Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Taxes [Abstract]

Provision For Income Taxes

Details of income taxes for the three years ended December 31, 2011 are shown below:

PROVISION FOR INCOME TAXES	FirstEnergy			FES			OE			CEI			TE			JCP&L		Met-Ed			Penelec
	(In millions)
2011
Currently payable (receivable)-
Federal	$	(243	)	$	(219	)	$	13		$	17		$	(15	)	$	19	$	26		$	(36	)
State	19			9			(12		)	(7		)	(6		)	7		7			(6		)
	(224		)	(210		)	1			10			(21		)	26		33			(42		)
Deferred, net-
Federal	785			206			65			15			35			71		14			75
State	24			(3		)	13			10			1			20		(10		)	(3		)
	809			203			78			25			36			91		4			72
Investment tax credit amortization	(11		)	(4		)	(1		)	(1		)	—			—		—			—
Total provision for income taxes	$	574		$	(11	)	$	78		$	34		$	15		$	117	$	37		30
2010
Currently payable (receivable)-
Federal	$	(23	)	$	(23	)	$	37		$	58		$	(8	)	$	80	$	1		$	(81	)
State	35			(2		)	(2		)	1			(2		)	36		12			(12		)
	12			(25		)	35			59			(10		)	116		13			(93		)
Deferred, net-
Federal	432			142			41			(19		)	25			30		37			122
State	27			12			3			(4		)	1			1		(2		)	18
	459			154			44			(23		)	26			31		35			140
Investment tax credit amortization	(9		)	(4		)	(1		)	(1		)	—			—		—			(1		)
Total provision for income taxes	$	462		$	125		$	78		$	35		$	16		$	147	$	48		$	46
2009
Currently payable (receivable)-
Federal	$	(183	)	$	87		$	21		$	40		$	6		$	40	$	(34	)	$	(21	)
State	44			8			4			2			—			26		(4		)	4
	(139		)	95			25			42			6			66		(38		)	(17		)
Deferred, net-
Federal	296			169			36			(62		)	(3		)	38		60			55
State	36			21			3			1			2			1		7			2
	332			190			39			(61		)	(1		)	39		67			57
Investment tax credit amortization	(9		)	(4		)	(2		)	(1		)	—			—		—			(1		)
Total provision for income taxes	$	184		$	281		$	62		$	(20	)	$	5		$	105	$	29		$	39

Reconciliation of federal income tax expense at the federal statutory rate to the total provision for income taxes

The following tables provide a reconciliation of federal income tax expense at the federal statutory rate to the total provision for income taxes for the three years ended December 31, 2011.

	FirstEnergy			FES			OE			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)
2011
Book income (loss) before provision for income taxes	$	1,459		$	(70	)	$	206		$	104		$	49		$	261		$	105		$	93
Federal income tax expense at statutory rate	$	511		$	(25	)	$	72		$	36		$	17		$	91		$	37		$	33
Increases (reductions) in taxes resulting from-
Amortization of investment tax credits	(11		)	(4		)	(1		)	(1		)	—			—			—			—
State income taxes, net of federal tax benefit	28			4			1			2			(3		)	18			(2		)	(6		)
State unitary tax adjustments	33			—			—			—			—			—			—			—
Manufacturing deduction	16			13			3			1			—			—			—			—
Medicare Part D	36			4			6			3			1			6			5			6
Effectively settled tax items	(11		)	(2		)	(3		)	(3		)	(3		)	—			—			—
State valuation allowance	(19		)	2			—			—			—			—			—			(4		)
Other, net	(9		)	(3		)	—			(4		)	3			2			(3		)	1
Total provision for income taxes	$	574		$	(11	)	$	78		$	34		$	15		$	117		$	37		$	30
2010
Book income before provision for income taxes	$	1,204		$	356		$	233		$	111		$	52		$	330		$	108		$	110
Federal income tax expense at statutory rate	$	421		$	125		$	82		$	39		$	18		$	116		$	38		$	39
Increases (reductions) in taxes resulting from-
Amortization of investment tax credits	(9		)	(4		)	(1		)	(1		)	—			—			—			(1		)
State income taxes, net of federal tax benefit	40			7			1			(2		)	(1		)	24			7			4
Manufacturing deduction	—			2			(2		)	—			—			—			—			—
Medicare Part D	17			1			2			1			—			4			2			3
Effectively settled tax items	(34		)	(2		)	(9		)	(4		)	(3		)	—			—			—
State valuation allowance	—			2			—			—			—			—			—			(1		)
Other, net	27			(6		)	5			2			2			3			1			2
Total provision for income taxes	$	462		$	125		$	78		$	35		$	16		$	147		$	48		$	46
2009
Book income (loss) before provision for income taxes	$	1,056		$	779		$	181		$	(50	)	$	24		$	263		$	82		$	89
Federal income tax expense at statutory rate	$	370		$	273		$	63		$	(18	)	$	8		$	92		$	29		$	31
Increases (reductions) in taxes resulting from-
Amortization of investment tax credits	(9		)	(4		)	(2		)	(1		)	—			—			—			(1		)
State income taxes, net of federal tax benefit	52			19			5			2			1			18			2			4
Manufacturing deduction	(13		)	(11		)	(2		)	1			(1		)	—			—			—
Medicare Part D	14			7			(1		)	—			—			2			1			2
Effectively settled tax items	(217		)	—			—			—			—			—			—			—
State valuation allowance	(1		)	3			—			—			—			—			—			(2		)
Other, net	(12		)	(6		)	(1		)	(4		)	(3		)	(7		)	(3		)	5
Total provision for income taxes	$	184		$	281		$	62		$	(20	)	$	5		$	105		$	29		$	39

Accumulated deferred income taxes

Accumulated deferred income taxes as of December 31, 2011 and 2010 are as follows:

	FirstEnergy			FES			OE			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)
December 31, 2011
Property basis differences	$	6,738		$	770		$	673		$	527		$	206		$	792		$	457		$	577
Regulatory transition charge	105			—			30			73			5			49			2			—
Customer receivables for future income taxes	125			—			—			—			—			12			55			58
Deferred MISO/PJM transmission costs	51			—			—			—			—			—			34			17
Other regulatory assets — RCP	165			—			82			55			28			—			—			—
Deferred sale and leaseback gain	(450		)	(398		)	(31		)	—			—			(10		)	(12		)	—
Nonutility generation costs	36			—			—			—			—			(2		)	31			7
Unamortized investment tax credits	(72		)	(19		)	(3		)	(4		)	(2		)	(2		)	(4		)	(4		)
Unrealized losses on derivative hedges	(21		)	5			—			—			—			(1		)	—			—
Pensions and OPEB	(752		)	(85		)	(76		)	(36		)	(18		)	(75		)	(24		)	(114		)
Lease market valuation liability	(179		)	(65		)	—			—			(68		)	—			—			—
Oyster Creek securitization (Note 12)	93			—			—			—			—			93			—			—
Nuclear decommissioning activities	123			108			15			—			17			(7		)	7			(17		)
Mark-to-market adjustments	(7		)	(7		)	—			—			—			—			—			—
Deferred gain for asset sales — affiliated companies	—			—			31			20			7			—			—			—
Equity investments	132			—			—			—			—			—			—			—
Loss carryforwards and AMT credits	(612		)	(34		)	—			—			—			—			(6		)	(30		)
Loss carryforward valuation reserve	34			12			—			—			—			—			—			7
All other	161			(1		)	66			28			(5		)	10			—			(2		)
Net deferred income tax liability	$	5,670		$	286		$	787		$	663		$	170		$	859		$	540		$	499
December 31, 2010
Property basis differences	$	3,910		$	650		$	625		$	496		$	206		$	728		$	407		$	504
Regulatory transition charge	235			12			37			89			3			95			(1		)	—
Customer receivables for future income taxes	113			—			—			—			—			13			48			52
Deferred MISO/PJM transmission costs	85			—			—			—			—			—			62			23
Other regulatory assets — RCP	166			—			82			56			28			—			—			—
Deferred sale and leaseback gain	(469		)	(412		)	(35		)	—			—			(10		)	(12		)	—
Nonutility generation costs	51			—			—			—			—			—			55			(4		)
Unamortized investment tax credits	(44		)	(20		)	(4		)	(4		)	(2		)	(2		)	(5		)	(4		)
Unrealized losses on derivative hedges	(29		)	—			—			—			—			—			—			—
Pensions and OPEB	(686		)	(96		)	(58		)	(32		)	(28		)	(74		)	(13		)	(80		)
Lease market valuation liability	(197		)	(82		)	—			—			(81		)	—			—			—
Oyster Creek securitization (Note 12)	109			—			—			—			—			109			—			—
Nuclear decommissioning activities	47			79			7			(1		)	15			(8		)	2			(47		)
Mark-to-market adjustments	(42		)	(42		)	—			—			—			—			—			—
Deferred gain for asset sales — affiliated companies	—			—			34			22			7			—			—			—
Loss carryforwards	(41		)	(10		)	—			—			—			—			—			(23		)
Loss carryforward valuation reserve	26			9			—			—			—			—			—			11
All other	(74		)	(21		)	49			21			(7		)	(58		)	(17		)	6
Net deferred income tax liability	$	3,160		$	67		$	737		$	647		$	141		$	793		$	526		$	438

Changes in unrecognized tax benefits

The following table summarizes the changes in unrecognized tax positions for the years ended 2011, 2010 and 2009.

	FirstEnergy			FES			OE			CEI			TE			JCP&L			Met-Ed			Penelec
	(In millions)
Balance, January 1, 2009	$	219		$	5		$	(30	)	$	(26	)	$	(4	)	$	42		$	28		$	24
Current year increases	41			34			4			3			—			—			—			—
Prior years increases	46			2			103			52			10			—			—			—
Prior years decreases	(100		)	—			—			—			—			(28		)	(15		)	(13		)
Decrease for settlement	(15		)	—			—			—			—			—			—			—
Balance, December 31, 2009	$	191		$	41		$	77		$	29		$	6		$	14		$	13		$	11
Current year increases	10			6			2			(1		)	—			—			2			1
Prior years increases	2			—			—			—			—			—			—			—
Prior years decreases	(81		)	(4		)	(19		)	(15		)	(6		)	(21		)	(2		)	(5		)
Decrease for settlement	(77		)	(2		)	(58		)	(14		)	—			7			(11		)	(6		)
Balance, December 31, 2010	$	45		$	41		$	2		$	(1	)	$	—		$	—		$	2		$	1
Increase due to merger with AE	97			—			—			—			—			—			—			—
Prior years increases	10			8			—			1			—			—			—			—
Prior years decreases	(35		)	(4		)	(2		)	—			—			—			(2		)	(1		)
Balance, December 31, 2011	$	117		$	45		$	—		$	—		$	—		$	—		$	—		$	—

Net interest expense (income) and cumulative net interest payable (receivable)

The following table summarizes the net interest expense (income) for the three years ended December 31, 2011 and the cumulative net interest payable (receivable) as of December 31, 2011 and 2010:

	Net Interest Expense (Income) For the Years Ended December 31,									Net Interest Payable As of December 31,
	2011			2010			2009			2011		2010
	(In millions)									(In millions)
FirstEnergy	$	(5	)	$	(10	)	$	(49	)	$	11	$	3
FES	1			1			(1		)	4		2
OE	(2		)	(3		)	4			1		1
CEI	(2		)	(2		)	3			—		—
TE	(1		)	(1		)	—			—		—
JCP&L	—			(2		)	(4		)	—		—
Met-Ed	—			—			(2		)	—		—
Penelec	—			—			(1		)	—		—

Pre-tax net operating loss expiration period

These losses expire as follows:

Expiration Period	FirstEnergy		FES		Penelec
	(In millions)
2012-2016	$	885	$	644	$	—
2017-2021	901		33		119
2022-2026	8,402		4		94
2027-2031	2,675		408		257
	$	12,863	$	1,089	$	470

Details of general taxes

Details of general taxes for the years ended 2011, 2010 and 2009, are shown below:

	FirstEnergy		FES		OE		CEI		TE		JCP&L		Met-Ed			Penelec
	(In millions)
2011
KWH excise	$	244	$	—	$	90	$	66	$	27	$	50	$	—		$	—
State gross receipts	264		62		17		2		1		—		64			55
Real and personal property	299		42		73		80		23		6		2			2
Social security and unemployment	109		14		9		6		3		11		5			6
Other	62		6		1		—		—		—		3			3
Total general taxes	$	978	$	124	$	190	$	154	$	54	$	67	$	74		$	66
2010
KWH excise	$	245	$	5	$	92	$	68	$	27	$	51	$	—		$	—
State gross receipts	185		17		15		—		—		—		85			68
Real and personal property	243		53		67		70		23		5		—			(1		)
Social security and unemployment	86		14		8		5		2		9		4			5
Other	17		5		1		—		—		—		(1		)	1
Total general taxes	$	776	$	94	$	183	$	143	$	52	$	65	$	88		$	73
2009
KWH excise(1)	$	224	$	1	$	84	$	66	$	24	$	49	$	—		$	—
State gross receipts	171		14		15		—		—		—		78			63
Real and personal property	253		53		64		74		21		5		2			2
Social security and unemployment	90		14		8		5		3		9		5			6
Other	15		5		—		—		—		—		3			3
Total general taxes	$	753	$	87	$	171	$	145	$	48	$	63	$	88		$	74

⁽¹⁾  KWH excise tax for OE and TE include $7 million and $3 million credit adjustments, respectively, recognized in 2009 related to prior periods.