ComEd 2013 Annual Report Download - page 92

ventures. TheRegistrantsspendasignificant amount ofcash on capital improvementsandconstruction projectsthat have a long-
termreturn on investment.Additionally, ComEd, PECO and BGE operate in rate-regulatedenvironmentsinwhich theamount ofnew
investment recoverymaybedelayedor limitedandwhere such recoverytakesplaceover an extendedperiodoftime.See Note 13
oftheCombinedNotesto ConsolidatedFinancial Statementsfor further discussion oftheRegistrants’ debtandcreditagreements.
Cash Flows from Operating Activities
General
Generation’s cash flows fromoperatingactivitiesprimarilyresult fromthesale ofelectric energy andenergy-relatedproductsand
servicesto customers. Generation’s future cash flows fromoperatingactivitiesmaybeaffectedbyfuture demandfor andmarket
pricesofenergy anditsabilityto continue to produceandsupplypower at competitivecostsaswell asto obtaincollectionsfrom
customers.
ComEd’s, PECO’s and BGE’s cash flows fromoperatingactivitiesprimarilyresult fromthe transmission and distribution ofelectricity
and, inthecaseof PECO and BGE, gas distribution services. ComEd’s, PECO’s and BGE’s distribution servicesare providedto an
establishedand diversebaseofretailcustomers. ComEd’s, PECO’s and BGE’s future cash flows maybeaffectedbytheeconomy,
weather conditions, future legislativeinitiatives, future regulatoryproceedings withrespecttotheir ratesor operations, competitive
suppliers, andtheirabilityto achieve operatingcostreductions.
See Notes3and22 oftheCombinedNotesto ConsolidatedFinancial Statementsfor further discussion ofregulatoryandlegal
proceedings andproposedlegislation.
Pension and Other Postretirement Benefits
Management considersvariousfactorswhen makingpension fundingdecisions, includingactuariallydeterminedminimum
contribution requirementsunder ERISA,contributionsrequiredto avoid benefitrestrictionsandat-risk statusasdefinedbythe
Pension Protection Actof2006, management ofthe pension obligation andregulatoryimplications. OnJuly6,2012,President
Obamasignedinto lawtheMovingAheadfor Progress intheTwenty-firstCenturyAct, which containsa pension fundingprovision
that resultsinlower pension contributionsinthe near term while increasingthe premiums pension planspayto thePension Benefit
GuarantyCorporation.Certain provisionsofthelawwere appliedin 2012 while otherstakeeffectin 2013.Theestimatedimpactsof
thelaware reflectedinthe projectedpension contributionsbelow.
Exelon expectsto contribute approximately$264 million to itspension plansin 2014, of which Generation,ComEd, PECO and BGE
expecttocontribute $118million,$119million,$11 million and$0million,respectively. See Note 16oftheCombinedNotesto
ConsolidatedFinancial Statementsfor theRegistrants’ 2013 and2012 pension contributions.
Unlikethequalifiedpension plans, Exelon’s other postretirement plansare not subjecttoregulatoryminimumcontribution
requirements. Management considersseveral factorsindeterminingthelevel ofcontributionsto Exelon’s other postretirement
benefit plans, includinglevelsofbenefitclaims paid andregulatoryimplications(amountsdeemedprudent to meet regulatory
expectationsandbestassure continuedrecovery). Exelon expectsto contribute approximately$430 million to theother
postretirement benefit plansin 2014, of which Generation,ComEd, PECO and BGE expecttocontribute $168 million,$197 million,
$19million and$17million,respectively. See Note 16oftheCombinedNotesto ConsolidatedFinancial Statementsfor the
Registrants’ 2013 and2012 other postretirement benefitcontributions.
See the“Contractual Obligations” section belowfor management’s estimatedfuture pension andother postretirement benefits
contributions.
Tax Matters
Exelon’s future cash flows fromoperatingactivitiesmaybeaffectedbythefollowingtaxmatters:
•Exelon,Generation,ComEd, PECO and BGE expecttoreceivetaxrefunds ofapproximately$380million,$60million,$320
million,$10 million and$20 million,respectively, between 2014and2015.
• Given thecurrent economic environment,state andlocal governmentsare facingincreasingfinancial challenges, which may
increasetherisk ofadditional incometaxlevies, propertytaxesandother taxes.
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