ComEd 2015 Annual Report Download - page 359

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Exelon Generation ComEd PECO BGE
Unrecognized tax benefits at January 1, 2014 $2,175 $ 1,415 $ 324 $ 44 $—
Increases based on tax positions related to 2014 15 15 — — —
Change to positions that only affect timing (255) 33 (175) — —
Increases based on tax positions prior to 2014 18 18 — — —
Decreases based on tax positions prior to 2014 (1) (2) — — —
Decrease from settlements with taxing authorities (35) (34) — — —
Decreases from expiration of statute of limitations (88) (88) — — —
Unrecognized tax benefits at December 31, 2014 $1,829 $ 1,357 $ 149 $ 44 $—
Exelon Generation ComEd PECO BGE
Unrecognized tax benefits at January 1, 2013 $1,024 $ 876 $ 67 $ 44 $—
Increases based on tax positions related to 2013 19 19 — — —
Change to positions that only affect timing 649 36 257 — —
Increases based on tax positions prior to 2013 493 493 — — —
Decreases based on tax positions prior to 2013 (6) (5) — — —
Decreases from expiration of statute of limitations (4) (4) — — —
Unrecognized tax benefits at December 31, 2013 $2,175 $ 1,415 $ 324 $ 44 $—
Included in Exelon’s unrecognized tax benefits balance at December 31, 2015 and 2014 are approximately $540 million and $1,129 million,
respectively, of tax positions for which the ultimate tax benefit is highly certain, but for which there is uncertainty about the timing of such benefits.
The disallowance of such positions would not materially affect the annual effective tax rate but would accelerate the payment of cash to, or defer
the receipt of the cash tax benefit from, the taxing authority to an earlier or later period respectively.
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AmerGen filed income tax refund claims taking the position that nuclear decommissioning liabilities assumed as part of its acquisition of
nuclear power plants are taken into account in determining the tax basis in the assets it acquired. The additional basis results primarily in reduced
capital gains or increased capital losses on the sale of assets in nonqualified decommissioning funds and increased tax depreciation and
amortization deductions. The IRS disagrees with this position and disallowed AmerGen’s claims. In early 2009, Generation filed a complaint in the
United States Court of Federal Claims to contest this determination. On September 17, 2013, the Court granted the government’s motion denying
AmerGen’s claims for refund. In the first quarter of 2014, Exelon filed an appeal of the decision to the United States Court of Appeals for the
Federal Circuit. On March 11, 2015, the Federal Circuit affirmed the lower court’s decision to deny AmerGen’s claims for refund. Exelon will not be
pursuing further appeals with respect to this issue and, as a result, reduced Generation and PECO’s unrecognized tax benefits by a total of $661
million and $43 million, respectively, in the first quarter of 2015. This change in unrecognized tax benefits had no impact on Exelon, Generation, or
PECO’s effective tax rate.
Unrecognized tax benefits that if recognized would affect the effective tax rate
Exelon and Generation have $538 million and $509 million, respectively, of unrecognized tax benefits at December 31, 2015 that, if
recognized, would decrease the effective tax rate. BGE has
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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