ComEd 2006 Annual Report Download - page 84

tax rate from continuing operations by 9.7% and 22.3% for 2006 and 2005, respectively. See Note 12
of the Combined Notes to the Consolidated Financial Statements for further discussion of the change
in the effective income tax rate.
Discontinued Operations. On January 31, 2005, subsidiaries of Generation completed a series of
transactions that resulted in Generation’s sale of its investment in Sithe. In addition, Exelon has sold or
wound down substantially all components of Enterprises. Accordingly, the results of operations and any
gain or loss on the sale of these entities have been presented as discontinued operations within Exelon’s
(for Sithe and Enterprises) and Generation’s (for Sithe) Consolidated Statements of Operations and
Comprehensive Income. See Notes 2 and 3 of the Combined Notes to Consolidated Financial
Statements for further information regarding the presentation of Sithe and certain Enterprises businesses
as discontinued operations. The results of Sithe are included in the Generation discussion below.
The income from discontinued operations decreased by $12 million for 2006 compared to 2005
primarily due to the gain on the sale of Sithe in 2005 partially offset by an adjustment to the gain on the
sale of Sithe in 2006 as a result of the expiration of certain tax indemnifications.
Cumulative Effect of Changes in Accounting Principles. The cumulative effect of changes in
accounting principles reflects the impact of adopting FIN 47 as of December 31, 2005. See Note 13 of the
Combined Notes to Consolidated Financial Statements for further discussion of the adoption of FIN 47.
Results of Operations by Business Segment
The comparisons of 2006 and 2005 operating results and other statistical information set forth
below include intercompany transactions, which are eliminated in Exelon’s consolidated financial
statements.
Net Income (Loss) from Continuing Operations by Business Segment
2006 2005
Favorable
(unfavorable)
variance
Generation ................................................. $1,403 $1,109 $ 294
ComEd .................................................... (112) (676) 564
PECO ..................................................... 441 520 (79)
Other (a) .................................................... (142) (2) (140)
Total ...................................................... $1,590 $ 951 $ 639
(a) Other includes corporate operations, shared service entities, including BSC, Enterprises, investments in synthetic fuel-
producing facilities and intersegment eliminations.
Net Income (Loss) Before Cumulative Effect of Changes in Accounting Principles by
Business Segment
2006 2005
Favorable
(unfavorable)
variance
Generation ................................................. $1,407 $1,128 $ 279
ComEd .................................................... (112) (676) 564
PECO ..................................................... 441 520 (79)
Other (a) .................................................... (144) (7) (137)
Total ...................................................... $1,592 $ 965 $ 627
(a) Other includes corporate operations, shared service entities, including BSC, Enterprises, investments in synthetic fuel-
producing facilities and intersegment eliminations.
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