Exelon 2014 Annual Report Download - page 224

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
The effective income tax rate from continuing operations varies from the U.S. Federal statutory rate principally due to the following:
For the Year Ended December 31,
2014 2013 2012 (a)
U.S. Federal statutory rate ............................................................. 35.0% 35.0% 35.0%
Increase (decrease) due to:
State income taxes, net of Federal income tax benefit .................................. 1.3 4.8 (3.5)
Qualified nuclear decommissioning trust fund income ................................... 2.4 3.7 5.4
Tax exempt income ............................................................... (0.2) (0.2) (0.2)
Domestic production activities deduction ............................................. (2.0) — —
Health care reform legislation ....................................................... 0.1 0.1 0.1
Amortization of investment tax credit, net deferred taxes ................................ (1.1) (1.9) (1.1)
Plant basis differences ............................................................ (1.9) (1.6) (2.4)
Production tax credits and other credits .............................................. (2.4) (2.1) (2.2)
Fines and Penalties ............................................................... — — 2.6
Merger expenses (b) ............................................................... — — 2.4
Non-controlling interest ............................................................ (1.8) — —
Statute of limitations expiration ..................................................... (2.6) (0.1) (0.1)
Other .......................................................................... — (0.1) (1.1)
Effective income tax rate .............................................................. 26.8% 37.6% 34.9%
(a) Exelon activity for the twelve months ended December 31, 2012 includes the results of Constellation and BGE for March 12, 2012—December 31, 2012. Generation
activity for the twelve months ended December 31, 2012 includes the results of Constellation for March 12, 2012—December 31, 2012.
(b) Prior to the close of the merger, the Registrants recorded the applicable taxes on merger transaction costs assuming the merger would not be completed. Upon
closing of the merger, the Registrants reversed such taxes for those merger transaction costs that were determined to be non tax-deductible upon successful
completion of a merger.
The tax effects of temporary differences and carryforwards, which give rise to significant portions of the deferred tax assets
(liabilities), as of December 31, 2014 and 2013 are presented below:
For the Year Ended December 31,
2014 2013
Plant basis differences ............................................................ $(12,143) $(11,612)
Accrual based contracts .......................................................... (178) (214)
Derivatives and other financial instruments ........................................... (46) (509)
Deferred pension and postretirement obligation ....................................... 1,914 1,489
Nuclear decommissioning activities ................................................. (726) (647)
Deferred debt refinancing costs .................................................... 112 173
Regulatory assets and liabilities .................................................... (1,824) (1,611)
Tax loss carryforward ............................................................. 111 252
Tax credit carryforward ........................................................... 97 534
Investment in CENG ............................................................. (563) (541)
Other, net ...................................................................... 1,029 804
Deferred income tax liabilities (net) ..................................................... $(12,217) $(11,882)
Unamortized investment tax credits ..................................................... (555) (490)
Total deferred income tax liabilities (net) and unamortized investment tax credits ............... $(12,772) $(12,372)
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