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Income Taxes | 6 Months Ended
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Jun. 30, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES FirstEnergy’s and FES’ interim effective tax rates reflect the estimated annual effective tax rates for 2017 and 2016. These tax rates are affected by estimated annual permanent items, such as AFUDC equity and other flow-through items, as well as discrete items that may occur in any given period, but are not consistent from period to period. FirstEnergy’s effective tax rate for the three months ended June 30, 2017 and 2016 was 40.2% on pre-tax income and 10.7% on pre-tax losses, respectively. FirstEnergy's effective tax rate for the six months ended June 30, 2017 and 2016 was 39.1% on pre-tax income and (12.2)% on pre-tax losses, respectively. The change in the effective tax rate for both periods is primarily due to the impairment of $800 million of goodwill in 2016, of which $433 million was non-deductible for tax purposes. Additionally, $159 million of valuation allowances were recorded in 2016 against state and municipal NOL carryforwards that also impact the 2016 effective tax rate. FES’ effective tax rate for the three months ended June 30, 2017 and 2016 was 54.8% on pre-tax income and 24.6% on pre-tax losses, respectively. FES' effective tax rate for the six months ended June 30, 2017 and 2016 was 22.8% and 16.6%, respectively. The change in the effective tax rate for both periods was primarily due to the re-measurement of ADIT resulting from the transfer of nuclear decommissioning trust assets and asset retirement obligations from OE and TE to NG, as discussed in Note 9, "Asset Retirement Obligation," as well as a $65 million valuation allowance recognized in the second quarter of 2016 against state and local NOL carryforwards and the impairment of goodwill in 2016, of which $23 million was non-deductible for tax purposes. As of June 30, 2017, it is reasonably possible that approximately $51 million of unrecognized tax benefits may be resolved within the next twelve months as a result of the statute of limitations expiring and expected resolution with respect to certain claims, of which approximately $26 million would affect FirstEnergy's effective tax rate. In February 2017, the IRS completed its examination of FirstEnergy's 2015 federal income tax return and issued a Full Acceptance Letter with no changes or adjustments to FirstEnergy's taxable income or effective tax rate.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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