ComEd 2006 Annual Report Download - page 123

Additionally, Exelon, through ComEd, has taken certain tax positions, which have been disclosed
to the IRS, to defer the tax gain on the 1999 sale of its fossil generating assets, to which the IRS has
objected. As discussed in Note 12 of the Combined Notes to the Consolidated Financial Statements,
this deferred tax obligation is significant.
The following table provides a summary of the major items affecting Exelon’s cash flows from
operations:
2006 2005 Variance
Net income ..................................................... $1,592 $ 923 $ 669
Add (subtract):
Non-cash operating activities (a) .................................... 3,213 4,102 (889)
Income taxes ................................................... 69 138 (69)
Changes in working capital and other noncurrent assets and liabilities (b) . . 141 (791) 932
Pension contributions and postretirement healthcare benefit payments,
net.......................................................... (180) (2,225) 2,045
Net cash flows provided by operations .............................. $4,835 $2,147 $2,688
(a) Includes depreciation, amortization and accretion, deferred income taxes, provision for uncollectible accounts, equity in
earnings of unconsolidated affiliates, pension and other postretirement benefits expense, other decommissioning-related
activities, cumulative effect of a change in accounting principle, impairment charges and other non-cash items.
(b) Changes in working capital and other noncurrent assets and liabilities exclude the changes in commercial paper, income
taxes and the current portion of long-term debt.
The increase in cash flows from operations during 2006 was primarily the result of $2 billion of
discretionary contributions to Exelon’s pension plans during 2005, which was initially funded through a
term loan agreement, as further described in the “Cash Flows from Financing Activities” section below.
Of the total contribution, Generation, ComEd and PECO contributed $844 million, $803 million, and
$109 million, respectively. The Generation contribution was primarily funded by capital contributions
from Exelon and included $2 million from internally generated funds. ComEd’s and PECO’s
contributions were funded by capital contributions from Exelon.
Cash flows provided by operations for 2006 and 2005 by registrant were as follows:
2006 2005
Exelon ................................................................ $4,835 $2,147
Generation ............................................................. 2,550 972
ComEd ................................................................ 987 247
PECO ................................................................. 1,017 704
Excluding the March 2005 discretionary pension contributions discussed above, changes in the
Registrants’ cash flows from operations were generally consistent with changes in their results of
operations, as adjusted by changes in working capital in the normal course of business.
In addition to the items mentioned in “Results of Operations” and the discretionary pension
contributions discussed above, significant operating cash flow impacts for Generation and ComEd for
2006 and 2005 were as follows:
Generation
• At December 31, 2006, 2005 and 2004, Generation had accounts receivable from ComEd
under the PPA of $197 million, $242 million and $189 million, respectively.
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