trusts, pension trusts and other trust funds, and cause us to make additional contributions sooner, or in amounts that are larger than currently anticipated. |
• | The ability to access the public securities and other capital and credit markets in accordance with FirstEnergy’s financing plan, the cost of such capital and overall condition of the capital and credit markets affecting FirstEnergy and its subsidiaries. |
• | Changes in general economic conditions affecting FirstEnergy and its subsidiaries. |
• | Interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy’s and its subsidiaries’ access to financing or their costs and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees. |
• | The continuing uncertainty of the national and regional economy and its impact on FirstEnergy’s and its subsidiaries’ major industrial and commercial customers. |
• | Issues concerning the soundness of financial institutions and counterparties with which FirstEnergy and its subsidiaries do business. |
• | Issues arising from the recently completed merger of FirstEnergy and Allegheny Energy, Inc. and the ongoing coordination of their combined operations including FirstEnergy’s ability to maintain relationships with customers, employees or suppliers, as well as the ability to successfully integrate the businesses and realize cost savings and any other synergies and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect. |
• | The risks and other factors discussed from time to time in the registrants’ SEC filings, and other similar factors. |
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Exhibit 10.1 | ||||||||
Exhibit 12 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
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AE | Allegheny Energy, Inc., a Maryland utility holding company that merged with a subsidiary of FirstEnergy on February 25, 2011 | |
AESC | Allegheny Energy Service Corporation, a subsidiary of AE | |
AE Supply | Allegheny Energy Supply Company LLC, an unregulated generation subsidiary of AE | |
AET | Allegheny Energy Transmission, LLC, a parent of TrAIL and PATH | |
AGC | Allegheny Generating Company, a generation subsidiary of AE | |
Allegheny | Allegheny Energy, Inc., together with its consolidated subsidiaries | |
AVE | Allegheny Ventures, Inc. | |
ATSI | American Transmission Systems, Incorporated, which owns and operates transmission facilities | |
CEI | The Cleveland Electric Illuminating Company, an Ohio electric utility operating subsidiary | |
FENOC | FirstEnergy Nuclear Operating Company, which operates nuclear generating facilities | |
FES | FirstEnergy Solutions Corp., which provides energy-related products and services | |
FESC | FirstEnergy Service Company, which provides legal, financial and other corporate support services | |
FEV | FirstEnergy Ventures Corp., which invests in certain unregulated enterprises and business ventures | |
FGCO | FirstEnergy Generation Corp., which owns and operates non-nuclear generating facilities | |
FirstEnergy | FirstEnergy Corp., a public utility holding company | |
Global Rail | A joint venture between FEV and WMB Loan Ventures II LLC, that owns coal transportation operations near Roundup, Montana | |
GPU | GPU, Inc., former parent of JCP&L, Met-Ed and Penelec, that merged with FirstEnergy on November 7, 2001 | |
JCP&L | Jersey Central Power & Light Company, a New Jersey electric utility operating subsidiary | |
Met-Ed | Metropolitan Edison Company, a Pennsylvania electric utility operating subsidiary | |
MP | Monongahela Power Company, a West Virginia electric utility operating subsidiary of AE | |
NGC | FirstEnergy Nuclear Generation Corp., owns nuclear generating facilities | |
OE | Ohio Edison Company, an Ohio electric utility operating subsidiary | |
Ohio Companies | CEI, OE and TE | |
PATH | Potomac-Appalachian Transmission Highline LLC, a joint venture between Allegheny and a subsidiary of American Electric Power Company, Inc. | |
PATH-VA | PATH Allegheny Virginia Transmission Corporation | |
PE | The Potomac Edison Company, a Maryland electric operating subsidiary of AE | |
Penelec | Pennsylvania Electric Company, a Pennsylvania electric utility operating subsidiary | |
Penn | Pennsylvania Power Company, a Pennsylvania electric utility operating subsidiary of OE | |
Pennsylvania Companies | Met-Ed, Penelec, Penn and WP | |
PNBV | PNBV Capital Trust, a special purpose entity created by OE in 1996 | |
Shippingport | Shippingport Capital Trust, a special purpose entity created by CEI and TE in 1997 | |
Signal Peak | A joint venture between FEV and WMB Loan Ventures LLC, that owns mining operations near Roundup, Montana | |
TE | The Toledo Edison Company, an Ohio electric utility operating subsidiary | |
TrAIL | Trans-Allegheny Interstate Line Company | |
Utilities | OE, CEI, TE, Penn, JCP&L, Met-Ed, Penelec, MP, PE and WP | |
Utility Registrants | OE, CEI, TE, JCP&L, Met-Ed and Penelec | |
WP | West Penn Power Company, a Pennsylvania electric utility operating subsidiary of AE | |
The following abbreviations and acronyms are used to identify frequently used terms in this report: | ||
ALJ | Administrative Law Judge | |
AOCL | Accumulated Other Comprehensive Loss | |
AEP | American Electric Power | |
AQC | Air Quality Control | |
ARO | Asset Retirement Obligation | |
ARR | Auction Revenue Rights | |
BGS | Basic Generation Service | |
BMP | Bruce Mansfield Plant | |
CAA | Clean Air Act | |
CAIR | Clean Air Interstate Rule | |
CAMR | Clean Air Mercury Rule | |
CATR | Clean Air Transport Rule | |
CBP | Competitive Bid Process |
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CCB | Coal Combustion By-products | |
CDWR | California Department of Water Resources | |
CO2 | Carbon Dioxide | |
CSAPR | Cross-State Air Pollution Rule | |
CTC | Competitive Transition Charge | |
CWA | Clean Water Act | |
CWIP | Construction Work in Progress | |
DCPD | Deferred Compensation Plan for Outside Directors | |
DOE | United States Department of Energy | |
DOJ | United States Department of Justice | |
DPA | Department of the Public Advocate, Division of Rate Counsel (New Jersey) | |
DSP | Default Service Plan | |
EDCP | Executive Deferred Compensation Plan | |
EE&C | Energy Efficiency and Conservation | |
EIS | Energy Insurance Services, Inc. | |
EMP | Energy Master Plan | |
ENEC | Expanded Net Energy Cost | |
EPA | United States Environmental Protection Agency | |
ESOP | Employee Stock Ownership Plan | |
ESP | Electric Security Plan | |
FASB | Financial Accounting Standards Board | |
FERC | Federal Energy Regulatory Commission | |
FMB | First Mortgage Bond | |
FPA | Federal Power Act | |
FRR | Fixed Resource Requirement | |
FTRs | Financial Transmission Rights | |
GAAP | Generally Accepted Accounting Principles in the United States | |
RGGI | Regional Greenhouse Gas Initiative | |
GHG | Greenhouse Gases | |
IRS | Internal Revenue Service | |
JOA | Joint Operating Agreement | |
kV | Kilovolt | |
KWH | Kilowatt-hours | |
LBR | Little Blue Run | |
LED | Light-Emitting Diode | |
LOC | Letter of Credit | |
LSE | Load Serving Entity | |
LTIP | Long-Term Incentive Plan | |
MACT | Maximum Achievable Control Technology | |
MDE | Maryland Department of the Environment | |
MDPSC | Maryland Public Service Commission | |
MEIUG | Met-Ed Industrial Users Group | |
MISO | Midwest Independent Transmission System Operator, Inc. | |
Moody’s | Moody’s Investors Service, Inc. | |
MRO | Market Rate Offer | |
MSHA | Mine Safety and Health Administration | |
MTEP | MISO Regional Transmission Expansion Plan | |
MVP | Multi-value Project | |
MW | Megawatts | |
MWH | Megawatt-hours | |
NAAQS | National Ambient Air Quality Standards | |
NDT | Nuclear Decommissioning Trusts | |
NERC | North American Electric Reliability Corporation | |
NJBPU | New Jersey Board of Public Utilities | |
NNSR | Non-Attainment New Source Review | |
NOAC | Northwest Ohio Aggregation Coalition | |
NOPEC | Northeast Ohio Public Energy Council | |
NOV | Notice of Violation | |
NOX | Nitrogen Oxide | |
NPDES | National Pollutant Discharge Elimination System | |
NRC | Nuclear Regulatory Commission |
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NSR | New Source Review | |
NUG | Non-Utility Generation | |
NUGC | Non-Utility Generation Charge | |
NYSEG | New York State Electric and Gas | |
OCC | Ohio Consumers’ Counsel | |
OCI | Other Comprehensive Income | |
OPEB | Other Post-Employment Benefits | |
OSBA | Office of Small Business Advocate | |
OVEC | Ohio Valley Electric Corporation | |
PA DEP | Pennsylvania Department of Environmental Protection | |
PCRB | Pollution Control Revenue Bond | |
PICA | Pennsylvania Intergovernmental Cooperation Authority | |
PJM | PJM Interconnection L. L. C. | |
POLR | Provider of Last Resort; an electric utility’s obligation to provide generation service to customers whose alternative supplier fails to deliver service | |
PPUC | Pennsylvania Public Utility Commission | |
PSCWV | Public Service Commission of West Virginia | |
PSA | Power Supply Agreement | |
PSD | Prevention of Significant Deterioration | |
PUCO | Public Utilities Commission of Ohio | |
PURPA | Public Utility Regulatory Policies Act of 1978 | |
RECs | Renewable Energy Credits | |
RFP | Request for Proposal | |
RGGI | Regional Greenhouse Gas Initiative | |
RPM | Reliability Pricing Model | |
RTEP | Regional Transmission Expansion Plan | |
RTC | Regulatory Transition Charge | |
RTO | Regional Transmission Organization | |
S&P | Standard & Poor’s Ratings Service | |
SB221 | Amended Substitute Senate Bill 221 | |
SBC | Societal Benefits Charge | |
SEC | U.S. Securities and Exchange Commission | |
SIP | State Implementation Plan(s) Under the Clean Air Act | |
SMIP | Smart Meter Implementation Plan | |
SNCR | Selective Non-Catalytic Reduction | |
SO2 | Sulfur Dioxide | |
SOS | Standard Offer Service | |
TBC | Transition Bond Charge | |
TDS | Total Dissolved Solid | |
TMDL | Total Maximum Daily Load | |
TMI-2 | Three Mile Island Unit 2 | |
TSC | Transmission Service Charge | |
VIE | Variable Interest Entity | |
VSCC | Virginia State Corporation Commission | |
WVDEP | West Virginia Department of Environmental Protection | |
WVPSC | Public Service Commission of West Virginia |
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(Unaudited)
Three Months | Six Months | |||||||||||||||
Ended June 30 | Ended June 30 | |||||||||||||||
In millions, except per share amounts | 2011 | 2010 | 2011 | 2010 | ||||||||||||
REVENUES: | ||||||||||||||||
Electric utilities | $ | 2,590 | $ | 2,373 | $ | 4,925 | $ | 4,916 | ||||||||
Unregulated businesses | 1,470 | 766 | 2,711 | 1,522 | ||||||||||||
Total revenues* | 4,060 | 3,139 | 7,636 | 6,438 | ||||||||||||
EXPENSES: | ||||||||||||||||
Fuel | 635 | 350 | 1,088 | 684 | ||||||||||||
Purchased power | 1,220 | 1,063 | 2,406 | 2,301 | ||||||||||||
Other operating expenses | 1,105 | 673 | 2,138 | 1,374 | ||||||||||||
Provision for depreciation | 282 | 190 | 502 | 383 | ||||||||||||
Amortization of regulatory assets | 90 | 161 | 222 | 373 | ||||||||||||
General taxes | 242 | 176 | 479 | 381 | ||||||||||||
Total expenses | 3,574 | 2,613 | 6,835 | 5,496 | ||||||||||||
OPERATING INCOME | 486 | 526 | 801 | 942 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment income | 31 | 31 | 52 | 47 | ||||||||||||
Interest expense | (265 | ) | (207 | ) | (496 | ) | (420 | ) | ||||||||
Capitalized interest | 20 | 40 | 38 | 81 | ||||||||||||
Total other expense | (214 | ) | (136 | ) | (406 | ) | (292 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 272 | 390 | 395 | 650 | ||||||||||||
INCOME TAXES | 101 | 134 | 179 | 245 | ||||||||||||
NET INCOME | 171 | 256 | 216 | 405 | ||||||||||||
Loss attributable to noncontrolling interest | (10 | ) | (9 | ) | (15 | ) | (15 | ) | ||||||||
EARNINGS AVAILABLE TO FIRSTENERGY CORP. | $ | 181 | $ | 265 | $ | 231 | $ | 420 | ||||||||
EARNINGS PER SHARE OF COMMON STOCK: | ||||||||||||||||
Basic | $ | 0.43 | $ | 0.87 | $ | 0.61 | $ | 1.38 | ||||||||
Diluted | $ | 0.43 | $ | 0.87 | $ | 0.61 | $ | 1.37 | ||||||||
AVERAGE SHARES OUTSTANDING: | ||||||||||||||||
Basic | 418 | 304 | 380 | 304 | ||||||||||||
Diluted | 420 | 305 | 382 | 305 | ||||||||||||
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK | — | — | $ | 0.55 | $ | 0.55 |
* | Includes excise tax collections of $116 million and $99 million in the three months ended June 30, 2011 and 2010, respectively, and $235 million and $208 million in the six months ended June 30, 2011 and 2010, respectively. |
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(Unaudited)
Three Months | Six Months | |||||||||||||||
Ended June 30 | Ended June 30 | |||||||||||||||
(In millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
NET INCOME | $ | 171 | $ | 256 | $ | 216 | $ | 405 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
Pension and other postretirement benefits | 111 | 17 | 130 | 30 | ||||||||||||
Unrealized gain on derivative hedges | 17 | 6 | 11 | 10 | ||||||||||||
Change in unrealized gain on available-for-sale securities | 10 | 6 | 19 | 12 | ||||||||||||
Other comprehensive income | 138 | 29 | 160 | 52 | ||||||||||||
Income tax expense related to other comprehensive income | 53 | 9 | 54 | 16 | ||||||||||||
Other comprehensive income, net of tax | 85 | 20 | 106 | 36 | ||||||||||||
COMPREHENSIVE INCOME | 256 | 276 | 322 | 441 | ||||||||||||
COMPREHENSIVE LOSS ATTRIBUTABLE | ||||||||||||||||
TO NONCONTROLLING INTEREST | (10 | ) | (9 | ) | (15 | ) | (15 | ) | ||||||||
COMPREHENSIVE INCOME AVAILABLE TO FIRSTENERGY CORP. | $ | 266 | $ | 285 | $ | 337 | $ | 456 | ||||||||
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(Unaudited)
June 30, | December 31, | |||||||
(In millions) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 476 | $ | 1,019 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $35 in 2011 and $36 in 2010 | 1,578 | 1,392 | ||||||
Other, net of allowance for uncollectible accounts of $8 in 2011 and 2010 | 256 | 176 | ||||||
Materials and supplies, at average cost | 866 | 638 | ||||||
Prepaid taxes | 474 | 199 | ||||||
Derivatives | 265 | 182 | ||||||
Other | 203 | 92 | ||||||
4,118 | 3,698 | |||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||
In service | 39,568 | 29,451 | ||||||
Less — Accumulated provision for depreciation | 11,593 | 11,180 | ||||||
27,975 | 18,271 | |||||||
Construction work in progress | 1,465 | 1,517 | ||||||
Property, plant and equipment held for sale, net | 502 | — | ||||||
29,942 | 19,788 | |||||||
INVESTMENTS: | ||||||||
Nuclear plant decommissioning trusts | 2,051 | 1,973 | ||||||
Investments in lease obligation bonds | 414 | 476 | ||||||
Nuclear fuel disposal trust | 212 | 208 | ||||||
Other | 479 | 345 | ||||||
3,156 | 3,002 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Goodwill | 6,456 | 5,575 | ||||||
Regulatory assets | 2,182 | 1,826 | ||||||
Intangible assets | 973 | 256 | ||||||
Other | 769 | 660 | ||||||
10,380 | 8,317 | |||||||
$ | 47,596 | $ | 34,805 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 2,058 | $ | 1,486 | ||||
Short-term borrowings | 656 | 700 | ||||||
Accounts payable | 1,122 | 872 | ||||||
Accrued taxes | 399 | 326 | ||||||
Accrued compensation and benefits | 331 | 315 | ||||||
Derivatives | 287 | 266 | ||||||
Other | 691 | 733 | ||||||
5,544 | 4,698 | |||||||
CAPITALIZATION: | ||||||||
Common stockholders’ equity- | ||||||||
Common stock, $0.10 par value, authorized 490,000,000 and 375,000,000 shares, respectively- 418,216,437 and 304,835,407 shares outstanding, respectively | 42 | 31 | ||||||
Other paid-in capital | 9,782 | 5,444 | ||||||
Accumulated other comprehensive loss | (1,433 | ) | (1,539 | ) | ||||
Retained earnings | 4,607 | 4,609 | ||||||
Total common stockholders’ equity | 12,998 | 8,545 | ||||||
Noncontrolling interest | (48 | ) | (32 | ) | ||||
Total equity | 12,950 | 8,513 | ||||||
Long-term debt and other long-term obligations | 16,491 | 12,579 | ||||||
29,441 | 21,092 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Accumulated deferred income taxes | 5,219 | 2,879 | ||||||
Retirement benefits | 2,134 | 1,868 | ||||||
Asset retirement obligations | 1,459 | 1,407 | ||||||
Deferred gain on sale and leaseback transaction | 942 | 959 | ||||||
Adverse power contract liability | 649 | 466 | ||||||
Other | 2,208 | 1,436 | ||||||
12,611 | 9,015 | |||||||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9) | ||||||||
$ | 47,596 | $ | 34,805 | |||||
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(Unaudited)
Six Months Ended | ||||||||
June 30 | ||||||||
(In millions) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 216 | $ | 405 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 502 | 383 | ||||||
Amortization of regulatory assets | 222 | 373 | ||||||
Nuclear fuel and lease amortization | 92 | 76 | ||||||
Deferred purchased power and other costs | (168 | ) | (146 | ) | ||||
Deferred income taxes and investment tax credits, net | 552 | 159 | ||||||
Deferred rents and lease market valuation liability | (61 | ) | (62 | ) | ||||
Accrued compensation and retirement benefits | 49 | (27 | ) | |||||
Commodity derivative transactions, net | (21 | ) | (29 | ) | ||||
Pension trust contribution | (262 | ) | — | |||||
Asset impairments | 41 | 21 | ||||||
Cash collateral paid, net | (31 | ) | (63 | ) | ||||
Interest rate swap transactions | — | 43 | ||||||
Decrease (increase) in operating assets- | ||||||||
Receivables | 199 | (156 | ) | |||||
Materials and supplies | 24 | (17 | ) | |||||
Prepayments and other current assets | (268 | ) | (81 | ) | ||||
Increase (decrease) in operating liabilities- | ||||||||
Accounts payable | (28 | ) | 18 | |||||
Accrued taxes | (66 | ) | (58 | ) | ||||
Accrued interest | (4 | ) | 10 | |||||
Other | 43 | 9 | ||||||
Net cash provided from operating activities | 1,031 | 858 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
New Financing- | ||||||||
Long-term debt | 503 | — | ||||||
Short-term borrowings, net | — | 281 | ||||||
Redemptions and Repayments- | ||||||||
Long-term debt | (1,002 | ) | (407 | ) | ||||
Short-term borrowings, net | (44 | ) | — | |||||
Common stock dividend payments | (420 | ) | (335 | ) | ||||
Other | (76 | ) | (23 | ) | ||||
Net cash used for financing activities | (1,039 | ) | (484 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (1,018 | ) | (997 | ) | ||||
Proceeds from asset sales | — | 116 | ||||||
Sales of investment securities held in trusts | 1,703 | 1,915 | ||||||
Purchases of investment securities held in trusts | (1,807 | ) | (1,934 | ) | ||||
Customer acquisition costs | (2 | ) | (105 | ) | ||||
Cash investments | 50 | 59 | ||||||
Cash received in Allegheny merger | 590 | — | ||||||
Other | (51 | ) | (21 | ) | ||||
Net cash used for investing activities | (535 | ) | (967 | ) | ||||
Net change in cash and cash equivalents | (543 | ) | (593 | ) | ||||
Cash and cash equivalents at beginning of period | 1,019 | 874 | ||||||
Cash and cash equivalents at end of period | $ | 476 | $ | 281 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Non-cash transaction: merger with Allegheny, common stock issued | $ | 4,354 | $ | — |
4
Table of Contents
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
(In millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||
REVENUES: | ||||||||||||||||
Electric sales to non-affiliates | $ | 1,052 | $ | 729 | $ | 2,097 | $ | 1,397 | ||||||||
Electric sales to affiliates | 170 | 539 | 431 | 1,146 | ||||||||||||
Other | 70 | 58 | 156 | 171 | ||||||||||||
Total revenues | 1,292 | 1,326 | 2,684 | 2,714 | ||||||||||||
EXPENSES: | ||||||||||||||||
Fuel | 316 | 343 | 659 | 671 | ||||||||||||
Purchased power from affiliates | 65 | 69 | 134 | 130 | ||||||||||||
Purchased power from non-affiliates | 329 | 310 | 626 | 760 | ||||||||||||
Other operating expenses | 429 | 304 | 910 | 608 | ||||||||||||
Provision for depreciation | 68 | 63 | 136 | 126 | ||||||||||||
General taxes | 30 | 22 | 60 | 49 | ||||||||||||
Impairment of long-lived assets | 7 | — | 20 | 2 | ||||||||||||
Total expenses | 1,244 | 1,111 | 2,545 | 2,346 | ||||||||||||
OPERATING INCOME | 48 | 215 | 139 | 368 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment income | 16 | 13 | 22 | 14 | ||||||||||||
Miscellaneous income (expense) | 4 | 4 | 8 | 7 | ||||||||||||
Interest expense — affiliates | (2 | ) | (2 | ) | (3 | ) | (5 | ) | ||||||||
Interest expense — other | (52 | ) | (51 | ) | (105 | ) | (101 | ) | ||||||||
Capitalized interest | 10 | 24 | 20 | 44 | ||||||||||||
Total other expense | (24 | ) | (12 | ) | (58 | ) | (41 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 24 | 203 | 81 | 327 | ||||||||||||
INCOME TAXES | 4 | 69 | 25 | 113 | ||||||||||||
NET INCOME | $ | 20 | $ | 134 | $ | 56 | $ | 214 | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 20 | $ | 134 | $ | 56 | $ | 214 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
Pension and other postretirement benefits | 1 | 1 | 3 | (9 | ) | |||||||||||
Unrealized gain on derivative hedges | 14 | 3 | 5 | 4 | ||||||||||||
Change in unrealized gain on available-for-sale securities | 8 | 6 | 15 | 11 | ||||||||||||
Other comprehensive income | 23 | 10 | 23 | 6 | ||||||||||||
Income taxes related to other comprehensive income | 10 | 4 | 8 | 2 | ||||||||||||
Other comprehensive income, net of tax | 13 | 6 | 15 | 4 | ||||||||||||
COMPREHENSIVE INCOME | $ | 33 | $ | 140 | $ | 71 | $ | 218 | ||||||||
5
Table of Contents
June 30, | December 31, | |||||||
(In millions) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 6 | $ | 9 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $18 in 2011 and $17 in 2010 | 450 | 366 | ||||||
Associated companies | 490 | 478 | ||||||
Other, net of allowances for uncollectible accounts of $3 in 2011 and $7 in 2010 | 51 | 90 | ||||||
Notes receivable from associated companies | 490 | 397 | ||||||
Materials and supplies, at average cost | 499 | 545 | ||||||
Derivatives | 221 | 182 | ||||||
Prepayments and other | 49 | 59 | ||||||
2,256 | 2,126 | |||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||
In service | 11,455 | 11,321 | ||||||
Less — Accumulated provision for depreciation | 4,206 | 4,024 | ||||||
7,249 | 7,297 | |||||||
Construction work in progress | 694 | 1,063 | ||||||
Property, plant and equipment held for sale, net | 487 | — | ||||||
8,430 | 8,360 | |||||||
INVESTMENTS: | ||||||||
Nuclear plant decommissioning trusts | 1,184 | 1,146 | ||||||
Other | 10 | 12 | ||||||
1,194 | 1,158 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Customer intangibles | 129 | 134 | ||||||
Goodwill | 24 | 24 | ||||||
Property taxes | 41 | 41 | ||||||
Unamortized sale and leaseback costs | 76 | 73 | ||||||
Derivatives | 135 | 98 | ||||||
Other | 75 | 48 | ||||||
480 | 418 | |||||||
$ | 12,360 | $ | 12,062 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 1,088 | $ | 1,132 | ||||
Short-term borrowings- | ||||||||
Associated companies | 541 | 12 | ||||||
Other | 1 | — | ||||||
Accounts payable- | ||||||||
Associated companies | 393 | 467 | ||||||
Other | 191 | 241 | ||||||
Derivatives | 242 | 266 | ||||||
Other | 262 | 322 | ||||||
2,718 | 2,440 | |||||||
CAPITALIZATION: | ||||||||
Common stockholder’s equity- | ||||||||
Common stock, without par value, authorized 750 shares- 7 shares outstanding | 1,488 | 1,490 | ||||||
Accumulated other comprehensive loss | (105 | ) | (120 | ) | ||||
Retained earnings | 2,474 | 2,418 | ||||||
Total common stockholder’s equity | 3,857 | 3,788 | ||||||
Long-term debt and other long-term obligations | 3,000 | 3,181 | ||||||
6,857 | 6,969 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Deferred gain on sale and leaseback transaction | 942 | 959 | ||||||
Accumulated deferred income taxes | 216 | 58 | ||||||
Asset retirement obligations | 875 | 892 | ||||||
Retirement benefits | 295 | 285 | ||||||
Lease market valuation liability | 194 | 217 | ||||||
Derivatives | 85 | 81 | ||||||
Other | 178 | 161 | ||||||
2,785 | 2,653 | |||||||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9) | ||||||||
$ | 12,360 | $ | 12,062 | |||||
6
Table of Contents
(Unaudited)
Six Months Ended | ||||||||
June 30 | ||||||||
(In millions) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 56 | $ | 214 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 136 | 126 | ||||||
Nuclear fuel and lease amortization | 92 | 78 | ||||||
Deferred rents and lease market valuation liability | (58 | ) | (59 | ) | ||||
Deferred income taxes and investment tax credits, net | 126 | 114 | ||||||
Asset impairments | 28 | 21 | ||||||
Accrued compensation and retirement benefits | 8 | 7 | ||||||
Commodity derivative transactions, net | (60 | ) | (29 | ) | ||||
Cash collateral paid, net | (40 | ) | (38 | ) | ||||
Decrease (increase) in operating assets- | ||||||||
Receivables | (36 | ) | (193 | ) | ||||
Materials and supplies | 50 | (29 | ) | |||||
Prepayments and other current assets | 12 | 25 | ||||||
Decrease in operating liabilities- | ||||||||
Accounts payable | (124 | ) | (32 | ) | ||||
Accrued taxes | (29 | ) | (8 | ) | ||||
Other | 21 | 21 | ||||||
Net cash provided from operating activities | 182 | 218 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
New financing- | ||||||||
Long-term debt | 247 | — | ||||||
Short-term borrowings, net | 530 | 76 | ||||||
Redemptions and repayments- | ||||||||
Long-term debt | (472 | ) | (295 | ) | ||||
Other | (11 | ) | (1 | ) | ||||
Net cash provided from (used for) financing activities | 294 | (220 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (334 | ) | (566 | ) | ||||
Proceeds from asset sales | — | 116 | ||||||
Sales of investment securities held in trusts | 513 | 957 | ||||||
Purchases of investment securities held in trusts | (545 | ) | (979 | ) | ||||
Loans to associated companies, net | (93 | ) | 631 | |||||
Customer acquisition costs | (2 | ) | (105 | ) | ||||
Leasehold improvement payments to associated companies | — | (51 | ) | |||||
Other | (18 | ) | (1 | ) | ||||
Net cash provided from (used for) investing activities | (479 | ) | 2 | |||||
Net change in cash and cash equivalents | (3 | ) | — | |||||
Cash and cash equivalents at beginning of period | 9 | — | ||||||
Cash and cash equivalents at end of period | $ | 6 | $ | — | ||||
7
Table of Contents
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||
REVENUES: | ||||||||||||||||
Electric sales | $ | 360,203 | $ | 415,437 | $ | 724,034 | $ | 895,362 | ||||||||
Excise and gross receipts tax collections | 24,941 | 23,949 | 53,136 | 52,424 | ||||||||||||
Total revenues | 385,144 | 439,386 | 777,170 | 947,786 | ||||||||||||
EXPENSES: | ||||||||||||||||
Purchased power from affiliates | 69,134 | 134,050 | 162,396 | 287,727 | ||||||||||||
Purchased power from non-affiliates | 62,667 | 78,826 | 123,046 | 173,057 | ||||||||||||
Other operating expenses | 110,778 | 88,275 | 212,240 | 177,130 | ||||||||||||
Provision for depreciation | 22,470 | 22,014 | 44,346 | 43,894 | ||||||||||||
Amortization of regulatory assets, net | 2,405 | 9,424 | 3,179 | 38,769 | ||||||||||||
General taxes | 45,592 | 43,362 | 95,018 | 90,854 | ||||||||||||
Total expenses | 313,046 | 375,951 | 640,225 | 811,431 | ||||||||||||
OPERATING INCOME | 72,098 | 63,435 | 136,945 | 136,355 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment income | 5,043 | 6,309 | 9,351 | 11,553 | ||||||||||||
Miscellaneous income (expense) | (477 | ) | 1,295 | (187 | ) | 1,003 | ||||||||||
Interest expense | (22,011 | ) | (22,155 | ) | (44,156 | ) | (44,465 | ) | ||||||||
Capitalized interest | 510 | 295 | 841 | 503 | ||||||||||||
Total other expense | (16,935 | ) | (14,256 | ) | (34,151 | ) | (31,406 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 55,163 | 49,179 | 102,794 | 104,949 | ||||||||||||
INCOME TAXES | 16,538 | 11,856 | 34,029 | 31,465 | ||||||||||||
NET INCOME | 38,625 | 37,323 | 68,765 | 73,484 | ||||||||||||
Income attributable to noncontrolling interest | 114 | 130 | 230 | 262 | ||||||||||||
EARNINGS AVAILABLE TO PARENT | $ | 38,511 | $ | 37,193 | $ | 68,535 | $ | 73,222 | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 38,625 | $ | 37,323 | $ | 68,765 | $ | 73,484 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
Pension and other postretirement benefits | 1,122 | 322 | 1,461 | 4,337 | ||||||||||||
Increase in unrealized gain on available-for-sale securities | 1,591 | 520 | 1,569 | 811 | ||||||||||||
Other comprehensive income | 2,713 | 842 | 3,030 | 5,148 | ||||||||||||
Income tax expense (benefit) related to other | ||||||||||||||||
comprehensive income | 386 | (26 | ) | (1,110 | ) | 667 | ||||||||||
Other comprehensive income, net of tax | 2,327 | 868 | 4,140 | 4,481 | ||||||||||||
COMPREHENSIVE INCOME | 40,952 | 38,191 | 72,905 | 77,965 | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO | ||||||||||||||||
NONCONTROLLING INTEREST | 114 | 130 | 230 | 262 | ||||||||||||
COMPREHENSIVE INCOME AVAILABLE TO PARENT | $ | 40,838 | $ | 38,061 | $ | 72,675 | $ | 77,703 | ||||||||
8
Table of Contents
(Unaudited)
June 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 176 | $ | 420,489 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $3,564 in 2011 and $4,086 in 2010 | 159,393 | 176,591 | ||||||
Associated companies | 68,709 | 118,135 | ||||||
Other | 32,798 | 12,232 | ||||||
Notes receivable from associated companies | 95,884 | 16,957 | ||||||
Prepayments and other | 35,339 | 6,393 | ||||||
392,299 | 750,797 | |||||||
UTILITY PLANT: | ||||||||
In service | 3,176,455 | 3,136,623 | ||||||
Less — Accumulated provision for depreciation | 1,230,570 | 1,207,745 | ||||||
1,945,885 | 1,928,878 | |||||||
Construction work in progress | 66,656 | 45,103 | ||||||
2,012,541 | 1,973,981 | |||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||
Investment in lease obligation bonds | 177,835 | 190,420 | ||||||
Nuclear plant decommissioning trusts | 133,354 | 127,017 | ||||||
Other | 92,440 | 95,563 | ||||||
403,629 | 413,000 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Regulatory assets | 392,580 | 400,322 | ||||||
Pension assets | 62,612 | 28,596 | ||||||
Property taxes | 71,331 | 71,331 | ||||||
Unamortized sale and leaseback costs | 27,628 | 30,126 | ||||||
Other | 19,041 | 17,634 | ||||||
573,192 | 548,009 | |||||||
$ | 3,381,661 | $ | 3,685,787 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 1,429 | $ | 1,419 | ||||
Short-term borrowings- | ||||||||
Associated companies | — | 142,116 | ||||||
Other | 166 | 320 | ||||||
Accounts payable- | ||||||||
Associated companies | 94,821 | 99,421 | ||||||
Other | 41,417 | 29,639 | ||||||
Accrued taxes | 69,364 | 78,707 | ||||||
Accrued interest | 25,374 | 25,382 | ||||||
Other | 79,795 | 74,947 | ||||||
312,366 | 451,951 | |||||||
CAPITALIZATION: | ||||||||
Common stockholder’s equity- | ||||||||
Common stock, without par value, authorized 175,000,000 shares – 60 shares outstanding | 783,871 | 951,866 | ||||||
Accumulated other comprehensive loss | (174,936 | ) | (179,076 | ) | ||||
Retained earnings | 110,156 | 141,621 | ||||||
Total common stockholder’s equity | 719,091 | 914,411 | ||||||
Noncontrolling interest | 5,313 | 5,680 | ||||||
Total equity | 724,404 | 920,091 | ||||||
Long-term debt and other long-term obligations | 1,151,720 | 1,152,134 | ||||||
1,876,124 | 2,072,225 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Accumulated deferred income taxes | 749,687 | 696,410 | ||||||
Accumulated deferred investment tax credits | 9,439 | 10,159 | ||||||
Retirement benefits | 183,345 | 183,712 | ||||||
Asset retirement obligations | 69,164 | 74,456 | ||||||
Other | 181,536 | 196,874 | ||||||
1,193,171 | 1,161,611 | |||||||
COMMITMENTS AND CONTINGENCIES (Note 9) | ||||||||
$ | 3,381,661 | $ | 3,685,787 | |||||
The accompanying Combined Notes to the Consolidated Financial Statements are an integral part of these financial statements. |
9
Table of Contents
(Unaudited)
Six Months Ended | ||||||||
June 30 | ||||||||
(In thousands) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 68,765 | $ | 73,484 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 44,346 | 43,894 | ||||||
Amortization of regulatory assets, net | 3,179 | 38,769 | ||||||
Purchased power cost recovery reconciliation | (8,584 | ) | (1,514 | ) | ||||
Amortization of lease costs | (4,696 | ) | (4,619 | ) | ||||
Deferred income taxes and investment tax credits, net | 62,216 | 4,964 | ||||||
Accrued compensation and retirement benefits | (8,328 | ) | (16,154 | ) | ||||
Accrued regulatory obligations | (3,309 | ) | (2,309 | ) | ||||
Cash collateral from (to) suppliers, net | (850 | ) | 1,215 | |||||
Pension trust contribution | (27,000 | ) | — | |||||
Decrease (increase) in operating assets- | ||||||||
Receivables | 80,968 | 49,250 | ||||||
Prepayments and other current assets | (28,947 | ) | 5,072 | |||||
Decrease in operating liabilities- | ||||||||
Accounts payable | (22,253 | ) | (57,208 | ) | ||||
Accrued taxes | (9,360 | ) | (25,685 | ) | ||||
Other | 4,261 | (114 | ) | |||||
Net cash provided from operating activities | 150,408 | 109,045 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Redemptions and Repayments- | ||||||||
Long-term debt | (707 | ) | (2,957 | ) | ||||
Short-term borrowings, net | (142,270 | ) | (93,017 | ) | ||||
Common stock dividend payments | (268,000 | ) | (250,000 | ) | ||||
Other | (2,340 | ) | (881 | ) | ||||
Net cash used for financing activities | (413,317 | ) | (346,855 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (78,894 | ) | (71,698 | ) | ||||
Leasehold improvement payments from associated companies | — | 18,375 | ||||||
Sales of investment securities held in trusts | 19,595 | 59,804 | ||||||
Purchases of investment securities held in trusts | (25,547 | ) | (64,063 | ) | ||||
Loans to associated companies, net | (78,927 | ) | 12,420 | |||||
Cash investments | 11,962 | 11,774 | ||||||
Other | (5,593 | ) | (1,298 | ) | ||||
Net cash used for investing activities | (157,404 | ) | (34,686 | ) | ||||
Net change in cash and cash equivalents | (420,313 | ) | (272,496 | ) | ||||
Cash and cash equivalents at beginning of period | 420,489 | 324,175 | ||||||
Cash and cash equivalents at end of period | $ | 176 | $ | 51,679 | ||||
10
Table of Contents
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||
REVENUES: | ||||||||||||||||
Electric sales | $ | 202,148 | $ | 280,180 | $ | 408,890 | $ | 592,677 | ||||||||
Excise tax collections | 15,706 | 15,495 | 33,851 | 33,068 | ||||||||||||
Total revenues | 217,854 | 295,675 | 442,741 | 625,745 | ||||||||||||
EXPENSES: | ||||||||||||||||
Purchased power from affiliates | 36,040 | 99,422 | 82,208 | 208,815 | ||||||||||||
Purchased power from non-affiliates | 23,099 | 32,651 | 41,319 | 70,049 | ||||||||||||
Other operating expenses | 31,625 | 28,937 | 66,661 | 60,172 | ||||||||||||
Provision for depreciation | 18,488 | 18,336 | 36,914 | 36,447 | ||||||||||||
Amortization of regulatory assets, net | 18,166 | 30,807 | 41,536 | 75,946 | ||||||||||||
General taxes | 36,954 | 28,840 | 77,166 | 67,329 | ||||||||||||
Total expenses | 164,372 | 238,993 | 345,804 | 518,758 | ||||||||||||
OPERATING INCOME | 53,482 | 56,682 | 96,937 | 106,987 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment income | 5,637 | 6,605 | 12,234 | 14,152 | ||||||||||||
Miscellaneous income | 1,038 | 675 | 1,674 | 1,257 | ||||||||||||
Interest expense | (32,135 | ) | (33,262 | ) | (65,213 | ) | (66,883 | ) | ||||||||
Capitalized interest | 36 | 7 | 63 | 33 | ||||||||||||
Total other expense | (25,424 | ) | (25,975 | ) | (51,242 | ) | (51,441 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 28,058 | 30,707 | 45,695 | 55,546 | ||||||||||||
INCOME TAXES | 6,209 | 8,785 | 10,645 | 19,628 | ||||||||||||
NET INCOME | 21,849 | 21,922 | 35,050 | 35,918 | ||||||||||||
Income attributable to noncontrolling interest | 309 | 366 | 675 | 785 | ||||||||||||
EARNINGS AVAILABLE TO PARENT | $ | 21,540 | $ | 21,556 | $ | 34,375 | $ | 35,133 | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 21,849 | $ | 21,922 | $ | 35,050 | $ | 35,918 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||||||||||
Pension and other postretirement benefits (charges) | 2,975 | 3,228 | 5,942 | (19,357 | ) | |||||||||||
Income tax expense (benefit) related to other comprehensive income | 860 | 976 | 398 | (7,301 | ) | |||||||||||
Other comprehensive income (loss), net of tax | 2,115 | 2,252 | 5,544 | (12,056 | ) | |||||||||||
COMPREHENSIVE INCOME | 23,964 | 24,174 | 40,594 | 23,862 | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 309 | 366 | 675 | 785 | ||||||||||||
COMPREHENSIVE INCOME AVAILABLE TO PARENT | $ | 23,655 | $ | 23,808 | $ | 39,919 | $ | 23,077 | ||||||||
11
Table of Contents
(Unaudited)
June 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 244 | $ | 238 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $2,801 in 2011 and $4,589 in 2010 | 97,997 | 183,744 | ||||||
Associated companies | 32,348 | 77,047 | ||||||
Other | 13,476 | 11,544 | ||||||
Notes receivable from associated companies | 71,911 | 23,236 | ||||||
Materials and supplies, at average cost | 13,784 | 398 | ||||||
Prepayments and other | 6,431 | 3,258 | ||||||
236,191 | 299,465 | |||||||
UTILITY PLANT: | ||||||||
In service | 2,417,031 | 2,396,893 | ||||||
Less — Accumulated provision for depreciation | 944,379 | 932,246 | ||||||
1,472,652 | 1,464,647 | |||||||
Construction work in progress | 59,281 | 38,610 | ||||||
1,531,933 | 1,503,257 | |||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||
Investment in lessor notes | 286,745 | 340,029 | ||||||
Other | 10,048 | 10,074 | ||||||
296,793 | 350,103 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Goodwill | 1,688,521 | 1,688,521 | ||||||
Regulatory assets | 320,337 | 370,403 | ||||||
Pension assets | 14,652 | — | ||||||
Property taxes | 80,614 | 80,614 | ||||||
Other | 12,884 | 11,486 | ||||||
2,117,008 | 2,151,024 | |||||||
$ | 4,181,925 | $ | 4,303,849 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 188 | $ | 161 | ||||
Short-term borrowings from associated companies | 23,303 | 105,996 | ||||||
Accounts payable- | ||||||||
Associated companies | 51,001 | 32,020 | ||||||
Other | 18,700 | 14,947 | ||||||
Accrued taxes | 83,265 | 84,668 | ||||||
Accrued interest | 18,551 | 18,555 | ||||||
Other | 38,685 | 44,569 | ||||||
233,693 | 300,916 | |||||||
CAPITALIZATION: | ||||||||
Common stockholder’s equity- | ||||||||
Common stock, without par value, authorized 105,000,000 shares, 67,930,743 shares outstanding | 887,053 | 887,087 | ||||||
Accumulated other comprehensive loss | (147,643 | ) | (153,187 | ) | ||||
Retained earnings | 539,280 | 568,906 | ||||||
Total common stockholder’s equity | 1,278,690 | 1,302,806 | ||||||
Noncontrolling interest | 15,195 | 18,017 | ||||||
Total equity | 1,293,885 | 1,320,823 | ||||||
Long-term debt and other long-term obligations | 1,831,023 | 1,852,530 | ||||||
3,124,908 | 3,173,353 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Accumulated deferred income taxes | 640,059 | 622,771 | ||||||
Accumulated deferred investment tax credits | 10,574 | 10,994 | ||||||
Retirement benefits | 76,010 | 95,654 | ||||||
Other | 96,681 | 100,161 | ||||||
823,324 | 829,580 | |||||||
COMMITMENTS AND CONTINGENCIES (Note 9) | ||||||||
$ | 4,181,925 | $ | 4,303,849 | |||||
12
Table of Contents
(Unaudited)
Six Months Ended | ||||||||
June 30 | ||||||||
(In thousands) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 35,050 | $ | 35,918 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 36,914 | 36,447 | ||||||
Amortization of regulatory assets, net | 41,536 | 75,946 | ||||||
Deferred income taxes and investment tax credits, net | 17,221 | (18,083 | ) | |||||
Accrued compensation and retirement benefits | 5,421 | 5,421 | ||||||
Accrued regulatory obligations | (2,001 | ) | (444 | ) | ||||
Cash collateral from suppliers, net | — | 685 | ||||||
Pension trust contribution | (35,000 | ) | — | |||||
Decrease (increase) in operating assets- | ||||||||
Receivables | 140,455 | 51,757 | ||||||
Prepayments and other current assets | (17,469 | ) | 5,392 | |||||
Increase (decrease) in operating liabilities- | ||||||||
Accounts payable | 10,135 | (34,488 | ) | |||||
Accrued taxes | (346 | ) | (11,317 | ) | ||||
Other | (4,436 | ) | 2,023 | |||||
Net cash provided from operating activities | 227,480 | 149,257 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Redemptions and Repayments- | ||||||||
Long-term debt | (74 | ) | (54 | ) | ||||
Short-term borrowings, net | (104,228 | ) | (136,013 | ) | ||||
Common stock dividend payments | (64,000 | ) | (100,000 | ) | ||||
Other | (5,239 | ) | (3,367 | ) | ||||
Net cash used for financing activities | (173,541 | ) | (239,434 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (52,743 | ) | (44,373 | ) | ||||
Loans to associated companies, net | (48,676 | ) | 2,322 | |||||
Redemptions of lessor notes | 53,283 | 48,608 | ||||||
Other | (5,797 | ) | (2,365 | ) | ||||
Net cash provided from (used for) investing activities | (53,933 | ) | 4,192 | |||||
Net change in cash and cash equivalents | 6 | (85,985 | ) | |||||
Cash and cash equivalents at beginning of period | 238 | 86,230 | ||||||
Cash and cash equivalents at end of period | $ | 244 | $ | 245 | ||||
13
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(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||
REVENUES: | ||||||||||||||||
Electric sales | $ | 93,048 | $ | 114,691 | $ | 199,373 | $ | 240,122 | ||||||||
Excise tax collections | 6,270 | 6,059 | 13,572 | 13,100 | ||||||||||||
Total revenues | 99,318 | 120,750 | 212,945 | 253,222 | ||||||||||||
EXPENSES: | ||||||||||||||||
Purchased power from affiliates | 17,037 | 47,106 | 52,554 | 101,725 | ||||||||||||
Purchased power from non-affiliates | 16,114 | 15,223 | 30,102 | 33,713 | ||||||||||||
Other operating expenses | 32,549 | 25,499 | 69,136 | 51,044 | ||||||||||||
Provision for depreciation | 7,959 | 8,013 | 15,890 | 15,963 | ||||||||||||
Deferral of regulatory assets, net | (7,054 | ) | (1,800 | ) | (18,532 | ) | (10,299 | ) | ||||||||
General taxes | 12,438 | 12,282 | 26,890 | 25,743 | ||||||||||||
Total expenses | 79,043 | 106,323 | 176,040 | 217,889 | ||||||||||||
OPERATING INCOME | 20,275 | 14,427 | 36,905 | 35,333 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment income | 2,599 | 5,057 | 5,521 | 8,857 | ||||||||||||
Miscellaneous income (expense) | 396 | (945 | ) | (1,233 | ) | (2,351 | ) | |||||||||
Interest expense | (10,415 | ) | (10,455 | ) | (20,858 | ) | (20,942 | ) | ||||||||
Capitalized interest | 135 | 80 | 237 | 158 | ||||||||||||
Total other expense | (7,285 | ) | (6,263 | ) | (16,333 | ) | (14,278 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 12,990 | 8,164 | 20,572 | 21,055 | ||||||||||||
INCOME TAXES | 1,429 | 948 | 3,164 | 6,330 | ||||||||||||
NET INCOME | 11,561 | 7,216 | 17,408 | 14,725 | ||||||||||||
Income attributable to noncontrolling interest | 2 | 2 | 4 | 5 | ||||||||||||
EARNINGS AVAILABLE TO PARENT | $ | 11,559 | $ | 7,214 | $ | 17,404 | $ | 14,720 | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 11,561 | $ | 7,216 | $ | 17,408 | $ | 14,725 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
Pension and other postretirement benefits | 575 | 714 | 1,167 | 1,010 | ||||||||||||
Increase (decrease) in unrealized gain on available-for-sale securities | 754 | (330 | ) | 2,059 | 39 | |||||||||||
Other comprehensive income | 1,329 | 384 | 3,226 | 1,049 | ||||||||||||
Income tax expense related to other comprehensive income | 351 | 65 | 685 | 235 | ||||||||||||
Other comprehensive income, net of tax | 978 | 319 | 2,541 | 814 | ||||||||||||
COMPREHENSIVE INCOME | 12,539 | 7,535 | 19,949 | 15,539 | ||||||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 2 | 2 | 4 | 5 | ||||||||||||
COMPREHENSIVE INCOME AVAILABLE TO PARENT | $ | 12,537 | $ | 7,533 | $ | 19,945 | $ | 15,534 | ||||||||
14
Table of Contents
(Unaudited)
June 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 12 | $ | 149,262 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $1,142 in 2011 and $1 in 2010 | 45,931 | 29 | ||||||
Associated companies | 48,340 | 31,777 | ||||||
Other, net of allowance for uncollectible accounts of $339 in 2011 and $330 in 2010 | 5,272 | 18,464 | ||||||
Notes receivable from associated companies | 128,815 | 96,765 | ||||||
Prepayments and other | 12,052 | 2,306 | ||||||
240,422 | 298,603 | |||||||
UTILITY PLANT: | ||||||||
In service | 955,002 | 947,203 | ||||||
Less — Accumulated provision for depreciation | 453,517 | 446,401 | ||||||
501,485 | 500,802 | |||||||
Construction work in progress | 17,386 | 12,604 | ||||||
518,871 | 513,406 | |||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||
Investment in lessor notes | 82,153 | 103,872 | ||||||
Nuclear plant decommissioning trusts | 79,018 | 75,558 | ||||||
Other | 1,448 | 1,492 | ||||||
162,619 | 180,922 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Goodwill | 500,576 | 500,576 | ||||||
Regulatory assets | 89,112 | 72,059 | ||||||
Pension assets | 24,603 | — | ||||||
Property taxes | 24,990 | 24,990 | ||||||
Other | 42,341 | 23,750 | ||||||
681,622 | 621,375 | |||||||
$ | 1,603,534 | $ | 1,614,306 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 188 | $ | 199 | ||||
Accounts payable- | ||||||||
Associated companies | 22,144 | 17,168 | ||||||
Other | 12,524 | 7,351 | ||||||
Accrued taxes | 23,699 | 24,401 | ||||||
Accrued interest | 5,933 | 5,931 | ||||||
Lease market valuation liability | 36,900 | 36,900 | ||||||
Other | 18,060 | 23,145 | ||||||
119,448 | 115,095 | |||||||
CAPITALIZATION: | ||||||||
Common stockholder’s equity- | ||||||||
Common stock, $5 par value, authorized 60,000,000 shares, 29,402,054 shares outstanding | 147,010 | 147,010 | ||||||
Other paid-in capital | 178,157 | 178,182 | ||||||
Accumulated other comprehensive loss | (46,642 | ) | (49,183 | ) | ||||
Retained earnings | 100,937 | 117,534 | ||||||
Total common stockholder’s equity | 379,462 | 393,543 | ||||||
Noncontrolling interest | 2,593 | 2,589 | ||||||
Total equity | 382,055 | 396,132 | ||||||
Long-term debt and other long-term obligations | 600,524 | 600,493 | ||||||
982,579 | 996,625 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Accumulated deferred income taxes | 168,429 | 132,019 | ||||||
Accumulated deferred investment tax credits | 5,715 | 5,930 | ||||||
Retirement benefits | 51,764 | 71,486 | ||||||
Asset retirement obligations | 29,737 | 28,762 | ||||||
Lease market valuation liability | 180,850 | 199,300 | ||||||
Other | 65,012 | 65,089 | ||||||
501,507 | 502,586 | |||||||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9) | ||||||||
$ | 1,603,534 | $ | 1,614,306 | |||||
15
Table of Contents
(Unaudited)
Six Months Ended | ||||||||
June 30 | ||||||||
(In thousands) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 17,408 | $ | 14,725 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 15,890 | 15,963 | ||||||
Deferral of regulatory assets, net | (18,532 | ) | (10,299 | ) | ||||
Deferred rents and lease market valuation liability | (43,851 | ) | (42,264 | ) | ||||
Deferred income taxes and investment tax credits, net | 41,457 | 16,503 | ||||||
Accrued compensation and retirement benefits | 1,085 | 2,600 | ||||||
Accrued regulatory obligations | (1,193 | ) | (632 | ) | ||||
Pension trust contribution | (45,000 | ) | — | |||||
Cash collateral from (to) suppliers, net | (14 | ) | 343 | |||||
Increase (decrease) in operating assets- | ||||||||
Receivables | (48,807 | ) | 52,754 | |||||
Prepayments and other current assets | (9,758 | ) | 3,608 | |||||
Increase (decrease) in operating liabilities- | ||||||||
Accounts payable | 3,661 | (61,195 | ) | |||||
Accrued taxes | (701 | ) | (4,007 | ) | ||||
Other | 5,771 | (8,960 | ) | |||||
Net cash used for operating activities | (82,584 | ) | (20,861 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Redemptions and Repayments- | ||||||||
Long-term debt | (105 | ) | (111 | ) | ||||
Short-term borrowings, net | — | (225,975 | ) | |||||
Common stock dividend payments | (34,000 | ) | (130,000 | ) | ||||
Other | (1,742 | ) | (112 | ) | ||||
Net cash used for financing activities | (35,847 | ) | (356,198 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (17,386 | ) | (20,237 | ) | ||||
Leasehold improvement payments from associated companies | — | 32,829 | ||||||
Loans to associated companies, net | (32,050 | ) | (10,818 | ) | ||||
Redemptions of lessor notes | 21,739 | 20,485 | ||||||
Sales of investment securities held in trusts | 28,401 | 106,814 | ||||||
Purchases of investment securities held in trusts | (30,050 | ) | (107,978 | ) | ||||
Other | (1,473 | ) | (2,905 | ) | ||||
Net cash provided from (used for) investing activities | (30,819 | ) | 18,190 | |||||
Net change in cash and cash equivalents | (149,250 | ) | (358,869 | ) | ||||
Cash and cash equivalents at beginning of period | 149,262 | 436,712 | ||||||
Cash and cash equivalents at end of period | $ | 12 | $ | 77,843 | ||||
16
Table of Contents
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||
REVENUES: | ||||||||||||||||
Electric sales | $ | 576,977 | $ | 709,606 | $ | 1,211,000 | $ | 1,400,998 | ||||||||
Excise tax collections | 11,120 | 11,012 | 23,607 | 23,364 | ||||||||||||
Total revenues | 588,097 | 720,618 | 1,234,607 | 1,424,362 | ||||||||||||
EXPENSES: | ||||||||||||||||
Purchased power | 328,463 | 410,470 | 698,631 | 824,486 | ||||||||||||
Other operating expenses | 78,603 | 75,177 | 164,682 | 170,837 | ||||||||||||
Provision for depreciation | 26,773 | 27,093 | 52,087 | 55,064 | ||||||||||||
Amortization of regulatory assets, net | 40,046 | 81,326 | 121,633 | 150,774 | ||||||||||||
General taxes | 15,115 | 14,902 | 32,526 | 31,338 | ||||||||||||
Total expenses | 489,000 | 608,968 | 1,069,559 | 1,232,499 | ||||||||||||
OPERATING INCOME | 99,097 | 111,650 | 165,048 | 191,863 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Miscellaneous income | 3,554 | 1,649 | 5,464 | 3,482 | ||||||||||||
Interest expense | (31,125 | ) | (30,041 | ) | (61,782 | ) | (59,464 | ) | ||||||||
Capitalized interest | 618 | 156 | 1,045 | 289 | ||||||||||||
Total other expense | (26,953 | ) | (28,236 | ) | (55,273 | ) | (55,693 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 72,144 | 83,414 | 109,775 | 136,170 | ||||||||||||
INCOME TAXES | 30,383 | 33,521 | 48,461 | 57,051 | ||||||||||||
NET INCOME | $ | 41,761 | $ | 49,893 | $ | 61,314 | $ | 79,119 | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 41,761 | $ | 49,893 | $ | 61,314 | $ | 79,119 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
Pension and other postretirement benefits | 4,290 | 4,135 | 8,511 | 20,063 | ||||||||||||
Unrealized gain on derivative hedges | 69 | 69 | 138 | 138 | ||||||||||||
Other comprehensive income | 4,359 | 4,204 | 8,649 | 20,201 | ||||||||||||
Income tax expense related to other comprehensive income | 1,612 | 1,441 | 3,202 | 7,999 | ||||||||||||
Other comprehensive income, net of tax | 2,747 | 2,763 | 5,447 | 12,202 | ||||||||||||
COMPREHENSIVE INCOME | $ | 44,508 | $ | 52,656 | $ | 66,761 | $ | 91,321 | ||||||||
17
Table of Contents
(Unaudited)
June 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 42 | $ | 4 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $3,306 in 2011 and $3,769 in 2010 | 259,313 | 323,044 | ||||||
Associated companies | 66,069 | 53,780 | ||||||
Other | 25,580 | 26,119 | ||||||
Notes receivable — associated companies | 16,288 | 177,228 | ||||||
Prepaid taxes | 135,679 | 10,889 | ||||||
Other | 15,421 | 12,654 | ||||||
518,392 | 603,718 | |||||||
UTILITY PLANT: | ||||||||
In service | 4,589,369 | 4,562,781 | ||||||
Less — Accumulated provision for depreciation | 1,682,577 | 1,656,939 | ||||||
2,906,792 | 2,905,842 | |||||||
Construction work in progress | 112,573 | 63,535 | ||||||
3,019,365 | 2,969,377 | |||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||
Nuclear fuel disposal trust | 212,419 | 207,561 | ||||||
Nuclear plant decommissioning trusts | 190,422 | 181,851 | ||||||
Other | 2,118 | 2,104 | ||||||
404,959 | 391,516 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Goodwill | 1,810,936 | 1,810,936 | ||||||
Regulatory assets | 469,490 | 513,395 | ||||||
Other | 34,028 | 27,938 | ||||||
2,314,454 | 2,352,269 | |||||||
$ | 6,257,170 | $ | 6,316,880 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 33,315 | $ | 32,402 | ||||
Short-term borrowings- | ||||||||
Associated companies | 360,917 | — | ||||||
Other | 50,000 | — | ||||||
Accounts payable- | ||||||||
Associated companies | 56,544 | 28,571 | ||||||
Other | 159,720 | 158,442 | ||||||
Accrued compensation and benefits | 35,578 | 35,232 | ||||||
Customer deposits | 23,684 | 23,385 | ||||||
Accrued taxes | 1,346 | 2,509 | ||||||
Accrued interest | 18,059 | 18,111 | ||||||
Other | 13,487 | 22,263 | ||||||
752,650 | 320,915 | |||||||
CAPITALIZATION: | ||||||||
Common stockholder’s equity- | ||||||||
Common stock, $10 par value, authorized 16,000,000 shares- 13,628,447 shares outstanding | 136,284 | 136,284 | ||||||
Other paid-in capital | 2,008,847 | 2,508,874 | ||||||
Accumulated other comprehensive loss | (248,095 | ) | (253,542 | ) | ||||
Retained earnings | 288,484 | 227,170 | ||||||
Total common stockholder’s equity | 2,185,520 | 2,618,786 | ||||||
Long-term debt and other long-term obligations | 1,754,582 | 1,769,849 | ||||||
3,940,102 | 4,388,635 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Accumulated deferred income taxes | 761,844 | 715,527 | ||||||
Power purchase contract liability | 239,943 | 233,492 | ||||||
Nuclear fuel disposal costs | 196,868 | 196,768 | ||||||
Retirement benefits | 71,711 | 182,364 | ||||||
Asset retirement obligations | 111,831 | 108,297 | ||||||
Other | 182,221 | 170,882 | ||||||
1,564,418 | 1,607,330 | |||||||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9) | ||||||||
$ | 6,257,170 | $ | 6,316,880 | |||||
18
Table of Contents
(Unaudited)
Six Months Ended | ||||||||
June 30 | ||||||||
(In thousands) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 61,314 | $ | 79,119 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 52,087 | 55,064 | ||||||
Amortization of regulatory assets, net | 121,633 | 150,774 | ||||||
Deferred purchased power and other costs | (70,998 | ) | (67,664 | ) | ||||
Deferred income taxes and investment tax credits, net | 51,222 | (1,425 | ) | |||||
Accrued compensation and retirement benefits | 1,319 | 2,608 | ||||||
Cash collateral paid, net | (235 | ) | (23,400 | ) | ||||
Pension trust contribution | (105,000 | ) | — | |||||
Decrease (increase) in operating assets- | ||||||||
Receivables | 58,466 | (46,788 | ) | |||||
Prepaid taxes | (124,790 | ) | (111,968 | ) | ||||
Increase (decrease) in operating liabilities- | ||||||||
Accounts payable | 13,856 | 11,924 | ||||||
Accrued taxes | (1,167 | ) | 10,368 | |||||
Other | 612 | (6,446 | ) | |||||
Net cash provided from operating activities | 58,319 | 52,166 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
New Financing- | ||||||||
Short-term borrowings, net | 410,917 | 57,850 | ||||||
Redemptions and Repayments- | ||||||||
Long-term debt | (14,671 | ) | (13,830 | ) | ||||
Common stock dividend payments | — | (90,000 | ) | |||||
Equity payment to parent | (500,000 | ) | — | |||||
Other | (1,452 | ) | — | |||||
Net cash used for financing activities | (105,206 | ) | (45,980 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (98,153 | ) | (80,727 | ) | ||||
Loans to associated companies, net | 160,940 | 85,049 | ||||||
Sales of investment securities held in trusts | 375,885 | 281,242 | ||||||
Purchases of investment securities held in trusts | (385,448 | ) | (289,454 | ) | ||||
Other | (6,299 | ) | (2,224 | ) | ||||
Net cash provided from (used for) investing activities | 46,925 | (6,114 | ) | |||||
Net change in cash and cash equivalents | 38 | 72 | ||||||
Cash and cash equivalents at beginning of period | 4 | 27 | ||||||
Cash and cash equivalents at end of period | $ | 42 | $ | 99 | ||||
19
Table of Contents
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
REVENUES: | ||||||||||||||||
Electric sales | $ | 265,363 | $ | 422,030 | $ | 603,779 | $ | 873,590 | ||||||||
Gross receipts tax collections | 14,601 | 20,629 | 33,401 | 42,196 | ||||||||||||
Total revenues | 279,964 | 442,659 | 637,180 | 915,786 | ||||||||||||
EXPENSES: | ||||||||||||||||
Purchased power from affiliates | 34,935 | 149,000 | 84,824 | 310,080 | ||||||||||||
Purchased power from non-affiliates | 100,836 | 85,276 | 253,879 | 177,204 | ||||||||||||
Other operating expenses | 50,075 | 90,151 | 97,307 | 192,134 | ||||||||||||
Provision for depreciation | 12,766 | 13,440 | 25,189 | 26,198 | ||||||||||||
Amortization of regulatory assets, net | 22,167 | 48,589 | 54,261 | 97,389 | ||||||||||||
General taxes | 17,152 | 19,894 | 39,302 | 41,634 | ||||||||||||
Total expenses | 237,931 | 406,350 | 554,762 | 844,639 | ||||||||||||
OPERATING INCOME | 42,033 | 36,309 | 82,418 | 71,147 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest income | 13 | 880 | 106 | 2,097 | ||||||||||||
Miscellaneous income | 915 | 1,381 | 1,885 | 3,554 | ||||||||||||
Interest expense | (13,130 | ) | (13,002 | ) | (26,187 | ) | (26,775 | ) | ||||||||
Capitalized interest | 228 | 159 | 375 | 285 | ||||||||||||
Total other expense | (11,974 | ) | (10,582 | ) | (23,821 | ) | (20,839 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 30,059 | 25,727 | 58,597 | 50,308 | ||||||||||||
INCOME TAXES | 13,281 | 8,618 | 19,232 | 20,884 | ||||||||||||
NET INCOME | $ | 16,778 | $ | 17,109 | $ | 39,365 | $ | 29,424 | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 16,778 | $ | 17,109 | $ | 39,365 | $ | 29,424 | ||||||||
OTHER COMPREHENSIVE INCOME | ||||||||||||||||
Pension and other postretirement benefits | 2,227 | 2,162 | 4,190 | 11,871 | ||||||||||||
Unrealized gain on derivative hedges | 84 | 84 | 168 | 168 | ||||||||||||
Other comprehensive income | 2,311 | 2,246 | 4,358 | 12,039 | ||||||||||||
Income tax expense related to other comprehensive income | 869 | 724 | 1,632 | 4,901 | ||||||||||||
Other comprehensive income, net of tax | 1,442 | 1,522 | 2,726 | 7,138 | ||||||||||||
COMPREHENSIVE INCOME | $ | 18,220 | $ | 18,631 | $ | 42,091 | $ | 36,562 | ||||||||
20
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June 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 157 | $ | 243,220 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $3,087 in 2011 and $3,868 in 2010 | 143,820 | 178,522 | ||||||
Associated companies | 12,849 | 24,920 | ||||||
Other | 16,437 | 13,007 | ||||||
Notes receivable from associated companies | 10,432 | 11,028 | ||||||
Prepaid taxes | 27,083 | 343 | ||||||
Other | 1,443 | 2,289 | ||||||
212,221 | 473,329 | |||||||
UTILITY PLANT: | ||||||||
In service | 2,266,437 | 2,247,853 | ||||||
Less — Accumulated provision for depreciation | 859,055 | 846,003 | ||||||
1,407,382 | 1,401,850 | |||||||
Construction work in progress | 42,604 | 23,663 | ||||||
1,449,986 | 1,425,513 | |||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||
Nuclear plant decommissioning trusts | 301,188 | 289,328 | ||||||
Other | 840 | 884 | ||||||
302,028 | 290,212 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Goodwill | 416,499 | 416,499 | ||||||
Regulatory assets | 341,488 | 295,856 | ||||||
Power purchase contract asset | 65,861 | 111,562 | ||||||
Other | 54,587 | 31,699 | ||||||
878,435 | 855,616 | |||||||
$ | 2,842,670 | $ | 3,044,670 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 28,760 | $ | 28,760 | ||||
Short-term borrowings- | ||||||||
Associated companies | 238,399 | 124,079 | ||||||
Other | 50,000 | — | ||||||
Accounts payable- | ||||||||
Associated companies | 24,377 | 33,942 | ||||||
Other | 48,262 | 29,862 | ||||||
Accrued taxes | 12,844 | 60,856 | ||||||
Accrued interest | 16,011 | 16,114 | ||||||
Other | 29,605 | 29,278 | ||||||
448,258 | 322,891 | |||||||
CAPITALIZATION: | ||||||||
Common stockholder’s equity- | ||||||||
Common stock, without par value, authorized 900,000 shares, 740,905 and 859,500 shares outstanding, respectively | 842,023 | 1,197,076 | ||||||
Accumulated other comprehensive loss | (139,657 | ) | (142,383 | ) | ||||
Retained earnings | 46,772 | 32,406 | ||||||
Total common stockholder’s equity | 749,138 | 1,087,099 | ||||||
Long-term debt and other long-term obligations | 704,486 | 718,860 | ||||||
1,453,624 | 1,805,959 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Accumulated deferred income taxes | 494,716 | 473,009 | ||||||
Accumulated deferred investment tax credits | 6,656 | 6,866 | ||||||
Nuclear fuel disposal costs | 44,471 | 44,449 | ||||||
Asset retirement obligations | 199,162 | 192,659 | ||||||
Retirement benefits | 22,276 | 29,121 | ||||||
Power purchase contract liability | 121,924 | 116,027 | ||||||
Other | 51,583 | 53,689 | ||||||
940,788 | 915,820 | |||||||
COMMITMENTS AND CONTINGENCIES (Note 9) | ||||||||
$ | 2,842,670 | $ | 3,044,670 | |||||
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Six Months Ended | ||||||||
June 30 | ||||||||
(In thousands) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 39,365 | $ | 29,424 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 25,189 | 26,198 | ||||||
Amortization of regulatory assets, net | 54,261 | 97,389 | ||||||
Deferred costs recoverable as regulatory assets | (41,699 | ) | (38,358 | ) | ||||
Deferred income taxes and investment tax credits, net | 11,972 | (12,079 | ) | |||||
Accrued compensation and retirement benefits | (510 | ) | (1,573 | ) | ||||
Cash collateral from suppliers, net | 174 | 50 | ||||||
Pension trust contribution | (35,000 | ) | — | |||||
Decrease (increase) in operating assets- | ||||||||
Receivables | 46,240 | (29,439 | ) | |||||
Prepaid taxes | (26,740 | ) | (31,246 | ) | ||||
Increase (decrease) in operating liabilities- | ||||||||
Accounts payable | 5,148 | 733 | ||||||
Accrued taxes | (47,676 | ) | 9,519 | |||||
Accrued interest | (103 | ) | (1,277 | ) | ||||
Other | 10,903 | 7,553 | ||||||
Net cash provided from operating activities | 41,524 | 56,894 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
New Financing- | ||||||||
Short-term borrowings, net | 164,320 | 17,898 | ||||||
Redemptions and Repayments- | ||||||||
Common stock | (150,000 | ) | — | |||||
Long-term debt | (14,784 | ) | (100,000 | ) | ||||
Common stock dividend payments | (80,000 | ) | — | |||||
Equity payment to parent | (150,000 | ) | — | |||||
Net cash used for financing activities | (230,464 | ) | (82,102 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (46,647 | ) | (54,405 | ) | ||||
Sales of investment securities held in trusts | 501,260 | 376,610 | ||||||
Purchases of investment securities held in trusts | (506,220 | ) | (381,219 | ) | ||||
Loans to associated companies, net | 596 | 85,943 | ||||||
Other | (3,112 | ) | (1,715 | ) | ||||
Net cash provided from (used for) investing activities | (54,123 | ) | 25,214 | |||||
Net change in cash and cash equivalents | (243,063 | ) | 6 | |||||
Cash and cash equivalents at beginning of period | 243,220 | 120 | ||||||
Cash and cash equivalents at end of period | $ | 157 | $ | 126 | ||||
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Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
(In thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
STATEMENTS OF INCOME | ||||||||||||||||
REVENUES: | ||||||||||||||||
Electric sales | $ | 238,942 | $ | 350,335 | $ | 547,258 | $ | 736,271 | ||||||||
Gross receipts tax collections | 12,727 | 16,162 | 29,256 | 33,686 | ||||||||||||
Total revenues | 251,669 | 366,497 | 576,514 | 769,957 | ||||||||||||
EXPENSES: | ||||||||||||||||
Purchased power from affiliates | 54,635 | 152,945 | 102,119 | 321,345 | ||||||||||||
Purchased power from non-affiliates | 64,459 | 86,829 | 205,895 | 178,252 | ||||||||||||
Other operating expenses | 44,570 | 67,070 | 85,898 | 139,464 | ||||||||||||
Provision for depreciation | 15,770 | 16,605 | 30,343 | 31,287 | ||||||||||||
Amortization (deferral) of regulatory assets, net | 12,608 | (10,522 | ) | 25,615 | (20,488 | ) | ||||||||||
General taxes | 14,665 | 18,647 | 35,401 | 35,181 | ||||||||||||
Total expenses | 206,707 | 331,574 | 485,271 | 685,041 | ||||||||||||
OPERATING INCOME | 44,962 | 34,923 | 91,243 | 84,916 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Miscellaneous income | 644 | 1,310 | 669 | 2,923 | ||||||||||||
Interest expense | (17,361 | ) | (17,630 | ) | (34,595 | ) | (34,920 | ) | ||||||||
Capitalized interest | 41 | 183 | 63 | 323 | ||||||||||||
Total other expense | (16,676 | ) | (16,137 | ) | (33,863 | ) | (31,674 | ) | ||||||||
INCOME BEFORE INCOME TAXES | 28,286 | 18,786 | 57,380 | 53,242 | ||||||||||||
INCOME TAXES | 13,568 | 5,812 | 25,356 | 22,969 | ||||||||||||
NET INCOME | $ | 14,718 | $ | 12,974 | $ | 32,024 | $ | 30,273 | ||||||||
STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 14,718 | $ | 12,974 | $ | 32,024 | $ | 30,273 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
Pension and other postretirement benefits | 1,890 | 1,830 | 3,475 | 10,377 | ||||||||||||
Unrealized gain on derivative hedges | 17 | 16 | 33 | 32 | ||||||||||||
Other comprehensive income | 1,907 | 1,846 | 3,508 | 10,409 | ||||||||||||
Income tax expense related to other comprehensive income | 678 | 483 | 1,233 | 3,767 | ||||||||||||
Other comprehensive income, net of tax | 1,229 | 1,363 | 2,275 | 6,642 | ||||||||||||
COMPREHENSIVE INCOME | $ | 15,947 | $ | 14,337 | $ | 34,299 | $ | 36,915 | ||||||||
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June 30, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 2 | $ | 5 | ||||
Receivables- | ||||||||
Customers, net of allowance for uncollectible accounts of $2,856 in 2011 and $3,369 in 2010 | 121,511 | 148,864 | ||||||
Associated companies | 65,989 | 54,052 | ||||||
Other | 11,420 | 11,314 | ||||||
Notes receivable from associated companies | 13,498 | 14,404 | ||||||
Prepaid taxes | 26,372 | 14,026 | ||||||
Other | 1,423 | 1,592 | ||||||
240,215 | 244,257 | |||||||
UTILITY PLANT: | ||||||||
In service | 2,552,303 | 2,532,629 | ||||||
Less — Accumulated provision for depreciation | 947,315 | 935,259 | ||||||
1,604,988 | 1,597,370 | |||||||
Construction work in progress | 62,592 | 30,505 | ||||||
1,667,580 | 1,627,875 | |||||||
OTHER PROPERTY AND INVESTMENTS: | ||||||||
Nuclear plant decommissioning trusts | 162,154 | 152,928 | ||||||
Non-utility generation trusts | 126,786 | 80,244 | ||||||
Other | 292 | 297 | ||||||
289,232 | 233,469 | |||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||
Goodwill | 768,628 | 768,628 | ||||||
Regulatory assets | 222,804 | 163,407 | ||||||
Power purchase contract asset | 4,000 | 5,746 | ||||||
Other | 15,272 | 19,287 | ||||||
1,010,704 | 957,068 | |||||||
$ | 3,207,731 | $ | 3,062,669 | |||||
LIABILITIES AND CAPITALIZATION | ||||||||
CURRENT LIABILITIES: | ||||||||
Currently payable long-term debt | $ | 45,000 | $ | 45,000 | ||||
Short-term borrowings- | ||||||||
Associated companies | 159,902 | 101,338 | ||||||
Accounts payable- | ||||||||
Associated companies | 77,121 | 35,626 | ||||||
Other | 29,217 | 41,420 | ||||||
Accrued taxes | 3,397 | 5,075 | ||||||
Accrued interest | 17,454 | 17,378 | ||||||
Other | 23,280 | 22,541 | ||||||
355,371 | 268,378 | |||||||
CAPITALIZATION: | ||||||||
Common stockholder’s equity- | ||||||||
Common stock, $20 par value, authorized 5,400,000 shares- 4,427,577 shares outstanding | 88,552 | 88,552 | ||||||
Other paid-in capital | 913,486 | 913,519 | ||||||
Accumulated other comprehensive loss | (161,251 | ) | (163,526 | ) | ||||
Retained earnings | 23,017 | 60,993 | ||||||
Total common stockholder’s equity | 863,804 | 899,538 | ||||||
Long-term debt and other long-term obligations | 1,072,417 | 1,072,262 | ||||||
1,936,221 | 1,971,800 | |||||||
NONCURRENT LIABILITIES: | ||||||||
Accumulated deferred income taxes | 415,899 | 371,877 | ||||||
Retirement benefits | 188,407 | 187,621 | ||||||
Power purchase contract liability | 160,130 | 116,972 | ||||||
Asset retirement obligations | 101,441 | 98,132 | ||||||
Other | 50,262 | 47,889 | ||||||
916,139 | 822,491 | |||||||
COMMITMENTS, GUARANTEES AND CONTINGENCIES (Note 9) | ||||||||
$ | 3,207,731 | $ | 3,062,669 | |||||
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Table of Contents
Six Months Ended | ||||||||
June 30 | ||||||||
(In thousands) | 2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 32,024 | $ | 30,273 | ||||
Adjustments to reconcile net income to net cash from operating activities- | ||||||||
Provision for depreciation | 30,343 | 31,287 | ||||||
Amortization (deferral) of regulatory assets, net | 25,615 | (20,488 | ) | |||||
Deferred costs recoverable as regulatory assets | (38,291 | ) | (38,955 | ) | ||||
Deferred income taxes and investment tax credits, net | 46,687 | 42,943 | ||||||
Accrued compensation and retirement benefits | 4,733 | 4,216 | ||||||
Cash collateral paid, net | (1,276 | ) | (3,613 | ) | ||||
Decrease (increase) in operating assets- | ||||||||
Receivables | 19,561 | 3,266 | ||||||
Prepaid taxes | (12,346 | ) | (37,504 | ) | ||||
Increase (decrease) in operating liabilities- | ||||||||
Accounts payable | 23,449 | (4,603 | ) | |||||
Accrued taxes | (12,373 | ) | (1,339 | ) | ||||
Other | 13,153 | 10,227 | ||||||
Net cash provided from operating activities | 131,279 | 15,710 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
New Financing- | ||||||||
Long-term debt | 25,000 | — | ||||||
Short-term borrowings, net | 58,564 | 25,313 | ||||||
Redemptions and Repayments- | ||||||||
Long-term debt | (25,000 | ) | — | |||||
Common stock dividend payments | (70,000 | ) | — | |||||
Other | (1,353 | ) | 5 | |||||
Net cash provided from (used for) financing activities | (12,789 | ) | 25,318 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property additions | (64,177 | ) | (58,293 | ) | ||||
Loans to associated companies, net | 906 | 498 | ||||||
Sales of investment securities held in trusts | 265,223 | 133,934 | ||||||
Purchases of investment securities held in trusts | (314,738 | ) | (113,067 | ) | ||||
Other | (5,707 | ) | (4,104 | ) | ||||
Net cash used for investing activities | (118,493 | ) | (41,032 | ) | ||||
Net change in cash and cash equivalents | (3 | ) | (4 | ) | ||||
Cash and cash equivalents at beginning of period | 5 | 14 | ||||||
Cash and cash equivalents at end of period | $ | 2 | $ | 10 | ||||
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26
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Shares of Allegheny common stock outstanding on February 24, 2011 | 170 | |||
Exchange ratio | 0.667 | |||
Number of shares of FirstEnergy common stock issued | 113 | |||
Closing price of FirstEnergy common stock on February 24, 2011 | $ | 38.16 | ||
Fair value of shares issued by FirstEnergy | $ | 4,327 | ||
Fair value of replacement share-based compensation awards relating to pre-merger service | 27 | |||
Total consideration transferred | $ | 4,354 | ||
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(In millions) | ||||
Current assets | $ | 1,494 | ||
Property, plant and equipment | 9,656 | |||
Investments | 138 | |||
Goodwill | 881 | |||
Other noncurrent assets | 1,347 | |||
Current liabilities | (716 | ) | ||
Noncurrent liabilities | (3,452 | ) | ||
Long-term debt and other long-term obligations | (4,994 | ) | ||
$ | 4,354 | |||
Competitive | Regulated | |||||||||||||||||||
Regulated | Energy | Independent | Other/ | |||||||||||||||||
(In millions) | Distribution | Services | Transmission | Corporate | Consolidated | |||||||||||||||
Balance as of December 31, 2010 | $ | 5,551 | $ | 24 | $ | — | $ | — | $ | 5,575 | ||||||||||
Merger with Allegheny | — | 881 | — | — | 881 | |||||||||||||||
Balance as of June 30, 2011 | $ | 5,551 | $ | 905 | $ | — | $ | — | $ | 6,456 | ||||||||||
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Table of Contents
Preliminary | Weighted Average | |||||||
(In millions) | Valuation | Amortization Period | ||||||
Above market contracts: | ||||||||
Energy contracts | $ | 189 | 10 years | |||||
NUG contracts | 124 | 25 years | ||||||
Coal supply contracts | 516 | 8 years | ||||||
829 | ||||||||
Below market contracts: | ||||||||
NUG contracts | 143 | 13 years | ||||||
Coal supply contracts | 83 | 7 years | ||||||
Transportation contract | 35 | 8 years | ||||||
261 | ||||||||
Net intangible assets | $ | 568 | ||||||
Intangible | ||||
(In millions) | Assets | |||
Purchase contract assets | ||||
NUG | $ | 198 | ||
OVEC | 54 | |||
252 | ||||
Intangible assets | ||||
Coal contracts | 487 | |||
FES customer intangible assets | 129 | |||
Energy contracts | 105 | |||
721 | ||||
Total intangible assets | $ | 973 | ||
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Table of Contents
April 1 – | February 26 – | |||||||
(In millions, except per share amounts) | June 30, 2011 | June 30, 2011 | ||||||
Total revenues | $ | 1,181 | $ | 1,618 | ||||
Earnings available to FirstEnergy Corp.(1) | 63 | 17 | ||||||
Basic Earnings Per Share | $ | 0.15 | $ | 0.04 | ||||
Diluted Earnings Per Share | $ | 0.15 | $ | 0.04 |
(1) | Includes Allegheny’s after-tax merger costs of $4 million and $56 million, respectively. |
Three Months Ended | Six Months Ended | |||||||||||||||
(Pro forma amounts in millions, except | June 30 | June 30 | ||||||||||||||
per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Revenues | $ | 4,062 | $ | 4,401 | $ | 8,848 | $ | 9,086 | ||||||||
Earnings available to FirstEnergy | $ | 186 | $ | 389 | $ | 323 | $ | 644 | ||||||||
Basic Earnings Per Share | $ | 0.44 | $ | 0.93 | $ | 0.77 | $ | 1.54 | ||||||||
Diluted Earnings Per Share | $ | 0.44 | $ | 0.93 | $ | 0.77 | $ | 1.53 | ||||||||
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Three Months | Six Months | |||||||||||||||
Reconciliation of Basic and Diluted Earnings per Share | Ended June 30 | Ended June 30 | ||||||||||||||
of Common Stock | 2011 | 2010 | 2011 | 2010 | ||||||||||||
(In millions, except per share amounts) | ||||||||||||||||
Earnings available to FirstEnergy Corp. | $ | 181 | $ | 265 | $ | 231 | $ | 420 | ||||||||
Weighted average number of basic shares outstanding(1) | 418 | 304 | 380 | 304 | ||||||||||||
Assumed exercise of dilutive stock options and awards | 2 | 1 | 2 | 1 | ||||||||||||
Weighted average number of diluted shares outstanding(1) | 420 | 305 | 382 | 305 | ||||||||||||
Basic earnings per share of common stock | $ | 0.43 | $ | 0.87 | $ | 0.61 | $ | 1.38 | ||||||||
Diluted earnings per share of common stock | $ | 0.43 | $ | 0.87 | $ | 0.61 | $ | 1.37 | ||||||||
(1) | Includes 113 million shares issued to AE stockholders for the periods subsequent to the merger date. (See Note 2) |
June 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
(In millions) | ||||||||||||||||
FirstEnergy(1) | $ | 18,371 | $ | 19,436 | $ | 13,928 | $ | 14,845 | ||||||||
FES | 4,056 | 4,310 | 4,279 | 4,403 | ||||||||||||
OE | 1,158 | 1,367 | 1,159 | 1,321 | ||||||||||||
CEI | 1,831 | 2,083 | 1,853 | 2,035 | ||||||||||||
TE | 600 | 690 | 600 | 653 | ||||||||||||
JCP&L | 1,795 | 2,008 | 1,810 | 1,962 | ||||||||||||
Met-Ed | 729 | 828 | 742 | 821 | ||||||||||||
Penelec | 1,120 | 1,231 | 1,120 | 1,189 |
(1) | Includes debt assumed in the Allegheny merger (See Note 2) with a carrying value and a fair value as of June 30, 2011 of $4,530 million and $4,127 million, respectively. |
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Table of Contents
June 30, 2011(1) | December 31, 2010(2) | |||||||||||||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||||||
Basis | Gains | Losses | Value | Basis | Gains | Losses | Value | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||
FirstEnergy | $ | 2,015 | $ | 48 | $ | — | $ | 2,063 | $ | 1,699 | $ | 31 | $ | — | $ | 1,730 | ||||||||||||||||
FES | 1,023 | 26 | — | 1,049 | 980 | 13 | — | 993 | ||||||||||||||||||||||||
OE | 128 | 3 | — | 131 | 123 | 1 | — | 124 | ||||||||||||||||||||||||
TE | 52 | 1 | — | 53 | 42 | — | — | 42 | ||||||||||||||||||||||||
JCP&L | 353 | 9 | — | 362 | 281 | 9 | — | 290 | ||||||||||||||||||||||||
Met-Ed | 249 | 5 | — | 254 | 127 | 4 | — | 131 | ||||||||||||||||||||||||
Penelec | 210 | 4 | — | 214 | 145 | 4 | — | 149 | ||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||||
FirstEnergy | $ | 187 | $ | 11 | $ | — | $ | 198 | $ | 268 | $ | 69 | $ | — | $ | 337 | ||||||||||||||||
FES | 90 | 6 | — | 96 | — | — | — | — | ||||||||||||||||||||||||
TE | 24 | 2 | — | 26 | — | — | — | — | ||||||||||||||||||||||||
JCP&L | 21 | 1 | — | 22 | 80 | 17 | — | 97 | ||||||||||||||||||||||||
Met-Ed | 32 | 1 | — | 33 | 125 | 35 | — | 160 | ||||||||||||||||||||||||
Penelec | 20 | 1 | — | 21 | 63 | 16 | — | 79 |
(1) | Excludes cash investments, receivables, payables, deferred taxes and accrued income: FirstEnergy – $130 million; FES – $39 million; OE – $3 million; JCP&L – $19 million; Met-Ed – $14 million and Penelec – $55 million. | |
(2) | Excludes cash investments, receivables, payables, deferred taxes and accrued income: FirstEnergy – $193 million; FES – $153 million; OE – $3 million; TE – $34 million; JCP&L – $3 million; Met-Ed – $(3) million and Penelec – $4 million. |
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Table of Contents
Three Months Ended June 30, | ||||||||||||||||
Interest and | ||||||||||||||||
2011 | Sales Proceeds | Realized Gains | Realized Losses | Dividend Income | ||||||||||||
(In millions) | ||||||||||||||||
FirstEnergy | $ | 734 | $ | 22 | $ | (16 | ) | $ | 28 | |||||||
FES | 297 | 10 | (7 | ) | 17 | |||||||||||
OE | 12 | — | — | 1 | ||||||||||||
TE | 15 | 1 | (1 | ) | 1 | |||||||||||
JCP&L | 159 | 4 | (2 | ) | 4 | |||||||||||
Met-Ed | 165 | 4 | (3 | ) | 3 | |||||||||||
Penelec | 86 | 3 | (3 | ) | 2 |
Interest and | ||||||||||||||||
2010 | Sales Proceeds | Realized Gains | Realized Losses | Dividend Income | ||||||||||||
(In millions) | ||||||||||||||||
FirstEnergy | $ | 1,183 | $ | 46 | $ | (36 | ) | $ | 16 | |||||||
FES | 685 | 41 | (35 | ) | 9 | |||||||||||
OE | 57 | 2 | — | — | ||||||||||||
TE | 76 | 2 | — | — | ||||||||||||
JCP&L | 91 | — | — | 3 | ||||||||||||
Met-Ed | 233 | 1 | (1 | ) | 2 | |||||||||||
Penelec | 41 | — | — | 2 |
Six Months Ended June 30, | ||||||||||||||||
Interest and | ||||||||||||||||
2011 | Sales Proceeds | Realized Gains | Realized Losses | Dividend Income | ||||||||||||
(In millions) | ||||||||||||||||
FirstEnergy | $ | 1,703 | $ | 122 | $ | (45 | ) | $ | 52 | |||||||
FES | 513 | 22 | (23 | ) | 32 | |||||||||||
OE | 20 | — | — | 2 | ||||||||||||
TE | 28 | 1 | (2 | ) | 1 | |||||||||||
JCP&L | 376 | 26 | (6 | ) | 8 | |||||||||||
Met-Ed | 501 | 48 | (7 | ) | 5 | |||||||||||
Penelec | 265 | 25 | (7 | ) | 4 |
Interest and | ||||||||||||||||
2010 | Sales Proceeds | Realized Gains | Realized Losses | Dividend Income | ||||||||||||
(In millions) | ||||||||||||||||
FirstEnergy | $ | 1,915 | $ | 83 | $ | (86 | ) | $ | 37 | |||||||
FES | 957 | 54 | (58 | ) | 22 | |||||||||||
OE | 60 | 2 | — | 1 | ||||||||||||
TE | 107 | 3 | — | 1 | ||||||||||||
JCP&L | 281 | 9 | (9 | ) | 7 | |||||||||||
Met-Ed | 377 | 9 | (12 | ) | 3 | |||||||||||
Penelec | 134 | 6 | (7 | ) | 3 |
June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair | Cost | Unrealized | Unrealized | Fair | |||||||||||||||||||||||||
Basis | Gains | Losses | Value | Basis | Gains | Losses | Value | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Debt Securities | ||||||||||||||||||||||||||||||||
FirstEnergy | $ | 414 | $ | 84 | $ | — | 498 | $ | 476 | $ | 91 | $ | — | $ | 567 | |||||||||||||||||
OE | 178 | 45 | — | 223 | 190 | 51 | — | 241 | ||||||||||||||||||||||||
CEI | 287 | 39 | — | 326 | 340 | 41 | — | 381 |
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June 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
(In millions) | ||||||||||||||||
Notes Receivable | ||||||||||||||||
FirstEnergy | $ | 6 | $ | 7 | $ | 7 | $ | 8 | ||||||||
TE | 82 | 94 | 104 | 118 |
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Table of Contents
Level 1 | — Quoted prices for identical instruments in active markets. | |
Level 2 | — Quoted prices for similar instruments in active markets; | |
— quoted prices for identical or similar instruments in markets that are not active; and | ||
— model-derived valuations for which all significant inputs are observable market data. | ||
Level 3 | — Valuation inputs are unobservable and significant to the fair value measurement. |
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June 30, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 868 | $ | — | $ | 868 | ||||||||
Derivative assets — commodity contracts | — | 312 | — | 312 | ||||||||||||
Derivative assets — FTRs | — | — | 13 | 13 | ||||||||||||
Derivative assets — interest rate swaps | — | 4 | — | 4 | ||||||||||||
Derivative assets — NUG contracts(1) | — | — | 75 | 75 | ||||||||||||
Equity securities(2) | 198 | — | — | 198 | ||||||||||||
Foreign government debt securities | — | 206 | — | 206 | ||||||||||||
U.S. government debt securities | — | 673 | — | 673 | ||||||||||||
U.S. state debt securities | — | 306 | — | 306 | ||||||||||||
Other(4) | — | 146 | — | 146 | ||||||||||||
Total assets | $ | 198 | $ | 2,515 | $ | 88 | $ | 2,801 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — commodity contracts | $ | — | $ | (362 | ) | $ | — | $ | (362 | ) | ||||||
Derivative liabilities — FTRs | — | — | (7 | ) | (7 | ) | ||||||||||
Derivative liabilities — interest rate swaps | — | (5 | ) | — | (5 | ) | ||||||||||
Derivative liabilities — NUG contracts(1) | — | — | (522 | ) | (522 | ) | ||||||||||
Total liabilities | $ | — | $ | (367 | ) | $ | (529 | ) | $ | (896 | ) | |||||
Net assets (liabilities)(3) | $ | 198 | $ | 2,148 | $ | (441 | ) | $ | 1,905 | |||||||
December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 597 | $ | — | $ | 597 | ||||||||
Derivative assets — commodity contracts | — | 250 | — | 250 | ||||||||||||
Derivative assets — NUG contracts(1) | — | — | 122 | 122 | ||||||||||||
Equity securities(2) | 338 | — | — | 338 | ||||||||||||
Foreign government debt securities | — | 149 | — | 149 | ||||||||||||
U.S. government debt securities | — | 595 | — | 595 | ||||||||||||
U.S. state debt securities | — | 379 | — | 379 | ||||||||||||
Other(4) | — | 219 | — | 219 | ||||||||||||
Total assets | $ | 338 | $ | 2,189 | $ | 122 | $ | 2,649 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — commodity contracts | $ | — | $ | (348 | ) | $ | — | $ | (348 | ) | ||||||
Derivative liabilities — NUG contracts(1) | — | — | (466 | ) | (466 | ) | ||||||||||
Total liabilities | $ | — | $ | (348 | ) | $ | (466 | ) | $ | (814 | ) | |||||
Net assets (liabilities)(3) | $ | 338 | $ | 1,841 | $ | (344 | ) | $ | 1,835 | |||||||
(1) | NUG contracts are generally subject to regulatory accounting and do not materially impact earnings. | |
(2) | NDT funds hold equity portfolios the performance of which is benchmarked against the S&P 500 Index or Russell 3000 Index. | |
(3) | Excludes $6 million and $(7) million as of June 30, 2011 and December 31, 2010, respectively, of receivables, payables, deferred taxes and accrued income associated with the financial instruments reflected within the fair value table. | |
(4) | Primarily consists of cash and cash equivalents. |
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Derivative Asset(1) | Derivative Liability(1) | Net(1) | ||||||||||
(In millions) | ||||||||||||
January 1, 2011 Balance | $ | 122 | $ | (466 | ) | $ | (344 | ) | ||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | (40 | ) | (203 | ) | (243 | ) | ||||||
Purchases | 13 | (3 | ) | 10 | ||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | (6 | ) | 154 | 148 | ||||||||
Transfers into Level 3 | — | (12 | ) | (12 | ) | |||||||
June 30, 2011 Balance | $ | 89 | $ | (530 | ) | $ | (441 | ) | ||||
January 1, 2010 Balance | $ | 200 | $ | (643 | ) | $ | (443 | ) | ||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | (71 | ) | (110 | ) | (181 | ) | ||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | (7 | ) | 287 | 280 | ||||||||
Transfers into Level 3 | — | — | — | |||||||||
December 31, 2010 Balance | $ | 122 | $ | (466 | ) | $ | (344 | ) | ||||
(1) | Changes in the fair value of NUG contracts are generally subject to regulatory accounting and do not materially impact earnings. |
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June 30, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 562 | $ | — | $ | 562 | ||||||||
Derivative assets — commodity contracts | — | 283 | — | 283 | ||||||||||||
Derivative assets — FTRs | — | — | 2 | 2 | ||||||||||||
Equity securities(3) | 96 | — | — | 96 | ||||||||||||
Foreign government debt securities | — | 160 | — | 160 | ||||||||||||
U.S. government debt securities | — | 316 | — | 316 | ||||||||||||
U.S. state debt securities | — | 7 | — | 7 | ||||||||||||
Other(2) | — | 42 | — | 42 | ||||||||||||
Total assets | $ | 96 | $ | 1,370 | $ | 2 | $ | 1,468 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — commodity contracts | $ | — | $ | (327 | ) | $ | — | $ | (327 | ) | ||||||
Total liabilities | $ | — | $ | (327 | ) | $ | — | $ | (327 | ) | ||||||
Net assets (liabilities)(1) | $ | 96 | $ | 1,043 | $ | 2 | $ | 1,141 | ||||||||
December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 528 | $ | — | $ | 528 | ||||||||
Derivative assets — commodity contracts | — | 241 | — | 241 | ||||||||||||
Foreign government debt securities | — | 147 | — | 147 | ||||||||||||
U.S. government debt securities | — | 308 | — | 308 | ||||||||||||
U.S. state debt securities | — | 6 | — | 6 | ||||||||||||
Other(2) | — | 148 | — | 148 | ||||||||||||
Total assets | $ | — | $ | 1,378 | $ | — | $ | 1,378 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — commodity contracts | $ | — | $ | (348 | ) | $ | — | $ | (348 | ) | ||||||
Total liabilities | $ | — | $ | (348 | ) | $ | — | $ | (348 | ) | ||||||
Net assets (liabilities)(1) | $ | — | $ | 1,030 | $ | — | $ | 1,030 | ||||||||
(1) | Excludes $7 million as of December 31, 2010 of receivables, payables, deferred taxes and accrued income associated with the financial instruments reflected within the fair value table. | |
(2) | Primarily consists of cash and cash equivalents. | |
(3) | NDT funds hold equity portfolios the performance of which is benchmarked against the S&P 500 Index or Russell 3000 Index. |
Derivative Asset | Derivative Liability | Net | ||||||||||
FTRs | FTRs | FTRs | ||||||||||
(In millions) | ||||||||||||
January 1, 2011 Balance | $ | — | $ | — | $ | — | ||||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | 1 | — | 1 | |||||||||
Purchases | 2 | — | 2 | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | (1 | ) | — | (1 | ) | |||||||
Transfers in (out) of Level 3 | — | — | — | |||||||||
June 30, 2011 Balance | $ | 2 | $ | — | $ | 2 | ||||||
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June 30, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
U.S. government debt securities | $ | — | $ | 131 | $ | — | $ | 131 | ||||||||
Other | — | 2 | — | 2 | ||||||||||||
Total assets(1) | $ | — | $ | 133 | $ | — | $ | 133 | ||||||||
December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
U.S. government debt securities | $ | — | $ | 124 | $ | — | $ | 124 | ||||||||
Other | — | 2 | — | 2 | ||||||||||||
Total assets(1) | $ | — | $ | 126 | $ | — | $ | 126 | ||||||||
(1) | Excludes $2 million and $1 million as of June 30, 2011 and December 31, 2010, respectively, of receivables, payables, deferred taxes and accrued income associated with the financial instruments reflected within the fair value table. |
June 30, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 16 | $ | — | $ | 16 | ||||||||
Equity securities(3) | 26 | — | — | 26 | ||||||||||||
U.S. government debt securities | — | 33 | — | 33 | ||||||||||||
U.S. state debt securities | — | 1 | — | 1 | ||||||||||||
Other(2) | — | 3 | — | 3 | ||||||||||||
Total assets(1) | $ | 26 | $ | 53 | $ | — | $ | 79 | ||||||||
December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 7 | $ | — | $ | 7 | ||||||||
U.S. government debt securities | — | 33 | — | 33 | ||||||||||||
U.S. state debt securities | — | 1 | — | 1 | ||||||||||||
Other(2) | — | 35 | — | 35 | ||||||||||||
Total assets(1) | $ | — | $ | 76 | $ | — | $ | 76 | ||||||||
(1) | Excludes $(1) million and $2 million as of June 30, 2011 and December 31, 2010, respectively of receivables, payables, deferred taxes and accrued income associated with the financial instruments reflected within the fair value table. | |
(2) | Primarily consists of cash and cash equivalents. | |
(3) | NDT funds hold equity portfolios the performance of which is benchmarked against the S&P 500 Index or Russell 3000 Index. |
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June 30, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 81 | $ | — | $ | 81 | ||||||||
Derivative assets — NUG contracts(1) | — | — | 5 | 5 | ||||||||||||
Equity securities(2) | 21 | — | — | 21 | ||||||||||||
Foreign government debt securities | — | 13 | — | 13 | ||||||||||||
U.S. government debt securities | — | 54 | — | 54 | ||||||||||||
U.S. state debt securities | — | 215 | — | 215 | ||||||||||||
Other | — | 14 | — | 14 | ||||||||||||
Total assets | $ | 21 | $ | 377 | $ | 5 | $ | 403 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — NUG contracts(1) | $ | — | $ | — | $ | (240 | ) | $ | (240 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (240 | ) | $ | (240 | ) | ||||||
Net assets (liabilities)(3) | $ | 21 | $ | 377 | $ | (235 | ) | $ | 163 | |||||||
December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 23 | $ | — | $ | 23 | ||||||||
Derivative assets — commodity contracts | — | 2 | — | 2 | ||||||||||||
Derivative assets — NUG contracts(1) | — | — | 6 | 6 | ||||||||||||
Equity securities(2) | 96 | — | — | 96 | ||||||||||||
U.S. government debt securities | — | 33 | — | 33 | ||||||||||||
U.S. state debt securities | — | 236 | — | 236 | ||||||||||||
Other | — | 4 | — | 4 | ||||||||||||
Total assets | $ | 96 | $ | 298 | $ | 6 | $ | 400 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — NUG contracts(1) | $ | — | $ | — | $ | (233 | ) | $ | (233 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (233 | ) | $ | (233 | ) | ||||||
Net assets (liabilities)(3) | $ | 96 | $ | 298 | $ | (227 | ) | $ | 167 | |||||||
(1) | NUG contracts are subject to regulatory accounting and do not impact earnings. | |
(2) | NDT funds hold equity portfolios the performance of which is benchmarked against the S&P 500 Index or Russell 3000 Index. | |
(3) | Excludes $5 million and $(3) million as of June 30, 2011 and December 31, 2010, respectively, of receivables, payables, deferred taxes and accrued income associated with the financial instruments reflected within the fair value table. |
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Table of Contents
Derivative Asset | Derivative Liability | Net | ||||||||||
NUG Contracts(1) | NUG Contracts(1) | NUG Contracts(1) | ||||||||||
(In millions) | ||||||||||||
January 1, 2011 Balance | $ | 6 | $ | (233 | ) | $ | (227 | ) | ||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | (1 | ) | (71 | ) | (72 | ) | ||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | — | 64 | 64 | |||||||||
Transfers in (out) of Level 3 | — | — | — | |||||||||
June 30, 2011 Balance | $ | 5 | $ | (240 | ) | $ | (235 | ) | ||||
January 1, 2010 Balance | $ | 8 | $ | (399 | ) | $ | (391 | ) | ||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | (1 | ) | 36 | 35 | ||||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | (1 | ) | 130 | 129 | ||||||||
Transfers in (out) of Level 3 | — | — | — | |||||||||
December 31, 2010 Balance | $ | 6 | $ | (233 | ) | $ | (227 | ) | ||||
(1) | Changes in the fair value of NUG contracts are subject to regulatory accounting and do not impact earnings. |
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Table of Contents
June 30, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 138 | $ | — | $ | 138 | ||||||||
Derivative assets — NUG contracts(1) | — | — | 66 | 66 | ||||||||||||
Equity securities(2) | 33 | — | — | 33 | ||||||||||||
Foreign government debt securities | — | 20 | — | 20 | ||||||||||||
U.S. government debt securities | — | 87 | — | 87 | ||||||||||||
U.S. state debt securities | — | 2 | — | 2 | ||||||||||||
Other | — | 22 | — | 22 | ||||||||||||
Total assets | $ | 33 | $ | 269 | $ | 66 | $ | 368 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — NUG contracts(1) | $ | — | $ | — | $ | (122 | ) | $ | (122 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (122 | ) | $ | (122 | ) | ||||||
Net assets (liabilities)(3) | $ | 33 | $ | 269 | $ | (56 | ) | $ | 246 | |||||||
December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 32 | $ | — | $ | 32 | ||||||||
Derivative assets — commodity contracts | — | 5 | — | 5 | ||||||||||||
Derivative assets — NUG contracts(1) | — | — | 112 | 112 | ||||||||||||
Equity securities(2) | 160 | — | — | 160 | ||||||||||||
Foreign government debt securities | — | 1 | — | 1 | ||||||||||||
U.S. government debt securities | — | 88 | — | 88 | ||||||||||||
U.S. state debt securities | — | 2 | — | 2 | ||||||||||||
Other | — | 14 | — | 14 | ||||||||||||
Total assets | $ | 160 | $ | 142 | $ | 112 | $ | 414 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — NUG contracts(1) | $ | — | $ | — | $ | (116 | ) | $ | (116 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (116 | ) | $ | (116 | ) | ||||||
Net assets (liabilities)(3) | $ | 160 | $ | 142 | $ | (4 | ) | $ | 298 | |||||||
(1) | NUG contracts are subject to regulatory accounting and do not impact earnings. | |
(2) | NDT funds hold equity portfolios the performance of which is benchmarked against the S&P 500 Index or Russell 3000 Index. | |
(3) | Excludes $(1) million and $(9) million as of June 30, 2011 and December 31, 2010, respectively, of receivables, payables, deferred taxes and accrued income associated with the financial instruments reflected within the fair value table. |
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Table of Contents
Derivative Asset | Derivative Liability | Net | ||||||||||
NUG Contracts(1) | NUG Contracts(1) | NUG Contracts(1) | ||||||||||
(In millions) | ||||||||||||
January 1, 2011 Balance | $ | 112 | $ | (116 | ) | $ | (4 | ) | ||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | (42 | ) | (36 | ) | (78 | ) | ||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | (4 | ) | 30 | 26 | ||||||||
Transfers in (out) of Level 3 | — | — | — | |||||||||
June 30, 2011 Balance | $ | 66 | $ | (122 | ) | $ | (56 | ) | ||||
January 1, 2010 Balance | $ | 176 | $ | (143 | ) | $ | 33 | |||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | (59 | ) | (38 | ) | (97 | ) | ||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | (5 | ) | 65 | 60 | ||||||||
Transfers in (out) of Level 3 | — | — | — | |||||||||
December 31, 2010 Balance | $ | 112 | $ | (116 | ) | $ | (4 | ) | ||||
(1) | Changes in the fair value of NUG contracts are subject to regulatory accounting and do not impact earnings. |
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Table of Contents
June 30, 2011 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 69 | $ | — | $ | 69 | ||||||||
Derivative assets — NUG contracts(1) | — | — | 4 | 4 | ||||||||||||
Equity securities(2) | 20 | — | — | 20 | ||||||||||||
Foreign government debt securities | 12 | 12 | ||||||||||||||
U.S. government debt securities | — | 52 | — | 52 | ||||||||||||
U.S. state debt securities | — | 81 | — | 81 | ||||||||||||
Other | — | 53 | — | 53 | ||||||||||||
Total assets | $ | 20 | $ | 267 | $ | 4 | $ | 291 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — NUG contracts(1) | $ | — | $ | — | $ | (160 | ) | $ | (160 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (160 | ) | $ | (160 | ) | ||||||
Net assets (liabilities)(3) | $ | 20 | $ | 267 | $ | (156 | ) | $ | 131 | |||||||
December 31, 2010 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Corporate debt securities | $ | — | $ | 8 | $ | — | $ | 8 | ||||||||
Derivative assets — commodity contracts | — | 2 | — | 2 | ||||||||||||
Derivative assets — NUG contracts(1) | — | — | 4 | 4 | ||||||||||||
Equity securities(2) | 81 | — | — | 81 | ||||||||||||
U.S. government debt securities | — | 9 | — | 9 | ||||||||||||
U.S. state debt securities | — | 133 | — | 133 | ||||||||||||
Other | — | 5 | — | 5 | ||||||||||||
Total assets | $ | 81 | $ | 157 | $ | 4 | $ | 242 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities — NUG contracts(1) | $ | — | $ | — | $ | (117 | ) | $ | (117 | ) | ||||||
Total liabilities | $ | — | $ | — | $ | (117 | ) | $ | (117 | ) | ||||||
Net assets (liabilities)(3) | $ | 81 | $ | 157 | $ | (113 | ) | $ | 125 | |||||||
(1) | NUG contracts are subject to regulatory accounting and do not impact earnings. | |
(2) | NDT funds hold equity portfolios the performance of which is benchmarked against the S&P 500 Index or Russell 3000 Index. | |
(3) | Excludes $1 million and $(3) million as of June 30, 2011 and December 31, 2010, respectively, of receivables, payables and accrued income associated with the financial instruments reflected within the fair value table. |
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Table of Contents
Derivative Asset | Derivative Liability | Net | ||||||||||
NUG Contracts(1) | NUG Contracts(1) | NUG Contracts(1) | ||||||||||
(In millions) | ||||||||||||
January 1, 2011 Balance | $ | 4 | $ | (117 | ) | $ | (113 | ) | ||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | — | (88 | ) | (88 | ) | |||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | — | 45 | 45 | |||||||||
Transfers in (out) of Level 3 | — | — | — | |||||||||
June 30, 2011 Balance | $ | 4 | $ | (160 | ) | $ | (156 | ) | ||||
January 1, 2010 Balance | $ | 16 | $ | (101 | ) | $ | (85 | ) | ||||
Realized gain (loss) | — | — | — | |||||||||
Unrealized gain (loss) | (11 | ) | (108 | ) | (119 | ) | ||||||
Purchases | — | — | — | |||||||||
Issuances | — | — | — | |||||||||
Sales | — | — | — | |||||||||
Settlements | (1 | ) | 92 | 91 | ||||||||
Transfers in (out) of Level 3 | — | — | — | |||||||||
December 31, 2010 Balance | $ | 4 | $ | (117 | ) | $ | (113 | ) | ||||
(1) | Changes in the fair value of NUG contracts are subject to regulatory accounting and do not impact earnings. |
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46
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Derivative Assets | ||||||||
Fair Value | ||||||||
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(In millions) | ||||||||
Power Contracts | ||||||||
Current Assets | $ | 210 | $ | 96 | ||||
Noncurrent Assets | 102 | 40 | ||||||
FTRs | ||||||||
Current Assets | 13 | — | ||||||
Noncurrent Assets | — | — | ||||||
NUGs | ||||||||
Current Assets | 4 | 3 | ||||||
Noncurrent Assets | 71 | 119 | ||||||
Interest Rate Swaps | ||||||||
Current Assets | 4 | — | ||||||
Noncurrent Assets | — | — | ||||||
Other | ||||||||
Current Assets | — | 10 | ||||||
Noncurrent Assets | — | — | ||||||
Total Derivatives | $ | 404 | $ | 268 | ||||
Derivative Liabilities | ||||||||
Fair Value | ||||||||
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(In millions) | ||||||||
Power Contracts | ||||||||
Current Liabilities | $ | 274 | $ | 209 | ||||
Noncurrent Liabilities | 88 | 38 | ||||||
FTRs | ||||||||
Current Liabilities | 7 | — | ||||||
Noncurrent Liabilities | — | — | ||||||
NUGs | ||||||||
Current Liabilities | 317 | 229 | ||||||
Noncurrent Liabilities | 205 | 238 | ||||||
Interest Rate Swaps | ||||||||
Current Liabilities | 5 | — | ||||||
Noncurrent Liabilities | — | — | ||||||
Other | ||||||||
Current Liabilities | — | — | ||||||
Noncurrent Liabilities | — | — | ||||||
Total Derivatives | $ | 896 | $ | 714 | ||||
Purchases | Sales | Net | Units | |||||||||||
(In thousands) | ||||||||||||||
Power Contracts | 45,573 | (59,549 | ) | (13,976 | ) | MWH | ||||||||
FTRs | 53,656 | — | 53,656 | MWH | ||||||||||
Interest Rate Swaps | 200,000 | (200,000 | ) | — | notional dollars | |||||||||
NUGs | 26,903 | — | 26,903 | MWH |
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Three Months Ended June 30, | ||||||||||||||||||||
Power | Interest | |||||||||||||||||||
Contracts | FTRs | Rate Swaps | Other | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Derivatives in a Hedging Relationship | ||||||||||||||||||||
2011 | ||||||||||||||||||||
Gain (Loss) Recognized in AOCL (Effective Portion) | $ | 14 | $ | — | $ | — | $ | — | $ | 14 | ||||||||||
Effective Gain (Loss) Reclassified to:(1) | ||||||||||||||||||||
Purchase Power Expense | — | — | — | — | — | |||||||||||||||
Revenues | — | — | — | — | — | |||||||||||||||
2010 | ||||||||||||||||||||
Gain (Loss) Recognized in AOCL (Effective Portion) | $ | — | $ | — | $ | — | $ | 3 | $ | 3 | ||||||||||
Effective Gain (Loss) Reclassified to:(1) | ||||||||||||||||||||
Purchase Power Expense | (3 | ) | — | — | — | (3 | ) | |||||||||||||
Revenues | (5 | ) | — | — | — | (5 | ) | |||||||||||||
Fuel Expense | — | — | — | (4 | ) | (4 | ) |
Derivatives Not in a Hedging Relationship | ||||||||||||||||||||
2011 | ||||||||||||||||||||
Unrealized Gain (Loss) Recognized in: | ||||||||||||||||||||
Purchase Power Expense | $ | 33 | $ | — | $ | — | $ | — | $ | 33 | ||||||||||
Revenues | (4 | ) | — | — | — | (4 | ) | |||||||||||||
Other Operating Expense | (34 | ) | 13 | — | — | (21 | ) | |||||||||||||
Realized Gain (Loss) Reclassified to: | ||||||||||||||||||||
Purchase Power Expense | 1 | — | — | — | 1 | |||||||||||||||
Revenues | (39 | ) | 18 | — | — | (21 | ) | |||||||||||||
Other Operating Expense | — | (59 | ) | — | — | (59 | ) | |||||||||||||
2010 | ||||||||||||||||||||
Unrealized Gain (Loss) Recognized in: | ||||||||||||||||||||
Purchase Power Expense | $ | 66 | $ | — | $ | — | $ | — | $ | 66 | ||||||||||
Realized Gain (Loss) Reclassified to: | ||||||||||||||||||||
Purchase Power Expense | (26 | ) | — | — | — | (26 | ) |
Derivatives Not in a Hedging | Three Months Ended June 30, | |||||||||||
Relationship with Regulatory Offset(2) | NUGs | Other | Total | |||||||||
(In millions) | ||||||||||||
2011 | ||||||||||||
Unrealized Gain (Loss) to Derivative Instrument: | $ | (147 | ) | $ | 2 | $ | (145 | ) | ||||
Unrealized Gain (Loss) to Regulatory Assets: | 147 | (2 | ) | 145 | ||||||||
Realized Gain (Loss) to Derivative Instrument: | 62 | — | 62 | |||||||||
Realized Gain (Loss) to Regulatory Assets: | (62 | ) | — | (62 | ) | |||||||
2010 | ||||||||||||
Unrealized Gain (Loss) to Derivative Instrument: | $ | (35 | ) | — | $ | (35 | ) | |||||
Unrealized Gain (Loss) to Regulatory Assets: | 35 | — | 35 | |||||||||
Realized Gain (Loss) to Derivative Instrument: | 68 | — | 68 | |||||||||
Realized Gain (Loss) to Regulatory Assets: | (68 | ) | — | (68 | ) |
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Six Months Ended June 30, | ||||||||||||||||||||
Power | Interest | |||||||||||||||||||
Contracts | FTRs | Rate Swaps | Other | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Derivatives in a Hedging Relationship | ||||||||||||||||||||
2011 | ||||||||||||||||||||
Gain (Loss) Recognized in AOCL (Effective Portion) | $ | 5 | $ | — | $ | — | $ | — | $ | 5 | ||||||||||
Effective Gain (Loss) Reclassified to:(1) | ||||||||||||||||||||
Purchase Power Expense | 16 | — | — | — | 16 | |||||||||||||||
Revenues | (12 | ) | — | — | — | (12 | ) | |||||||||||||
2010 | ||||||||||||||||||||
Gain (Loss) Recognized in AOCL (Effective Portion) | $ | (2 | ) | $ | — | $ | — | $ | 6 | $ | 4 | |||||||||
Effective Gain (Loss) Reclassified to:(1) | ||||||||||||||||||||
Purchase Power Expense | (7 | ) | — | — | — | (7 | ) | |||||||||||||
Revenues | (5 | ) | — | — | — | (5 | ) | |||||||||||||
Fuel Expense | — | — | — | (8 | ) | (8 | ) | |||||||||||||
Derivatives Not in a Hedging Relationship | ||||||||||||||||||||
2011 | ||||||||||||||||||||
Unrealized Gain (Loss) Recognized in: | ||||||||||||||||||||
Purchase Power Expense | $ | 61 | $ | — | $ | — | $ | — | $ | 61 | ||||||||||
Revenues | (3 | ) | — | — | — | (3 | ) | |||||||||||||
Other Operating Expense | (54 | ) | 13 | 1 | — | (40 | ) | |||||||||||||
Realized Gain (Loss) Reclassified to: | ||||||||||||||||||||
Purchase Power Expense | (36 | ) | — | — | — | (36 | ) | |||||||||||||
Revenues | (29 | ) | 26 | — | — | (3 | ) | |||||||||||||
Other Operating Expense | — | (87 | ) | — | — | (87 | ) | |||||||||||||
2010 | ||||||||||||||||||||
Unrealized Gain (Loss) Recognized in: | ||||||||||||||||||||
Purchase Power Expense | $ | 39 | $ | — | $ | — | $ | — | $ | 39 | ||||||||||
Realized Gain (Loss) Reclassified to: | ||||||||||||||||||||
Purchase Power Expense | (49 | ) | — | — | — | (49 | ) |
Derivatives Not in a Hedging | Six Months Ended June 30, | |||||||||||
Relationship with Regulatory Offset(2) | NUGs | Other | Total | |||||||||
(In millions) | ||||||||||||
2011 | ||||||||||||
Unrealized Gain (Loss) to Derivative Instrument: | $ | (236 | ) | $ | 2 | $ | (234 | ) | ||||
Unrealized Gain (Loss) to Regulatory Assets: | 236 | (2 | ) | 234 | ||||||||
Realized Gain (Loss) to Derivative Instrument: | 134 | (10 | ) | 124 | ||||||||
Realized Gain (Loss) to Regulatory Assets: | (134 | ) | 10 | (124 | ) | |||||||
2010 | ||||||||||||
Unrealized Gain (Loss) to Derivative Instrument: | $ | (259 | ) | — | $ | (259 | ) | |||||
Unrealized Gain (Loss) to Regulatory Assets: | 259 | — | 259 | |||||||||
Realized Gain (Loss) to Derivative Instrument: | 146 | (9 | ) | 137 | ||||||||
Realized Gain (Loss) to Regulatory Assets: | (146 | ) | 9 | (137 | ) |
(1) | The ineffective portion was immaterial. | |
(2) | Changes in the fair value of certain contracts are deferred for future recovery from (or refund to) customers. |
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Three Months Ended June 30, | ||||||||||||
Derivatives Not in a Hedging Relationship with Regulatory Offset(1) | NUGs | Other | Total | |||||||||
(In millions) | ||||||||||||
Outstanding net asset (liability) as of April 1, 2011 | $ | (362 | ) | $ | — | $ | (362 | ) | ||||
Additions/Change in value of existing contracts | (147 | ) | 2 | (145 | ) | |||||||
Settled contracts | 62 | — | 62 | |||||||||
Outstanding net asset (liability) as of June 30, 2011 | $ | (447 | ) | $ | 2 | $ | (445 | ) | ||||
Outstanding net asset (liability) as of April 1, 2010 | $ | (590 | ) | $ | 10 | $ | (580 | ) | ||||
Additions/Change in value of existing contracts | (35 | ) | — | (35 | ) | |||||||
Settled contracts | 68 | — | 68 | |||||||||
Outstanding net asset (liability) as of June 30, 2010 | $ | (557 | ) | $ | 10 | $ | (547 | ) | ||||
Six Months Ended June 30, | ||||||||||||
Derivatives Not in a Hedging Relationship with Regulatory Offset(1) | NUGs | Other | Total | |||||||||
(In millions) | ||||||||||||
Outstanding net asset (liability) as of January 1, 2011 | $ | (345 | ) | $ | 10 | $ | (335 | ) | ||||
Additions/Change in value of existing contracts | (236 | ) | 2 | (234 | ) | |||||||
Settled contracts | 134 | (10 | ) | 124 | ||||||||
Outstanding net asset (liability) as of June 30, 2011 | $ | (447 | ) | $ | 2 | $ | (445 | ) | ||||
Outstanding net asset (liability) as of January 1, 2010 | $ | (444 | ) | $ | 19 | $ | (425 | ) | ||||
Additions/Change in value of existing contracts | (259 | ) | — | (259 | ) | |||||||
Settled contracts | 146 | (9 | ) | 137 | ||||||||
Outstanding net asset (liability) as of June 30, 2010 | $ | (557 | ) | $ | 10 | $ | (547 | ) | ||||
(1) | Changes in the fair value of certain contracts are deferred for future recovery from (or refund to) customers. |
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Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
Pension Benefit Cost (Credit) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
(In millions) | ||||||||||||||||
Service cost | $ | 34 | $ | 25 | $ | 62 | $ | 49 | ||||||||
Interest cost | 97 | 79 | 181 | 157 | ||||||||||||
Expected return on plan assets | (115 | ) | (90 | ) | (216 | ) | (181 | ) | ||||||||
Amortization of prior service cost | 4 | 3 | 7 | 6 | ||||||||||||
Recognized net actuarial loss | 48 | 47 | 97 | 94 | ||||||||||||
Curtailments(1) | — | — | (2 | ) | — | |||||||||||
Special termination benefits(1) | — | — | 9 | — | ||||||||||||
Net periodic cost | $ | 68 | $ | 64 | $ | 138 | $ | 125 | ||||||||
(1) | Represents costs (credits) incurred related to change in control provision payments to certain executives who were terminated or were expected to be terminated as a result of the merger. |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
Other Postretirement Benefit Cost (Credit) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
(In millions) | ||||||||||||||||
Service cost | $ | 3 | $ | 3 | $ | 7 | $ | 5 | ||||||||
Interest cost | 12 | 11 | 23 | 22 | ||||||||||||
Expected return on plan assets | (10 | ) | (9 | ) | (20 | ) | (18 | ) | ||||||||
Amortization of prior service cost | (52 | ) | (48 | ) | (100 | ) | (96 | ) | ||||||||
Recognized net actuarial loss | 14 | 15 | 28 | 30 | ||||||||||||
Net periodic cost (credit) | $ | (33 | ) | $ | (28 | ) | $ | (62 | ) | $ | (57 | ) | ||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
Pension Benefit Cost | 2011 | 2010 | 2011 | 2010 | ||||||||||||
(In millions) | ||||||||||||||||
FES | $ | 22 | $ | 22 | $ | 43 | $ | 44 | ||||||||
OE | 5 | 6 | 11 | 11 | ||||||||||||
CEI | 5 | 5 | 10 | 11 | ||||||||||||
TE | 2 | 2 | 3 | 4 | ||||||||||||
JCP&L | 5 | 6 | 11 | 12 | ||||||||||||
Met-Ed | 3 | 3 | 5 | 5 | ||||||||||||
Penelec | 4 | 5 | 9 | 9 | ||||||||||||
Other FirstEnergy Subsidiaries | 22 | 15 | 46 | 29 | ||||||||||||
$ | 68 | $ | 64 | $ | 138 | $ | 125 | |||||||||
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Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
Other Postretirement Benefit Credit | 2011 | 2010 | 2011 | 2010 | ||||||||||||
(In millions) | ||||||||||||||||
FES | $ | (8 | ) | $ | (7 | ) | $ | (14 | ) | $ | (13 | ) | ||||
OE | (5 | ) | (6 | ) | (12 | ) | (12 | ) | ||||||||
CEI | (2 | ) | (1 | ) | (3 | ) | (3 | ) | ||||||||
TE | — | — | (1 | ) | (1 | ) | ||||||||||
JCP&L | (2 | ) | (2 | ) | (3 | ) | (4 | ) | ||||||||
Met-Ed | (2 | ) | (2 | ) | (5 | ) | (4 | ) | ||||||||
Penelec | (2 | ) | (2 | ) | (5 | ) | (4 | ) | ||||||||
Other FirstEnergy Subsidiaries | (12 | ) | (8 | ) | (19 | ) | (16 | ) | ||||||||
$ | (33 | ) | $ | (28 | ) | $ | (62 | ) | $ | (57 | ) | |||||
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Maximum | Discounted Lease | Net | ||||||||||
Exposure | Payments, net(1) | Exposure | ||||||||||
(In millions) | ||||||||||||
FES | $ | 1,348 | $ | 1,156 | $ | 192 | ||||||
OE | 635 | 445 | 190 | |||||||||
CEI(2) | 624 | 69 | 555 | |||||||||
TE(2) | 624 | 303 | 321 |
(1) | The net present value of FirstEnergy’s consolidated sale and leaseback operating lease commitments is $1.6 billion. | |
(2) | CEI and TE are jointly and severally liable for the maximum loss amounts under certain sale-leaseback agreements. |
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• | a $40 million annualized base rate increase effective June 29, 2010; |
• | a deferral of February 2010 storm restoration expenses in West Virginia over a maximum five-year period; |
• | an additional $20 million annualized base rate increase effective in January 2011; |
• | a decrease of $20 million in ENEC rates effective January 2011, which amount is deferred for later recovery in 2012; and |
• | a moratorium on filing for further increases in base rates before December 1, 2011, except under specified circumstances. |
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Six Months | ||||
Ended | ||||
June 30, 2011 | ||||
Restricted stock and stock units outstanding as of January 1, 2011 | 1,878,022 | |||
Granted | 891,881 | |||
Converted Allegheny restricted stock | 645,197 | |||
Exercised | (428,686 | ) | ||
Forfeited | (71,775 | ) | ||
Restricted stock and stock units outstanding as of June 30, 2011 | 2,914,639 | |||
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Weighted | ||||||||
Average | ||||||||
Number of | Exercise | |||||||
Stock Option Activities | Shares | Price | ||||||
Stock options outstanding as of January 1, 2011 (all exercisable) | 2,889,066 | $ | 35.18 | |||||
Options granted | 662,122 | 37.75 | ||||||
Converted Allegheny options | 1,805,811 | 41.75 | ||||||
Options exercised | (691,304 | ) | 31.38 | |||||
Options forfeited/expired | (78,978 | ) | 71.71 | |||||
Stock options outstanding as of June 30, 2011 | 4,586,717 | $ | 38.09 | |||||
(3,924,595 options exercisable) |
Weighted | Remaining | |||||||||||
Shares Under | Average | Contractual | ||||||||||
Exercise Prices | Options | Exercise Price | Life in Years | |||||||||
$20.02 – $30.74 | 1,045,122 | $ | 26.54 | 2.02 | ||||||||
$30.89 – $40.93 | 3,160,440 | 37.30 | 4.17 | |||||||||
$42.72 – $51.82 | 3,883 | 51.02 | 0.70 | |||||||||
$53.06 – $62.97 | 54,559 | 56.15 | 3.02 | |||||||||
$64.52 – $71.82 | 9,042 | 67.50 | 5.24 | |||||||||
$73.39 – $80.47 | 311,003 | 80.17 | 3.81 | |||||||||
$81.19 – $89.59 | 2,668 | 85.39 | 6.09 | |||||||||
Total | 4,586,717 | $ | 38.08 | 3.64 | ||||||||
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• | Energy Delivery Services was renamed Regulated Distribution and the operations of MP, PE and WP, which were acquired as part of the merger with Allegheny, and certain regulatory asset recovery mechanisms formerly included in the “Other” segment, were placed into this segment. |
• | A new Regulated Independent Transmission segment was created consisting of ATSI, and the operations of TrAIL Company and FirstEnergy’s interest in PATH; TrAIL and PATH were acquired as part of the merger with Allegheny. The transmission assets and operations of JCP&L, Met-Ed, Penelec, MP, PE and WP remain within the Regulated Distribution segment. |
• | AE Supply, an operator of generation facilities that was acquired as part of the merger with Allegheny, was placed into the Competitive Energy Services segment. |
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Competitive | Regulated | |||||||||||||||||||||||
Regulated | Energy | Independent | Other/ | Reconciling | ||||||||||||||||||||
Three Months Ended | Distribution | Services | Transmission | Corporate | Adjustments | Consolidated | ||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
June 30, 2011 | ||||||||||||||||||||||||
External revenues | $ | 2,485 | $ | 1,495 | $ | 105 | $ | (30 | ) | $ | (7 | ) | $ | 4,048 | ||||||||||
Internal revenues | — | 318 | — | — | (306 | ) | 12 | |||||||||||||||||
Total revenues | 2,485 | 1,813 | 105 | (30 | ) | (313 | ) | 4,060 | ||||||||||||||||
Depreciation and amortization | 240 | 107 | 18 | 7 | — | 372 | ||||||||||||||||||
Investment income (loss), net | 27 | 15 | — | 1 | (12 | ) | 31 | |||||||||||||||||
Net interest charges | 145 | 67 | 11 | 21 | 1 | 245 | ||||||||||||||||||
Income taxes | 108 | 7 | 18 | (30 | ) | (2 | ) | 101 | ||||||||||||||||
Net income (loss) | 184 | 12 | 31 | (51 | ) | (5 | ) | 171 | ||||||||||||||||
Total assets | 26,932 | 17,146 | 2,339 | 1,179 | — | 47,596 | ||||||||||||||||||
Total goodwill | 5,551 | 905 | — | — | — | 6,456 | ||||||||||||||||||
Property additions | 302 | 197 | 45 | 25 | — | 569 | ||||||||||||||||||
June 30, 2010 | ||||||||||||||||||||||||
External revenues | $ | 2,314 | $ | 795 | $ | 59 | $ | (21 | ) | $ | (8 | ) | $ | 3,139 | ||||||||||
Internal revenues | 19 | 539 | — | — | (558 | ) | — | |||||||||||||||||
Total revenues | 2,333 | 1,334 | 59 | (21 | ) | (566 | ) | 3,139 | ||||||||||||||||
Depreciation and amortization | 264 | 71 | 13 | 3 | — | 351 | ||||||||||||||||||
Investment income (loss), net | 28 | 13 | — | — | (10 | ) | 31 | |||||||||||||||||
Net interest charges | 124 | 33 | 5 | 9 | (4 | ) | 167 | |||||||||||||||||
Income taxes | 81 | 75 | 7 | (12 | ) | (17 | ) | 134 | ||||||||||||||||
Net income (loss) | 132 | 121 | 11 | (20 | ) | 12 | 256 | |||||||||||||||||
Total assets | 21,457 | 11,102 | 993 | 914 | — | 34,466 | ||||||||||||||||||
Total goodwill | 5,551 | 24 | — | — | — | 5,575 | ||||||||||||||||||
Property additions | 157 | 290 | 15 | 27 | — | 489 | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||||
June 30, 2011 | ||||||||||||||||||||||||
External revenues | $ | 4,753 | $ | 2,736 | $ | 172 | $ | (53 | ) | $ | (16 | ) | $ | 7,592 | ||||||||||
Internal revenues | — | 661 | — | — | (617 | ) | 44 | |||||||||||||||||
Total revenues | 4,753 | 3,397 | 172 | (53 | ) | (633 | ) | 7,636 | ||||||||||||||||
Depreciation and amortization | 485 | 195 | 31 | 13 | — | 724 | ||||||||||||||||||
Investment income (loss), net | 52 | 21 | — | 1 | (22 | ) | 52 | |||||||||||||||||
Net interest charges | 276 | 122 | 20 | 40 | — | 458 | ||||||||||||||||||
Income taxes | 164 | 10 | 25 | (50 | ) | 30 | 179 | |||||||||||||||||
Net income (loss) | 280 | 17 | 44 | (86 | ) | (39 | ) | 216 | ||||||||||||||||
Total assets | 26,932 | 17,146 | 2,339 | 1,179 | — | 47,596 | ||||||||||||||||||
Total goodwill | 5,551 | 905 | — | — | — | 6,456 | ||||||||||||||||||
Property additions | 479 | 411 | 72 | 56 | — | 1,018 | ||||||||||||||||||
June 30, 2010 | ||||||||||||||||||||||||
External revenues | $ | 4,798 | $ | 1,514 | $ | 116 | $ | (43 | ) | $ | (14 | ) | $ | 6,371 | ||||||||||
Internal revenues | 19 | 1,213 | — | — | (1,165 | ) | 67 | |||||||||||||||||
Total revenues | 4,817 | 2,727 | 116 | (43 | ) | (1,179 | ) | 6,438 | ||||||||||||||||
Depreciation and amortization | 577 | 148 | 25 | 6 | — | 756 | ||||||||||||||||||
Investment income (loss), net | 54 | 14 | — | 1 | (22 | ) | 47 | |||||||||||||||||
Net interest charges | 248 | 66 | 10 | 22 | (7 | ) | 339 | |||||||||||||||||
Income taxes | 143 | 117 | 14 | (24 | ) | (5 | ) | 245 | ||||||||||||||||
Net income (loss) | 235 | 190 | 23 | (39 | ) | (4 | ) | 405 | ||||||||||||||||
Total assets | 21,457 | 11,102 | 993 | 914 | — | 34,466 | ||||||||||||||||||
Total goodwill | 5,551 | 24 | — | — | — | 5,575 | ||||||||||||||||||
Property additions | 309 | 619 | 29 | 40 | — | 997 |
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(Unaudited)
For the Three Months Ended June 30, 2011 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
REVENUES | $ | 1,275 | $ | 535 | $ | 393 | $ | (911 | ) | $ | 1,292 | |||||||||
EXPENSES: | ||||||||||||||||||||
Fuel | 6 | 266 | 44 | — | 316 | |||||||||||||||
Purchased power from affiliates | 902 | 9 | 65 | (911 | ) | 65 | ||||||||||||||
Purchased power from non-affiliates | 332 | (3 | ) | — | — | 329 | ||||||||||||||
Other operating expenses | 159 | 115 | 143 | 12 | 429 | |||||||||||||||
Provision for depreciation | 1 | 32 | 36 | (1 | ) | 68 | ||||||||||||||
General taxes | 16 | 8 | 6 | — | 30 | |||||||||||||||
Impairment of long-lived assets | — | 7 | — | — | 7 | |||||||||||||||
Total expenses | 1,416 | 434 | 294 | (900 | ) | 1,244 | ||||||||||||||
OPERATING INCOME (LOSS) | (141 | ) | 101 | 99 | (11 | ) | 48 | |||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Investment income | — | 1 | 15 | — | 16 | |||||||||||||||
Miscellaneous income (expense), including net income from equity investees | 123 | 1 | — | (120 | ) | 4 | ||||||||||||||
Interest expense — affiliates | — | (1 | ) | (1 | ) | — | (2 | ) | ||||||||||||
Interest expense — other | (24 | ) | (28 | ) | (16 | ) | 16 | (52 | ) | |||||||||||
Capitalized interest | — | 5 | 5 | — | 10 | |||||||||||||||
Total other income (expense) | 99 | (22 | ) | 3 | (104 | ) | (24 | ) | ||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (42 | ) | 79 | 102 | (115 | ) | 24 | |||||||||||||
INCOME TAXES (BENEFITS) | (62 | ) | 25 | 38 | 3 | 4 | ||||||||||||||
NET INCOME | $ | 20 | $ | 54 | $ | 64 | $ | (118 | ) | $ | 20 | |||||||||
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(Unaudited)
For the Six Months Ended June 30, 2011 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
REVENUES | $ | 2,642 | $ | 1,278 | $ | 862 | $ | (2,098 | ) | $ | 2,684 | |||||||||
EXPENSES: | ||||||||||||||||||||
Fuel | 7 | 560 | 92 | — | 659 | |||||||||||||||
Purchased power from affiliates | 2,087 | 11 | 134 | (2,098 | ) | 134 | ||||||||||||||
Purchased power from non-affiliates | 629 | (3 | ) | — | — | 626 | ||||||||||||||
Other operating expenses | 321 | 233 | 331 | 25 | 910 | |||||||||||||||
Provision for depreciation | 2 | 63 | 74 | (3 | ) | 136 | ||||||||||||||
General taxes | 27 | 19 | 14 | — | 60 | |||||||||||||||
Impairment charges of long-lived assets | — | 20 | — | — | 20 | |||||||||||||||
Total expenses | 3,073 | 903 | 645 | (2,076 | ) | 2,545 | ||||||||||||||
OPERATING INCOME (LOSS) | (431 | ) | 375 | 217 | (22 | ) | 139 | |||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Investment income | 1 | 1 | 20 | — | 22 | |||||||||||||||
Miscellaneous income, including net income from equity investees | 356 | 2 | — | (350 | ) | 8 | ||||||||||||||
Interest expense — affiliates | (1 | ) | (1 | ) | (1 | ) | — | (3 | ) | |||||||||||
Interest expense — other | (48 | ) | (56 | ) | (33 | ) | 32 | (105 | ) | |||||||||||
Capitalized interest | — | 10 | 10 | — | 20 | |||||||||||||||
Total other income (expense) | 308 | (44 | ) | (4 | ) | (318 | ) | (58 | ) | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (123 | ) | 331 | 213 | (340 | ) | 81 | |||||||||||||
INCOME TAXES (BENEFITS) | (179 | ) | 119 | 80 | 5 | 25 | ||||||||||||||
NET INCOME | $ | 56 | $ | 212 | $ | 133 | $ | (345 | ) | $ | 56 | |||||||||
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(Unaudited)
For the Three Months Ended June 30, 2010 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
REVENUES | $ | 1,307 | $ | 581 | $ | 339 | $ | (901 | ) | $ | 1,326 | |||||||||
EXPENSES: | ||||||||||||||||||||
Fuel | 7 | 302 | 34 | — | 343 | |||||||||||||||
Purchased power from affiliates | 913 | 8 | 49 | (901 | ) | 69 | ||||||||||||||
Purchased power from non-affiliates | 310 | — | — | — | 310 | |||||||||||||||
Other operating expenses | 81 | 94 | 117 | 12 | 304 | |||||||||||||||
Provision for depreciation | 1 | 27 | 36 | (1 | ) | 63 | ||||||||||||||
General taxes | 6 | 9 | 7 | — | 22 | |||||||||||||||
Total expenses | 1,318 | 440 | 243 | (890 | ) | 1,111 | ||||||||||||||
OPERATING INCOME (LOSS) | (11 | ) | 141 | 96 | (11 | ) | 215 | |||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Investment income | 2 | — | 11 | — | 13 | |||||||||||||||
Miscellaneous income, including net income from equity investees | 151 | 1 | — | (148 | ) | 4 | ||||||||||||||
Interest expense — affiliates | — | (2 | ) | — | — | (2 | ) | |||||||||||||
Interest expense — other | (24 | ) | (28 | ) | (15 | ) | 16 | (51 | ) | |||||||||||
Capitalized interest | — | 20 | 4 | — | 24 | |||||||||||||||
Total other income (expense) | 129 | (9 | ) | — | (132 | ) | (12 | ) | ||||||||||||
INCOME BEFORE INCOME TAXES | 118 | 132 | 96 | (143 | ) | 203 | ||||||||||||||
INCOME TAXES (BENEFITS) | (16 | ) | 48 | 34 | 3 | 69 | ||||||||||||||
NET INCOME | $ | 134 | $ | 84 | $ | 62 | $ | (146 | ) | $ | 134 | |||||||||
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(Unaudited)
For the Six Months Ended June 30, 2010 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
REVENUES | $ | 2,674 | $ | 1,149 | $ | 765 | $ | (1,874 | ) | $ | 2,714 | |||||||||
EXPENSES: | ||||||||||||||||||||
Fuel | 12 | 582 | 77 | — | 671 | |||||||||||||||
Purchased power from affiliates | 1,881 | 12 | 111 | (1,874 | ) | 130 | ||||||||||||||
Purchased power from non-affiliates | 760 | — | — | — | 760 | |||||||||||||||
Other operating expenses | 134 | 194 | 256 | 24 | 608 | |||||||||||||||
Provision for depreciation | 2 | 54 | 73 | (3 | ) | 126 | ||||||||||||||
General taxes | 11 | 24 | 14 | — | 49 | |||||||||||||||
Impairment of long-lived assets | — | 2 | — | — | 2 | |||||||||||||||
Total expenses | 2,800 | 868 | 531 | (1,853 | ) | 2,346 | ||||||||||||||
OPERATING INCOME (LOSS) | (126 | ) | 281 | 234 | (21 | ) | 368 | |||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Investment income | 4 | — | 10 | — | 14 | |||||||||||||||
Miscellaneous income, including net income from equity investees | 317 | 1 | — | (311 | ) | 7 | ||||||||||||||
Interest expense to affiliates | — | (4 | ) | (1 | ) | — | (5 | ) | ||||||||||||
Interest expense — other | (48 | ) | (54 | ) | (31 | ) | 32 | (101 | ) | |||||||||||
Capitalized interest | — | 36 | 8 | — | 44 | |||||||||||||||
Total other income (expense) | 273 | (21 | ) | (14 | ) | (279 | ) | (41 | ) | |||||||||||
INCOME BEFORE INCOME TAXES | 147 | 260 | 220 | (300 | ) | 327 | ||||||||||||||
INCOME TAXES (BENEFITS) | (67 | ) | 97 | 78 | 5 | 113 | ||||||||||||||
NET INCOME | $ | 214 | $ | 163 | $ | 142 | $ | (305 | ) | $ | 214 | |||||||||
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(Unaudited)
As of June 30, 2011 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 6 | $ | — | $ | — | $ | 6 | ||||||||||
Receivables- | ||||||||||||||||||||
Customers | 450 | — | — | — | 450 | |||||||||||||||
Associated companies | 481 | 425 | 263 | (679 | ) | 490 | ||||||||||||||
Other | 24 | 23 | 4 | — | 51 | |||||||||||||||
Notes receivable from associated companies | 6 | 410 | 74 | — | 490 | |||||||||||||||
Materials and supplies, at average cost | 54 | 253 | 192 | — | 499 | |||||||||||||||
Derivatives | 221 | — | — | — | 221 | |||||||||||||||
Prepayments and other | 34 | 14 | 1 | — | 49 | |||||||||||||||
1,270 | 1,131 | 534 | (679 | ) | 2,256 | |||||||||||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||||||||||||||
In service | 101 | 6,105 | 5,634 | (385 | ) | 11,455 | ||||||||||||||
Less — Accumulated provision for depreciation | 19 | 2,067 | 2,298 | (178 | ) | 4,206 | ||||||||||||||
82 | 4,038 | 3,336 | (207 | ) | 7,249 | |||||||||||||||
Construction work in progress | 10 | 198 | 486 | — | 694 | |||||||||||||||
Property, plant and equipment held for sale, net | — | 487 | — | — | 487 | |||||||||||||||
92 | 4,723 | 3,822 | (207 | ) | 8,430 | |||||||||||||||
INVESTMENTS: | ||||||||||||||||||||
Nuclear plant decommissioning trusts | — | — | 1,184 | — | 1,184 | |||||||||||||||
Investment in associated companies | 5,302 | — | — | (5,302 | ) | — | ||||||||||||||
Other | 1 | 9 | — | — | 10 | |||||||||||||||
5,303 | 9 | 1,184 | (5,302 | ) | 1,194 | |||||||||||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||||||||||||||
Accumulated deferred income tax benefits | 18 | 344 | — | (362 | ) | — | ||||||||||||||
Customer intangibles | 129 | — | — | — | 129 | |||||||||||||||
Goodwill | 24 | — | — | — | 24 | |||||||||||||||
Property taxes | — | 16 | 25 | — | 41 | |||||||||||||||
Unamortized sale and leaseback costs | — | 6 | — | 70 | 76 | |||||||||||||||
Derivatives | 135 | — | — | — | 135 | |||||||||||||||
Other | 39 | 97 | 7 | (68 | ) | 75 | ||||||||||||||
345 | 463 | 32 | (360 | ) | 480 | |||||||||||||||
$ | 7,010 | $ | 6,326 | $ | 5,572 | $ | (6,548 | ) | $ | 12,360 | ||||||||||
LIABILITIES AND CAPITALIZATION | ||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||
Currently payable long-term debt | $ | 1 | $ | 436 | $ | 671 | $ | (20 | ) | $ | 1,088 | |||||||||
Short-term borrowings- | ||||||||||||||||||||
Associated companies | 453 | 88 | — | — | 541 | |||||||||||||||
Other | — | 1 | — | — | 1 | |||||||||||||||
Accounts payable- | ||||||||||||||||||||
Associated companies | 665 | 231 | 165 | (668 | ) | 393 | ||||||||||||||
Other | 80 | 111 | — | — | 191 | |||||||||||||||
Derivatives | 242 | — | — | — | 242 | |||||||||||||||
Other | 69 | 137 | 46 | 10 | 262 | |||||||||||||||
1,510 | 1,004 | 882 | (678 | ) | 2,718 | |||||||||||||||
CAPITALIZATION: | ||||||||||||||||||||
Total equity | 3,858 | 2,728 | 2,556 | (5,285 | ) | 3,857 | ||||||||||||||
Long-term debt and other long-term obligations | 1,483 | 2,050 | 706 | (1,239 | ) | 3,000 | ||||||||||||||
5,341 | 4,778 | 3,262 | (6,524 | ) | 6,857 | |||||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||||||||
Deferred gain on sale and leaseback transaction | — | — | — | 942 | 942 | |||||||||||||||
Accumulated deferred income taxes | — | — | 504 | (288 | ) | 216 | ||||||||||||||
Asset retirement obligations | — | 28 | 847 | — | 875 | |||||||||||||||
Retirement benefits | 50 | 245 | — | — | 295 | |||||||||||||||
Lease market valuation liability | — | 194 | — | — | 194 | |||||||||||||||
Derivatives | 85 | — | — | — | 85 | |||||||||||||||
Other | 24 | 77 | 77 | — | 178 | |||||||||||||||
159 | 544 | 1,428 | 654 | 2,785 | ||||||||||||||||
$ | 7,010 | $ | 6,326 | $ | 5,572 | $ | (6,548 | ) | $ | 12,360 | ||||||||||
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(Unaudited)
As of December 31, 2010 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 9 | $ | — | $ | — | $ | 9 | ||||||||||
Receivables- | ||||||||||||||||||||
Customers | 366 | — | — | — | 366 | |||||||||||||||
Associated companies | 333 | 357 | 126 | (338 | ) | 478 | ||||||||||||||
Other | 21 | 56 | 13 | — | 90 | |||||||||||||||
Notes receivable from associated companies | 34 | 189 | 174 | — | 397 | |||||||||||||||
Materials and supplies, at average cost | 41 | 276 | 228 | — | 545 | |||||||||||||||
Derivatives | 182 | — | — | — | 182 | |||||||||||||||
Prepayments and other | 48 | 10 | 1 | — | 59 | |||||||||||||||
1,025 | 897 | 542 | (338 | ) | 2,126 | |||||||||||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||||||||||||||
In service | 96 | 6,198 | 5,412 | (385 | ) | 11,321 | ||||||||||||||
Less — Accumulated provision for depreciation | 17 | 2,020 | 2,162 | (175 | ) | 4,024 | ||||||||||||||
79 | 4,178 | 3,250 | (210 | ) | 7,297 | |||||||||||||||
Construction work in progress | 9 | 520 | 534 | — | 1,063 | |||||||||||||||
88 | 4,698 | 3,784 | (210 | ) | 8,360 | |||||||||||||||
INVESTMENTS: | ||||||||||||||||||||
Nuclear plant decommissioning trusts | — | — | 1,146 | — | 1,146 | |||||||||||||||
Investment in associated companies | 4,942 | — | — | (4,942 | ) | — | ||||||||||||||
Other | — | 12 | — | — | 12 | |||||||||||||||
4,942 | 12 | 1,146 | (4,942 | ) | 1,158 | |||||||||||||||
DEFERRED CHARGES AND OTHER ASSETS: | ||||||||||||||||||||
Accumulated deferred income tax benefits | 43 | 412 | — | (455 | ) | — | ||||||||||||||
Customer intangibles | 134 | — | — | — | 134 | |||||||||||||||
Goodwill | 24 | — | — | — | 24 | |||||||||||||||
Property taxes | — | 16 | 25 | — | 41 | |||||||||||||||
Unamortized sale and leaseback costs | — | 10 | — | 63 | 73 | |||||||||||||||
Derivatives | 98 | — | — | — | 98 | |||||||||||||||
Other | 21 | 71 | 14 | (58 | ) | 48 | ||||||||||||||
320 | 509 | 39 | (450 | ) | 418 | |||||||||||||||
$ | 6,375 | $ | 6,116 | $ | 5,511 | $ | (5,940 | ) | $ | 12,062 | ||||||||||
LIABILITIES AND CAPITALIZATION | ||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||
Currently payable long-term debt | $ | 101 | $ | 419 | $ | 632 | $ | (20 | ) | $ | 1,132 | |||||||||
Short-term borrowings- | ||||||||||||||||||||
Associated companies | — | 12 | — | — | 12 | |||||||||||||||
Accounts payable- | ||||||||||||||||||||
Associated companies | 351 | 213 | 250 | (347 | ) | 467 | ||||||||||||||
Other | 139 | 102 | — | — | 241 | |||||||||||||||
Derivatives | 266 | — | — | — | 266 | |||||||||||||||
Other | 56 | 183 | 46 | 37 | 322 | |||||||||||||||
913 | 929 | 928 | (330 | ) | 2,440 | |||||||||||||||
CAPITALIZATION: | ||||||||||||||||||||
Common stockholder’s equity | 3,788 | 2,515 | 2,414 | (4,929 | ) | 3,788 | ||||||||||||||
Long-term debt and other long-term obligations | 1,519 | 2,119 | 793 | (1,250 | ) | 3,181 | ||||||||||||||
5,307 | 4,634 | 3,207 | (6,179 | ) | 6,969 | |||||||||||||||
NONCURRENT LIABILITIES: | ||||||||||||||||||||
Deferred gain on sale and leaseback transaction | — | — | — | 959 | 959 | |||||||||||||||
Accumulated deferred income taxes | — | — | 448 | (390 | ) | 58 | ||||||||||||||
Asset retirement obligations | — | 27 | 865 | — | 892 | |||||||||||||||
Retirement benefits | 48 | 237 | — | — | 285 | |||||||||||||||
Lease market valuation liability | — | 217 | — | — | 217 | |||||||||||||||
Derivatives | 81 | — | — | — | 81 | |||||||||||||||
Other | 26 | 72 | 63 | — | 161 | |||||||||||||||
155 | 553 | 1,376 | 569 | 2,653 | ||||||||||||||||
$ | 6,375 | $ | 6,116 | $ | 5,511 | $ | (5,940 | ) | $ | 12,062 | ||||||||||
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(Unaudited)
For the Six Months Ended June 30, 2011 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES | $ | (329 | ) | $ | 321 | $ | 200 | $ | (10 | ) | $ | 182 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
New Financing- | ||||||||||||||||||||
Long-term debt | — | 140 | 107 | — | 247 | |||||||||||||||
Short-term borrowings, net | 453 | 77 | — | — | 530 | |||||||||||||||
Redemptions and Repayments- | ||||||||||||||||||||
Long-term debt | (135 | ) | (192 | ) | (155 | ) | 10 | (472 | ) | |||||||||||
Other | (9 | ) | (1 | ) | (1 | ) | — | (11 | ) | |||||||||||
Net cash provided from (used for) financing activities | 309 | 24 | (49 | ) | 10 | 294 | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Property additions | (6 | ) | (109 | ) | (219 | ) | — | (334 | ) | |||||||||||
Sales of investment securities held in trusts | — | — | 513 | — | 513 | |||||||||||||||
Purchases of investment securities held in trusts | — | — | (545 | ) | — | (545 | ) | |||||||||||||
Loans to associated companies, net | 28 | (221 | ) | 100 | — | (93 | ) | |||||||||||||
Customer acquisition costs | (2 | ) | — | — | — | (2 | ) | |||||||||||||
Other | — | (18 | ) | — | — | (18 | ) | |||||||||||||
Net cash provided from (used for) investing activities | 20 | (348 | ) | (151 | ) | — | (479 | ) | ||||||||||||
Net change in cash and cash equivalents | — | (3 | ) | — | — | (3 | ) | |||||||||||||
Cash and cash equivalents at beginning of period | — | 9 | — | — | 9 | |||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 6 | $ | — | $ | — | $ | 6 | ||||||||||
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(Unaudited)
For the Six Months Ended June 30, 2010 | FES | FGCO | NGC | Eliminations | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES | $ | (223 | ) | $ | 163 | $ | 287 | $ | (9 | ) | $ | 218 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
New Financing- | ||||||||||||||||||||
Short-term borrowings, net | — | 76 | — | — | 76 | |||||||||||||||
Redemptions and Repayments- | ||||||||||||||||||||
Long-term debt | — | (261 | ) | (43 | ) | 9 | (295 | ) | ||||||||||||
Other | (1 | ) | — | — | — | (1 | ) | |||||||||||||
Net cash used for financing activities | (1 | ) | (185 | ) | (43 | ) | 9 | (220 | ) | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Property additions | (4 | ) | (333 | ) | (229 | ) | — | (566 | ) | |||||||||||
Proceeds from asset sales | — | 116 | — | — | 116 | |||||||||||||||
Sales of investment securities held in trusts | — | — | 957 | — | 957 | |||||||||||||||
Purchases of investment securities held in trusts | — | — | (979 | ) | — | (979 | ) | |||||||||||||
Loans to associated companies, net | 332 | 241 | 58 | — | 631 | |||||||||||||||
Customer acquisition costs | (105 | ) | — | — | — | (105 | ) | |||||||||||||
Leasehold improvement payments to associated companies | — | — | (51 | ) | — | (51 | ) | |||||||||||||
Other | 1 | (2 | ) | — | — | (1 | ) | |||||||||||||
Net cash provided from (used for) investing activities | 224 | 22 | (244 | ) | — | 2 | ||||||||||||||
Net change in cash and cash equivalents | — | — | — | — | — | |||||||||||||||
Cash and cash equivalents at beginning of period | — | — | — | — | — | |||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
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Item 2. | Management’s Discussion and Analysis of Registrant and Subsidiaries |
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three Months | Six Months | |||||||
Change In Basic Earnings Per Share From Prior Year(1) | Ended June 30 | Ended June 30 | ||||||
Basic Earnings Per Share - 2010 | $ | 0.87 | $ | 1.38 | ||||
Non-core asset sales/impairments | (0.01 | ) | (0.04 | ) | ||||
Trust securities impairments | 0.01 | 0.02 | ||||||
Mark-to-market adjustments | (0.10 | ) | (0.02 | ) | ||||
Income tax charge from healthcare legislation - 2010 | — | 0.04 | ||||||
Regulatory charges - 2011 | (0.01 | ) | (0.05 | ) | ||||
Regulatory charges - 2010 | — | 0.08 | ||||||
Litigation resolution | (0.06 | ) | (0.07 | ) | ||||
Merger related costs | (0.02 | ) | (0.31 | ) | ||||
Segment operating results -(2) | ||||||||
Regulated Distribution | 0.02 | — | ||||||
Competitive Energy Services | (0.15 | ) | (0.24 | ) | ||||
Interest expense, net of amounts capitalized | (0.04 | ) | (0.08 | ) | ||||
Merger accounting — commodity contracts | (0.08 | ) | (0.12 | ) | ||||
Net merger accretion(3) | 0.02 | 0.06 | ||||||
Settlement of uncertain tax positions | (0.03 | ) | (0.05 | ) | ||||
Other expenses | 0.01 | 0.01 | ||||||
Basic Earnings Per Share - 2011 | $ | 0.43 | $ | 0.61 | ||||
(1) | Amounts shown are net of income tax effect | |
(2) | Excludes amounts that are shown separately | |
(3) | Excludes merger accounting — commodity contracts, regulatory charges, mark-to-market adjustments and merger-related costs that are shown separately |
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• | Energy Delivery Services was renamed Regulated Distribution and the operations of MP, PE and WP, which were acquired as part of the merger with Allegheny, and certain regulatory asset recovery mechanisms formerly included in the “Other” segment, were placed into this segment. |
• | A new Regulated Independent Transmission segment was created consisting of ATSI, and the operations of TrAIL Company and FirstEnergy’s interest in PATH; TrAIL and PATH were acquired as part of the merger with Allegheny. The transmission assets and operations of JCP&L, Met-Ed, Penelec, MP, PE and WP remain within the Regulated Distribution segment. |
• | AE Supply, an operator of generation facilities that was acquired as part of the merger with Allegheny, was placed into the Competitive Energy Services segment. |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||||
Increase | Increase | |||||||||||||||||||||||
2011 | 2010 | (Decrease) | 2011 | 2010 | (Decrease) | |||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||
Earnings (Loss) By Business Segment: | ||||||||||||||||||||||||
Regulated Distribution | $ | 184 | $ | 132 | $ | 52 | $ | 280 | $ | 235 | $ | 45 | ||||||||||||
Competitive Energy Services | 12 | 121 | (109 | ) | 17 | 190 | (173 | ) | ||||||||||||||||
Regulated Independent Transmission | 31 | 11 | 20 | 44 | 23 | 21 | ||||||||||||||||||
Other and reconciling adjustments* | (46 | ) | 1 | (47 | ) | (110 | ) | (28 | ) | (82 | ) | |||||||||||||
Earnings available to FirstEnergy Corp. | $ | 181 | $ | 265 | $ | (84 | ) | $ | 231 | $ | 420 | $ | (189 | ) | ||||||||||
Basic Earnings Per Share | $ | 0.43 | $ | 0.87 | $ | (0.44 | ) | $ | 0.61 | $ | 1.38 | $ | (0.77 | ) | ||||||||||
Diluted Earnings Per Share | $ | 0.43 | $ | 0.87 | $ | (0.44 | ) | $ | 0.61 | $ | 1.37 | $ | (0.76 | ) |
* | Consists primarily of interest expense related to holding company debt, corporate support services revenues and expenses, noncontrolling interests and the elimination of intersegment transactions. |
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Competitive | Regulated | Other and | ||||||||||||||||||
Regulated | Energy | Independent | Reconciling | FirstEnergy | ||||||||||||||||
Second Quarter 2011 Financial Results | Distribution | Services | Transmission | Adjustments | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
External | ||||||||||||||||||||
Electric | $ | 2,352 | $ | 1,394 | $ | — | $ | — | $ | 3,746 | ||||||||||
Other | 133 | 101 | 105 | (37 | ) | 302 | ||||||||||||||
Internal | — | 318 | — | (306 | ) | 12 | ||||||||||||||
Total Revenues | 2,485 | 1,813 | 105 | (343 | ) | 4,060 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Fuel | 73 | 562 | — | — | 635 | |||||||||||||||
Purchased power | 1,144 | 382 | — | (306 | ) | 1,220 | ||||||||||||||
Other operating expenses | 438 | 640 | 19 | 8 | 1,105 | |||||||||||||||
Provision for depreciation | 153 | 107 | 15 | 7 | 282 | |||||||||||||||
Amortization of regulatory assets | 87 | — | 3 | — | 90 | |||||||||||||||
General taxes | 180 | 51 | 8 | 3 | 242 | |||||||||||||||
Total Expenses | 2,075 | 1,742 | 45 | (288 | ) | 3,574 | ||||||||||||||
Operating Income | 410 | 71 | 60 | (55 | ) | 486 | ||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Investment income | 27 | 15 | — | (11 | ) | 31 | ||||||||||||||
Interest expense | (148 | ) | (79 | ) | (12 | ) | (26 | ) | (265 | ) | ||||||||||
Capitalized interest | 3 | 12 | 1 | 4 | 20 | |||||||||||||||
Total Other Expense | (118 | ) | (52 | ) | (11 | ) | (33 | ) | (214 | ) | ||||||||||
Income Before Income Taxes | 292 | 19 | 49 | (88 | ) | 272 | ||||||||||||||
Income taxes | 108 | 7 | 18 | (32 | ) | 101 | ||||||||||||||
Net Income (Loss) | 184 | 12 | 31 | (56 | ) | 171 | ||||||||||||||
Loss attributable to noncontrolling interest | — | — | — | (10 | ) | (10 | ) | |||||||||||||
Earnings (loss) available to FirstEnergy Corp. | $ | 184 | $ | 12 | $ | 31 | $ | (46 | ) | $ | 181 | |||||||||
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Competitive | Regulated | Other and | ||||||||||||||||||
Regulated | Energy | Independent | Reconciling | FirstEnergy | ||||||||||||||||
Second Quarter 2010 Financial Results | Distribution | Services | Transmission | Adjustments | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
External | ||||||||||||||||||||
Electric | $ | 2,243 | $ | 739 | $ | — | $ | — | $ | 2,982 | ||||||||||
Other | 71 | 56 | 59 | (29 | ) | 157 | ||||||||||||||
Internal | 19 | 539 | — | (558 | ) | — | ||||||||||||||
Total Revenues | 2,333 | 1,334 | 59 | (587 | ) | 3,139 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Fuel | — | 350 | — | — | 350 | |||||||||||||||
Purchased power | 1,291 | 330 | — | (558 | ) | 1,063 | ||||||||||||||
Other operating expenses | 331 | 340 | 16 | (14 | ) | 673 | ||||||||||||||
Provision for depreciation | 106 | 71 | 10 | 3 | 190 | |||||||||||||||
Amortization of regulatory assets | 158 | — | 3 | — | 161 | |||||||||||||||
General taxes | 138 | 27 | 7 | 4 | 176 | |||||||||||||||
Total Expenses | 2,024 | 1,118 | 36 | (565 | ) | 2,613 | ||||||||||||||
Operating Income | 309 | 216 | 23 | (22 | ) | 526 | ||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Investment income | 28 | 13 | — | (10 | ) | 31 | ||||||||||||||
Interest expense | (125 | ) | (57 | ) | (6 | ) | (19 | ) | (207 | ) | ||||||||||
Capitalized interest | 1 | 24 | 1 | 14 | 40 | |||||||||||||||
Total Other Expense | (96 | ) | (20 | ) | (5 | ) | (15 | ) | (136 | ) | ||||||||||
Income Before Income Taxes | 213 | 196 | 18 | (37 | ) | 390 | ||||||||||||||
Income taxes | 81 | 75 | 7 | (29 | ) | 134 | ||||||||||||||
Net Income (Loss) | 132 | 121 | 11 | (8 | ) | 256 | ||||||||||||||
Loss attributable to noncontrolling interest | — | — | — | (9 | ) | (9 | ) | |||||||||||||
Earnings available to FirstEnergy Corp. | $ | 132 | $ | 121 | $ | 11 | $ | 1 | $ | 265 | ||||||||||
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Changes Between Second Quarter 2011 | Competitive | Regulated | Other and | |||||||||||||||||
and Second Quarter 2010 Financial | Regulated | Energy | Independent | Reconciling | FirstEnergy | |||||||||||||||
Results Increase (Decrease) | Distribution | Services | Transmission | Adjustment | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
External | ||||||||||||||||||||
Electric | $ | 109 | $ | 655 | $ | — | $ | — | $ | 764 | ||||||||||
Other | 62 | 45 | 46 | (8 | ) | 145 | ||||||||||||||
Internal | (19 | ) | (221 | ) | — | 252 | 12 | |||||||||||||
Total Revenues | 152 | 479 | 46 | 244 | 921 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Fuel | 73 | 212 | — | — | 285 | |||||||||||||||
Purchased power | (147 | ) | 52 | — | 252 | 157 | ||||||||||||||
Other operating expenses | 107 | 300 | 3 | 22 | 432 | |||||||||||||||
Provision for depreciation | 47 | 36 | 5 | 4 | 92 | |||||||||||||||
Amortization of regulatory assets | (71 | ) | — | — | — | (71 | ) | |||||||||||||
General taxes | 42 | 24 | 1 | (1 | ) | 66 | ||||||||||||||
Total Expenses | 51 | 624 | 9 | 277 | 961 | |||||||||||||||
Operating Income | 101 | (145 | ) | 37 | (33 | ) | (40 | ) | ||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Investment income | (1 | ) | 2 | — | (1 | ) | — | |||||||||||||
Interest expense | (23 | ) | (22 | ) | (6 | ) | (7 | ) | (58 | ) | ||||||||||
Capitalized interest | 2 | (12 | ) | — | (10 | ) | (20 | ) | ||||||||||||
Total Other Expense | (22 | ) | (32 | ) | (6 | ) | (18 | ) | (78 | ) | ||||||||||
Income Before Income Taxes | 79 | (177 | ) | 31 | (51 | ) | (118 | ) | ||||||||||||
Income taxes | 27 | (68 | ) | 11 | (3 | ) | (33 | ) | ||||||||||||
Net Income | 52 | (109 | ) | 20 | (48 | ) | (85 | ) | ||||||||||||
Loss attributable to noncontrolling interest | — | — | — | (1 | ) | (1 | ) | |||||||||||||
Earnings available to FirstEnergy Corp. | $ | 52 | $ | (109 | ) | $ | 20 | $ | (47 | ) | $ | (84 | ) | |||||||
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Three Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
Revenues by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
Pre-merger companies: | ||||||||||||
Distribution services | $ | 810 | $ | 851 | $ | (41 | ) | |||||
Generation sales: | ||||||||||||
Retail | 747 | 1,097 | (350 | ) | ||||||||
Wholesale | 104 | 180 | (76 | ) | ||||||||
Total generation sales | 851 | 1,277 | (426 | ) | ||||||||
Transmission | 51 | 141 | (90 | ) | ||||||||
Other | 66 | 64 | 2 | |||||||||
Total pre-merger companies | 1,778 | 2,333 | (555 | ) | ||||||||
Allegheny companies | 707 | — | 707 | |||||||||
Total Revenues | $ | 2,485 | $ | 2,333 | $ | 152 | ||||||
Increase | ||||||||||||
Electric Distribution KWH Deliveries | 2011 | 2010 | (Decrease) | |||||||||
(in thousands) | ||||||||||||
Pre-merger companies: | ||||||||||||
Residential | 8,623 | 8,663 | (0.5 | )% | ||||||||
Commercial | 7,926 | 8,121 | (2.4 | )% | ||||||||
Industrial | 8,798 | 8,846 | (0.5 | )% | ||||||||
Other | 126 | 132 | (4.5 | )% | ||||||||
Total pre-merger companies | 25,473 | 25,762 | (1.1 | )% | ||||||||
Allegheny companies | 9,527 | — | — | |||||||||
Total Electric Distribution KWH Deliveries | 35,000 | 25,762 | 35.9 | % | ||||||||
Increase | ||||
Source of Change in Generation Revenues | (Decrease) | |||
(In millions) | ||||
Retail: | ||||
Effect of decrease in sales volumes | $ | (447 | ) | |
Change in prices | 96 | |||
(351 | ) | |||
Wholesale: | ||||
Effect of decrease in sales volumes | (8 | ) | ||
Change in prices | (67 | ) | ||
(75 | ) | |||
Net Decrease in Generation Revenues | $ | (426 | ) | |
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• | Purchased power costs, excluding the Allegheny companies, were $483 million lower in the second quarter of 2011 due primarily to a decrease in volumes required. The decrease in power purchased from FES reflected the increase in customer shopping described above and the termination of Met-Ed’s and Penelec’s partial requirements PSA with FES at the end of 2010. The increase in volumes purchased from non-affiliates under Met-Ed’s and Penelec’s generation procurement plan effective January 1, 2011 was offset by a decrease in RPM expenses in the PJM market. The Allegheny companies added $336 million in purchased power costs in the second quarter of 2011. |
Increase | ||||
Source of Change in Purchased Power | (Decrease) | |||
(In millions) | ||||
Pre-merger companies: | ||||
Purchases from non-affiliates: | ||||
Change due to decreased unit costs | $ | (161 | ) | |
Change due to increased volumes | 88 | |||
(73 | ) | |||
Purchases from FES: | ||||
Change due to increased unit costs | 20 | |||
Change due to decreased volumes | (398 | ) | ||
(378 | ) | |||
Increase in costs deferred | (32 | ) | ||
Total pre-merger companies | (483 | ) | ||
Purchases by Allegheny companies | 336 | |||
Net Decrease in Purchased Power Costs | $ | (147 | ) | |
• | Transmission expenses decreased $29 million primarily due to lower PJM network transmission expenses and congestion costs of $70 million for Met-Ed and Penelec, partially offset by transmission expenses for the Allegheny companies of $41 million in the second quarter of 2011. Met-Ed and Penelec defer or amortize the difference between revenues from their transmission rider and transmission costs incurred with no material effect on earnings. |
• | Energy Efficiency program costs, which are also recovered through rates, increased by $43 million. |
• | The absence of a $7 million favorable JCP&L labor settlement that occurred in the second quarter of 2010. |
• | Net amortization of regulatory assets decreased $71 million due primarily to reduced transition cost recovery and increased deferral of energy efficiency program costs. |
• | Fuel expenses for MP were $73 million in the second quarter of 2011. | ||
• | Operating expenses for the Allegheny companies were $95 million in the second quarter of 2011. | ||
• | Depreciation expense for the Allegheny companies was $48 million in the second quarter of 2011. |
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• | Merger-related costs increased $4 million in the second quarter of 2011 compared to the same period of 2010. |
• | General taxes increased $42 million primarily due to property taxes and gross receipts taxes incurred by the Allegheny companies in the second quarter of 2011. |
Three Months | ||||||||||||
Revenues by | Ended June 30 | Increase | ||||||||||
Transmission Asset Owner | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
ATSI | $ | 54 | $ | 59 | $ | (5 | ) | |||||
TrAIL | 46 | — | 46 | |||||||||
PATH | 5 | — | 5 | |||||||||
Total Revenues | $ | 105 | $ | 59 | $ | 46 | ||||||
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Three Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
Revenues by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
Direct and Governmental Aggregation | $ | 925 | $ | 586 | $ | 339 | ||||||
POLR and Structured Sales | 231 | 615 | (384 | ) | ||||||||
Wholesale | 66 | 77 | (11 | ) | ||||||||
Transmission | 30 | 19 | 11 | |||||||||
RECs | 12 | — | 12 | |||||||||
Other | 38 | 37 | 1 | |||||||||
Allegheny Companies | 511 | — | 511 | |||||||||
Total Revenues | $ | 1,813 | $ | 1,334 | $ | 479 | ||||||
Allegheny Companies | ||||||||||||
Direct and Governmental Aggregation | $ | 26 | ||||||||||
POLR and Structured Sales | 185 | |||||||||||
Wholesale | 267 | |||||||||||
Transmission | 32 | |||||||||||
Other | 1 | |||||||||||
Total Revenues | $ | 511 | ||||||||||
Three Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
MWH Sales by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In thousands) | ||||||||||||
Direct | 11,547 | 7,004 | 64.9 | % | ||||||||
Governmental Aggregation | 3,970 | 2,715 | 46.2 | % | ||||||||
POLR and Structured Sales | 3,718 | 11,600 | (67.9 | )% | ||||||||
Wholesale | 395 | 1,108 | (64.4 | )% | ||||||||
Allegheny Companies | 8,051 | — | — | |||||||||
Total Sales | 27,681 | 22,427 | 23.4 | % | ||||||||
Allegheny Companies | ||||||||||||
Direct | 425 | |||||||||||
POLR | 2,169 | |||||||||||
Structured Sales | 846 | |||||||||||
Wholesale | 4,611 | |||||||||||
Total Sales | 8,051 | |||||||||||
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Increase | ||||
Source of Change in Direct and Governmental Aggregation | (Decrease) | |||
(In millions) | ||||
Direct Sales: | ||||
Effect of increase in sales volumes | $ | 267 | ||
Change in prices | (13 | ) | ||
254 | ||||
Governmental Aggregation: | ||||
Effect of increase in sales volumes | 80 | |||
Change in prices | 5 | |||
85 | ||||
Net Increase in Direct and Governmental Aggregation Revenues | $ | 339 | ||
Increase | ||||
Source of Change in POLR and Structured Revenues | (Decrease) | |||
(In millions) | ||||
POLR: | ||||
Effect of decrease in sales volumes | $ | (418 | ) | |
Change in prices | 34 | |||
(384 | ) | |||
Increase | ||||
Source of Change in Wholesale Revenues | (Decrease) | |||
(In millions) | ||||
Wholesale: | ||||
Effect of decrease in sales volumes | (49 | ) | ||
Change in prices | 38 | |||
(11 | ) | |||
• | Fuel costs decreased by $27 million primarily due to decreased volumes ($56 million), partially offset by higher unit prices ($29 million). Volumes decreased due to lower generation at the fossil units. Higher unit prices reflect increased coal transportation costs and higher nuclear fuel unit prices following the refueling outages that occurred in 2010. |
• | Purchased power costs were unchanged as higher unit costs ($70 million) were offset by lower volumes purchased ($70 million). The decrease in volume primarily relates to the absence in 2011 of a 1,300 MW third party contract associated with serving Met-Ed and Penelec. |
• | Fossil operating costs increased by $18 million due primarily to higher labor, contractor and materials and equipment costs due to in increase in outages, both planned and unplanned, from the previous year. |
• | Nuclear operating costs increased by $33 million due primarily to having two refueling outages, Perry and Beaver Valley 2, occurring this year. While Davis-Besse had a refueling outage last year, the work performed during the second quarter of 2010 was largely capital-related. |
• | Transmission expenses increased by $66 million due primarily to increases in PJM of $91 million from higher congestion, network, and line loss expense, partially offset by lower MISO transmission expenses of $25 million due to lower network and line loss costs. |
• | General taxes increased by $10 million due to an increase in revenue-related taxes. |
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• | Other expenses increased by $36 million primarily due to: a $14 million mark-to-market adjustment; a $7 million impairment charge related to non-core assets; and an $8 million increase in intercompany billings. The intercompany billings increased due to merger related costs and increased intersegment billings for leasehold costs from the Ohio Companies. |
Increase | ||||
Source of Expense Changes | (Decrease) | |||
(In millions) | ||||
Allegheny Companies | ||||
Fuel | $ | 238 | ||
Purchased power | 53 | |||
Fossil | 55 | |||
Transmission | 75 | |||
Mark-to-Market | 9 | |||
General taxes | 11 | |||
Other | 15 | |||
Depreciation | 32 | |||
Total Expense | $ | 488 | ||
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Competitive | Regulated | Other and | ||||||||||||||||||
Regulated | Energy | Independent | Reconciling | FirstEnergy | ||||||||||||||||
First Six Months 2011 Financial Results | Distribution | Services | Transmission | Adjustments | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
External | ||||||||||||||||||||
Electric | $ | 4,527 | $ | 2,556 | $ | — | $ | — | $ | 7,083 | ||||||||||
Other | 226 | 180 | 172 | (69 | ) | 509 | ||||||||||||||
Internal | — | 661 | — | (617 | ) | 44 | ||||||||||||||
Total Revenues | 4,753 | 3,397 | 172 | (686 | ) | 7,636 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Fuel | 97 | 991 | — | — | 1,088 | |||||||||||||||
Purchased power | 2,323 | 700 | — | (617 | ) | 2,406 | ||||||||||||||
Other operating expenses | 824 | 1,288 | 36 | (10 | ) | 2,138 | ||||||||||||||
Provision for depreciation | 269 | 195 | 25 | 13 | 502 | |||||||||||||||
Amortization of regulatory assets | 216 | — | 6 | — | 222 | |||||||||||||||
General taxes | 356 | 95 | 16 | 12 | 479 | |||||||||||||||
Total Expenses | 4,085 | 3,269 | 83 | (602 | ) | 6,835 | ||||||||||||||
Operating Income | 668 | 128 | 89 | (84 | ) | 801 | ||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Investment income | 52 | 21 | — | (21 | ) | 52 | ||||||||||||||
Interest expense | (280 | ) | (144 | ) | (21 | ) | (51 | ) | (496 | ) | ||||||||||
Capitalized interest | 4 | 22 | 1 | 11 | 38 | |||||||||||||||
Total Other Expense | (224 | ) | (101 | ) | (20 | ) | (61 | ) | (406 | ) | ||||||||||
Income Before Income Taxes | 444 | 27 | 69 | (145 | ) | 395 | ||||||||||||||
Income taxes | 164 | 10 | 25 | (20 | ) | 179 | ||||||||||||||
Net Income (Loss) | 280 | 17 | 44 | (125 | ) | 216 | ||||||||||||||
Loss attributable to noncontrolling interest | — | — | — | (15 | ) | (15 | ) | |||||||||||||
Earnings available to FirstEnergy Corp. | $ | 280 | $ | 17 | $ | 44 | $ | (110 | ) | $ | 231 | |||||||||
Competitive | Regulated | Other and | ||||||||||||||||||
Regulated | Energy | Independent | Reconciling | FirstEnergy | ||||||||||||||||
First Six Months 2010 Financial Results | Distribution | Services | Transmission | Adjustments | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
External | ||||||||||||||||||||
Electric | $ | 4,641 | $ | 1,408 | $ | — | $ | — | $ | 6,049 | ||||||||||
Other | 157 | 106 | 116 | (57 | ) | 322 | ||||||||||||||
Internal | 19 | 1,213 | — | (1,165 | ) | 67 | ||||||||||||||
Total Revenues | 4,817 | 2,727 | 116 | (1,222 | ) | 6,438 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Fuel | — | 684 | — | — | 684 | |||||||||||||||
Purchased power | 2,686 | 780 | — | (1,165 | ) | 2,301 | ||||||||||||||
Other operating expenses | 690 | 692 | 30 | (38 | ) | 1,374 | ||||||||||||||
Provision for depreciation | 210 | 148 | 19 | 6 | 383 | |||||||||||||||
Amortization of regulatory assets | 367 | — | 6 | — | 373 | |||||||||||||||
General taxes | 292 | 64 | 14 | 11 | 381 | |||||||||||||||
Total Expenses | 4,245 | 2,368 | 69 | (1,186 | ) | 5,496 | ||||||||||||||
Operating Income | 572 | 359 | 47 | (36 | ) | 942 | ||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Investment income | 54 | 14 | — | (21 | ) | 47 | ||||||||||||||
Interest expense | (250 | ) | (113 | ) | (11 | ) | (46 | ) | (420 | ) | ||||||||||
Capitalized interest | 2 | 47 | 1 | 31 | 81 | |||||||||||||||
Total Other Expense | (194 | ) | (52 | ) | (10 | ) | (36 | ) | (292 | ) | ||||||||||
Income Before Income Taxes | 378 | 307 | 37 | (72 | ) | 650 | ||||||||||||||
Income taxes | 143 | 117 | 14 | (29 | ) | 245 | ||||||||||||||
Net Income (Loss) | 235 | 190 | 23 | (43 | ) | 405 | ||||||||||||||
Loss attributable to noncontrolling interest | — | — | — | (15 | ) | (15 | ) | |||||||||||||
Earnings available to FirstEnergy Corp. | $ | 235 | $ | 190 | $ | 23 | $ | (28 | ) | $ | 420 | |||||||||
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Changes Between First Six Months 2011 and | Competitive | Regulated | Other and | |||||||||||||||||
First Six Months 2010 Financial Results | Regulated | Energy | Independent | Reconciling | FirstEnergy | |||||||||||||||
Increase (Decrease) | Distribution | Services | Transmission | Adjustments | Consolidated | |||||||||||||||
(In millions) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
External | ||||||||||||||||||||
Electric | $ | (114 | ) | $ | 1,148 | $ | — | $ | — | $ | 1,034 | |||||||||
Other | 69 | 74 | 56 | (12 | ) | 187 | ||||||||||||||
Internal | (19 | ) | (552 | ) | — | 548 | (23 | ) | ||||||||||||
Total Revenues | (64 | ) | 670 | 56 | 536 | 1,198 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Fuel | 97 | 307 | — | — | 404 | |||||||||||||||
Purchased power | (363 | ) | (80 | ) | — | 548 | 105 | |||||||||||||
Other operating expenses | 134 | 596 | 6 | 28 | 764 | |||||||||||||||
Provision for depreciation | 59 | 47 | 6 | 7 | 119 | |||||||||||||||
Amortization of regulatory assets | (151 | ) | — | — | — | (151 | ) | |||||||||||||
General taxes | 64 | 31 | 2 | 1 | 98 | |||||||||||||||
Total Expenses | (160 | ) | 901 | 14 | 584 | 1,339 | ||||||||||||||
Operating Income | 96 | (231 | ) | 42 | (48 | ) | (141 | ) | ||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Investment income | (2 | ) | 7 | — | — | 5 | ||||||||||||||
Interest expense | (30 | ) | (31 | ) | (10 | ) | (5 | ) | (76 | ) | ||||||||||
Capitalized interest | 2 | (25 | ) | — | (20 | ) | (43 | ) | ||||||||||||
Total Other Expense | (30 | ) | (49 | ) | (10 | ) | (25 | ) | (114 | ) | ||||||||||
Income Before Income Taxes | 66 | (280 | ) | 32 | (73 | ) | (255 | ) | ||||||||||||
Income taxes | 21 | (107 | ) | 11 | 9 | (66 | ) | |||||||||||||
Net Income | 45 | (173 | ) | 21 | (82 | ) | (189 | ) | ||||||||||||
Loss attributable to noncontrolling interest | — | — | — | — | — | |||||||||||||||
Earnings available to FirstEnergy Corp. | $ | 45 | $ | (173 | ) | $ | 21 | $ | (82 | ) | $ | (189 | ) | |||||||
Six Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
Revenues by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
Pre-merger companies: | ||||||||||||
Distribution services | $ | 1,719 | $ | 1,733 | $ | (14 | ) | |||||
Generation sales: | ||||||||||||
Retail | 1,620 | 2,272 | (652 | ) | ||||||||
Wholesale | 220 | 397 | (177 | ) | ||||||||
Total generation sales | 1,840 | 2,669 | (829 | ) | ||||||||
Transmission | 88 | 299 | (211 | ) | ||||||||
Other | 123 | 116 | 7 | |||||||||
Total pre-merger companies | 3,770 | 4,817 | (1,047 | ) | ||||||||
Allegheny companies | 983 | — | 983 | |||||||||
Total Revenues | $ | 4,753 | $ | 4,817 | $ | (64 | ) | |||||
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Increase | ||||||||||||
Electric Distribution KWH Deliveries | 2011 | 2010 | (Decrease) | |||||||||
(in thousands) | ||||||||||||
Pre-merger companies: | ||||||||||||
Residential | 19,261 | 19,119 | 0.7 | % | ||||||||
Commercial | 15,855 | 16,074 | (1.4 | )% | ||||||||
Industrial | 17,640 | 17,197 | 2.6 | % | ||||||||
Other | 256 | 262 | (2.3 | )% | ||||||||
Total pre-merger companies | 53,012 | 52,652 | 0.7 | % | ||||||||
Allegheny companies | 13,068 | — | — | |||||||||
Total Electric Distribution KWH Deliveries | 66,080 | 52,652 | 25.5 | % | ||||||||
Increase | ||||
Source of Change in Generation Revenues | (Decrease) | |||
(In millions) | ||||
Retail: | ||||
Effect of decrease in sales volumes | $ | (826 | ) | |
Change in prices | 174 | |||
(652 | ) | |||
Wholesale: | ||||
Effect of decrease in sales volumes | (2 | ) | ||
Change in prices | (175 | ) | ||
(177 | ) | |||
Net Decrease in Generation Revenues | $ | (829 | ) | |
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• | Purchased power costs, excluding the Allegheny companies, were $843 million lower in the first six months of 2011 due to a decrease in volumes required. The decrease in power purchased from FES reflected the increase in customer shopping described above and the termination of Met-Ed’s and Penelec’s partial requirements PSA with FES at the end of 2010. The increase in volumes purchased from non-affiliates under Met-Ed’s and Penelec’s generation procurement plan effective January 1, 2011 was offset by a decrease in RPM expenses in the PJM market. The Allegheny companies added $481 million in purchased power costs in the first six months of 2011. |
Increase | ||||
Source of Change in Purchased Power | (Decrease) | |||
(In millions) | ||||
Pre-merger companies: | ||||
Purchases from non-affiliates: | ||||
Change due to decreased unit costs | $ | (356 | ) | |
Change due to increased volumes | 277 | |||
(79 | ) | |||
Purchases from FES: | ||||
Change due to increased unit costs | 63 | |||
Change due to decreased volumes | (809 | ) | ||
(746 | ) | |||
Increase in costs deferred | (18 | ) | ||
Total pre-merger companies | (843 | ) | ||
Purchases by Allegheny companies | 481 | |||
Net Decrease in Purchased Power Costs | $ | (362 | ) | |
• | Transmission expenses decreased $124 million primarily due to lower PJM network transmission expenses and congestion costs of $177 million for Met-Ed and Penelec, partially offset by transmission expenses for the Allegheny companies of $53 million in the first six months of 2011. Met-Ed and Penelec defer or amortize the difference between revenues from their transmission rider and transmission costs incurred with no material effect on earnings. |
• | Energy efficiency program costs, which are also recovered through rates, increased $62 million. |
• | The absence of a $7 million favorable JCP&L labor settlement that occurred in the second quarter of 2010. |
• | A provision for excess and obsolete material of $13 million was recognized in the first six months of 2011 due to revised inventory practices adopted in conjunction with the Allegheny merger. |
• | Net amortization of regulatory assets decreased $150 million primarily due to reduced net PJM transmission cost and transition cost recovery and the absence of a $35 million regulatory asset impairment recognized in 2010 associated with the filing of the Ohio ESP on March 23, 2010, partially offset by increased energy efficiency cost recovery. |
• | Fuel expenses for MP were $97 million in the first six months of 2011. |
• | Operating expenses for the Allegheny companies were $131 million in the first six months of 2011. |
• | Merger-related costs increased $46 million in the first six months of 2011 compared to the same period of 2010. |
• | Depreciation expense for the Allegheny companies was $64 million. |
• | General taxes increased by $64 million primarily due to taxes incurred by the Allegheny companies and the absence of a favorable property tax settlement recognized in 2010. |
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Six Months | ||||||||||||
Revenues by | Ended June 30 | Increase | ||||||||||
Transmission Asset Owner | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
ATSI | $ | 106 | $ | 116 | $ | (10 | ) | |||||
TrAIL | 61 | — | 61 | |||||||||
PATH | 5 | — | 5 | |||||||||
Total Revenues | $ | 172 | $ | 116 | $ | 56 | ||||||
Six Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
Revenues by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
Direct and Governmental Aggregation | $ | 1,765 | $ | 1,097 | $ | 668 | ||||||
POLR and Structured Sales | 607 | 1,315 | (708 | ) | ||||||||
Wholesale | 156 | 142 | 14 | |||||||||
Transmission | 56 | 36 | 20 | |||||||||
RECs | 44 | 67 | (23 | ) | ||||||||
Other | 79 | 70 | 9 | |||||||||
Allegheny Companies | 690 | — | 690 | |||||||||
Total Revenues | $ | 3,397 | $ | 2,727 | $ | 670 | ||||||
Allegheny Companies | ||||||||||||
Direct and Governmental Aggregation | $ | 34 | ||||||||||
POLR and Structured Sales | 254 | |||||||||||
Wholesale | 357 | |||||||||||
Transmission | 44 | �� | ||||||||||
Other | 1 | |||||||||||
Total Revenues | $ | 690 | ||||||||||
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Six Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
MWH Sales by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In thousands) | ||||||||||||
Direct | 21,219 | 12,857 | 65.0 | % | ||||||||
Governmental Aggregation | 8,279 | 5,447 | 52.0 | % | ||||||||
POLR and Structured Sales | 9,561 | 25,344 | (62.3 | )% | ||||||||
Wholesale | 1,380 | 1,538 | (10.3 | )% | ||||||||
Allegheny Companies | 10,687 | — | — | |||||||||
Total Sales | 51,126 | 45,186 | 13.1 | % | ||||||||
Allegheny Companies | ||||||||||||
Direct | 570 | |||||||||||
POLR | 2,981 | |||||||||||
Structured Sales | 1,149 | |||||||||||
Wholesale | 5,987 | |||||||||||
Total Sales | 10,687 | |||||||||||
Increase | ||||
Source of Change in Direct and Governmental Aggregation | (Decrease) | |||
(In millions) | ||||
Direct Sales: | ||||
Effect of increase in sales volumes | $ | 493 | ||
Change in prices | (20 | ) | ||
473 | ||||
Governmental Aggregation: | ||||
Effect of increase in sales volumes | 176 | |||
Change in prices | 19 | |||
195 | ||||
Net Increase in Direct and Governmental Aggregation Revenues | $ | 668 | ||
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Increase | ||||
Source of Change in POLR Revenues | (Decrease) | |||
(In millions) | ||||
POLR: | ||||
Effect of decrease in sales volumes | $ | (819 | ) | |
Change in prices | 111 | |||
(708 | ) | |||
Increase | ||||
Source of Change in Wholesale Revenues | (Decrease) | |||
Wholesale: | ||||
Effect of decrease in sales volumes | (15 | ) | ||
Change in prices | 29 | |||
14 | ||||
• | Fuel costs decreased by $13 million primarily due to decreased volumes ($28 million), partially offset by higher unit prices ($15 million). Volumes decreased due to lower generation from the fossil units. Unit prices increased primarily due to increased coal transportation costs and higher nuclear fuel unit prices following the refueling outages that occurred in 2010. |
• | Purchased power costs decreased by $154 million due primarily to lower volumes purchased ($248 million) partially offset by higher unit costs ($94 million). The decrease in volume primarily relates to the absence in 2011 of a 1,300 MW third party contract associated with serving Met-Ed and Penelec. |
• | Fossil operating costs increased by $20 million due primarily to higher labor, contractor and material costs resulting from an increase in planned and unplanned outages. |
• | Nuclear operating costs increased by $48 million due primarily to having two refueling outages, Perry and Beaver Valley 2, occurring this year. While Davis-Besse had a refueling outage last year, the work performed during the second quarter of 2010 was largely capital-related. |
• | Transmission expenses increased by $176 million due primarily to increases in PJM of $198 million from higher congestion, network, and line loss expense, partially offset by lower MISO transmission expenses of $22 million. |
• | General taxes increased by $12 million due to an increase in revenue-related taxes. |
• | Other expenses increased by $93 million primarily due to: a $54 million provision for excess and obsolete material relating to revised inventory practices adopted in connection with the Allegheny merger; a $20 million impairment charge related to non-core assets; and a $9 million increase in intercompany billings. The intercompany billings increased due to merger related costs and increased intersegment billings for leasehold costs from the Ohio Companies. |
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Increase | ||||
Source of Expense Changes | (Decrease) | |||
(In millions) | ||||
Allegheny Companies | ||||
Fuel | $ | 320 | ||
Purchased power | 74 | |||
Fossil | 82 | |||
Transmission | 99 | |||
Mark-to-Market | 43 | |||
General taxes | 15 | |||
Other | 43 | |||
Depreciation | 43 | |||
Total Expense | $ | 719 | ||
June 30, | December 31, | Increase | ||||||||||
Regulatory Assets | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
OE | $ | 393 | $ | 400 | $ | (7 | ) | |||||
CEI | 320 | 370 | (50 | ) | ||||||||
TE | 89 | 72 | 17 | |||||||||
JCP&L | 469 | 513 | (44 | ) | ||||||||
Met-Ed | 341 | 296 | 45 | |||||||||
Penelec | 222 | 163 | 59 | |||||||||
Other* | 348 | 12 | 336 | |||||||||
Total | $ | 2,182 | $ | 1,826 | $ | 356 | ||||||
* | 2011 includes $337 million related to the Allegheny companies. |
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Amount of | ||||||||||||||||
Increase | ||||||||||||||||
(Decrease) | ||||||||||||||||
June 30, | December 31, | Increase | Attributable | |||||||||||||
Regulatory Assets by Source | 2011 | 2010 | (Decrease) | to AE | ||||||||||||
(In millions) | ||||||||||||||||
Regulatory transition costs | $ | 899 | $ | 770 | $ | 129 | $ | — | ||||||||
Customer receivables for future income taxes | 502 | 326 | 176 | 160 | ||||||||||||
Loss on reacquired debt | 53 | 48 | 5 | 8 | ||||||||||||
Employee postretirement benefits | 11 | 16 | (5 | ) | — | |||||||||||
Nuclear decommissioning and spent fuel disposal costs | (201 | ) | (184 | ) | (17 | ) | — | |||||||||
Asset removal costs | (228 | ) | (237 | ) | 9 | 22 | ||||||||||
MISO/PJM transmission costs | 292 | 184 | 108 | 76 | ||||||||||||
Deferred generation costs | 454 | 386 | 68 | 15 | ||||||||||||
Distribution costs | 284 | 426 | (142 | ) | — | |||||||||||
Other | 116 | 91 | 25 | 56 | ||||||||||||
Total | $ | 2,182 | $ | 1,826 | $ | 356 | $ | 337 | ||||||||
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Currently Payable Long-term Debt | ||||
PCRBs supported by bank LOCs (1) | $ | 949 | ||
AE Supply unsecured note | 503 | |||
FirstEnergy Corp. unsecured note | 250 | |||
FGCO and NGC unsecured PCRBs (1) | 136 | |||
WP unsecured note | 80 | |||
NGC collateralized lease obligation bonds | 59 | |||
Sinking fund requirements | 50 | |||
Other notes | 31 | |||
$ | 2,058 | |||
(1) | Interest rate mode permits individual debt holders to put the respective debt back to the issuer prior to maturity. |
Available | ||||||||||||||
Company | Type | Maturity | Commitment | Liquidity | ||||||||||
(In millions) | ||||||||||||||
FirstEnergy(1) | Revolving | June 2016 | $ | 2,000 | $ | 1,751 | ||||||||
FES / AE Supply | Revolving | June 2016 | 2,500 | 2,449 | ||||||||||
TrAIL | Revolving | Jan. 2013 | 450 | 450 | ||||||||||
AGC | Revolving | Dec. 2013 | 50 | — | ||||||||||
Subtotal | $ | 5,000 | $ | 4,650 | ||||||||||
Cash | — | 586 | ||||||||||||
Total | $ | 5,000 | $ | 5,236 | ||||||||||
(1) | FirstEnergy Corp. and regulated subsidiary borrowers. |
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New Revolving | Regulatory and | |||||||
Credit Facility | Other Short-Term | |||||||
Borrower | Sub-Limit | Debt Limitations | ||||||
(In millions) | ||||||||
FirstEnergy | $ | 2,000 | — | (a) | ||||
FES | $ | 1,500 | — | (b) | ||||
AE Supply | $ | 1,000 | — | (b) | ||||
OE | $ | 500 | $ | 500 | ||||
CEI | $ | 500 | $ | 500 | ||||
TE | $ | 500 | $ | 500 | ||||
JCP&L | $ | 425 | $ | 411 | (c) | |||
Met-Ed | $ | 300 | $ | 300 | (c) | |||
Penelec | $ | 300 | $ | 300 | (c) | |||
West Penn | $ | 200 | $ | 200 | (c) | |||
MP | $ | 150 | $ | 150 | (c) | |||
PE | $ | 150 | $ | 150 | (c) | |||
ATSI | $ | 100 | $ | 100 | ||||
Penn | $ | 50 | $ | 33 | (c) |
(a) | No limitations. | |
(b) | No limitation based upon blanket financing authorization from the FERC under existing open market tariffs. | |
(c) | Excluding amounts which may be borrowed under the regulated companies’ money pool. |
Borrower | ||||
FirstEnergy | 56.9 | % | ||
FES | 54.1 | % | ||
OE | 56.2 | % | ||
Penn | 34.4 | % | ||
CEI | 56.3 | % | ||
TE | 58.4 | % | ||
JCP&L | 43.9 | % | ||
Met-Ed | 53.5 | % | ||
Penelec | 55.5 | % | ||
ATSI | 54.9 | % | ||
MP | 59.3 | % | ||
PE | 60.1 | % | ||
WP | 53.9 | % | ||
AE Supply | 39.4 | % |
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Aggregate LOC | Reimbursements of | |||||||
LOC Bank | Amount(1) | LOC Termination Date | LOC Draws Due | |||||
(In millions) | ||||||||
UBS | $ | 272 | April 2014 | April 2014 | ||||
The Bank of Nova Scotia | 178 | Beginning June 2012 | Multiple dates(2) | |||||
CitiBank N.A. | 165 | June 2014 | June 2014 | |||||
Wachovia Bank | 153 | March 2014 | March 2014 | |||||
The Royal Bank of Scotland | 131 | June 2012 | 6 months | |||||
US Bank | 60 | April 2014 | 6 months | |||||
Total | $ | 959 | ||||||
(1) | Includes approximately $10 million of applicable interest coverage. | |
(2) | Shorter of 6 months or LOC termination date ($49 million) and shorter of one year or LOC termination date ($129 million). |
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Senior Secured | Senior Unsecured | |||||||||||
Issuer | S&P | Moody’s | Fitch | S&P | Moody’s | Fitch | ||||||
FirstEnergy Corp. | — | — | — | BB+ | Baa3 | BBB | ||||||
Allegheny | — | — | — | BB+ | Baa3 | — | ||||||
FES | — | — | — | BBB- | Baa2 | BBB | ||||||
AE Supply | BBB | Baa2 | BBB | BBB- | Baa3 | BBB- | ||||||
AGC | — | — | — | BBB- | Baa3 | BBB+ | ||||||
ATSI | — | — | — | BBB- | Baa1 | A- | ||||||
CEI | BBB | Baa1 | BBB | BBB- | Baa3 | BBB- | ||||||
JCP&L | — | — | — | BBB- | Baa2 | BBB+ | ||||||
Met-Ed | BBB | A3 | A- | BBB- | Baa2 | BBB+ | ||||||
MP | BBB+ | Baa1 | A- | BBB- | Baa3 | BBB+ | ||||||
OE | BBB | A3 | BBB+ | BBB- | Baa2 | BBB | ||||||
Penelec | BBB | A3 | BBB+ | BBB- | Baa2 | BBB | ||||||
Penn | BBB+ | A3 | BBB+ | — | — | — | ||||||
PE | BBB+ | Baa1 | A- | BBB- | Baa3 | BBB+ | ||||||
TE | BBB | Baa1 | BBB | — | — | — | ||||||
TrAIL | — | — | — | BBB- | Baa2 | A- | ||||||
WP | BBB+ | A3 | A- | BBB- | Baa2 | BBB+ |
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Six Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
Operating Cash Flows | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
Net income | $ | 216 | $ | 405 | $ | (189 | ) | |||||
Non-cash charges | 1,229 | 789 | 440 | |||||||||
Pension trust contribution | (262 | ) | — | (262 | ) | |||||||
Working capital and other | (152 | ) | (336 | ) | 184 | |||||||
$ | 1,031 | $ | 858 | $ | 173 | |||||||
Six Months | ||||||||
Ended June 30 | ||||||||
Debt Issuances and Redemptions | 2011 | 2010 | ||||||
(In millions) | ||||||||
New Issues | ||||||||
Pollution control notes | $ | 272 | $ | — | ||||
Long-term revolving credit | 70 | — | ||||||
Unsecured Notes | 161 | — | ||||||
$ | 503 | $ | — | |||||
Redemptions | ||||||||
Pollution control notes | $ | 312 | $ | 251 | ||||
Long-term revolving credit | 475 | — | ||||||
Senior secured notes | 166 | 55 | ||||||
First mortgage bonds | 14 | — | ||||||
Unsecured notes | 35 | 100 | ||||||
$ | 1,002 | $ | 406 | |||||
Short-term borrowings, net | $ | (44 | ) | $ | 281 | |||
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Summary of Cash Flows | Property | |||||||||||||||
Provided from (Used for) Investing Activities | Additions | Investments | Other | Total | ||||||||||||
(In millions) | ||||||||||||||||
Sources (Uses) | ||||||||||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||
Regulated distribution | $ | (479 | ) | $ | (2 | ) | $ | (25 | ) | $ | (506 | ) | ||||
Competitive energy services | (411 | ) | (32 | ) | (335 | ) | (778 | ) | ||||||||
Regulated independent transmission | (72 | ) | (1 | ) | (1 | ) | (74 | ) | ||||||||
Cash received in Allegheny merger | — | 590 | — | 590 | ||||||||||||
Other and reconciling items | (56 | ) | (21 | ) | 310 | 233 | ||||||||||
Total | $ | (1,018 | ) | $ | 534 | $ | (51 | ) | $ | (535 | ) | |||||
Six Months Ended June 30, 2010 | ||||||||||||||||
Regulated distribution | $ | (309 | ) | $ | 87 | $ | (18 | ) | $ | (240 | ) | |||||
Competitive energy services | (619 | ) | (11 | ) | (1 | ) | (631 | ) | ||||||||
Regulated independent transmission | (29 | ) | — | (2 | ) | (31 | ) | |||||||||
Other and reconciling items | (40 | ) | (25 | ) | — | (65 | ) | |||||||||
Total | $ | (997 | ) | $ | 51 | $ | (21 | ) | $ | (967 | ) | |||||
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Maximum | ||||
Guarantees and Other Assurances | Exposure | |||
(In millions) | ||||
FirstEnergy Guarantees on Behalf of its Subsidiaries | ||||
Energy and Energy-Related Contracts(1) | $ | 223 | ||
OVEC obligations | 300 | |||
Other(2) | 301 | |||
824 | ||||
Subsidiaries’ Guarantees | ||||
Energy and Energy-Related Contracts | 155 | |||
FES’ guarantee of NGC’s nuclear property insurance | 70 | |||
FES’ guarantee of FGCO’s sale and leaseback obligations | 2,324 | |||
Other | 19 | |||
2,568 | ||||
Surety Bonds | 136 | |||
LOC(3) | 269 | |||
405 | ||||
Total Guarantees and Other Assurances | $ | 3,797 | ||
(1) | Issued for open-ended terms, with a 10-day termination right by FirstEnergy. | |
(2) | Includes guarantees of $95 million for nuclear decommissioning funding assurances, $161 million supporting OE’s sale and leaseback arrangement, and $35 million for railcar leases. | |
(3) | Includes $105 million issued for various terms pursuant to LOC capacity available under FirstEnergy’s revolving credit facilities, $122 million pledged in connection with the sale and leaseback of Beaver Valley Unit 2 by OE and $39 million pledged in connection with the sale and leaseback of Perry by OE. |
Collateral Provisions | FES | AE Supply | Utilities | Total | ||||||||||||
(In millions) | ||||||||||||||||
Credit rating downgrade to below investment grade (1) | $ | 440 | $ | 4 | $ | 78 | $ | 522 | ||||||||
Material adverse event (2) | 33 | 57 | 13 | 103 | ||||||||||||
Total | $ | 473 | $ | 61 | $ | 91 | $ | 625 | ||||||||
(1) | Includes $206 million and $59 million that is also considered an acceleration of payment or funding obligation for FES and the Utilities, respectively. | |
(2) | Includes $32 million that is also considered an acceleration of payment or funding obligation for FES. |
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Collateral Provisions | FES | AE Supply | Utilities | Total | ||||||||||||
(In millions) | ||||||||||||||||
Credit rating downgrade to below investment grade (1) | $ | 477 | $ | 5 | $ | 78 | $ | 560 | ||||||||
Material adverse event (2) | 36 | 57 | 13 | 106 | ||||||||||||
Total | $ | 513 | $ | 62 | $ | 91 | $ | 666 | ||||||||
(1) | Includes $206 million and $59 million that is also considered an acceleration of payment or funding obligation for FES and the Utilities, respectively. | |
(2) | Includes $32 million that is also considered an acceleration of payment or funding obligation for FES. |
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Source of Information- | ||||||||||||||||||||||||||||
Fair Value by Contract Year | 2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total | |||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Prices actively quoted(1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Other external sources(2) | (287 | ) | (169 | ) | (48 | ) | (38 | ) | — | — | (542 | ) | ||||||||||||||||
Prices based on models | 9 | (3 | ) | — | — | — | 44 | 50 | ||||||||||||||||||||
Total(3) | $ | (278 | ) | $ | (172 | ) | $ | (48 | ) | $ | (38 | ) | $ | — | $ | 44 | $ | (492 | ) | |||||||||
(1) | Represents exchange traded New York Mercantile Exchange futures and options. | |
(2) | Primarily represents contracts based on broker and IntercontinentalExchange quotes. | |
(3) | Includes $445 million in non-hedge commodity derivative contracts that are primarily related to NUG contracts. NUG contracts are generally subject to regulatory accounting and do not materially impact earnings. |
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• | a $40 million annualized base rate increase effective June 29, 2010; |
• | a deferral of February 2010 storm restoration expenses in West Virginia over a maximum five-year period; |
• | an additional $20 million annualized base rate increase effective in January 2011; | ||
• | a decrease of $20 million in ENEC rates effective January 2011, which amount is deferred for later recovery in 2012; and |
• | a moratorium on filing for further increases in base rates before December 1, 2011, except under specified circumstances. |
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Six Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
Revenues by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In millions) | ||||||||||||
Direct and Governmental Aggregation | $ | 1,765 | $ | 1,097 | $ | 668 | ||||||
POLR and Structured Sales | 607 | 1,315 | (708 | ) | ||||||||
Wholesale | 156 | 142 | 14 | |||||||||
Transmission | 56 | 36 | 20 | |||||||||
RECs | 44 | 67 | (23 | ) | ||||||||
Other | 56 | 57 | (1 | ) | ||||||||
Total Revenues | $ | 2,684 | $ | 2,714 | $ | (30 | ) | |||||
Six Months | ||||||||||||
Ended June 30 | Increase | |||||||||||
MWH Sales by Type of Service | 2011 | 2010 | (Decrease) | |||||||||
(In thousands) | ||||||||||||
Direct | 21,219 | 12,857 | 65.0 | % | ||||||||
Governmental Aggregation | 8,279 | 5,447 | 52.0 | % | ||||||||
POLR and Structured Sales | 9,561 | 25,344 | (62.3 | )% | ||||||||
Wholesale | 1,380 | 1,538 | (10.3 | )% | ||||||||
Total Sales | 40,439 | 45,186 | (10.5 | )% | ||||||||
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Increase | ||||
Source of Change in Direct and Governmental Aggregation | (Decrease) | |||
(In millions) | ||||
Direct Sales: | ||||
Effect of increase in sales volumes | $ | 493 | ||
Change in prices | (20 | ) | ||
473 | ||||
Governmental Aggregation: | ||||
Effect of increase in sales volumes | 176 | |||
Change in prices | 19 | |||
195 | ||||
Net Increase in Direct and Governmental Aggregation Revenues | $ | 668 | ||
Increase | ||||
Source of Change in POLR Revenues | (Decrease) | |||
(In millions) | ||||
POLR: | ||||
Effect of decrease in sales volumes | $ | (819 | ) | |
Change in prices | 111 | |||
$ | (708 | ) | ||
Increase | ||||
Source of Change in Wholesale Revenues | (Decrease) | |||
Wholesale: | ||||
Effect of increase in sales volumes | $ | (15 | ) | |
Change in prices | 29 | |||
$ | 14 | |||
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Increase | ||||
Source of Change in Fuel and Purchased Power | (Decrease) | |||
(In millions) | ||||
Fossil Fuel: | ||||
Change due to increased unit costs | $ | 2 | ||
Change due to volume consumed | (29 | ) | ||
(27 | ) | |||
Nuclear Fuel: | ||||
Change due to increased unit costs | 14 | |||
Change due to volume consumed | 1 | |||
15 | ||||
Non-affiliated Purchased Power: | ||||
Change due to increased unit costs | 108 | |||
Change due to volume purchased | (242 | ) | ||
(134 | ) | |||
Affiliated Purchased Power: | ||||
Change due to increased unit costs | 34 | |||
Change due to volume purchased | (30 | ) | ||
4 | ||||
Net Decrease in Fuel and Purchased Power Costs | $ | (142 | ) | |
• | Transmission expenses increased by $176 million due primarily to increases in PJM of $198 million from higher congestion, network, and line loss expense, partially offset by lower MISO transmission expenses of $22 million. |
• | Nuclear operating costs increased by $48 million due primarily to having two refueling outages, Perry and Beaver Valley 2, occurring this year. While Davis-Besse had a refueling outage last year, the work performed during the second quarter of 2010 was largely capital-related. |
• | Fossil operating costs increased by $20 million due primarily to higher labor, contractor and material costs resulting from an increase in planned and unplanned outages. |
• | A $54 million provision for excess and obsolete material related to revised inventory practices adopted in connection with the Allegheny merger. |
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ANALYSIS OF RESULTS OF OPERATIONS
Distribution KWH Deliveries | Increase | |||
Residential | 3.0 | % | ||
Commercial | 0.2 | % | ||
Industrial | 3.5 | % | ||
Increase in Distribution Deliveries | 2.4 | % | ||
Distribution Revenues | Increase | |||
(In millions) | ||||
Residential | $ | 19 | ||
Commercial | 7 | |||
Industrial | 5 | |||
Increase in Distribution Revenues | $ | 31 | ||
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Retail Generation KWH Sales | Decrease | |||
Residential | (30.7 | )% | ||
Commercial | (39.0 | )% | ||
Industrial | (25.4 | )% | ||
Decrease in Retail Generation Sales | (31.2 | )% | ||
Retail Generation Revenues | Decrease | |||
(In millions) | ||||
Residential | $ | (128 | ) | |
Commercial | (52 | ) | ||
Industrial | (31 | ) | ||
Decrease in Retail Generation Revenues | $ | (211 | ) | |
Increase | ||||
Expenses - Changes | (Decrease) | |||
(In millions) | ||||
Purchased power costs | $ | (175 | ) | |
Other operating expenses | 36 | |||
Amortization of regulatory assets, net | (36 | ) | ||
General taxes | 4 | |||
Net Decrease in Expenses | $ | (171 | ) | |
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ANALYSIS OF RESULTS OF OPERATIONS
Increase | ||||
Distribution KWH Deliveries | (Decrease) | |||
Residential | 2.2 | % | ||
Commercial | 2.9 | % | ||
Industrial | (3.1 | )% | ||
Increase in Distribution Deliveries | 0.6 | % | ||
Increase | ||||
Distribution Revenues | (Decrease) | |||
(In millions) | ||||
Residential | $ | 2 | ||
Commercial | 17 | |||
Industrial | (33 | ) | ||
Net Decrease in Distribution Revenues | $ | (14 | ) | |
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Retail Generation KWH Sales | Decrease | |||
Residential | (46.6 | )% | ||
Commercial | (44.2 | )% | ||
Industrial | (69.8 | )% | ||
Decrease in Retail Generation Sales | (55.0 | )% | ||
Retail Generation Revenues | Decrease | |||
(In millions) | ||||
Residential | $ | (69 | ) | |
Commercial | (46 | ) | ||
Industrial | (54 | ) | ||
Decrease in Retail Generation Revenues | $ | (169 | ) | |
Increase | ||||
Expenses - Changes | (Decrease) | |||
(In millions) | ||||
Purchased power costs | $ | (155 | ) | |
Other operating costs | 6 | |||
Amortization of regulatory assets, net | (34 | ) | ||
General taxes | 10 | |||
Net Decrease in Expenses | $ | (173 | ) | |
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ANALYSIS OF RESULTS OF OPERATIONS
Increase | ||||
Distribution KWH Deliveries | (Decrease) | |||
Residential | 4.5 | % | ||
Commercial | (2.5 | )% | ||
Industrial | 3.7 | % | ||
Net Increase in Distribution Deliveries | 2.6 | % | ||
Increase | ||||
Distribution Revenues | (Decrease) | |||
(In millions) | ||||
Residential | $ | 5 | ||
Commercial | — | |||
Industrial | (2 | ) | ||
Net Increase in Distribution Revenues | $ | 3 | ||
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Retail Generation KWH Sales | Decrease | |||
Residential | (28.3 | )% | ||
Commercial | (46.6 | )% | ||
Industrial | (11.7 | )% | ||
Decrease in Retail Generation Sales | (22.6 | )% | ||
Retail Generation Revenues | Decrease | |||
(In millions) | ||||
Residential | $ | (16 | ) | |
Commercial | (13 | ) | ||
Industrial | (24 | ) | ||
Decrease in Retail Generation Revenues | $ | (53 | ) | |
Increase | ||||
Expenses - Changes | (Decrease) | |||
(In millions) | ||||
Purchased power costs | $ | (53 | ) | |
Other operating expenses | 18 | |||
Deferral of regulatory assets, net | (8 | ) | ||
General Taxes | 1 | |||
Net Decrease in Expenses | $ | (42 | ) | |
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ANALYSIS OF RESULTS OF OPERATIONS
Distribution KWH Deliveries | Decrease | |||
Residential | (2.5 | )% | ||
Commercial | (3.3 | )% | ||
Industrial | (1.8 | )% | ||
Decrease in Distribution Deliveries | (2.7 | )% | ||
Distribution Revenues | Decrease | |||
(In millions) | ||||
Residential | $ | (33 | ) | |
Commercial | (31 | ) | ||
Industrial | (7 | ) | ||
Decrease in Distribution Revenues | $ | (71 | ) | |
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Retail Generation KWH Sales | Decrease | |||
Residential | (12.1 | )% | ||
Commercial | (26.2 | )% | ||
Industrial | (24.8 | )% | ||
Decrease in Retail Generation Sales | (16.7 | )% | ||
Retail Generation Revenues | Decrease | |||
(In millions) | ||||
Residential | $ | (68 | ) | |
Commercial | (59 | ) | ||
Industrial | (5 | ) | ||
Decrease in Retail Generation Revenues | $ | (132 | ) | |
Increase | ||||
Expenses - Changes | (Decrease) | |||
(In millions) | ||||
Purchased power costs | $ | (126 | ) | |
Other operating costs | (6 | ) | ||
Provision for depreciation | (3 | ) | ||
Amortization of regulatory assets, net | (29 | ) | ||
General taxes | 1 | |||
Net Decrease in Expenses | $ | (163 | ) | |
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ANALYSIS OF RESULTS OF OPERATIONS
Increase | ||||
Distribution KWH Deliveries | (Decrease) | |||
Residential | 0.2 | % | ||
Commercial | (4.1 | )% | ||
Industrial | 3.6 | % | ||
Net Increase in Distribution Deliveries | 0.5 | % | ||
Distribution Revenues | Decrease | |||
(In millions) | ||||
Residential | $ | (58 | ) | |
Commercial | (47 | ) | ||
Industrial | (49 | ) | ||
Decrease in Distribution Revenues | $ | (154 | ) | |
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Retail Generation KWH Sales | Decrease | |||
Residential | (1.0 | )% | ||
Commercial | (44.7 | )% | ||
Industrial | (87.6 | )% | ||
Decrease in Retail Generation Sales | (43.1 | )% | ||
Increase | ||||
Retail Generation Revenues | (Decrease) | |||
(In millions) | ||||
Residential | $ | 88 | ||
Commercial | (14 | ) | ||
Industrial | (84 | ) | ||
Net Decrease in Retail Generation Revenues | $ | (10 | ) | |
Expenses - Changes | Decrease | |||
(In millions) | ||||
Purchased power costs | $ | (149 | ) | |
Other operating costs | (95 | ) | ||
Provision for depreciation | (1 | ) | ||
Amortization of regulatory assets, net | (43 | ) | ||
General taxes | (2 | ) | ||
Decrease in Expenses | $ | (290 | ) | |
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ANALYSIS OF RESULTS OF OPERATIONS
Increase | ||||
Distribution KWH Deliveries | (Decrease) | |||
Residential | (1.2 | )% | ||
Commercial | (4.7 | )% | ||
Industrial | 7.3 | % | ||
Net Increase in Distribution Deliveries | 1.4 | % | ||
Increase | ||||
Distribution Revenues | (Decrease) | |||
(In millions) | ||||
Residential | $ | 3 | ||
Commercial | (14 | ) | ||
Industrial | 6 | |||
Net Decrease in Distribution Revenues | $ | (5 | ) | |
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Retail Generation KWH Sales | Decrease | |||
Residential | (2.7 | )% | ||
Commercial | (47.1 | )% | ||
Industrial | (87.4 | )% | ||
Decrease in Retail Generation Sales | (47.5 | )% | ||
Increase | ||||
Retail Generation Revenues | (Decrease) | |||
(In millions) | ||||
Residential | $ | 52 | ||
Commercial | (35 | ) | ||
Industrial | (97 | ) | ||
Net Decrease in Retail Generation Revenues | $ | (80 | ) | |
Increase | ||||
Expenses - Changes | (Decrease) | |||
(In millions) | ||||
Purchased power costs | $ | (192 | ) | |
Other operating costs | (53 | ) | ||
Amortization of regulatory assets, net | 46 | |||
Provision for depreciation | (1 | ) | ||
Net Decrease in Expenses | $ | (200 | ) | |
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ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
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ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | ||||||||||||||||
April | May | June | Second Quarter | |||||||||||||
Total Number of Shares Purchased(a) | 213,550 | 367,422 | 428,966 | 1,009,938 | ||||||||||||
Average Price Paid per Share | $ | 38.59 | $ | 42.62 | $ | 44.44 | $ | 42.54 | ||||||||
Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs | — | — | — | — | ||||||||||||
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | — | — | — | — |
(a) | Share amounts reflect purchases on the open market to satisfy FirstEnergy’s obligations to deliver common stock for some or all of the following: 2007 Incentive Plan, Deferred Compensation Plan for Outside Directors, Executive Deferred Compensation Plan, Savings Plan, Director Compensation, Allegheny Energy, Inc. 1998 Long-Term Incentive Plan, Allegheny Energy, Inc. 2008 Long-Term Incentive Plan, Allegheny Energy, Inc, Non-Employee Director Stock Plan, Allegheny Energy, Inc, Amended and Restated Revised Plan for Deferral of Compensation of Directors, and Stock Investment Plan. |
ITEM 5. | OTHER INFORMATION |
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Signal | ||||
Peak | ||||
Number of significant and substantial violations of mandatory health or safety standards under 104* | 30 | |||
Number of orders issued under 104(b)* | — | |||
Number of citations and orders for unwarrantable failure to comply with mandatory health or safety standards under 104(d)* | — | |||
Number of flagrant violations under 110(b)(2)* | — | |||
Number of imminent danger orders issued under 107(a)* | — | |||
MSHA written notices under Mine Act section 104(e)* of a pattern of violation of mandatory health or safety standards or of the potential to have such a pattern | — | |||
Pending Mine Safety Commission legal actions (including any contested citations issued) | 8 | |||
Number of mining related fatalities | — | |||
Total dollar value of proposed assessments | $ | 6,989 |
* | References to sections under Mine Act |
ITEM 6. | EXHIBITS |
Exhibit Number | ||||
FirstEnergy | ||||
3.1 | Amendment to the Amended Articles of Incorporation of FirstEnergy Corp. dated as of February 25, 2011 (incorporated by reference to FirstEnergy’s Form 8-K filed February 25, 2011, Exhibit 3.1, File No. 21011) | |||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Corp., The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, American Transmission Systems, Incorporated, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power Company, as borrowers, the Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 | |||
101 | * | The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Corp. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. |
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Exhibit Number | ||||
FES | ||||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Solutions Corp., and Allegheny Energy Supply Company, LLC, as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 | |||
101 | * | The following materials from the Quarterly Report on Form 10-Q of FirstEnergy Solutions Corp. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. | ||
OE | ||||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Corp., The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, American Transmission Systems, Incorporated, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power, as borrowers, the Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 | |||
101 | * | The following materials from the Quarterly Report on Form 10-Q of Ohio Edison Company. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. | ||
CEI | ||||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Corp., The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, American Transmission Systems, Incorporated, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power, as borrowers, the Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 | |||
101 | * | The following materials from the Quarterly Report on Form 10-Q of The Cleveland Electric Illuminating Company. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. |
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Exhibit Number | ||||
TE | ||||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Corp., The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, American Transmission Systems, Incorporated, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power, as borrowers, the Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 | |||
101 | * | The following materials from the Quarterly Report on Form 10-Q of The Toledo Edison Company. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. | ||
JCP&L | ||||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Corp., The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, American Transmission Systems, Incorporated, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power, as borrowers, the Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 | |||
101 | * | The following materials from the Quarterly Report on Form 10-Q of Jersey Central Power & Light Company. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. | ||
Met-Ed | ||||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Corp., The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, American Transmission Systems, Incorporated, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power, as borrowers, the Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 |
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Exhibit Number | ||||
101 | * | The following materials from the Quarterly Report on Form 10-Q of Metropolitan Edison Company. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. | ||
Penelec | ||||
10.1 | Credit Agreement, dated as of June 17, 2011, among FirstEnergy Corp., The Cleveland Electric Illuminating Company, Metropolitan Edison Company, Ohio Edison Company, Pennsylvania Power Company, The Toledo Edison Company, American Transmission Systems, Incorporated, Jersey Central Power & Light Company, Monongahela Power Company, Pennsylvania Electric Company, The Potomac Edison Company and West Penn Power, as borrowers, the Royal Bank of Scotland plc, as administrative agent, and the lending banks, fronting banks and swing line lenders identified therein. | |||
12 | Fixed charge ratios | |||
31.1 | Certification of chief executive officer, as adopted pursuant to Rule 13a-14(a) | |||
31.2 | Certification of chief financial officer, as adopted pursuant to Rule 13a-14(a) | |||
32 | Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C. Section 1350 | |||
101 | * | The following materials from the Quarterly Report on Form 10-Q of Pennsylvania Electric Company. for the period ended June 30, 2011, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, (iv) related notes to these financial statements tagged as blocks of text and (v) document and entity information. |
* | Users of these data are advised pursuant to Rule 401 of Regulation S-T that the financial information contained in the XBRL-Related Documents is unaudited and, as a result, investors should not rely on the XBRL-Related Documents in making investment decisions. Furthermore, users of these data are advised in accordance with Rule 406T of Regulation S-T promulgated by the Securities and Exchange Commission that this Interactive Data File is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
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FIRSTENERGY CORP. Registrant FIRSTENERGY SOLUTIONS CORP. Registrant OHIO EDISON COMPANY Registrant THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Registrant THE TOLEDO EDISON COMPANY Registrant METROPOLITAN EDISON COMPANY Registrant PENNSYLVANIA ELECTRIC COMPANY Registrant | ||||
Harvey L. Wagner | ||||
Vice President, Controller and Chief Accounting Officer | ||||
JERSEY CENTRAL POWER & LIGHT COMPANY Registrant | ||||
K. Jon Taylor | ||||
Controller (Principal Accounting Officer) |
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