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Discussion฀of฀Financial฀Results฀-฀ComEd
30
Results฀of฀Operations฀–฀ComEd
฀฀Favorable
฀ ฀ (Unfavorable)
(Dollars฀in฀millions)฀ ฀ ฀ 2009฀ 2008฀฀ Variance
Operating฀revenues฀ $฀ 5,774฀ $฀ 6,136฀ $฀ (362)
Purchased฀power฀expense฀ ฀ 3,065฀฀3,582฀฀ 517
Revenue฀net฀of฀purchased฀power฀expense฀ ฀ 2,709฀฀2,554฀฀ 155
Other฀operating฀expenses฀ ฀฀ ฀฀ ฀
Operating฀and฀maintenance฀ ฀ 1,028฀฀1,097฀฀ 69
Operating฀and฀maintenance฀for฀regulatory฀required฀programs฀ ฀ 63฀฀ 28฀฀ (35)
Depreciation฀and฀amortization฀ ฀ 494฀฀ 464฀฀ (30)
Taxes฀other฀than฀income฀ ฀ 281฀฀ 298฀฀ 17
Total฀other฀operating฀expenses฀ ฀ 1,866฀฀1,887฀฀ 21
Operating฀income฀ ฀ 843฀฀ 667฀฀ 176฀
Other฀income฀and฀deductions฀ ฀฀ ฀฀ ฀
Interest฀expense,฀net฀ ฀ (319)฀฀ (348)฀฀ 29
Equity฀in฀losses฀of฀unconsolidated฀afliates฀ ฀ –฀฀ (8)฀฀ 8
Other,฀net฀ ฀ 79฀฀ 18฀฀ 61
Total฀other฀income฀and฀deductions฀ ฀ (240)฀฀ (338)฀฀ 98
Income฀before฀income฀taxes฀ ฀ 603฀฀ 329฀฀ 274
Income฀taxes฀ ฀ 229฀฀ 128฀฀ (101)
Net฀income฀ $฀ 374฀ $฀ 201฀ $฀ 173
The฀increase฀in฀ComEd’s฀net฀income฀was฀driven฀primarily฀by฀higher฀revenue฀net฀of฀purchased฀power฀expense,฀reecting฀increased฀distribution฀rates฀effective฀September฀
16,฀2008,฀ partially฀ offset฀by฀a฀ decline฀ in฀electric฀deliveries,฀ primarily฀ resulting฀ from฀unfavorable฀ weather฀ conditions฀ and฀reduced฀ load฀ in฀ 2009.฀In฀ addition,฀ ComEd’s฀
increase฀in฀net฀income฀reects฀lower฀operating฀and฀maintenance฀expenses,฀lower฀interest฀expense,฀and฀higher฀interest฀income฀related฀to฀the฀2009฀remeasurement฀of฀
uncertain฀income฀tax฀positions.
The฀reduction฀in฀operating฀and฀maintenance฀expense฀reects฀Exelon’s฀company-wide฀cost฀savings฀initiative฀in฀2009.฀The฀initiative฀included฀job฀reductions,฀for฀which฀ComEd฀
recorded฀a฀charge฀for฀severance฀expense฀as฀a฀cost฀to฀achieve฀these฀savings.฀ComEd฀also฀beneted฀from฀decreased฀storm฀expenses.฀Operation฀and฀maintenance฀expense฀reect฀
increased฀pension฀and฀other฀postretirement฀benets฀expense฀due฀to฀lower฀than฀expected฀pension฀and฀postretirement฀plan฀asset฀returns฀in฀2008.฀In฀the฀September฀2008฀rate฀
case฀ruling,฀the฀ICC฀mandated฀xed฀asset฀disallowances฀while฀allowing฀certain฀regulatory฀assets,฀which฀were฀recorded฀as฀a฀net฀one-time฀charge฀in฀2008.฀฀
Depreciation฀and฀amortization฀expenses฀increased฀due฀to฀higher฀plant฀balances฀and฀new฀depreciation฀rates฀effective฀January฀1,฀2009.฀ComEd฀experienced฀a฀decrease฀
in฀interest฀expense฀primarily฀due฀to฀lower฀outstanding฀debt฀in฀2009.฀ComEd฀also฀recorded฀higher฀interest฀income฀related฀to฀the฀remeasurement฀in฀2009฀of฀uncertain฀
income฀tax฀positions.