ComEd 2015 Annual Report Download - page 135

Table of Contents
Effective Income Tax Rate.
Generation’s effective income tax rates for the years ended December 31, 2015, 2014 and 2013 were 27.1%, 16.9% and 36.7%,
respectively. See Note 14—Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the
components of the effective income tax rates.
Results of Operations—ComEd
2015 2014
Favorable
(Unfavorable)
2015 vs.
2014
Variance 2013
Favorable
(Unfavorable)
2014 vs.
2013
Variance
Operating revenue $4,905 $4,564 $ 341 $4,464 $ 100
Purchased power expense 1,319 1,177 (142) 1,174 (3)
Revenue net of purchased power expense 3,586 3,387 199 3,290 97
Other operating expenses
Operating and maintenance 1,567 1,429 (138) 1,368 (61)
Depreciation and amortization 707 687 (20) 669 (18)
Taxes other than income 296 293 (3) 299 6
Total other operating expenses 2,570 2,409 (161) 2,336 (73)
Gain on sales of assets 1 2 (1) — 2
Operating income 1,017 980 37 954 26
Other income and (deductions)
Interest expense, net (332) (321) (11) (579) 258
Other, net 21 17 4 26 (9)
Total other income and (deductions) (311) (304) (7) (553) 249
Income before income taxes 706 676 30 401 275
Income taxes 280 268 (12) 152 (116)
Net income $ 426 $ 408 $ 18 $ 249 $ 159
(a) ComEd evaluates its operating performance using the measure of Revenue net of purchased power expense. ComEd believes that Revenue net of purchased power expense is
a useful measurement because it provides information that can be used to evaluate its operational performance. In general, ComEd only earns margin based on the delivery and
transmission of electricity. ComEd has included its discussion of Revenue net of purchased power expense below as a complement to the financial information provided in
accordance with GAAP. However, Revenue net of purchased power expense is not a presentation defined under GAAP and may not be comparable to other companies’
presentations or deemed more useful than the GAAP information provided elsewhere in this report.
(b) For regulatory recovery mechanisms, including ComEd’s electric distribution and transmission formula rates, and riders, revenues increase and decrease i) as fully recoverable
costs fluctuate (with no impact on net earnings), and ii) pursuant to changes in rate base, capital structure and ROE (which impact net earnings).
Net Income
 ComEd’s Net income for the year ended December 31, 2015
was higher than the same period in 2014 primarily due to increased electric distribution and transmission formula rate earnings (reflecting the
impacts of increased capital investment, partially offset by lower allowed electric distribution ROE), partially offset by unfavorable weather and
volume.
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(a)(b)
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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